TIDMPREM
RNS Number : 6072E
Premier African Minerals Limited
30 June 2023
30 June 2023
Premier African Minerals Limited
Final Results
Premier African Minerals Limited ("Premier" or the "Company"),
the AIM-traded, multi-commodity mining and natural resource
development company focused on Southern Arica, is pleased to
announce publication of its audited Annual Report and Accounts for
the year ended 31 December 2022 (the "Annual Report").
The Annual Report is available on the Company's website,
www.premierafricanminerals.com and is in the process of being
posted to Shareholders.
The Annual Report for the year ended 31 December 2022 is set out
in full below.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 as it forms part of
UK Domestic Law by virtue of the European Union (Withdrawal) Act
2018.
The person who arranged the release of this announcement on
behalf of the Company was George Roach.
Enquiries:
George Roach Premier African Minerals Tel: +27 (0) 100
Limited 201 281
Michael Cornish Beaumont Cornish Limited Tel: +44 (0) 20
/ Roland Cornish (Nominated Adviser) 7628 3396
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Douglas Crippen CMC Markets UK Plc Tel: +44 (0) 20
3003 8632
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John More/Toby Shore Capital Stockbrokers Tel: +44 (0) 20
Gibbs Limited 7408 4090
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PREMIER AFRICAN MINERALS LIMITED
ANNUAL REPORT
31 DECEMBER 2022
WWW.PREMIERAFRICANMINERALS .COM
(AIM:PREM)
CEO STATEMENT -Mr George Roach
2022 was every much as transformational as expected. Premier
African Minerals Limited ("Premier" or "Company") took the giant
step of commencing implementation of the Zulu Lithium and Tantalum
Project ("Zulu") build and thanks to almost unimaginable commitment
and determination from our staff and our contractors, and in the
face of one of the wettest seasons ever in Zimbabwe, we had looked
forward to mine build completion and start of production in Q1
2023. This was underpinned by continuing worldwide short supply of
spodumene and the inordinately high prices being reported. All this
was enabled by the commitment from Canmax Technologies Co Ltd. to
purchase our spodumene and to pay for the product in advance.
Thanks to this, Premier was placed in the enviable situation of
being able to proceed to mine build without completion of the
Definitive Feasibilty Study ("DFS"), and in effect to use the
"pilot" plant as the proving ground for a much larger and expanded
mining operation at Zulu in years to come. As subsequently
reported, however, the plant optimisation process and requirement
for plant modifications has resulted in significant delays.
In brief, the RHA Tungsten Mine ("RHA") has still not
progressed, and the ongoing impasse pertaining to future
development and funding remains. In effect, the plant at RHA is the
property of Premier but the claims that are held in a Zimbabwean
registered company are effectively owned 51% by an agency of the
Zimbabwe Government. Premier's historic spend is a matter of record
and the potential to bring RHA back into production remains good.
Premier remains committed to a return to production but on the
basis of equitable contribution to the projected costs or an
equitable dilution. I have no doubt that Premier will be able to
deploy parts if not all of the plant to other Zimbabwe based
projects within the next 12 months if there is no resolution to
this impasse.
Important to note is the progress at our claims located in the
Mutare Greenstone Belt in regard to which Li3 Resources Inc has
completed an earn-in to hold 50% of the ownership of the claims.
Exploration activities are underway and early results are most
encouraging. It is too early to predict an outcome to these
activities, but certain of the claims straddle pegmatites that
follow from neighbouring claims with a mine under development. I
would not be surprised to see another pilot plant construction like
Zulu under serious consideration at this site before we next report
annual financials.
Premier continues to hold minority positions in MN Holdings
Limited, the operator of the Otjozondu Manganese Mining Project in
Namibia and Vortex Limited ("Vortex"), who hold 36.7% of Circum
Minerals Limited, the owners of the Danakil Potash Project in
Ethiopia.
With our focus on Zulu, little has been achieved in regard to
Premier other projects. Once matters have been addressed at Zulu, I
expect that Premier other projects will start see receiving serious
attention in the coming year with a view to realising a return that
is closer to our original investments than the value we now have
elected to include these in our accounts.
_____________________
George Roach
Acting Chairman and Chief Executive Officer
30 June 2023
STRATEGIC REPORT
The strategic report provides a detailed assessment of the
activities of the Company during the period under review. It also
details the main objectives of the Company related to our portfolio
of assets. The principal risks and uncertainties associated with
our activities are outlined in a specific principal risks and
uncertainties section.
RHA
49% Interest owned by Premier
51% Locally indigenized owned by National Indigenisation and
Economic Empowerment Fund ("NIEEF") NIEEF is controlled by Ministry
of Mines and Mining Development
Despite indications to the contrary, nothing has changed. The
price of wolframite continues to suggest that RHA should be back
into production but with my reticence to commit more funds into RHA
under the present share ownership structure, I am unable to predict
when and if there will be a return to production. What is certain
is that with advances in other exploration in Zimbabwe and with a
need for additional comminution capacity at Zulu, most of the plant
at RHA will be relocated during the latter part of 2023 if we are
unable to resolve the present ownership status.
Recoverability of RHA Assets
The RHA assets remain fully impaired at this time and are likely
to so remain until we are able to conclude the discussions underway
at present.
Zulu
In September 2022 we broke ground. In February 2023 we ran
elements of the plant. In late March/early April 2023 we saw first
concentrates produced. Perhaps this was all just too good to be
without some setbacks. And there are and they are discussed below.
During the course of 2022, Premier secured the finance to construct
Zulu, continued with an exploration programme that generated
sufficient quality data as to give confidence to the secure
funding, and to commit to a novel approach to producing spodumene
concentrate using two different ore sorting techniques. And so we
come to the recent past and developments during this first six
months of 2023.
Much has been covered in various notifications and I will dwell
primarily on the issues faced since we first started the plant,
what is being done and what we should expect in the coming months.
It is important to note that the equipment manufacturers and
suppliers have an acknowledged responsibility to meet certain
deliverables that include correctly sized milled ore to the
floatation section. Equally important is the fact that the overall
operation of the plant remains under the day-to-day operational
control of the team at Stark Resources and this will continue until
the plant is fully optimised and signed over to Premier.
In summary, the plant required feed to the floatation section
that was correctly sized. Less than 20% of this requirement was met
and the result was that target production of concentrate could not
be achieved. It has also become clear that efficient running of the
overall plant is impossible at this reduced throughput. The
required fixes are now clear. The inability of the screening
systems to manage the required tonnage and the inability of the
milling system to deliver correctly sized tonnage at the required
rate will be addressed in two stages. This responsibility sits
squarely with the plant suppliers who intend to proceed firstly,
with the installation of a hydro sizing system. This equipment is
intended to deal with the quantity of material that the screens
could not and is expected to increase delivery of material
correctly sized to the float plant to about 50% of design
throughput.
Secondly, an additional conventional mill will be added to the
circuit and this will allow the plant to reach, or possibly exceed
the design throughput. Interestingly, it is possible that the mill
Premier already owns that is situated at RHA may fill this role. At
the same time that step one is in process, Stark Resources will
install the secondary UV based ore sorters that are expected to
increase the grade of ore delivered to the milling section, which
according to Stark Resources, should result in substantial
improvements in ore grade and both quality and quantity of
concentrate. With immediate availability of the sizer and the
simultaneous delivery of the UV sorters, the decision has been
taken to substantially reduce production and proceed with the
installation of these components immediately.
Whilst this will delay first shipment of concentrates, it is
expected to rapidly increase production after commissioning of
these components. Anticipated commissioning for first stage is in
early Q3 2023, and the second stage with the inclusion of an
additional mill is likely to complete Q4 2023. Production of
concentrate is expected to meet the original target of 4,000 ton
per month during Q4 2023. Following the failure of the plant
supplier to adequately and timeously communicate the issues set out
herein, Premier has revised internal monitoring and oversight of
procedures. And as reported on 26 June 2023, and for reasons set
out more fully in the Force Majeure notice that Premier served on
25 June 2023 under its agreement with Canmax dated 28 July 2022, a
formal state of Force Majeure is now in effect.
Extended Lithium Portfolio
In my summary a year ago, I referred to this as potentially, a
hidden gem considered of little value when Premier acquired a gold
prospect in Mozambique and this portfolio of hard-rock lithium
assets located in Zimbabwe from Lithium Consolidated Ltd ("Li3") on
the 28 July 2020. And how that has changed. With so much focus on
Zulu, the decision to conclude a 50/50 JV with Li3 Resources Inc
was easy and I am pleased to say that since Li3 has taken on
management of the project, there has been expansion of exploration
activity with surface trenching and commencement of drilling.
Early indications support the expectation that these claims may
well support another concentrate plant. With Zulu able to provide
substantial support in the evaluation of the resource and
accelerated studies, I expect to see rapid progress.
Turwi Gold Project
Premier acquired through an earn-in of $250,000 operational
control and 50% of this gold exploration project in Southeast
Zimbabwe. Early drilling intersected targets previously identified
and samples have been submitted for assay. Whilst it is early, that
target zones were intercepted as predicted from primary target
generation work is most encouraging. Details will be provided
together with first assay results as they become available.
MN Holdings Limited ("MNH")
This investment occurred at a time when Premier's very existence
was under threat and was seen as a low-cost entry point to
potential early revenue. Despite our best efforts, this has not
developed and continuing poor financial statements and reported
losses, have demonstrated that without direct operational
involvement by Premier, something not possible with our minority
interest, little is likely to change. Accordingly, we have now
decided that this investment should be written down and we will now
actively seek to exit. Under consideration is the potential sale of
MNH to an existing listed entity with the intention being that
payment is in listed securities that might be distributed to
Premier shareholders, should this materialise.
In the unaudited management accounts for year ended 30 June
2022, MNH's wholly-owned operating subsidiary, Otjozondu reported
revenue of approximately N$49 million (equivalent to $2.8 million)
and an operating loss before tax (and interest charges to group
companies) of approximately N$106.9 million (equivalent to $5.9
million). Total assets as at the same date amounted to
approximately N$126 million (equivalent to $7.2 million).
Vortex Limited (formerly Circum Minerals Limited "Circum")
Although the status in Ethiopia has improved, little has been
achieved. Frustrations related to cooperative agreements and
differing opinions on development of this outstanding worldclass
deposit, allied to the Ethiopian status continue to frustrate the
realisation of this investment. Accordingly, Premier has now in
these accounts reduced the carrying value of this asset in our
books. On the bright side of this, the cooperative agreement that
restricted Vortex from seeking a separate and independent way ahead
ended on 30 May 2023 and together with our partners in Vortex, we
will actively pursue a development course and independently of
other shareholders if necessary.
Funding
During the reporting period we raised net proceeds of $14.838
million (2020: of $3.609 million).
Principal activities and strategic review of the business
The principal activity of Premier and its subsidiary companies
(the Group) during the year under review is the mining,
exploration, evaluation development and investment in natural
resource properties on the African continent.
Premier was incorporated on 21 August 2007 in the British Virgin
Islands (BVI) as a BVI business company with number 1426861. The
registered office is Craigmuir Chambers, PO Box 71, Road Town,
Tortola, British Virgin Islands. The Company was admitted to
trading on the London Stock Exchange's AIM Market on 10 December
2012.
Objectives
During the current year, the primary focus will be:
* Optimise and stabilise profitable operations at Zulu
* Progress resource development within the Zulu EPO and
secure a Mining lease over prospective areas therein.
* Expand production at Zulu
* Seek to resolve the status of RHA, MNH and Vortex
* Identify and secure high value exploration targets in
other jurisdictions.
Principal risks and uncertainties
The Group is subject to a number of risks and uncertainties
which could have a material effect on its business, operations, or
future performance, including but not limited to:
Credit Risk
Credit risk is the risk of potential loss to the Company if
counterparty to a financial instrument fails to meet its
contractual obligations. The Company's credit risk is primarily
attributable to its liquid financial assets, including cash,
receivables, and balances receivable from the government. The
Company limits the exposure to credit risk in its cash by only
investing its cash with high-credit quality financial institutions
in business and savings accounts, guaranteed investment
certificates and in government treasury bills which are available
on demand by the Company for its programs. The Company does not
invest in money market funds. The Company has no risk exposure to
asset backed commercial paper or auction rate securities.
Refer to note 30 for the company's exposure to credit risk.
Liquidity Risk
Liquidity risk is the risk that the Company will not have the
resources to meet its obligations as they fall due. The Company
manages this risk by closely monitoring cash forecasts and managing
resources to ensure that it will have sufficient liquidity to meet
its obligations. Also refer to the going concern section below.
Refer to note 30 for the company's exposure to liquidity
risk.
Operating Risks
The activities of the Group are subject to all of the hazards
and risks normally incidental to exploring and developing natural
resource projects. These risks and uncertainties include, but are
not limited to environmental hazards, machinery and plant
breakdowns, industrial accidents, labour disputes, geo-political
risks, encountering unusual or unexpected geologic formations or
other geological or grade problems, unanticipated changes in rock
formation characteristics and mineral recovery, encountering
unanticipated ground or water conditions, land slips, flooding,
periodic interruptions due to inclement or hazardous weather
conditions and other acts of God or un-favourable operating
conditions and losses.
Should any of these risks and hazards affect the Group's
exploration, development or mining activities, it may cause the
cost of production to increase to a point where it would no longer
be economic to extract minerals from the Group's properties,
require the Group to write-down the carrying value of one or more
of its assets, cause delays or a stoppage of mining and processing,
result in the destruction of mineral properties or processing
facilities, cause death or personal injury and related legal
liability, any and all of which may have a material adverse effect
on the Group.
Early-stage Business Risk
The Group's success will depend on its ability to raise capital
and generate cash flows from production in the future at Zulu. The
board of directors manages this risk by monitoring cash levels and
reviewing cash flow forecasts on a regular basis. In particular,
the Group's success will depend on the successful commissioning,
modification and optimisation of the processing plant at Zulu and
there is no certainty that there may not be further unforeseen
delays, plant modifications or unanticipated costs.
Market Risk (exchange rates, commodity, and equity)
Market risk is the risk of loss that may arise from changes in
market factors such as interest rates, foreign exchange rates, and
commodity and equity prices. These fluctuations may be
significant.
Interest Rate Risk: The Company is exposed to interest rate risk
to the extent that its cash balances bear variable rates of
interest. The interest rate risks on cash and short-term
investments and on the Company's, obligations are not considered
significant.
Foreign Currency Risk: The Company is exposed to the financial
risk related to the fluctuation of foreign exchange rates against
the Company's functional currency, which is the United States
dollar ("USD"). The Company expects to continue to raise funds in
the United Kingdom. The Company conducts its business in Zimbabwe
with a significant portion of expenditures in that country
historically denominated in USD and now also in RTGS Dollars
("RTGS$"). The introduction of the RTGS$ during the 2019 financial
year has resulted in the devaluation of the RTGS$ against the US
Dollar. This devaluation has also resulted in the Zimbabwean
economy going into hyperinflationary status. The RTGS$ denominated
assets and liabilities are inflation adjusted at each reporting
period yielding foreign exchange gains or losses on conversion to
USD. Additionally, a portion of the Company's business is conducted
in South African Rands ("ZAR"). As such, it is subject to risk due
to fluctuations in the exchange rates between the USD and each of
the RTGS$, ZAR and GBP. A
significant change in the currency exchange rates between the
USD relative to foreign currencies could have an effect on the
Company's results of operations, financial position, or cash flows.
The Company has not hedged its exposure to currency
fluctuations.
Commodity Price Risk - Zulu value is largely related to the
price of lithium and the outlook on this mineral. Zulu has agreed a
minimum offtake price of US$2000 per ton until the 31 December 2022
with CanMax to mitigate commodity-based risks to the ongoing
operations.
The Company minority interest in MNH results in limited control
of how MNH mitigate the risk associated with Manganese price
fluctuations.
Refer to note 30 for the company's exposure to market risk.
Early-stage Project Risk
Zulu moved into early-stage production through the development
of a pilot plant without a DFS. In advancing Zulu to the stage
where it may be cash generative, many risks are faced including
without limitation, the inherent uncertainty of mining and
continuity of the mineral resource without a DFS support by a
measured category resource statement, the capital costs of
exploration and production, commodity pricing, operating in remote
and often politically unstable environment.
Environmental Risks and Hazards
All phases of the Group's operations are subject to
environmental regulation in the areas in which it operates.
Environmental legislation is evolving in a manner that may require
stricter standards and enforcement, increased fines and penalties
for non-compliance, more stringent environmental assessments of
proposed projects and a heightened degree of responsibility for
companies and their officers, directors, and employees. There is no
assurance that existing or future environmental regulation will not
materially adversely affect the Group's business, financial
condition, and results of operations. Environmental hazards may
exist on the properties on which the Group holds interests that are
unknown to the Group at present. The Board manages this risk by
working with environmental consultants and by engaging with the
relevant governmental departments and other concerned
stakeholders.
Licencing Risk
The Company's exploration and development activities are
dependent upon the grant of appropriate licences, concessions,
leases, permits and regulatory consents which may be withdrawn or
made subject to limitations or performance criteria. Such licences
and permits are as a practical matter subject to the discretion of
the applicable Government or Government office. The Group must
comply with known standards, existing laws and regulations that may
entail greater or lesser costs and delays depending on the nature
of the activity to be permitted. The interpretations, amendments to
existing laws and regulations, or more stringent enforcement of
existing laws and regulations could have a material adverse impact
on the Group's results of operations and financial condition.
Whilst the Company continually seeks to do everything within its
control to ensure that the terms of each licence are met and
adhered to, third parties may seek to exploit any technical
breaches in licence terms for their own benefit. There is a risk
that negotiations with a Government in relation to the grant,
renewal or extension of a licence may not result in the grant,
renewal or extension taking effect prior to the expiry of the
previous licence period, and there can be no assurance of the terms
of any extension, renewal, or grant.
Political and Regulatory Risk
The Group's operating activities in Africa, notably in Zimbabwe,
are subject to laws and regulations governing expropriation of
property, health and worker safety, employment standards, waste
disposal, protection of the environment, mine development, land and
water use, prospecting, mineral production, exports, taxes, labour
standards, occupational health standards, toxic wastes, the
protection of endangered and protected species and other matters.
The Group is dependent on the political and economic situation in
these countries and may be adversely impacted by political factors
such as expropriation, war, terrorism, insurrection, and changes to
laws governing mineral exploration and operations.
Internal Control and Financial Risk Management
The Board has overall responsibility for the Group's systems of
internal control and for reviewing their effectiveness. The Group
maintains systems which are designed to provide reasonable but not
absolute assurance against material loss and to manage rather than
eliminate risk.
The key features of the Group's systems of internal control are
as follows:
Management structure with clearly identified responsibilities.
Production of management information presented to the Board.
Day to day hands on involvement of the Executive Directors
and Senior Management.
Regular board meetings and discussions with the non-executive
directors.
The Group's activities expose it to a number of financial risks
including cash flow risk, liquidity risk and foreign currency risk.
The Group has identified certain short coming in the financial
control systems, which are currently in the process of being
addressed.
Disclosure of management's objectives, exposure, and policies in
relation to these risks can be found in note 30 to these financial
statements.
Environmental Policy
The Group is aware of the potential impact that its subsidiary
companies may have on the environment. The Group ensures that it
complies with all local regulatory requirements and seeks to
implement a best practice approach to managing environmental
aspects.
Zulu was granted approval of its Environmental Impact Assessment
and was permitted to undertake mining operations by the
Environmental Management Agency of Zimbabwe.
Health and Safety
The Group's aim is to achieve and maintain a high standard of
workplace safety. In order to achieve this objective, the Group
provides ongoing training and support to employees and sets
demanding standards for workplace safety.
Going Concern
These consolidated financial statements are prepared on the
going concern basis. The going concern basis assumes that the Group
will continue in operation for the foreseeable future and will be
able to realise its assets and discharge its liabilities and
commitments in the normal course of business.
The Directors have prepared cash flow forecasts for the period
ending 30 June 2024, on the basis of the following considerations,
inter alia:
RHA
* The Company has not funded any of the activities at
RHA since 1 July 2019, apart from essential care and
maintenance costs.
Zulu
* Zulu is now commissioned with ongoing works on the
optimisation of the pilot plant and process
procedures (including modification) to achieve
nameplate throughput continuing with Stark
International Projects Limited who remain the
operator of the pilot plant.
* Subject to completion of further pilot plant upgrades
as part of the optimisation process, Zulu has the
potential to fully support all cash flow projections.
MNH
* The Company has received the unaudited management
accounts as at 30 June 2022, which reflects a loss of
N$106.986 million (US$5.96 million) for the 12 months
then ended.
The Group
* During 2022 the Group issued 3,000,000,000 shares at
an average price of 0.40p per share raising a total
of $14.838 million. This cash was used to continue
with the Zulu DFS and EPO exploration. As part of the
DFS a pilot plant and associated mine development was
undertaken.
* In May 2023 the options issued in 2017 were exercised
raising GBP550,382 for the Group
* Further in May 2023, direct equity raised
GBP2,369,500 before expenses for the Group
* The Company has the general authority to issue shares
on a pre-emptive basis, such as an open offer or
rights issue to secure funding to support cash flow
projections.
* In June 2023, the Group received a purported notice
of termination of the Offtake Agreement from Canmax
following service of a Notice of Force Majeure on
Canmax on the 25 June 2023.
* The Group will use its reasonable endeavours to work
with CanMax during the period of Force Majeure to
seek a remedy, however any dispute pertaining to the
Offtake Agreement (including the Force Majeure) will
be resolved in Singapore through arbitration which is
expected to take over 12 months for the matter to be
both heard and adjudicated on based on the nature of
the dispute.
