TIDMFRG
RNS Number : 4595E
Firering Strategic Minerals PLC
30 June 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014
WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL)
ACT 2018, AS AMED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A
REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO
BE IN THE PUBLIC DOMAIN.
Firering Strategic Minerals plc / EPIC: FRG / Market: AIM /
Sector: Mining
30 June 2023
Firering Strategic Minerals plc
("Firering" or "the Company")
2022 Final Results and AGM
Firering Strategic Minerals plc, an exploration company focusing
on critical minerals, is pleased to announce its Final Results for
the year ended 31 December 2022 . The Company also gives notice
that its Annual General Meeting ('AGM') will be held at Hill
Dickinson LLP, The Broadgate Tower, 20 Primrose Street, London EC2A
2EW on 27 July 2023 at 10.30am BST. The Notice of AGM will be sent
to shareholders and the Notice of AGM and Accounts will be made
available to download later today from the Company's website
www.fireringplc.com .
Operational Highlights
-- Completion of Phase I Diamond drilling ('DD') campaign of 3,027m drilled over 19 holes:
o Pegmatite intersected in all 19 drill holes.
o Visual identification of lithium mineralisation in 18 of the
19 drill holes
-- Assay Results from DD campaign included stand out drilling intercepts of:
o 64m at 1.24% Li(2) O from 76m in hole TVDD0004, including:
-- 27m at 2.13% Li(2) O from 76m
-- 4.06% Li(2) O, the highest individual sample assay grade.
o 15m at 0.59% Li(2) O from 37m in hole TVDD0003, including:
-- 4m at 1.95% Li(2) O from 45m.
o 25m at 1.39% Li2O from 77m in hole TVDD0018, including:
-- 18m at 1.85% Li2O from 80m.
o 7m at 1.33% Li2O from 60m in hole TVDD0019.
o 21m at 0.73% Li2O from 72m in hole TVDD0019, including:
-- 7m at 1.65% Li2O from 73m.
Corporate Highlights
-- Secured up to US$18.6 million investment from Ricca Resources
Ltd ("Ricca") to fund the advancement of the Atex Project and
adjacent Alliance licence in Côte d'Ivoire.
o Upfront US$1m cash consideration received from Ricca
o US$0.6m of Ricca shares to be provided to Firering on Ricca
IPO on ASX planned for H2 2023
o Ricca to complete a four stage earn-in of up to 50% of the
Project through the funding of up to US$17m with the aim of
achieving a Definitive Feasibility Study ("DFS") on Atex.
Post period Highlights
-- Agreement between Firering and Atex dated 31 March 2023:
Firering acquired 13% of the issued share capital of Atex for
EUR258,484 increasing its stake from 77% to 90%
-- Phase II exploration work together with Ricca commenced with
a large-scale soil sampling programme completed in June 2023:
o A total of 14,116 soil samples completed and six high-priority
soil anomalies identified
o Several lithium in soil anomalies occurred adjacent to and
along similar orientations to the Spodumene Hill lithium occurrence
where previous drilling returned significant intersections,
including 64m at 1.24% Li(2) O and 25m at 1.39% Li(2) O
-- Based on the successful outcomes of the large-scale soil
sampling campaign we will shortly commence a planned c.11,000m
Auger drilling programme which we expect will be followed by
Reverse Circulation ("RC") drilling campaign in H2 2023
Commenting on the results Yuval Cohen, CEO of Firering said:
"There have been several operational highlights during the year,
including the completion of the Phase I diamond drilling campaign
where we successfully drilled 1 9 drill holes with pegmatites
intersected in all 19 holes drilled and visible lithium
mineralisation present in 18 out of the 19 holes. This was followed
by some stand out drilling intercepts 64m at 1.24% Li2O which
greatly increased our understanding of the scale and potential of
the Atex project.
"In November 2022, we were delighted to announce our partnership
with Ricca Resources and their US$18.6 million investment, which
will allow us to accelerate the project to DFS stage at a time when
continued demand for lithium, driven by the EV revolution and
transition to net zero, remains buoyant.
"Post period, the Company announced the start of Phase II of our
large-scale exploration programme which commenced with a
comprehensive soil sampling programme at Atex, in partnership with
Ricca and we look forward to updating the market on our planned
11,000m auger drilling to commence imminently."
