Tectonic Gold Plc - Final Results to 30 June 2021

21 December 2021

TECTONIC GOLD PLC

(“Tectonic Gold” or the “Company”)

Final Results to 30 June 2021

CHAIRMAN’S STATEMENT

Dear Shareholders,

The results for Tectonic Gold Plc for the 12 months to 30 June 2021 mark the third year of your Company as a listed entity and, once again, a year of challenge and opportunity. COVID-19 and the restrictions on movement eased and we were able to get into the field on our lead gold project in Queensland where we executed multiple successful campaigns, advancing our research into Intrusive Related Gold Systems and our understanding of the Specimen Hill system itself. We pursued the Southern Copper discovery and made several rediscoveries of old workings and new discoveries in these various campaigns. Drilling in December 2020 and January 2021 returned promising results and attracted the attention of some of the large copper and gold miners. We hosted several leading experts to site to rigorously challenge our thinking and ensure our research efforts were robust. Thei r reviews encouraged us to get back into the field and extend the January findings with additional testing. With your support in funding our innovative “drill warrant” program, we returned with a drilling campaign in September and immediately followed up on this with diamond core drilling in October. The weather again cut our campaign short, tantalisingly just 100m from our bullseye target below the high grade Goldsmith’s Reef, but we none the less added significantly to our understanding of the Specimen Hill system and at the time of writing we are waiting on assays from this last campaign. Every time we go back to the field at Specimen Hill the project grows in size and potential and shows our initial thesis of tackling this district scale system to be worthy.

Our diamond and heavy minerals investment in South Africa with Kazera Global Plc (“Kazera”) is advancing. Kazera have been successful in progressing the diamond mining opportunity and this encouraged them to exercised their option to acquire 60% of Whale Head Pty Ltd (“Whale Head”). Whale Head holds a mineral sands mining application over the same diamond bearing alluvial deposit that Deep Blue is prosecuting. The application is progressing after a COVID driven hiatus in the South African Mines Department. We supported Kazera by exercising our share options to assist them in funding the expansion of onsite activities, including taking operation control over the Government owned diamond processing plant. We expect this to significantly enhance their production capacity in the year ahead. As a reminder, Tectonic holds non diluting interests now in both the diamonds and heavy minerals operations.

In addition to support from shareholders, we have continued to enjoy support from the Australian Federal Government under their R&D sponsorship program. We have submitted a claim under this program for a cash rebate on all the qualifying research on gold exploration this year. It is not only about gold however as we are now picking up an encouraging copper presence across parts of the Specimen Hill system near a neighbouring historic copper mine. We will continue to progress this investigation in the year ahead with a view to partnering with one of the larger copper-gold mining companies to take Specimen Hill into the next phase of project development. Tectonic’s focus then will shift to the next asset in the portfolio, Mount Cassidy, which we will also work up towards a partnership transaction. Alongside this we are always keeping an eye out for new projects and the opportunity to utilise our research and expertise on other projects in Australia and around the world.

On 11 March 2020, the World Health Organisation (“WHO”) declared COVID-19 a pandemic. The pandemic has adversely affected the global economy, including an increase in unemployment, decrease in consumer demand, interruptions in supply chains, and tight liquidity and credit conditions. Consequently, governments around the world announced monetary and fiscal stimulus packages to minimise the adverse economic impact. However, the COVID-19 situation is still evolving, and its full economic impact remains uncertain.

The Company has several assets where the value may be impacted by COVID-19. At the date these financial statements were approved by the Directors the extent of the impact COVID-19 on the Company’s assets cannot be reasonably estimated at this time.

The pandemic has impacted the Company’s operations with Government mandated bans on mass gatherings and social distancing measures resulting in disruption to the Company’s operations; this disruption is expected to negatively impact the ability for the Company to conduct drilling and its parent entity’s ability to raise capital, refer Going Concern Note 2. The Directors and management are continually monitoring and managing the Company’s operations closely in response to COVID-19 however the extent of the impact COVID-19 may have on the Company’s future liquidity, financial performance and position and operations is uncertain and cannot be reasonably estimated at the date these financial statements were issued.

Thank you to all of our supportive shareholders and stakeholders who have worked with us over the last year to progress our gold projects and our exciting South African diamond and heavy minerals investment.

Yours sincerely
Bruce Fulton

CHIEF EXECUTIVE OFFICER’S REPORT

During the year to June 2021 the Company had a very intense level of activity on its flagship Specimen Hill project. After COVID restricted access to the site in 2020, we used the opportunity in 2021 to recapture as much momentum as possible from the success of the 2019 campaigns. Shareholders supported us with a raise in September 2020 which enabled us to get a drill rig onto site in December 2020 and follow up again in January 2021. Testing returned positive results with every hole intersecting mineralisation and some very attractive grades returned from assays. Follow on field work taking independent experts to site to add rigour to our Australian Government supported research program also delivered the rediscovery of the high-grade Goldsmith’s Reef workings and a number of new discoveries.

Shareholders were pleased with the results and supported us again through the innovative “drill warrant” program devised by our corporate advisers, VSA Capital, funding the team back into the field for further drilling in September and October. At the time of writing, we are waiting on the assays from this latest campaign.

During the year Tectonic divested its interest in Toronto listed VOX Royalty Corp. (“VOX”), generating over CAD$300,000, which we have recycled into our technology research and exploration efforts.

In September 2021, Tectonic sold 20 million shares in Kazera and used the proceeds to exercise 10 million warrants to support their expansion of operations on our diamond and heavy mineral sands project As an incentive to hold the shares we are also earning an additional 5 million warrants with a 2.0p conversion price. At the time of writing of this report, Deep Blue Minerals Pty Ltd (“Deep Blue”) is in diamonds production and Whale Head is progressing its heavy mineral sands mining application.

We have enjoyed the hard work of the field campaigns over the last year and celebrated the success of new discoveries which keep on expanding the footprint of the Specimen Hill system. I thank my fellow directors who have rolled up their sleeves to ensure we have made the most of 2021. Our management team and advisers have similarly put in a tremendous effort this year and I thank them as well. Our commitment after such a difficult 2020 was to build shareholder value which we have made good progress on, but there is more to come and we expect 2022 to deliver as much again.

Brett Boynton
Chief Executive Officer
15 December 2021

STRATEGIC REPORT

For the year ended 30 June 2021

The Directors present their strategic report for Tectonic Gold Plc (“Tectonic Gold” and/or “the Company”) and its controlled entities (“the Group”) for the year ended 30 June 2021 (“the reporting period”).

REVIEW OF THE BUSINESS

Following severe restrictions due to COVID in 2020, the team was able to again access our flagship Specimen Hill project, where we conducted a number of field campaigns including drilling, mapping and sampling.

The Company supported our diamond and heavy minerals investment partner, Kazera Global Plc in taking diamond production forward at Deep Blue in South Africa.Tectonic Gold holds a non-diluting 10% interest.

On 30 September 2021, Kazera exercised an option to acquire 60% of Whale Head Minerals Pty Ltd from Tectonic Gold. Whale Head has made an application for a mining permit to mine (and process) heavy mineral sands coincident with the diamonds at the Alexkor diamond mining operation.

For further details see the Chief Executive Officer’s Report on Page 5.

RESULTS AND COMPARATIVE INFORMATION

The Group reports a loss after tax for the reporting period of £231,564 from continuing operations (2020: £356,682 profit).

On 17 April 2019, the Company established Deep Blue and as announced on 4 June 2020, the Company sold a majority interest in Deep Blue Minerals Pty Ltd effective on 17 June 2020. For reporting purposes, Deep Blue was held as an investment for the period.

On 14 February 2020, the Company established Whale Head Minerals Pty Ltd. For accounting and reporting purposes, this Company has remained dormant since the date of incorporation to the end of the reporting period.

DIVIDENDS

The Directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend to the date of this report (2021: £nil).

