TIDMAFP
RNS Number : 5765N
African Pioneer PLC
30 September 2021
30 September 2021
African Pioneer Plc
("African" or the "Company")
Interim Results for the Six Months Ended 30 June 2021
African Pioneer Plc a company engaging in development of natural
resources exploration projects in Sub-Saharan Africa, announces its
unaudited interim results for the six months ended 30 June
2021.
OPERATIONAL, FINANCIAL, CORPORATE and STRATEGY REVIEWS
OPERATIONAL REVIEW
The period under review has been transformatory for the Company
in that the Company completed an Initial Public Offering (IPO) on
the FCA's Standard List with the shares being admitted to trading
on the Main Market for listed securities of the London Stock
Exchange and the acquisition of its projects in Namibia, Zambia and
Botswana more details of which are provided in the Corporate
Highlights section of this review.
From the IPO the Group has been engaged in development of the
natural resources exploration projects in Sub-Saharan Africa. The
Company's' main focus is on evaluating and advancing the Namibian
and Zambian Projects as the Botswanan Projects are subject to the
Conditional Botswana Licence Sale Agreement as described under the
Corporate Review.
Technical review of Projects: After the IPO and having acquired
its projects in Namibia, Zambia and Botswana, the Company commenced
technical reviews and / or programmes on all of the projects
located in Namibia and Zambia. The primary metal in all countries
is copper with by-product potential in all of our projects. In
Zambia we have potential for cobalt, in Namibia gold and in
Botswana potential for silver.
Namibia: In Namibia, the Company is exercising a complete data
review with the view to applying for a mining licence for the
Ongombo licence which is located on the Matchless Copperbelt. The
work to date have been very revealing and it appears that the
mineralisation is "open ended" and potential exist for a small open
pit which will thereafter facilitate mine entries. We are in
discussion with a number of parties for financing the mine
development either in whole or in part.
Examination of previous drilling results has indicated that gold
may play a significant role in the revenues from a mine and our
planning will take note of high value gold areas and our
metallurgical design will include a gold recovery circuit. We
intend to apply for a mining licence during the second half of 2021
with the view to developing a mine in the shortest practical time
subject to mining licence grant.
Zambia: The Zambian project portfolio consists of three large
copper/cobalt licences in Northwest Zambia and with two more
licences in the Lusaka province. The Northwest projects are
considered to be highly prospective resembling the geology of the
DRC which is in close proximity in the North. The licences have
been flown for air borne geophysics as well as ground geochemistry.
Previous work has indicated potential drill targets which will be
tested in the near future. The Lusaka licences are prospective for
gold and initial reconnaissance and will be carried out during the
second half of the year. We have conducted initial reconnaissance
in the north-western areas including outcrop identification,
topography mapping and establishing logistics for drilling.
Botswana: The Botswana projects are in the Kalahari Copperbelt
and are considered highly prospective since they are in the general
area of mining development being carried out by Sandfire Resources
of Australia. Sandfire subscribed to a Pre-IPO funding round and
earned a 15% interest in the Company post IPO as a result of the
funding. We have entered into a Conditional Licence Sale Agreement
with Sandfire to acquire the Botswana licences for USD1 million
together with a commitment to spend a further USD1 million within
two years. On identification of viable mineralisation a one-off
success payment is to be paid to Company for the first ore reserve
reported under JORC Code 2012 edition on which exceeds 200,000
tonnes of contained copper (the "First Ore Reserve") in the range
of US$10 million to US$80 million depending on the amount of
contained copper in the First Ore Reserve (the "Success
Payment").
FINANCIAL REVIEW
Financial highlights:
-- GBP184K loss after tax (2020: GBP16K)
-- Approximately GBP1.62m cash at bank at the period end (2020: GBP88K)
-- The basic and diluted losses per share are summarised in the table below
Loss per share 30 June 30 June
(pence) 21 20
Note
Basic 3 (0.45)p (0.77)p
Note
Diluted 3 (0.39)p (0.77)p
--------- --------
-- The net asset value as at 30 June 2021 was GBP4.7m (31 December 2020: GBP87K)
Fundraisings:
On 11 March 2021 the Company entered into a Convertible Loan
Note Subscription Agreement with Sandfire Exploration Limited,
listed on the Australian Stock Exchange ("Sandfire") under which
Sandfire subscribed for US$500,000 of interest free unsecured loan
notes, which upon listing was converted into Ordinary Shares
constituting 15 per cent. of the Company's issued share
capital.
At Listing the Company raised GBP1,750,000 (before expenses)
through the issue of 50,000,000 new ordinary shares of no par value
in the capital of the Company ("Ordinary Shares") at 3.5 pence per
Ordinary Share.
The funds raised on Admission provided the Group with sufficient
money to undertake the exploration and assessment of the Company's
licences in Namibia and Zambia and also in Botswana were the
Conditional Botswana Licence Sale Agreement conditions not to be
met for at least 18 months. Details of these work programmes are
set out in the Company's Prospectus dated 26 May 2021. As noted
below, if the disposal of the Botswanan Projects to Sandfire
proceeds, then the funds which would otherwise have been reserved
for those projects will be available for the development of the
Namibian and Zambian Projects and/or further acquisitions as and
when any may be identified.
CORPORATE REVIEW
Company Board: The Board of the Company comprises Colin Bird,
Executive Chairman Raju Samtani, Finance Director Christian
Cordier, Business Development Director Kjeld Thygesen, Independent
Non-executive Director James Nicholas Cunningham-Davis,
Non-executive Director
Listing: The Company was admitted to the Official List (Standard
Segment) and commenced trading on the Main Market for listed
securities of the London Stock Exchange on 1 June 2021 (the
"Listing" or "IPO").