**S **
For further information, visit www.fireringplc.com or contact the following:
Firering Strategic Minerals Tel: +44 20 7236 1177
Yuval Cohen
SPARK Advisory Partners Limited Tel: +44 20 3368 3550
Nominated Adviser
Neil Baldwin / James Keeshan / Adam
Dawes
Optiva Securities Limited Tel: +44 20 3137 1903
Broker
Christian Dennis / Daniel Ingram
St Brides Partners Limited T: +44 20 7236 1177
Financial PR E: firering @stbridespartners.co.uk
Ana Ribeiro / Susie Geliher /Isabelle
Morris
Chairman's Statement
I am pleased to present the Annual Report of Firering Strategic
Minerals plc for the year ended 31 December 2022.
2022 has been an excellent year for Firering as it continued to
advance its exploration programme at its flagship project - the
Atex project in Côte d'Ivoire - with a view of establishing a
maiden Lithium resource and progressing our plan to commence pilot
scale production of ethical tantalum and niobium.
To this end, and in an announcement that validates our own
belief in the potential of the Atex Lithium-Tantalum project to
become a leading supplier of lithium, we were thrilled to secure an
investment of up to US$18.6 million from Ricca , an Australian
diversified minerals company which was formerly part of AIM and
ASX-quoted Atlantic Lithium Limited to advance the Atex project and
adjacent Alliance exploration license in Côte d'Ivoire.
This agreement will enable the exploration of the project and
secure funding for its development pathway, including a maiden
Mineral Resource Estimate ("MRE") and feasibility studies, in
partnership with Ricca. The aim is to achieve a Definitive
Feasibility Study ("DFS") on the Project, with Ricca completing a
four-stage earn-in of up to 50% of the Project through the funding
of up to US$17m, with the potential for an additional US$2m to be
funded if the JORC inferred Mineral Resource Estimate surpasses
20Mt @ 1.0% Li2O. Any additional expenditure beyond the earn-in
funding amounts to be spent on the Project will be funded equally
between Ricca and Firering. Firering's partnership with Ricca will
help to realize the potential of the Atex Lithium-Tantalum Project
as Côte d'Ivoire's first lithium mine. With our combined expertise
and Ricca's investment, we can accelerate the exploration pathway,
reduce funding risk through studies, and bring the project towards
production while lowering capital costs. Ricca's management team,
with their extensive experience in West Africa and lithium, will
provide valuable support. This agreement is a great outcome for
Firering and Ricca shareholders and stakeholders in Côte d'Ivoire,
and we look forward to working together to fast-track the Project
amid surging demand for lithium. In November 2022 we announced that
we had received the upfront consideration payment of US$1 million
from Ricca Resources Limited.
It is worth noting that the agreement with Ricca would not have
taken place had it not been for the excellent work of our Board,
management team and technical team on the ground who have worked
tirelessly to increase the understanding of the mineralisation of
the project whilst entering into key strategic agreements.
Looking back to the first half of 2022, and in line with our
strategy to focus on critical metals, on 15 March 2022 we announced
the acquisition of the Toura nickel-cobalt licence application
situated in western Côte d'Ivoire. Nonetheless, our primary
exploration focus for the rest of the year remained on progressing
the Atex project. The year commenced positively, with the receipt
of all assay results from our auger drilling campaign in the Atex
licence region by early April 2022. These outcomes confirmed the
presence of the identified lithium pegmatites as per the regional
mapping exercise, which was a critical milestone in our decision to
accelerate our exploration activities. Subsequently, we engaged
FOREMI as our diamond drilling contractor to carry out our diamond
drilling programme. The first half of the year was a pivotal period
for Firering, as it endeavoured to deliver our strategic and
operational objectives while maximizing the value of our flagship
Atex dual Lithium-Tantalum Project.