* Should the Group be unable to resolve the status with
Canmax or no other party concludes an offtake
agreement on terms considered fair and reasonable to
Premier shareholders as a whole, then the Board does
consider that there are alternative funding options
available to the Group to support the cash flow
projections based on the underlying value of the
Group's assets and the Group's proven track record of
securing funds on the public market.
In the event that the Group is unable to either resolve the
status of Canmax or find an alternative offtake and marketing
partner to settle the CanMax prepayment amount plus interest and
Zulu fails to meet its revised production targets, then a material
uncertainty exists which may cast significant doubt on the ability
of the Group to continue as a going concern and therefore be unable
to realise its assets and settle its liabilities in the normal
course of business.
Refer to note 5 for further information.
George Roach
Acting Chairman and Chief Executive Officer
30 June 2023
Management Team
CEO - MR GEORGE ROACH
George has extensive experience in the natural resources
sector in Africa. He has successfully obtained licenses
and concluded mineral exploration and exploitation agreements
in the entire SADAC region, Ethiopia, and most of CEMAC
and ECOWAS regions. Under the auspices of Exploration Services,
he has provided consultancy to prospective exploration companies
and has acted in significant capacities for several start-ups
that have subsequently listed on AIM and TSX-V. Prior to
founding Premier, George was the Managing Director Africa,
for Uramin Inc.
COO - Mr Errico Vascotto
Errico is an accomplished and qualified Mining Engineer
with more than 40 years in the mining industry. Errico also
has an MBA from the University of Southern Queensland, Australia
with Project Management as a speciality. He has worked on
both greenfield and brownfield projects globally. In addition
to direct mining experience, Errico has gained experience
in mining construction, providing strategic project leadership
in line with industry best practice.
CFO - Mr Tomas Apetauer
Since qualifying as a C.A. (S.A.), Tomas has gained extensive
experience in a diverse range of industries including finance,
engineering consulting, corporate finance and as an international
trainer. As Premier's chief financial officer, he brings
the skills gained through corporate turnaround strategies,
multi-million-dollar capital raises and buy-outs primarily
focused on the African market.
Country Manager - Mr Jabulani Chirasha
A qualified Metallurgical Engineer with over 30 years' experience
in mining and process engineering. Prior to joining Premier,
Jabulani was a senior manager at Anglo American in Zimbabwe.
Jabulani has authored a number of international papers on
mining and process technology and facilitated at international
mining conferences as a speaker.
Corporate Secretary - Mr Brendan Roach
Brendan holds a B.Com LLB and MA(Law). He manages the full
function of corporate affairs for Premier and acts as our
international Legal Counsel.
Exploration Manager - Mr Bruce Cumming
With more than 40 years' experience Bruce is an accomplished,
SACNASP registered Geologist. Bruce qualified with a BSc
Hons degree from the University of Cape Town and is a member
of the GSSA. Bruce has extensive exploration project management
experience and has worked in various capacities in diverse
African countries. He has a long history with Premier African
Minerals.
Directors
CEO - MR GEORGE ROACH
George has extensive experience in natural resource business
development in Africa. He has held positions in and/or initiated
a number of start-up businesses listed on AIM and/or TSX-V.
Mr Wolfgang Hempel - Non-executive Director
Wolfgang has more than 27 years' experience in the African,
American, European, and Asian exploration and mining industry.
He holds a Diploma in Economic Geology from the Technical
University of Munich and is a registered European Geologist
(EurGeol) n*1261, with the European Federation of Geologists.
Mr Godfrey Manhambara - Non-Executive Director
A Zimbabwean national with extensive experience in business.
Godfrey was the former Chief Executive of Affretair. In
1999, Godfrey was appointed as CEO of the Civil Aviation
Authority in Zimbabwe, a position he held until 2001. Currently
Godfrey is the Chief Executive of Beta Holding, the largest
infrastructure supply manufacturer in Zimbabwe.
Dr Luo Wei - Non-Executive Director
Dr Wei has a PhD in Mineral Prospecting and Exploration
from Central South University. With over a decade of experience
in the mining and exploration industry Dr Wei has extensive
experience in project management and optimisation with a
focus on resource development.
DIRECTORS REPORT
Results
The audited financial statements for the year ended 31 December
2022 are set out on pages 29 to 85. The Group reported a loss
before and after tax of $5.803 million for the year ended 31
December 2022 (2021: profit $2.298 million).
The loss before and after tax includes:
-- A gross trading profit after depreciation and amortisation is $nil (2021: $nil).
-- Administration expenses amounting to $4.622 million (2021: $2.366 million).
-- Finance costs amounting to $nil (2021: $0.018 million); and
-- The reversal of the impairment of the Zulu Lithium's
intangible assets of $nil (2021: $4.563 million).
The total comprehensive loss for the year amounted to $13.646
million (2021: Profit $2.150 million). This includes a fair value
adjustment to the investment in Vortex Ltd and MNH Holdings Ltd and
loans receivable of $7.841 million (2021: $nil).
Dividends
The Directors do not recommend the payment of a dividend in
respect of the year under review.
Fund-raising and capital
During the 2022 financial year net funds of $14.838 million were
raised through direct subscriptions from the issue of new ordinary
shares (2021: $3.609 million).
There remains an active and very liquid market for the Group's
shares.
Borrowings
During the financial year, no additional borrowings were
raised.
Other key elements of financial position
The Group concluded an Offtake and Marketing Agreement with
Canmax (formerly Suzhou TA&A Ultra Clean Technology Co Ltd) for
the pre-purchase of spodumene concentrate from the Zulu Lithium
mine. The total received by 31 December 2022 under this agreement
amounts to $32.464 million.
The Company's holdings in Vortex Ltd (previously Circum
Minerals) amount to $0.501 million (2021: Circum Minerals $6.263
million).
The Company's holdings in MNH amount to $nil (2021: $2.079
million).
The Company's investment in property, plant and equipment during
the year was $35.997 million (2021: $0.139 million).
Events after the reporting date
At the date these financial statements were approved, the
Directors were not aware of any significant events after the
reporting date other than those set out in note 33 to the financial
statements.
Directors
The Directors of Premier who served during the period or
subsequently were:
* George Roach (appointed on incorporation April 2007)
* Godfrey Manhambara (appointed 27 September 2017)
* Wolfgang Hampel (appointed 10 April 2018)
* Neil Herbert (appointed 28 August 2019, resigned 30
April 2022)
* Dr Luo Wei (appointed 30 April 2022)
Directors' Fiduciary Statement
The Directors acknowledge their fiduciary duties and consider
that they have, both individually and together, acted in the way
that, in good faith, would be most likely to promote the success of
the Company for the benefit of its members as a whole. In doing so,
they have had regard (amongst other matters) to:
* The likely consequences of any decision in the long
term. The Group's long-term strategic objectives,
including progress made during the year and principal
risks to these objectives, are shown in the strategic
report and the key performance indicators.
* The interests of the Company's employees. Our
employees are fundamental to us achieving our
long-term strategic objectives.
* The impact of the Company's operations on the
community and the environment. The Group operates
honestly and transparently. We consider the impact on
the environment on our day-to-day operations and how
we can minimise this.
* The desirability of the Company maintaining a
reputation for high standards of business conduct.
Our intention is to behave in a responsible manner,
operating within the high standard of business
conduct and good corporate governance.
* The need to act fairly as between members of the
Company. Our intention is to behave responsibly
towards our shareholders and treat them fairly and
equally so that they may benefit from the successful
delivery of our strategic objectives.
Share capital
Premier's shares are publicly traded on AIM with the stock
ticker of PREM. As at 31 December 2022, the Company's issued share
capital consists of 22,418,009,831 (note 19) Ordinary Shares of
no-par value.
The company does not hold any Ordinary Shares in treasury.
Major Shareholders
As at 30 June 2023 the Company was aware of the following
persons who hold, directly or indirectly, voting rights
representing 3% or more of the issued share capital of the Company
to which voting rights are attached:
Name Number of Ordinary Shares % Issued Share Capital
Canmax (formerly Suzhou TA&A Ultra Clean Technology Co. Ltd) 3,000,000,000 13.14%
George Roach*
James Goozee(#) 1,597,514,207 7.1%
1,031,745,473 4.5%
* George Roach and/or structures associated with G Roach.
(#) James Goozee and/or his wife Mrs. Elizabeth Goozee.
There are no restrictions on the transfer of the Company's AIM
securities.
George Roach
Acting Chairman and Chief Executive Officer
30 June 2023
CORPORATE GOVERNANCE STATEMENT
Premier is committed to maintaining the highest standards in
corporate governance throughout its operations and to ensure all
its practices are conducted transparently, morally, and
efficiently. Therefore, and in accordance with the AIM Rules for
Companies (March 2018), Premier will seek to comply with the
provisions of The UK Corporate Governance Code July 2018, as
published by the Financial Reporting Council Limited, to the extent
the Board consider appropriate, given the Company's size, stage of
development and resources (the "Code").
Throughout the Reporting Period, the Company has continued to
adhere to this Code and the following statement sets out how the
Company complies or otherwise departs from the principles of the
Code.
Premier constantly seeks to maintain the highest levels of
corporate governance whereby the Company ensures that a periodic
review of the Company's corporate governance is done. Following
this recent review, there have been no corporate governance issues
identified by Premier.
Accordingly, the Company has established specific committees and
implemented certain policies, to ensure that:
* It is led by an experienced Board which is
collectively responsible for the long-term success of
the Company.
* The Board and the committees have the appropriate
balance of skills, experience, independence, and
knowledge of the Company to enable them to discharge
their respective duties and responsibilities
effectively.
* The Board establish a formal and transparent
arrangement for considering how it applies the
corporate reporting, risk management and internal
control principles and for maintaining an appropriate
relationship with the Company's auditors.
* There is a dialogue with shareholders based on the
mutual understanding of objectives.
During the year, the board of directors held one formal board
meeting that was attended by all members in office. Due to the
ongoing medical issues pertaining to one of the members of the
board of directors, the board of directors have elected to hold a
number of informal virtual board calls with the attendance of most
of the directors in office to discuss the operations of the
Company. Since the year end, the board continued to implement the
policy of holding informal board calls as so required and is also
in the process of actively looking to strengthen the board of
directors. The various committees of the Company have continued to
meet from time to time in accordance with the requirements of the
Company's ongoing operations.
In addition, the Company has adopted a comprehensive suite of
policies including:
* Anti-corruption and bribery.
* Health and safety.
* Environment and community.
* IT, communications, and systems.
* social media.
The Code follows 5 Main Principles, which are herein assessed in
accordance with Premier commitment to maintain the highest levels
of corporate governance.
1. Leadership
The Role of the Board of Directors
The Board is responsible for the management of the business of
the Company, setting its strategic direction and establishing
appropriate policies. It is the Directors' responsibility to
oversee the financial position of the Company and monitor its
business and affairs on behalf of the Shareholders, to whom they
are accountable. The primary duty of the Board is always to act in
the best interests of the Company. The Board also addresses issues
relating to internal control and risk management. The Non-executive
Directors bring a wide range of skills and experience to the
Company, as well as independent judgment on strategy, risk, and
performance. The Non-executive Directors are considered by the
Board to be independent at the date of this report. To achieve its
objectives, the Board strictly adheres to the Code.
The Board meets at least three times a year with supplementary
meetings held as required. The agenda for the Board meetings is
prepared jointly by the Chairman and CEO. The Board maintains
annual rolling plan ("Agenda") of items for discussion to ensure
that all matters reserved for the Board, with other items as
appropriate, are addressed. The agenda, with all accompanying
documents, generally includes the following:
* Review of previous minutes.
* Discussion on various project activities and market
conditions.
* Management Accounts and Financial position.
* Corporate Matters.
* Other business matters that Board members can freely
raise beyond the defined Agenda.
The Annual Accounts of Premier best reflects the Board key types
of decisions that the Board are required to take in their pursuant
of maintaining the highest levels of corporate governance. The
following matters are reserved for the Board.
* Strategy, Policy, and Management.
* Group Structure and capital requirements.
* Financial reporting and controls.
* Internal and External controls.
* Transactions and Commercial Contracts including
delegation authority.
* Board structure.
* Corporate governance matters.
Premier has established varies committees to assist the Board in
maintain the highest levels of corporate governance. Of these
committees, the following two strongly assist the decision making
of the Board.
Audit Committee
The Audit Committee ("AC"), which comprises of George Roach and
is chaired by Godfrey Manhambara, is responsible for the
appointment of auditors and the audit fee, and for ensuring that
the financial performance of the Company is properly monitored and
reported. The Audit Committee, inter alia, meets with the Company's
external auditor and its senior financial management to review the
annual and interim financial statements of the Company, oversees
the Company's accounting and financial reporting processes, the
Company's internal accounting controls and the resolution of issues
identified by the Company's auditors.
Other key aspects of the AC include:
* Reviewing the Company's accounting policies and
reports produced by internal and external audit
functions.
* Considering whether the Company has followed
appropriate accounting standards and made appropriate
estimates and judgements, considering the views of
the external auditor.
* Reporting its views to the board of directors if it
is not satisfied with any aspect of the proposed
financial reporting by the Company.
* Reviewing the adequacy and effectiveness of the
Company's internal financial controls and internal
control and risk management systems.
* Reviewing the adequacy and effectiveness of the
Company's anti-money laundering systems and controls
for the prevention of bribery and receive reports on
non-compliance.
* Overseeing the appointment of and the relationship
with the external auditor.
Remuneration Committee
The Remuneration Committee comprises of George Roach and is
chaired by Godfrey Manhambara. The Remuneration Committee assumes
general responsibility for assisting the Board in respect of
remuneration policies for Premier. The Committee reviews and
recommends remuneration strategies for the Company and proposals
relating to compensation for the Company's officers, directors and
consultants and assesses the performance of the officers of the
Company in fulfilling their responsibilities and meeting corporate
objectives. It has the responsibility for, inter alia,
administering share and cash incentive plans and programmes for
Directors and employees and for approving (or making
recommendations to the Board on) share and cash awards for
Directors and employees.
The Committee is satisfied that the advice received has been
objective and independent as at the date of this report.
The Division of Responsibility of the Board of Directors
It is important that the Board itself contains the right mix of
skills and experience to deliver the strategy of the Company. The
roles of the Chairman and Chief Executive Officer ("CEO") are
currently exercised by the same person, George Roach agreed to act,
for a limited time, as interim chairman during the development of
Zulu. Once Zulu becomes cash generative, George Roach will actively
engage a replacement for one of his two roles in the Company. There
is no one individual or group of individuals on the Board that have
unfettered powers of discretion nor is there any undue influence in
the collective decision-making ability of the Board.
The responsibilities of the Chairman, CEO and Non-executive
director are set out in writing and are review by the Board
annually to ensure that it remains relevant and accurate. In brief
summary, they are responsible as follows:
* The Chairman's role is to lead and manage the Board
and play a role in facilitating the discussion of the
Company's strategy, as set by the Board. And to
effectively promote the success of the Company.
* The CEO's role, including the role of the Technical
Director, is the responsibility of the day-to-day
management of the Company's operational activities,
and for the proper execution of the stagey as set by
the Board.
* The Non-executive directors, act as a member of the
unitary Board, however, they are required to
constructively challenge performance of management
and help develop proposals on strategy, agreeing of
goals and the Company key objectives.
2. Effectiveness
The Composition of the Board
The Board and its committees should have the appropriate balance
of skills, experience, independence, and knowledge of the Company
to enable them to discharge their respective duties and
responsibilities effectively.
As such, the Board has been structured to ensure that correct
mix of skills and experience are in place to allow it to operate
effectively:
* A Chairman (George Roach on an interim basis), whose
primary responsibility to lead and manage the Board.
This remains vital in the delivery of the Company's
corporate governance model. The Chairman has a clear
separation from the day-to-day business of the
Company which allows him to make independent
decisions.
* a CEO (George Roach), whose primary focus is
communicating, on behalf of the Company, with
shareholders, government entities, and the public.
Leading the development of the Company's short- and
long-term strategy.
* a Technical Director (Wolfgang Hampel), whose is
responsible for leading, co-ordinating, and
optimising the performance of both mining and
exploration services. With a further responsibility
for geological and mine planning activities, his role
is critical in ensuring the quality and efficiency of
Premier geology, and
* one independent Non-Executive Director (Godfrey
Manhambara).
The Code requires that a smaller company (and which the Company
is under the Code) should have at least two independent
non-executive directors. Godfrey Manhambara is independent under
the Code. The Board also regards Wolfgang Hampel as independent,
notwithstanding that he participates in the Company's share option
plan and provides some technical advice to the board. The Board is
satisfied that Wolfgang Hampel acts independently irrespective of
these interests. The Board also notes that no single individual
will dominate decision making and further notes that there has been
sufficient challenge of executive management at meetings of the
Board thereby confirming that the Board is capable of operating
effectively.
The Board has not appointed a senior Finance Director but is
actively seeking for the appropriate candidate with financial
expertise to provide board oversight on all report prepared by the
group financial manager, Mr Tomas Apetauer who is a chartered
accountant with extensive audit and financial management
experience. Additionally, the Company has a Company Secretary in
the United Kingdom who assists the Chairman and CEO 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.
The Nomination Committee ("NC") has been established to
regularly review and ensure that the Board has the appropriate
balance of skills, experience, and knowledge of the Company. NC
meets as required to consider the composition of and succession
planning for the Board, and to lead the process of appointments to
the Board. The Committee is made up of George Roach and Wolfgang
Hampel and is chaired by George Roach.
Other key aspects of the NC include:
* regularly reviewing the structure, size, and
composition (including the skills, knowledge,
experience, and diversity) of the board and make
recommendations to the board about any changes,
succession planning and vacancies; and
* identifying suitable candidates from a wide range of
backgrounds to be considered for positions on the
board.
Appointments to the Board
The appointment of new Directors to the Board is led by the NC
who has the responsibility for nominating candidates for
appointment. Both the NC and Board considers the need for
diversity, including equality, and that the new directors must
exhibit the required skills, experience, knowledge, and
independence.
The Board acknowledges that the Company is not in compliance
with the Code whereby the NC should comprise a majority of
independent directors. The Board considers that the NC has a strong
enough independent component with Godfrey Manhambara.
Commitment
The Board requires that all directors should be able to allocate
sufficient time to the Company to discharge their responsibilities
in accordance their letter of appointment. The Company maintains
records of each letter of appointment, which can be inspected at an
agreed time, at the Company's registered office.
The NC is responsible for considering on an annual basis,
whether each director is able to devote sufficient time to their
duties.
Development
All directors are required to familiarise themselves with the
Board and should regularly update and refresh their skills and
knowledge. The Company provides each joining director with an
induction on the Company. Each induction is tailored to the
specific background and requirements of the new director. In
general, the induction contains information on:
* Structures and operations.
* Board procedures.
* Corporate Governance.
* Details regarding their duties and responsibilities.
Information and Support
As Premier constantly seeks to maintain the highest levels of
corporate governance, it is imperative that information is supplied
to the Board in a form and of a quality appropriate to enable the
Board to discharge its duties in a timely manner. The supply of the
information is done by the Chairman with the assistance of the
Company Secretary.
Premier encourage all Board members to seek independent
professional advice (at the reasonable expense of the Company) in
the furtherance of their duties. The Board is given sufficient
opportunity to meet with any manager, consultant, or contractor to
gain further insight into Premier.
Evaluation
The Board recognises that it should undertake a formal and
rigorous annual evaluation of its own performance, that of its
committees and individual directors.
The evaluation of the Board's performance is an assessment of
the following key factors:
* The Board structure.
* The Board's performance.
* The Board business strategy.
* Financial reporting and controls.
* Performance monitoring.
* Supporting and advisory roles.
The Board is not in compliance with the Code as the evaluation
process is usually conducted internally due to the size and
complexity of the operations of the Company. Furthermore, the Board
believes that internal assessment best help identify the key
strength and weaknesses to allow for effective evaluation. The
Board will continue to assess the internal review process against
the growth of the Company as should the Company grow in size it may
consider getting an independent assessment.
Re-election
The Board believe that all directors should be submitted for
re-election at regular intervals, subject to the continued
satisfactory performance of the Company.
The Director longest in office since their last appointment is
required to retire by rotation or stand for reappointment at the
Annual General Meeting ("AGM").
3. Accountability
Financial and Business reporting
A key duty of the Board is to oversee the financial affairs of
the Company. The Financial Statements is the Board's primary means
of presenting a fair, balanced and understandable assessment of the
Company's positions that also best provides the information
necessary to allow shareholders to assess the Company's
performance, business model and strategy for that period.
You can view Premier Annual Report and Financial Statements on
the Company's webpage at the following address,
www.premierafricanminerals.com . Under the Strategic Review section
of the Company's Annual Report and Financial Statements for the
year ended December 2022, the Board set outs the strategic
objectives of the Company, how these will be delivered, Premier
business model and how the Company will generate and preserve value
over the longer term for shareholders.
The Board have a reasonable expectation that the Group has
adequate resources to continue in operations or existence for the
foreseeable future thus continues to adopt the going concern basis
in preparing its Annual Report and Financial Statements. Refer to
note 5 to the financial statements.
Risk Management and Internal Control
The Board is responsible for determining the nature and extent
of the significant risks it is willing to take in achieving its
strategic objectives. The Board manages the risk through the
implementation of internal control systems.
The Board has identified the following as some of the risks and
their mitigation:
* Credit Risk: Credit risk is the risk of potential
loss to the Company if counterparty to a financial
instrument fails to meet its contractual obligations.
The Company's credit risk is primarily attributable
to its liquid financial assets, including cash,
receivables, and balances receivable from the
government. The Company limits the exposure to credit
risk in its cash by only investing its cash with
high-credit quality financial institutions in
business and savings accounts, guaranteed investment
certificates and in government treasury bills which
are available on demand by the Company for its
programs.