KEY PERFORMANCE INDICATORS

The key performance indicators are set out below:

KEY RISKS AND UNCERTAINTIES

Currently the principal risk lies in securing additional funding as and when necessary to continue with the core research and exploration business. The Company’s projects are in the exploration phase of development and do not generate revenue. If the Company is unsuccessful in monetising its research developments or its exploration projects by attracting development partners or divesting assets it may need to raise additional capital as other junior exploration companies do from time to time. This risk is mitigated through the Company’s corporate development efforts and active engagement with a number of gold mining companies, project funders and other investors for the purpose of attracting investment in one or more of the Company’s projects or acquisition of one of the assets in line with the business plan.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Details of the Company's financial risk management objectives and policies are set out in Note 25 to these financial statements.

ENVIRONMENTAL REGULATIONS

The Group conducts a range of activities in the field which require accessing remote sites with heavy vehicles and equipment and disturbing the surface with sample taking to test geological structures. This work is conducted under very strict regulatory oversight and once completed the test sites are fully rehabilitated to ensure there is no long-term impact from the Company's activities on the environment. The Group is subject to environmental regulations under the laws of the Commonwealth and the State it operates In Australia. The Board of Directors monitors compliance with environmental regulations and as at the date of this report the Directors are not aware of any breach of such regulations during the reporting period.

PROMOTION OF THE COMPANY FOR THE BENEFIT OF THE MEMBERS AS A WHOLE

The Director’s believe they have acted in the way most likely to promote the success of the Company for the benefit of its members as a whole, as required by s172 of the Companies Act 2006.

The requirements of s172 are for the Directors to:

-              Consider the likely consequences of any decision in the long term;

-              Act fairly between the members of the Company;

-              Maintain a reputation for high standards of business conduct;

-              Consider the interests of the Company’s employees;

-              Foster the Company’s relationships with suppliers, customers and others; and

-              Consider the impact of the Company’s operations on the community and the environment.

The Company is quoted on the AQUIS Stock Exchange (formerly NEX) and its members will be fully aware, through detailed announcements, shareholder meetings and financial communications, of the Board’s broad and specific intentions and the rationale for its decisions.

When selecting investments, issues such as the impact on the community and the environment have actively been taken into consideration.

The Group pays its creditors promptly and keeps its costs to a minimum to protect shareholders funds. Currently, other than the directors, the Group engages all staff as contractors and has no employees.

The Group acknowledges the Traditional Owners of the land on which it operates and participates in supporting Native Title. The Group has interests in projects around the world and supports the basic rights of all people.

The Group adheres to the strictest anti-corruption protocols and does not trade in any non-compliant or conflict related resources.

The Group utilises its technology platform and expertise to identify and delineate natural resource projects which it monetises by selling or partnering to bring into production.

The Group adheres to the 10 principles set out in the QCA Code which it has adopted.

The Group utilises its technology platform and expertise to identify and delineate natural resource projects which it monetises by selling or partnering to bring into production. The Group adheres to the 10 principles set out in the QCA Code which it has adopted. The outcome of adherence to the QCA Code is the development of a best practice governance structure in the Group to pursue each of the 10 principles.

The principal risks identified are a failure to meet stakeholder commitments as a result of the inappropriate behaviour by members of the Group or the consultants and contractors which it engages. The Group is aware of its impact in operating in remote locations and the potential damage it can cause to the environment and property if its operations are not conducted with the utmost care. With these risks in mind, all contractors and consultants are vetted for appropriate expertise and experience prior to engagement and upon engagement are taken through thorough pre site induction training to ensure all standards are met in execution of their tasks.

This report was approved by the Board of Directors on 15 December 2021 and signed on its behalf by:

Brett Boynton
Chief Executive Officer

DIRECTORS’ REPORT

For the year ended 30 June 2021

The Directors present their report and the audited consolidated financial statements of Tectonic Gold Plc (“Tectonic Gold” or the “Company”) and its controlled entities (“Consolidated Entity” or “Group”) for the year ended 30 June 2021.

DIRECTORS

The Board comprised the following directors who served throughout the year and up to the date of this report save where disclosed otherwise:

DIRECTORS’ INTERESTS

The Directors’ interests in the share capital of the Company at 30 June 2021, held either directly or through related parties, were as follows:

Details of the options granted to or held by the Directors at 30 June 2021 are as follows:

DONATIONS

The Company did not make any political or charitable donations during the reporting period (30 June 2020: £nil).

EMPLOYEE CONSULTATION

The Company places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on various factors affecting the performance of the Company. This is achieved through formal and informal meetings. Equal opportunity is given to all employees regardless of their sex, age, religion or ethnic origin.

POST YEAR END EVENTS

A list of post year events has been included in Note 28.

GOING CONCERN

The adoption of the going concern basis by the Directors is following a review of the current position of the Company and Group and the forecasts for at least the next 12 months from the date of signing of these financial statements. Cash on hand and tradable securities together with the funds expected from the Australian Government R&D Tax Incentive and Warrants expiring in February 2022 (See Note 22) are more than sufficient to enable to Company to meet its obligations as they fall due and continue to operate for at least twelve months from the date of signing these financial statements. Thus, the Directors continue to adopt the going concern basis in preparing the financial statements. It is beyond the scope of the Directors to predict any future impact of COVID- 19 on any of these funding sources however and if for any reason it is not possible to sell any tradeable securities or State Government funding is not secured, this may impact the ability of the Company to meet its obligations and continue to operate as envisaged. Further details regarding the adoption of the going concern basis and uncertainty surrounding it can be found in Note 2 of these financial statements.

In keeping with other investment companies, the growth if the Group is dependent on its ability to invest in current projects and new opportunities. The ability to raise additional finance is critical to the group’s growth objective. The Directors are confident in their ability to finance future projects and opportunities by raising funds in the market.

The Directors and management are continually monitoring and managing the Company’s operations closely in response to COVID-19.

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the Group and Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the UK, and as regards the Company financial statements, as applied in accordance with the provisions of the Companies Act 2006. Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group and Company for that period. In preparing these financial statements, the directors are required to:

-              select suitable accounting policies and then apply them consistently;

-              state whether applicable IFRSs have been followed, subject to any material departures disclosed and explained in the financial statements;

-              make judgements and accounting estimates that are reasonable and prudent; and

-              prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the financial statements comply with the Companies Act 2006.

The directors are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

DISCLOSURE OF INFORMATION TO THE AUDITORS

In the case of each of the persons who are directors of the Company at the date when this report is approved:

-              So far as each director is aware, there is no relevant audit information of which the Company’s auditors are unaware; and

-              Each of the directors has taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the auditors are aware of the information.

AUDITOR

Moore Kingston Smith LLP were appointed in the year and have expressed their willingness to continue in office as auditor and it is expected that a resolution to reappoint them will be proposed at the next annual general meeting.

The Board as a whole considers the appointment of external auditors, including their independence, specifically including the nature and scope of non-audit services provided.

CORPORATE GOVERNANCE

The Company has set out its full Corporate Governance Statement on page 12.

BOARD OF DIRECTORS

The Company supports the concept of an effective Board leading and controlling the Company. The Board of Directors is responsible for approving Company policy and strategy. It meets regularly and has a schedule of matters specifically reserved to it for decision. All Directors have access to advice from independent professionals at the Company's expense. Training is available for new and existing Directors, as necessary.

The Board consists of the Non-Executive Chairman, Bruce Fulton, Chief Executive Officer, Brett Boynton, Executive Director, Sam Quinn and Non-Executive director, Dennis Edmonds.

Since Admission to the AQUIS Stock Exchange on 25 June 2018, the Board has established properly constituted audit, remuneration and AQUIS Stock Exchange compliance committees with formally delegated duties and responsibilities, a summary of which is set out below.

AUDIT COMMITTEE

The Audit Committee comprises Bruce Fulton (Non-Executive Chairman), Sam Quinn and the Chief Financial Officer, Anne Adaley. The Committee meets at least twice a year and is responsible for ensuring the financial performance of the Company is properly reported on and monitored. It liaises with the auditor and reviews the reports from the auditor relating to the financial statements.

REMUNERATION COMMITTEE

The Remuneration Committee comprises Bruce Fulton (Non-Executive Chairman) and Sam Quinn. The Committee meets at least twice a year and is responsible for reviewing the performance of Executive Directors and sets the scale and structure of their remuneration on the basis of their service agreements, with due regard to the interests of the shareholders and the performance of the Company.