This momentum continued through into the second half of the
reporting period, in July 2022, we commenced Phase I Diamond
Drilling ("DD") campaign, successfully completing 19 DD holes
targeting potential Li-bearing pegmatites for a total of 3,039m of
drilling at the Atex licence area. Pegmatites were intersected in
all 19 holes drilled to that date, with visible lithium
mineralisation present in 18 out of the 19 holes. Additionally, a
potential new pegmatite field was identified in the NNW of the Atex
licence area. Firering demonstrated its commitment to the local
community by funding the drilling of an additional water borehole
at Touvré, a local village with limited access to clean water.
Furthermore, the Company increased its stake in the Atex
Lithium-Tantalum Project from 51% to 77% in line with its strategy
to develop Atex to supply the increasing demand for ethically
sourced critical minerals required for Net Zero transition.
Throughout 2022, we achieved several significant milestones with
respect to our operational advancements and drilling initiatives.
Notably, the conclusive assay results obtained from the maiden
scout diamond drill programme at Atex confirmed the existence of
lithium within our pegmatite system and provided valuable insights
into the broader Atex licence region.
As mentioned above, we announced the final set of assay results
from our maiden scout diamond drill programme at the Atex
Lithium-Tantalum Project in Côte d'Ivoire which show significant
intercepts of lithium. Among the significant intercepts of Phase I
scout drilling is one exceptional intercept of 64m at 1.24% Li2O in
hole TVDD0004, which was among the world's top five drill hits in
October. The final assay results have revealed additional
significant intercepts, such as 25m grading 1.39% Li2O. These
results confirmed the existence of lithium-bearing pegmatites
beneath the visible surface, and laboratory assays confirmed
visible spodumene interceptions in several drill holes,
demonstrating the potential for Atex to become a significant
lithium resource in West Africa.
Post period, the Company announced the start of Phase II of our
large-scale exploration programme which commenced with a
comprehensive soil sampling programme at Atex, in partnership with
Ricca. A total of 14,116 soil samples completed and six
high-priority soil anomalies identified. Several lithium in soil
anomalies occur adjacent to and along similar orientations to the
Spodumene Hill lithium occurrence where previous drilling returned
significant intersections, including 64m at 1.24% Li(2) O and 25m
at 1.39% Li(2) O. The very promising outcomes from the soil
programme have greatly assisted in determining new targets for a
c.11,000m Auger drilling programme which will commence imminently
and we expect this will be followed by Reverse Circulation ("RC")
drilling campaign in H2 2023.
Later in Q1 2023, we announced that the Company increased its
stake in the Atex Lithium Tantalum Project in Côte d'Ivoire to 90%.
This acquisition comes as a result of an existing option shares
agreement between the Company and Atex, in which Firering acquired
13% of the issued share capital of Atex, increasing our stake from
77% to 90%. The consideration for the acquisition was split between
Firering and Ricca. This transaction is aligned with our strategy
to focus on critical minerals and to develop Atex to meet the
rising demand for ethically sourced minerals needed for the Net
Zero transition.
I am thrilled to witness the positive progress made by the
Company, the success of the past year is undoubtedly the result of
a highly experienced and committed team that deserves commendation.
It is their tireless efforts that have led to such remarkable
achievements, and I am confident that this momentum will continue
through 2023 and beyond as we advance our flagship Atex
project.
With several ongoing field programmes, I am optimistic that the
team will make even more strides in 2023. The Company's commitment
to excellence and its relentless pursuit of critical minerals are a
testament to its unwavering mission to provide ethically sourced
minerals to meet the demand of lithium as the world transitions to
Net Zero by 2050.
