TIDMATM
RNS Number : 3907X
AfriTin Mining Ltd
28 August 2020
28 August 2020
AfriTin Mining Limited
("AfriTin" or the "Company" and with its subsidiaries the
"Group")
Audited Financial Results
for the year ended 29 February 2020
AfriTin Mining Limited (AIM: ATM), a mining company with a
portfolio of tin assets in Namibia and South Africa, is pleased to
announce its final audited results for the year ended 29 February
2020.
The preliminary financial information does not constitute full
statutory accounts but is derived from accounts for the year ended
29 February 2020 which are audited. This preliminary announcement
is prepared on the same basis as set out in the statutory accounts
for the year ended 29 February 2020. While the financial
information included in this preliminary announcement has been
prepared in accordance with the recognition and measurement
criteria of International Financial Reporting Standards (IFRS), as
adopted by the European Union (EU), this announcement does not in
itself contain sufficient information to comply with IFRSs.
The auditor's report for the year ended 29 February 2020 was
unqualified but did contain an emphasis of matter (see Note 1
below).
The full Annual Report along with a Notice of Annual General
Meeting ("AGM") will be distributed to shareholders today and is
now available from the Company's website
(www.afritinmining.com).
The AGM will be held at 18-20 Le Pollet, St Peter Port, Guernsey
GY1 1WH on 29 September 2020 at 11:00 am.
For further information, please visit www.afritinmining.com or
contact:
AfriTin Mining Limited
Anthony Viljoen, CEO +27 (11) 268 6555
Nominated Adviser
WH Ireland Limited
Katy Mitchell
James Sinclair-Ford +44 (0) 207 220 1666
Corporate Advisor and Joint Broker
Hannam & Partners
Andrew Chubb
Jay Ashfield
Nilesh Patel +44 (0) 20 7907 8500
Joint Broker
Turner Pope Investments
Andy Thacker +44 (0) 203 657 0050
Financial PR (United Kingdom)
Tavistock +44 (0) 207 920 3150
Jos Simson
Barney Hayward
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014.
CHAIRMAN'S STATEMENT
Dear Shareholders,
I am pleased to present to you, the shareholders, the Annual
Report of AfriTin Mining Limited for the year ended 29 February
2020 which provides an update on activities relating to our
flagship Uis tin mine in Namibia.
The year was a transformational one for the Company, with two
key objectives achieved at our flagship asset, namely: achieving
initial production of tin concentrate through our newly constructed
pilot processing plant; and recording first revenues following our
shipment of tin concentrate out of Walvis Bay. I believe that to go
from admission to trading on AIM in 2017, when the mine was dormant
with no pilot plant infrastructure, to becoming an active tin
producer in a relatively short space of time, is an excellent
achievement and testament to our entire team's commitment.
Africa was previously a major source of tin production, with
volumes peaking in the 1970s, and we believe this resurgent region
will be the next growth area for the metal. The current
JORC-compliant resource at Uis is based on the V1 and V2 pegmatite
ore zones and represents material from two of the twelve existing
pits at site. There are over 180 pegmatites identified within five
kilometres of the current pilot processing plant. The prospectivity
of the Uis area could lead to the creation of a large tin and
associated metals mine, and the company is well placed to unlock
this potential.
As communicated to shareholders in August 2019, AfriTin
transitioned from developer to producer with the first production
of tin concentrate as part of the commissioning of the Phase 1
pilot plant. The objective for Phase 1 is a ramp-up programme to
720 tonnes of tin concentrate per annum. This first step is an
important part of AfriTin's evolving strategy and is the precursor
to the implementation of Phase 2, with the objective of increasing
capacity to 5 000 tonnes per annum of tin concentrate as we look to
become the African tin champion.
Despite the global tin market being small compared to other base
metals, tin is predicted to be the metal most positively impacted
by advances in new technologies such as robotics, renewables and
energy storage, amongst others (according to a study done by the
Massachusetts Institute of Technology in 2018). Clearly the more
traditional uses for tin are the basis of the demand for the metal,
but it is exciting to contemplate these new growth areas.
Tin prices were relatively high at the beginning of 2019, which
we believe was due to constrained Indonesian supply. As this
bottleneck opened around April 2019, demand softened, followed by
the price falling to three-year lows. Looking ahead, the general
consensus is that prices are unlikely to rise quickly due to the
amount of idle capacity at both mines and smelters in China and
Indonesia . Should demand recover - which it appears likely to do
in the long term - refined tin could re-enter the market at short
notice. In March 2020, prices dropped as the COVID-19 pandemic
spread globally and impacted global economies. With the easing of
global lockdown restrictions prices have rebound over the last two
to three months and are now back at pre COVID-19 levels. However,
with the continued uncertainty surrounding the COVID-19 pandemic,
global commodity markets are understandably unpredictable at the
moment. With this being said, the board remains confident in the
long-term fundamentals of tin and we believe the Company is set to
benefit from them.
Namibia continues to be an excellent country in which to operate
and do business. The country welcomes long-term investment in its
mining sector and recognises the importance of our operations to
both the local area in which we operate and the country as a whole.
An example of this is how easily and quickly we were able to
organise and connect to the country's state power grid. This was
not only a vital step for our operation, but it also highlights the
ease of doing business in this fantastic country. On that note, I'd
like to thank both our local Namibian partners and the government
for their continued encouragement and support for what we are
trying to achieve at Uis.
Another exciting milestone that the Company achieved this year
is the identification of additional commodities at Uis beyond the
primary tin mineral. Of particular interest is the addition of
tantalum and lithium to the resource estimate, which could provide
additional revenue streams in the future. We have always stated
that this could be an option for the Company, especially if the
production of these other mineral concentrates is a by-product
credit from our mining of the tin orebody. Although our priority
remains tin, we look forward to exploring this further and
quantifying the economic value this can add to the Company.
As always, I would like to thank all our shareholders,
stakeholders and the entire AfriTin team for their continued
support throughout this year and beyond. Clearly, although we are
living in uncertain times, my Board and I have full confidence in
the Company's ability to see these through and come out the other
side even stronger.
GLEN PARSONS
Chairman
27 August 2020
CHIEF EXECUTIVE OFFICER'S STATEMENT
Introduction
In the year under review we achieved a number of important
milestones as we continue towards our goal of transforming Uis into
a full-scale producing tin mine .
Since our IPO in 2017, our team has done excellent work in
transforming the mine from its dormant state following its closure
in the 1980s, to what is now an operational facility. We have
managed to accomplish this through the construction of the Phase 1
pilot plant, which allowed us to achieve two important objectives
in the year, namely, proof of commercial scale concept and
generation of first revenues.
The year in review
We achieved a major milestone in July 2019, with the completion
of the Uis Phase 1 pilot plant, consisting of a 4-stage crusher,
3-stage DMS and a dewatering circuit. Shortly thereafter, in August
2019, we achieved first production of a saleable tin concentrate --
a testament to the talent and hard work put in by the entire team.
In addition to tin production, the Phase 1 pilot plant is a crucial
step in proving the metallurgical process in the lead-up to the
Phase 2 project. While our focus remains on ramping up the pilot
plant to its design capacity of 500 000 tonnes of ore feed per
annum, it is the lessons learned from Phase 1 that will be
invaluable when we progress to Phase 2.
We received a strong vote of confidence in the long-term
development plan of our mine when we concluded an off-take
agreement with Thaisarco, a key player in the global, conflict-free
tin concentrate market. As part of the contract signed on 1 August
2019, concentrate produced during the period of the off-take is to
be shipped to Thaisarco in Phuket, Thailand from the port of Walvis
Bay. Thaisarco will pay AfriTin on the basis of actual tin content
in the concentrate. This agreement provides us with a steady
revenue stream from an industry leader in the manufacture of tin,
tin-alloys and tin-related products.
This financial year saw the conclusion of our maiden sale of tin
concentrate and dispatch of our second shipment of tin concentrate
from the Uis mine. The first shipment of tin concentrate and first
revenues from the Uis tin mine in three decades marks a significant
milestone for the Company and the Erongo region of Namibia and has
transformed us into a revenue-generating Company, an achievement of
which I am immensely proud.
We have always known that a key value catalyst at Uis would be
the economic extraction of additional minerals from the orebody, as
well as the surrounds. In March 2019, we announced the discovery of
significant grades of lithium in pegmatites of the ML 133 Licence,
located in the Nainais area. The ML 133 Licence is outside of the
current development area at the Uis mine, but remains of strategic
importance for the company. Mineralogical testing confirmed the
presence of lithium minerals, specifically petalite, within the
pegmatites in the licence area and this certainly warrants further
investigation to explore its economic potential. Although this is
not an immediate development priority for the Company, it does
provide us with a considerable upside target for additional
resources. Lithium remains a major component in battery storage
technologies and the exploitation of lithium from this licence area
could potentially contribute value to the Company in the future. We
look forward to exploring this opportunity further.
Access to a stable power supply is a vital component in mine
construction, from both the general operation at site to keeping
costs low with an affordable power feed. In April 2019, we
concluded a formal supply agreement for electrical grid power with
state-owned utility, Namibia Power Corporation, to provide the full
on-site power requirements for the Phase 1 project. Grid power is
significantly more cost effective than the diesel-generated power
that was previously used to power the mine and the Phase 1
facility. Under the agreement, we will get a supply voltage of 66
kV and a supply capacity of 1.5 MVA for a period of 10 years. This
agreement will provide the site with reliable energy, which is so
vital when operating in a remote region such as Uis. It will also
improve the planned cost structure, and further support the
economic viability of our project. Furthermore, we have also
established a secure supply of water for mining and processing in a
water-scarce area.
To prove the commercial concept and confirm the historical
(non-JORC) tonnages and grade at Uis, originally declared by SRK in
1989, we undertook a confirmatory drilling programme designed to
support the declaration of a mineral resource estimate on the V1
and V2 pegmatites. The objective of the drilling programme was to
announce a JORC (2012) compliant measured, indicated and inferred
mineral resource estimate for Uis. Three sets of drilling results
were announced during the year, one in May and two in June. These
drilling campaigns yielded a number of encouraging results. For
example, we saw an intersection of 108.97 metres at 0.17% Sn, which
indicates that the V1 and V2 pegmatites merge and thicken at depth.
Following these announcements that were made to the market, we were
able to announce a JORC-compliant resource of 71.54 million tonnes
of ore at a grade of 0.134% Sn for 95 539 tonnes of contained tin,
an inferred mineral resource estimate of 71.54 million tonnes of
ore at 85 ppm tantalum for 6 091 tonnes contained tantalum, and an
inferred mineral resource estimate of 71.54 million tonnes of ore
at 0.63% lithium oxide for 450 265 tonnes contained lithium oxide.
The full details of these drilling programmes is set out in the
announcements dated 28 May 2019, 10 June 2019 and 26 June 2019. The
additional downdip drilling confirmed an extension and thickening
of the orebody at depth, affirming our belief in the scale of this
deposit and increasing the resource historically stated by SRK
(1989) on the V1/V2 orebody. Confirming the historical data at Uis
has always been a crucial step in the progression and development
of the project, as we needed to confirm the anticipated resource at
the mine when we first came to the London Stock Exchange in 2017.
This resource contains one of the largest tin inventories of its
kind in the world, and encourages further development of additional
outcropping pegmatites within the mining licence area, in which
over 180 pegmatite bodies have been identified.
To strengthen our financial position, the Company agreed a
GBP1.9m working capital facility with Nedbank Namibia on 12 August
2019. This facility has enabled our team to focus on ramp-up
activities to achieve the design capacity of the Phase 1 pilot
plant. Procuring financing from a local Namibian financial
institution highlights the support for, and belief in, AfriTin's
long-term business case, and emphasises the importance of the Uis
tin mine to the Namibian economy. As discussed below, this facility
has been renewed and increased post period end.
In November 2019, we raised GBP3.8m by way of convertible loan
notes with a strategic African tin trading group and existing
shareholders. These funds are for general working capital purposes
relating to the progression of the project towards feasibility
studies for the Phase 2 expansion at Uis and initial test work on
the lithium discovery within the pegmatite orebody. This
convertible was anchored by AfriMet. We have been collaborating
with AfriMet to establish multiple channels of revenue generation
from the trade in tin and tantalum products.
As per the update in February 2020, the processing plant
throughput increased by an average of 63% month-on-month from
November 2019 to January 2020. Enhancements to the pilot processing
plant are underway to increase throughput and achieve nameplate
production of 60 tonnes of tin concentrate per month. The continued
ramp-up is supported by a number of operational commissioning
initiatives including: the transition from the current six-day
plant roster to continuous 24/7 operation; the de-bottlenecking of
and enhancements to the pilot processing plant, in particular the
fines tailings dewatering circuits which require additional
capacity due to a higher-than-expected fines ratio in the
run-of-mine feed; the expansion of the on-site laboratory to
facilitate metal accounting and increased plant recovery; and the
implementation of a computerized maintenance management system to
support targeted plant availability.
Post-period activities
Post the period under review, we announced a Company update
following the global outbreak of the COVID-19 pandemic and the new
legislation that was implemented by the Government of Namibia. In
order to tackle the spread of COVID-19, the Namibian government
announced a 21-day lockdown effective 27 March 2020. Under the
government legislation, mining operations were categorised as
critical economic services and minimum operational activity was
permitted to continue, including critical maintenance work. To
comply with this directive, the Uis tin mine suspended mining from
the open pit but continued feeding the processing plant from the
run-of-mine stockpile during this period. Full production has since
resumed and the Company continues to operate the Uis tin mine at
full scale despite ongoing COVID-19 measures in Namibia and South
Africa. The health, safety and well-being of our employees,
contractors and the local community are of utmost importance to the
Company. All necessary steps to mitigate a possible outbreak have
been taken, and the Company is pleased to report that there
continue to be no confirmed cases of COVID-19 at the Uis tin
mine.
On 5 May 2020, loan notes to the value of GBP2.05m were issued
at an interest rate of 10% per annum.
In July 2020, the offtake agreement with Thaisarco was renewed
for a further 12 months and the Company looks forward to building
on this robust relationship.
On 3 August 2020, the Company secured additional financing by
way of a placing and subscription to raise GBP3.05 million at a
price of 2.1 pence per ordinary share. In addition to this, the
Company has renewed and increased its working capital and VAT
facilities with Nedbank Namibia for a further 12 month period.
We are delighted that we have continued our relationship with
our offtake partner, Thaisarco, and our banking partner, Nedbank
Namibia, as we believe that both show a confidence in our Company,
asset and commodity.
Conclusion
I would like to take this opportunity to thank all the key
stakeholders in our business: the government and people of Namibia,
my fellow directors, all our employees, shareholders, advisors and
wider stakeholders. These are no doubt difficult times in the
global markets and I'm very proud of what our team has been able to
achieve this year, in particular producing our first tin
concentrate and generating our first revenues. I look forward to
continued progress at Uis as we continue to ramp up our mining
efforts and scale up our operations.
This report was approved by the Board on 27 August 2020.
ANTHONY VILJOEN
Chief Executive Officer
27 August 2020
FINANCIAL REVIEW
The year under review saw first revenue of GBP47k recorded from
the sale of tin concentrate shortly before year end, the Company's
primary product in addition to the on-going revenue generated from
the sale of sand at Zaaiplaats.
With Uis becoming a fully-fledged operation during the year,
administrative expenses across the Group increased to GBP1 815k for
the year (year ending 28 February 2019: GBP1 098k). Furthermore,
the increase is as a result of the group incurring a full year of
office rental costs, an increase in salary cost due to an increase
in head count given the ramp up of operations, the once-off issue
of shares to new key members of the management team and due
diligence costs relating to potential future financing options.
