Chesterfield Resources : Annual Report And Financial Statements For The Year Ended 31 December 2023

Registered number: 10545738

CHESTERFIELD RESOURCES PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED

31 DECEMBER 2023

CHESTERFIELD RESOURCES PLC

CONTENTS

	Page
Company Information	1
Chairman's Review	2
Group Strategic Report	3
Directors' Report	7
Directors' Responsibilities Statement	10
Corporate Governance Report	11
Directors' Remuneration Report	13
Independent Auditor's Report	17
Group Statement of Comprehensive Income	22
Group and Company Statement of Financial Position	23
Group Statement of Changes in Equity	24
Company Statement of Changes in Equity	25
Group and Company Statement of Cash Flows	26
Notes to the Financial Statements	27

CHESTERFIELD RESOURCES PLC

COMPANY INFORMATION

Directors	Ajay Kejriwal
	Paul Ensor
	David Cliff (resigned 16 March 2024)
	Evgeny Vrublevskiy (resigned 25 September 2023)
	Kashif Afzal (appointed 23 September 2023)
Company Secretary	Westend Corporate LLP
Registered Office	6 Heddon Street, London, W1B 4BT
Auditors	PKF Littlejohn LLP
	Statutory Auditor
	15 Westferry Circus
	Canary Wharf
	London
	E14 4HD
Brokers	Peterhouse Capital Limited
	80 Cheapside
	London
	EC2V 6DZ
Solicitors	Hill Dickinson
	The Broadgate Tower
	20 Primrose Street
	London
	EC2A 2EW
Bankers	Barclays Bank plc
	1 Churchill Place
	Canary Wharf
	London
	E14 5HP
Registrars and Transfer Office	Neville Registrars Limited
	Neville House
	Steelpark Road
	Halesowen
	B62 8HD
Website	www.chesterfieldplc.com

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CHESTERFIELD RESOURCES PLC

CHAIRMAN'S REVIEW

Dear Shareholders,

During 2023, Chesterfield continued to streamline its operations whilst focusing extensively on cost control, all whilst positioning the company, both financially and operationally, to best be able to exploit new opportunities as they arise.

Cyprus

The retained licences, in the Westline Trend enjoy a history of positive drill results as previously announced. During 2023 Chesterfield has been evaluating the merits of both partnerships with third parties to explore the licences further and to independently continue a programme of exploration.

Whilst no acceptable partnership or joint venture agreement has been reached the company continues to focus on possible ways to work the licences whilst passing the capital risk to third parties. Due to the significant decrease in expenditure within the three retained areas in Cyprus, the Directors concluded that an impairment charge of £897,395 was necessary for the year ended 31 December 2023.

Canada

The Adeline project has been optioned to Sterling Metals (SAG.V) and they have the ability to exercise their option to fully acquire the Adeline Project by November 2024.

In the meantime, responsibility for exploring the licence area and to maintain them in good standing is borne by Sterling metals entirely at their cost.

During 2023, Sterling announced a highly successful private placement, continued work at Sail Pond, and the commencement of a 1,930-meter diamond drilling program at Adeline. In December 2023 the initial assay results of the drilling campaign were released and indicated the possibility of a big metal district at Adeline.

In 2024 Sterling, in whom Chesterfield is already a significant shareholder, announced its intention to acquire the Copper Road project in Ontario.

It is expected that during 2024 Sterling will acquire the Adeline project from Chesterfield in consideration for additional cash and shares in Sterling.

Corporate Changes

In recent months Chesterfield has appointed new brokers, Peterhouse Capital, and announced several changes to the Board. David Cliff has stepped down and I would like to thank him for his wonderful contribution to Chesterfield over the last several years.

Ajay Kejriwal and Paul Ensor have moved to Non-Executive roles and I have been appointed Executive Chairman.

Costs are at an absolute minimum whilst we preserve cash for business development and avoid shareholder dilution as much as possible.

Financial Review

The loss of the Group for the year ended 31 December 2023 amounted to £1,911,855 (year ended 31 December 2022: loss of £3,659,387).

The Group's cash position at 31 December 2023 was £278,675 (2022: £304,022).