Youval Rasin
Non-Executive Chairman
Extracts of the 2022 Consolidated Financial Statements are set
out below.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 December
--------------------
2022 2021
---- --------- ---------
Note Euros in thousands
---- --------------------
CURRENT ASSETS
Cash and cash equivalents 1,184 3 ,384
Other receivables - 32 30
--------- ---------
Total current assets 1,216 3, 414
--------- ---------
NON-CURRENT ASSETS
Other receivables 19 637 -
Investment in joint venture 19 2,0 73 -
Intangible assets 7 1,276 2,073
Property, plant and equipment 8 166 305
--------- ---------
Total non-current assets 4,1 52 2,378
--------- ---------
Total assets 5,3 68 5,7 92
--------- ---------
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 December
--------------------
2022 2021
-------- ----------
Note Euros in thousands
---- --------------------
CURRENT LIABILITIES
Trade payables 61 150
Other payables 20 451 102
Capital note 17 214 214
-------- ----------
Total current liabilities 726 466
-------- ----------
NON-CURRENT LIABILITIES
Accrued severance pay, net 8 8
Capital notes 10 565 514
Loan from non-controlling interest in
subsidiary 11 103 92
Liability to non-controlling interest
in subsidiary 6 - 130
-------- ----------
Total non-current liabilities 676 744
-------- ----------
Total liabilities 1,402 1,210
-------- ----------
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
OF THE COMPANY 12
Share capital 87 87
Share premium 6,967 6 ,878
Warrants 20 20
Accumulated deficit (3,057) ( 2 ,973)
Capital reserve ( 51 ) 327
-------- ----------
3,9 66 4,339
Non-controlling interests - 243
-------- ----------
Total equity 3,9 66 4,582
Total liabilities and equity 5,3 68 5,792
======== ==========
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year ended 31 December
------------------------------
Note 2022 2021
---- -------------- --------------
Euros in thousands
(except per share amounts)
Gain on earn-in arrangement 19 1,614 -
-------------- --------------
General and administrative expenses 13 (1,504) (929)
-------------- --------------
Operating profit (loss) 110 (929)
-------------- --------------
Financial expenses 14 (290) (1,373)
Loss before taxes on income (180) (2,302)
Taxes on income 15 - -
-------------- --------------
Net loss (180) (2,302)
-------------- --------------
Other comprehensive loss - -
-------------- --------------
Total comprehensive loss (180) (2,302)
-------------- --------------
Net loss attributable to:
Equity holders of the Company (84) (2,276)
Non-controlling interests (96) (26)
-------------- --------------
(180) (2,302)
============== ==============
Total comprehensive loss attributable
to:
Equity holders of the Company (84) (2,276)
Non-controlling interests (96) (26)
-------------- --------------
(180) (2,302)
============== ==============
Loss per share (euro) - basic and diluted 16 (0.00) (0.06)
============== ==============
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the
Company Non
------------------------------------------------
Shares
to
Share Share Wa rr be Reserves Accumulated -controlling Total
capital Premium ants issued (*) deficit Total interests Equity
------- ------- ------ -------- -------- ----------- --------- ------------ ---------
Euros in thousands
-----------------------------------------------------------------------------------------------------
As of 1 January 2021 1 - - 50 (697) (646) 90 (556)
Loss for the period - - - - - (2,276) (2,276) (26) (2,302)
Issuance of shares
(Note
12) 71 3,962 20 (50) - - 4,003 - 4,003
Conversion to equity
of
convertible loan
notes
(Note 10) 15 2,216 - - - - 2,231 - 2,231
Share-based
compensation
(Note 12) - 700 - - - 700 - 700
Contribution to
equity
(Note 11) - - - - 327 327 31 358
Non-controlling
interests
arising from
initially
consolidated
subsidiary
(Note 6) - - - - - - - 148 148
------- ------- ------ -------- -------- ----------- --------- ------------ ---------
As of 31 December
2021 87 6,878 20 - 327 (2,973) 4,339 243 4,582
------- ------- ------ -------- -------- ----------- --------- ------------ ---------
Profit (Loss) for
the
period ) 84) (84) (96) (180)
Acquisition of
non-controlling ( 378 ( 289
interests (Note 12) - 89 - - ) - ) (31) ( 320 )
Change in
Non-controlling
interests arising
from
deconsolidation
(Note
6) - - - - - - - (116) (116)
------- ------- ------ -------- -------- ----------- --------- ------------ ---------
As of 31 December
2022 87 6,967 20 - (51) (3,057) 3,9 66 - 3,9 66
======= ======= ====== ======== ======== =========== ========= ============ =========
(*) See Note 12d for details of reserves.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended 31 December
------------------------
2022 2021