The Group's loss for the year totalled GBP1 830k (year ending 28
February 2019: GBP 1 057k).
Basic loss per share from operations of 0.29 pence was recorded
(2019: 0.23 pence).
The commencement of a preliminary economic assessment for Phase
2 and other exploration and evaluation work resulted in expenditure
of GBP522k being capitalised to the exploration and evaluation
intangible asset (2019: GBP 571k).
Progress continued throughout the year on the Phase 1 Pilot
Plant project and capital expenditure on this project amounted to
GBP7.4m during the year under review (2019: GBP 4.7m) relating to
the construction of the processing plant as well as capitalised
ramp-up and project team costs.
As at 28 February 2020, the Group had cash in the bank of GBP
575k (2019: GBP 1 781k) with the primary movements reflecting cash
used in operations totalling GBP1 254k mainly due to operating
costs incurred, investing cash outflows of GBP7.7m mainly due to
the capital expenditure detailed above and GBP7.8m of financing
cash inflows. During the year, a working capital facility of N$38m
(approximately GBP1.9m) was granted to the Company by Nedbank
Namibia. At 28 February 2020, N$24.7m (approximately GBP1.2m) had
been drawn down on this facility. The facility was successfully
renewed and increased subsequent to year end (see below) and is due
for annual review and renewal next in July 2021. The remaining
significant financing cash inflows related to the equity raise in
May 2019 detailed below and GBP3.8m raised through a convertible
loan note that matures in May 2021 and can be settled in equity at
the Company's discretion.
The inventory balance has increased to GBP247k (2019: GBP25k) as
a result of the operations at the Uis tin mine ramping up and
GBP185k of tin concentrate (28 tonnes) being on hand and ready for
shipment at year end which have subsequently been shipped.
The majority of trade and other receivables of GBP 649k (2019:
GBP 474k) relate to VAT refunds in both Namibia and South Africa.
As at the date of this report, all outstanding VAT receivables from
year end have been received and refunds from Namibia are now being
received on a more timely basis.
Net proceeds from an equity raise in May 2019 of GBP2 876k
account for the majority of the movement in the share capital
balance for the financial year.
Share-based payment charges relating to the share option scheme
amounting to GBP365k (2019: GBP157k), as well as a charge of GBP38k
(2019:GBP65k) relating to shares to be issued to certain directors
and employees in lieu of fees/salaries, were recognised in the
share-based payment reserve during the year.
Apart from trade and other payables of GBP895k (comprising GBP
571k trade creditors and GBP 324k other payables) (2019: GBP 379k),
the other significant liability on the balance sheet is the
environmental rehabilitation provision and lease liabilities
recognised following IFRS requirements applicable in the current
year. The increase in trade and other payables is as a result of
Uis becoming a fully-fledged operation during the year.
Funding
Subsequent to year end, the completion of a convertible loan
note for GBP2.05m on 5 May 2020, an equity subscription of GBP3.05m
on 3 August 2020 as well as the renewal and increase in the Nedbank
Namibia working capital facility will allow us to continue the ramp
up of the Uis project. The convertible loan note matures in May
2021 and can be settled in cash or equity subject to the agreement
of both parties. Based on the recent funding, the Company has
strengthened its financial position and forecasts indicate that the
Group will have sufficient working capital for at least the next 12
months. However, as detailed in note 2 to the financial statements
which highlights the material uncertainty over going concern, this
is dependent on a number of factors including the GBP2.05m loan
note holder agreeing to settle the loan note in equity, the renewal
of the working capital facility in July 2021 and operational
performance in the COVID-19 environment. In the event that
additional funding is required the Company is confident that such
funding will be available through debt or equity given the strength
of the Uis Project.
ROBERT SEWELL
Chief Financial Officer
27 August 2020
DIRECTORS' REPORT
The Directors of AfriTin hereby present their report together
with the consolidated financial statements for the period from 1
March 2019 to 29 February 2020.
Principal Activities, Business Review and Future
Developments
The principal activity of the Group (AfriTin and its
subsidiaries) is mineral exploration and the development of mining
and exploration projects in both Namibia and South Africa. A review
of the Group's progress and prospects is given in the CEO's
statement in this Annual Report.
Principal Risks and Uncertainties
The Group is subject to a variety of risks, specifically those
relating to the mining and exploration industry. As an
entrepreneurial business operating in emerging markets, there is
clearly an elevated risk which is balanced by potentially greater
rewards. The Board is mindful of, and monitors, both its corporate
risk and individual project risk. Outlined below are the principal
risk factors that the Board feels may affect performance. The risks
detailed below are not exhaustive, and further risks and
uncertainties may exist which are currently unidentified or
considered to be immaterial. The risks are not presented in any
order of priority. The primary change in risk compared to the prior
period has been the emergence of COVID-19 and its related impacts
as detailed below.
Risk and Impact Mitigation
COVID-19 COVID-19 resulted in widespread The countries in which
socio-economic disruption the Group operates have
around the world. Post period all instituted measures
end, the countries where the to limit the spread of
Group operates, namely Namibia, COVID-19. The Group is
South Africa and the United following the guidelines
Kingdom were subject to lockdown of the World Health Organisation
restrictions to contain the (WHO) and is complying
spread of the disease. The with the regulations of
Group's operation in Namibia Namibia, South Africa and
remained open (albeit it with the United Kingdom related
a temporary suspension on to COVID-19. In addition,
mining) during the lockdown the Group has updated its
due to an exemption granted health and safety policies
to the mining industry but and procedures to align
did suffer supply-chain disruptions with the above guidelines
which delayed production ramp-up. and to translate those
The Group's operations are guidelines into workplace-specific
continuing with minimal disruption measures.
now that global lockdown measures
have eased. However, there The location of the Group's
continues to be a risk that operation in Namibia is
lockdown measures return in relatively remote. However,
the event of further COVID-19 movement of personnel between
outbreaks which could result locations on site, and
in interruptions to operations between the site and other
through supply chain disruption, cities or towns is restricted
illness amongst our workforce in order to mitigate the
or offtake, together with risk of local infection.
potential volatility in tin
and tantalum prices. The Group has adopted technological
tools, such as online video
There are still significant conferencing and project
restrictions in place for and team management software,
international travel which to enable office-bound
limit personnel from the Group's staff to work remotely.
head office in South Africa
from visiting the mine, which The Group has a well established
limits management oversight. network of suppliers in
Namibia and South Africa
and the procurement team
is liaising with existing
suppliers to minimise supply-chain
disruptions and sourcing
from alternative suppliers
where needed.
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Volatility Tin and tantalum prices are The Board and management
of metal prices subject to high levels of constantly monitor the
volatility and are impacted markets in which the Group
by numerous factors that are operates. Long-term financial
outside of the control of planning is undertaken
the Group. A low tin or tantalum on a regular basis.
price could affect the financial
performance of the Group which
may affect the ability of
the Group to fund future growth.
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Foreign exchange With AfriTin's operations The Group holds the majority
mainly in Namibia and South of its funds in major currencies.
Africa, but tin sales based It attempts to match cash
in US Dollars and funding held in a particular currency
based in Pound Sterling, the to the currency in which
volatility and movement in liabilities are incurred.
the Rand exchange rate could
be a significant risk factor
to the Group.
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Development Development projects have The Group has appointed
projects no operating history upon a strong and experienced
which to base estimates of team of geoscientists and
future cash operating costs. engineers, complemented
For development projects, by experienced consultants
estimates of proven and probable in specialist areas. Any
reserves and cash operating new capital projects are
costs are, to a large extent, supported by feasibility
based on the interpretation studies. The Uis Phase
of geological data obtained 1 pilot plant will assist
from drillholes and other in understanding the metallurgy
sampling techniques and feasibility and processing elements
studies which derive estimates of the project which will
of cash operating costs based provide essential up-front
upon anticipated tonnage and information for the implementation
grades of ore to be mined of Phase 2.
and processed, as well as
the con guration of the orebody,
expected throughput and recovery
rates, comparable facility
and equipment operating costs,
anticipated climatic conditions,
and other factors.
Issues with the continued
ramp-up with the Phase 1 plant
as a result of metallurgical
challenges, financial constraints
or supply chain issues.
As a result, it is possible
that actual cash operating
costs and economic returns
may differ materially from
those currently estimated.
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Exploration The business of mineral exploration Exploration projects are
and mining involves a high degree of carefully managed with
risks risk. Whilst the discovery regular review by the Board
of a mineral deposit may result of progress against targets
in substantial rewards, few and expenditure. Funds
properties at the exploration are only expended in areas
stage are ultimately developed deemed prospective.
into producing mines.
The Group adheres strictly
The operations of the Group to a health and safety
may be disrupted by a variety programme. When constructing
of risks and hazards which a mine site, external geotechnical,
are beyond the control of environmental and geo-hydrological
the Group, including geological, consultants are used to
geotechnical and seismic factors, ensure all potential risks
environmental hazards, industrial of this nature are understood
accidents, occupational and and mitigation plans are
health hazards, technical put in place.
failures, labour disputes,
unexpected rock properties,
explosions, ooding, and extended
interruptions due to inclement
or hazardous weather conditions
and other acts of God.
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Social license Past environmental incidents Our ability to maintain
to operate in the extractive industry regulatory compliance in
highlight risks such as water order to protect the environment,
management, tailings storage as well as the health and
facilities and other potential safety of our host communities
hazards to both the environment and our workers, remains
and community health and safety. our top priority. We seek
to build partnerships with
host governments and local
communities based on trust
to drive shared long-term
value while working to
minimise the social and
environmental impacts of
our activities. The Board
oversees the Group's environmental,
safety and health, and
corporate social responsibility
programmes, policies and
performance.
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Capital budget Whilst best estimates are Capital expenditure and
overruns used in preparing capital project execution are subject
project budgets, the strategy to pre-defined governance
of relying on historical mine and approval procedures.
information prior to construction Management and the Board
of the Phase 1 pilot plant, regularly review project
coupled with the fact that progress and related expenditure
these budgets are dependent on projects. This includes
on a number of external factors reviewing actual costs
which are beyond the control against budgeted costs,
of the Group, results in a updating working capital
risk of material overruns models, and assessing potential
versus budget. impacts on future cash
flow.
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Power and water Power sources and water supply The Group has concluded
supply are key to the functioning a formal electrical power
of viable mining operations. supply agreement with Namibia
A lack of power or water, Power Corporation for power
or uncertainties around their at the mining and processing
uninterrupted supply, would facility in Uis and this
adversely impact the feasibility will provide enough power
of the operation. for Phase 1 of the project.
Diesel generators will
serve as backup power.
A geohydrological study,
water drilling and test
pumping programme has demonstrated
the viability of using
groundwater sources for
the Phase 1 pilot plant.
This was confirmed with
the implementation and
successful operation of
a water supply network.
Solutions for Phase 2 in
terms of both electrical
power and water supply
are in the process of being
reviewed.
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Country and AfriTin's operations are predominantly The AfriTin team is highly
political risk based in Namibia and South experienced at operating
Africa. Emerging-market economies in Africa. AfriTin routinely
are generally subject to greater monitors political and
risks including legal, regulatory, regulatory developments
tax, economic and political in its countries of operation
risks, which are potentially at both regional and local
subject to rapid change. level.
--------------------------------------- -------------------------------------
Key personnel The success and operational The Group has built a strong
risk performance of the Group is team of executives, scientists,
dependent on the skills, expertise engineers and support personnel
and knowledge of management who are experienced and
and qualified personnel. Group versatile enough to address
profitability could be impacted shortcomings that may arise
in the event that key personnel from the loss of employees.
leave the business. In addition, the Group
has developed long-standing
relationships with consulting
firms in key specialist
areas. Remuneration arrangements,
given the stage of the
Group's development, are
intended to be sufficiently
competitive to attract,
retain and motivate high-quality
executives capable of achieving
the Group's objectives,
thereby enhancing shareholder
value.
--------------------------------------- -------------------------------------
Financing The successful extraction The Group has sufficient
of tin, tantalum and eventually funds for its near-term
lithium will require signi goal of ramping up the
cant capital investment. The Uis pilot plant production
Group's ability to raise further and has a supportive shareholder
funds will depend on the success base and other interested
of existing and acquired operations. investors to engage with
Market conditions may not for future funding rounds.
be conducive to financing. The Group monitors cash
The Group may not be successful flows on a monthly basis.
in procuring the requisite
funds.
Refer to note 2 to the financial
statements for further details
in relation to financing risks
and going concern.
--------------------------------------- -------------------------------------
Results and Dividend
The Group's results show a loss for the year of GBP1 830 457.
The Directors will not be recommending a dividend.
Share Capital and Funding
Full details of the authorised and issued share capital,
together with details of the movements in the Company's issued
share capital during the year, are shown in Note 22. The Company
has one class of ordinary shares which carry no right to fixed
income. Each share carries the right to one vote at general
meetings of the Company.
Directors
The Directors who served the Company during the year and to date
are as follows:
Anthony Viljoen (appointed 23 October 2017) Chief Executive Officer
Glen Parsons (appointed 23 October 2017) Chairman/Independent
Non-Executive Director
Laurence Robb (appointed 23 October 2017) Independent Non-Executive Director
Roger Williams (appointed 23 October 2017) Independent Non-Executive Director
Terence Goodlace (appointed 23 May 2018) Independent Non-Executive Director
Directors' Interests
The Directors' beneficial interests in the shares of the Company
at 29 February 2020 were:
Ordinary
shares of
no par value Share options
Anthony Viljoen 5 541 970 10 600 000
Glen Parsons 2 707 486 4 500 000
Roger Williams 2 201 437 4 000 000
Laurence Robb 820 815 4 000 000
Terence Goodlace - 4 000 000
Directors' Indemnity Insurance
The Group has maintained insurance throughout the year for its
directors and officers against the consequences of actions brought
against them in relation to their duties for the Group.
Employee Involvement Policies
The Group places considerable value on the awareness and
involvement of its employees in the Group's exploration and
development activities. Within the bounds of commercial
confidentiality, information is disseminated to all levels of staff
about matters that affect the progress of the Group, and that are
of interest and concern to them as employees.
Creditors' Payment Policy and Practice
The Group's policy is to ensure that, in the absence of dispute,
all suppliers are dealt with in accordance with its standard
payment policy to abide by the terms of payment agreed with
suppliers when agreeing the terms of each transaction. Suppliers
are made aware of the terms of payment. The number of days of
average daily purchases included in trade payables at 29 February
2020 was 30 days.
Related-party Transactions
Details of related-party transactions are given in Note 27 of
the consolidated financial statements.
Events after Balance Sheet Date
Events after balance sheet date are detailed in Note 26 of the
consolidated financial statements.
Statement as to Disclosure of Information to Auditor
The Directors who were in office on 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.
Auditor
The Directors will place a resolution before the Annual General
Meeting to reappoint BDO LLP as the Group's auditor for the ensuing
year.
Electronic Communications
The maintenance and integrity of the Group's website is the
responsibility of the Directors; the work carried out by the
auditor does not involve consideration of these matters and
accordingly the auditor accepts no responsibility for any changes
that may have occurred to the financial statements since they were
initially presented on the website.
The Group's website is maintained in compliance with AIM Rule
26.
By order of the Board
ANTHONY VILJOEN
Chief Executive Officer
27 August 2020
CORPORATE GOVERNANCE REPORT
Introduction
As a listed company traded on the AIM market of the London Stock
Exchange, we recognise the importance of sound corporate governance
throughout our organisation, giving our shareholders and other
stakeholders including employees, customers, suppliers and the
wider community confidence in our business. We endeavour to conduct
our business in an ethical and sensitive manner irrespective of
race, colour or creed.