Outlook

Chesterfield continues to seek new opportunities and is consistently evaluating many such possibilities. Whilst no transaction is imminent, I am of the belief that a shareholder accretive opportunity will be executed in due course and that is a key objective for me in 2024 and beyond.

I would like to thank shareholders and stakeholders for their continued support in 2023 and look forward to updating the market as developments occur.

Kashif Afzal

Executive Chairman

29 April 2024

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CHESTERFIELD RESOURCES PLC

GROUP STRATEGIC REPORT

The Directors of the Company and its subsidiary undertakings (which together comprise the "Group") present their Strategic Report on the Group for the year ended 31 December 2023.

Strategic Approach

The Group's aim is to create value for shareholders through the discovery and development of economic mineral deposits. The Group's strategy is to evaluate its existing and new mineral resource opportunities.

Organisation Overview

The Group's business is directed by the Board and is managed on a day-to-day basis by the one Executive director being Kashif Afzal. The Board monitors compliance with objectives and policies of the Group through monthly performance reporting, budget updates and periodic operational reviews.

The Corporate Head Office of the Group is located in London, UK, and provides corporate support services to the overseas operations. Overseas operations are managed in Cyprus and Canada.

As at 31 December 2023, the Board comprised of two Executive Directors and two Non-Executive Directors as detailed below:

Ajay Kejriwal - Executive Director

Mr Kejriwal has over 30 years of experience in finance and commerce, having worked for Morgan Stanley, Cazenove and Nomura, in London and Hong Kong. Mr Kejriwal is a Chartered Accountant, having qualified with PriceWaterhouseCoopers in 1994. He has considerable experience in the junior resource sector and is a specialist in structuring transactions.

Paul Ensor - Executive Director

Mr Ensor has 30 years' experience in institutional equity markets having worked for Baring Securities, CLSA and UBS in Hong Kong and South-East Asia. Since his return to London, Mr Ensor has advised on growth strategies for a number of junior companies, principally in the natural resources sector. He has notable experience in new business development and financing.

David Cliff - Non-Executive Director

Mr Cliff has over 50 years in exploration and mine geology. Previously he had over 26 years at Rio Tinto including five as Exploration Manager Europe. He has a BSc Hons in Geology and is a Chartered Engineer and Member of the Institute of Materials, Minerals and Mining.

Kashif Afzal - Non-Executive Director

Mr Afzal, is a British businessman based in the UAE, and a graduate of Oxford University and the professional programme at the Camborne School of Mines. In addition to Juniper International FZ LLC, Mr Afzal is an advisor to a number of institutional and family office investors and a Director of Blockbase Asia and RMH International.

As at 29 April 2024, the Board consisted of one Executive Director and two Non-Executive Directors.
During the year the Group had the following gender composition of employees and directors:
Gender Composition	Male	Female
Directors (1) (2)	5	0
Employees	0	0
(1)	Evgeny Vrublevskiy resigned during the year.
(2)	David Cliff resigned 19 March 2024.

In 2023, 0% of the board was made up of women. As the Company grows and develops it is eager to increase its gender diversity by appointing more women to its Board, adding new perspectives and contributions. However, at present the Board and Company remains fairly small.

One third of the Company's board is formed of individuals from ethic minority backgrounds, as defined by the Listing Rules.

Review of Business

The Group has undertaken a review of its exploration portfolio. On 3 March 2023 company granted an option to acquire its Adeline Project to Sterling Metals (SAG.V) and has reduced the size of the licence holding in Cyprus in order to better focus on the most prospective licences. In 2022, there was an extensive reassessment of the portfolio in Cyprus, which resulted in a substantial relinquishment of licences. The three remaining licences are AE4664, AE4672 and AE4673.

Financial Performance Review

The loss of the Group for the year ended 31 December 2023 amounts to £1,911,855 (year ended 31 December 2022: loss of £3,659,387).

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CHESTERFIELD RESOURCES PLC

GROUP STRATEGIC REPORT

The Board monitors the activities and performance of the Group on a regular basis. The Board uses financial indicators based on budget versus actual to assess the performance of the Group. The indicators set out below will continue to be used by the Board to assess performance over the year to 31 December 2024. The Group is committed to best practice in energy consumption, social, community and human rights issues however given the Groups size it does not separately disclose these matters in this report.