----------- -----------
Euros in thousands
Cash flows from operating activities:
Net loss (180) (2,302)
----------- -----------
Adjustments to the profit or loss items:
Gain on earn-in arrangement (97 7 ) -
Depreciation 47 151
Share-based compensation - 700
Accrued interest on convertible loan notes - 111
Change in fair value of conversion option of
convertible loan notes - 669
Accrued interest on capital note and on loan
from non-controlling interest 75 17
Increase in other receivables (147) (29)
Increase in non- current other receivables (637) -
Increase (decrease) in trade payables (89) 145
Increase (decrease) in other payables 369 (156)
Increase in severance pay - 8
----------- -----------
(1,35 9
) 1,616
(1,53 9
Net cash used in operating activities ) (686)
----------- -----------
Cash flows from investing activities:
Net cash outflow from acquisition of subsidiaries - (289)
Proceeds from sale of control rights in subsidiaries 97 7 -
Decrease in cash upon deconsolidation of subsidiaries,
net (33) -
Additions to property, plant and equipment (20) (142)
Additions to intangible assets (1,265) (863)
----------- -----------
Net cash used in investing activities (34 1 ) (1,294)
----------- -----------
Cash flows from financing activities:
Cash paid for acquisition of non-controlling
interest (320) -
Issuance of shares - 4,004
Proceed of loans from shareholders - 254
Proceeds from the issue of convertible loans - 726
----------- -----------
Net cash provided by (used in) financing activities (320) 4,984
=========== ===========
Net change in cash and cash equivalents (2,200) 3,004
Cash and cash equivalents at beginning of year 3,384 380
----------- -----------
Cash and cash equivalents at end of year 1,184 3,384
=========== ===========
Supplemental disclosure of non-cash activities:
Non-current receivable in respect of earn-in arrangement 637 -
Non-current receivable in respect of earn-in arrangement
Issuance of shares in consideration for conversion of
convertible loan notes 637 2,231
Discount on loans from shareholders and non-controlling
interests accounted for as contributions to equity - 358
Issue of shares to non-controlling interests as part of
share swap
(see Note 6) 89
NOTE 1:- GENERAL INFORMATION
Firering Strategic Minerals PLC ("The Company") is a holding
company for a group of exploration and development companies set up
to focus on developing assets towards the ethical production of
critical metals. The Company was incorporated on 8 May 2019 in
Cyprus. The address of its registered office is Ioanni Stylianou 6,
2(nd) Floor, Office 202, 2003, Nicosia, Cyprus.
The Company owns 75% of the issued share capital of Bri Coltan
SARL ("Bri Coltan") a company incorporated in Cote d'Ivoire. The
principal activity of the subsidiary is the exploration and
development of mineral projects (in particular, columbite-
tantalite).
On 1 March 2021, the Company purchased 51% of the issued share
capital of Atex Mining Resources SARL ("Atex") a company
incorporated in Cote d'Ivoire. The principal activity of Atex is
the exploration and development of mineral projects (in particular,
lithium and columbite-tantalite). Details of the acquisition are
set out in Note 6.
On 22 November 2021, the Company purchased 80% of the issued
share capital of Alliance Minerals Corporation SARL ("Alliance"), a
company incorporated in Cote d'Ivoire. Alliance holds an
exploration license request at an area bordering Atex. Details of
the acquisition are set out in Note 6.
On 12 November 2021, the Company completed its Initial Public
Offering ("IPO") and admission to trading on the AIM, a market
operated by the London Stock Exchange ("the AIM"), by issuing
30,769,230 Ordinary shares at a price of GBP 0.13 per share for a
total cash consideration of EUR 4.68 million (GBP 4 million). The
net proceeds after expenses were EUR4.25 million (GBP 3.63
million).
On 2 November 2022 the Company signed an earn-in agreement with
Ricca Resources Pty Limited ("Ricca"), an Australian diversified
minerals company to advance the Atex Lithium-Tantalum Project
("Atex") and the adjacent Alliance exploration licence (once
granted).
According to the agreement, Ricca will have the exclusive right
to undertake and fund at Ricca's sole cost the exploration of the
Atex Project and adjacent Alliance licence.
In order to undertake exploration of the Atex and Alliance
Tenements, the Company shall transfer its entire shareholdings in
the Atex agreement and the Alliance agreement to a new entity
(joint venture) in which Ricca and the Company will have joint
control.
Accordingly, the Company ceased to consolidate the financial
statements of Atex and Alliance and the investment in the joint
venture is accounted for using equity method.