Corporate Acquisitions: At Listing the Company completed the
acquisition of projects based in Namibia, Zambia, and Botswana by
acquiring:
1) 100% of Zamcu Exploration Pty Ltd ("Zamcu"), for GBP836,649
of which GBP687,500 was settled by the issue of Ordinary Shares at
3.5 pence per Share at Listing and cash of GBP149,149. Zamcu via
its subsidiaries holds a 70 per cent. interest in two Namibia
Exclusive Prospecting Licenses ("EPLs") located within the
Matchless amphibolite Belt of central Namibia (the "Namibian
Projects");
2) 80% of African Pioneer Zambia Limited ("APZ"), for
GBP1,925,000 which was settled by the issue of Ordinary Shares at
3.5 pence per share at Listing. APZ holds a 100 per cent. interest
in five Zambian Prospecting Licenses (PLs) located in two areas
namely the Central Africa Copperbelt (Copperbelt), which comprises
four PLs and the Zambezi area which comprises one PL (the "Zambian
Projects"); and
3) 100% of Resource Capital Partners Pty Ltd ("RCP"), for
GBP350,000 which was settled by the issue of Ordinary Shares at 3.5
pence per Share at Listing. RCP which holds a 100 per cent.
interest in eight Botswana Prospecting Licenses ("PLs") located in
two areas namely (1) the Kalahari Copperbelt (KC), which comprises
six PLs and (2) the Limpopo Mobile Belt (Limpopo), which comprises
two PLs (the "Botswanan Projects") (together the "Projects") (the
"Subsidiaries") (together the "Group").
Lock Up and Orderly Market: All the Ordinary Shares issued to
vendors at Listing to acquire Zamcu, APZ and RCP were subject to a
12 month lock up from the IPO followed by a 12 month orderly market
arrangement.
Conditional sale of Botswana Licences to Sandfire: The Botswana
Projects have been acquired at an attractive purchase price of
GBP350,000, as although unexplored, they are located in an highly
prospective area for copper projects and it was the Company's
original intention to conduct an initial 18 month exploration work
programme to assess the prospects of the Botswanan Projects and
assess the best way of developing them. However, whilst working on
the Listing, the Company was approached by Sandfire Resources
Limited, listed on the Australian Stock Exchange and capitalised at
approximately A$1.2 billion ("Sandfire"), who have a large
established presence in the Kalahari Copperbelt, with a proposal to
acquire the Botswanan Projects. The Company has seen this as an
opportunity for Sandfire to take over ownership and responsibility
for the exploration stage of the Botswanan assets whilst allowing
the Group to share in the potential upside should the exploration
ultimately be successful in establishing a mineable reserve.
On 12 March 2021 the Company entered into a conditional licence
sale agreement with Sandfire (the "Conditional Botswana Licence
Sale Agreement") under which the Company guaranteed the sale to
Sandfire following Admission of all the Botswanan Licences in
return for a payment at completion of the Conditional Botswana
Licence Sale Agreement of US$1,000,000 with US$500,000 in cash and
US$500,000 by the issue of 107,271 Sandfire Shares (which will not
be subject to any trading restrictions). Sandfire has the in
country infrastructure and technical expertise and financial
resources to accelerate the rate of expenditure on the Botswanan
assets by agreeing to fund a minimum of US$1 million of expenditure
(compared to the Group's 18 month budget of US$176,000) and the
proceeds from the sale to Sandfire will allow the Group to
concentrate its increased financial resources and its management
capabilities on its remaining projects in Namibia and Zambia.
The Conditional Botswana Licence Sale Agreement is conditional
inter alia on ministerial consent and applicable competition
approval in Botswana. Upon these conditions precedent being met the
Botswana licences will no longer form part of the Group. However,
if the conditions precedent of the Conditional Botswana Licence
Sale Agreement are not met by the long stop date of 30 September
2021 or such later date as agreed by the parties then the Botswana
licences will remain part of the Group. The Company is currently
finalizing negotiations with Sandfire in relation to the
Conditional Botswana Licence Sale Agreement and anticipates making
an announcement in this regard in the near future.
Under the Conditional Botswana Licence Sale Agreement Sandfire
will be committed to spend a minimum of US$1M within 2 years of
settlement (the "Exploration Period") and if the US$1M is not
spent, any shortfall will be paid to APP. In addition, a one-off
success payment to be paid to APP for the first ore reserve
reported under JORC Code 2012 edition on the Included Licences
which exceeds 200,000 tonnes of contained copper (the "First Ore
Reserve") in the range of US$10 million to US$80 million depending
on the amount of contained copper in the First Ore Reserve (the
"Success Payment").
STRATEGY REVIEW
The Company's short to medium term strategic objectives are to
enhance the value of its mineral resource Projects through
exploration and technical studies conducted by the Company or
through joint venture or other arrangements (such as sale of the
Botswanan Projects to Sandfire) with a view to establishing the
Projects can be economically mined for profit. With a positive
global outlook for both base and precious metals, the Directors
believe that the Projects provide a base from which the Company
will seek to add significant value through the application of
structured and disciplined exploration.
Outlook
Outlook for Copper: The future price forecast for copper is
extremely positive as is the forecast for the by-product metals.