AfriTin has chosen to adopt the Quoted Companies Alliance (QCA)
Corporate Governance Code 2018 for Smaller Companies. The table
below outlines how we apply each of the code's ten key principles
to our business.
Principle Application
1. Establish a The Company is the first pure tin company listed
strategy and business in London and its vision is to create a portfolio
model which promote of world-class, conflict-free, tin-producing
long-term value assets. The Company's flagship asset is the
for shareholders. Uis brownfield tin mine in Namibia, formerly
the world's largest hard-rock tin mine.
The Company is managed by an experienced Board
of Directors and management team with a current
two-fold strategy: fast track Uis brownfield
tin mine in Namibia to commercial production
(the intention is to ramp up to 5 000 tonnes
of concentrate) and consolidate other quality
African tin assets. The Company strives to capitalise
on the solid supply/demand fundamentals of tin
by developing a critical mass of tin resource
inventory, achieving production in the near
term and further scaling production by consolidating
tin assets in Africa.
The Company is subject to a variety of risks,
specifically those relating to the mining and
exploration industry. The principal risk factors
facing the business as well as mitigation of
those risks are outlined in the Directors' Report
in this Annual Report.
--------------------------------------------------------------
2. Seek to understand The Board is committed to maintaining good communication
and meet shareholder and having a constructive dialogue with all
needs and expectations. its shareholders.
Management, led by the CEO, undertake regular
presentations and roadshows to investors as
appropriate. This enables them to develop a
balanced understanding of the issues and concerns
of shareholders. The views of shareholders are
communicated to the rest of the Board.
Furthermore, the Company keeps shareholders
informed on the Company's progress through its
public announcements and its website. All reports
and press releases are published in the Investor
Relations section of the Company's website.
--------------------------------------------------------------
3. Take into account The Board recognises that its prime responsibility
wider stakeholder is to promote the success of the Company for
and social responsibilities the benefit of its members as a whole. This
and their implications success is largely reliant on its relations
for long-term with its stakeholders, both internal (employees
success. and shareholders) and external (customers, suppliers,
business partners and advisors).
Employees, community members and other stakeholders
work in collaboration with one another and with
transparency and accountability. Open dialogue
and engagement with community members at our
sites is central to maintaining a successful
relationship and essential to ensuring long-term
sustainability for all parties involved.
The Company endeavours to systematically examine
the environmental impact of any of our operations
and will adopt measures to mitigate this. The
goal is to minimise the negative impacts on
the environment of the different processes related
to the extraction of tin. The Company operates
in the most environmentally and socially responsible
way possible.
The Company maintains a regular dialogue with
key suppliers.
The Company places considerable value on the
awareness and involvement of its employees in
its activities. Within the bounds of commercial
confidentiality, information is disseminated
to all levels of staff about matters that affect
the progress of the Company and that are of
interest and concern to them as employees.
The Company has set up a share option scheme
for key employees which will give them a stake
in the Company's long-term success.
--------------------------------------------------------------
4. Embed effective As an entrepreneurial business operating in
risk management, emerging markets there is clearly an elevated
considering both risk which is balanced by potentially greater
opportunities rewards. The Board is mindful of and monitors
and threats, throughout both its corporate risks and individual project
the organisation. risks.
The Board ensures that there is a risk-management
framework in place which identifies and addresses
all relevant risks in order to execute and deliver
strategy. Key risks are reviewed by the Board
regularly and disclosed in the Directors' Report.
The Audit Committee receives feedback from the
external auditor on the state of the Company's
internal controls, and reports their findings
to the Board.
--------------------------------------------------------------
5. Maintain the The Board is made up of a Chairman, three Non-Executive
Board as a well-functioning, Directors and the CEO.
balanced team
led by the chair. The roles of the Chairman and CEO are clearly
separated.
The CEO is responsible for the day-to-day operational
management of the business and is supported
by a Chief Financial Officer, a Chief Operating
Officer, geologists and engineers.
The Chairman is responsible for the leadership
and effective working of the Board, for the
implementation of sound corporate governance,
for setting the Board agenda, and ensuring that
Directors receive accurate, timely and clear
information.
The Chairman and Non-Executive Directors (Glen
Parsons, Terence Goodlace, Laurence Robb and
Roger Williams) are considered to be independent
of management and free to exercise independent
judgement. It is acknowledged that the Non-Executive
Directors do have share options. However, the
quantum of these share options is not material
and is too low to affect independence.
The Board meets at least every three months
or at any other time deemed necessary for the
good management of the business. Every Director
has attended all Board meetings whilst being
a Director of the Company.
--------------------------------------------------------------
6. Ensure that Directors who have been appointed to the Company
between them the have been chosen because of the skills and experience
Directors have they offer.
the necessary
up-to-date experience, The composition of the Board as well as biographical
skills and capabilities. details are included within the Board of Directors
page on the Company website.
Furthermore, the Company has put in place an
Audit Committee and a Remuneration Committee.
The Directors have access to training (online
training or external training courses) to ensure
that their skills are kept up to date.
The Board and its committees will also seek
external expertise and advice where required.
Directors are briefed on regulations that are
relevant to their role as directors of an AIM-quoted
company from the Company's nominated advisor.
Robert Sewell (Chief Financial Officer) and
Frans van Daalen (Chief Operating Officer) attend
Board meetings by invitation to provide input
from a financial and operational perspective.
--------------------------------------------------------------
7. Evaluate Board The Board considers evaluation of its performance
performance based and that of its committees and individual directors
on clear and relevant to be an integral part of corporate governance
objectives, seeking to ensure it has the necessary skills, experience
continuous improvement. and abilities to fulfil its responsibilities.
The goal of the Board evaluation process is
to identify and address opportunities for improving
the performance of the Board and to solicit
honest, genuine and constructive feedback.
The Chairman is responsible for ensuring the
evaluation process is "fit for purpose", as
well as dealing with matters raised during the
process.
Succession planning is a vital task for boards
and the management of succession planning represents
a key measure of the effectiveness of the Board.
--------------------------------------------------------------
8. Promote a corporate The Company has a strong ethical culture, which
culture that is is promoted by the Board and the management
based on ethical team.
values and behaviours.
The Company endeavours to conduct its business
in an ethical, professional and responsible
manner, treating all employees, customers, suppliers
and partners with equal courtesy and respect
at all times.
--------------------------------------------------------------
9. Maintain governance The Board approves the Company's strategy and
structures and ensures that necessary resources are in place
processes that in order for the Company to meet its objectives.
are fit for purpose
and support good Whilst the Board has delegated the operational
decision-making management of the Company to the Chief Executive
by the Board. Officer and other senior management, there are
detailed specific matters subject to the approval
of the Board. These include:
* annual budget;
* interim and final financial statements;
* management structure and appointments;
* mergers, acquisitions and disposals;
* capital raising;
* joint ventures and investments;
* projects of a capital nature; and
* significant contracts.
The Non-Executive Directors have a particular
responsibility to constructively challenge the
strategy proposed by the executive management
team, to scrutinise and challenge performance,
to ensure appropriate remuneration, and to ensure
that succession planning arrangements are in
place in relation to senior members of the management
team. The senior management team enjoy open
access to the Non-Executive Directors.
The Chairman is responsible for leadership of
the Board and ensuring its effectiveness. The
Chairman with the assistance of the Chief Executive
Officer sets the Board's agenda and ensures
that adequate time is available for discussion
of all agenda items, in particular strategic
issues.
The role of the Audit Committee and the Remuneration
Committee is set out further on in this report.
The governance structures will evolve over time
in parallel with the Company's objectives, strategy,
and business model to reflect the development
of the Company.
--------------------------------------------------------------
10. Communicate The Board is committed to maintaining good communication
how the company and having constructive dialogue with all of
is governed and its stakeholders, including shareholders, providing
is performing them with access to information to enable them
by maintaining to come to informed decisions about the Company.
a dialogue with The Investor Relations section on the Company's
shareholders and website provides all required regulatory information
other relevant as well as additional information shareholders
stakeholders. may find helpful, including:
* information on Board members, advisors and
significant shareholdings;
* a historical list of the Company's announcements;
* corporate governance information;
* historical Annual Reports and notices of Annual
General Meetings; and
* share price information and interactive charting
facilities to assist shareholders in analysing
performance.
Results of shareholder meetings and details
of votes cast will be publicly announced through
the regulatory system and displayed on the Company's
website with suitable explanations of any actions
undertaken as a result of any significant votes
for or against resolutions.
--------------------------------------------------------------
The Board of Directors
The Board currently comprises:
Independent Non-Executive Chairman
-- Glen Parsons (appointed 23 October 2017)
Independent Non-Executive Directors
-- Roger Williams (appointed 23 October 2017)
-- Laurence Robb (appointed 23 October 2017)
-- Terence Goodlace (appointed 23 May 2018)
Executive Director
-- Anthony Viljoen (appointed 23 October 2017) Chief Executive Officer
Operational management in South Africa and Namibia is led by
Anthony Viljoen supported by a Chief Financial Officer (Robert
Sewell), a Chief Operating Officer (Frans van Daalen), geologists
and engineers. Operational management is also supported technically
through various consultancy agreements that were in place during
the year under review.
The Board met formally four times during the year and also met
frequently on an ad-hoc basis. This included a Board site visit to
Uis.
All press releases, including operational updates, are approved
by the entire Board.
The Audit Committee
The Audit Committee meets at least twice a year and is composed
exclusively of Non-Executive Directors: Roger Williams (Chairman)
and Glen Parsons. The Chief Financial Officer, Robert Sewell,
attends Audit Committee meetings by invitation. The committee is
responsible for:
-- reviewing the annual financial statements and interim reports
prior to approval, focusing on changes in accounting policies and
practices, major judgemental areas, significant audit adjustments,
going concern and compliance with accounting standards, stock
exchange requirements, and legal requirements;
-- receiving and considering reports on internal financial
controls, including reports from the auditor, and reporting auditor
findings to the Board;
-- considering the appointment of the auditor and their
remuneration, including reviewing and monitoring their independence
and objectivity;
-- meeting with the auditor to discuss the scope of the audit,
issues arising from their work and any matters they wish to raise;
and
-- developing and implementing policy on the engagement of the
external auditor to supply non-audit services.
The Audit Committee is provided with details of any proposed
related-party transactions in order to consider and approve the
terms and conditions of such transactions.
The Audit Committee met three times during the year to consider
the following agenda items:
June 2019:
-- External audit report
-- Critical accounting estimates
-- Going concern assessment
-- Impairment
-- Approval of the Annual Report for the period ended February 2019
November 2019:
-- Half-year results and report to 31 August 2019
-- Going concern assessment
February 2020:
-- Auditor independence
-- External audit plan for the year ended February 2020
The Remuneration Committee
The Remuneration Committee meets at least once a year and is
composed exclusively of Non-Executive Directors: Glen Parsons
(Chairman) and Roger Williams.
The Committee is responsible for reviewing the performance of
senior management and for setting the scale and structure of their
remuneration, determining the payment of bonuses, considering the
grant of options under any share option scheme and, in particular,
the price per share and the application of performance standards
which may apply to any such grant, paying due regard to the
interests of shareholders and the performance of the Group.
The Remuneration Committee met formally twice during the year to
consider the following agenda items:
September 2019:
-- Award of share options for senior management
January 2020:
-- Approval of remuneration structure for new senior staff member
-- Consideration of salary increases. No salary increases were granted to senior staff.
Internal Controls
The Board acknowledges its responsibility for the Group's
systems of internal controls and for reviewing their effectiveness.
These internal controls are designed to safeguard the assets of the
Group and to ensure the reliability of financial information for
both internal use and external publication. Whilst the Board is
aware that no system can provide absolute assurance against
material misstatement or loss, in light of the increased activity
and further development of the Group, continuing reviews of
internal controls will be undertaken to ensure that they are
adequate and effective.
Risk Management
The Board considers risk assessment and management to be
important in achieving its strategic objectives. Project milestones
and timelines are regularly reviewed.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Directors'
Report and the financial statements in accordance with applicable
law and regulations.
The Companies (Guernsey) Law, 2008 requires the Directors to
prepare Group financial statements for each financial year in
accordance with generally accepted accounting principles. The
Directors are required by the AIM rules of the London Stock
Exchange to prepare Group financial statements in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the European Union ("EU").
The financial statements of the Group are required by law to
give a true and fair view of the state of the Group's affairs at
the end of the financial year and of the profit or loss of the
Group for that year and are required by IFRS as adopted in the EU
to reflect fairly the financial position and performance of the
Group.
In preparing the Group financial statements, the Directors are
required to:
i) Select suitable accounting policies and then apply them consistently;
ii) Make judgements and accounting estimates that are reasonable and prudent;
iii) State whether they have been prepared in accordance with IFRS as adopted by the EU; and
iv) Prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group will continue
in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's
transactions, disclose with reasonable accuracy at any time the
financial position of the Group, and enable them to ensure that the
financial statements comply with the Companies (Guernsey) Law,
2008. They are also responsible for safeguarding the assets of the
Group and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the Group's
website. Legislation in Guernsey governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
The Directors confirm they have discharged their
responsibilities as noted above.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 29 February 2020
Year ended Year ended
29 February 28 February
2020 2019
Notes GBP GBP
Continuing operations
Revenue 5 69 032 26 782
Cost of Sales (47 336) -
----------------------- -----------------------
Gross Profit 21 696 26 782
Administrative expenses 6 (1 815 227) (1 097 718)
----------------------- -----------------------
Operating loss (1 793 531) (1 070 936)
Finance income 8 3 793 13 416
Finance cost 9 (40 719) -
----------------------- -----------------------
Loss before tax (1 830 457) (1 057 520)
Income tax expense 10 - -
----------------------- -----------------------
Loss for the year (1 830 457) (1 057 520)
======================= =======================
Other comprehensive income/loss
Items that will or may be reclassified
to profit or loss:
Exchange differences on translation
of share-based payment reserve (1 039) (1 577)
Exchange differences on translation
of foreign operations (1 113 281) (421 827)
Exchange differences on non-controlling
interest 4 167 332
Total comprehensive loss for the
year (2 940 610) (1 480 592)
======================= =======================
Loss for the year attributable to:
Owners of the parent (1 781 962) (1 050 074)
Non-controlling interests (48 495) (7 446)
(1 830 457) (1 057 520)
======================= =======================
Total comprehensive loss for the
year attributable to:
Owners of the parent (2 896 282) (1 473 478)
Non-controlling interests (44 328) (7 114)
(2 940 610) (1 480 592)
======================= =======================
Loss per ordinary share
Basic and diluted loss per share
(in pence) 11 (0.29) (0.23)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 29 February 2020
29 February 28 February
2020 2019
Notes GBP GBP
Assets
Non-current assets
Intangible assets 13 7 441 018 7 012 317
Property, plant and equipment 14 12 467 868 5 785 043
----------- -------------------
Total non-current assets 19 908 886 12 797 360
=========== ===================
Current assets
Inventories 15 246 910 25 221
Trade and other receivables 16 648 722 474 963
Cash and cash equivalents 17 574 600 1 781 335
----------- -------------------
Total current assets 1 470 232 2 281 519
=========== ===================
Total assets 21 379 118 15 078 879
=========== ===================
Equity and liabilities
Equity
Share capital 22 20 487 239 17 337 718
Convertible loan note reserve 28 3 770 645 -
Accumulated deficit (4 365 500) (2 583 538)
Warrant reserve 23 78 651 78 651
Share-based payment reserve 24 559 534 220 729
Foreign currency translation reserve (1 535 108) (421 827)
Equity attributable to the owners
of the parent 18 995 461 14 631 733
----------- -------------------
Non-controlling interests (51 812) (7 484)
----------- -------------------
Total equity 18 943 649 14 624 249
=========== ===================
Non-current liabilities
Environmental rehabilitation liability 20 86 005 75 180
Lease liability 21 181 544 -
Total non-current liabilities 267 549 75 180
=========== ===================
Current liabilities
Trade and other payables 19 894 830 379 450
Borrowings 18 1 230 961 -
Lease liability 21 42 129 -
----------- -------------------
Total current liabilities 2 167 920 379 450
=========== ===================
Total equity and liabilities 21 379 118 15 078 879
=========== ===================
The notes that follow in this report form part of these
financial statements.