* Liquidity Risk: Liquidity risk is the risk that the
Company will not have the resources to meet its
obligations as they fall due. The Company manages
this risk by closely monitoring cash forecasts and
managing resources to ensure that it will have enough
liquidity to meet its obligations.
* Operating Risks: The activities of the Company are
subject to all of the hazards and risks normally
incidental to exploring and developing natural
resource projects. These risks and uncertainties
include, but are not limited to environmental hazards,
industrial accidents, Covid-19, labour disputes,
geo-political risks, encountering unusual or
unexpected geologic formations or other geological or
grade problems, unanticipated changes in rock
formation characteristics and mineral recovery,
encountering unanticipated ground or water conditions,
land slips, flooding, periodic interruptions due to
inclement or hazardous weather conditions and other
acts of God or un-favourable operating conditions and
losses. The Company manages the risk by closing
monitoring operations and maintaining adequate
insurance cover.
* Early-stage Business Risk: The Board manages this
risk by monitoring cash levels and reviewing cash
flow forecasts on a regular basis.
* Market Risk (exchange rates, commodity, and equity):
Market risk is the risk of loss that may arise from
changes in market factors such as interest rates,
foreign exchange rates, and commodity and equity
prices. The Company manages the risk by closing
monitoring exchange rates, commodity, and equity
markets. The Company further engages consultants to
undertake commodity forecasts.
* Interest Rate Risk: The Company is exposed to
interest rate risk to the extent that its cash
balances bear variable rates of interest. The
interest rate risks on cash and short-term
investments and on the Company's, obligations are not
considered significant and is not mitigated at this
time.
* Foreign Currency Risk: The Company is exposed to the
financial risk related to the fluctuation of foreign
exchange rates against the Company's functional
currency, which is the United States dollar ("USD").
The Company has not hedged its exposure to currency
fluctuations.
* Environmental Risks and Hazards: All phases of the
Company's operations are subject to environmental
regulation in the areas in which it operates. The
Board manages this risk by working with environmental
consultants and by engaging with the relevant
governmental departments and other concerned
stakeholders.
* Licencing Risk: The Company's exploration and
development activities are dependent upon the grant
of appropriate licences, concessions, leases, permits
and regulatory consents which may be withdrawn or
made subject to limitations or performance criteria.
Such licences and permits are as a practical matter
subject to the discretion of the applicable
Government or Government office. The Group must
comply with known standards, existing laws and
regulations that may entail greater or lesser costs
and delays depending on the nature of the activity to
be permitted. The interpretations, amendments to
existing laws and regulations, or more stringent
enforcement of existing laws and regulations could
have a material adverse impact on the Group's results
of operations and financial condition. Whilst the
Company continually seeks to do everything within its
control to ensure that the terms of each licence are
met and adhered to, third parties may seek to exploit
any technical breaches in licence terms for their own
benefit. There is a risk that negotiations with a
Government in relation to the grant, renewal or
extension of a licence may not result in the grant,
renewal or extension taking effect prior to the
expiry of the previous licence period, and there can
be no assurance of the terms of any extension,
renewal, or grant.
* Political and Regulatory Risk: The Company operating
activities in Africa, notably in Zimbabwe, and
Namibia, are subject to laws and regulations
governing expropriation of property, health and
worker safety, employment standards, waste disposal,
protection of the environment, mine development, land
and water use, prospecting, mineral production,
exports, taxes, labour standards, occupational health
standards, toxic wastes, the protection of endangered
and protected species and other matters. The Group is
dependent on the political and economic situation in
these countries and may be adversely impacted by
political factors such as expropriation, war,
terrorism, insurrection, and changes to laws
governing mineral exploration and operations.
* Internal Control and Financial Risk Management: The
Board has overall responsibility for the Group's
systems of internal control and for reviewing their
effectiveness. The Group maintains systems which are
designed to provide reasonable but not absolute
assurance against material loss and to manage rather
than eliminate risk.
The Board has overall responsibility for maintaining and
reviewing the Group's system of internal control and ensuring that
the controls are robust and effective in enabling risks to be
appropriately assessed and managed.
Refer to the principal risks and uncertainties as set out in the
Strategic Report for additional information on these risks.
On behalf of the Board, the AC conducts an annual review of the
effectiveness of the systems of internal control including
financial, operational and compliance controls and risk management
systems.
Audit Committee and Auditors
The functions of the AC are clearly described as part of the
Leadership function in this note.
Whilst the Board sets the Company risk appetite, it reviews the
operations and effectiveness of the Company's risk management
activities through the AC, which undertake the day-to-day oversight
of the risk management framework on behalf of the Board. The
Chairman of the AC regularly provides an update on the work carried
out by the AC to the board.
It is noted that the AC follow the recommendations of the Code
whereby they monitor and review the effectiveness of the internal
audit activities. However, at this time, the Board have determined
that the appointment of internal auditor is not required due to the
size of the Company.
4. Remuneration
The Level and Components of Remuneration
Executive directors' remuneration should be designed to promote
the long-term success of the Company. Performance-related elements
should be transparent, stretching and rigorously applied. The Board
delegates the responsibility for setting the appropriate levels of
remuneration for its directors to the Remuneration Committee.
The levels of Remuneration to directors are disclosed to
shareholders in Premier Annual Report and Financial Statements.
Both the Board and Remuneration Committee seek to provide
appropriate reward for the skill and time commitment required so at
to retain the right calibre of director at a cost to the Company
and which reflects the current market rates.
Procedure
The Board have a formal and transparent procedure for developing
policy on the executive remuneration and for fixing the
remuneration packages of individual directors. As strict policy, no
director is involved in deciding their own remuneration.
The Remuneration Committee consider and approves the
remuneration and where applicable, incentives and benefits, and
makes recommendations to the Board. The Committee will also govern
employee share schemes. The Chairman of the Committee will be
consulted by the CEO in respect of the Company and director's
performance approvals, compensation and in respect of any
appointment/departures from roles.
The remuneration of non-executive directors shall be a matter
for the executive members of the Board.
The Company has adopted a share dealing code to ensure directors
and certain employees do not abuse, and do not place themselves
under suspicion of abusing inside information of which they are in
possession and to comply with its obligations under MAR which
applies to the Company by virtue of its shares being traded on AIM.
Furthermore, the Company's share dealing code is compliant with the
AIM Rules for Companies published by the London Stock Exchange (as
amended from time to time).
Under the share dealing code, the Company must:
* Disclose all inside information to the public as soon
as possible by way of market announcement unless
certain circumstances exist in which the disclosure
of the inside information may be delayed.
* Keep a list of each person who is in possession of
inside information relating to the Company.
* Procure that all persons discharging managerial
responsibilities and certain employees are given
clearance by the Company before they are allowed to
trade in Company securities; and
* Procure that all persons discharging managerial
responsibilities and persons closely associated to
them notify both the Company and the Financial
Conduct Authority of all trades in Company securities
that they make.
Additionally, under the share dealing code, no person
discharging managerial responsibilities is permitted to deal in
Company securities (whether directly or through an investment
manager) during a closed period; being the period either: from the
end of the relevant financial year up to the release of the
preliminary announcement of the Company's annual results; from the
end of the relevant financial period up to the release of the
Company's half-yearly financial report or; 30 calendar days before
the release of each of the Company's first quarter report and third
quarter report.
For details of the directors' remuneration refer to note 28.
5. Relations with Shareholders
Dialogue with shareholders
The Company recognises that maintaining strong communications
with its shareholders promotes transparency and will drive value in
the medium to long-term. Accordingly, the Company has an
established programme to communicate with shareholders. This done
by providing regular updates on the progress of the Company,
detailing recent business and strategy developments, in news
releases which will be posted on the Company's website and through
certain social media channels.
The Board has responsibility for approval and monitoring
compliance with the Company's disclosure controls and procedures.
It has the responsibility, inter alia, determining whether
information is inside information, deciding whether the inside
information is to be announced as soon as possible and reviewing
the scope, content, and accuracy of disclosure. The Company has
adopted a share dealing code governing the share dealings of the
Directors and applicable employees during close periods and is in
accordance with Rule 21 of the AIM Rules.
The Chairman and CEO are contactable via email. Their email
address can be obtained at either the Company's registered office
or by requesting them at the below address. To continually improve
transparency, the Board would be delighted to receive feedback from
shareholders. Communications should be directed to
info@premierafricanminerals.com . The CEO 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.
Constructive Use of General Meetings
The Company holds AGM each year, whereby all of the directors
aim to attend the AGM and value the opportunity of welcoming
individual shareholders and other investors to communicate directly
and address their questions.
In addition to the mandatory information required and procedures
to calling a general meeting, which can be found under the
Company's constitutional documents on the webpage, the Board ensure
that a full, fair, and balanced explanation of business of all
general meetings is sent in advance to shareholders.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report
and financial statements and have prepared the Group financial
statements in accordance with UK adopted International Accounting
Standards in order to give a true and fair view of the state of
affairs of the Group and of its profit or loss for that period, in
accordance with the rules of the London Stock Exchange for
companies trading securities on AIM.
In preparing these financial statements the directors are
required to:
* select suitable accounting policies and then apply
them consistently.
* make judgements and accounting estimates that are
reasonable and prudent.
* state whether they have been prepared in accordance
with UK adopted International Accounting Standards ,
subject to any material departures disclosed and
explained in the financial statements; and
* prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Company and the Group will continue in business.
The directors are responsible for keeping records that are
sufficient to show and explain the Group and Company's transactions
and will, at any time, enable the financial position of the Group
and Company to be determined with reasonable accuracy. They are
also responsible for safeguarding the assets of the Company and the
Group and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
All reports and accounts, taken as a whole, is fair, balanced,
understandable, and provides the information necessary for
shareholders to assess the Company's position, performance,
business model and strategy.
Statement of disclosure to auditor
The directors who were in office at the date of approval of
these financial statements have confirmed that, as far as they are
aware, there is no relevant audit information of which the auditor
is unaware. Each of the directors has confirmed that they have
taken all the steps that they ought to have taken as directors in
order to make themselves aware of any relevant audit information
and to establish that it has been communicated to the auditor.
Viability statement and going concern
The Board has assessed the prospects of the Group over a period
of 12 months from the date of approval of these financial
statements, involving a review of the Group's forecast prepared for
the 12 months ending 30 June 2024. and taking account of the
Board's intentions for future activities after that date. As
explained further in note 5, taking account of the Group's current
position and principal risks, over a 12-month period, the Board has
a reasonable expectation that the Group will be able to continue in
operation and meet its liabilities as they fall due over that
period.
The Board considers these periods of assessment to be
appropriate because they contextualise the Company's financial
position, business model and strategy.
George Roach
Acting Chairman and Chief Executive Officer
30 June 202
NON-STATUTORY INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF
PREMIER AFRICAN MINERALS LIMITED
Opinion on non-statutory financial statements
We have audited the consolidated non-statutory financial
statements of Premier African Minerals Ltd (the 'Group') for the
year ended 31 December 2022 which comprise the consolidated income
statement, the consolidated statement of comprehensive income, the
consolidated statement of financial position, the consolidated
statements of cash flows, the consolidated statements of changes in
equity and notes to the financial statements, including a summary
of significant accounting policies.
The financial reporting framework that has been applied in the
preparation of the financial statements UK adopted international
accounting standards.
In our opinion the non-statutory financial statements:
* give a true and fair view of the state of the Group's
affairs as at 31 December 2022 and of the Group's
loss for the year then ended;
* have been properly prepared in accordance with UK
adopted international accounting standards.
Basis for opinion
We conducted our audit in accordance with UK adopted
international accounting standards. 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 in accordance with
the ethical requirements that are relevant to our audit of the
financial statements, 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.
Material uncertainty relating to going concern
We draw attention to note 5 in the financial statements, which
indicates that the Group is loss making and has net current
liabilities. In addition, the Group is in dispute with Canmax, who
have submitted a purported notice of termination of the Offtake
Agreement and have required the Group to settle the prepayment
amount of $34.7m within 90 days of 25 June 2023. However, the Group
has been advised that this notice of termination has no force or
effect. As stated in note 5, these events or conditions, along with
the other matters as set forth in note 5, indicate that a material
uncertainty exists that may cast significant doubt on the Group's
ability to continue as a going concern. Our opinion is not modified
in respect of this matter.
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 entity's ability to
continue to adopt the going concern basis of accounting
included:
* Reviewing the cash flow forecasts prepared by
management for the period up to Jun 2026, providing
challenge to key assumptions, reviewing for
reasonableness and stress testing the forecasts.
* Reviewing post-year period end RNS announcements and
holding detailed discussions with management about
the Canmax dispute and what actions are available to
the Group to resolve the situation and to obtain
alternative funding;
* Reviewing the legal and other correspondence
surrounding the Canmax Offtake Agreement dispute and
other supporting documentation to corroborate
management's explanations and their plans to resolve
the situation: and
-- Assessing the adequacy of going concern disclosures within
the financial statements.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the directors made
subjective judgments, for example in respect of significant
accounting estimates that involved making assumptions and
considering future events that are inherently uncertain. As in all
of our audits we also addressed the risk of management override of
internal controls, including evaluating whether there was evidence
of bias by the directors that represented a risk of material
misstatement due to fraud.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the
Group, the accounting processes and controls, and the industry in
which they operate.
The Group financial statements are a consolidation of reporting
units, comprising the Group's operating businesses and holding
companies.
We performed full scope audits of the financial information of
the components within the Group which were individually financially
significant and material. We also performed specified audit
procedures over certain account balances and transaction classes
that we regarded as material to the Group, as well as analytical
procedures, for components which were not significant and not
material. The audit work and specified audit procedures accounted
for 100% of the Group's consolidated expenditures and 100% of the
Group's absolute loss before tax (i.e. the sum of the numerical
values without regard to whether they were profits or losses for
the relevant reporting units).
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, 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. This is not a
complete list of all risks identified by our audit.
Key audit matters How our audit addressed the
key audit matter
Valuation of the rehabilitation Valuation of the rehabilitation
provision provision
The Group has recognised a rehabilitation We have understood and assessed
provision, under IAS 37 - contingent the inputs in calculation of
liabilities and contingent assets, the liability. These were based
of $360,000 (2021: $360,000), on the original environmental
in relation to the future costs impact assessment as carried
to rehabilitate the current out in 2015. We have also verified
mines as per regulation. that there were no applicable
The directors are required to changes to the regulations which
assess the provision at the would increase the liability
end of each reporting period and have reviewed calculations
and adjust to reflect their for the unwinding of the provision.
best estimates of the liability.
The directors consider the liability
to be sufficient due to the
value of the RGTS (Zimbabwe
currency) against the Dollar.
Fair value of investments Fair value of investments
The Group has recognised Investments We have clarified that the Vortex
of $501,000 (2021: $8,342,000) shares were valued on the basis
as at the reporting date. of the latest share transactions
Directors are required to assess and have been written down accordingly.
the fair value of investments We reviewed the information
at each reporting date under available for MNH and agree
IFRS 9. with management's view that
As neither Vortex nor MNH are that the investment should be
traded on an active market a fully impaired.
level 3 valuation technique
was used. The shareholding was
based on the most recent placing
of the shares in the respective
companies, as well as management's
best estimates of the fair values.
Carrying value of exploration Carrying value of exploration
and evaluation assets and mining and evaluation assets and mining
properties properties
The Group holds intangible assets Our audit work in this area
of $4,739,000 (2021: $4,686,000) included:
and tangible assets of $35,997,000 -- We have understood and assessed
(2021: $139,000) relating to the methodology used in the
capitalised costs, primarily capitalisation of these assets.
in respect of the Zulu Lithium -- Reviewing a sample of costs
project in Zimbabwe. capitalised during the year
There are risks that expenses to ensure they meet the recognition
have been incorrectly capitalized or classification criteria under
or that impairment indicators IFRS 6, IAS 38 or IAS 16;
exist which would result in -- Confirming that the Group
an impairment of the year end has good title to any applicable
balances. licences for the mining properties.
-- Evaluating the status of
the projects during the year,
and subsequent to the year-end,
to identify and evidence any
impairment indicators;
-- Assessing management's impairment
reviews, including challenging
key assumptions and consideration
of sensitivity to reasonably
possible changes;
Our application of materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating
the effect of misstatements, both individually and in aggregate on
the financial statements as a whole.
Based on our professional judgment, we determined materiality
for the financial statements as a whole as follows:
Group financial statements
--------------------------------------------------------------------------
Overall materiality $255,000
How we determined 0.5% of Gross assets
it
Rationale for benchmark We believe that the gross assets is a primary
applied measure used by shareholders in assessing
the performance of the Group, as the Group
is at a pre-revenue stage and is asset heavy.
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 contained within the annual report. Our opinion on the
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. 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
course of 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 this
gives rise to a material misstatement in the financial statements
themselves. 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.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement as set out in the Corporate Governance Statement, the
directors are responsible for the preparation of the 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 financial statements, the directors are
responsible for assessing the Group'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.
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 extent to which the audit was considered capable of
detecting irregularities including fraud
Our approach to identifying and assessing the risks of material
misstatement in respect of irregularities, including fraud and
non-compliance with laws and regulations, was as follows:
* the senior statutory auditor ensured the engagement
team collectively had the appropriate competence,
capabilities and skills to identify or recognise
non-compliance with applicable laws and regulations;
* we focused on specific laws and regulations which we
considered may have a direct material effect on the
financial statements or the operations of the Group.
* we assessed the extent of compliance with the laws
and regulations identified above through making
enquiries of management and inspecting legal
correspondence; and
* identified laws and regulations were communicated
within the audit team regularly and the team remained
alert to instances of non-compliance throughout the
audit.
We assessed the susceptibility of the Group's financial
statements to material misstatement, including obtaining an
understanding of how fraud might occur, by:
* making enquiries of management as to where they
considered there was susceptibility to fraud, their
knowledge of actual, suspected and alleged fraud;
* considering the internal controls in place to
mitigate risks of fraud and non-compliance with laws
and regulations.
To address the risk of fraud through management bias and
override of controls, we:
* performed analytical procedures to identify any
unusual or unexpected relationships;
* tested journal entries to identify unusual
transactions;
* assessed whether judgements and assumptions made in
determining the accounting estimates set out in Note
4 were indicative of potential bias;
* investigated the rationale behind significant or
unusual transactions.
In response to the risk of irregularities and non-compliance
with laws and regulations, we designed procedures which included,
but were not limited to:
* agreeing financial statement disclosures to
underlying supporting documentation;
* reading the minutes of meetings of those charged with
governance;
* enquiring of management as to actual and potential
litigation and claims;
* reviewing correspondence with the Group's legal
advisors.
There are inherent limitations in our audit procedures described
above. The more removed that laws and regulations are from
financial transactions, the less likely it is that we would become
aware of non-compliance. Auditing standards also limit the audit
procedures required to identify non-compliance with laws and
regulations to enquiry of the directors and other management and
the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to
detect than those that arise from error as they may involve
deliberate concealment or collusion.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor's report.
Use of this report
This report is made solely to the Company's members, as a body,
in accordance with our engagement letter. 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.
MAH, Chartered Accountants
2nd Floor, 154 Bishopsgate,
London, EC2M 4LN
30 June 2023
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 31 December 2022
EXPRESSED IN US DOLLARS 2022 2021
Notes $ 000 $ 000
ASSETS
Non-current assets
Intangible assets 8 4,739 4,686
Investments 9 501 8,342
Property, plant and equipment 10 35,997 139
Loans Receivable 11 - 859
41,237 14,026
--------- ---------
Current assets
Inventories 12 11 -
Trade and other receivables 13 180 386
Cash and cash equivalents 14 9,627 940
9,818 1,326
--------- ---------
TOTAL ASSETS 51,055 15,352
--------- ---------
LIABILITIES
Non-current liabilities
Deferred tax 26 - -
Provisions - rehabilitation 15 360 360
360 360
--------- ---------
Current liabilities
Trade and other payables 16 33,725 556
Borrowings 18 180 180
33,905 736
--------- ---------
TOTAL LIABILITIES 34,265 1,096
--------- ---------
NET ASSETS 16,790 14,256
--------- ---------
EQUITY
Share capital 19 70,951 56,113
Share based payment and warrant
reserve 20 3,708 2,366
Revaluation reserve 711 711
Foreign currency translation reserve 7 (13,150) (13,216)
Accumulated loss (32,713) (19,513)
Total equity attributed to the
owners of the parent company 29,507 26,461
Non-controlling interest 21 (12,717) (12,205)
TOTAL EQUITY 16,790 14,256
--------- ---------
These financial statements were approved and authorised for
issue by the Board on 30 June 2023 and are signed on its
behalf.
George Roach
Chief Executive Officer
The notes on pages 34 to 85 are an integral part of these
consolidated financial statements.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
AS AT 31 December 2022
Continuing operations 2022 2021
$
EXPRESSED IN US DOLLARS Notes $ 000 000
Revenue 22 - -
Cost of sales excluding depreciation and - -
amortisation 23
Gross profit / (loss) - -
Administrative expenses 24 (4,622) (2,366)
Operating profit / (loss) (4,622) (2,366)
--------- --------
Depreciation and amortisation 10 (54) (14)
Other Income 22 34 133
Reversal of Impairment of Intangible assets
-
Zulu Lithium 8 - 4,563
Finance charges 25 - (18)
Impairment loss for investments and loans
receivable 11 (1,161) -
--------- --------
(1,181) 4,664
--------- --------
Profit / (Loss) before income tax (5,803) 2,298
Income tax expense 26 - -
--------- --------
Profit / (Loss) from continuing operations (5,803) 2,298
Loss for the year (5,803) 2,298
Other comprehensive income:
Items that are or may be reclassified subsequently
to profit or loss:
Foreign exchange loss on translation 7 (2) (148)
Fair Value adjustment on investments 9 (7,841) -
(7,843) (148)
--------- --------
Total comprehensive income for the year (13,646) 2,150
--------- --------
Loss attributable to:
Owners of the Company (5,359) 2,736
Non-controlling interests (444) (438)
(5,803) 2,298
--------- --------
Total comprehensive income attributable
to:
Owners of the Company (13,134) 2,608
Non-controlling interests (512) (458)
Total comprehensive income for the year (13,646) 2,150
--------- --------
Loss per share attributable to owners of the
parent (expressed in US cents)
Basic loss per share 27 (0.03) 0.01
The notes on pages 34 to 85 are an integral part of these
consolidated financial statements.