The outlook for copper supply is quite bleak and we are likely to
see more smaller mines being developed since most large mining
copper projects have been shelved for political or economic
reasons. Thus the Company is well positioned with all its projects,
to take part in an acquisition boom or alternatively be a subject
which attracts financing which might not have been available in the
immediate past.
The major mining companies are seeking new projects for
acquisition and all of our projects have fundamentals which may
attract the attention of larger companies and we have already
entered into an agreement with Sandfire in relation to the Botswana
Projects.
Whilst politicians are trying to persuade us that inflation is
at least 3 years away, the evidence is somewhat different and we
feel there is a strong possibility that the spectre of inflation
will loom much sooner. This might slow down major stock markets but
may be good for the small mines sector since in such times they
have been seen to outperform.
The Board feels they have assembled an enviable portfolio of
projects and are pleased that Sandfire have elected to take a
position in the Company. We look forward to advancing all our
projects in the second half and providing our shareholders with the
prospects of enhanced value flowing into next year.
Post Period Events
On 27 August 2021 the Company announced it had entered into an
agreement to acquire a further 15% interest in its Ongombo Project
and Ongeama Project in Namibian (the "Namibian Projects") by
increasing its interest in the Namibian Projects to 85% (further
details are in Note 10 to the unaudited Interim Results).
INTERIM MANAGEMENT REPORT
The Directors are required to provide an Interim Management
Report in accordance with the Financial Conduct Authorities ("FCA")
Disclosure Guidance and Transparency Rules ("DTR"). The Directors
consider the preceding Operational, Financial, Corporate and
Strategy Review of this Half Yearly Financial Report provides
details of the important events which have occurred during the
period and their impact on the financial statements as well as the
outlook for the Company for the remaining six months of the year
ended 31 December 2021.
The following statement of the Principal Risks and
Uncertainties, the Related Party Transactions, the Statement of
Directors' Responsibilities and the Operational, Financial,
Corporate and Strategy Review constitute the Interim Management
Report of the Company for the six months ended 30 June 2021.
Principal Risks and Uncertainties
The principal risks that are specific to the Company were
detailed under this heading in Part 1 Summary of the Company's
prospectus which was published on 26 May 2021 (the "Prospectus")
which is available on the Company's website at
www.africanpioneerplc.com Part II Risk factors of the Prospectus
provides more details of risk factors specific and material to the
Group and to the Natural Resources Sector. The Board are of the
opinion that these risk factors will continue to remain unchanged
for the forthcoming six month period.
The principal risks and uncertainties facing the group are as
follows:
-- There are significant risks associated with any exploration
project and the ability of the Company to explore, develop and
generate operational cashflows from its projects
-- No assurances can be given that minerals will be discovered
in economically viable quantities at the Company's projects
-- Adverse foreign exchange fluctuations
The Board has also reviewed emerging risks which may impact the
forthcoming six-month period and the main risk facing the Company
is the ongoing impact of the COVID-19 pandemic which to date has
not had a significant impact on the Company's operations.
Related Party Transactions during the period
1. Issue of shares at the IPO as disclosed in the Prospectus
a) The Company entered into a Share Purchase Agreement, dated 29
October 2020 ("Zamcu SPA") with Tonehill Pty Ltd, Coreks Super Pty
Ltd and Breamline Pty Limited ("Zamcu Sellers") under which the
Zamcu Sellers (which are controlled by Christian Cordier) agreed to
sell to the Company their collective 100 per cent. ownership
interests in Zamcu in return for 10,000,000 shares issued at the
IPO with an issue price of 3.5 pence per share in the Company
("Consideration Shares") . The sale is subject to a 12 month
lock-in during which the Zamcu Sellers are not permitted to sell
their Consideration Shares in the Company, followed by a 12 month
orderly markets period during which the Zamcu Sellers are required
to work with the Company's broker for 30 days prior to making any
sale.
b) The Company entered into a Share Purchase Agreement, dated 29
October 2020 ("RCP SPA") with M&A Wealth Pty Ltd and Breamline
Pty Limited (a company controlled by Christian Cordier) ("RCP
Sellers") under which the RCP Sellers agreed to sell to the Company
their collective 100 per cent. ownership interests in RCP in return
for 10,000,000 Consideration Shares in the Company issued at the
IPO, of which each RCP Seller received 5,000,000 Consideration
Shares. The sale is subject to a 12 month lock-in during which the
RCP Sellers are not permitted to sell their Consideration Shares in
the Company, followed by a 12 month orderly markets period during
which sellers are required to work with the Company's broker for 30
days prior to making any sale.
c) The Company entered into a Share Purchase Agreement, dated 25
November 2020 ("APZ SPA") with Raju Samtani, Colin Bird, Mohamad
Ahmad, Caleb Amos Mulenga, Lukonde Makungu and Camden Park Trading
(a company controlled by Colin Bird) ("AP Zambia Sellers") under
which the AP Zambia Sellers agreed to sell to the Company their
collective 80 per cent. ownership interests in African Pioneer
Zambia Pty Limited ("AP Zambia") in return for 55,000,000
Consideration Shares in the Company issued at the IPO, in
proportion to their existing holdings of which 15,000,000
Considerations Shares were issued to each of Colin Bird and Raju
Samtani and 5,000,000 Consideration Shares were issued to Camden
Park Trading. The sale is subject to a 12 month lock-in during
which the AP Zambia Sellers are not permitted to sell their
Consideration Shares in the Company, followed by a 12 month orderly
markets period during which sellers are required to work with the
Company's broker for 30 days prior to making any sale.