The financial statements were authorised and approved for issue
by the Board of Directors and authorised for issue on 27 August
2020
ANTHONY VILJOEN
Chief Executive Officer
27 AUGUST 2020
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 29 February 2020
Foreign
Convertible Share-based currency
Share loan note Accumulated Warrant payment translation Non-controlling Total
capital reserve deficit reserve reserve reserve Total interests equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Total equity
at 28
February
2018 10 853 631 - (1 533 464) 29 783 - - 9 349 950 (370) 9 349 580
Loss for the
year - - (1 050 074) - (1 050 074) (7 446) (1 057 520)
Other
comprehensive
income/loss - - - - (1 577) (421 827) (423 404) 332 (423 072)
Transactions
with owners: - -
Warrants
granted in
the
year (48 868) - - 48 868 - - - - -
Share-based
payments in
the year - - - - 222 306 - 222 306 - 222 306
Issue of
shares 6 858 813 - - - - - 6 858 813 - 6 858 813
Share issue
costs (325 858) - - - - - (325 858) - (325 858)
---------- ----------- ----------- ------- ----------- ----------- ----------- --------------- -----------
Total equity
at 28
February
2019 17 337 718 - (2 583 538) 78 651 220 729 (421 827) 14 631 733 (7 484) 14 624 249
Loss for the
year - - (1 781 962) - - - (1 781 962) (48 495) (1 830 457)
Other
comprehensive
income/loss - - - - (1 039) (1 113 281) (1 114 320) 4 167 (1 110 153)
Transactions
with owners:
Share-based
payments in
the year - - - - 403 562 - 403 562 - 403 562
Issue of
shares 3 261 208 - - - (63 718) - 3 197 490 - 3 197 490
Share issue
costs (111 687) - - - - - (111 687) - (111 687)
Issue of
convertible
loan
notes - 3 800 000 - - - - 3 800 000 - 3 800 000
Convertible
loan note
issue
costs - (29 355) - - - - (29 355) - (29 355)
---------- ----------- ----------- ------- ----------- ----------- ----------- --------------- -----------
Total equity
at 29
February 18 995 18 943
2020 20 487 239 3 770 645 (4 365 500) 78 651 559 534 (1 535 108) 461 (51 812) 649
========== =========== =========== ======= =========== =========== =========== =============== ===========
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 29 February 2020
Year ended Year ended
29 February 28 February
2020 2019
Notes GBP GBP
Cash flows from operating activities
Loss before taxation (1 830 457) (1 057 520)
Adjustments for:
Depreciation of property, plant and
equipment 14 128 130 22 824
Share-based payments 184 888 205 962
Equity-settled transactions 109 190 -
Finance income 8 (3 793) (13 416)
Finance costs 9 40 719 -
Changes in working capital:
Increase in receivables (220 634) (379 245)
Increase in inventory (241 546) (26 222)
Increase/(decrease) in payables 578 828 (119 708)
------------------- ---------------------
Net cash used in operating activities (1 254 675) (1 367 325)
------------------- ---------------------
Cash flows from investing activities
Finance income 8 3 793 13 416
Purchase of intangible assets 13 (596 291) (570 767)
Purchase of property, plant and equipment
(including
capitalised cash interest of GBP55
235 (2019: Nil)) 14 (7 159 313) (4 901 993)
------------------- ---------------------
Net cash used in investing activities (7 751 811) (5 459 344)
------------------- ---------------------
Cash flows from financing activities
Finance costs 9 (562) -
Lease payments 21 (68 015) -
Net proceeds from issue of shares 22 2 876 705 5 682 954
Net proceeds from issue of convertible
loan notes 3 770 645 -
Proceeds from borrowings 18 4 840 989 -
Repayment of borrowings 18 (3 610 028) -
------------------- ---------------------
Net cash generated from financing
activities 7 809 734 5 682 954
------------------- ---------------------
Net decrease in cash and cash equivalents (1 196 752) (1 143 715)
Cash and cash equivalents at the
beginning of the year 1 781 335 2 904 767
Foreign exchange differences (9 983) 20 283
------------------- ---------------------
Cash and cash equivalents at the
end of the year 17 574 600 1 781 335
=================== =====================
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 29 February 2020
1. Corporate information and principal activities
AfriTin Mining Limited ("AfriTin") was incorporated and
domiciled in Guernsey on 1 September 2017, and admitted to the AIM
market in London on 9 November 2017. The company's registered
office is 18-20 Le Pollet, St Peter Port, Guernsey, GY1 1WH and
operates from Illovo Edge Office Park, 2nd Floor, Building 3,
Corner Harries and Fricker Road, Illovo, Johannesburg, 2116, South
Africa.
These financial statements are for the year ended 29 February
2020 and the comparative figures are for the year ended 28 February
2019. The financial statements for the year ended 29 February 2020
and comparative figures set out in this announcement do not
constitute the Company's statutory annual report and financial
statements but are extracted from the audited financial statements
for those years. The 28 February 2019 accounts have been delivered
to the Registrar of Companies. The statutory financial statements
for 2020 will be delivered to the Registrar of Companies in due
course.
The auditors have reported on the financial statements for the
year ended 29 February 2020; their report contained a paragraph
drawing attention to disclosures in the financial statements
regarding the existence of a material uncertainty related to the
ability of the Company to continue as a going concern. Their
opinion on the financial statements was not modified in respect of
this matter.
The AfriTin Group comprises AfriTin Mining Limited and its
subsidiaries as noted below.
AfriTin Mining Limited ("AML") is an investment holding company
and holds 100% of Guernsey subsidiary, Greenhills Resources Limited
("GRL").
GRL is an investment holding company that holds investments in
resource-based tin and tantalum exploration companies in Namibia
and South Africa. The Namibian subsidiary is AfriTin Mining
(Namibia) Pty Limited ("AfriTin Namibia"), in which GRL holds 100%
equity interest. The South African subsidiaries are Mokopane Tin
Company Pty Limited ("Mokopane") and Pamish Investments 71 Pty
Limited ("Pamish 71"), in which GRL holds 100% equity interest.
AfriTin Namibia owns an 85% equity interest in Uis Tin Mining
Company Pty Limited ("UTMC"). The minority shareholder in UTMC is
The Small Miners of Uis who own 15%.
Mokopane owns a 74% equity interest in Renetype Pty Limited
("Renetype") and a 50% equity interest in Jaxson 641 Pty Limited
("Jaxson").
The minority shareholders in Renetype are African Women
Enterprises Investments Pty Limited and Cannosia Trading 62 CC who
own 10% and 16% respectively.
The minority shareholder in Jaxson is Lerama Resources Pty
Limited who owns a 50% interest in Jaxson. Pamish 71 owns a 74%
interest in Zaaiplaats Mining Pty Limited ("Zaaiplaats"). The
minority shareholder in Zaaiplaats is Tamiforce Pty Limited who
owns 26%.
AML holds 100% of Tantalum Investment Pty Limited, a company
containing Namibian exploration licenses EPL5445 and EPL5670 for
the exploration of tin, tantalum and associated minerals.
As at 29 February 2020, the AfriTin Group comprised:
Equity holding
and voting Country of
Company rights incorporation Nature of activities
AfriTin Mining Limited N/A Guernsey Ultimate holding
company
-------------- -------------- --------------------------
Greenhills Resources Limited(1) 100% Guernsey Holding company
-------------- -------------- --------------------------
AfriTin Mining Pty Limited(1) 100% South Africa Group support services
-------------- -------------- --------------------------
Tantalum Investment Pty 100% Namibia
Limited(1) Tin & tantalum exploration
-------------- -------------- --------------------------
AfriTin Mining (Namibia) 100% Namibia
Pty Limited(2) Tin & tantalum operations
-------------- -------------- --------------------------
Uis Tin Mining Company 85% Namibia
Pty Limited(3) Tin & tantalum exploration
-------------- -------------- --------------------------
Mokopane Tin Company Pty 100% South Africa
Limited(2) Holding company
-------------- -------------- --------------------------
Renetype Pty Limited(4) 74% South Africa Tin & tantalum exploration
-------------- -------------- --------------------------
Jaxson 641 Pty Limited(4) 50% South Africa Tin & tantalum exploration
-------------- -------------- --------------------------
Pamish Investments 71 Pty 100% South Africa
Limited(2) Holding company
-------------- -------------- --------------------------
Zaaiplaats Mining Pty Limited(5) 74% South Africa Property owning
-------------- -------------- --------------------------
(1) Held directly by AfriTin Mining Limited
(2) Held by Greenhills Resources Limited
(3) Held by AfriTin Mining (Namibia) Pty Limited
(4) Held by Mokopane Tin Company Pty Limited
(5) Held by Pamish Investments 71 Pty Limited
These financial statements are presented in Pound Sterling (GBP)
because that is the currency in which the Group has raised funding
on the AIM market in the United Kingdom. Furthermore, Pound
Sterling (GBP) is the functional currency of the ultimate holding
company, AfriTin Mining Limited.
2. Significant accounting policies
Basis of accounting
These financial statements have been prepared in accordance with
International Financial Reporting Standards, International
Accounting Standards and Interpretations (collectively "IFRS")
issued by the International Accounting Standards Board ("IASB") as
adopted by the European Union ("EU adopted IFRS").
The Group has adopted the standards, amendments and
interpretations effective for annual periods beginning on or after
1 March 2019. The adoption of IFRS 16 "Leases" had a material
effect on the financial statements of the Group. See Note 3.
The consolidated financial statements have been prepared under
the historical cost convention. The preparation of financial
statements in conformity with IFRS requires the use of certain
critical accounting estimates. It also requires management to
exercise judgement in the process of applying the Group's
accounting policies. The areas involving a higher degree of
judgement or complexity and areas where assumptions and estimates
are significant to the consolidated financial statements are
discussed further in this note. The principal accounting policies
are set out below.
Going concern
These financial statements have been prepared on the basis of
accounting principles applicable to a going concern which assumes
the Company will be able to continue in operation for the
foreseeable future and will be able to realize its assets and
discharge its liabilities in the normal course of operations.
At year end, the company had cash in the bank of GBP574k and had
drawn down GBP1.2m of the GBP1.9m Nedbank working capital
facility.
Subsequent to year end, a loan note issue in May 2020 raised
GBP2.05m and an equity subscription in August 2020 raised GBP3.05m
gross proceeds. The GBP2.05m loan note, together with the previous
GBP3.8m loan note raised in November 2019 mature in May 2021.
Furthermore, the Nedbank working capital and VAT facility was
renewed in July 2020 and increased from N$38m (approx. GBP1.9m) to
N$43m (approx. GBP2.1m). The N$4.2m Nedbank guarantee to Namibia
Power Corporation Pty Limited in relation to a deposit for the
supply of electrical power continues to be in place. The Nedbank
facility falls due for renewal in July 2021.
The Company is commissioning and ramping up the Phase 1 pilot
plant at Uis with the purpose of proving up the feasibility of a
much larger, profitable Phase 2 plant to go into full commercial
production. Whilst the ramp up was adversely impacted by supply
chain disruption associated with COVID-19, the ramp up is now
continuing with minimal disruption following easing of government
restrictions and measures implemented by the mine.
Management have prepared a detailed cashflow forecast for the
period to 30 September 2021 and stress tests of those forecasts.
The base case forecast demonstrates that the Group will have
sufficient funds to meet its liabilities as they fall due and
includes the following key assumptions:
-- The previous GBP3.8m convertible loan notes and recent
GBP2.05m loan notes are assumed to be settled in equity. Per the
agreements, the GBP3.8m convertible loan notes can be settled in
equity at the discretion of the Company. However, settlement of the
GBP2.05m loan notes in cash or shares is subject to agreement by
both parties and therefore equity settlement cannot be guaranteed
and is dependent on the loan note holders.
-- The working capital facility with Nedbank Namibia is
anticipated to be renewed in July 2021 under the annual review and
renewal applicable to the facility.
-- Prices have been set at $17,500 which is the current spot
price per tonne of tin and $150,000 per tonne of tantalum.
-- The forecasts assume a continued ramp up in production to
steady state for Phase One of the operation by November 2020.
Whilst the Board anticipate that the GBP2.05m loan note will be
settled in equity based on discussions with the loan note holders
when the loan was subscribed, there can be no guarantee that this
event will occur and if it is not forthcoming the Group will likely
need to raise additional funds.
Whilst the Board fully anticipate renewal of the working capital
facility in July 2021, noting the recent renewal of the facility,
there can be no guarantee that this will occur.
Additionally, the Group's forecasts are based on anticipated
growth in production which is considered achievable by the Board.
However the Board have considered the risks and uncertainties
associated with COVID-19 on the Group's operations including the
potential impact on areas including risks to supply chain and
access to site by consultants, additional government restrictions
and potential volatility in commodity prices. In the event of
further disruption to the production ramp up or operational cash
flow as a result of COVID-19 or other related operational issues,
the Group may require additional funding.
These matters indicate a material uncertainty exists which may
cast significant doubt on the Group's ability to continue as a
going concern. No adjustments have been made relating to the
recoverability and classification of recorded asset amounts and
classification of liabilities that might be necessary should the
combined Group not continue as a going concern.
Basis of consolidation
Subsidiaries
Subsidiaries are all entities (including structured entities)
over which the Group has control. The Group controls an entity when
the Group 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. Subsidiaries are fully
consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date that control
ceases.
The Group applies the acquisition method to account for business
combinations. The consideration transferred for the acquisition of
a subsidiary is the fair value 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. The Group recognises any non-controlling interest
in the acquiree on an acquisition-by-acquisition basis, either at
fair value or at the non-controlling interest's proportionate share
of the recognised amounts of acquiree's identifiable net
assets.
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the
acquisition date carrying value of the acquirer's previously held
equity interest in the acquiree is re-measured to fair value at the
acquisition date; any gains or losses arising from such
re-measurement are recognised in profit or loss.
Any contingent consideration to be transferred by the Group is
recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that is
deemed to be an asset or liability are recognised either in profit
or loss or as a change to other comprehensive income. Contingent
consideration that is classified as equity is not re-measured, and
its subsequent settlement is accounted for within equity.
The acquisition of subsidiaries that do not meet the definition
of a business and hold early stage exploration licenses are
accounted for as asset purchases with the fair value of
consideration being allocated to the assets.
Inter-company transactions, balances and unrealised gains/losses
on transactions between Group companies are eliminated. When
necessary, amounts reported by subsidiaries have been adjusted to
conform with the Group's accounting policies.