CONSOLIDATED
STATEMENT OF
CHANGES IN
EQUITY
FOR THE YEARED 31
December
2022
Share
option Foreign Total
and currency attributable Non-controlling
Share warrant Revaluation translation Accumulated to owners interest Total
capital reserve reserve reserve loss of parent ("NCI") equity
EXPRESSED IN
US DOLLARS $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000
-------- -------- ------------ ------------ ------------ ------------- ---------------- ---------
At 1 January
2021 52,504 2,366 711 (13,088) (22,249) 20,244 (11,747) 8,497
Loss for the
period - - - - 2,736 2,736 (438) 2,298
Other
comprehensive
income
for the
period - - - (128) - (128) (20) (148)
Total
comprehensive
income
for the
period - - - (128) 2,736 2,608 (458) 2,150
Transactions
with Owners
Issue of
equity shares 3,839 - - - - 3,839 - 3,839
Share issue
costs (230) - - - - (230) - (230)
Warrant - - - - - -
options
cancelled - -
Share based - - - - - -
payments - -
At 31 December
2021 56,113 2,366 711 (13,216) (19,513) 26,461 (12,205) 14,256
Loss for the
period - - - - (5,359) (5,359) (444) (5,803)
Other
comprehensive
income
for the
period - - - 66 (7,841) (7,775) (68) (7,843)
Total
comprehensive
income
for the
period - - - 66 (13,200) (13,134) (512) (13,646)
Transactions
with Owners
Issue of
equity shares 15,782 - - - - 15,782 - 15,782
Share issue
costs (944) - - - - (944) - (944)
Warrant - - - - - -
options
cancelled - -
Share based
payments - 1,342 - - - 1,342 - 1,342
At 31 December
2022 70,951 3,708 711 (13,150) (32,713) 29,507 (12,717) 16,790
-------- -------- ------------ ------------ ------------ ------------- ---------------- ---------
The notes on pages 34 to 85 are an integral part of these
consolidated financial statements.
CONSOLIDATED STATEMENT OF CASH
FLOWS
FOR THE YEARED 31 December
2022
2022 2021
EXPRESSED IN US DOLLARS Notes $ 000 $ 000
Net cash inflow / (outflow) from
operating activities 29 30,116 (2,564)
--------- --------
Investing activities
Acquisition of property plant and
equipment 10 (35,912) (153)
Acquisition of intangible assets 8 (53) -
Loans advanced to investment 11 (302) (859)
Net cash used in investing activities (36,267) (1,012)
--------- --------
Financing activities
Proceeds from borrowings granted 18 - 180
Net proceeds from issue of share
capital 19 14,838 3,609
Finance charges 25 - -
Net cash from financing activities 14,838 3,789
--------- --------
Net decrease in cash and cash
equivalents 8,687 213
Cash and cash equivalents at beginning
of year 940 727
Net cash and cash equivalents
at end of year 9,627 940
--------- --------
The notes on pages 34 to 85 are an integral part of these
consolidated financial statements.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
1. Reporting entity
Premier African Minerals Limited ('Premier' or 'the Company'),
together with its subsidiaries (the 'Group'), was incorporated in
the Territory of the British Virgin Islands under the BVI Business
Companies Act, 2004. The address of the registered office is
Craigmuir Chambers, PO Box 71, Road Town, Tortola, British Virgin
Islands.
The Group's operations and principal activities are the mining
and development of mineral reserves on the African continent.
Premier's shares were admitted to trading on the London Stock
Exchange's AIM market on 10 December 2012.
2. Basis of accounting
These consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (UK
adopted International Accounting Standards). They were authorised
for issue by the Company's board of directors on 30 June 2023.
Details of the Group's accounting policies are detailed
below.
The preparation of financial statements in conformity with UK
adopted IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in
the process of applying the Group's accounting policies.
The accounting policies set out below are applied consistent
across the Group and to all periods presented in these consolidated
financial statements.
Functional and presentation currency
The Group's presentation currency and the functional currency of
the majority of the Group's entities is
US dollars. All amounts have been rounded to the nearest
thousand, unless otherwise indicated. The Zimbabwean subsidiaries'
functional currency was changed by the Zimbabwean government from
USD to RTGS dollar during the 2019 financial year. Refer to note 7
for detailed information.
Use of judgements and estimates
In preparing these consolidated financial statements, management
has made judgements, estimates and assumptions that affect the
application of the Group's accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to estimates are recognised prospectively.
For details of the use of judgments and estimates refer to note
4 and detailed notes on the Intangible assets and goodwill (note
8), Investments (note 9), Property, plant and equipment (note 10),
Inventories (note 12), Trade and other receivables (note 13),
Provision for rehabilitation (note 15) and Share based payment and
warrant reserve (note 20).
3. Significant accounting policies
3.1 Change in significant accounting policies
The following standards, amendments and interpretations are new
and effective for the year ended 31 December 2022 and have been
adopted. None of the IFRS standards below had a material impact on
the financial statements.
Reference Title Summary Application
date of standard
(Periods commencing
on or after)
---------- ---------------- ------------------------------------------- ---------------------
IFRS 16 Leases COVID-19 related rent concessions 1 April 2021
Extension of the practical expedient
---------- ---------------- ------------------------------------------- ---------------------
IFRS 4, Interest rate benchmark reform 1 January 2021
IAS 7 - Phase 2.
and The Phase 2 amendments address
IFRS issues that arise from the implementation
16 of the reforms, including the
replacement of one benchmark with
an alternative one. The Phase
2 amendments provide additional
temporary reliefs from applying
specific IAS 39 and IFRS 9 hedge
accounting requirements to hedging
relationships directly affected
by IBOR reform.
---------- ---------------- ------------------------------------------- ---------------------
IFRS 3 Business Updating a reference in IFRS 3 1 January 2022
Combinations to the Conceptual Framework for
Financial Reporting without changing
the accounting requirements for
business combinations.
---------- ---------------- ------------------------------------------- ---------------------
IAS 16 Property, Prohibits a company from deducting 1 January 2022
Plant and from the cost of property, plant
Equipment and equipment amounts received
from selling items produced while
the company is preparing the asset
for its intended use. Instead,
a company will recognise such
sales proceeds and related cost
in profit or loss.
---------- ---------------- ------------------------------------------- ---------------------
IAS 37 Provisions, Specifies which costs a company 1 January 2022
contingent includes when assessing whether
liabilities a contract will be loss-making.
and contingent
assets
---------- ---------------- ------------------------------------------- ---------------------
The following new standards, amendments to standards and
interpretations have been issued, but are not effective for the
year ended 31 December 2022 and have not been early adopted:
Reference Title Summary Application
date of standard
(Periods commencing
on or after)
---------- ----------------- ------------------------------------------- ---------------------
IAS 1 Presentation Clarifies that liabilities are 1 January 2023
of Financial classified as either current or
Statements noncurrent, depending on the rights
that exist at the end of the reporting
period. Classification is unaffected
by the expectations of the entity
or events after the reporting
date (for example, the receipt
of a waiver or a breach of covenant).
The amendment also clarifies what
IAS 1 means when it refers to
the 'settlement' of a liability.
---------- ----------------- ------------------------------------------- ---------------------
IAS 1 'Presentation Amendments to improve accounting 1 January 2023
and IAS of Financial policy disclosures and to help
8 Statements' users of the financial statements
and 'Accounting to distinguish between changes
policies, in accounting estimates and changes
changes in in accounting policies.
accounting
estimates
and errors'
---------- ----------------- ------------------------------------------- ---------------------
IAS 12 Deferred These amendments require companies 1 January 2023
Taxation to recognise deferred tax on transactions
that, on initial recognition give
rise to equal amounts of taxable
and deductible temporary differences.
---------- ----------------- ------------------------------------------- ---------------------
IFRS17 Insurance This standard replaces IFRS 4, 1 January 2023
contracts which currently permits a wide
variety of practices in accounting
for insurance contracts. IFRS
17 will fundamentally change the
accounting by all entities that
issue insurance contracts and
investment contracts with discretionary
participation features.
---------- ----------------- ------------------------------------------- ---------------------
The Directors anticipate that the adoption of these standards
and the interpretations in future periods will not have a material
impact on the financial statements of the Group.
3.2 Basis of consolidation
Subsidiaries are all entities over which the Group has control.
The Group controls an entity when it is exposed to, or has the
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over
the entity. The existence and effect of potential voting rights
that are currently exercisable or convertible are considered when
assessing whether the Group controls another entity. The Group also
assesses existence of control where it does not have more than 50%
of the voting power but is able to govern the financial and
operating policies by virtue of de-facto control. This is evidenced
with RHA Tungsten (Private) Limited which the Group owns 49% of but
is consolidated into the Group (note 4.7).
Subsidiaries are consolidated, using the acquisition method,
from the date that control is gained and non-controlling interests
are apportioned on a proportional basis.
When necessary, amounts reported by subsidiaries have been
adjusted to conform to the Group's accounting policies.
3.3 Business combinations and goodwill
The Group applies the acquisition method to account for business
combinations. The consideration transferred for the acquisition of
a subsidiary is the fair values of the assets transferred, the
liabilities incurred to the former owners of the acquiree, and the
equity interests issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired
and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the
acquisition date.
3.4 Subsidiaries
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
The financial statements of subsidiaries are included in the
consolidated financial statements from the date on which control
commences until the date on which control ceases.
3.5 Non-controlling interests ("NCI")
Non-controlling interests are measured initially at their
proportionate share of the acquiree's identifiable net assets at
the date of acquisition.
Changes in the Group's interest in a subsidiary that do not
result in a loss of control are accounted for as equity
transactions.
3.6 Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income
and expenses arising from intra-Group transactions, are eliminated.
Unrealised gains arising from transactions with equity accounted
investees are eliminated against the investment to the extent of
the Group's interest in the investee. Unrealised losses are
eliminated in the same way as unrealised gains, but only to the
extent that there is no evidence of impairment.
3.7 Foreign currency
Transactions in foreign currencies are translated into the
respective functional currencies of Group companies at the exchange
rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign
currencies are translated into the functional currency at the
exchange rate at the reporting date. Non-monetary assets and
liabilities that are measured at fair value in a foreign currency
are translated into the functional currency at the exchange rate
when the fair value was determined. Non-monetary items that are
measured based on historical cost in a foreign currency are
translated at the exchange rate at the date of the transaction.
Foreign currency differences are generally recognised in profit or
loss.
The assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on acquisition, are
translated into dollars at the exchange rates at the reporting
date. The income and expenses of foreign operations are translated
into dollars at the exchange rates at the dates of the
transactions.
Foreign currency differences are recognised in Other
Comprehensive Income ("OCI") and accumulated in the translation
reserve, except to the extent that the translation difference is
allocated to NCI.
Where the functional currency of a company is in a
hyperinflationary economy IAS 29 Financial Reporting in
Hyperinflationary Economies is applied. Under this standard the
results are restated to reflect the current cost of the various
elements of the financial statements. For the Statement of
comprehensive income the cost of sales and depreciation are
recorded at current costs at the time of consumption; sales and
other expenses are recorded at their money amounts when they
occurred. Therefore all amounts need to be restated into the
measuring unit current at the end of the reporting period by
applying a general price index.
Monetary items stated in the Statement of financial position
that are stated at current cost are not restated because they are
already expressed in terms of the measuring unit current at the end
of the reporting period. All non-monetary items in the statement of
financial position are restated by applying an index at the time of
their acquisition to the reporting date. Any resulting gain or loss
on the net monetary position is included in profit or loss
reserve.
In accordance with IAS29, corresponding figures for the previous
reporting period, whether they were based on a historical cost
approach or a current cost approach, are restated by applying a
general price index so that the comparative financial statements
are presented in terms of the measuring unit current at the end of
the reporting period. Information that is disclosed in respect of
earlier periods is also expressed in terms of the measuring unit
current at the end of the reporting period.
When a foreign operation is disposed of in its entirety or
partially such that control, significant influence or joint control
is lost, the cumulative amount in the translation reserve related
to that foreign operation is reclassified to profit or loss as part
of the gain or loss on disposal. If the Group disposes of part of
its interest in a subsidiary but retains control, then the relevant
proportion of the cumulative amount is reattributed to NCI. When
the Group disposes of only part of an associate or joint venture
while retaining significant influence or joint control, the
relevant proportion of the cumulative amount is reclassified to
profit or loss.
3.8 Discontinued operation
A discontinued operation is a component of the Group's business,
the operations and cash flows of which can be clearly distinguished
from the rest of the Group and which:
-- represents a separate major line of business or geographic area of operations;
-- is part of a single co-ordinated plan to dispose of a
separate major line of business or geographic area of operations;
or
-- is a subsidiary acquired exclusively with a view to re-sale.
Classification as a discontinued operation occurs at the earlier
of disposal or when the operation meets the criteria to be
classified as held-for-sale.
When an operation is classified as a discontinued operation, the
comparative statement of profit or loss and OCI is re-presented as
if the operation had been discontinued from the start of the
comparative year.
3.9 Revenue
Performance obligations and service recognition policies
Revenue is measured based on the consideration specified in a
contract with a customer in line with IFRS 15. The Group recognises
revenue when it transfers control over of goods or services to a
customer.
The following table provides information about the nature and
timing of the satisfaction of performance obligations in contracts
with customers, including significant payment terms, and the
related revenue recognition policies.
Nature and timing of satisfaction
Type of product/ of performance obligations, including Revenue recognition
service significant payment terms under IFRS 15
Revenue
Wolframite Customers obtain control of the Revenue is recognised
sales wolframite ore when the ore has when the goods
been delivered to and have been are delivered and
accepted at their premises or have been accepted
the agreed point of delivery. by the customers
Invoices are generated at that at their premises
point in time based on the agreed or the agreed point
upon weight of the ore. Invoices of delivery.
are generally payable within
30 days. No discounts are provided
for.
The sale of the ore is not subject
to a return policy.
--------------------------------------- ------------------------
Scrap sales Customers obtain control of the Revenue is recognised
scrap when the scrap has been when the goods
delivered to and have been accepted are delivered and
at their premises or the agreed have been accepted
point of delivery. Invoices are by the customers
generated at that point in time at their premises
based upon the agreed upon weight or the agreed point
of the scrap. Invoices are generally of delivery.
payable within 30 days. No discounts
are provided for.
The sale of the scrap is not
subject to a return policy.
--------------------------------------- ------------------------
Reserve Bank The Export Incentive is provided The Group gains
of Zimbabwe on an individual basis and has control over the
Export Incentive to be applied for. It is based export incentive
on the export sales of the company. when it is received
As such the revenue from the in the Group's
RBZ is not guaranteed. bank accounts.
--------------------------------------- ------------------------
Other Income
Government The Group has no control over The Group gains
Grants the timing of the grants nor control over the
any payment terms. Government grant
when it is received
in the Group's
bank accounts.
--------------------------------------- ------------------------
Prescription Management periodically reviews Debts are considered
of debts all outstanding payables and prescribed if the
identifies any potential debts creditor has not
that may have prescribed. claimed payment
for a period in
excess of the relevant
prescription period.
--------------------------------------- ------------------------
3.10 Employee benefits
Short-term employee benefits
Short-term employee benefits are expensed as the related service
is provided. A liability is recognised for the amount expected to
be paid if the Group has a present legal or constructive obligation
to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.
Share-based payment arrangements
The Group operates an equity-settled share option plan and
issues warrants from time to time either with direct subscriptions
in equity or as finance related packages. The fair value of the
service received in exchange for the grant of options or issue of
warrants is recognised as an expense or recognised as a deduction
from equity or an addition to intangible assets depending on the
nature of the services received.
Share-based payments are measured at fair value at the date of
grant. The fair value determined at the grant date of
equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group's estimate of
shares that will eventually vest.
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.
Any adjustments are recognised through the profit and loss. The
fair value is reassessed annually.
3.11 Finance income and finance costs
The Group's finance income and finance costs include:
* interest income;
* Interest expense;
* dividend income;
Interest income and expense is recognised using the effective
interest method. Dividend income is recognised in profit or loss on
the date on which the Group's right to receive payment is
established.
The "effective interest rate" is the rate that exactly discounts
estimated future cash payments or receipts through the expected
life of the financial instrument to:
* the gross carrying amount of the financial asset; or
* the amortised cost of the financial liability.
In calculating interest income and expense, the effective
interest rate is applied to the gross carrying amount of the asset
(when the asset is not credit-impaired) or to the amortised cost of
the liability. However, for financial assets that have become
credit-impaired subsequent to initial recognition, interest income
is calculated by applying the effective interest rate to the
amortised cost of the financial asset, if the asset is no-longer
credit-impaired, then the calculation of interest income reverts to
the gross basis.
3.12 Income tax
Income tax expense comprises current and deferred tax. It is
recognised in profit or loss except to the extent that it relates
to a business combination, or items recognised directly in equity
or in OCI.
3.12.1 Current tax
Current tax comprises the expected tax payable or receivable on
the taxable income or loss for the year and any adjustment to the
tax payable or receivable in respect of previous years. The amount
of current tax payable or receivable is the best estimate of the
tax amount expected to be paid or received that reflects
uncertainty related to income taxes, if any. It is measured using
tax rates enacted or substantively enacted at the reporting date.
Current tax also includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain
criteria are met.
3.12.2 Deferred tax
Deferred tax is recognised in respect of temporary differences
between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation
purposes.
Deferred tax is not recognised for:
* temporary differences on the initial recognition of
assets or liabilities in a transaction that is not a
business combination and that affects neither
accounting nor taxable profit or loss;
* temporary differences related to investments in
subsidiaries, associates and joint arrangements to
the extent that the Group is able to control the
timing of the reversal of the temporary differences
and it is probable that they will not reverse in the
foreseeable future; and -- taxable temporary
differences arising on the initial recognition of
goodwill.
Deferred tax assets are recognised for unused tax losses, unused
tax credits and deductible temporary differences to the extent that
it is probable that future taxable profits will be available
against which they can be used. Future taxable profits are
determined based on the reversal of relevant taxable temporary
differences. If the amount of taxable temporary differences is
insufficient to recognise a deferred tax asset in full, then future
taxable profits, adjusted for reversals of existing temporary
differences, are considered, based on the business plans for
individual subsidiaries in the Group. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that
it is no longer probable that the related tax benefit will be
realised; such reductions are reversed when the probability of
future taxable profits improves.
Unrecognised deferred tax assets are reassessed at each
reporting date and recognised to the extent that it has become
probable that future taxable profits will be available against
which they can be used.
Deferred tax is measured at the tax rates that are expected to
be applied to temporary differences when they reverse, using tax
rates enacted or substantively enacted at the reporting date.
The measurement of deferred tax reflects the tax consequences
that would follow from the manner in which the Group expects, at
the reporting date, to recover or settle the carrying amount of its
assets and liabilities.
Deferred tax assets and liabilities are offset only if certain
criteria are met.
3.13 Intangible assets and goodwill
All costs of Exploration and Evaluation ("E&E") are
initially capitalised as intangible assets, such as payments to
acquire the legal right to explore, costs of technical services and
studies, seismic acquisition, exploratory drilling and testing. The
costs include directly attributable overheads together with the
cost of other materials consumed during the exploration and
evaluation phases.
Costs incurred prior to having obtained the legal rights to
explore an area are expensed directly to profit or loss as they are
incurred.
E&E assets are not amortised.
Intangible assets related to each exploration licence or pool of
licences are carried forward, until the existence (or otherwise) of
commercial reserves has been determined. Once the technical
feasibility and commercial viability of extracting a mineral
resource is demonstrable, the related E&E assets are assessed
for impairment on an individual licence or cost pool basis, as
appropriate, as set out below and any impairment loss is recognised
in profit or loss.
The Group considers each licence, or where appropriate, a pool
of licences, separately, for the purposes of determining whether
impairment of E&E assets has occurred.
Intangible assets are assessed for impairment when facts and
circumstances suggest that the carrying amount may exceed its
recoverable amount. Such indicators include, but are not limited
to, those situations outlined in paragraph 20 of IFRS 6 Exploration
for and Evaluation of Mineral Resources and include the point at
which a determination is made as to whether or not commercial
reserves exist.
When impairment indicators exist, the aggregate carrying value
is compared against the expected recoverable amount, generally by
reference to the present value of the future net cash flows
expected to be derived from production of commercial reserves.
When a licence or pool of licences is abandoned or there is no
planned future work, the costs associated with the respective
licences are written off in full and recognised in profit or
loss.
Any impairment loss is recognised in profit or loss and
separately disclosed.
3.14 Impairment
3.14.1 Non-derivative financial assets
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial
assets carried at amortised cost and debt securities at FVOCI are
credit-impaired. A financial asset is "credit-impaired" when one or
more events that have a detrimental impact on the estimated future
cash flows of the financial assets have occurred.