The three main KPIs for the Group are as follows. These allow the Group to monitor costs and plan future exploration and development activities:

KPI	2023	2022
Cash and cash equivalents (£)	278,675	304,022
Administrative expenses as a percentage of total assets	90%	30%
Exploration costs capitalised during the period (£)	27,367	462,587

Cash has been used to fund the Group's operations and facilitate its investment activities (refer to the Statement of Cash Flows on page 26).

Administrative expenses are the expenses related to the Group's ability to run the corporate functions to ensure they can perform their operational commitments.

Exploration costs capitalised during the year consist of exploration expenditure on the Group's exploration licences, net of foreign exchange rate movements and excludes the fair value uplift of acquisitions. During the year exploration costs were capitalised however at 31 December 2023 the Group revaluated the carrying amount of the exploration costs and concluded that the carrying amount exceeded the recoverable amount resulting in a full impairment in accordance with IAS36.

Principal Risks and Uncertainties

The management of the business and the execution of the Group's strategy are subject to a number of risks. The key business risks affecting the Group are set out below.

Risks are formally reviewed by the Board, and appropriate processes are put in place to monitor and mitigate them. If more than one event occurs, it is possible that the overall effect of such events would compound the possible adverse effects on the Group.

Exploration risks

The exploration and mining business are controlled by a number of global factors, principally supply and demand which in turn is a key driver of global mineral prices; these factors are beyond the control of the Group. Exploration is a high-risk business and there can be no guarantee that any mineralisation discovered will result in proven and probable reserves or go on to be an operating mine. At every stage of the exploration process the projects are rigorously reviewed to determine if the results justify the next stage of exploration expenditure ensuring that funds are only applied to high priority targets.

The principal asset of the Group, comprising the mineral exploration licences, are subject to certain financial and legal commitments. If these commitments are not fulfilled the licences could be revoked. They are also subject to legislation defined by the Cypriot and Canadian Governments; if this legislation is changed it could adversely affect the value of the Group's assets.

Dependence on key personnel

The Group and Company is dependent upon its executive management team and various technical consultants. Whilst it has entered into contractual agreements at market rates with the aim of securing the services of these personnel, the retention of their services cannot be guaranteed. The development and success of the Group depends on its ability to recruit and retain high quality and experienced staff. The loss of the service of key personnel or the inability to attract additional qualified personnel as the Group grows could have an adverse effect on future business and financial conditions.

Uninsured risk

The Group, as a participant in exploration and development programmes, may become subject to liability for hazards that cannot be insured against or third-party claims that exceed the insurance cover. The Group may also be disrupted by a variety of risks and hazards that are beyond its control, including geological, geotechnical and seismic factors, environmental hazards, industrial accidents, occupation and health hazards and weather conditions or other acts of God.

Funding risk

The only sources of funding currently available to the Group are through the issue of additional equity capital in the parent company in discrete tranches or through bringing in partners to fund exploration and development costs. The Company's ability to raise further funds will depend on the success of the Group's exploration activities and its investment strategy. The Company may not be successful in procuring funds on terms which are attractive and, if such funding is unavailable, the

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CHESTERFIELD RESOURCES PLC

GROUP STRATEGIC REPORT

Group may be required to reduce the scope of its exploration activities or relinquish some of the exploration licences held for which it may incur fines or penalties.

Political risk

All of the Group's operations are located in a foreign jurisdiction. As a result, the Group is subject to political, economic and other uncertainties, including but not limited to, changes in policies or the personnel administering them, terrorism, appropriation of property without fair compensation, cancellation or modification of contractual rights, foreign exchange restrictions and currency fluctuations.

Financial Risks

The Group's operations expose it to a variety of financial risks that can include market risk (including foreign currency, price and interest rate risk), credit risk, and liquidity risk. The Group has a risk management programme in place that seeks to limit the adverse effects on the financial performance of the Group by monitoring levels of debt finance and the related finance costs. The Group does not use derivative financial instruments to manage interest rate costs and, as such, no hedge accounting is applied.