AQUIS STOCK EXCHANGE COMPLIANCE COMMITTEE

The role of the AQUIS Stock Exchange compliance committee is to ensure that the Company has in place sufficient procedures, resources and controls to enable it to comply with the AQUIS Stock Exchange Rules. The AQUIS Stock Exchange compliance committee make recommendations to the Board and proactively liaise with the Company’s AQUIS Stock Exchange Corporate Adviser on compliance with the AQUIS Stock Exchange Rules. The AQUIS Stock Exchange compliance committee also monitors the Company’s procedures to approve any share dealings by directors or employees in accordance with the Company’s share dealing code. The members of the AQUIS Stock Exchange compliance committee are Brett Boynton (Non-Executive Chairman), Sam Quinn and Dennis Edmonds.

SHARE DEALING CODE

The Company has adopted a share dealing code for dealings in securities of the Company by directors and certain employees which is appropriate for a company whose shares are traded on the AQUIS Stock Exchange. This will constitute the Company’s share dealing policy for the purpose of compliance with UK legislation including the Market Abuse Regulation and the relevant part of the AQUIS Stock Exchange Rules. It should be noted that the insider dealing legislation set out in the UK Criminal Justice Act 1993, as well as provisions relating to market abuse, also apply to the Company and dealings in Ordinary Shares.

COMMUNICATIONS WITH SHAREHOLDERS

Communications with shareholders are given a high priority by the management. In addition to the publication of an annual report and an interim report, there is regular dialogue with shareholders and analysts. The Annual General Meeting is viewed as a forum for communicating with shareholders, particularly private investors. Shareholders may question the Managing Director and other members of the Board at the Annual General Meeting.

INTERNAL CONTROL

The Directors acknowledge they are responsible for the Company’s system of internal control and for reviewing the effectiveness of these systems. The risk management process and systems of internal control are designed to manage rather than eliminate the risk of the Company failing to achieve its strategic objectives. It should be recognised that such systems can only provide reasonable and not absolute assurance against material misstatement or loss. The Company has well established procedures which are considered adequate given the size of the business.

REMUNERATION

The remuneration of the directors has been fixed by the Board as a whole. The Board seeks to provide appropriate reward for the skill and time commitment required so as to retain the right calibre of director at a cost to the Company which reflects current market rates.

Details of directors’ fees and of payments made to directors for professional services rendered are set out in Note 8 to the financial statements and details of the directors’ share options are set out in the Directors’ Report.

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE ANNUAL FINANCIAL REPORT

We confirm that to the best of our knowledge:

-              the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

-              the Directors’ report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

This information is given and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 2006.

This report was approved by the Board of Directors on 15 December 2021 and signed on its behalf by:

Brett Boynton
Chief Executive Officer

CORPORATE GOVERNANCE STATEMENT

The Company is committed to maintaining the highest standards in corporate governance throughout its operations and to ensure all of its practices are conducted transparently, ethically and efficiently. The Company believes scrutinising all aspects of its business and reflecting, analysing and improving its procedures will result in the continued success of the Company and deliver value to shareholders. Therefore, and in accordance with the Aquis Growth Market Apex Rule Book, (the “AQSE Rules”), the Company has chosen to formalise its governance policies by complying with the UK's Quoted Companies Alliance Corporate Governance Code 2018 (the "QCA Code").

The Board currently consists of four Directors: a Chief Executive Officer (Brett Boynton) an Executive Director (Sam Quinn), and two independent Non-Executive Directors (NEDs) being Bruce Fulton as Non-Executive Chairman and Dennis Edmonds. The Board considers that appropriate oversight of the Company is provided by the currently constituted Board.

QCA Code

The 10 principles set out in the QCA Code are listed below, with an explanation of how the Company applies each of the principles and the reason for any aspect of non-compliance.

Principle 1 - Establish a strategy and business model which promotes long-term value for shareholders.

The strategic vision of the Company is to successfully finance, manage and develop its large-scale Intrusion Related Gold System assets in Central and Northeast Queensland, Australia.

The Company’s business model and strategy is outlined on a yearly basis in the Chief Executive Officer’s Statement in the Annual Report.

Principle 2 - Seek to understand and meet shareholder needs and expectations.

The Board values the importance of interacting with our shareholders, explaining strategy and developments in the businesses and seeking shareholder views and opinions. We also value the input of our advisers, including our AQSE Growth Market Corporate Adviser and broker and auditors. The Board is committed to maintaining good communications and having constructive dialogue with its shareholders. Institutional shareholders and analysts have the opportunity to discuss issues and provide feedback at meetings with the Company. As a policy, all shareholders are encouraged to attend the Company’s Annual General Meeting and any other General Meetings that are held throughout the year, although the Directors recognise that this has not been possible during the pandemic lockdown.

Investors also have access to current information on the Company through its website www.tectonicgold.com and through the Chief Executive Officer who is available to answer investor relations enquiries at: admin@signaturegold.com.au. The Company provides regulatory, financial and business news updates through the Regulatory News Service in accordance with AQSE Rules.

Principle 3 - Take into account wider stakeholder and social responsibilities and their implications for long term success.

There are a number of key relationships and resources that are fundamental to the Company's success, which include, amongst other things, relationships with, advisors, consultant suppliers, contractors, employees and potential investors. These relationships are key components to the successful running of the Company’s investments and are reviewed by the Board and management on a regular basis to ensure that all potential risks are mitigated. To the extent any issues or concerns come to light following such review, or upon engagement with such stakeholders, the Company seeks to address matters in an expeditious manner in order to preserve and strengthen relationships.

The Board recognises that the long-term success of the Company will be enhanced by good relations with different internal and external groups and to understand their needs, interest and expectations, the Board has established a range of processes and systems to ensure that there is ongoing two-way communication, control and feedback processes in place with to enable appropriate and timely response.

Principle 4 - Embed effective risk management, considering both opportunities and threats, throughout the organisation.

The Board regularly reviews the risks to which the Company is exposed and ensures through its meetings and regular reporting that these risks are minimised as far as possible whilst recognising that its business opportunities carry an inherently high level of risk. The principal risks and uncertainties facing the Company are detailed in the Risk Factors report of the Company’s Admission Document and updated in the annual report and accounts, which are available on the Company’s website www.tectonicgold.com. The Board has established an audit committee with formally delegated duties and responsibilities, details of which are included below.

Principle 5 - Maintain the Board as a well-functioning, balanced team led by the Non-Executive Chairman.

The Board’s role is to agree the Company’s long-term direction and strategy and monitor achievement of key milestones against its business objectives. The Board meets formally at least four times a year for these purposes and holds additional meetings when necessary to transact other business. The Board receives reports for consideration on all significant strategic, operational and financial matters.

The Board is comprised of a Chief Executive Officer, an Executive Director and two independent Non-Executive Directors (NEDs) of which one is Non-Executive Chairman. Each Director serves on the Board until the Annual General Meeting following his election or appointment. Each member of the Board is committed to spending sufficient time to enable them to carry out their duties as a Director. The Board meets regularly throughout the year as deemed appropriate formally and informally, in person and by telephone.

The Company constantly keeps under review the constitution of the Board and may seek to add more members as required as the Company grows and develops.

The Board as a whole considers the NEDs to be independent of management and free from any business or other relationship which could materially interfere with the exercise of their independent judgement.

The Board has implemented an effective committee structure to assist in the discharge of its responsibilities. All committees of the Board have written terms of reference dealing with their authority and duties. Membership of the Audit and Remuneration Committees is comprised exclusively of Non-Executive Directors. The Company Secretary acts as secretary to each of these committees.

The table below sets out the number of Board and Committee meeting held during the period and each Director’s attendance at those meetings.

Principle 6 - Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities.

The Board considers the current balance of sector, financial and public market skills and experience which it embodies is appropriate for the size and stage of development of the Company and that the Board has the skills and requisite experience necessary to execute the Company’s strategy and business plan whilst also enabling each Director to discharge their fiduciary duties effectively. Biographies for each member of the Board is provided on the Company’s website www.tectonicgold.com.