Evidence that a financial asset is credit-impaired includes the
following observable data:
* significant financial difficulty of the borrower or
issuer;
* a breach of contract such as a default or being more
than 90 days past due;
* the restructuring of a loan or advance by the Group
on terms that the Group would not consider otherwise;
* it is probable that the borrower will enter
bankruptcy or other financial reorganisation; or
* the disappearance of an active market for a security
because of financial difficulties.
A 12 months approach is followed in determining the Expected
Credit Loss ("ECL").
Presentation of allowance for ECL in the statement of financial
position
Loss allowances for financial assets measured at amortised cost
are deducted from the gross carrying amount of the assets.
For debt securities at FVOCI, the loss allowance is charged to
profit or loss and is recognised in OCI.
Write-off
The gross carrying amount of a financial asset is written off
when the Group has no reasonable expectations of recovering a
financial asset in its entirety or a portion thereof. For corporate
customers, the Group individually makes an assessment with respect
to the timing and amount of write-off based on whether there is a
reasonable expectation of recovery from the amount written off.
However, financial assets that are written off could still be
subject to enforcement activities in order to comply with the
Group's procedures of recovery of the amounts due.
3.14.2 Financial assets measured at amortised cost
The Group considers evidence of impairment for these assets at
both an individual asset and a collective level. All individually
significant assets are individually assessed for impairment. Those
found not to be impaired are then collectively assessed for any
impairment that has been incurred but not yet individually
identified. Assets that are not individually significant are
collectively assessed for impairment. Collective assessment is
carried out by grouping together assets with similar risk
characteristics.
In assessing collective impairment, the Group uses historical
information on the timing of recoveries and the amount of loss
incurred, and makes an adjustment if current economic and credit
conditions are such that the actual losses are likely to be greater
or lesser than suggested by historical trends.
An impairment loss is calculated as the difference between an
asset's carrying amount and the present value of the estimated
future cash flows discounted at the asset's original effective
interest rate. Losses are recognised in profit or loss and
reflected in an allowance account. When the Group considers that
there are no realistic prospects of recovery of the asset, the
relevant amounts are written off. If the amount of impairment loss
subsequently decreases and the decrease can be related objectively
to an event occurring after the impairment was recognised, then the
previously recognised impairment loss is reversed through profit or
loss.
3.14.3 Available for sale financial asset
Impairment losses on available-for-sale financial assets are
recognised, only when fair value is less than carrying value and
this is significant over a prolonged period, by reclassifying the
losses accumulated in the fair value reserve to profit or loss. The
amount reclassified is the difference between the acquisition cost
(net of any principal repayment and amortisation) and the current
fair value, less any impairment loss previously recognised in
profit or loss.
3.14.4 Non-financial assets
At each reporting date, the Group reviews the carrying amounts
of its non-financial assets (other than inventories) to determine
whether there is any indication of impairment. If any such
indication exists, then the asset's recoverable amount is
estimated. Goodwill is tested annually for impairment.
For impairment testing, assets are grouped together into the
smallest group of assets that generates cash inflows from
continuing use that are largely independent of the cash inflows of
other assets or CGUs. Goodwill arising from a business combination
is allocated to CGUs or groups of CGUs that are expected to benefit
from the synergies of the combination.
The recoverable amount of an asset or CGU is the greater of its
value in use and its fair value less cost of disposal. Value in use
is based on the estimated future cash flows, discounted to their
present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks
specific to the asset or CGU.
An impairment loss is recognised if the carrying amount of an
asset or CGU exceeds its recoverable amount.
Impairment losses are recognised in profit or loss. They are
allocated first to reduce the carrying amount of any goodwill
allocated to the CGU, and then to reduce the carrying amounts of
the other assets in the CGU on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. For
other assets, an impairment loss is reversed only to the extent
that the asset's carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.
3.15 Cash and cash equivalents
The Cash and cash equivalents comprises of cash at bank, cash on
hand and other highly liquid investments with short term
maturities. Cash and cash equivalents are measured at amortised
cost. For the purposes of the Statement of Cash Flows, cash and
cash equivalents consist of cash and cash equivalents as defined
above, net of outstanding bank overdrafts.
3.16 Inventory
Inventory is measured at the lower of cost and net realisable
value. The cost of inventories is based on the first-in, first-out
principle. The cost of inventories includes the cost of consumables
and cost of production. Net realisable value is the estimated
selling price in the ordinary course of business, less the
estimated costs of completion and selling expenses.
Inventory consists of mining consumables.
3.17 Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost,
which includes capitalised borrowing costs, less accumulated
depreciation and any accumulated impairment losses.
If significant parts of an item of property, plant and equipment
have different useful lives, then they are accounted for as
separate items (major components) of property, plant and
equipment.
Any gain or loss on disposal of an item of property, plant and
equipment is recognised in profit or loss.
Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable
that the future economic benefits associated with the expenditure
will flow to the Group.
Depreciation
Depreciation is calculated to write off the cost of items of
property, plant and equipment less their estimated residual values
using the straight-line method over their estimated useful lives,
and is generally recognised in profit or loss. Leased assets are
depreciated over the shorter of the lease term and their useful
lives unless it is reasonably certain that the Group will obtain
ownership by the end of the lease term. Land is not
depreciated.
The estimated useful lives of property, plant and equipment for
current and comparative periods are as follows:
* Land - indefinite useful life
* Buildings - 10 years
* Plant & equipment - 4/6 years
* Mine development - depreciated over the life of the
mine, currently assessed at 10 years
Depreciation methods, useful lives and residual values are
reviewed at each reporting date and adjusted if appropriate.
3.18 Financial instruments
The Group classifies non-derivative financial assets into the
following categories: loans and receivables and FVTPL and FVTOCI
financial assets.
The Group classifies non-derivative financial liabilities into
the following category: other financial liabilities.
3.18.1 Non-derivative financial assets and financial liabilities
- Recognition and derecognition
The Group initially recognises loans and receivables on the date
when they are originated. All other financial assets and financial
liabilities are initially recognised on the trade date when the
entity becomes a party to the contractual provisions of the
instrument.
The Group derecognises a financial asset when the contractual
rights to the cash flows from the asset expire, or it transfers the
rights to receive the contractual cash flows in a transaction in
which substantially all of the risks and rewards of ownership of
the financial asset are transferred, or it neither transfers nor
retains substantially all of the risks and rewards of ownership and
does not retain control over the transferred asset. Any interest in
such derecognised financial assets that is created or retained by
the Group is recognised as a separate asset or liability.
The Group derecognises a financial liability when its
contractual obligations are discharged or cancelled or expire.
Gains or losses on derecognition of financial liabilities are
recognised in profit or loss as a finance charge.
Financial assets and financial liabilities are offset, and the
net amount presented in the statement of financial position when,
and only when, the Group currently has a legally enforceable right
to offset the amounts and intends either to settle them on a net
basis or to realise the asset and settle the liability
simultaneously.
3.18.2 Loans and receivables- Measurement
These assets are initially measured at fair value plus any
directly attributable transaction costs. Subsequent to initial
recognition, they are measured at amortised cost using the
effective interest method.
3.18.3 Assets at FVOCI - Measurement
These assets are initially measured at fair value plus any
directly attributable transaction costs. Subsequent to initial
recognition, they are measured at fair value and changes therein,
other than impairment losses, are recognised in OCI and accumulated
in the revaluation reserve.
When these assets are derecognised, the gain or loss accumulated
in equity is reclassified to profit or loss.
3.18.4 Non-derivative financial liabilities - Measurement
Other non-derivative financial liabilities are initially
measured at fair value less any directly attributable transaction
costs. Subsequent to initial recognition, these liabilities are
measured at amortised cost using the effective interest method.
3.18.5 Convertible loan notes and derivative financial instruments
The presentation and measurement of loan notes for accounting
purposes is governed by IAS 32 and IAS 39. These standards require
the loan notes to be separated into two components:
* A derivative liability, and
* A debt host liability.
This is because the loan notes are convertible into an unknown
number of shares, therefore failing the 'fixed-for-fixed' criterion
under IAS 32. This requires the 'underlying option component' of
the loan note to be valued first (as an embedded derivative), with
the residual of the face value being allocated to the debt host
liability (refer financial liabilities policy above).
Compound financial instruments issued by the Group comprise
convertible notes denominated in dollars that can be converted to
ordinary shares at the option of the holder, when the number of
shares to be issued is fixed and does not vary with changes in fair
value.
The liability component of compound financial instruments is
initially recognised at the fair value of a similar liability that
does not have an equity conversion option. The equity component is
initially recognised at the difference between the fair value of
the compound financial instrument as a whole and the fair value of
the liability component. Any directly attributable transaction
costs are allocated to the liability and equity components in
proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a
compound financial instrument is measured at amortised cost using
the effective interest method. The equity component of a compound
financial instrument is not remeasured.
Interest related to the financial liability is recognised in
profit or loss. On conversion at maturity, the financial liability
is reclassified to equity and no gain or loss is recognised.
3.19 Provisions - Rehabilitation
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
An obligation to incur environmental restoration, rehabilitation
and decommissioning costs arises when disturbance is caused by the
development or on-going production of a mining property. Such costs
arising from the decommissioning of plant and other site
preparation work, discounted to their net present value, are
provided for and capitalised at the start of each project, as soon
as the obligation to incur such costs arises. These costs are
recognised in profit or loss over the life of the operation,
through the depreciation of the asset and the unwinding of the
discount on the provision. Costs for restoration of subsequent site
damage which is created on an ongoing basis during production are
provided for at their net present values and recognised in profit
or loss as extraction progresses.
Changes in the measurement of a liability relating to the
decommissioning of plant or other site preparation work (that
result from changes in the estimated timing or amount of the cash
flow, or a change in the discount rate) are added to or deducted
from the cost of the related asset in the current period. If a
decrease in the liability exceeds the carrying amount of the asset,
the excess is recognised immediately in profit or loss. If the
asset value is increased and there is an indication that the
revised carrying value is not recoverable, an impairment test is
performed in accordance with the accounting policy above.
Provisions are determined by discounting the expected future
cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to
the liability. The unwinding of the discount is recognised as
finance cost in profit or loss.
3.20 Equity
Equity comprises the following:
* Share capital - ordinary shares are classified as
equity. Incremental costs directly attributable to
the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds.
* Share-options and warrant reserve - represents
equity-settled share-based payments.
* Accumulated loss represents retained profits less
retained losses.
* Revaluation reserve represents the difference between
the nominal value of shares issued by the Company to
the shareholders of ZimDiv Holdings Limited
("Zimdiv") and the nominal value of the ZimDiv shares
taken in exchange.
* Non-controlling interests represents the share of
retained profits less retained losses of the
non-controlling interests.
* Foreign currency translation reserve represents the
other comprehensive income gains or losses arising on
the conversion of the functional currencies of the
subsidiaries to the holding company's functional
currency of USD.
3.21 Leases
Determining whether an arrangement contains a lease.
At inception of an arrangement, the Group determines whether the
arrangement is or contains a lease.
At inception or on reassessment of an arrangement that contains
a lease, the Group separates payments and other consideration
required by the arrangement into those for the lease and those for
other elements on the basis of their relative fair values. If the
Group concludes for a finance lease that it is impracticable to
separate the payments reliably, then an asset and a liability are
recognised at an amount equal to the fair value of the underlying
asset; subsequently, the liability is reduced as payments are made
and an imputed finance cost on the liability is recognised using
the Group's incremental borrowing rate.
Assets held under leases are recognised as assets of the Group
at the fair value at the inception of the lease or, if lower, at
the present value of the minimum lease payments. Lease payments are
apportioned between interest expense and capital redemption of the
liability. Interest is recognised immediately in the statement of
comprehensive income unless attributable to qualifying assets, in
which case they are capitalised to the cost of those assets.
Exemptions are applied for short life leases and low value
assets made under operating leases charged to the statement of
comprehensive income on a straight line basis over the period of
the lease.
Payments made under non-capitalised leases are recognised in
profit or loss on a straight-line basis over the term of the lease.
Lease incentives received are recognised as an integral part of the
total lease expense, over the term of the lease.
Minimum lease payments made are apportioned between the finance
expense and the reduction of the outstanding liability. The finance
expense is allocated to each period during the lease term so as to
produce a constant periodic rate of interest on the remaining
balance of the liability.
3.22 Operating segments
Segmental information is provided for the Group on the basis of
information reported internally to the chief operating
decision-maker for decision-making purposes. The Group considers
that the role of chief operating decision-maker is performed by the
Group's board of directors.
4. Significant accounting judgements, estimates and assumptions
In preparing these consolidated financial statements, management
has made judgements, estimates and assumptions that affect the
application of the Group's accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to estimates are recognised prospectively.
4.1. Judgements
Information about judgements made in applying accounting
policies that have the most significant effects on the amounts
recognised in the consolidated financial statements is included in
the following notes:
* Note 4.7 - consolidation: whether the Group has de
facto control over an investee; and
* Note 15 - leases: whether an arrangement contains a
lease.
4.2. Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that
have a significant risk of resulting in a material adjustment to
the carrying amounts of assets and liabilities within the year
ended 31 December 2022 is included in the following notes:
* Note 26 - recognition of deferred tax assets:
availability of future taxable profit against which
tax losses carried forward can be used ;
* Note 4.4 - Recoverability of exploration and
evaluation assets: key assumptions underlying
recoverable amounts;
* Note 4.5 - Recoverability of RHA Cash-Generating Unit
"CGU": key assumptions underlying recoverable
amounts;
* Note 17 - recognition and measurement of provisions
and contingencies: key assumptions about the
likelihood and magnitude of an outflow of resources;
and
* Note 20 - share based payments assumptions regarding
the various inputs into the Black Scholes model used
to determine the option value.
4.3. Measurement of fair values
A number of the Group's accounting policies and disclosures
require the measurement of fair values, for both financial and
non-financial assets and liabilities.
When measuring the fair value of an asset or a liability, the
Group uses observable market data as far as possible. Fair values
are categorised into different levels in a fair value hierarchy
based on the inputs used in the valuation techniques as
follows.
* Level 1: quoted prices (unadjusted) in active markets
for identical assets or liabilities.
* Level 2: inputs other than quoted prices included in
Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
* Level 3: inputs for the asset or liability that are
not based on observable market data (unobservable
inputs).
If the inputs used to measure the fair value of an asset or a
liability fall into different levels of the fair value hierarchy,
then the fair value measurement is categorised in its entirety in
the same level of the fair value hierarchy as the lowest level
input that is significant to the entire measurement.
The Group recognises transfers between levels of the fair value
hierarchy at the end of the reporting period during which the
change occurred.
Further information about the assumptions made in measuring fair
values is included in the following notes:
* Note 20 - share-based payment arrangements;
* Note 30 - financial instruments.
4.4 Recoverability of exploration and evaluation assets
Determining whether an exploration and evaluation asset is
impaired requires an assessment of whether there are any indicators
of impairment, including by reference to specific impairment
indicators prescribed in IFRS 6 Exploration for and Evaluation of
Mineral Resources. If there is any indication of potential
impairment, an impairment test is required based on value in use of
the asset or fair value less cost to sell.
The carrying amount of exploration and evaluation assets at 31
December 2022 amounted to $4,739 million (2021: $4.566 million).
Refer to note 8 for the assumptions used.
4.5 Recoverability of RHA Cash-Generating Unit "CGU"
Determining whether a CGU is impaired requires an assessment of
whether there are any indicators of impairment, including by
reference to specific impairment indicators prescribed in IAS36
Impairment of Assets. If there is any indication of potential
impairment, an impairment test is required based on the greater of
fair value less cost of disposal, and, value in use of the asset.
The value in use calculation requires the entity to estimate the
future cash flows expected to arise from the cash-generating unit
and a suitable discount rate in order to calculate the present
value.
During 2017 the operating losses at RHA were higher than
predicted due to operations in the open pit and underground failing
to deliver both the ore volumes and the anticipated grade. The
operating losses are an indicator of potential impairment. In
December 2017, due to the lower ore delivery, anticipated grade and
operating losses, the Board of Directors decided to place the RHA
Tungsten mine under care and maintenance.
As a result, management completed an impairment review.
The impairment review concluded that four months further capex
will be required in order to open the existing underground mining
of 6 000 tons per month run of mine ore. Concurrently additional
plant upgrades and a connection to the national grid would result
in a 40 000 ton per month run of mine ore operation. A further
option to construct a new decline vehicle access was not considered
during this review.
Key assumptions used in calculating the initial impairment
included:
* 7 265 mtu concentrate production per month; 10 year
mine plan; APT price of $275 per metric ton unit
('mtu');
* 20% discount rate; and a zero growth rate in
operating cash flow after the plant is fully
operational, forecast to be for the full year 2019.
Other key factors include attainment of forecast
grade as set out in our resource statement and plant
operating parameters being achieved.
* The XRT sorter installation is a significant element
in increasing confidence in RHA in that 70% of the
anticipated run of mine feed target of 40 000 ton per
month is passed through the sorter, which is able to
recover approximately 90% of the mineralisation in a
mass pull of some 5%.
* The model assumes annual revenues of $13.1m from
2020. Revenue generation is dependent on a number of
inter-linked assumptions and a combination of
negative changes in those assumptions would result in
further impairment charges.
As the mine is not operating, these assumptions were not
revisited and the mine remains fully impaired.
Sensitivity analysis was conducted on the volume, grade,
concentrate production per month and APT price assumptions in the
model.
The management of RHA continue to engage with NIEEF about the
future of RHA.
4.6 Estimation of useful life for mine assets
Mine assets are depreciated /amortised on a straight-line basis
over the life of the mine concerned. Judgement is applied in
assessing the mine's useful life and in the case of RHA, the
Group's only operating concern, is based on the initial Preliminary
Economic Assessment ('PEA') first published in August 2013 that
initially modelled an 8 year life of mine. The life of mine
reassessed annually based on levels of production.
4.7 Basis of consolidation
RHA
During 2013, Premier concluded a shareholders' agreement with
NIEEF whereby NIEEF acquired 51% of the shares of RHA. The
principal terms of the agreement are as follows:
* ZimDiv Holdings Limited ('ZimDiv'), a wholly owned
subsidiary, is appointed as the Manager of the
project for an initial 5 year term.
* On 7 May 2019 ZimDiv were reappointed as the manager
for another 5 year term.
* ZimDiv has marketing rights to the product.
* Each shareholder can appoint up to two directors each,
with a 5(th) director who is rotated between each
shareholder. The 5(th) director will not have a vote.
* Although the local Zimbabwean company is responsible
for financing and repayment of such. Premier has
secured the funding to advance RHA to production.
* There has been no operational change since the
agreements were signed and Premier continues to fund
RHA until it becomes cash generative.
At the financial year-end, two directors of RHA were from the
Premier Group and three directors from NIEEF. There is no majority
vote at board level and Premier still retains operational and
management control through its shareholders' agreement. Following
the assessment, the Directors concluded that Premier, through its
wholly owned subsidiary ZimDiv, retained control and should
continue to consolidate 100% of RHA and recognise non-controlling
interests of 51% in the consolidated financial statements.
4.8 Valuations
* Investments - Premier's investment in Vortex Ltd
(formerly Circum Minerals Ltd) is classified as an
FVOCI as such is required to be measured at fair
value at the reporting date. As Vortex is unlisted
there are no quoted market prices. In previous years
the fair value of the Vortex shares was derived using
the most recent placing price. The Fair value of the
Vortex shares as at 31 December 2022 was derived
using the most recent placing price in 30 December
2022.
* Investments - Premier's investment in MNH is
classified as an FVOCI as such is required to be
measured at fair value at the reporting date. As MNH
is unlisted there are no quoted market prices. The
Fair value of the MNH shares as at 31 December 2022
was derived using the 30 June 2022 management
accounts which reflected a loss before taxation of
$5.9million. Based upon those management accounts,
the investment in MNH was fully impaired.
* Valuation of warrants, share options and ordinary
shares issued as consideration - judgement is applied
in determining appropriate assumptions to be used in
calculating the fair value of the warrants, shares
and share options issued. Refer accounting policy
note and note 20.
* Provision for Rehabilitation - A provision is
recognised for site rehabilitation and
decommissioning of current mining activities based on
current environmental and regulatory requirements.
The net present value of the provision is calculated
at a discount rate of 10% over an 8 year life of
mine. No mining took place during the year, therefore
the remaining life of the mine was not adjusted and
resulted in no movement in the rehabilitation
provision.
* The life of mine has subsequently been reassessed to
a total of 10 years. The corresponding rehabilitation
assets were capitalised to property, plant and
equipment and is depreciated over the life of the
mine.
5. Going Concern
These consolidated financial statements are prepared on the
going concern basis. The going concern basis assumes that the Group
will continue in operation for the foreseeable future and will be
able to realise its assets and discharge its liabilities and
commitments in the normal course of business.
The Group has an operating loss from continuing operations
amounting to $5.803 million (2021: profit of $2.298 million) and
positive cash flows from operations amounting to $30.116 million
for the year ended 31 December 2022 (2021: negative cash flows
amounting to $2.564 million). The Group advanced Zulu through the
EPO and the continuation of a Definitive Feasibility Study, by
commencing construction of a pilot plant and development of the
lithium ore resource. As part of the DFS, a pilot plant is being
constructed and an off-take agreement has been concluded with
Canmax (formerly Suzhou TA&A Ultraclean Technology Co. Ltd)
with production and sale of spodumene concentrate expected in June
2023. Additionally, the Group continued with its external partners
joint venture processes described above in this report and explored
new opportunities to diversify and mitigate general risks
associated with its Zimbabwe based projects.