2. Directors' Letters of Appointment and Service Agreements as
disclosed in the Prospectus
a) Pursuant to an agreement dated 24 May 2021, the Company
renewed the appointment of James Cunningham-Davis as a Director.
The appointment continues unless terminated by either party giving
to the other 3 months' notice in writing. James Cunningham-Davis is
entitled to director's fees of GBP12,000 per annum for being a
director of the Company plus reasonable and properly documented
expenses incurred during the performance of his duties which will
be invoiced by Cavendish Trust Company Ltd an Isle of Man Trust
Company that James Cunningham-Davis is a founder and managing
director of. James Cunningham-Davis is not entitled to any pension,
medical or similar employee benefits. The agreement replaces all
previous agreements with James Cunningham-Davis and/or Cavendish
Trust Company Ltd in relation to the appointment of James
Cunningham-Davis as a director of the Company.
b) Pursuant to an agreement dated 24 May 2021, the Company
appointed Kjeld Thygesen as a non-executive Director with effect
from the date of the IPO. The appointment continues unless
terminated by either party giving to the other 3 months' notice in
writing and Kjeld Thygesen is entitled to director's fees of
GBP18,000 per annum for being a director of the Company plus
reasonable and properly documented expenses incurred during the
performance of his duties. Kjeld Thygesen is not entitled to any
pension, medical or similar employee benefits.
c) Pursuant to an agreement dated 24 May 2021, the Company
renewed the appointment of Colin Bird as a Director. The
appointment continues unless terminated by either party giving to
the other 3 months' notice in writing. Colin Bird is entitled to
director's fees of GBP18,000 per annum for being a director of the
Company plus reasonable and properly documented expenses incurred
during the performance of his duties. Colin Bird is not entitled to
any pension, medical or similar employee benefits. The agreement
replaces all previous agreements with Colin Bird in relation to his
appointment as a director of the Company.
d) Pursuant to a consultancy agreement dated 24 May 2021, the
Company has, with effect from the date of the IPO, appointed Colin
Bird as a consultant to provide technical advisory services in
relation to its current and future projects including but not
limited to assessing existing geological data and studies, existing
mine development studies and developing exploration programs and
defining the framework of future geological and mine study reports
(the "Colin Bird Services"). The appointment continues unless
terminated by either party giving to the other 3 months' notice in
writing. Colin Bird is entitled to fees of GBP3,500 per month for
being a consultant to the Company plus reasonable and properly
documented expenses incurred during the performance of the Colin
Bird Services.
e) Pursuant to an agreement dated 24 May 2021, the Company
renewed the appointment of Raju Samtani. The appointment continues
unless terminated by either party giving to the other 3 months'
notice in writing. Raju Samtani is entitled to director's fees of
GBP18,000 per annum for being a director of the Company plus
reasonable and properly documented expenses incurred during the
performance of his duties. Raju Samtani is not entitled to any
pension, medical or similar employee benefits. The agreement
replaces all previous agreements with Raju Samtani in relation to
his appointment as a director of the Company.
f) Pursuant to a consultancy agreement dated 24 May 2021, the
Company has ,with effect from the date of Admission, appointed Raju
Samtani as a financial consultant to provide financial advisory
services to the Company (the "Raju Samtani Services"). The
appointment continues unless terminated by either party giving to
the other 3 months' notice in writing. Raju Samtani is entitled to
fees of GBP2,667 per month for being a consultant to the Company
plus reasonable and properly documented expenses incurred during
the performance of the Raju Samtani Services.
g) Pursuant to an agreement dated 24 May 2021, the Company
appointed Christian Cordier as a Director with effect from the date
of Admission. The appointment continues unless terminated by either
party giving to the other 3 months' notice in writing. Christian
Cordier is entitled to director's fees of GBP18,000 per annum for
being a director of the Company plus reasonable and properly
documented expenses incurred during the performance of his duties.
Christian Cordier is not entitled to any pension, medical or
similar employee benefits.
h) Pursuant to a consultancy agreement dated 24 May 2021, with
Mystic Light Pty Ltd a personal service company of Christian
Cordier the Company has secured the services of Christian Cordier,
with effect from the date of the IPO, as a business development
consultant to provide business development l advisory services to
the Company in relation to its existing and future projects (the
"Christian Cordier Services"). The appointment continues unless
terminated by either party giving to the other 3 months' notice in
writing. Mystic Light Pty Ltd is entitled to fees of GBP1,000 per
month for providing the Christian Cordier Services plus reasonable
and properly documented expenses incurred during the performance of
the Christian Cordier Services.
3. Related Party transactions described in the annual report to
31 December 2020
Other than disclosed above there have been no changes in the
related parties transactions described in the annual report for the
year ended 31 December 2020 that could have a material effect on
the financial position or performance of the Company in the first
six months of the current financial year
Responsibility Statement
The Directors, whose names and functions are set out in this
report under the heading Company Board, are responsible for
preparing the Unaudited Interim Condensed Consolidated Financial
Statements in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct
Authority ('DTR') and with International Accounting Standard 34 on
Interim Financial reporting (IAS34). The Directors confirm that, to
the best of their knowledge, this Unaudited Interim Condensed
Consolidated Report, which has been prepared in accordance with
IAS34, gives a true and fair view of the assets, liabilities,
financial position and profit or loss of the Group and the interim
management report includes a fair review of the information
required by DTR 4.2.7 R and by DTR 4.2.8 R, namely:
-- an indication of key events occurred during the period and
their impact on the Unaudited Interim Condensed Consolidated
Financial Statements and a description of the principal risks and
uncertainties for the second half of the financial year; and
-- material related party transactions that have taken place
during the period and that have materially affected the financial
position or the performance of the business during that
period."