All Directors, through their involvement in other listed companies as well as the Company, including attendance at seminars, forums and industry events and through their memberships of various professional bodies, keep their skill sets up to date.

The Board reviews annually, and when required, the appropriateness of its mix of skills and experience to ensure that it meets the changing needs of the Company.

The Company has a professional Company Secretary in the UK who assists the Chief Executive Officer in preparing for and running effective Board meetings, including the timely dissemination of appropriate information. The Company Secretary provides advice and guidance to the extent required by the Board on the legal and regulatory environment. In addition, the Board’s finance function is supported by a CFO who is engaged by the Company to provide accounting and finance services.

Principle 7 - Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement.

Review of the Company’s progress against the long-term strategy and aims of the business provides a means to measure the effectiveness of the Board. This progress is reviewed in Board meetings held at least four times a year. The Chief Executive Officer’s performance is reviewed once a year by the rest of the Board and measured against a definitive list of short, medium and long-term strategic targets set by the Board.

The Company conducts periodic reviews of its Board succession planning protocols which includes an assessment of the number of Board members and relative experience of each Board member vis-a-vis the Company’s requirements given its stage of development, with the goal of having in place an adequate and sufficiently experienced Board at all times.

Principle 8 - Promote a corporate culture that is based on ethical values and behaviours.

The corporate culture of the Company is promoted throughout its employees and contractors and is underpinned by compliance with local regulations and the implementation and regular review and enforcement of various policies including a Share Dealing Policy and Code, Anti-Corruption and Anti-Bribery and Media and Communications Policy so that all aspects of the Company are run in a robust and responsible way.

The Board recognises that its decisions regarding strategy and risk will impact the corporate culture of the Company and that this will impact performance. The Board is very aware that the tone and culture set by the Board will greatly impact all aspects of the Company and the way that employees behave. The exploration for, and development of, mineral resources can have a significant impact in the areas where the Company and its investments are active and it is important that the communities view its activities positively. Therefore, the importance of sound ethical values and behaviours is crucial to the ability of the Company to successfully achieve its corporate objectives. The Board places great importance on this aspect of corporate life and seeks to ensure that this is reflected in all the Company does.

Principle 9 - Maintain governance structures and processes that are fit for purpose and support good decision- making by the Board.

The Board is responsible for setting the vision and strategy for the Company to deliver value to the Company’s shareholders by effectively putting in place its business model.

The roles and responsibility of the Chief Executive Officer, Non-Executive Chairman and other Directors are laid out below:

•              The Chief Executive Officer’s primary responsibilities are to: implement the Company’s strategy in consultation with the Board; take responsibility for the Company’s projects; run the Company on a day-by-day basis; implement the decisions of the Board; monitor, review and manage key risks; act as the Company’s primary spokesman; communicate with external audiences such as investors, analysts and media; and be responsible for the administration of all aspects of the Company.

•              The Non-Executive Chairman’s primary responsibilities are to: lead the Board and to ensure the effective working of the Board; in consultation with the Board, ensure good corporate governance and set clear expectations with regards to the Company culture, values and behaviour; set the Board’s agenda and ensures that all Directors are encouraged to participate fully in the decision-making process of the Board and take responsibility for relationships with the Company’s professional advisers and major shareholders.

•              The Company’s NED'S participate in all Board level decisions and play a particular role in the determination and articulation of strategy. The Company’s NED’s provide oversight and scrutiny of the performance of the Executive Directors, whilst both constructively challenging and inspiring them, thereby ensuring the business develops, communicate and execute the agreed strategy and operate within the risk management framework.

•              The Company Secretary is responsible for ensuring that Board procedures are followed and applicable rules and regulations are complied with.

The Board is supported by the audit and remuneration committees as described below.

The Board has not established a Nominations Committee. The Board considers that a separately established committee is not warranted at this stage of the Group’s development and that the functions of such a committee are being adequately discharged by the Board as a whole.

Audit Committee

The Audit Committee comprises two non-executive Directors, Bruce Fulton and Dennis Edmonds and the Chief Executive Officer, Brett Boynton.

The Audit Committee reviews reports from management and from Moore Kingston Smith LLP, the Company’s statutory auditor, relating to the interim and annual accounts and to the system of internal financial control.

The Audit Committee is responsible for assisting the Board’s oversight of the integrity of the financial statements and other financial reporting, the independence and performance of the auditor, the regulation and risk profile of the Company and the review and approval of any related party transactions. The Audit Committee may hold private sessions with management and the auditor without management present. Further, the Audit Committee is responsible for making recommendations to the Board on the

appointment of the auditor and the audit fee and reviews reports from management and the auditor on the financial accounts and internal control systems used throughout the Group. The Audit Committee meets at least two times a year and is responsible for ensuring that the Company’s financial performance is properly monitored, controlled and reported. The Audit Committee is responsible for the scope and effectiveness of the external audit and compliance by the Company with statutory and other regulatory requirements.

With respect to the auditor, the Audit Committee:

•              monitors in discussion with the auditor the integrity of the financial statements of the Company, any formal announcements relating to the Company’s financial performance and reviews significant financial reporting judgments contained in them;

•              reviews the Company’s internal financial controls and reviews the Company’s internal control and risk management systems;

•              considers annually whether there is a need for an internal audit function and makes a recommendation to the Board;

•              makes recommendations to the Board for it to put to the shareholders for their approval in the general meeting, in relation to the appointment, re-appointment and removal of the auditor and to approve the remuneration and terms of engagement of the auditor;

•              reviews and monitors the auditor’s independence and objectivity and the effectiveness of the audit process, taking into consideration relevant professional and regulatory requirements;

•              develops and implements policy on the engagement of the auditor to supply non-audit services, taking into account relevant external guidance regarding the provision of non-audit services by the auditor; and

•              reports to the Board, identifying any matters in respect of which it considers that action or improvement is needed and making recommendations as to the steps to be taken.

The Audit Committee also reviews arrangements by which the staff of the Company and the Company may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters and ensure that arrangements are in place for the proportionate and independent investigation of such matters with appropriate follow-up action.

Where necessary, the Audit Committee obtains specialist external advice from appropriate advisers.

Remuneration Committee

The Remuneration Committee comprises Non-Executive Directors, Sam Quinn and Bruce Fulton.

The Remuneration Committee is responsible for considering all material elements of remuneration policy, the remuneration and incentivisation of Executive Directors and senior management (as appropriate) and to make recommendations to the Board on the framework for executive remuneration and its cost. The role of the Remuneration Committee is to keep under review the Company’s remuneration policies to ensure that the Company attracts, retains and motivates the most qualified talent who will contribute to the long-term success of the Company. The Remuneration Committee also reviews the performance of the Chief Executive Officer and sets the scale and structure of his remuneration, including the implementation of any bonus arrangements, with due regard to the interests of shareholders.

The Remuneration Committee is also responsible for granting options under the Company’s share option plan and, in particular, the price per share and the application of the performance standards which may apply to any grant, ensuring in determining such remuneration packages and arrangements, due regard is given to any relevant legal requirements, the provisions and recommendations in the AQSE Rules and The QCA Code.

The Remuneration Committee:

•              determines and agrees with the Board the framework or broad policy for the remuneration of the Chief Executive Officer and senior management;

•              determines the remuneration of Non-Executive Directors;

•              determines targets for any performance-related pay schemes operated by the Company;

•              ensures that contractual terms on termination and any payments made are fair to the individual, the Company, that failure is not rewarded and that the duty to mitigate loss is fully recognised;

•              determines the total individual remuneration package of the Chief Executive Officer and senior management, including bonuses, incentive payments and share options;

•              is aware of and advises on any major changes in employees’ benefit structures throughout the Company

•              ensures that provisions regarding disclosure, including pensions, as set out in the (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019, are fulfilled; and

•              is exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the Remuneration Committee.

Principle 10 - Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.

The Board is committed to maintaining good communication and having constructive dialogue with its shareholders. Institutional shareholders and analysts have the opportunity to discuss issues and provide feedback at meetings with the Company.