As at 31 December 2022, current liabilities exceeded current
assets by $24.087 million (2021: current assets exceeded current
liabilities by $0.590 million). The Group raised $14.838 million
(2021: $3.609 million) in net funding through share subscriptions
to fund the construction of Zulu pilot plant and extend the Zulu
EPO and DFS, general group maintenance and preservation of assets
and to investigate and assess potential diversification, through
potential investments in cash generating assets, as discussed
above.
The Directors have prepared cash flow forecasts for the period
ending 30 June 2026, on the basis of the following
considerations.
RHA
* The Company has not funded any of the activities at
RHA since 1 July 2019, apart from essential care and
maintenance costs.
Zulu
* Zulu is now commissioned with ongoing works on the
optimisation of the pilot plant and process
procedures to achieve nameplate throughput continuing
with Stark International Projects Limited who remain
the operator of the pilot plant.
* Subject to completion of further pilot plant upgrades
as part of the optimisation process, Zulu has the
potential to fully support all cash flow projections.
MNH
* The Company has received the June 2022 unaudited
management accounts which reflects a loss of
NS106.986 millions ($5.96 million). The December 2021
management accounts reflects a loss of N$45.6 million
($3 million).
The Group
* During 2022 the Group issued 3,000,000,000 shares at
an average price of 0.40p per share raising a total
of $14.838 million. This cash is being used to
continue with the Zulu DFS and EPO exploration. As
part of the DFS a pilot plant and associated mine
development was undertaken.
* In May 2023 the options issued in 2017 were exercised
raising GBP550,382 for the Group.
* Further in May 2023, direct equity raised
GBP2,369,500 before expenses for the Group.
* The Company has the general authority to issue shares
on a pre-emptive basis such as an open offer or
rights issue to secure funding to support cash flow
projections.
* In June 2023, the Company received a purported notice
of termination of the Offtake Agreement from Canmax
following service of a Notice of Force Majeure on
Canmax on the 25 June 2023. The notice of termination
requires the Company to settle the prepayment amount
of $34.7m within 90 days, however the Company has
been advised that this notice of termination has no
force or effect.
* The Company will use its reasonable endeavours to
work with CanMax during the period of Force Majeure
to seek a remedy, however any dispute pertaining to
the Offtake Agreement (including the Force Majeure)
will be resolved in Singapore through arbitration
which is expected to take over 12 months for the
matter to be both heard and adjudicated on based on
the nature of the dispute.
* Should the Company be unable to resolve the status
with Canmax or no other party concludes an offtake
agreement on terms considered fair and reasonable to
Premier shareholders as a whole, then the Board does
consider that there are alternative funding options
available to the Company to support the cash flow
projections based on the underlying value of the
Company's assets and the Company's proven track
record of securing funds on the public market.
In the event that the Company is unable to either resolve the
status of Canmax or find an alternative offtake and marketing
partner to settle the CanMax prepayment amount plus interest and
Zulu fails to meet its revised production targets, then a material
uncertainty exists which may cast significant doubt on the ability
of the Company to continue as a going concern and therefore be
unable to realise its assets and settle its liabilities in the
normal course of business.
6. Operating segments
The Group has the following three reportable segments that are
managed separately due to the different jurisdictions.
Segmental results, assets and liabilities include items directly
attributable to a segment as well as those that can be allocated on
a reasonable basis.
Reportable segments Operations
------------------------ ---------------------------
RHA and RHA Mauritius Development and mining of
Wolframite
Zulu and Zulu Mauritius Development of Lithium and
Tantalite
Head office General administration and
control
Exploration
RHA Tungsten Zulu Lithium
Mine Zimbabwe Zimbabwe
Unallocated and RHA and Zulu Total continued
By operating segment Corporate Mauritius* Mauritius operations
2022 $ 000 $ 000 $ 000 $ 000
Result
Revenue - - - -
Operating loss / (income) 3,774 213 689 4,676
------------ --------------- -------------- ----------------
Other income - - (34) (34)
Finance charges - - - -
Impairment of investments
and
loans receivable 1,161 - - 1,161
------------ --------------- --------------
Loss before taxation 4,935 213 655 5,803
------------ --------------- -------------- ----------------
Assets
Exploration and evaluation
assets 176 - 4,563 4,739
Investments 501 - - 501
Property, plant and equipment 63 - 35,934 35,997
Loans receivable - - - -
Inventories - - 11 11
Trade and other receivables 65 3 112 180
Cash 9,238 12 377 9,627
Total assets 10,043 15 40,997 51,055
------------ --------------- -------------- ----------------
Liabilities
Borrowings (180) - - (180)
Bank overdraft - - - -
Trade and other payables (33,792) - 67 (33,725)
Provisions - (360) - (360)
------------ --------------- --------------
Total liabilities (33,972) (360) 67 (34,265)
------------ --------------- -------------- ----------------
Net assets (23,929) (345) 41,064 16,790
Other information
Depreciation and amortisation 7 - 47 54
Property plant and equipment
additions 70 - 35,841 35,911
Costs capitalised to
intangible assets 53 - - 53
Exploration
RHA Tungsten Zulu Lithium
Mine Zimbabwe Zimbabwe
Unallocated and RHA and Zulu Total continued
By operating segment Corporate Mauritius* Mauritius operations
2021 $ 000 $ 000 $ 000 $ 000
Result
Revenue - - - -
Operating loss / (income) 1,543 102 734 2,379
------------ --------------- -------------- ----------------
Other income (122) (10) - (132)
Finance charges - 18 - 18
Reversal of Impairment
of Zulu - - (4,563) (4,563)
------------ --------------- --------------
Loss before taxation 1,421 110 (3,829) (2,298)
------------ --------------- -------------- ----------------
Assets
Exploration and evaluation
assets 123 - 4,563 4,686
Investments 8,342 - - 8,342
Property, plant and equipment - - 139 139
Loans receivable 859 - - 859
Inventories - - - -
Trade and other receivables 11 5 370 386
Cash 919 2 19 940
Total assets 10,254 7 5,091 15,352
------------ --------------- -------------- ----------------
Liabilities
Borrowings (180) - - (180)
Bank overdraft - - - -
Trade and other payables (556) - - (556)
Provisions - (360) - (360)
------------ --------------- --------------
Total liabilities (736) (360) - (1,096)
------------ --------------- -------------- ----------------
Net assets 9,518 (353) 5,091 14,256
Other information
Depreciation and amortisation - - 14 14
Property plant and equipment
additions - - 154 154
Costs capitalised to
intangible assets 123 - - 123
*Represents 100% of the results and financial position of RHA
Tungsten (Private) Limited ("RHA") whereas the Group owns 49%.
Non-controlling interests are disclosed in note 21.
RHA Revenue is generated from sales to Noble Minerals, in line
with RHA's off-take agreement.
7. Hyper-inflationary accounting
In terms of IAS29, Hyperinflation is indicated by
characteristics of the economic environment of a country which
include, but are not limited to, the following:
a) the general population prefers to keep its wealth in non
-- monetary assets or in a relatively stable foreign currency.
Amounts of local currency held are immediately invested to
maintain purchasing power;
b) the general population regards monetary amounts not in terms
of the local currency but in terms of a relatively stable foreign
currency. Prices may be quoted in that currency;
c) sales and purchases on credit take place at prices that
compensate for the expected loss of purchasing power during
the credit period, even if the period is short;
d) interest rates, wages and prices are linked to a price index;
and
e) the cumulative inflation rate over three years is approaching,
or exceeds, 100%.
As stated in the 2018 annual financial statements, with effect
of the 21(st) of February 2019 Zimbabwe implemented the Real Time
Gross Settlement of US Dollars ("RTGS") at an official exchange
rate of 1:1. At that time the official inflation rate was 0%. At
the year end the official exchange rate has moved to RTGS 684.3339:
$1 (2021: RTGS 108.6660 : $1) whilst the official inflation rate
has moved to 105.5 0% (2021: 60.70 %) on a year on year basis. The
table below details the exchange rates and inflation rates, as
published by https://tradingeconomics.com/zimbabwe/inflation-cpi ,
on a monthly basis for the year ended 31 December 2022.
Exchange Exchange
Inflation Rate RTGS Inflation Rate RTGS
Rate : US$ Rate : US$
2022 2022 2021 2021
---------- ----------- ---------- -----------
January 60.60% 115.4223 362.63% 82.6756
---------- ----------- ---------- -----------
February 66.10% 124.0189 321.59% 83.8868
---------- ----------- ---------- -----------
March 72.70% 142.4237 240.55% 84.4001
---------- ----------- ---------- -----------
April 96.40% 159.3482 194.07% 84.5032
---------- ----------- ---------- -----------
May 131.70% 301.4994 161.91% 84.7259
---------- ----------- ---------- -----------
June 70.00% 370.9646 106.60% 85.4234
---------- ----------- ---------- -----------
July 96.10% 443.8823 56.37% 85.6402
---------- ----------- ---------- -----------
August 106.30% 546.8254 50.24% 85.9084
---------- ----------- ---------- -----------
September 107.50% 621.8922 51.55% 87.6653
---------- ----------- ---------- -----------
October 108.70% 632.7703 54.50% 97.1361
---------- ----------- ---------- -----------
November 107.10% 654.9284 58.40% 105.6684
---------- ----------- ---------- -----------
December 105.50% 684.3339 60.70% 108.6660
---------- ----------- ---------- -----------
Two of the Group's subsidiaries, namely RHA and Zulu, operate in
Zimbabwe.
In accordance with IAS29 the Group has implemented the
Historical Cost approach in restating the subsidiary accounts as at
the 31 December 2022 and the corresponding comparative figures for
the year ended 31 December 2021.
The financial statements reflect the reduction in the purchasing
power of RTGS which have been remeasured, in terms of IAS 29, as at
31 December 2022.
8. Intangible assets
2022 2021
$ 000 $ 000
Exploration and evaluations assets 4,739 4,686
------ ------
Total intangible assets 4,739 4,686
------ ------
Opening carrying value 4,686 120
Expenditure on options to conduct 53 -
exploration and evaluation
Impairment of Exploration and evaluation - -
assets
Reversal of impairment of Zulu
Lithium's E&E assets - 4,563
Additional costs capitalised to
the Li3 assets - 3
Closing carrying value 4,739 4,686
------ ------
During the 2021 year, the market conditions for lithium improved
substantially. This improvement enabled management to revisit the
assumptions surrounding the impairment of the Zulu Lithium
Exploration and Evaluation assets. Based upon the current market
conditions and associated assumptions, management has reversed the
impairment of the Zulu Lithium's Exploration and Evaluation
assets.
During the 2020 year the company acquired a portfolio of
hard-rock lithium assets located in Zimbabwe and Mozambique from
Lithium Consolidated Ltd ("Li3").
During the year $ 0.053million was expended to purchase an
option to conduct exploration on Turwi Gold.
Zulu Lithium and Tantalite Project
During the year $nil (2021: $nil) exploration costs were
incurred and capitalised to Zulu. The Group views this project as
strategic and exploration work will be continued in the future,
cash flow permitting.
Key assumptions applied in calculating the discounted cash flow
analysis included:
-- Targeted annual production of spodumene concentrate 84 000
tonnes
-- Targeted annual production of petalite concentrate 32 500
tonnes
-- Price of spodumene concentrate $975/t
-- Price of petalite concentrate $400/t
-- Discount rate 25%
-- Operating costs per combined tonnage of concentrate
$486/t
-- Estimated 15 year life of mine
-- Average strip ratio of 5.5:1
During March 2021, the EPO was granted and a DFS is being
undertaken.
For additional information on events after the reporting date,
refer to note 33.
9. Investments
Vortex Ltd Manganese Total
(formerly Namibian
Circum Minerals) Holdings
$ 000 $ 000 $ 000
----------------- ---------- --------
Opening carrying value 2021 6,263 - 6,263
Shares acquired - 2,079 2,079
Fair value adjustment - - -
----------------- ---------- --------
Closing carrying value 2021 6,263 2,079 8,342
----------------- ---------- --------
Shares acquired - - -
Fair value adjustment (5,762) (2,079) (7,841)
Closing carrying value 2022 501 - 501
----------------- ---------- --------
Reconciliation of movements
in investments
Opening carrying value 2021
(1) (2) 6,263 - 6,263
Acquisition at fair value 2021
(3) - 2,079 2,079
----------------- ---------- --------
Opening carrying value 2022 6,263 2,079 8,342
Acquisition of shares - - -
Fair value adjustment (5,762) (2,079) (7,841)
Closing carrying value 2022 501 - 501
----------------- ---------- --------
(1) Represents 5 million shares in unlisted entity Circum.
(2) As Circum is unlisted there are no quoted markets. The fair
value of the Circum shares was derived using the previous issue
price and validating it against the most recent placing price on 30
December 2022 of $0.10 per share. In March 2022, the shares were
sold at book value to Vortex Limited in exchange for shares in
Vortex Limited.
(3) Represents a purchase of 19.9% interest in MNH.
The shares are considered to be level 3 financial assets under
the IFRS 13 categorisation of fair value measurements.
Premier continues to have an indirect interest in 5,010,333
shares in Circum held by Vortex and currently valued in total at
$0.501 million (2021: $6.263 million). Circum published a general
update to shareholders in May 2021 and the major shareholders and
directors of Circum are now fully coordinated in their intention to
generate a liquidity event for shareholders. Novopro has been
appointed to complete a DFS for an initial production of +/-
375ktpa of Sulphate of Potash which will be scaled up to 750Ktpa
over time. To this effect a fully subscribed rights issue raised
$12.5 million.
The fair value of these investments on 31 December 2022 amounted
to $0.501 million (2021: $8.342 million).
Premier's investment in Vortex is classified as FVOCI and as
such is required to be measured at fair value at each reporting
date. As Vortex is unlisted there are no quoted market prices. The
fair value of the Circum shares held by Vortex was derived using
the previous issue price and validating it against the most recent
placing price on 30 December 2022.
Premier's investment in MNH is classified as FVOCI and as such
is required to be measured at fair value at each
reporting date. As MNH is unlisted there are no quoted market
prices. The fair value of the MNH shares was fully impaired based
on their most recently available financial information.
Sensitivity analysis
The investments are subject to changes in market prices. A 10%
reduction in market prices would result in a $0.050 million (2021:
$0.834 million) charge to Other Comprehensive Income.
10. Property, plant and equipment
Plant Land Capital
Mine Development and Equipment and Buildings Work-in-Progress Total
$ 000 $ 000 $ 000 $ 000
Cost
At 1 January 2021 943 2,694 35 - 3,672
Exchange differences
(1) (48) (22) (8) - (78)
Transfer from Capital - - - - -
Work in Progress
Additions - 140 14 - 154
Disposals - - - - -
----------------- --------------- --------------- ------------------ -------
At 31 December 2021 895 2,812 41 - 3,748
Exchange differences
(1) (122) (54) (22) - (198)
Additions - 700 255 34,956 35,911
Disposals - - - - -
-------
At 31 December 2022 773 3,458 274 34,956 39,461
----------------- --------------- --------------- ------------------ -------
Accumulated Depreciation and
Impairment Losses
At 1 January 2021 943 2,694 35 - 3,672
Charge for the period - - - - -
Exchange differences
(1) (48) (21) (8) - (77)
Charge for the year - 14 - - 14
Impairment of RHA - - - - -
----------------- --------------- --------------- ------------------ -------
At 31 December 2021 895 2,687 27 - 3,609
Exchange differences
(1) (122) (54) (23) - (199)
Charge for the year - 44 10 - 54
Impairment - - - - -
At 31 December 2022 773 2,677 14 - 3,464
----------------- --------------- --------------- ------------------ -------
Net Book Value
At 31 December 2021 - 125 14 - 139
At 31 December 2022 - 781 260 34,956 35,997
Refer to note 7 Hyperinflationary Accounting.
The impairment assessment is detailed in note 4, Significant
accounting judgements, estimates and assumptions.
11. Loans receivable
2022 2021
$ 000 $ 000
Outback Investments Pty Ltd - 414
Otjozondu Mining (Pty) Ltd - 445
Vortex Ltd - -
- 859
------ ------
The above loans are made to a subsidiary and a related party of
MN Holdings (Pty) Ltd and are held at amortised cost.
The purpose of the Outback Investments Pty Ltd loan was to
enable MNH to lease and acquire the remaining extent of the
Ebenezer No 377 Farm which contains untreated tailings facilities
from the Purity Mining Project as announced on the 8(th) of July
2019. The loan will be forgiven following the uninterrupted use of
the farm land for the treatment of the tailing facilities for a
period of up to 10 years. During this period Premier has rights to
these tailings facilities. The loan is interest free. The loan is
only repayable upon default by Outback Investments.
The loan to Otjozondu Mining is to assist with funding the day
to day operations and is in accordance with the RNS of 31(st)
August 2021. Premier has provided a loan of $265,000 which bears
interest of 20% and is repayable in instalments of $25,000 per
shipment of manganese shipped from Namibia. The balance of $180,000
has been provided interest free as it is linked to the loan from
Neil Herbert, see note 18 for additional information. These loans
have been fully impaired based upon the 30 June 2022 management
accounts of Otjozondu Mine, which as per note 5, reflect a trading
loss of $5.96 million.
During the year the Group advanced $0.243 million to Vortex Ltd
to enable Vortex Ltd to participate in rights issues conducted by
Circum Minerals Ltd. The most recent rights issue on 30 December
2022 for $0.10 per Circum share. Due to the price of the rights
issue, the Group fully impaired the loan advanced.
12. Inventories
2022 2021
$ 000 $ 000
Mine consumables 11 -
11 1
------ ------
13. Trade and other receivables
2022 2021
$ 000 $ 000
Indirect tax receivable 3 6
Other receivables 52 -
Prepayments 125 380
------ ------
180 386
------ ------
Current 180 386
Non-current - -
------ ------
180 386
------ ------
2022 2021
$ 000 $ 000
The exposure to credit risk for
trade receivables
by geographic region was as follows:
Zimbabwe 3 5
Other 52 -
------ ------
55 5
------ ------
The exposure to credit risk for
trade receivables
by counterparty was as follows:
Zimbabwe Revenue Authority 3 3
Other 52 2
------ ------
55 5
------ ------
The exposure to credit risk for
trade receivables
by credit rating was as follows:
External credit ratings - -
Other 55 5
------ ------
55 5
------ ------
The receivables are considered to be held within a
held-to-collect business model consistent with the Group's
continuing recognition of the receivables.
As at 31 December 2022 the Group does not have any contract
assets arising out of contracts with customers relating to the
Group's right to receive consideration for work completed but not
billed.
Credit and market risks, and impairment losses
The Group did not impair any of its trade receivables as at 31
December 2022, as all trade receivables generated during the
financial year were settled in full prior to the year-end.
Information about the Group's exposure to credit and market
risks and impairment losses for trade receivables is included in
Note 30.
The Directors consider that the carrying amount of trade and
other receivables approximates their fair value.
14. Cash and cash equivalents
2022 2021
$ 000 $ 000
Bank balances 9,627 940
Cash and cash equivalents per the statement
of cash flows 9,627 940
------ ------
15. Provisions - rehabilitation
2022 2021
$ 000 $ 000
As at 1 January 360 153
Foreign Exchange variation on translation - 189
Unwinding of discount - 18
As at 31 December 360 360
------ ------
A provision is recognised for site rehabilitation and
decommissioning of current mining activities based on current
environmental and regulatory requirements. The gross provision was
based upon an environmental impact assessment ("EIA") conducted and
calculated in 2014 and discounted to a net present value using a
discount rate of 10% over a life of mine of 8 years. The
corresponding rehabilitation assets was capitalised to property,
plant and equipment and is depreciated over the life of the mine.
The initial provision for rehabilitation was performed in the then
functional currency of USD. With the implementation of RTGS this
provision was restated in terms of note 7 on Hyperinflationary
accounting. With RHA currently under care and maintenance the
directors reassessed the final provision based upon actual volumes
extracted versus projected volumes. This reassessment will be done
annually taking into consideration the remaining volume of ore to
be extracted, the current level of mining that has already been
conducted and the estimated costs involved in rehabilitating the
land.
16. Trade and other payables
2022 2021
$ 000 $ 000
Trade payables 984 250
Accrued expenses 273 298
Advance receipt by Canmax 32,464 -
Payroll liabilities 4 8
33,725 556
------- ------
During the year the Group entered into an Offtake and Marketing
agreement withCanmax, whereby Canmax would prepurchase 143,000
tonnes of spodumene concentrate that will be produced by the
Group's Zulu mine.
All trade and other payables at 31 December 2022 are due within
one year, non-interest bearing, and comprise amounts outstanding
for mine purchases and on-going costs, except as described further
below. The Directors consider that the carrying amount of trade and
other payables approximates their fair value.
17. Contingent Liability
Premier engaged China Zenith Capital Ltd to facilitate the
placement of 3,000,000,000 shares with Canmax. Subsequent to that,
the Group entered into an Offtake and Marketing agreement with
Canmax, whereby Canmax would prepurchase 143,000 tonnes of
spodumene concentrate that will be produced by the Group's Zulu
mine. China Zenith Capital Ltd are suing Premier for approximately
$1,350,000, claiming a success fee based on Premier's consultancy
agreement with them. Premier has rejected China Zenith Capital's
claim on the basis that it has no foundation for the claim. No
provision has been made for this contingent liability.
18. Borrowings
2022 2021
$ 000 $ 000
Loan Neil Herbert 180 180
180 180
------ ------
2022 2021
$ 000 $ 000
Reconciliation of movement in borrowings
As at 1 January 180 -
Loans received (1) (2) - 180
Loans repaid through conversion to equity
(1) (3) (4) - -
Implementation fee - -
Accrued interest - -
As at 31 December 180 180
------ ------
Current 180 180
Non-current - -
180 180
------ ------
Borrowings comprise loans from a related party and a non-related
party. Loans from a related party are further disclosed in Note 32,
Related Party Transactions.