For and on behalf of the Board of Directors
Colin Bird
Executive Chairman
29 September 2021
For further information, please contact:
African Pioneer Plc
Colin Bird
Executive Chairman +44 (0) 20 7581 4477
Beaumont Cornish (Financial Adviser)
Roland Cornish +44 (0) 20 7628 3396
Novum Securities Limited (Broker)
Jon Belliss +44 (0) 20 7399 9400
or visit https://africanpioneerplc.com/
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
UK Domestic Law by virtue of the European Union (Withdrawal) Act
2018 ("UK MAR").
Group Statement of Profit and Loss
For the six months ended 30 June 2021
Notes Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2021 2020
GBP'000 GBP'000
Income
Dividend receivable 139 236
Realised loss on sale of investments - (48,625)
Unrealised gain on investments 16,942 44,104
------------ ------------
Total income 17,081 4,285
Operating expenses (195,900) 11,823
Group operating loss (178,819) (16,108)
Interest costs (4,830) -
Loss before taxation (183,649) (16,108)
Taxation - -
------------ ------------
Loss for the period (183,649) (16,108)
------------ ------------
Loss per share (pence)
Basic 3 (0.45)p (0.77)p
Diluted 3 (0.39)p (0.77)p
--------- --------
Group Statement of Other Comprehensive Income
For the six months ended 30 June 2021
Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2021 2020
GBP GBP
Other comprehensive income :
Loss for the period (183,649) (16,108)
Items that may be reclassified to profit
or loss:
Foreign currency reserve movement - -
------------ ------------
Total comprehensive loss for the period (183,649) (16,108)
------------ ------------
Group S tatement of Changes in Equity
For the six months ended 30 June 2021
Share Capital Retained Total
Capital Contribution Earnings Equity
GBP GBP GBP GBP
Unaudited - six months ended
30 June 2021
Balance at 1 January 2021 452,983 186,446 (552,315) 87,114
Current period loss - - (183,649) (183,649)
Total comprehensive loss
for the period - - (183,649) (183,649)
---------- -------------- ---------- ----------
Net proceeds from shares
issued 1,844,431 - - 1,844,431
Acquisition of subsidiaries 2,962,500 2,962,500
Loan notes converted into
shares 186,446 (186,446) - -
Balance at 30 June 2021 5,446,360 - (735,964) 4,710,396
---------- -------------- ---------- ----------
Unaudited - six months ended
30 June 2020
Balance at 1 January 2020 452,983 61,446 (462,159) 52,270
Current period loss - - (16,108) (16,108)
Total comprehensive loss
for the period - (16,108) (16,108)
-------- ------- ---------- ---------
Net proceeds from shares
issued - - - -
Balance at 30 June 2020 452,983 61,446 (478,267) 36,162
-------- ------- ---------- ---------
Group Balance Sheet
As at 30 June 2021
Unaudited Audited
30 31
June December
2021 2020
Notes GBP GBP
ASSETS
Non-current assets
Investments 4 116,046 99,105
Exploration and evaluation assets 6 3,152,373 -
---------- ----------
Total non-current assets 3,268,419 99,105
---------- ----------
Current assets
Trade and other receivables 41,533 420
Cash and cash equivalents 1,619,973 87,462
---------- ----------
Total current assets 1,661,506 87,882
----------
TOTAL ASSETS 4,929,925 186,987
----------
LIABILITIES
Current liabilities
Trade and other payables 219,529 50,730
Total current liabilities 219,529 50,730
---------- ----------
NET CURRENT ASSETS 1,441,977 37,152
---------- ----------
Non-current liabilities
Loans - (49,143)
---------- ----------
Total non-current liabilities - (49,143)
---------- ----------
TOTAL LIABILITIES 219,529 (99,873)
---------- ----------
NET ASSETS 4,710,396 87,114
---------- ----------
EQUITY
Share capital 7 5,446,360 452,983
Capital contribution - 186,446
Retained earnings (735,964) (552,315)
---------- ----------
TOTAL EQUITY 4,710,396 87,114
---------- ----------
Group Statement of Cash Flows
For the six months ended 30 June 2021
Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2021 2020
Notes GBP GBP
Cash flows from operating activities
Loss before tax (183,649) (16,108)
Adjustments for:
Dividends received (139) (236)
Loss on sale of investments - 48,625
Unrealised gain on investments (16,942) (44,104)
(Increase)/decrease in receivables (41,112) 210
Increase in payables 119,656 49,287
Net cash inflow from operating activities (122,186) 37,674
------------ -----------
Cash flows from/(used) in investing activities
Dividends received 139 236
Net movement in Investments held - (5,632)
Purchase of Exploration and Evaluation
assets on Acquisition of subsidiaries (3,152,373) -
------------
(3,152,234) (5,396)
------------ -----------
Cash flows from financing activities
Proceeds from Issue of shares, net of
issue costs 8 1,844,431 -
Shares issued to acquire subsidiaries 2,962,500 -
------------
4,806,931 -
------------ -----------
Increase in cash 1,532,511 32,278
Cash and cash equivalents at beginning
of period 87,462 1,576
Cash and cash equivalents at end of period 1,619,973 33,854
------------ -----------
Notes to the interim financial information
For the six months ended 30 June 2021
1. General information
This financial information is for African Pioneer Plc ("the
Company") and its subsidiary undertakings. The principal activity
of African Pioneer Plc (the 'Company') and its subsidiaries
(together the 'Group') is the development of natural resources
exploration projects in Sub-Saharan Africa. The Company is a public
limited company and was listed on to the Official List (Standard
Segment) and commenced trading on the Main Market for listed
securities of the London Stock Exchange on 1 June 2021. The Company
is domiciled in the Isle of Man and was incorporated on 20th July
2012 under the Isle of Man Companies Act 2006 with company
registration number 00859IV, and with registered address being 34
North Quay, Douglas, Isle of Man, IM1 4LB.