The Company also provides regular updates on the progress of the Company, detailing recent business and strategy developments, in news releases which is available on the Company's website www.tectonicgold.com.

The Company’s financial reports can be found on its website www.tectonicgold.com. The Company has elected to preference hosting its AGMs in London. The Directors believe hosting the AGM in London will enhance engagement with the Company's shareholders by making the meeting more accessible, however with consideration for the current COVID related restrictions to Directors attending in person, the AGM will be held in Sydney for the foreseeable future.

The Company also participates in various investor events including conferences and presentation evenings, at which shareholders can meet with management in person to answer queries, provide information on current developments and to take into consideration shareholder views and suggestions.

The Board is always open to receiving feedback from shareholders. The Chief Executive Officer has been appointed to manage the relationship between the Company and its shareholders and will review and report to the Board on any communications received.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TECTONIC GOLD PLC

For the year ended 30 June 2021

Opinion

We have audited the financial statements of Tectonic Gold Plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 30 June 2021 which comprise the Consolidated Statement of Profit or Loss and Other Comprehensive Income, the Consolidated and Company Statements of Financial Position, the Consolidated and Company Statements of Changes in Equity, the Consolidated and Company Statements of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the UK and as regards the parent company financial statements, as applied in accordance with the provision of the Companies Act 2006.

In our opinion:

-              the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 30 June 2021 and of the group’s loss for the year then ended;

-              the group financial statements have been properly prepared in accordance with UK adopted international accounting standards;

-              the parent company financial statements have been properly prepared in accordance with UK adopted international accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and

-              the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

An overview of the scope of our audit

The scope of our audit was influenced by our evaluation of materiality and our assessment of the risks of material misstatement in the group and parent company financial statements. In particular, we assessed the areas involving significant accounting estimates and judgement by the directors as risks for our audit. This included the carrying value of exploration assets and investments as well as future events that are inherently uncertain and could have an impact on the group and parent company’s ability to continue as a going concern. These were judged to be the most significant assessed risks of material misstatement and therefore reported as key audit matters below.

The significant component based in Australia was audited by a component auditor. We had oversight of, and regular communication with, the component auditor who was operating under our instructions. The component auditor supplied their working papers for our review. This, along with further discussions with the component auditor, gave us sufficient appropriate evidence for our audit opinion on the Group financial statements.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Our application of materiality

When establishing our overall audit strategy, we set certain thresholds which help us to determine the nature, timing and extent of our audit procedures. When evaluating whether the effects of misstatements, both individually and on the financial statements as a whole, could reasonably influence the economic decisions of the users of the financial statements we take into account the qualitative nature and the size of the misstatements. Based on our professional judgement, we determined materiality as follows:

Overall materiality

Our overall Group materiality is £75,000 and the Company materiality is £72,000. Materiality for the significant component, Signature Gold Pty Ltd, was set at £47,000 based on 1.4% of gross assets.

Basis for determining overall materiality

Our materiality is based upon 1.7% of gross assets. The rationale for our materiality calculation is that the Group and Company are still in the exploration stage and therefore no significant revenues are currently being generated. Current and potential investors will thus be most interested in the level and recoverability of the gross assets, in particular the exploration and evaluation assets. Gross assets is thus considered to be the most appropriate benchmark for determining overall materiality.

Performance materiality

Our Group, Company and significant component performance materiality figures have been calculated as £37,500, £36,000 and

£23,500 respectively which have been calculated as 50% of overall materiality.

Reporting of misstatements to the Audit Committee

We agreed with the Audit Committee that we would report all individual audit differences in excess of £3,750 and £3,600 in respect of the Group and Company respectively. We also agreed to report differences below that threshold that, in our view, warranted reporting on qualitative grounds.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the group and parent company financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Conclusions relating to going concern

In auditing the financial statements we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the group and parent company’s ability to continue to adopt the going concern basis of accounting included included critical assessment of the forecasts for twelve months from the date of approval of the audit report with appropriate sensitivity analysis, challenging management as to the assumptions used in the forecasts and consideration of the post-period end performance of the Group including a review of the available banking and loan facilities available and assessment of the likelihood of the receipt of the Research & Development Tax Incentive Claim rebate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group’s and company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and those of the directors with respect to going concern are described in the relevant sections of this report.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-              the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-              the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

-              adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-              the parent company financial statements are not in agreement with the accounting records and returns; or

-              certain disclosures of directors’ remuneration specified by law are not made; or

-              we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the preparation of the group and parent company financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the group and parent company financial statements, the directors are responsible for assessing the group’s and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities is located on the Financial Reporting Council’s website at:https://www.frc.org.uk/auditors/auditor-assurance/auditor-s-responsibilities-for-the-audit-of-the-fi/description-of- the-auditor's-responsibilities-for.

. This description forms part of our auditor’s report.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatemen t due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.

Our approach was as follows:

-              We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK adopted international accounting standards, the rules of the Aquis Exchange and UK and Australian taxation legislation.

-              We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.

-              We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.

-              We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.

-              Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non- compliance with laws and regulations that are not closely related to events and transactions reflected in the financial state ments. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Matthew Banton (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP, Statutory Auditor

16 December 2021
Devonshire House
60 Goswell Road
London, EC1M 7AD

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2021

The accompanying notes form part of these financial statements.

STATEMENTS OF FINANCIAL POSITION

AS AT 30 JUNE 2021

As permitted by s408 Companies Act 2006, the Company has not presented its own profit and loss account and related notes. The Company’s loss for the year was £214,747 (2020: Profit of £178,567).

These financial statements were approved by the Board of Directors on 15 December 2021 and signed on their behalf by:

Brett Boynton
Chief Executive Officer
Company number:
05173250

The accompanying notes form part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2021

The accompanying notes form part of these financial statements.

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2021

The accompanying notes form part of these financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2021

The accompanying notes form part of these financial statements.

COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2021

The accompanying notes form part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2021

1.            GENERAL INFORMATION

Tectonic Gold Plc is a company incorporated in England and Wales under the Companies Act 2006. The nature of the Company’s operations and its principal activities are set out in the Strategic Report and the Directors’ Report on pages 6 and 8.

2.            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PREPARATION

The consolidated and parent company financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the UK applied in accordance with the provisions of the Companies Act 2006.

The consolidated and parent company financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities at fair value through profit or loss.

IFRS is subject to amendment and interpretation by the International Accounting Standards Board (“IASB”) and the International Financial Standards Interpretations Committee (“IFRS IC”). The accounts have been prepared on the basis of the recognition and measurement principles of IFRS that were applicable at 30 June 2021.

This financial report includes the consolidated financial statement and notes of Tectonic Gold Plc and its controlled entities.

The principal accounting policies adopted and applied in the preparation of the Group’s financial statements are set out below. These have been consistently applied to all the years presented unless otherwise stated.

GOING CONCERN

Any consideration of the foreseeable future involves making a judgement, at a particular point in time, about future events which are inherently uncertain. The ability of the Group and Company to carry out their planned business objectives is dependent on the continuing ability to raise adequate financing from equity investors and/or the achievement of profitable operations.

The adoption of the going concern basis of preparation of the financial statements by the Directors is following a review of the current position of the Company and Group and the forecasts for the next 12 months from the date of signing of these financial statements. Cash on hand and tradable securities together with the funds expected from the Australian Government R&D Tax Incentive and Warrants expiring in February 2022 (See Note 22) are more than sufficient to enable the Company and Group to meet its obligations as they fall due and continue to operate for at least twelve months from the date of signing these financial statements. Thus, the directors continue to adopt the going concern basis in preparing the financial statements. It is beyond the scope of the Directors to predict any future impact of COVID-19 on any of these funding sources however and if for any reason it is not possible to sell any tradeable securities or State Government funding is not secured, this may impact the ability of the Group and Company to meet their obligations and continue to operate as envisaged, although the Directors consider this scenario to be remote.

CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

New standards, amendments and interpretations adopted by the Group and Company

During the reporting period, the Group adopted all of the new and revised Standards and Interpretations issued that are relevant to its operations and effective for reporting periods beginning on 1 July 2020. The Group has not elected to early adopt any new standards or amendments.

The directors note that the impact of the initial application of the Standards and Interpretations which have been issued but which are not yet effective is not yet known or is not reasonably estimable and is currently being assessed.

Accounting standards and interpretations not yet effective

At the date of authorisation of the financial statements, the Standards and Interpretations that were issued but not yet effective are listed below:

•              Annual Improvements to IFRS Standards 2018–2020 (effective 1 January 2022)

•              IFRS 7, IFRS 9 & IAS 39 (amendments) regarding replacement issues in the context of the IBOR reform (effective 1 January 2021)

•              IFRS 3 Business Combinations amendments (effective 1 January 2022)

•              IFRS 16 Amendment to IFRS 16, ‘Leases’ – Covid-19 related rent concessions (effective 1 January 2022)

•              IFRS 17 Insurance Contracts (effective 1 January 2023)

•              IAS 1 (amendments) regarding the presentation of financial statements on classification of liabilities as Current or Non-current (effective 1 January 2023)

•              IAS 1 (amendments) Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies (effective 1 January 2023)

•              IAS 8 Amendments to Accounting Policies, Changes in Accounting Estimates and Errors (amendments regarding the definition of material) (effective 1 January 2023)

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

•              IAS 16 (amendments) prohibiting a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use (effective 1 January 2022)

•              IAS 37 (amendments) regarding the costs to include when assessing whether a contract is onerous (effective 1 January 2022)

None of these is expected to have a significant effect on the consolidated financial statements of the Group or Company.

BASIS OF CONSOLIDATION

Where the Group has control over an investee, it is classified as a subsidiary. The Group controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the end of the reporting period. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as for the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances. All intra-group balances, balances and unrealised gains and losses resulting from intra-group transactions and dividends are eliminated in full.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

On 25 June 2018, Tectonic Gold (the legal parent) acquired Signature Gold Pty Ltd (Signature Gold). Although the transaction was not a business combination, the acquisition has been accounted for as an asset acquisition with reference to the guidance for reverse acquisition in IFRS 3 Business Combinations and IFRS 2 Share-based Payment.

On 14 February 2020, the Company established Whale Head Minerals Pty Ltd. This Company has remained dormant since the date of incorporation to the end of the reporting period.

The financial information for the reporting period includes that of Tectonic Gold Plc and its controlled entities for the whole reporting period.

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS

Investments are initially measured at fair value plus directly attributable incidental acquisition costs. Subsequently, they are measured at fair value in accordance with IFRS 9. This is either the bid price or the last traded price, depending on the convention of the exchange on which the investment is quoted.

Investments are recognised as financial assets at fair value through the profit or loss. Gains and losses on measurement are recognised in other comprehensive income except for impairment losses and foreign exchange gains and losses on monetary items denominated in a foreign currency, until the assets are derecognised, at which time the cumulative gains and losses previously recognised in other comprehensive income are recognised in the income statement.

The Company assesses at each year-end date whether there is any objective evidence that a financial asset or group of financial assets classified as available-for-sale has been impaired. An impairment loss is recognised if there is objective evidence that an event or events since initial recognition of the asset have adversely affected the amount or timing of future cash flows from the asset. A significant or prolonged decline in the fair value of a security below its cost shall be considered in determining whether the asset is impaired.

INVESTMENTS

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less impairment losses.

JOINT VENTURE

A joint venture is an arrangement that the Group controls jointly with one or more other investors, and over which the Group has rights to a share of the arrangement’s net assets rather than direct rights to underlying assets and obligations for underlying liabilities. A joint arrangement in which the Group has direct rights to underlying assets and obligations for underlying liabilities is classified as a joint operation.

FOREIGN CURRENCIES

The Group and Company’s financial statements are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of these financial statements, the results and financial position are expressed in Pounds Sterling, which is the presentation currency of the Group and Company.

Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the income statement. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period, except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.

When a decline in the fair value of a financial asset has been previously recognised in other comprehensive income and there is objective evidence that the asset is impaired, the cumulative loss is removed from other comprehensive income and recognised in the income statement. The loss is measured as the difference between the cost of the financial asset and its current fair value less any previous impairment.

For the purpose of presenting the Group and Company financial statements, the assets and liabilities of any of the Group and Company’s operations that are overseas are translated at exchange rates prevailing on the year-end date. Income and expense items are translated at the average exchange rates for the period.

Any translation differences on consolidation are recognised in Other Comprehensive Income.

TAXATION

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the year end date.

The research and development tax incentive claim is recognised as income tax revenue in the period in which it is received.

Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and where they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

EXPLORATION AND EVALUATION EXPENDITURE

Exploration expenditure incurred is accumulated in respect of each identifiable area of interest, net of any related grant income received. These costs are only carried forward to the extent that they are expected to be recovered through the successful development or sale of the area or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves.

Accumulated costs in relation to an abandoned area are written off in full against profit or loss in the year in which the decision to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to the area of interest.

Exploration and evaluation assets are assessed for impairment annually or when facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable amount in accordance with IFRS 6.

PROPERTY, PLANT AND EQUIPMENT

Items of property, plant and equipment are recorded at cost and depreciated as outlined below: Depreciation of Property, Plant and Equipment

Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment over its expected useful life for the entity. Estimates of remaining useful lives are made on a regular basis for all assets with annual reassessments for major items. The expected useful lives are as follows: Plant and equipment - 5 years.

IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENT

At each financial year end date, the Company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash- generating unit to which the asset belongs.

If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount and the impairment loss is recognised as an expense immediately.

When an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

NON-CURRENT ASSETS (OR DISPOSAL GROUPS) HELD-FOR-SALE AND DISCONTINUED OPERATIONS

Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell. A discontinued operation is a component of the Group that is classified as held for sale and that represents a separate line of business or geographical area of operations. The results of discontinued operations are presented separately in the Consolidated Income Statement.

TRADE RECEIVABLES, LOANS AND OTHER RECEIVABLES

Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified under ‘loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short term receivables when the recognition of interest would be immaterial.

Other receivables, that do not carry any interest, are measured at their nominal value as reduced by any appropriate allowances for irrecoverable amounts.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash on hand and other short-term bank deposits.

FINANCIAL LIABILITIES

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial liabilities’.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. Subsequent measurement is at amortised cost using the effective interest method. The Group’s financial liabilities include trade and other payables.

A financial liability is held for trading if it meets one of the following conditions:

•              It is incurred principally for the purpose of repurchasing it in the near term;

•              On initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking; or

•              It is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument).

There were no financial liabilities ‘at FVTPL’ during the current, or preceding, period.

OTHER FINANCIAL LIABILTIES AND SHORT-TERM BORROWINGS

Interest-bearing loans and overdrafts are recorded at the proceeds received, net of direct issue costs. Finance charges are accounted for on an accruals basis in profit or loss using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. Other short-term borrowings being intercompany loans and unsecured convertible loan notes issued in the year are recognised at amortised cost net of any financing or arrangement fees.

TRADE PAYABLES

Trade payables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

SHARE-BASED PAYMENTS

The Company has applied the requirements of IFRS 2 Share-based Payment.

The Company operates an equity-settled share-based payment scheme under which share options are issued to certain employees. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company’s estimate of shares that will eventually vest and adjusted for the effect of non-market-based vesting conditions.

Fair value is measured by use of the Black Scholes model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

EQUITY INSTRUMENTS INCLUDING SHARE CAPITAL

Equity instruments issued by the Company are recorded at the proceeds received, net of incremental costs attributable to the issue of new shares.

An equity instrument is any contract that evidences a residual interest in the assets of a company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received net of direct issue costs. Share capital represents the amount subscribed for shares at nominal value.

The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits. Any bonus issues are also deducted from share premium.

The reverse takeover reserve represents the adjustment to reflect the reverse takeover of Signature Gold.

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries on consolidation.

The warrant reserve represents the fair value of warrants granted to employees and suppliers for services provided to the Group. The fair value of warrants is expensed over the vesting period or during the period in which the services are received.