See Notes 6 and 19 for further details.
Going concern
The Group's operations are at an early stage of development and
the continuing success of the Group will depend on the Group's
ability to manage its mineral projects. Presently, the Group has no
projects producing positive cash flow and the Group is likely to
remain cash flow negative in the near future. The Group's ultimate
success will depend on its ability to generate positive cash flow
from active mining operations in the future and its ability to
secure external funding for its development requirements. However,
there is no assurance that the Group will achieve profitability or
positive cash flow from its operating activities,
The Board of Directors and Group management have assessed the
ability of the Group to continue as a going concern. In respect of
its mineral projects, funding has been obtained as follows:
Atex and Alliance
As described in Note 19, in 2022 the Company signed an earn-in
agreement with an Australian diversified minerals company which has
agreed to fund at its sole cost these two exploration projects for
a period that may extend to 4-5 years from the reporting date.
Bri Colton
As described in Note 7, in 2022 the Company has been provided
with a long-term credit facility of up to EUR 7.16 million which is
intended be used to develop this project, with the objective of
obtaining further funding.
In respect of its ongoing general activities, based on a review
of the Group's budget and forecast cash flows, there is a
reasonable expectation that the Group will have adequate resources
to continue its daily operations and meet its obligations as they
become due for at least a period of twelve months from the date of
approval of the financial statements. Thus, the going concern basis
of accounting has continued to be applied in preparing these
financial statements.
Definitions:
The Company - Firering Strategic Minerals PLC
Subsidiaries - Companies that are controlled by the Company -
- Bri Coltan SARL; Atex Mining Resources SARL
& Alliance Minerals Corporation SARL
The Group - The Company and its subsidiaries
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies have been applied consistently
in the financial statements for all periods presented, unless
otherwise stated.
a. Basis of preparation of the financial statements
These financial statements of the Company have been prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union ("IFRS").
The financial statements have been prepared on a cost basis.
The Group has elected to present the profit or loss items using
the function of expense method.
b. Consolidated financial statements:
Subsidiaries are all 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 can 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 financial statements of the Company and of the subsidiaries
are prepared as of the same dates and periods. The consolidated
financial statements are prepared using uniform accounting policies
by all companies in the Group. Significant intragroup balances and
transactions and gains or losses resulting from intragroup
transactions are eliminated in full in the consolidated financial
statements.
Non-controlling interests in subsidiaries represent the equity
in subsidiaries not attributable, directly or indirectly, to a
parent. Non-controlling interests are presented in equity
separately from the equity attributable to the equity holders of
the Company. Profit or loss and components of other comprehensive
income are attributed to the Company and to non-controlling
interests. Losses are attributed to non-controlling interests even
if they result in a negative balance of non-controlling interests
in the consolidated statement of financial position.
A change in the ownership interest of a subsidiary, without a
change of control, is accounted for as a change in equity by
adjusting the carrying amount of the non-controlling interests with
a corresponding adjustment of the equity attributable to equity
holders of the Company less / plus the consideration paid or
received.
Upon the disposal of a subsidiary resulting in loss of control,
the Company derecognizes
the subsidiary's assets (including goodwill) and liabilities,
derecognizes the carrying amount of non-controlling interests,
recognizes the fair value of the consideration received, and
recognizes any resulting difference (surplus or deficit) as gain or
loss.
c. Business combinations:
The Group applies the acquisition method to account for business
combinations. The consideration transferred for the acquisition of
a subsidiary is the fair values of the assets transferred, the
liabilities incurred to the former owners of the acquiree, and the
equity interests issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired
and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the
acquisition date. The Group recognizes any non-controlling interest
in the acquire on an acquisition-by-acquisition basis, either at
fair value or at the non-controlling interest's proportionate share
of the recognized amounts of acquiree's identifiable net
assets.
Direct acquisition costs are recorded in profit or loss as
incurred.
d. Investment in joint arrangements:
Joint arrangements are arrangements in which the Company has
joint control. Joint control is the contractually agreed sharing of
control of an arrangement, which exists only when decisions about
the relevant activities require the unanimous consent of the
parties sharing control. In joint ventures the parties that have
joint control of the arrangement have rights to the net assets of
the arrangement. A joint venture is accounted for at equity.
e. Investments accounted for using the equity method:
The Group's investments in associates and joint ventures are
accounted for using the equity method.