2. Basis of preparation
The unaudited interim financial information set out above, which
incorporates the financial information of the Company and its
subsidiary undertakings (the "Group"), has been prepared using the
historical cost convention and in accordance with International
Financial Reporting Standards ("IFRS").
These interim results for the six months ended 30 June 2021 are
unaudited and do not constitute statutory accounts as defined in
section 434 of the Companies Act 2006. The financial statements for
the year ended 31 December 2020 were audited and the auditors'
report on those financial statements was unqualified and contained
a material uncertainty pertaining to going concern.
The same accounting policies, presentation and methods of
computation have been followed in these unaudited interim financial
statements as those which were applied in the preparation of the
company's annual financial statements for the year ended 31
December 2020.
The interim consolidated financial information incorporates the
financial statements of African Pioneer Plc and its
subsidiaries.
Going concern basis of accounting
The Group made a loss from all operations for the six months
ended 30 June 2021 after tax of GBP183,649 (2020: GBP16,108), had
negative cash flows from operations and is currently not generating
revenues. However, during the period the Company raised
GBP1,750,000 (gross) at the time of the Company's Listing and
GBP365,000 by a share subscription by Sandfire Resources Limited
and Cash and cash equivalents were GBP1.62 million as at 30 June
2021, which will enable the Company to commence its exploration
activities on its newly acquired projects. An operating loss is
expected in the year subsequent to the date of these accounts and
as a result the Company will need to raise funding to provide
additional working capital to finance its ongoing activities.
Management has successfully raised money in the past, but there is
no guarantee that adequate funds will be available when needed in
the future.
Based on the Board's assessment that the Company will be able to
raise additional funds, as and when required, to meet its working
capital and capital expenditure requirements, the Board have
concluded that they have a reasonable expectation that the Group
can continue in operational existence for the foreseeable future.
For these reasons the financial statements have been prepared on
the going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and discharge of
liabilities in the normal course of business.
3. Earnings per share
Unaudited Unaudited
30 30
June June
2021 2020
GBP GBP
(Loss) attributable to equity holders
of the Company (183,649) (16,108)
Weighted average number of shares 41,187,791 11,729,826
Weighted average number of shares and
warrants 47,440,119 11,729,826
Basic loss per ordinary share (0.45)p (0.14)p
Diluted loss per ordinary share (0.39)p (0.14)p
The use of the weighted average number of shares in issue in the
period recognises the variations in the number of shares throughout
the period and is in accordance with IAS 33.
4. Investments
The Company has adopted the provisions of IFRS9 and has elected
to treat all available for sale investments at fair value with
changes through the profit and loss.
Available-for-sale investments under IFRS9 are initially
measured at fair value plus incidental acquisition costs.
Subsequently, they are measured at fair value in accordance with
IFRS 13. This is either the bid price or the last traded price,
depending on the convention of the exchange on which the investment
is quoted. All gains and losses are taken to profit and loss.
The Company's intention following its Listing is not to purchase
any new investments and to hold its residual portfolio as
realisable investments as a source of liquidity to cover
explorations costs and general overheads of the Company.
5. Acquisition of subsidiaries
Acquisition of Zamcu Exploration Pty Limited (Namibian
Projects)
On 1 June 2021 the Company completed the acquisition of 100% of
Zamcu Exploration Pty Ltd ("Zamcu"), which via its subsidiaries,
holds a 70 per cent. interest in two Namibian Exclusive Prospecting
Licenses ("EPLs") comprising the Ongombo and Ongeama projects,
located within the Matchless amphibolite Belt of central Namibia
that hosts copper-gold mineralisation;
The fair value of the assets and liabilities acquired were as
follows:
Oct 2020
GBP
Consideration
Equity consideration
* Ordinary shares (issued) 687,500
Cash consideration 149,149
---------
836,649
Fair value of assets and
liabilities acquired
-
* Assets
* Liabilities (262)
---------
(262)
Deemed fair value of
exploration assets acquired 836,911
---------
Acquisition of African Pioneer Zambia Limited ("APZ") (Zambia
Projects)
On 1 June 2021 the Company completed the acquisition of 80% of
APZ, which holds a 100 per cent. interest in five Zambian
Prospecting Licenses (PLs) located in two areas namely (i) the
Central Africa Copperbelt (Copperbelt), which is the largest and
most prolific mineralized sediment- hosted copper province known on
Earth and which comprises four PLs and (ii) the Zambezi area
located within the Zambezi Belt of southern Zambia that hosts a
lower Katanga Supergroup succession which, although less studied
than its northern counterpart, also hosts a number of
Copperbelt-style occurrences and which comprises one PL.