(1) Neil Herbert made available a loan of US$180,000 to the
Company. Under the terms of the Director Loan, the loan is
both unsecured and will not attract any interest and is repayable
in full by the Company on the signing of a new off-take agreement
at Otjozondu. The purpose of the Director Loan is to provide
funding to Premier to allow an amendment to the Otjozondu
Loan while Premier, acting collectively with Otjozondu, looks
to secure the best possible off-take funding package.
At 31 December 2022 the off-take funding had not been secured
and Mr Herbert agreed to the deferment of the repayment of
the loan until such off-take agreement has been secured.
19. Share capital
Authorised share capital
22.42 billion (2021: 19.42 billion) ordinary shares of no par
value.
Issued share capital
Number
of Shares Value
'000 $ 000
----------- --------
As at 1 January 2021 17,793,009 55,593
----------- --------
Shares issued for direct Investment (1) 625,000 1,416
Shares issued for direct Investment (2) 500,000 1,364
Shares issued for direct Investment (3) 500,000 1,059
As at 31 December 2021 19,418,009 59,432
----------- --------
Shares issued for direct Investment (4) 3,000,000 15,782
As at 31 December 2022 22,418,009 75,214
----------- --------
Less cumulative share costs (4,263)
Net share capital as at 31 December 2022 70,951
--------
(1) On the 03 June 2021, the Company issued 625 000
000 shares under a subscription agreement at a price
of 0,16p for a total value of $1.501 million
(2) On the 17 August 2021 the Company issued 500 000
000 shares under a subscription agreement at a price
of 0,02p for a total value of $1.446 million
(3) On the 14 December 2021 the Company issued 500 000
000 shares under a subscription agreement at a price
of 0,16p for a total value of $1.122 million
(4) On the 30 March 2022 the Company issued 3 000 000
000 shares under a subscription agreement at a price
of 0,4p for a total value of $15.782 million
Reconciliation to balance as stated in the consolidated
statement of financial position
2022 2021
$ 000 $ 000
As at 1 January 56,113 52,504
Shares issued under subscription agreements
- cash flow - -
Shares issued to settle trade payables - -
Shares issued on conversion of loans and
loan notes (note 12) - non-cash - -
Shares issued to purchase Investment in
MNH - -
Share issue costs - cash flow (944) (230)
Shares issued for direct Investment 15,782 3,839
As at 31 December 70,951 56,113
------- -------
20. Share based payment and warrant reserve
2022 2021
$ 000 $ 000
Share options and warrants reserve beginning
of year 2,366 2,366
Warrants granted - -
Share options granted 1,342 -
Warrants cancelled - -
Share options and warrants reserve end
of year 3,708 2,366
------ ------
Share options and warrant arrangements are set out below.
Equity-settled Share base payment arrangement
The Company adopted an incentive share option plan (the 'Plan')
during 2012. The essential elements of the Plan provide that the
aggregate number of common shares of the Company's capital stock
issuable pursuant to options granted under the Plan may not exceed
15% of the issued and outstanding Ordinary Shares at the time of
any grant of options. Options granted under the Plan will have a
maximum term of 10 years. All options granted to Directors and
management are subject to vesting provisions of one to two
years.
All options are to be settled by the physical delivery of
shares.
The fair value of all the share options has been measured using
the Black-Scholes Model.
Number
of Options
Granted
Date Vesting Exercise Expiry Estimated
Issued to Granted Term '000 Price Date Fair Value
Employees and
consultants 10/02/2011 1 year 2,250 1.135p 09/02/2014 0.87p
Directors 04/12/2012 See 1 below 20,386 Nil 03/12/2022 1.11p
Directors 04/12/2012 See 2 below 20,386 2p 03/12/2022 1.85p
Employees and
associates 04/12/2012 See 3 below 5,536 Nil 03/12/2022 1.85p
Directors 29/07/2014 See 4 below 6,000 1.15p 28/07/2024 1.15p
Directors 29/07/2014 See 5 below 6,000 1.50p 28/07/2024 1.15p
Management 29/07/2014 See 4 below 6,500 1.15p 28/07/2024 1.15p
Management 29/07/2014 See 5 below 6,500 1.50p 28/07/2024 1.15p
Directors 13/03/2015 See 4 below 2,000 0.9p 12/03/2025 0.67p
Directors 13/03/2015 See 5 below 2,000 1.17p 12/03/2025 0.64p
Management 13/03/2015 See 4 below 3,250 0.9p 12/03/2025 0.67p
Management 13/03/2015 See 5 below 3,250 1.17p 12/03/2025 0.64p
Directors 19/01/2017 See 5 below 30,500 0.28p 18/01/2027 0.278p
Consultants 19/01/2017 See 5 below 50,439 0.28p 18/01/2027 0.278p
Directors 19/01/2017 See 5 below 30,500 0.40p 18/01/2027 0.28p
Consultants 19/01/2017 See 5 below 50,439 0.40p 18/01/2027 0. 28p
Directors 30/05/2022 See 4 below 122,500 Nil 31/05/2032 0.32p
Consultants 30/05/2022 See 4 below 202,500 Nil 31/05/2032 0.32p
Directors 30/05/2022 See 6 below 65,000 0.4p 31/05/2032 0.18p
Consultants 30/05/2022 See 6 below 202,500 0.4p 31/05/2032 0.18p
Directors 30/05/2022 See 5 below 65,000 0.5p 31/05/2032 0.19p
Consultants 30/05/2022 See 5 below 202,500 0.5p 31/05/2032 0.19p
Directors 30/05/2022 See 7 below 65,000 0.5p 31/05/2032 0.19p
Consultants 30/05/2022 See 7 below 202,500 0.5p 31/05/2032 0.19p
Total number
of options 1,373,436
------------
Issued to:
- Directors 429,272
- Employees and consultants 924,664
- Management 19,500
----------
1,373,436
Less:
- Options exercised in
prior years 27,257
- Options cancelled in
prior years 32,803
Total options in issue
at 31 December 2022 1,313,376
----------
Expected volatility has been based on an evaluation of the
historical volatility of the Company's share price, particularly
over the historical period commensurate with the expected term. The
expected term of the instruments has been based on historical
experience and general option holder behaviour.
The Company has granted the following share options during the
years up to 31 December 2022:
1. These share options vest on the two-year anniversary of
the grant date. The options are exercisable at any time after
vesting during the grantee's period as an eligible option
holder, and must be exercised no later than 10 years after
the date of grant, after which the options will lapse.
2. These share options vest in equal instalments annually
on the anniversary of the grant date over a two year period.
The options are exercisable at any time after vesting during
the grantee's period as an eligible option holder, and must
be exercised no later than 10 years after the date of grant,
after which the options will lapse.
3. These share options vested on the grant date. The options
are exercisable at any time after vesting during the grantee's
period as an eligible option holder, and must be exercised
no later than 10 years after the date of grant, after which
the options will lapse.
4. These share options vest on the one-year anniversary of
the grant date. The options are exercisable at any time after
vesting during the grantee's period as an eligible option
holder, and must be exercised no later than 10 years after
the date of grant, after which the options will lapse.
5. These share options vest on the two-year anniversary of
the grant date. The options are exercisable at any time after
vesting during the grantee's period as an eligible option
holder, and must be exercised no later than 10 years after
the date of grant, after which the options will lapse.
6. These share options vest on the 18 month anniversary of
the grant date. The options are exercisable at any time after
vesting during the grantee's period as an eligible option
holder, and must be exercised no later than 10 years after
the date of grant, after which the options will lapse.
7. These share options vest on the 30 month anniversary of
the grant date. The options are exercisable at any time after
vesting during the grantee's period as an eligible option
holder, and must be exercised no later than 10 years after
the date of grant, after which the options will lapse.
8. No share options were granted during the year ended 31
December 2021.
The fair value of the options granted during the year ended 31
December 2022 was $1.342 million (2021: $nil). The assessed fair
value of options granted to directors and management was determined
using the Black-Scholes Model that takes into account the exercise
price, the term of the option, the share price at grant date, the
expected price volatility of the underlying share, the expected
dividend yield and the risk-free rate interest rate for the term of
the option.
In issue Cancelled In issue
prior to Exercised / Lapsed Granted as at 31
1 January during during the during December
2022 the year year the year 2022
Directors:
- G. Roach 21,517 - (2,517) 260,000 279,000
- W. Hampel 8,000 - - 17,500 25,500
- G. Manhambara - - - 40,000 40,000
- N. Herbert
(resigned) 4,000 - - - 4,000
- M. Foster
(resigned) 18,000 - - - 18,000
- Resigned
directors 40,941 - - - 40,941
Other option
holders 107,891 - (11,955) 810,000 905,936
200,349 - (14,472) 1,127,500 1,313,377
----------- ---------- ------------ ---------- ----------
The Group has the following share options outstanding:
Grant Date Expiry Exercise Number Number
Date Price of options of options
outstanding vested and
exercisable
'000 '000
29/07/2014 28/07/2024 1.15p 3,000 3,000
29/07/2014 28/07/2024 1.50p 10,500 10,500
13/03/2015 12/03/2025 0.9p 5,250 5,250
13/03/2015 12/03/2025 1.17p 5,250 5,250
19/01/2017 18/01/2027 0.28p 80,939 80,939
19/01/2017 18/01/2027 0.40p 80,939 80,939
30/05/2022 31/05/2032 Nil 325,000 0
30/05/2022 31/05/2032 0.40p 267,500 0
30/05/2022 31/05/2032 0.50p 267,500 0
30/05/2022 31/05/2032 0.50p 267,500 0
------------- -------------
The following table lists the inputs into the valuation
model.
Expected Risk-free Share
Dividend volatility interest price at Exercise
yield (%) (%) rate (%) grant date price
Issue - 30 May
2022 - 70.00 3.02 0.32p 0.00p
Issue - 30 May
2022 - 70.00 3.02 0.32p 0.4p
Issue - 30 May
2022 - 70.00 3.02 0.32p 0.5p
Issue - 30 May
2022 - 70.00 3.02 0.32p 0.5p
Issue - 19 Jan
2017 - 236.0 1.43 0.28p 0.28p
Issue - 19 Jan
2017 - 236.0 1.43 0.28p 0.40p
Issue - 13 Mar
2015 - 100.0 1.71 0.9p 0.9p
Issue - 13 Mar
2015 - 100.0 1.71 0.9p 1.17p
issue - 29 Jul
2014 - 148.0 1.71 1.15p 1.15p
issue - 29 Jul
2014 - 148.0 1.71 1.15p 1.5p
The shares that the options are based on are quoted in GBP and
so the option agreement is stated in GBP. As such they are
presented in GBP despite the presentational currency of the Group
being USD.
The number and weighted-average exercise prices of share options
under the share option programmes and replacement awards were as
follows:
2022 2021
---------------------- --------------------
Shares Weighted Shares Weighted
Average Average
Exercise Exercise
Price Price
----------
'000 '000
---------- ----------
Options outstanding,
beginning of year 200,349 0.55p 200,349 0.55p
Granted 1,127,500 0.33p - -
Options outstanding,
end of year 1,327,849 0.35p 200,349 0.55p
---------- ---------- -------- ----------
The weighted-average life of the options in issue as at 31
December 2022 is 8 years and 2 days (2021 - 3 years and 27
days.)
Warrants
The Company did not grant warrant options during the year (2021:
nil)
A summary of the status of the Company's share warrants as of 31
December 2020 and changes during the year are as follows:
2022 2021
'000 '000
----- -----
Warrants outstanding, - -
beginning of year
Granted - -
Expired - -
Exercised - -
Cancelled * - -
Warrants outstanding, - -
end of year
----- -----
During the year ending 31 December 2021 nil (2021 - nil)
warrants granted to an advisor expired.
There are no warrants outstanding in favour of the
Directors.
Premier's share price opened at 0.185p in January 2022, traded
at an average of 0.32p, with a high of 0.565 and low of 0.179p
during the year and closed at 0.505p on 31 December 2022.
21. Non-controlling interest
2022 2021
RHA Tungsten Limited (51% Non-controlling
interest) $ 000 $ 000
At 1 January (12,205) (11,747)
Foreign exchange and hyper-inflationary -
adjustments
Non-controlling interest in share of profit
/ (losses) for the year - RHA (68) (20)
Non-controlling interest in share of other
comprehensive income for the period (444) (438)
At 31 December (12,717) (12,205)
--------- ---------
The following table summarises the information relating to each
of the Group's subsidiaries that has material Non-controlling
interest, before any intra-group eliminations.
2022 2021
RHA RHA
Non-controlling Interest percentage 51% 51%
Non-current assets - -
Current assets 15 8
Non-current liabilities (18,516) (18,319)
Current liabilities (6,434) (5,621)
Net assets (24,935) (23,932)
--------- ---------
Net assets attributed to Non-controlling
Interest (12,717) (12,205)
--------- ---------
Revenue - -
Profit / (Loss) (870) (858)
Other Comprehensive Income /(Loss) (134) (40)
Total comprehensive income (1,004) (898)
--------- ---------
Loss allocated to NCI (512) (458)
--------- ---------
The share of losses in the year represents the losses
attributable to non-controlling interests in RHA for the year.
22. Revenue
2022 2021
$ 000 $ 000
Major product/service lines
Sale of Wolframite - -
Sale of scrap - -
Reserve Bank of Zimbabwe Export Incentive - -
------ ------
Total revenue - -
Prescription of debts 34 133
Total other income 34 133
Gross revenue 34 133
------ ------
Primary Geographical Markets
Africa 34 133
34 133
------ ------
Timing of revenue recognition
Products transferred at a point in time - -
- -
------ ------
23. Cost of sales excluding depreciation and amortisation
2022 2021
$ 000 $ 000
Mining contractor - -
Staff costs - -
Consumables - -
Equipment hire and maintenance - -
Mining services - -
Plant services - -
Selling costs - -
Net realisable value adjustment of cost - -
of inventory sold
Inventory write-down / (write-up) - -
- -
------ ------
RHA mine is under care and maintenance and accordingly there are
no cost of sales.
24. Administrative expenses
2022 2021
$ 000 $ 000
Audit fees - Holding company 42 44
- Under provision prior year 7 3
- Over provision prior year - -
Staff costs 53 568
Consulting and advisory fees 1,369 1,199
Directors' fees 116 118
Accounting and legal fees 230 143
Marketing and public relations 22 3
Travel 380 50
Security costs 33 7
Vehicle operating costs 47 9
Insurance 53 8
Office and administration 306 88
Short term non-capitalised lease payments 126 114
Foreign exchange losses 480 12
Share based payment (note 20) 1,342 -
Exploration costs 16 -
4,622 2,366
------ ------
Number of staff 2022 2021
Directors of the Holding Company 4 4
Administrative staff 0 0
----- -----
Total Holding Company staff 4 4
Directors of subsidiaries 3 1
Subsidiary administrative and operating
staff 12 6
Total staff 19 11
----- -----
25. Finance charges
2022 2021
$ 000 $ 000
Interest charged by suppliers - -
Interest on borrowings - -
Derivative financial liability transaction
costs - -
Unwinding of discount on provisions - 18
Loss on extinguishment of debt - -
Interest on finance lease - -
- 18
------ ------
26. Taxation
Deferred tax 2022 2021
$ 000 $ 000
As at 1 January - -
As at 31 December - -
------ ------
Income Tax
Taxation charge for the year - -
------ ------
There is no taxation charge for the year ended 31 December 2022
(2021: Nil) because the Group is registered in the British Virgin
Islands where no corporate taxes or capital gains tax are charged.
However, the Group may be liable for taxes in the jurisdictions of
the underlying operations.
The Group has incurred tax losses in West Africa and Zimbabwe;
however a deferred tax asset has not been recognised in the
accounts due to the unpredictability of future profit streams. The
accumulated tax losses not recognised at RHA amount to RTGS
15,862.422 million (2021: RTGS 1,615.272 million).
Reconciliation of effective
tax rate 2022 2022 2021 2021
$ 000 $ 000
(Loss) / Income before tax
from continuing operations - (5,803) - 2,298
------ -------- ------ ------
Tax using the Zimbabwean
company tax rate 25% 1,451 25% (575)
------ -------- ------ ------
Tax effect of:
Effects of tax rates in
foreign jurisdictions (25%) (1,451) (25%) 575
------ -------- ------ ------
Contingent liability
The Group operates across different geographical regions and is
required to comply with tax legislation in various jurisdictions.
The determination of the Group's tax is based on interpretations
applied in terms of the respective tax legislations and may be
subject to periodic challenges by tax authorities which may give
rise to tax exposures.
27. Loss per share
The calculation of loss per share is based on the loss after
taxation attributable to shareholders, divided by the weighted
average number of shares in issue during the year:
2022 2021
$ 000 $ 000
Net loss attributable to owners of the
company ($ 000) (5,803) 2,298
Weighted average number of Ordinary Shares
in calculating basic earnings per share
('000) 21,686,502 18,337,187
Basic loss per share (US cents) (0.03) 0.01
Diluted loss per share (US cents) (0.03) 0.01
Weighted average number of ordinary shares
Issued ordinary shares at 1 January ('000) 19,418,009 17,793,009
Weighted average of shares issued during
the year ('000) 2,268,493 544,178
Weighted average number of ordinary shares
at 31 December ('000) 21,686,502 18,337,187
----------- -----------
As the Group incurred a loss for the year, there is no dilutive
effect from share options and warrants in issue or the shares
issued after the reporting date.
2022 2021
Potential dilutive effect on earnings
per share $ 000 $ 000
Options issued 1,327,849 200,349
Warrants issued - -
Convertible loan notes - -
Total potentially dilutive shares 1,327,849 200,349
-------------------------- --------------------------
Refer to note 33 Post balance sheet events for additional
potentially dilutive transactions.
28. Directors' remuneration
Directors' Consultancy Share Options Total
fees Fees
2022 $ 000 $ 000 $ 000 $ 000
Executive Directors
George Roach - current - 275 - 275
Non-Executive Directors
Godfrey Manhambara
- current 42 - - 42
Wolfgang Hampel 42 42
Neil Herbert - 11 - 11
Dr Wei Lou 31 - - 31
115 286 - 401
----------- ------------ -------------- ------
Directors' Consultancy Share Options Total
fees Fees
2021 $ 000 $ 000 $ 000 $ 000
Executive Directors
George Roach - current - 275 - 345
- backdated increase 70
Non-Executive Directors
Godfrey Manhambara
- current 42 - - 87
- backdated increase 45
Wolfgang Hampel 31 - - 31
Neil Herbert - 36 - 36
118 381 - 499
----------- ------------ -------------- ------
(*) These directors were not employed during the full financial
year.
The Directors' fees disclosed in note 24 include nil (2021: nil)
being the fees paid to Directors of RHA, who are not directors of
the parent company.
29. Notes to the statement of cash flows
Cash and cash equivalents comprise cash at bank, bank overdrafts
and short-term bank deposits with an original maturity of three
months or less. The carrying value of these assets is approximately
equal to their fair value.
2022 2021
$ 000 $ 000
Profit / (Loss) before tax (5,803) 2,298
Adjustments for:
Finance charges - 18
Foreign exchange variations 1,342 43
Settlement agreement on Finance
lease - -
Impairment of Investments and loans
receivable 1,161 -
Reversal of Impairment of intangible
assets - Zulu - (4,566)
Depreciation and amortisation 54 14
-------- --------
Operating cash flows before movements
in working capital (3,246) (2,193)
(Increase)/decrease in inventories (11) 1
(Increase)/decrease in receivables 206 (379)
Increase/(decrease) in payables 33,167 7
Net cash inflow / (outflow) from
operating activities 30,116 (2,564)
-------- --------
2021 2020
Reconciliation of Non-Cash Transactions $ 000 $ 000
Share Capital
Shares issued 15,782 3,839
Less: Share issue costs (944) (230)
Less: Settlement of payables - -
14,838 3,609
------- ------
Finance Charges
Finance charge expense - (18)
Less: Unwinding of discount on the
Provision for rehabilitation - 18
Less: Interest accrued on loans
and other payables - -
- -
------- ------
Cash
and
cash Total
equivalents Borrowings debt Net debt
GBP GBP GBP GBP
Net debt as at 31 December
2020 727 - - 727
Cash flows 256 (180) (180) 76
Foreign exchange adjustments (43) - - (43)
Net debt as at 31 December
2021 940 (180) (180) 760
Cash flows 7,345 - - 7,345
Foreign exchange adjustments 1,342 - - 1,342
Net debt as at 31 December
2022 9,627 (180) (180) 9,447
------------------------------ ------------ ----------- ------ ---------
30. Financial Instruments - Fair values and risk management
The following table shows the carrying amounts and fair values
of financial assets and financial liabilities, including their
levels in the fair value hierarchy. It does not include fair value
information for financial assets and financial liabilities not
measured at fair value if the carrying amount is a reasonable
approximation of fair value.
Trade and other receivables and trade and other payables
classified as held-for-sale are not included in the table below. As
at 31 December 2022 the Group did not have any trade and other
receivables nor any trade and other payables that were classified
as held-for-sale.
The Group has not disclosed the fair values of financial
instruments such as short-term trade receivables and payables,
because their carrying amounts are a reasonable approximation of
their fair value.