Disposal of subsidiaries
When the Group ceases to have control, any retained interest in
the entity is measured to its fair value at the date when control
is lost, with the change in carrying amount recognised in profit or
loss. The fair value is the initial carrying amount for the
purposes of subsequently accounting for the retained interest as an
associate, joint venture or financial asset. In addition, any
amounts previously recognised in other comprehensive income in
respect of that entity are accounted for as if the Group had
directly disposed of the related assets or liabilities. This may
mean that amounts previously recognised in other comprehensive
income are reclassified to profit or loss.
Non-controlling interests
Non-controlling interests in subsidiaries are identified
separately from the Group's equity therein. Those interests of
non-controlling shareholders that present ownership interests
entitling their holders to a proportionate share of the net assets
upon liquidation are initially measured at fair value. Subsequent
to acquisition, the carrying amount of non-controlling interests is
the amount of those interests at initial recognition plus the
non-controlling interests' share of subsequent changes in equity.
Total comprehensive income is attributed to non-controlling
interests even if this results in the non-controlling interests
having a deficit balance.
Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the management steering committee
that makes strategic decisions.
Foreign currencies
Functional and presentational currency
The individual financial statements of each Group company are
prepared in the currency of the primary economic environment in
which they operate (its functional currency). For the purpose of
the consolidated financial statements, the results and financial
position of each group company are expressed in Pound Sterling,
which is the functional currency of the Company, and the
presentation currency for the consolidated financial
statements.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions or valuation date where items are re-measured. Foreign
exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies
are recognised in the income statement, except when deferred in
other comprehensive income as qualifying cash flow hedges and
qualifying net investment hedges. Foreign exchange gains and losses
that relate to borrowings and cash and cash equivalents are
presented in the income statement within "finance income or
costs".
Group companies
The results and financial position of all the Group entities
(none of which has the currency of a hyper-inflationary economy)
that have a financial currency different from the presentation
currency are translated into the presentation currency as
follows:
i) assets and liabilities for each balance sheet presented are
translated at the closing rate at the date of that balance
sheet;
ii) income and expenses for each income statement are translated
at average exchange rates (unless the average is not a reasonable
approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are
translated at the rate on the dates of the transactions); and
iii) all resulting exchange differences are recognised in other comprehensive income.
Revenue recognition
IFRS 15 "Revenue from Contracts with Customers" established a
comprehensive framework for determining whether, how much and when
revenue is recognised. The core principle is that an entity
recognises revenue to depict the transfer of promised goods and
services to the customer of an amount that reflects the
consideration to which the entity expects to be entitled in
exchange for those goods or services. In the current year, the
Group began generating revenue from its primary activity, the sale
of tin concentrate, and it continued to generate immaterial revenue
from the sale of sand.
The Group produces and sells tin concentrate from its Uis tin
mine in Namibia. Once concentrate has been produced at the Uis
plant, it is bagged, sampled and loaded into containers for
transportation to the port in Walvis Bay for shipment.
The company currently has an off-take agreement with its
customer, Thailand Smelting and Refining Co. ("Thaisarco"), which
was signed on 1 August 2019. The salient terms of the off-take
agreement are as follows:
-- Concentrate produced during the period of the agreement is to
be shipped to Thaisarco in Phuket, Thailand from the port of Walvis
Bay;
-- Thaisarco pays AfriTin on the basis of actual tin content in
the concentrate per Thaisarco's analysis at the London Metal
Exchange price less treatment charges, unit deductions and impurity
charges;
-- Pricing shall be declared within 20 market days after arrival
of concentrate at Thaisarco's works.
The Group can elect for the sale of each shipment to occur under
the following terms:
Option 1: Standard provisional payment
Thaisarco shall pay 80% provisional payment on the basis of
actual tin content as per their own analysis. Payment is to be made
within 10 working days after the arrival of concentrate at
Thaisarco's works. The performance obligation is satisfied when the
concentrate arrives at the Songkhla Port in Thailand, being the
point at which title and risk pass. Any quality or price
adjustments are recognised when the final assay and tin price are
known.
Option 2: Provisional payment option against original bill of
lading
Thaisarco shall pay 80% provisional payment on the basis of
provisional tin content per UTMC's analysis. The provisional
payment shall be done against presentation of a provisional invoice
and an original bill of lading. The performance obligation is
satisfied when the provisional payment is received by UTMC, being
the point at which title and risk pass. Any quality or price
adjustments are to be recognized when the final assay and tin price
are known.
During the year, the Group concluded all sales under Option
1.
Revenue is recognised at a point in time when control of the
goods has transferred to the customer, which is when the
concentrate arrives at the Songkhla Port in Thailand under Option 1
or when provisional payment is received by UTMC under Option 2.
There is limited judgement needed to identify the point at which
control passes: once physical delivery of the products to the
agreed location has occurred, the Group no longer has physical
possession of the products. At this point, the Group will have a
present right to payment and retains none of the significant risks
and rewards of the goods in question.
Variable consideration relating to final assay results is
constrained in estimating revenue unless it is highly probable that
there will not be a future reversal in the amount of revenue
recognised when the final assay has been determined.
Finance income
Interest revenue is recognised when it is probable that economic
benefits will flow to the Group and the amount of revenue can be
measured reliably. Interest revenue is accrued on a time basis, by
reference to the principal outstanding and the effective interest
rate applicable, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial
asset to that asset's net carrying amount on initial
recognition.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
The tax charge is based on taxable profit for the period. The
Group's liability for current tax is calculated by using tax rates
that have been enacted or substantively enacted by the reporting
date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amount of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
"balance sheet liability" method.
Deferred tax liabilities are recognised for all taxable
temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised.
Deferred tax is calculated at the tax rates that are expected to
apply to the year when the asset is realised or the liability is
settled based upon rates enacted and substantively enacted at the
reporting date. Deferred tax is charged or credited to profit or
loss, except when it relates to items credited or charged to other
comprehensive income, in which case the deferred tax is also dealt
with in other comprehensive income.
Intangible exploration and evaluation assets
All costs associated with mineral exploration and evaluation
including the costs of acquiring prospecting licenses; mineral
production licenses and annual license fees; rights to explore;
topographical, geological, geochemical and geophysical studies;
exploratory drilling; trenching, sampling and activities to
evaluate the technical feasibility and commercial viability of
extracting a mineral resource; are capitalised as intangible
exploration and evaluation assets and subsequently measured at
cost.
If an exploration project is successful, the related
expenditures will be transferred at cost to property, plant and
equipment and amortised over the estimated life of the commercial
ore reserves on a unit of production basis (with this charge being
taken through profit or loss). Where capitalised costs relate to
both development projects and exploration projects, the Group
reclassifies a portion of the costs which are considered
attributable to near term production based on a percentage of the
ore resource expected to be mined in the relevant phase. Where a
project does not lead to the discovery of commercially viable
quantities of mineral resources and is relinquished, abandoned, or
is considered to be of no further commercial value to the Group,
the related costs are recognised in the income statement.
The recoverability of deferred exploration costs is dependent
upon the discovery of economically viable ore reserves, the ability
of the Group to obtain necessary financing to complete the
development of ore reserves and future profitable production or
proceeds from the extraction or disposal thereof.
Impairment of exploration and evaluation assets
Intangible exploration and evaluation assets are reviewed
regularly for indicators of impairment following the guidance in
IFRS 6 "Exploration for and Evaluation of Mineral Resources" and
tested for impairment where such indicators exist.
In accordance with IFRS 6, the Group considers the following
facts and circumstances in their assessment of whether the Group's
exploration assets may be impaired:
-- whether the period for which the Group has the right to
explore in a specific area has expired during the period or will
expire in the near future, and is not expected to be renewed;
or
-- whether substantive expenditure on further exploration for
and evaluation of mineral resources in a specific area is neither
budgeted nor planned; or
-- whether exploration for and evaluation of mineral resources
in a specific area have not led to the discovery of commercially
viable deposits and the Group has decided to discontinue such
activities in the specific area; or
-- whether sufficient data exists to indicate that although a
development in a specific area is likely to proceed, the carrying
amount of the exploration and evaluation assets is unlikely to be
recovered in full from successful development or by sale.
If any such facts or circumstances are noted, the Group, as a
next step, perform an impairment test in accordance with the
provisions of IAS 36 "Impairment of Assets". In such circumstances,
the aggregate carrying value of the mining exploration and assets
is compared against the expected recoverable amount of the
cash-generating unit. The recoverable amount is the higher of value
in use and the fair value less costs to sell.
Warrant reserve
The warrants issued by the Company are recorded at fair value on
initial recognition net of transaction costs. The fair value of
warrants granted is recognised as an expense or as share issue
costs, with a corresponding increase in equity. The fair value of
the warrants granted is measured using the Black Scholes valuation
model, taking into account the terms and conditions under which the
options were granted. The amount recognised as an expense is
adjusted to reflect the actual number of warrants that vest.
Convertible loan note reserve
The proceeds received on issue of the Group's convertible loan
notes are allocated into their liability and equity components
based on the terms of the agreement.
The Group takes into account:
-- whether there is a contractual obligation to settle in cash;
-- whether there is a contractual obligation to issue a variable number of shares; and
-- whether the instruments book value is variable.
Where none of the above criteria are met, the convertible loan
notes are allocated as equity.
Share-based payment reserve
Where equity settled share options are awarded to directors or
employees, the fair value of the options at the date of grant is
charged to the statement of comprehensive income over the vesting
period. Non-market vesting conditions are taken into account by
adjusting the number of equity instruments expected to vest at each
reporting date so that, ultimately, the cumulative amount
recognised over the vesting period is based on the number of
options that eventually vest. Non-vesting conditions and market
vesting conditions are factored into the fair value of the options
granted. As long as all other vesting conditions are satisfied, a
charge is made irrespective of whether the market vesting
conditions are satisfied. The cumulative expense is not adjusted
for failure to achieve a market vesting condition or where a
non-vesting condition is not satisfied.
Where the terms and conditions of options are modified before
they vest, the increase in the fair value of the options, measured
immediately before and after the modification, is also charged to
the statement of comprehensive income over the remaining vesting
period.
Where equity instruments are granted to persons other than
employees, the statement of comprehensive income is charged with
the fair value of goods and services received.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less
accumulated depreciation.
Land is not depreciated. Depreciation is provided on all plant
and equipment at rates calculated to write each asset down to its
estimated residual value, using the straight-line method over the
estimated useful life of the asset as follows:
-- The mining asset and the decommissioning asset are amortised
over the life of the mine or 20 years, whichever is the lesser.
Depreciation begins when the asset is available for use and
continues until the asset is derecognised, even if it is idle;
-- Right-of-use asset over the period of the lease contract;
-- Computer equipment over three years;
-- Furniture over five years;
-- Vehicles over four years.
Mining assets under construction are not depreciated.
The estimated useful lives, residual values and depreciation
methods are reviewed at each year end and adjusted if
necessary.
Gains or losses on disposal are included in profit or loss.
An asset's carrying amount is written down immediately to its
recoverable amount if the asset's carrying amount is greater than
its estimated recoverable amount.
Right-of-use asset
At inception of a contract, the Group assesses whether a
contract is, or contains a lease. A contract is, or contains, a
lease if the contract conveys the right to control the use of an
identified asset, for a period of time, in exchange for
consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Group assesses
whether:
-- the contract involves the use of an identified asset. This
may be specified explicitly or implicitly and should be physically
distinct or represent substantially all of the capacity of a
physically distinct asset. If the supplier has a substantive
substitution right, then the asset is not identified;
-- the Group has the right to obtain substantially all of the
economic benefits from use of the asset throughout the period of
use; and
-- the Group has the right to direct the use of the asset. The
Group has the right when it has the decision-making rights that are
most relevant to changing how and for what purposes the asset is
used. In rare cases where the decision about how and for what
purpose the assets is used is predetermined, the Group has the
right to direct the use of the asset if either:
- the Group has the right to operate the asset; or
- the Group designed the asset in a way that predetermines how
and for what purpose it will be used.
At inception or on reassessment of a contract that contains a
lease component, the Group allocates the consideration in the
contract to each lease component on the basis of their relative
stand-alone prices.
The right-of-use asset is initially measured at the present
value of the remaining lease payments, discounted using the
interest rate implicit in the lease.
The right-of-use asset is subsequently depreciated using the
straight-line method from the commencement date to the end of the
lease term. In addition, the right-of-use asset is annually
assessed for impairment and will be adjusted for certain
remeasurements of the lease liability.
Impairment of property, plant and equipment
At each statement of financial position date, the Group reviews
the carrying amounts of its tangible assets to determine whether
there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss, if any. Where the asset does not generate
cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
Where there has been a change in economic conditions that
indicate a possible impairment in a cash-generating unit, the
recoverability of the net book value relating to that mine is
assessed by comparison with the estimated discounted future cash
flows based on management's expectations of future commodity prices
and future costs.
The recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are 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 for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised as an expense
immediately, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a
revaluation decrease to the extent that it reverses gains
previously recognised in other comprehensive income.
Where conditions giving rise to impairment subsequently reverse,
the effect of the impairment charge is also reversed as a credit to
the income statement, net of any depreciation that would have been
charged since the impairment.
Inventories
Inventories are initially recognised at cost, and subsequently
at the lower of cost and net realisable value. Cost comprises all
costs of purchase, costs of conversion and other costs incurred in
bringing the inventories to their present location and
condition.
Weighted average cost is used to determine the cost of
ordinarily interchangeable items.
Financial instruments
Financial instruments are recognised in the Group's statement of
financial position when the Group becomes a party to the
contractual provisions of the instrument.
Financial assets
Financial assets are classified as at amortised cost only if the
asset is held to collect the contractual cash flows and the
contractual terms of the asset give rise to cash flows that are
solely payments of principal and interest. At subsequent reporting
dates, financial assets at amortised cost are measured at amortised
cost less any impairment losses.
Impairment of financial assets
The Group assesses on a forward-looking basis the expected
credit losses, defined as the difference between the contractual
cash flows and the cash flows that are expected to be received,
associated with its assets carried at amortised cost. The
impairment methodology applied depends on whether there has been a
significant increase in credit risk. For trade receivables only,
the simplified approach permitted by IFRS 9 "Financial Instruments"
is applied, which requires expected lifetime losses to be
recognised from initial recognition of the receivables. Losses are
recognised in the income statement. When a subsequent event causes
the amount of impairment loss to decrease, the decrease in
impairment loss is reversed through the income statement.
Trade and other receivables
Trade and other receivables are initially recognised at the fair
value of the consideration receivable less any impairment.
Trade and other receivables are subsequently measured at
amortised cost, less any impairment.
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and deposits on
a term of not greater than three months.
Financial liabilities
Financial liabilities include trade and other payables,
derivatives and other longer-term financing, classified into one of
the following categories:
Fair value through profit and loss: The liabilities are carried
in the statement of financial position at fair value with changes
in fair value recognised in the income statement.
Financial liabilities carried at amortised cost:
Trade and other payables
Trade and other payables are initially recognised at fair value.
They are subsequently measured at amortised cost using the
effective interest rate method.
Rehabilitation costs
The net present value of estimated future rehabilitation costs
is provided for in the financial statements and capitalised within
property, plant and equipment on initial recognition.
Rehabilitation will generally occur on closure or after closure of
a mine.
Initial recognition is at the time of the construction or
disturbance occurring and thereafter as and when additional
construction or disturbances take place. The estimates are reviewed
annually to take into account the effects of inflation and changes
in the estimated cost of the rehabilitation works and are
discounted using rates that reflect the time value of money. Annual
increases in the provision due to the unwinding of the discount are
recognised in the statement of comprehensive income as a finance
cost. The present value of additional disturbances and changes in
the estimate of the rehabilitation liability are recorded to mining
assets against an increase/decrease in the rehabilitation
provision.