Accumulated losses include all current and prior period results as disclosed in the Statement of Profit and L:oss and Other Comprehensive Income.

2.            CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATIONS

In the application of the Company’s accounting policies, which are described in note 2, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period. Judgements and estimates that may affect future periods are as follows:

SHARE BASED PAYMENTS

The calculation of the fair value of equity-settled share-based awards and the resulting charge to the Statement of Profit and Loss and Other Comprehensive Income requires assumptions to be made regarding future events and market conditions. These assumptions include the future volatility of the Company’s share price. These assumptions are then applied to a recognised valuation model in order to calculate the fair value of the awards. The charge to the Statement of Profit and Loss and Other Comprehensive Income for the reporting period is £139,462 (2020: £Nil).

TREATMENT OF EXPLORATION AND EVALUATION COSTS

Exploration expenditure incurred is accumulated in respect of each identifiable area of interest, net of any related grant income received. These costs are only carried forward to the extent that they are expected to be recovered through the successful development or sale of the area or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves. The carrying value carried forward at 30 June 2021 is £3,016,512 (2020: £2,695,681).

Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to the area of interest.

The value of the Group’s exploration and evaluation expenditure will be dependent upon the success of the Group in discovering economic and recoverable mineral resources. It is also dependent on the Group successfully renewing its licences.

The future revenue flows relating to these assets is uncertain and will also be affected by competition, relative exchange rates and potential new legislation and related environmental requirements.

3.            SEGMENTAL INFORMATION

The Chief Operating Decision Maker of the Group is the Board of Directors. The Group operates in one industry segment being mineral exploration. Information is therefore shown for geographical segments.

All additions to intangible assets occurred in the Australian reporting segment.

All additions to intangible assets occurred in the Australian reporting segment.

4.            REVENUE

5.            OPERATING (LOSS)/PROFIT

6.            AUDITORS’ REMUNERATION

7.            STAFF COSTS

During the comparative reporting period, consulting fees totalling £14,428 was paid to Zeg Choudhry, former Director of Tectonic Gold Plc. There were no other fees paid to directors during the reporting period nor in the comparative reporting period.

8.            TAXATION

No deferred tax asset has been recognised in respect of the losses. At the end of the reporting period the Group had unused tax losses of £2,256,240 (2020: £2,235,596). Where it is anticipated that future taxable profits will be available against which these losses will be utilised, a deferred tax asset is recognised. The total taxation charge in future periods will be affected by any changes to the corporation tax rates in force in the countries in which the Group operates.

The Finance Bill in the United Kingdom had its third reading on 24 May 2021 and is now considered substantially executed. The deferred tax assets have thus been restated at the 25% main rate of corporation tax which will apply from 1 April 2023.

9.            (LOSS)/EARNINGS PER SHARE

As detailed in note 22 there are 148,161,362 share options/warrants which are anti-dilutive in the year ended 30 June 2021.

10.          CASH AND CASH EQUIVALENTS

The Directors consider the carrying amount of cash and cash equivalents approximates to their fair value.

11.          TRADE AND OTHER RECEIVABLES

No receivables were past due or provided for at the year-end or at the previous year end. The Directors consider the carrying amount of trade and other receivables approximates to their fair value.

The loan to subsidiary undertaking is unsecured, interest free and repayable on demand.

12.          NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

On 17 June 2020, the Company sold 90% of the investment in Deep Blue Minerals Pty Ltd to Align Capital via a write- off of the loan from Align of £100,000.

The results of the discontinued operations which have been included in the Consolidated Statement of Profit and Loss and Other Comprehensive Income, were as follows:

During the 2020 comparative year, Deep Blue Minerals Pty Ltd contributed to the Group’s cash flows as follows:

13.          PROPERTY, PLANT AND EQUIPMENT

14.          EXPLORATION AND EVALUATION EXPENDITURE

The ultimate recoupment of balances carried forward in relation to areas of interest still in the exploration or valuation phase is dependent on successful development, and commercial exploitation, or alternatively sale of the respective areas.

15.          FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS

Investment in VOX Royalty Corp Plc

On 2 September 2019, the Company announced the sale of its 2.5% royalty interest in Bass Metals’ Graphmada graphite mine to Silverstream SEZC for a consideration of up to A$550,000 in cash and convertible notes. The Company received a CAD $250,000 one year 5% unsecured convertible note maturing on 27 August 2020 with the balance of the consideration due in cash subject to performance milestones.

The Convertible Note of CAD $250,000 was settled on 25 May 2020 with the issue of 98,039 shares in VOX Royalty Corp (VOX) (formerly Silverstream SEZC) at a price of CAD $3.00 per share less 15% discount which amounts to CAD

$2.55 per share.

On 1 March 2021, the Company sold 65,539 shares held in VOX at CAD $3.23 per share raising CAD $211,777 (£123,622). As at 30 June 2021, the Company held 32,500 shares in VOX. The closing price as at 30 June 2021 was CAD $2.43 (2020: CAD $3.85).

Investment in Kazera Global Plc

On 31 August 2020, the Company acquired 20 million shares in Kazera Global Plc priced at 0.5p per share, under the terms of the transaction for the sale of Deep Blue Minerals Pty Ltd announced on 4 June 2020. Funds for the share purchase were provided by way of a Director’s Loan from B Boynton. The loan is unsecured, interest free and repayable on demand.

The closing price as at 30 June 2021 was 1.5p per share.

Measurement of fair value of financial instruments

The management team of Tectonic Gold perform valuations of financial items for financial reporting purposes, with everything being a Level 1 listed investment. Valuation techniques are selected based on the characteristics of each instrument, with the overall objective of maximising the use of market-based information.

16.          CONTROLLED ENTITIES

Details of controlled entities are as follows:

(i)            Signature Gold Pty Ltd was converted from a Public Limited Company to a Private Limited Company on 3 June 2019.

(ii)           Deep Blue Minerals Pty Ltd was incorporated on 17 April 2019 and 90% of the Company’s interest in Deep Blue Minerals Pty Ltd was sold on 17 June 2020. The Company retains an interest of 10% in the Company as at 30 June 2021.

(iii)          Whale Head Minerals Pty Ltd was incorporated on 14 February 2020.

17.          OTHER ASSETS

(i)            In 2018 the Company paid Titeline Drilling Pty Ltd ACN 096 640 201 (Titeline) for future drilling services in accordance with the heads of agreement dated 28 March 2018 between Titeline, Signature Gold and Tectonic Gold.

(ii)           Titeline has been engaged to complete 10,000 meters of diamond drilling to produce core samples for analysis, assay and metallogenic studies from the Company’s Biloela Project site. A review to be completed after 2,500 metres of drilling has been completed and the completion program for the remaining 7,500 metres to be mutually agreed.

As at 30 June 2021, the balance of the prepayment to Titeline is £339,522 (A$625,386) (2020: £349,341) (A$625,386).

18.          TRADE AND OTHER PAYABLES

The Directors consider the carrying amount of trade payables approximates to their fair value.

19.          BORROWINGS

(i)            The loans from 33^rd Degree Pty Ltd, a company of which Brett Boynton is a director and majority shareholder, outstanding at the end of the reporting period and comparative periods do not accrue interest and are not due to be repaid on or before 12 months after the end of each reporting period.

(ii)           Signature Gold and shareholder Consolidated Minerals Pte Ltd, a resources and infrastructure investment fund based in Singapore, are evaluating international IRGS assets as cooperative opportunities. The parties expect to settle the loan as part of an agreement on one or more of these projects either in equity via an acquisition or merger or as a joint venture interest via a farm in. This is not expected to complete prior to 30 June 2022.

The Directors consider the carrying amount of short-term borrowings approximates to their fair value.

20.          ISSUED CAPITAL

Fully Paid Ordinary Shares

Reconciliation of share issued during the reporting period is set out below:

Each ordinary share carries the right to be one vote at shareholders’ meetings and is entitled to participate in any dividends or other distributions of the Company.