Carrying
value Fair value
-------------- ------ ------
Financial
assets
FVOCI at Other
31 December - equity amortised financial Level Level Level
2022 instruments cost liabilities Total 1 2 3 Total
Note $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000
------------- ------------ ------------- --------- ------ ------ ------ ------
Financial assets
measured
at fair value
FVOCI 501 - - 501 - - 501 501
501 - - 501
---------------------- ------------- ------------ ------------- ---------
Financial assets not
measured at fair value
Trade and other
receivables - - - -
Cash and cash
equivalents - - - -
- - - -
------------- -------- ------------- ------------ ------------- ---------
Financial liabilities
measured at fair value
- - - -
- - - -
------------- -------- ------------- ------------ ------------- ---------
Financial liabilities not measured at fair value
Bank
overdrafts - - - -
Unsecured loans from
shareholders - - - -
Secured loan - - - -
Trade and other
payables - - (33,725) (33,725)
- - (33,725) (33,725)
---------------------- ------------- ------------ ------------- ---------
Carrying
value Fair value
-------------- ------ ------
Financial
FVOCI assets Other
31 December - equity at amortised financial Level Level Level
2021 instruments cost liabilities Total 1 2 3 Total
Note $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000
------------- -------------- ------------- ------ ------ ------ ------ ------
Financial assets
measured
at fair value
FVOCI 8,342 - - 8,342 - - 8,342 8,342
8,342 - - 8,342
----------------------- ------------- -------------- ------------- ------
Financial assets not
measured at fair value
Trade and other
receivables - 5 - 5
Cash and cash
equivalents - - - -
- 5 - 5
----------------------- ------------- -------------- ------------- ------
Financial liabilities
measured at fair value
- - - -
- - - -
-------------- -------- ------------- -------------- ------------- ------
Financial liabilities not measured at fair value
Bank
overdrafts - - - -
Unsecured loans from
shareholders - - - -
Secured loan - - - -
Trade and other
payables - - (556) (556)
- - (556) (556)
----------------------- ------------- -------------- ------------- ------
Financial instruments - Fair values and risk management
B. Measurement of fair values
i. Valuation techniques and significant unobservable inputs
The following tables show the valuation techniques used in
measuring Level 3 fair values for financial instruments measured at
fair value in the statement of financial position, as well as the
significant unobservable inputs used. Related valuation processes
are described in Note 4.8.
Financial instruments measured at fair value
Inter-relationship
between significant
Significant unobservable unobservable inputs
Type Valuation technique inputs and fair value measurement
Unlisted Current market value None None
Equity technique:
investments The valuation model
is based upon the
latest price at
which the unlisted
entity raised capital.
------------------------ ------------------------- ----------------------------
ii. Transfers between Levels 1 and 2
There were no transfers between Levels 1 and 2 in either the
current financial year or in the prior financial year.
C. Financial Risk Management
The Group has exposure to the following risks arising from
financial instruments:
- credit risk;
- liquidity risk; and
- market risk.
Risk management framework
The Company's board of directors has overall responsibility for
the establishment and oversight of the Group's risk management
framework.
The Group's risk management policies are established to identify
and analyse the risks faced by the Group, to set appropriate risk
limits and controls and to monitor risks and adherence to limits.
Risk management policies and systems are reviewed regularly to
reflect changes in market conditions and the Group's
activities.
The Group's audit committee oversees how management monitors
compliance with the Group's risk management policies and
procedures, and reviews the adequacy of the risk management
framework in relation to the risks faced by the Group. The Group's
audit committee undertake ad hoc reviews of risk management
controls and procedures, the results of which are reported to the
audit committee.
Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group's
receivables from customers and investments in debt securities.
The carrying amounts of financial assets represent the maximum
credit exposure.
In the current year there was no impairment loss, nor 2021, for
unrecoverable sundry debtors.
Trade receivables
The Group's exposure to credit risk is influenced mainly by the
individual characteristics of each customer. However, management
also considers the factors that may influence the credit risk of
its customer base, including the default risk associated with the
industry and country in which its customers operate. Details of
concentration of revenue are included in Note 22.
The Group has established a credit policy under which each new
customer is analysed individually for creditworthiness before the
Group's standard payment terms and conditions are offered. The
Group's review includes external ratings, if they are available,
financial statements, credit agency information, industry
information and in some cases bank references. Sales limits are
established for each customer and are reviewed regularly.
The Group limits its exposure to credit risk from trade
receivables by establishing a maximum payment period of one
month.
The Group is monitoring the economic environment in Zimbabwe,
where its exploration and mining operations are based.
The Group does not require collateral in respect of trade and
other receivables. The Group does not have trade receivables for
which a no allowance is recognised because of collateral.
2022 2021
$ 000 $ 000
The exposure to credit risk for trade
receivables
by geographic region was as follows:
Zimbabwe - -
Other - -
- -
------ ------
The exposure to credit risk for trade
receivables
by counterparty was as follows:
Zimbabwe Revenue Authority 2 5
Other - -
2 5
------ ------
The exposure to credit risk for trade
receivables
by credit rating was as follows:
External credit ratings - -
Other 2 5
2 5
------ ------
Expected credit loss assessment for corporate customers as at 31
December 2022 and 31 December 2021
The Group allocates each exposure to a credit risk grade based
on data that is determined to be predictive of the risk of loss
(including but not limited to external ratings, audited financial
statements, management accounts and cash flow projections and
available press information about customers) and applying
experienced credit judgement. Credit risk grades are defined using
qualitative and quantitative factors that are indicative of the
risk of default.
The company had no exposure to credit risk for the year ended 31
December 2022 (2021 - nil)
Movements in the allowance for impairment in respect of trade
receivables
The movement in the allowance for impairment in respect of trade
receivables during the year amounted to nil (2021 - nil).
Cash and cash equivalents
As at 31 December 2022, the Group held $9.627 million in cash
and cash equivalents (2021: $0.940 million). The cash and cash
equivalents are held with bank and financial institution
counterparties which are rated BB to BAA (according to Standard and
Poor's).
Impairment on cash and cash equivalents has been measured on a
12-month expected loss basis and reflects the short maturities of
the exposures. The Group considers that its cash and cash
equivalents have low credit risk based on the external credit
ratings of the counterparties. On the implementation of IFRS 9 the
Group did not impair any of its cash and cash equivalents.
Liquidity risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another
financial asset. The Group's approach to managing liquidity is to
ensure, as far as possible, that it will have sufficient liquidity
to meet its liabilities when they are due, under both normal and
stressed conditions, without incurring unacceptable losses or
risking damage to the Group's reputation.
Exposure to liquidity risk
The following table presents the remaining contractual
maturities of financial liabilities at the reporting date. The
amounts are gross and undiscounted and include contractual interest
payments and exclude the impact of netting agreements.
Contractual
cash flows
--------- --------- --------- ---------------------- --------- ---------
More
Carrying 2 Months 2 to 1 to 2 to than
31 December 2022 value Total or less 12 Months 2 Years 5 Years 5 years
$ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000
--------- --------- --------- ----------- --------- --------- ---------
Non- derivative
financial
liabilities
Bank overdrafts - - - - - - -
Unsecured shareholder's
loan - - - - - - -
Unsecured loans - - - - - - -
Secured loans - - - - - - -
Trade payables (33,725) (33,725) (33,725) - - - -
(33,725) (33,725) (33,725) - - - -
--------- --------- --------- ----------- --------- --------- ---------
Derivative financial - - - - - - -
liabilities - - - - - - -
- - - - - - -
--------- --------- --------- ----------- --------- --------- ---------
Contractual
cash flows
--------- ------ --------- ---------------------- --------- ---------
More
Carrying 2 Months 2 to 1 to 2 to than
31 December 2021 value Total or less 12 Months 2 Years 5 Years 5 years
$ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000
--------- ------ --------- ----------- --------- --------- ---------
Non- derivative
financial
liabilities
Bank overdrafts - - - - - - -
Unsecured shareholder's
loan - - - - - - -
Unsecured loans - - - - - - -
Secured loans - - - - - - -
Trade payables (556) (556) (556) - - - -
(556) (556) (556) - - - -
--------- ------ --------- ----------- --------- --------- ---------
Derivative financial - - - - - - -
liabilities - - - - - - -
- - - - - - -
--------- ------ --------- ----------- --------- --------- ---------
The interest payments on the financial liabilities represent the
fixed interest rates as per the respective contracts.
The Group aims to maintain the level of its cash and cash
equivalents and other highly marketable debt investments at an
amount in excess of expected cash outflows on financial liabilities
other than trade payables. The Group also monitors the level of
expected cash inflows on trade and other receivables together with
expected cash outflows on trade and other payables.
Market risk
Market risk is the risk that changes in market prices - such as
foreign exchange rates, interest rates and equity prices - will
affect the Group's income or the value of its holdings of financial
instruments. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters,
while optimising the return.
Currency risk
The Group is exposed to transactional foreign currency risk to
the extent that there is a mismatch between the currencies in which
sales, purchases, receivables and borrowings are denominated and
the respective functional currencies of Group companies. The
functional currencies of Group companies are primarily Pound
Sterling and the US Dollar. The Zimbabwean trading companies
functional currency is RTGS. The currencies in which these
transactions are primarily denominated are Euro, US Dollar, South
African Rand, RTGS and Pound Sterling.
The Company conducts its business in Zimbabwe with a significant
portion of expenditures in that country historically denominated in
USD and now also in RTGS. The introduction of the RTGS$ during the
financial year has resulted in the devaluation of the RTGS$ against
the US Dollar. This devaluation has also resulted in the Zimbabwean
economy going into hyperinflationary status. To a large extent this
is beneficial to Premier as its Zimbabwean assets are fully
impaired. The remaining liabilities are inflation adjusted at each
reporting period yielding foreign exchange gains on conversion to
USD.
All transactions are subject to spot rates and with no hedging
transactions taking place.
Exposure to currency risk
31 December 2022 31 December 2021
EUR GBP USD ZAR RTGS EUR GBP USD ZAR RTGS
'000 '000
'000 '000 '000 '000 000 '000 '000 '000 '000 000
------ ------ -------- --------- -------- ------ ------ -------- -------- --------
Trade receivables - - - - - - - - - -
Unsecured
loans - - - - - - - - - -
Trade payables (13) (28) (15) (523) (231) - (98) (189) (87) (3,143)
------ ------ -------- --------- -------- ------ ------ -------- -------- --------
Net statement
of financial
position exposure (13) (28) (15) (523) (231) - (98) (189) (87) (3,143)
------ ------ -------- --------- -------- ------ ------ -------- -------- --------
Next 6 months
forecast
sales - - - - - - - - - -
Next 6 months
forecast purchases (129) (596) (7,029) (23,997) (4,883) (379) (392) (2,391) (3,048) (1,327)
Net forecast
transaction
exposure (129) (596) (7,029) (23,997) (4,883) (379) (392) (2,391) (3,048) (1,327)
------ ------ -------- --------- ------ ------ -------- --------
Net exposure (142) (624) (7,044) (24,520) (5,114) (379) (490) (2,580) (3,135) (4,470)
------ ------ -------- --------- -------- ------ ------ -------- -------- --------
The summary quantitative data about the Group's exposure to
currency risk as reported to the management of the Group is as
follows:
The following significant exchange rates in relation to the
reporting currency are applicable:
Average rate for
the year Year end spot rate
------------------- ----------------------
2022 2021 2022 2021
Euro 1.0540 1.1921 1.0702 1.2281
GBP 1.2355 1.3867 1.2097 1.421
ZAR 0.0589 0.0682 0.0591 0.0741
RTGS 399.859 87.9503 684.334 108.666
The carrying amounts of the Group's foreign currency denominated
monetary assets and monetary liabilities at the reporting date are
as follows:
Liabilities Assets
------------------ ----------------------
2022 2021 2022 2021
'000 '000 '000 '000
Sterling (GBP) 28 11 - -
Euro (EUR) 13 77 - -
South African Rand
(ZAR) 523 540 - -
Real Time Gross
Settlement of USD
(RTGS) 231 12,707 - -
The presentation currency of the Group is US dollars.
The Group is exposed primarily to movements in USD for trade,
RTGS for the Zimbabwean companies and GBP for all fund raising
activities.
Sensitivity analysis
Financial instruments affected by foreign currency risk include
financial investments (see note 9) cash and cash equivalents, other
receivables, trade and other payables and convertible loan notes.
The following analysis is intended to illustrate the sensitivity of
the Group's financial instruments (at year end) to changes in
market variables, being exchange rates.
The following assumptions were made in calculating the
sensitivity analysis:
All income statement sensitivities also impact equity.
Translation of foreign subsidiaries and operations into the
Group's presentation currency have been excluded from this
sensitivity as they have no monetary effect on the results.
Income Statement / Equity
2022 2021
$ 000 $ 000
Exchange rates:
+10% $ Sterling (GBP) (3) (10)
-10% $ Sterling (GBP) 3 10
+10% $ RTGS (23) (314)
-10% $ RTGS 23 314
The above sensitivities are calculated with reference to a
single moment in time and will change due to a number of factors
including:
* Fluctuating other receivable and trade payable
balances
* Fluctuating cash balances
* Changes in currency mix
Interest rate risk
The Group has entered into fixed rate agreements for its finance
leases and shareholders loans. The Group does not hedge its
interest rate exposure by entering into variable interest rate
swaps.
Exposure to interest rate risk
The interest rate profile of the Group's interest-bearing
financial instruments as reported to the management of the Group is
as per the table below.
2022 2021
$ 000 $ 000
Fixed rate instruments
Financial assets - -
Financial liabilities - -
- -
------ ------
Fair value sensitivity analysis for fixed-rate instruments
The Group does not account for any fixed-rate financial assets
of financial liabilities at FVTPL. Therefore, a change in interest
rates at the reporting date would not affect profit or loss.
Other market price risk
The Group is exposed to equity price risk, which arises from
equity securities at FVOCI are held as a long-term investment.
The Group's investments in equity securities comprise small
shareholdings in unlisted companies. The shares are not readily
tradable and any monetisation of the shares is dependent on finding
a willing buyer.
Valuation techniques and assumptions applied for the purposes of
measuring fair value
Due to the short term nature, the fair value of cash and
receivables and liabilities approximates the carrying values
disclosed in the financial statements.
Due to the short term nature, the fair value of cash and
receivables and liabilities approximates the carrying values
disclosed in the financial statements.
The fair value of financial assets is estimated by using other
readily available information. As the Vortex (formerly Circum) and
MNH shares are in privately held exploration companies, the fair
values were estimated using observable placing prices where
available.
Vortex and MNH are unlisted and there are no quoted market
prices. The fair value of the Vortex shares was derived using the
previous issue price and validating it against the most recent
placing price on 30 December 2022. The fair value of MNH shares was
derived from the latest financial information and was fully
impaired. .
Capital management
The Group manages its capital resources to ensure that entities
in the Group will be able to continue as a going concern, while
maximising shareholder return.
The capital structure of the Group consists of equity
attributable to shareholders, comprising issued share capital and
reserves. The availability of new capital will depend on many
factors including a positive mineral exploration environment,
positive stock market conditions, the Group's track record, and the
experience of management. There are no externally imposed capital
requirements. The Directors are confident that adequate cash
resources exist or will be made available to finance operations but
controls over expenditure are carefully managed.
31. Subsidiaries
Premier had investments in the following subsidiary undertakings
as at 31 December 2022, which principally affected the losses and
net assets of the Group:
31.1 Subsidiaries held during the year
Country of Proportion of
Name incorporation voting interest
and operation % A ctivity
2022 2021
Zulu Lithium Mauritius
Holdings Limited Mauritius 100 100 Holding Company
RHA Tungsten Mauritius
Limited Mauritius 100 100 Holding Company
Kavira Minerals Holdings
Limited Mauritius 100 100 Holding Company
Tinde Fluorspar Holdings
Limited Mauritius 100 100 Holding Company
Lubimbi Minerals Holdings
Limited Mauritius 100 100 Holding Company
Gwaaii River Minerals Limited Mauritius 100 100 Holding Company
Zulu Lithium (Private)
Limited Zimbabwe 100 100 Exploration
RHA Tungsten (Private)
Limited Zimbabwe 49* 49* Care and maintenance
Katete Mining (Private)
Limited Zimbabwe 100 100 Exploration
Tinde Fluorspar (Private)
Limited Zimbabwe 100 100 Exploration
LM Minerals (Private) Limited Zimbabwe 100 100 Exploration
BM Mining & Exploration
(Private) Limited Zimbabwe 100 100 Exploration
Licomex (Pty) Ltd Zimbabwe 100 100 Exploration
Li3 Mozambique (Pty) Ltd Australia 100 100 Holding Companies
Li3B Mozambique (Pty) Ltd Australia 100 100 Holding Companies
Li3C Mozambique (Pty) Ltd Australia 100 100 Holding Companies
Lithium B S.A. Mozambique 100 100 Exploration
Premier African Minerals South Africa 100 N/a Procurement
(South Africa) (Pty) Ltd assistance
* Accounted as a controlled subsidiary, refer note 4 -
Significant accounting policies, estimates and assumptions and note
4.7 - Basis of consolidation.
31.2 Acquisition of subsidiaries
During the year ended 31 December 2020 the Group acquired 100%
of the following companies:
Number
of shares Purchase Country
Company Name purchased Consideration of Incorporation Main Activity
Premier African Minerals 100 $nil South Africa Procurement
(South Africa) (Pty) assistance
Ltd
----------- --------------- ------------------ --------------
Total purchase consideration $nil
--------------- ----------------------------------
32. Related party transactions
Ultimate controlling party
There is no single ultimate controlling party.
Transactions with key management personnel
Borrowings
During the 2021 financial year, Neil Herbert advanced $0.180
million to Premier African Minerals to facilitate an additional
loan to MN Holdings. At 31 December 2022 the loan was still
owing.
Remuneration of key management personnel
The remuneration of the Directors and other key management
personnel of the Group are set out below for each of the categories
specified in IAS 24 Related Party Disclosures.
2022 2021
$ 000 $ 000
Staff costs 53 568
Consulting and advisory fees 286 381
Directors' fees 116 118
455 1,067
------ ------
33. Events after the reporting date
33.1 Corporate matters
On the 27 April 2023 all options under the 2017 Options Award
(as announced on 19 January 2017) with half the number of options
shares exercised at the price of 0.28p and the other half at the
price 0.40p per ordinary share. Accordingly, together with the
24,500,000 options exercised by current directors, in aggregate, a
total of 161,877,130 new ordinary shares were issued by Company
pursuant to the exercise of the options. The total proceeds of the
exercise amounts to GBP550,382.24 which will be used by the Company
for general working capital purposes.
In May 2023, the Company appointed MAH, Chartered Accountants as
its new independent auditor following the resignation of Jeffreys
Henry LLP as a result of their insufficient capacity to satisfy its
regulatory requirements in respect of its audit engagement with
Premier.
In May 2023, Premier concluded a direct equity raise of
GBP1,759,500 before expenses at an issue price of 0.925 pence per
new ordinary share for the ongoing Zulu Pilot Plant
Optimisation.
In May 2023, Premier concluded a further direct equity raise of
GBP610,000 before expenses at an issue price of 0.925 pence per new
ordinary share for the ongoing Zulu Pilot Plant Optimisation.
George Roach participated directly in this equity raise by way of
subscription of GBP110,000.
Pursuant to the above equity raise, the Company agreed to
appoint CMC Markets UK Plc as joint broker to the Company.
On 26 June 2023, the Company held its Annual General Meeting. At
the meeting George Roach was reappointed to the board of directors
of the Company by the simple majority following his retirement by
rotation and the resolution for the board of directors to disapply
pre-emption rights for 4 billion shares for a period of 24 month
failed to be approved by special majority.
33.2 Offtake and Prepayment Agreement
In accordance with Offtake and Prepayment Agreement
("Agreement") entered into on 3 August 2022 between Premier and
Canmax , Premier was required to supply product by 30 May 2023,
failing which Canmax has the right to terminate the Agreement by
notice in writing to Premier and Premier will need to enact
repayment of the prepayment amount plus interest in full within
ninety (90) days of such termination notice. Premier has been
accruing interest at 3.5% per annum (subject to adjustment from
time to time in accordance with loan prime rate as published by the
People's Bank of China) to Canmax in accordance with the
Agreement.
Premier advised CanMax that further funding would be required to
achieve the required obligation under the Agreement and both
parties have expressed their intention to reach agreement and to
proceed with the conclusion of a suitable amendment to the
Agreement, while no amendment has been signed to date.
On 25 June 2023, Premier served CanMax with a Force Majeure
notice ("FM Notice") as the milling and sizing component of the
plant required certain limited modifications to allow for full
optimisation to design capacity throughput. In particular, Premier
had been informed by plant designer that the plant is unable to
provide material correctly sized and in sufficient tonnage from the
comminution section to the floatation plant to meet the concentrate
production contemplated under the Agreement. Inter alia, the
bearing seal assemblies in the EDS mill are unable to prevent dust
and liquid ingress into the bearing assembly and consequentially
must be redesigned.
The immediate effect of the FM Notice is the suspension of all
obligations under the Agreement including those associated with
delivery of Product by Premier and any consequences associated with
it. Specifically, this suspends for the duration of the Force
Majure event, any consequence, notice, interest, or the like
associated with the delivery of Product. The existing Agreement
makes provision for such an event of Force Majure and contemplates
a maximum time of six months during which the cause or causes of
the Force Majure should be rectified. In Premier's current opinion,
in the light of recent developments, a de facto state of Force
Majure has therefore been in existence from 25 May 2023.
On 28 June 2023, the Company received a purported notice of
termination of the Offtake Agreement from Canmax following service
of a Notice of Force Majeure on Canmax on the 25 June 2023. The
notice of termination requires the Company to settle the prepayment
amount of $34.7m within 90 days, however the Company has been
advised that this notice of termination has no force or effect.
Premier remains committed to an equitable solution and will
continue to engage with Canmax to the extent to which Canmax is so
prepared.
34 Ultimate Controlling Company
There is no single ultimate controlling company for Premier.
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END
FR NKKBPNBKDQAN
(END) Dow Jones Newswires
June 30, 2023 09:57 ET (13:57 GMT)
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