The rehabilitation asset will be amortised over the life of the
mine once commercial production commences. Rehabilitation projects
undertaken, included in the estimates, are charged to the provision
as incurred. Environmental liabilities, other than rehabilitation
costs, which relate to liabilities arising from specific events,
are expensed when they are known, probable and may be reasonably
estimated.
Lease liability
The lease liability is initially measured at the present value
of the remaining lease payments, discounted using the interest rate
implicit in the lease. The liability is subsequently measured at
amortized cost using the effective interest method. Lease payments
are apportioned between the finance charges and reduction of the
lease liability using the incremental borrowing rate implicit in
the lease to achieve a constant rate of interest on the remaining
balance of the liability.
Critical accounting estimates and judgements
In the application of the Group's accounting policies, the
Directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may
differ from these estimates. In particular, information about
significant areas of estimation uncertainty considered by
management in preparing the financial statements is described
below:
Estimates and judgements are continually evaluated. Revisions to
accounting estimates are recognised in the year in which the
estimates are revised if the revision affects only that year, or in
the year of revision and in future years if the revision affects
both current and future years.
i) Going concern and liquidity
Significant estimates were required in forecasting cash flows
used in the assessment of going concern including tin and tantalum
prices, the level of production and the rate at which production
ramp up is achieved, operating costs and capital expenditure
requirements. Additionally, judgment has been applied in assessing
the likely form of settlement of one of the loan notes, renewal of
the working capital facility and the risks associated with
COVID-19; together with mitigating steps available to the Group is
required.
ii) Decommissioning and rehabilitation obligations
Estimating the future costs of environmental and rehabilitation
obligations is complex and requires management to make estimates
and judgements as most of the obligations will be fulfilled in the
future and contracts and laws are often not clear regarding what is
required. The resulting provisions (see Note 20) are further
influenced by changing technologies, political, environmental,
safety, business and statutory considerations.
The Group's rehabilitation provision is based on the net present
value of management's best estimates of future rehabilitation
costs. Judgement is required in establishing the disturbance and
associated rehabilitation costs at year end, timing of costs,
discount rates and inflation. In forming estimates of the cost of
rehabilitation which are risk adjusted, the Group assessed the
Environmental Management Plan and reports provided by internal and
external experts. Actual costs incurred in future periods could
differ materially from the estimates and changes to environmental
laws and regulations, life of mine estimates, inflation rates and
discount rates could affect the carrying amount of the provision.
The carrying amount of the rehabilitation obligations for the Group
at 29 February 2020 was GBP86 005 (February 2019: GBP75 180).
iii) Acquisition of Tantalum Investment Pty Limited ("Tantalum") in the prior year
On 2 October 2018, the Group completed the acquisition of
Tantalum which has interests in tin exploration projects in
Namibia. The total cost of the acquisition was GBP850 000. Due to
the lack of processes and outputs relating to Tantalum at the time
of purchase, the Board did not consider the entity acquired to meet
the definition of a business. As such, the Group has accounted for
the acquisition of Tantalum as an asset purchase. Further details
are disclosed in Note 12.
iv) Impairment indicator assessment for exploration & 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. The valuation of intangible exploration assets is
dependent upon the discovery of economically recoverable deposits
which, in turn, is dependent on future tin prices, future capital
expenditures and environmental, regulatory restrictions and the
successful renewal of licenses. The directors have concluded that
there are no indications of impairment in respect of the carrying
value of intangible assets at 29 February 2020 based on results of
exploration to date, the status of licences, planned future
development of the projects and current and forecast tin prices.
Exploration and evaluation assets are disclosed fully in Note
13.
v) Impairment assessment for property, plant and equipment
Management performed an impairment indicator assessment at 29
February 2020 and identified a potential impairment indicator based
on the Group's market capitalisation and the decrease in tin prices
and performed an impairment test accordingly. The impairment test
was performed on a fair value less cost to sell basis and included
assessments of different scenarios associated with capital
development and expansion opportunities. The forecasts required
estimates regarding forecast tin and tantalum prices, ore resources
and production, together with operating and capital costs. The
impairment test was performed at a discount rate of 11.7% post tax
nominal.
vi) Transfer of capitalised exploration costs to property, plant and equipment in the prior year
On 28 February 2019, the Group transferred the Uis Phase One
exploration and evaluation asset to mine development costs. The
determination that the project had reached a stage of being
commercially viable and technically feasible for extraction
represented a key judgement. In forming this judgement, the Board
considered factors including: a) the mine permit had been awarded;
b) the Project had secured funding for development and construction
of the plant; c) the production phase due to commence shortly is
anticipated to be profitable and cash generative; d) the mine
development plan had been established; and e) the results of
exploration data including internal and external assessments.
Where capitalised costs relate to both development projects and
exploration projects, the Group reclassifies a portion of the costs
which are considered attributable to near-term production based on
a percentage of the ore resource expected to be mined in the
relevant phase. Judgement was involved in determining the
percentage split of capitalised costs between exploration
expenditure and costs that relate to the development stage asset
and should be transferred to PPE. In calculating the percentage
split, the key inputs were total ore resource, ore resource for
Phase One, nameplate capacity of the plant and estimated timing for
Phase Two.
3. Adoption of new and revised standards
IFRS 16 "Leases"
The Group adopted IFRS 16 with a transition date of 1 March
2019. IFRS 16 introduces a single lease accounting model. This
standard requires lessees to account for all leases under a single
on-balance sheet model.
The Group has applied the modified retrospective approach where
the cumulative effect of initially applying IFRS 16 is recognised
at the date of initial application. Therefore, there is no impact
on any comparative accounting periods. The modified retrospective
approach recognises the right-of-use asset at the date of initial
application at an amount equal to the lease liability, which has
been discounted using the rate implicit in the lease agreement.
Under the new standard, a lessee is required to recognise all
lease assets and liabilities on the balance sheet; recognise
depreciation of leased assets and interest on lease liabilities
over the lease term; and separately present the principal amount of
cash paid and interest in the cash flow statement. The requirements
of IFRS 16 extend to certain service contracts, such as mining
contractors in which the contractor provides services and the use
of assets, which may impact the Group.
The Group has elected not to recognise assets and liabilities
for leases with a term of 12 months or less as well as leases of
low value items. These lease payments are recognised as an expense
on a straight-line basis over the term of the lease.
Below is a summary of the impact upon adoption of IFRS 16
"Leases":
A right-of-use asset amounting to GBP276 547 and corresponding
lease liability relating to the corporate office building were
recognised on initial application. Depreciation relating to this
right-of-use asset of GBP58 220 was charged during the year and
finance charges of GBP33 128 were raised on the lease liability
during the year.
Accounting standards and interpretations not applied
Standards, amendments and interpretations to existing standards
that are not yet effective and have not been early adopted by the
Group:
IFRS 3 Amendments to IFRS 3 "Business Combinations": 1 January 2020
Definition of business
IAS 1 and Amendments to IAS 1 "Presentation of Financial 1 January 2020
IAS 8 Statements" and IAS 8 "Accounting Policies,
Changes in Accounting Estimates and Errors":
Definition of material
Conceptual Amendments to References to the Conceptual 1 January 2020
Framework Framework in IFRS Standards
IFRS 17 IFRS 17 "Insurance Contracts" 1 January 2021
The Directors anticipate that the adoption of these standards
and interpretations in future periods will have no material impact
on the financial statements of the Group based on current
operations.
4. Segmental reporting
The reporting segments are identified by the management steering
committee (who are considered to be the chief operating
decision-makers) by the way that the Group's operations are
organised. As at 29 February 2020, the Group operated within two
operating segments, tin exploration and mining activities in
Namibia and South Africa.
Segment results
The following is an analysis of the Group's results by
reportable segment.
South Africa Namibia Total
GBP GBP GBP
Year ended 29 February
2020
Results
Other income 21 696 47 336 69 032
Associated costs (14 006) (436 922) (450 928)
------------ --------- ---------
Segmental profit/(loss) 7 690 (389 586) (381 896)
============ ========= =========
Year ended 28 February
2019
Results
Other income 26 782 - 26 782
Associated costs (13 623) (93 711) (107 334)
------------ --------- ---------
Segmental profit/(loss) 13 159 (93 711) (80 552)
============ ========= =========
The reconciliation of segmental gross loss to the Group's loss
before tax is as follows:
Year ended Year ended
29 February 28 February
2020 2019
GBP GBP
Segmental loss (381 896) (80 552)
Unallocated
costs (1 411 635) (990 384)
Finance income 3 793 13 416
Finance costs (40 719) -
------------ ------------
Loss before
tax (1 830 457) (1 057 520)
============ ============
Unallocated costs mainly comprise of corporate overheads and
costs associated with being listed in London.
Other segmental information
South Africa Namibia Total
GBP GBP GBP
As at 29 February 2020
4 332 7 441
Intangible assets 3 108 713 305 018
Other reportable segmental 13 041 13 102
assets 60 323 793 116
Other reportable segmental
liabilities (64 997) (774 676) (839 673)
Unallocated net liabilities - - (759 812)
------------ --------- ---------
16 599 18 943
Total consolidated net assets 3 104 039 422 649
============ ========= =========
As at 28 February 2019
3 798 7 012
Intangible assets 3 214 042 275 317
Other reportable segmental 6 061 6 150
assets 89 103 366 469
Other reportable segmental
liabilities (70 203) (286 546) (356 749)
1 818
Unallocated net assets - - 212
------------ --------- ---------
9 573 14 624
Total consolidated net assets 3 232 942 095 249
============ ========= =========
Unallocated net assets/liabilities are mainly comprised of cash
and cash equivalents and the working capital facility which are
managed at a corporate level.
5. Revenue
Year ended Year ended
29 February 28 February
2020 2019
GBP GBP
Revenue from the sale of
tin 47 336 -
Revenue from the sale of
sand 21 696 26 782
69 032 26 782
============ ============
6. Expenses by nature
The loss for the year has been arrived at after charging:
Year ended Year ended
29 February 28 February
2020 2019
GBP GBP
Staff costs (see Note 7) 793 687 519 823
Depreciation of property,
plant & equipment 128 130 22 824
Operating lease expense - 20 332
Professional fees 88 550 75 076
Travelling expenses 98 988 105 939
Other costs 652 999 313 724
Auditor's remuneration 52 873 40 000
1 815 227 1 097 718
============ ============
7. Staff costs
Year ended Year ended
29 February 28 February
2020 2019
GBP GBP
Staff costs capitalised under
property, plant and
Equipment 1 185 121 570 042
Staff costs capitalised under
intangible assets 104 521 75 005
Staff costs recognised as administrative
expenses 575 561 313 860
Shares issued (including amounts
capitalised) 65 470 65 297
Share-based payment charge (including
amounts
capitalised) 403 562 157 008
2 334 235 1 181 212
============ ==========================
Key management personnel have been identified as the Board of
Directors, Frans van Daalen (Chief Operating Officer of the Group)
and Robert Sewell (Chief Financial Officer of the Group). Details
of key management remuneration are shown in Note 27.
The average number of staff during the year was 66 (February
2019: 22) with an average total cost for the year of GBP25 970
(February 2019: GBP52 693).
Emoluments of GBP190 932 including GBP65 281 of share options
and shares to be issued (February 2019: GBP172 210 including GBP45
562 of share options and shares to be issued) were in respect of
the highest-paid Director during the year.
8. Finance income
Year ended
29 February Year ended
2020 28 February 2019
GBP GBP
Bank interest 3 793 13 416
============ =================
9. Finance cost
Year ended Year ended
29 February 28 February
2020 2019
GBP GBP
Interest on lease liability 33 128 -
Interest on environmental rehabilitation
liability 7 029
Bank interest 562 -
------------ ------------
40 719 -
============ ============
10. Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
Year ended Year ended
29 February 28 February
2020 2019
Factors affecting tax for the year: GBP GBP
The tax assessed for the year at
the Guernsey corporation
tax charge rate of 0%, as explained
below:
Loss before taxation (1 830 457) (1 057 520)
------------ ------------
Loss before taxation multiplied by - -
the Guernsey corporation
tax charge rate of 0%
Effects of:
Differences in tax rates (overseas
jurisdictions) (327 821) (160 094)
Tax losses carried forward 327 821 160 094
------------ ------------
Tax for the year - -
============ ============
Accumulated losses in the subsidiary undertakings for which
there is an unrecognised deferred tax asset are GBP1 797 379 (2019:
GBP842 560).
11. Loss per share from continuing operations
The calculation of a basic loss per share of 0.29 pence
(February 2019: loss per share of 0.23 pence), is calculated using
the total loss for the year attributable to the owners of the
Company of GBP1 781 962 (February 2019: GBP1 050 074) and the
weighted average number of shares in issue during the year of 623
591 330 (February 2019: 465 473 041).
Due to the loss for the year, the diluted loss per share is the
same as the basic loss per share. The number of potentially
dilutive ordinary shares, in respect of share options, warrants and
shares to be issued as at 29 February 2020 is 69 080 819 (February
2019: 48 566 727). These potentially dilutive ordinary shares may
have a dilutive effect on future earnings per share.
As part of the issuing of loan notes subsequent to year end
(Refer to Note 26), 20 500 000 warrants were issued.
12. Asset acquisition
Acquisition of Tantalum Investment Pty Limited ("Tantalum") in
the prior year
On 2 October 2018, the Group completed the acquisition of
Tantalum which has interests in tin exploration projects in
Namibia. The consideration of GBP850 000 was settled by way of
issue of 25 000 000 ordinary shares of the Company which were
issued to a group of sellers. Due to the lack of processes and
outputs relating to Tantalum at the time of purchase, the Board
does not consider the entity acquired to meet the definition of a
business. As such, the Group has accounted for the acquisition of
Tantalum as an asset purchase.
The relative fair values of the identifiable assets and
liabilities acquired and included in the consolidation are:
GBP
Intangible assets - exploration
and evaluation 850 000
===================
13. Intangible assets
Exploration
and evaluation Computer
assets software Total
GBP GBP GBP
6 300
As at 28 February 2018 6 300 864 - 864
Additions for the year - other expenditure 570 767 - 570 767
Additions for the year - acquisition
of Tantalum 850 000 - 850 000
Reclassification to property, plant
and equipment (488 891) - (488 891)
Foreign exchange difference (220 423) - (220 423)
---------- --------- ---------
7 012
As at 28 February 2019 7 012 317 - 317
Additions for the year - other expenditure 522 131 125 894 648 025
Exchange differences (209 954) (9 370) (219 324)
7 441
As at 29 February 2020 7 324 494 116 524 018
========== ========= =========
For the purposes of impairment testing, the intangible
exploration and evaluation assets are allocated to the Group's
cash-generating units, which represent the lowest level within the
Group at which the intangible exploration and evaluation assets are
measured for internal management purposes, which is not higher than
the Group's operating segments as reported in Note 4.
The amounts for intangible exploration and evaluation assets
represent costs incurred on active exploration projects. Amounts
capitalised are assessed for impairment indicators under IFRS 6 at
each year end as detailed in the Group's accounting policy. In
addition, the Group routinely reviews the economic model and
reasonably possible sensitivities and considers whether there are
indicators of impairment.
The directors have concluded that there are no indicators of
impairment in respect of the carrying value of exploration and
evaluation assets at 29 February 2020 based on planned future
development of the projects and current and forecast tin prices. In
making this assessment a tin price of USD16 500/tonne was used.