21.          SHARE BASED PAYMENTS

The following share-based payment arrangements were in existence during the reporting period:

*Drill Warrants expired 30 days after the Company published the results of its drilling programme.

The weighted average remaining contractual life of warrants and share options outstanding at the end of the reporting period is 2.2 years.

*Expected volatility was based on the standard deviation of historic closing prices from September 2020 to April 2021.

22.          RESERVES

The Foreign Currency Translation Reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries on consolidation.

The Option Reserve represents the fair value of options granted to employees and suppliers for services provided to the Group. The fair value of options is expensed over the vesting period or during the period in which the services are received.

The Reverse Takeover Reserve represents the adjustment needed to reflect the reverse takeover of Signature Gold which was completed on 25 June 2018.

23.          CASH FLOW INFORMATION

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Cash and cash equivalents at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows:

Non-cash financing and investing activities

There were no non-cash financing and investing activities during the year.

24.          FINANCIAL INSTRUMENTS

Financial assets by category

The IFRS 9 categories of financial assets included in the Statement of Financial Position and the headings in which they are included are as follows:

Financial liabilities by category

The IFRS 9 categories of financial liability included in the Statement of Financial Position and the headings in which they are included are as follows:

The following are the Group’s contractual maturities of financial liabilities, including estimated interest payments:

Capital risk management

The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of debt, (previously includes the borrowings) cash and cash equivalents and equity attributable to equity holders of the Company, comprising issued capital, reserves and accumulated losses, all as disclosed in the Statement of Financial Position.

Financial risk management objectives

The Group is exposed to a variety of financial risks which result from both its operating and investing activities. The Group’s risk management is coordinated by the board of directors and focuses on actively securing the Group’s short to medium term cash flows by minimising the exposure to financial markets.

The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market price risk.

Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. Since 25 June 2018. the Company’s major activity is now investment in Australia through its subsidiary Signature Gold, bringing exposure to the exchange rate fluctuations of GBP/£ Sterling with Australian Dollars.

Exchange rate exposures are managed within approved policy parameters. The Company does not enter into forward exchange contracts to mitigate the exposure to foreign currency risk as amounts paid and received in specific currencies are expected to largely offset one another and the currencies most widely traded are relatively stable.

The Directors consider the balances most susceptible to foreign currency movements to be the net assets of Signature Gold for the Group.

The following table illustrates the sensitivity of the value of the foreign currency denominated assets in regard to the change in AUD exchange rates.

It assumes a +/- 15% change in the AUD/GBP exchange rate for the year ended 30 June 2021 (2020:15%).

Impact of exchange rate fluctuations

Exposure to foreign exchange rates varies during the year depending on the volume and nature of foreign transactions. Nonetheless, the analysis above is considered to be representative of the Group’s exposure to currency risk.

Interest rate risk management

The Group’s exposure to interest rates on financial assets and financial liabilities is detailed in the liquidity risk management section of this note.

There are no long-term loans or short-term loans that carry any interest and thus sensitivity analyses have not been provided on the exposure to interest rates for both derivatives and non-derivative instruments during the year.

There would have been no effect on amounts recognised directly in equity.

Credit risk management

The Group's financial instruments, which are subject to credit risk, are considered to be cash and cash equivalents and trade and other receivables, and its exposure to credit risk is not material. The credit risk for cash and cash equivalents is considered negligible since the counterparties are reputable banks.

The Group’s maximum exposure to credit risk is £589,246 (2020: £54,599) comprising other receivables, investments and cash.

Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which monitors the Group’s short, medium and long-term funding and liquidity management requirements on an appropriate basis. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities. The Group’s liquidity risk arises in supporting the trading operations in the subsidiaries, which hopefully will start to generate profits and positive cash-flows in the short term. However, as referred to in Note 3 the Group is currently exposed to significant liquidity risk and needs to obtain external funding to support the Group going forwards.

25.          RELATED PARTY DISCLOSURES

Group and the Company 2021

(i)            The remuneration of the Directors, who are the key management personnel of the Group, is set out in Note 8.

(ii)           Loans from the related parties are disclosed in Note 20.

(iii)          On 31 August 2020, the Company acquired 20 million shares in Kazera Global Plc priced at 0.5p per share, under the terms of the transaction for the sale of Deep Blue Minerals Pty Ltd announced on 4 June 2020. Funds for the share purchase totalling £100,000 were provided by way of a Director’s Loan from B Boynton. The loan does not accrue interest. For further detail, refer to Note 16.

As at 30 June 2021, 33^rd Degree Pty Ltd had advanced £156,685 (2020: £56,685) to the Group as detailed in note

20. These loans are interest free and is not required to be repaid on or before 30 June 2022.

2020

(i)            During the comparative reporting period, consulting fees totalling £14,428 were paid to Zeg Choudhry, former Director of Tectonic Gold Plc.

(ii)           As at 30 June 2020, 33^rd Degree Pty Ltd had advanced A$25,000 (2019: A$25,000) to Signature Gold Pty Ltd. This loan is interest free and was not required to be repaid on or before 30 June 2021.

(iii)          On 17 June 2020, the balance owing to B Boynton from Deep Blue Minerals Pty Ltd was £56,685 (2019: £68,124). On the date of sale of Deep Blue Minerals Pty Ltd being 17 June 2020, this loan was assigned to Tectonic Gold Plc. This loan is unsecured, interest free and not required to be repaid on or before 30 June 2022.

26.          CAPITAL COMMITMENTS

Exploration Lease Expenditure Commitments

In order to maintain the Company’s tenements in good standing with Queensland Mines and Energy, the Company will be required to incur exploration expenditure under the terms of each licence. It is likely that the granting of new licences and changes in the terms of each licence will change the expenditure commitment from a to time.

27.          CONTINGENT ASSET

The Group, through its subsidiary undertaking, Signature Gold Pty Ltd, has successfully renewed its Australian Federal Tax Government Research & Development Tax Incentive Scheme participation in November 2021. Whilst there can be no certainty of a successful claim and rebate under the Scheme the Group expects an eventual rebate of approximately AUD$275,000 to be received in respect of the year ended 30 June 2021.

28.          EVENTS AFTER THE REPORTING PERIOD

On 17 September 2021, the Company announced that it has issued 2,608,695 ordinary shares at a price of 1.15p per share ("New Ordinary Shares") to professional advisors for services rendered to the Company.

On 17 September 2021 the Company sold 20 million shares in Kazera Global Plc and exercised warrants to acquire 10 million shares in Kazera Global Plc with the right to a further 5 million warrants subject to holding the Kazera shares for at least of three months.

On 30 September 2021, the Company announced that its diamond and heavy minerals investment partner, Kazera Global Plc had exercised its option under the 4 June 2020 agreement (June 2020 agreement), to acquire a 60% interest in Whale Head Minerals Pty Ltd, the Company’s South African mineral sands subsidiary.

Under the June 2020 agreement, Tectonic Gold will retain a non-diluting 10% interest in Whale Head. The Kazera equity being issued as consideration is being assigned to Consolidated Minerals Pte, the group that laid much of the groundwork for this project and the issuance of this equity extinguishes a legacy loan of A$279,732 from Consolidated Minerals Pte to Tectonic Gold. Consolidated Minerals Pte is a long-term partner and Tectonic Gold will be holding their equity in trust. For further detail, refer to the Company’s Release on 30 September 2021.

Other than as stated elsewhere in this report, Directors are not aware of any other matters or circumstances at the date of this report that have significantly affected or may significantly affect the operations, the results of the operations or the state of affairs of the Company in subsequent financial years.

29.          PRIOR YEAR ADJUSTMENT

The directors have re assessed the classification of the loan to subsidiary undertaking, Signature Gold Pty Ltd, at the year-end in the company statement of financial position and consider that it should be disclosed within current assets. The prior year comparative has also been restated to reclassify the loan from non-current to current assets. At the year-end non-current and current assets have decreased and increased by £1,845,673 respectively. There is no impact on net assets nor on the net result for the year.

DISTRIBUTION

Copies of these financial statements is available on the Company's website (www.tectonicgold.com) or directly from the Company at its registered address.

For further information, please contact:

Ends