Details of the Group's financial risk management policies are set out in Note 3 to the Financial Statements.

Section 172(1) Statement - Promotion of the Company for the benefit of the members as a whole

The Directors 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 operates as a base metal's exploration business, which is inherently speculative in nature and, without regular income, is dependent upon fund-raising for its continued operation. The pre-revenue nature of the business is important to the understanding of the Company by its members, employees and suppliers, and the Directors are as transparent about the cash position and funding requirements as is allowed under LSE regulations.

The application of the s172 requirements can be demonstrated in relation to the some of the key decisions made during 2023:

• Continuing evaluation of existing license areas and assessment of targets
• Cost control measures including cuts in exploration and related staffing and other overhead cost. Management have been able to significantly reduce outgoings both to service providers and the Board;
• Consider the likely consequences of any decision in the long term;
• continued to carry out extensive work to examine a number of possible options for the Group to make an investment into new opportunities with the goal of finding new business activity that will generate significant shareholder value;
• Granted Sterling Metals the option to acquire its' Adeline Project;
• Foster the Company's relationships with suppliers, customers and others, and
• Keeping costs at an absolute minimum whilst preserving cash for business development.

As a mining exploration Company operating in Cyprus and Canada, the Board takes seriously its ethical responsibilities to the communities and environment in which it works. We abide by the local and relevant UK laws on anti-corruption & bribery. Wherever possible, local communities are engaged in the geological operations and support functions required for field operations, providing much needed employment and wider economic benefits to the local communities. In addition, we follow international best practise on environmental aspects of our work.

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CHESTERFIELD RESOURCES PLC

GROUP STRATEGIC REPORT

Our goal is to meet or exceed standards, in order to ensure we obtain and maintain our social licence to operate from the communities with which we interact. The interests of our employees are a primary consideration for the Board. An inclusive share-option programme allows them to share in the future success of the Company, personal development opportunities are supported and a health and security support network is in place to assist with any issues that may arise on field expeditions.

The Group Strategic Report was approved by the Board on 29 April 2024.

Kashif Afzal

Executive Chairman

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CHESTERFIELD RESOURCES PLC

DIRECTORS' REPORT

The Directors present their annual report on the affairs of Chesterfield Resources plc together with the audited Financial Statements for the year ended 31 December 2023.

Dividends

The Directors do not recommend the payment of a dividend for the year (2022: nil).

Directors & Directors' Interests

The Directors who served during the year ended 31 December 2023 are shown below and had, at that time, the following beneficial interests in the shares of the Company:

	31 December 2023	31 December 2022
	Ordinary	Options &	Ordinary	Options &
	Shares	Warrants	Shares	Warrants
Ajay Kejriwal	150,000	1,100,000	150,000	1,100,000
David Cliff(3)	450,000	785,000	450,000	1,950,000
Paul Ensor	172,841	750,000	172,841	750,000
Evgeny Vrublevskiy(1)	-	-	-	-
Kashif Afzal(2)(4)	23,333,334	-	-	-

1. Evgeny Vrublevskiy resigned 25 September 2023
2. Kashif Afzal was appointed 23 September 2023
3. David Cliff resigned 19 March 2024
4. Kashif Afzal's shares are held via Juniper International FZ LLC which he holds a 100% interest in.

Further details on options can be found in Note 21 to the Financial Statements.

Substantial Shareholders

The substantial shareholders with more than a 3% shareholding at 29 April 2023 are shown below:

	Holding	Percentage
Juniper International FZ LLC (1)(2)	23,333,334	17.9%
Altius Minerals	10,089,199	7.7%

1. Kashif Afzal is the Director and owner of Juniper International FZ LLC.
2. The final completion of the sale of the shares from Polymetal International plc to Juniper International FZ LLC remains subject to certain regulatory considerations and it is expected that formal notification will be issued upon completion of the remaining formalities as announced on 25 September 2023.

Corporate Responsibility

Environmental

Chesterfield undertakes its exploration activities in a manner that minimises or eliminates negative environmental impacts and maximises positive impacts of an environmental nature. Chesterfield is a mineral explorer, not a mining company. Hence, the environmental impact associated with its activities is minimal. To ensure proper environmental stewardship on its projects, Chesterfield conducts certified baseline studies prior to all drill programmes and ensures that areas explored are properly maintained and conserved.