The Company's subsidiary, Greenhills Resources Limited has the
following:
i) a 74% interest in Renetype Pty Limited ("Renetype") which
holds an interest in Prospecting Right 2205.
ii) an 85% interest in Uis Tin Mining Company Pty Limited
("UTMC") which holds an interest in mining rights, ML129, ML133 and
ML134.
iii) a 50% interest in Jaxson 641 Pty Limited ("Jaxson") which
holds an interest in Prospecting Right 428.
iv) a 74% interest in Zaaiplaats Mining Pty Limited
("Zaaiplaats") which holds an interest in Prospecting Right
183.
The Company has a 100% interest in Tantalum Investment Pty
Limited ("Tantalum") which holds an interest in Exclusive
Prospecting Licence 5445 and Exclusive Prospecting Licence
5670.
14. Property, plant and equipment
Mining
asset
under Decommissioning Right-of-use Computer
Land construction asset Asset Equipment Furniture Vehicles Total
Cost
As at 28
February
2018 15 366 518 841 - - 4 540 - - 538 747
Additions for
the
year - other 4 721 5 027
expenditure - 734 78 168 - 64 701 74 065 88 902 570
Transfer from
exploration
and
evaluation
asset - 488 891 - - - - - 488 891
Foreign
exchange
differences (1 927) (233 695) (2 988) - (3 043) (2 831) (3 398) (247 882)
------- ------------- ---------------- ------------- ----------- ---------- --------- ---------
As at 28
February 5 495 5 807
2019 13 439 771 75 180 - 66 198 71 234 85 504 326
Additions for
the
year - other 7 370 276 7 713
expenditure - 105 10 715 547 35 768 20 290 - 425
Exchange
differences (1 001) (864 947) (6 398) (20 583) (7 593) (6 776) (6 369) (931 667)
------- ------------- ---------------- ------------- ----------- ---------- --------- ---------
As at 29
February 12 000 255 12 607
2020 12 438 929 79 497 964 94 373 84 748 79 135 084
======= ============= ================ ============= =========== ========== ========= =========
Accumulated
Depreciation
As at 28
February
2018 - - - - 378 - - 378
Charge for the
year - - - - 11 135 4 280 7 409 22 824
Exchange
differences - - - - (473) (164) (282) (919)
------- ------------- ---------------- ------------- ----------- ---------- --------- ---------
As at 28
February
2019 - - - - 11 040 4 116 7 127 22 283
Charge for the
year - - - 58 220 32 573 15 962 21 375 128 130
Exchange
differences - - - (4 333) (3 274) (1 468) (2 122) (11 197)
------- ------------- ---------------- ------------- ----------- ---------- --------- ---------
As at 29
February
2020 - - - 53 887 40 339 18 610 26 380 139 216
======= ============= ================ ============= =========== ========== ========= =========
Net Book Value
As at 29
February 12 000 12 467
2020 12 438 929 79 497 202 077 54 034 66 138 52 755 868
As at 28
February 5 495 5 785
2019 13 439 771 75 180 - 55 158 67 118 78 377 043
As at 28
February
2018 15 366 518 841 - - 4 162 - - 538 369
15. Inventories
29 February 28 February
2020 2019
GBP GBP
Tin concentrate on hand 185 338 -
Consumables 61 572 25 221
-----------
246 910 25 221
=========== ===========
16. Trade and other receivables
29 February 28 February
2020 2019
GBP GBP
Trade receivables 42 772 42 463
Other receivables 111 614 83 615
VAT receivables 494 336 348 885
648 722 474 963
=========== ===========
The Directors consider that the carrying amount of trade and
other receivables approximates to their fair value due to their
short-term nature. No allowance for any expected credit losses
against any of the receivables is provided.
The total trade and other receivables denominated in South
African Rand amount to GBP65 288 (February 2019: GBP80 662) and
denominated in Namibian Dollars amount to GBP517 322 (February
2019: GBP316 307).
17. Cash and cash equivalents
29 February 28 February
2020 2019
GBP GBP
Cash on hand and in bank 574 600 1 781 335
=========== ===========
Cash and cash equivalents (which are presented as a single class
of assets on the face of the Statement of Financial Position)
comprise cash at bank. The Directors consider that the carrying
amount of cash and cash equivalents approximates their fair value.
The total cash and cash equivalents denominated in South African
Rand amount to GBP48 887 (February 2019: GBP82 287), the total cash
and cash equivalents denominated in Namibian Dollars amount to
GBP240 623 (February 2019: GBP660 190) and the total cash and cash
equivalents denominated in US Dollars amount to GBP132 (February
2019: GBP132).
18. Borrowings
29 February 2020 28 February 2019
GBP GBP
Working capital
facility 1 230 961 -
================ ================
On 16 August 2019, a working capital facility of N$35 000 000
(approximately GBP2 million) and a VAT facility for N$8 000 000
(approximately GBP456 000) was entered into between the Company's
subsidiary, AfriTin Mining (Namibia) Pty Limited and Nedbank
Namibia.
The VAT facility is secured by assessed/audited VAT returns
(refunds) which have not been paid by Namibia Inland Revenue.
Nedbank Namibia provides a facility amounting to 70% of the total
unpaid refunds. Any drawdowns against this facility are repaid to
the bank upon receipt of cash from Namibia Inland Revenue.
The working capital facility and the VAT facility were
reviewable on 31 July 2020 and were renewed post period end.
Interest accrues on these loans at the prime rate charged by
Nedbank Namibia.
Both AfriTin, as the parent company of AfriTin Mining (Namibia)
Pty Limited, and Bushveld Minerals Limited ("Bushveld"), a
shareholder holding approximately 8% of the Company, provide
collateral in the form of a joint suretyship.
Included within the facility amount of N$35 000 000, Nedbank
Namibia have provided AfriTin Mining (Namibia) Pty Limited with a
N$ 4 117 500 guarantee to Namibia Power Corporation Pty Limited in
relation to a deposit for the supply of electrical power. As a
result of the guarantee provided by Nedbank Namibia, no cash was
paid over for the deposit.
19. Trade and other payables
29 February 2020 28 February 2019
GBP GBP
Trade payables 570 779 266 184
Other payables 71 117 110 716
Accruals 252 934 2 550
894 830 379 450
================ ================
Trade and other payables principally comprise amounts
outstanding for trade purchases and on-going costs. The average
credit period taken for trade purchases is 30 days.
The Group has financial risk management policies in place to
ensure that all payables are paid within the pre-arranged credit
terms. No interest has been charged by any suppliers as a result of
late payment of invoices during the year.
The Directors consider that the carrying amount of trade and
other payables approximates to their fair value.
The total trade and other payables denominated in South African
Rand amount to GBP165 988 (February 2019: GBP149 684) and GBP622
762 (February 2019: GBP179 394) is denominated in Namibian
Dollars.
20. Environmental rehabilitation liability
GBP
Balance at 28 February
2018 -
Increase in provision 78 168
Foreign exchange differences (2 988)
-------
Balance at 28 February
2019 75 180
Increase in provision 10 717
Interest expense 7 029
Foreign exchange differences (6 921)
-------
Balance at 29 February
2020 86 005
=======
Provision for future environmental rehabilitation and
decommissioning costs are made on a progressive basis. Estimates
are based on costs that are regularly reviewed and adjusted
appropriately for new circumstances. The environmental
rehabilitation liability is based on disturbances and the required
rehabilitation as at 29 February 2020.
The rehabilitation provision represents the present value of
decommissioning costs relating to the dismantling of mechanical
equipment and steel structures related to the Phase 1 Pilot Plant,
the demolishing of civil platforms and reshaping of earthworks. A
provision for this requires estimates and assumptions to be made
around the relevant regulatory framework, the magnitude of the
possible disturbance and the timing, extent and costs of the
required closure and rehabilitation activities. In calculating the
appropriate provision, cost estimates of the future potential cash
outflows based on current studies of the expected rehabilitation
activities and timing thereof are prepared. These forecasts are
then discounted to their present value using a risk-free rate
specific to the liability. In determining the amount attributable
to the rehabilitation liability, management used a discount rate of
9.35%, an inflation rate of 5.5% and an estimated mining period of
38 years. Actual rehabilitation and decommissioning costs will
ultimately depend upon future market prices for the necessary
rehabilitation works and timing of when the mine ceases
operation.
21. Lease liability
A lease liability is raised for the rental of an office
building. The lease commenced on 1 December 2018 and has a term of
5 years.
The following is a reconciliation of the operating lease
commitment to the lease liability as at 1 March 2019:
GBP
Operating lease commitment as at
1 March 2019 389 317
Less the effect of discounting using
the incremental
borrowing rate as at the date of
initial application (112 770)
Lease liability raised 276 547
=========
GBP
Balance at 28 February 2019 -
Additions 276 547
Interest expense 33 128
Lease payments (68 015)
Foreign exchange differences (17 987)
--------
Balance at 29 February 2020 223 673
========
The following is the split between the current and the
non-current portion of the liability:
29 February 28 February
2020 2019
GBP GBP
Non-current liability 181 544 -
Current liability 42 129 -
223 673 -
=========== ===========
22. Share capital
Number of ordinary
shares of no
par value issued Share Capital
and fully paid GBP
Balance at 28 February 2018 297 481 929 10 853 631
Capital raise - 14 June
2018 220 515 292 5 953 913
Share issue costs - excluding
warrants - (325 858)
Share issue costs - fair
value of warrants - (48 868)
Shares issued to Hannam
& Partners 1 591 304 54 900
"Tantalum" Acquisition 25 000 000 850 000
------------------ -------------
Balance at 28 February 2019 544 588 525 17 337 718
Capital raise - 22 May 2019 99 613 074 2 988 392
Share issue costs - (111 687)
Shares issued to Hannam
& Partners 327 868 10 000
Shares issued to directors/employees 8 616 906 262 816
------------------ -------------
Balance at 29 February 2020 653 146 373 20 487 239
================== =============
Authorised: 966 302 399 ordinary shares of no par value
Allotted, issued and fully paid: 653 146 373 shares of no par
value
On 2 October 2018, AfriTin Mining Limited acquired the entire
issued share capital of Tantalum Investment Pty Limited, containing
Namibian exploration licenses EPL5445 and EPL5670 for the
exploration of tin, tantalum and other associated minerals from Jan
Jonathan Serfontein. The purchase price of GBP850 000 was settled
by way of issue of 25 000 000 ordinary shares in the Company, at a
price of 3.40p.
On 22 May 2019, AfriTin Mining Limited completed an equity
fundraising by way of a direct subscription of 99 613 074 ordinary
shares of no par value in the Company at a price of 3 pence per
share.
On 10 December 2019, 8 616 906 ordinary shares of no par value
were issued to various directors and employees in lieu of payment
of director fees and part settlement of salaries. Furthermore 327
868 shares were issued to Hannam and Partners, in accordance with
the terms of their broker agreement with the Company. These shares
were issued at a price of 3.05 pence per share.
23. Warrant reserve
The following warrants were granted during the year ended 28
February 2019:
Date of grant 23 January
2019
Number granted 3 800 000
Contractual life 2 years
Estimated fair value
per warrant (GBP) 0.01286
The following warrants were granted during the period ended 28
February 2018:
Date of grant 9 November
2017
Number granted 1 871 939
Contractual life 3 years
Estimated fair value
per warrant (GBP) 0.01591
The estimated fair values were calculated by applying the Black
Scholes pricing model. The model inputs were:
Date of grant 23 January 9 November
2019 2017
Share price at grant
date (pence) 4.15 3.90
Exercise price (pence) 4.50 3.90
Expected life 2 years 3 years
Expected volatility 60% 60%
Expected dividends Nil Nil
Risk-free interest rate 1.24% 1.24%
In accordance with the terms of a Demerger Agreement between
Bushveld Minerals Limited and AfriTin Mining Limited, Bushveld
warrant holders were entitled to exercise the same amount of
warrants in AfriTin for GBPnil consideration subject to the
demerger ratio of 0.0899. This agreement effectively gave rise to
43 120 AfriTin warrants on admission. In the period to 28 February
2018, 17 137 of these warrants were exercised. The remaining 25 983
of these warrants expired during the year ended 28 February
2019.
The warrants in issue during the year are as follows:
Outstanding at 28 February
2018 1 897 922
Exercisable at 28 February
2018 1 897 922
Granted during the year 3 800 000
Expired during the year (25 983)
Exercised during the year -
----------
Outstanding at 28 February
2019 5 671 939
Exercisable at 28 February
2019 5 671 939
Granted during the year -
Expired during the year -
Exercised during the year -
----------
Outstanding at 29 February
2020 5 671 939
Exercisable at 29 February
2020 5 671 939
The warrants outstanding at the year-end have an average
exercise price of GBP0.043 (February 2019: GBP0.043), with a
weighted average remaining contractual life of 0.83 years (February
2019: 1.83 years).
In the year ended 29 February 2020, there were no warrant
charges (February 2019: GBP48 868) accounted for as there were no
warrant issues during the year.
24. Share-based payment reserve
Director share options
The following director share options were granted during the
year ended 29 February 2020:
18 October 18 October 18 October
Date of grant 2019 2019 2019
Number granted 3 200 000 3 200 000 3 200 000
Vesting period 1 year 2 years 3 years
Contractual life 5 years 5 years 5 years
Estimated fair value
per option (pence) 1.4790 1.3340 1.2510
The estimated fair values were calculated by applying the Black
Scholes pricing model. The model inputs were:
Date of grant 18 October 18 October 18 October
2019 2019 2019
Share price at grant
date (pence) 3.15 3.15 3.15
Exercise price (pence) 3.75 4.50 5.00
18 October 18 October 18 October
Expiry date 2024 2024 2024
Expected volatility 60% 60% 60%
Expected dividends Nil Nil Nil
Risk-free interest rate 1.24% 1.24% 1.24%
The following director share options were granted during the
year ended 28 February 2019:
Date of grant 14 June 2018 14 June 2018 14 June 2018
Number granted 8 750 000 4 375 000 4 375 000
Vesting period 1 year 18 months 2 years
Contractual life 5 years 5 years 5 years
Estimated fair value
per option (pence) 1.1040 0.9090 0.7280
The estimated fair values were calculated by applying the Black
Scholes pricing model. The model inputs were:
Date of grant 14 June 2018 14 June 2018 14 June 2018
Share price at grant
date (pence) 2.8 2.8 2.8
Exercise price (pence) 4.5 6.0 8.0
Expiry date 14 June 2023 14 June 2023 14 June 2023
Expected volatility 60% 60% 60%
Expected dividends Nil Nil Nil
Risk-free interest rate 1.24% 1.24% 1.24%
The director share options in issue during the year are as
follows:
Outstanding at 1 March
2018 -
17 500
Granted during the year 000
Forfeited during the year -
Exercised during the year -
Expired during the year -
----------
Outstanding at 28 February 17 500
2019 000
Exercisable at 28 February
2019 -
Granted during the year 9 600 000
Forfeited during the year -
Exercised during the year -
Expired during the year -
----------
Outstanding at 29 February 27 100
2020 000
Exercisable at 29 February 13 125
2020 000
The director share options outstanding at the year-end have an
average exercise price of GBP0.053 (February 2019: GBP0.058), with
a weighted average remaining contractual life of 3.77 years
(February 2019: 4.29 years).
The director must remain as a director of the Company for the
share options to vest. There are no market-based vesting conditions
on the share options.