The fair value of the assets and liabilities acquired were as
follows:
Oct 2020
GBP
Ordinary shares (issued) 1,925,000
Fair value of assets and
liabilities acquired
* Assets 743
* Loan for exploration licenses (41,205)
----------
(40,462)
Deemed fair value of
* exploration assets acquired 1,965,462
----------
Resource Capital Partners Pty Ltd ("RCP") (Botswana
Projects)
On 1 June 2021 the Company completed the acquisition of 100% of
Resource Capital Partners Pty Ltd ("RCP"), which holds a 100 per
cent. interest in eight Botswana Prospecting Licenses ("PLs")
located in two areas namely (i) the Kalahari Copperbelt (KC) that
contains copper-silver mineralisation and which is generally
stratabound and hosted in metasedimentary rocks that have been
folded, faulted and metamorphosed to greenschist facies during the
Damara Orogeny and which comprises six PLs and (ii) the Limpopo
Mobile Belt ("Limpopo") set within the Motloutse Complex of eastern
Botswana, a transitional boundary between the Zimbabwe Craton to
the north and the Limpopo Mobile Belt to the south which comprises
two Pls.
The fair value of the assets and liabilities acquired were as
follows:
Oct 2020
GBP
Consideration
Equity consideration
* Ordinary shares (issued) 350,000
Fair value of assets and liabilities
acquired
-
* Assets
-
* Liabilities
---------
-
Deemed fair value of
exploration assets acquired 350,000
---------
6. Exploration and evaluation assets
30 June 2021 31 Dec 2020
GBP GBP
Balance at beginning of - -
period
Acquisitions during the
period
836,911 -
* Namibia Projects (note 5)
1,965,462 -
* Zambia Projects (note 5)
350,000 -
* Botswana Projects (note 5)
Carried forward
at end of period 3,152,373 -
------------- ------------
6.1 Exploration assets
The Company's principal business is to explore opportunities
within the natural resources sector in Sub-Saharan Africa, with a
focus on base and precious metals including but not limited to
copper, nickel, lead and zinc. The Company has acquired the Namibia
Projects, Zambia Projects and Botswana Projects (see Note 5 for
details).
No current JORC 2012 compliant Mineral Resources exist for any
of the Projects and no Mineral Reserve estimates have been
completed for the Projects.
The Company's' main focus following Admission is on evaluating
and advancing the Namibian and Zambian Projects as the Botswana
Projects are the subject of the Conditional Botswana Licence Sale
Agreement described in the following paragraph.
The Botswana Projects have been acquired at an attractive
purchase price of GBP350,000, as although unexplored, they are
located in an highly prospective area for copper projects and it
was the Company's original intention to conduct an initial 18 month
exploration work programme to assess the prospectively of the
Botswanan Projects and assess the best way of developing them.
However, whilst working on the Admission, the Company was
approached by Sandfire Resources Limited, listed on the Australian
Stock Exchange and capitalised at approximately A$1 billion
("Sandfire"), who have a large established presence in the Kalahari
Copperbelt, with a proposal to acquire the Botswanan Projects. The
Company has seen this as an opportunity for Sandfire to take over
ownership and responsibility for the exploration stage of the
Botswanan assets whilst allowing the Group to share in the
potential upside should the exploration ultimately be successful in
establishing a mineable reserve. Accordingly, on 12 March 2021 the
Company entered into a conditional licence sale agreement with
Sandfire (the "Conditional Botswana Licence Sale Agreement") under
which the Company guaranteed the sale to Sandfire following
Admission of all the Botswanan Licences in return for a payment at
completion of the Conditional Botswana Licence Sale Agreement of
US$1,000,000 with US$500,000 in cash and US$500,000 by the issue of
107,271 Sandfire Shares (which will not be subject to any trading
restrictions). Sandfire has the in-country infrastructure and
technical expertise and financial resources to accelerate the rate
of expenditure on the Botswanan assets by agreeing to fund a
minimum of US$1 million of expenditure (compared to the Group's 18
month budget of US$176,000) and the proceeds from the sale to
Sandfire will allow the Group to concentrate its increased
financial resources and its management capabilities on its
remaining two projects in Namibia and Zambia. In addition, as part
of the relationship with Sandfire, they agreed to come in as a
cornerstone investor into the Company making a US$500,000
investment in the Company as described in Note 8.
The Conditional Botswana Licence Sale Agreement is conditional
inter alia on ministerial consent and applicable competition
approval in Botswana. Upon these conditions precedent being met the
Botswana licences will no longer form part of the Group. However,
if the conditions precedent of the Conditional Botswana Licence
Sale Agreement are not met by the long stop date of 30 September
2021 or such later date as agreed by the parties then the Botswana
licences will remain part of the Group. The Company is currently
finalizing negotiations with Sandfire in relation to the
Conditional Botswana Licence Sale Agreement and anticipates making
an announcement in this regard in the near future.
6.2 Exploration assets accounting policy
Exploration, evaluation and development expenditure incurred is
accumulated in respect of each identifiable area of interest. These
costs are only carried forward to the extent that they are expected
to be recouped through the successful development of the area or
where activities in the area have not yet reached a stage which
permits reasonable assessment of the existence of economically
recoverable reserves. Accumulated costs in relation to an abandoned
area are written off in full in the year in which the decision to
abandon the area is made. When production commences, the
accumulated costs for the relevant area of interest are transferred
to development assets and amortised over the life of the area
according to the rate of depletion of the economically recoverable
reserves. A regular review is undertaken of each area of interest
to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest.
7. Share Capital
The share capital of African Pioneer Plc consists only of fully
paid ordinary shares with no par value. All shares are equally
eligible to receive dividends and the repayment of capital and
represent one vote at shareholders' meetings of the Company.