As an exploration stage business, the Group's operations are at a relatively small scale. As such, the Group's environmental impact is relatively small when compared with larger businesses in the sector. Nevertheless, the Board recognises its responsibility to protect the environment (particularly as the business scales up) and is fully committed to conserving natural resources and striving for environmental sustainability, by ensuring that its facilities are operated to optimise energy usage; minimise waste production; and protect nature and people.

Current UK based annual energy usage and associated annual GHG emissions are reported pursuant to the Companies and Limited Liability Partnerships Regulations 2018 that came into force 1 April 2019. Energy use and associated GHG emissions are reported as defined by the operational control approach. The minimum mandatory requirements set out in the 2018 Regulations requires reporting of UK based energy use and emissions. The Group has a small carbon footprint in the UK as most of the directors' work from home. As a result, the energy usage in the UK is below 40,000KWh (2022: below 40,000 KWh) and therefore, Greenhouse gas emissions, energy consumption and energy efficiency disclosures have not been provided in the Annual Report

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CHESTERFIELD RESOURCES PLC

DIRECTORS' REPORT

As the Group's operations scale up, it will continue to monitor its energy use and its status as a low energy user. The Group will seek to collect, structure, and effectively disclose related performance data for the material, climate-related risks and opportunities identified where relevant.

Health and safety

Chesterfield operates a comprehensive health and safety programme to ensure the wellness and security of its employees. The control and eventual elimination of all work-related hazards requires a dedicated team effort involving the active participation of all employees. A comprehensive health and safety programme is the primary means for delivering best practices in health and safety management. This programme is regularly updated to incorporate employee suggestions, lessons learned from past incidents and new guidelines related to new projects with the aim of identifying areas for further improvement of health and safety management. This results in continuous improvement of the health and safety programme. Employee involvement is regarded as fundamental in recognising and reporting unsafe conditions and avoiding events that may result in injuries and accidents.

Internal Controls

The Board recognises the importance of both financial and non-financial controls and has reviewed the Group's control environment and any related shortfalls during the period. Since the Group was established, the Directors are satisfied that, given the current size and activities of the Group, adequate internal controls have been implemented. Whilst they are aware that no system can provide absolute assurance against material misstatement or loss, in light of the current activity and proposed future development of the Group, continuing reviews of internal controls will be undertaken to ensure that they are adequate and effective.

Corporate Governance

The statement on corporate governance can be found in the Corporate Governance Report on page 11 of these Financial Statements. The Corporate Governance Report forms part of this directors' report and is incorporated into it by cross reference. The Group is committed to diversity of age, gender, educational and professional backgrounds however given the Groups size it does not have a specific policy in place.

Supplier payment policy

The Group's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).

The Group's current policy concerning the payment of trade creditors is to:

• settle the terms of payment with suppliers when agreeing the terms of each transaction;
• ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
• pay in accordance with the Group's contractual and other legal obligations.

Going Concern

The Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future and, therefore, continue to adopt the going concern basis in preparing the Annual Report and Financial Statements.

Whilst the Directors are of the view that the Group will have sufficient funds, taking into consideration Sterling Metals (SAG.V) ability to exercise their option to fully acquire the Adeline Project by November 2024 and ability to raise additional funds by the sale of the SAG.V shares. Notwithstanding, the current conditions do indicate the existence of a material uncertainty that may cast significant doubt regarding the applicability of the going concern assumption and the auditors have made reference to this in their audit report. The Directors are confident in the Company's ability to realise additional funds as required within the next 12 months. Thus, they continue to adopt the going concern basis of accounting preparing these financial statements.

Further details on their assumptions and their conclusion thereon are included in the statement on going concern included in Note 2.3 to the Financial Statements.

Directors' and Officers' Indemnity Insurance

The Group has made qualifying third-party indemnity provisions for the benefit of its Directors and Officers. These were made during the period and remain in force at the date of this report.

Events after the reporting period

Events after the reporting date are detailed in Note 24.

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