Employee share options
The following employee share options were granted during the
year ended 29 February 2020:
18 October 18 October 18 October
Date of grant 2019 2019 2019
Number granted 4 110 001 4 110 000 4 109 999
Vesting period 1 year 2 years 3 years
Contractual life 5 years 5 years 5 years
Estimated fair value
per option (pence) 1.4790 1.3340 1.2510
The estimated fair values were calculated by applying the Black
Scholes pricing model. The model inputs were:
Date of grant 18 October 18 October 18 October
2019 2019 2019
Share price at grant
date (pence) 3.15 3.15 3.15
Exercise price (pence) 3.75 4.50 5.00
18 October 18 October 18 October
Expiry date 2024 2024 2024
Expected volatility 60% 60% 60%
Expected dividends Nil Nil Nil
Risk-free interest rate 1.24% 1.24% 1.24%
The following employee share options were granted during the
year ended 28 February 2019:
1 October 1 October 1 October
Date of grant 2018 2018 2018
Number granted 11 250 000 5 625 000 5 625 000
Vesting period 1 year 18 months 2 years
Contractual life 5 years 5 years 5 years
Estimated fair value
per option (pence) 1.5750 1.3240 1.0830
The estimated fair values were calculated by applying the Black
Scholes pricing model. The model inputs were:
Date of grant 1 October 1 October 1 October
2018 2018 2018
Share price at grant
date (pence) 3.5 3.5 3.5
Exercise price (pence) 4.5 6.0 8.0
30 September 30 September 30 September
Expiry date 2023 2023 2023
Expected volatility 60% 60% 60%
Expected dividends Nil Nil Nil
Risk-free interest rate 1.24% 1.24% 1.24%
The employee share options in issue during the year are as
follows:
Outstanding at 1 March
2018 -
22 500
Granted during the year 000
Forfeited during the year -
Exercised during the year -
Expired during the year -
-------
Outstanding at 28 February 22 500
2019 000
Exercisable at 28 February
2019 -
12 330
Granted during the year 000
Forfeited during the year -
Exercised during the year -
Expired during the year -
-------
Outstanding at 29 February 34 830
2020 000
Exercisable at 29 February 11 250
2020 000
The employee share options outstanding at the year-end have an
average exercise price of GBP0.053 (February 2019: GBP0.058), with
a weighted average remaining contractual life of 3.96 years
(February 2019: 4.59 years)
The employee must remain in employment with the Company for the
share options to vest. There are no market-based vesting conditions
on the share options.
Director shares to be issued
Directors fees of GBP24 050 (February 2019: GBP24 050) are owing
to the directors at the end of the year. These fees will be settled
through the issuing of shares. The corresponding credit has been
recorded in the share-based payment reserve.
Employee shares to be issued
Employee salaries of GBP13 961 (February 2019: GBP41 248) are
owing to employees at the end of the year. These fees will be
settled through the issuing of shares. The corresponding credit has
been recorded in the share-based payment reserve.
25. Financial instruments
The Group is exposed to the risks that arise from its use of
financial instruments. This note describes the objectives, policies
and processes of the Group for managing those risks and the methods
used to measure them. Further quantitative information in respect
of these risks is presented throughout these financial
statements.
Capital risk management
The Group manages its capital to ensure that entities in the
Group will be able to continue as going concerns while maximizing
returns to shareholders. In order to maintain or adjust the capital
structure, the Group may issue new shares or arrange debt
financing.
The capital structure of the Group consists of cash and cash
equivalents and equity, comprising issued capital, issued
convertible loan notes and retained losses.
The Group is not subject to any externally imposed capital
requirements.
Significant accounting policies
Details of the significant accounting policies and methods
adopted including the criteria for recognition, the basis of
measurement and the basis for recognition of income and expenses
for each class of financial asset, financial liability and equity
instrument are disclosed in note 2.
Principal financial instruments
The principal financial instruments used by the Group, from
which financial instrument risk arises, are as follows:
-- Trade and other receivables
-- Cash and cash equivalents
-- Trade and other payables
-- Borrowings
-- Lease liability
-- Convertible loan notes
Categories of financial instruments
The Group holds the following financial assets:
Year ended Year ended
29 February 28 February
2020 2019
GBP GBP
Measured at amortised
cost:
Trade and other receivables 154 386 126 805
Cash and cash equivalents 574 600 1 781 335
Total financial assets 728 986 1 908 140
============ ============
The Group holds the following financial liabilities:
Year ended Year ended
29 February 28 February
2020 2019
GBP GBP
Measured at amortised
cost:
Trade and other payables 894 830 379 450
Borrowings 1 230 961 -
Lease liability 223 673 -
Total financial liabilities 2 349 464 379 450
============ ============
Maturity analysis of the contractual undiscounted cashflows:
Between Between
Up to Between 3 1 2
3 months and 12 months and 2 years and 5 years
Trade and other 894 830 - - -
payables
Borrowings - 1 230 961 - -
Lease Liability 9 705 32 424 53 753 127 791
---------- --------------- ------------- -------------
904 535 1 263 385 53 753 127 791
========== =============== ============= =============
General objectives, policies and processes
The Board has overall responsibility for the determination of
the Group's risk management objectives and policies. The Board
receives reports through which it reviews the effectiveness of the
processes put in place and the appropriateness of the objectives
and policies it sets.
The overall objective of the Board is to set policies that seek
to reduce risk as far as possible without unduly affecting the
Group's competitiveness and flexibility. Further details regarding
these policies are set out below:
Credit risk
The Group's principal financial assets are bank balances and
trade and other receivables.
Credit risk arises principally from the Group's cash balances.
Credit risk is the risk that the counterparty fails to repay its
obligation to the Group in respect of amounts owed. The Group gives
careful consideration to which organisations it uses for its
banking services in order to minimize credit risk. Credit risk
relating to other receivables is minimal. There are no formal
procedures in place for monitoring and collecting amounts owed to
the Group. A risk management framework will be developed over time,
as appropriate to the size and complexity of the business.
The concentration of the Group's credit risk is considered by
counterparty, geography and by currency. The Group has split its
cash reserves across multiple banks in an effort to mitigate credit
risk. The Pound Sterling and US Dollar accounts are held with a
bank in Mauritius which has a rating of Baa1 (Moody's), the Rand
account is held with a bank in South Africa which has a rating of
Ba1 (Moody's) and the Namibian Dollar account is held with a bank
in Namibia with a rating of Ba2 (Moody's). While the credit ratings
of the countries in which the cash is held have been downgraded
during the year, the banks chosen remain stable and do not present
any further risks.
The concentration of credit risk was as follows:
29 February 28 February
2020 2019
GBP GBP
Currency
Sterling 284 958 1 038 726
USD 132 132
South African
Rand 48 887 82 287
Namibian Dollars 240 623 660 190
574 600 1 781 335
=========== ===========
There are no other significant concentrations of credit risk as
at the balance sheet date.
At 29 February 2020, the Group held no collateral as security
against any financial asset. The carrying amount of financial
assets recorded in the financial statements, net of any allowances
for losses, represents the Group's maximum exposure to credit risk
without taking account of the value of any collateral obtained. At
29 February 2020, no financial assets were past their due date. The
Group applies IFRS 9 to measure expected credit losses for
receivables and these are regularly monitored and assessed. There
has been no impairment of financial assets during the year.
Management considers the above measures to be sufficient to control
the credit risk exposure.
Liquidity risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting its financial obligations as they fall due.
Ultimate responsibility for liquidity risk management rests with
the Board of Directors. The Board manages liquidity risk by
regularly reviewing the Group's gearing levels, cash-flow
projections and associated headroom and ensuring that excess
banking facilities are available for future use.
The Group maintains good relationships with its banks, which
have high credit ratings and its cash requirements are anticipated
via the budgetary process. At 29 February 2020, the Group had
GBP574 600 (2019: GBP1 781 335) of cash reserves.
Market risk
The Group's activities expose it primarily to the financial risk
of changes in foreign currency exchange rates and interest
rates.
Interest rate risk
The Group was exposed to minimal interest rate risk during the
year. For this reason, no sensitivity analysis has been performed
regarding interest rate risk.
Foreign exchange risk
The Group has foreign currency denominated assets and
liabilities. Exposure to exchange rate fluctuations therefore
arise. The carrying amount of the Group's foreign currency
denominated monetary assets and liabilities, all in Pound Sterling,
are shown below.
Year ended Year ended
29 February 28 February
2020 2019
GBP GBP
Cash and cash equivalents 289 642 742 609
Other receivables 88 274 48 811
Trade and other
payables (788 750) (329 078)
Borrowings (1 230 961) -
(1 641 795) 462 342
============ ============
The Group is exposed to a level of foreign currency risk. Due to
the minimal level of foreign exchange transactions, the Directors
currently believe the foreign currency risk is at an acceptable
level.
The Group does not enter into any derivative financial
instruments to manage its exposure to foreign currency risk.
The following table details the Group's sensitivity to a 10%
increase and decrease in the Pound Sterling against the Rand and
the Namibian Dollar. 10% is the sensitivity rate used when
reporting foreign currency risk internally to key management
personnel and represents management's assessment of the reasonable
possible change in foreign currency rates. The sensitivity analysis
includes only outstanding foreign currency denominated monetary
items and adjusts their translation at the year end for a 10%
change in foreign currency rates.
Rand denominated Rand currency Rand currency
monetary items impact impact
GBP Strengthening Weakening
GBP GBP
Assets 92 269 101 496 83 042
Liabilities (165 988) (182 586) (149 389)
---------------- ---------------- ----------------
(73 719) (81 090) (66 347)
================ ================ ================
Namibian dollar Namibian dollar Namibian dollar
denominated currency impact currency impact
monetary items Strengthening Weakening
GBP GBP GBP
Assets 285 515 314 067 256 964
Liabilities (1 853 724) (2 039 096) (1 668 351)
---------------- ---------------- ----------------
(1 568 209) (1 725 029) (1 411 387)
================ ================ ================
26. Events after balance sheet date
Loan note facility
On 5 May 2020, loan notes to the value of GBP2 050 000 were
issued. The loan notes bear an interest rate of 10% per annum
(payable in full on redemption) and have a 12-month term. The
redemption of the notes can be by way of cash or shares, but the
repayment mechanism will be by way of mutual agreement and the
Company is not obliged to issue shares. The notes are unsecured and
rank in subordination to the working capital facility with Nedbank
Namibia.
As part of the agreement, the subscribers to the notes received
10 warrants for each GBP1 subscribed, each warrant giving the
holder the right to subscribe for one share in AfriTin. The
warrants can be exercised at any time from the date of issue and
will lapse after 3 years. The exercise price of the warrants is
1.95 pence.
Equity Fundraising
On 3 August 2020, the Company completed an equity fundraising by
way of a placing and direct subscription of 145,238,089 ordinary
shares of no par value in the Company at a price of 2.1 pence per
share, to raise approximately GBP3 million before expenses.
COVID-19
Post the period under review, following the global outbreak of
the COVID-19 pandemic, new legislation was implemented by the
Government of Namibia. In order to tackle the spread of COVID-19,
the Namibian government announced a 21-day lockdown effective 27
March 2020. Under the government legislation, mining operations
were categorised as critical economic services and minimum
operational activity was permitted to continue, including critical
maintenance work. To comply with this directive, the Uis tin mine
suspended mining from the open pit but continued feeding the
processing plant from the run-of-mine stockpile during this period.
Full production has since resumed and the Company continues to
operate the Uis tin mine at full scale despite ongoing COVID-19
measures in Namibia and South Africa. The health, safety and
well-being of our employees, contractors and the local community
are of utmost importance to the Company. All necessary steps to
mitigate a possible outbreak have been taken, and the Company is
pleased to report that there continue to be no confirmed cases of
COVID-19 at the Uis tin mine.
27. Related-party transactions
Balances and transactions between the Company and its
subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in this note.
Goldiblox Pty Limited ("Goldiblox") is a related party due to
Frans van Daalen, key management personnel of AfriTin Mining
Limited being a 50% shareholder of Goldiblox. During the prior
year, Goldiblox charged the Group GBP66 554 for management
services. Furthermore, the Group acquired a DMS plant from
Goldiblox during the current year for GBP155 678. At year end, the
Group did not owe Goldiblox any funds.
Bushveld Minerals Limited ("Bushveld") is a related party due to
Anthony Viljoen, Chief Executive Officer, being a Non-Executive
Director on the Bushveld Board. During the year, Bushveld charged
the Group GBP85 596 (February 2019: GBP22 477) for use of office
space and GBPnil (February 2019: GBP18 592) for employee costs. At
year end, the Group owed Bushveld GBP71 762. Furthermore, Bushveld
provide suretyship of GBP1 491 000 as collateral for the Nedbank
Namibia working capital facility.
The remuneration of the key management personnel of the Group,
which includes the Directors, Frans van Daalen and Robert Sewell,
is set out below.
29 February 2020 Shares
Issued
in Relation
Shares/Share to Director Director Other
Options Fees/Salary Fees/Salary Fees Total
GBP GBP GBP GBP GBP
Non-Executive Directors
Glen Parsons (Chairman) 17 626 40 000 - - 57 626
Terence Goodlace 15 471 - 28 772 - 44 243
22
Laurence Robb 15 471 13 000 12 000 000 62 471
Roger Williams 15 471 25 000 - - 40 471
Executive Director
Anthony Viljoen (Chief Executive 125 190
Officer) 41 440 23 841 650 - 932
Other key management personnel
Robert Sewell (Chief Financial 185
Officer) 43 078 55 147 87 257 - 482
Frans van Daalen (Chief 114 194
Operating Officer) 68 944 10 994 656 - 594
217 368 22 775
501 167 983 335 000 819
============ ============ ============ ===== =======
28 February 2019 Shares
Issued
in Relation
Shares/Share to Director Director Other
Options Fees/Salary Fees/Salary Fees Total
GBP GBP GBP GBP GBP
Non-Executive Directors
Glen Parsons (Chairman) 15 100 12 333 - - 27 433
Terence Goodlace 12 583 - 21 996 - 34 579
Laurence Robb 12 583 4 008 12 000 - 28 591
Roger Williams 12 583 7 708 - - 20 291
Executive Director
Anthony Viljoen (Chief Executive 126 172
Officer) 35 233 10 329 648 - 210
Other key management personnel
Robert Sewell (Chief Financial 101
Officer) 10 641 6 979 83 851 - 471
Frans van Daalen (Chief 112 138
Operating Officer) 18 380 8 166 302 - 848
117 356 523
103 49 524 797 - 425
============ ============ ============ ===== =======
*Salary cost of GBP28 266 was paid to Frans van Daalen via
Goldiblox.
28. Reserves within equity
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.
Convertible loan note reserve
The convertible loan note reserve represents proceeds on issue
of convertible loan notes relating to equity component.
On 26 November 2019, the Group raised GBP3.8m through the
issuing of convertible loan notes which mature in May 2021. The
instruments entitle the holders to a 10% coupon. Under the terms of
the instrument the Group can elect to settle the loan note into a
fixed number of shares at a 4p conversion rate. The Group can elect
to redeem the loan notes early in cash at a premium of 10%. As
there is no obligation to settle in cash the loan notes have been
accounted for in equity as an increase in the convertible loan note
reserve.
Warrant reserve
The warrant reserve represents the cumulative charge to date in
respect of unexercised share warrants at the balance sheet
date.
Share-based payment reserve
The share-based payment reserve represents the cumulative charge
to date in respect of unexercised share options at the balance
sheet date as well as fees/salaries owed to directors/employees to
be settled through the issuing of shares.
Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign
exchange differences arising from the translation of entities with
a functional currency other than Pound Sterling.
Retained earnings/accumulated deficit
The retained earnings/accumulated deficit represents the
cumulative profit and loss net of distribution to owners.
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END
FR FFFIFTRIDFII
(END) Dow Jones Newswires
August 28, 2020 02:00 ET (06:00 GMT)
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