30 June 2021
Number GBP
Authorised:
1,000,000,000 ordinary shares 1,000,000,000 n/a
of no par value (1)
(1) on 7th December 2020, the
company increased its authorized
share capital from 500,000,000
shares 1,000,000,000 shares
30 June 2021
Number of Share
Group shares capital
GBP
----------------------------------------------- ----------- ---------
As at 1 January 2021 (2) 11,729,826 452,983
Shares issued during the period 177,729,724 5,440,877
Share issue costs - (447,500)
----------- ---------
As at 30 June 2021 189,459,550 5,446,360
----------- ---------
(2) on 7th December 2020, the company
consolidated its ordinary shares of zero
par value on a 10 existing shares to 1
new share basis which resulted in a reduction
of the total number of ordinary shares
in issue from 117,298,200 to 11,729,826
Movement in shares issued during the period
Shares issued from placing on admission 50,000,000 1,750,000
Share issued on acquisition on subsidiaries 84,642,857 2,962,500
Conversion of loans and share subscriptions 39,847,503 615,000
Advisers' fees settled by shares 3,239,364 113,377
Total 177,729,724 5,440,877
----------- ---------
The Company issued the following warrants during the period
Number Date granted Exercise Expiry Vesting conditions
price
21 Oct
8,571,428 01/06/2021 3.5p 23 upon being granted
1 June
2,500,000 01/06/2021 3.5p 24 upon being granted
1 June
25,000,000 01/06/2021 5.25p 23 upon being granted
1 June
1,420,947 01/06/2021 3.5p 24 upon being granted
1 June
230,000 01/06/2021 3.5p 23 upon being granted
-----------
37,722,375
8. Proceeds from the issuance of ordinary shares
Six months to YE 31 December
30 June 2021 2020
GBP GBP
Share capital at end of period (Note
7) 5,446,360 -
Advisers' fees settled by shares (113,377) -
Conversion of loans and share subscriptions
(1) (615,000) -
Share issued on acquisition on subsidiaries (2,962,500) -
Listing costs 447,500 -
Share capital and premium at beginning
of year (452,983) -
1,302,500 -
-------------- ---------------
(1) The GBP615,000 conversion was at Listing and comprised;
a) GBP150,000 in relation to a 21 October 2020 convertible loan
note agreement with Sanderson Capital Partners ("Sanderson") for
GBP150,000. Sanderson advanced the sum of GBP125,000 under this
agreement prior to 31 December 2020 and the balancing GBP25,000 was
received by the Company on 4 February 2021; and
b) GBP100,000 in relation to a 20 June 2018 loan agreement with
Tiger Royalties and Investments Plc ("Tiger") under which Tiger
loaned to the Company GBP100,000 due to convert on Listing into
2,857,143 New Ordinary Shares in the Company as agreed between
Tiger and the Company under a settlement letter, dated 8 February
2021; and
c) GBP365,000 in relation to a 11 March 2021 Convertible Loan
Note Subscription Agreement with Sandfire Exploration Limited,
listed on the Australian Stock Exchange ("Sandfire") under which
Sandfire subscribed for US$500,000 of interest free unsecured loan
notes, which upon Listing converted into Ordinary Shares
constituting 15 per cent. of the Company's issued share
capital.
Six months to Six months
30 June 2021 to
GBP 30 June 2020
GBP
Gross Funds raised from placing 1,750,000 -
on admission
Listing costs (447,500) -
-------------- --------------
Net proceeds received from placing 1,302,500 -
-------------- --------------
Advisers' fees settled by shares 113,377 -
Conversion of pre IPO loans 615,000 -
received to shares
Loan notes converted into shares (186,446) -
-------------- --------------
Net proceeds from issue of shares 1,844,431 -
-------------- --------------
9. Concert party
At the period end the Concert Party, further details of which
were disclosed in the Company's prospectus dated 26 May 2021, held
an aggregated interest of 51.11%
10. Subsequent events
On 27 August 2021 the Company entered into an agreement to
acquire a further 15% interest in its Ongombo Project and Ongeama
Project in Namibian (the "Namibian Projects") increasing its
interest in the Namibian Projects to 85%.
The 15% interest in the Namibia Projects is being acquired by
the Company through its wholly owned subsidiary Zamcu Exploration
Pty Ltd which is acquiring a 15% shareholding in each of Manmar
Investments One Hundred and Twenty Nine (Pty) Ltd and Manmar
Investments One Three Six (Pty) Ltd for an aggregated cash payments
of AUD528,000 (appox. GBP278,495) and the issue of 2,248,295
ordinary shares of no par value each (the "New Ordinary Shares") to
settle AUD100,000 (approx. GBP52,745). The New Ordinary Shares will
be issued to the vendor, Mr. Wilhelm Shali who holds the remaining
15% interest in Namibian Projects and who is a member of the
Concert Party further details of which are disclosed in the
Company's prospectus dated 26 May 2021. The New Ordinary Shares are
subject to a 12 month lock up and will increase Mr. Shali's
shareholding to 7,124,675 shares which will represent 3.71% of the
share capital as enlarged by the issue of the New Ordinary Shares.
Accordingly, following Admission the aggregated Concert Party
interest will be 51.72%. In addition, pursuant to the agreement,
the Company will have first right of refusal should Mr. Shali want
to sell his remaining 15% interest and he is prohibited from any
sale which could prejudice the Company's ability to comply with any
ownership or licensing requirements under any applicable laws or
regulations.
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END
IR FBLFXFKLFBBE
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September 30, 2021 07:18 ET (11:18 GMT)
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