Under the equity method, the investment in the associate or in
the joint venture is presented at cost with the addition of
post-acquisition changes in the Group's share of net assets,
including other comprehensive income of the associate or the joint
venture. Gains and losses resulting from transactions between the
Group and the associate or the joint venture are eliminated to the
extent of the interest in the associate or in the joint venture.
The cost of the investment includes transaction costs.
Gains and losses from upstream or downstream transactions with
an associate or joint venture are recognized in the Group's
financial statements up to the unrelated investors' share of the
associate or joint venture. The Group's share of the profits or
losses of the associate or joint venture from these transactions is
eliminated.
Goodwill relating to the acquisition of an associate or a joint
venture is presented as part of the investment in the associate or
the joint venture, measured at cost and not systematically
amortized. Goodwill is evaluated for impairment as part of the
investment in the associate or in the joint venture as a whole.
The financial statements of the Company and of the associate or
joint venture are prepared as of the same dates and periods. The
accounting policies applied in the financial statements of the
associate or the joint venture are uniform and consistent with the
policies applied in the financial statements of the Group.
Losses of an associate in amounts which exceed its equity are
recognized by the Company to the extent of its investment in the
associate plus any losses that the Company may incur as a result of
a guarantee or other financial support provided in respect of the
associate. For this purpose, the investment includes long-term
receivables (such as loans granted) for which settlement is neither
planned nor likely to occur in the foreseeable future.
The equity method is applied until the loss of significant
influence in the associate or loss of joint control in the joint
venture or classification as investment held for sale.
f. Functional currency, presentation currency and foreign currency:
1. Functional and presentation currency
The local currency used in Cote d'Ivoire is the West African CFA
Franc ("FCFA"), which has a fixed exchange rate with the Euro (Euro
1 = FCFA 655.957). A substantial portion of the Group's expenses
and expenditures for acquisitions is incurred in or linked to the
FCFA or the Euro. The Group obtains certain debt financing in FCFA,
or Euro and the funds of the Group are held in FCFA. Therefore, the
Company's management has determined that the Euro is the currency
of the primary economic environment of the Company and its
subsidiaries, and thus its functional currency. The presentation
currency is Euro.
2. Transactions, assets and liabilities in foreign currency
Transactions denominated in foreign currency are recorded upon
initial recognition at the exchange rate at the date of the
transaction. After initial recognition, monetary assets and
liabilities denominated in foreign currency are translated at each
reporting date into the functional currency at the exchange rate at
that date. Exchange rate
differences, other than those capitalized to qualifying assets
or accounted for as hedging transactions in equity, are recognized
in profit or loss. Non-monetary assets and liabilities denominated
in foreign currency and measured at cost are translated at the
exchange rate at the date of the transaction. Non-monetary assets
and liabilities denominated in foreign currency and measured at
fair value are translated into the functional currency using the
exchange rate prevailing at the date when the fair value was
determined.
g. Cash equivalents:
Cash equivalents are considered as highly liquid investments,
including unrestricted short-term bank deposits with an original
maturity of three months or less from the date of investment or
with a maturity of more than three months, but which are redeemable
on demand without penalty and which form part of the Group's cash
management.
h. Property, plant and equipment
Property, plant and equipment are measured at cost, including
directly attributable costs, less accumulated depreciation,
accumulated impairment losses and any related investment grants and
excluding day-to-day servicing expenses. Cost includes spare parts
and auxiliary equipment that are used in connection with plant and
equipment.
The cost of an item of property, plant and equipment comprises
the initial estimate of the costs of dismantling and removing the
item and restoring the site on which the item is located.
Depreciation is calculated on a straight-line basis over the
useful life of the assets at annual rates as follows:
%
---
Computers 33%
Plant and equipment 18%
Motor vehicles 33%
The useful life, depreciation method and residual value of an
asset are reviewed at least each year-end and any changes are
accounted for prospectively as a change in accounting estimate.
Depreciation of assets is discontinued the earlier of the date on
which the asset is classified as held for sale, or the date on
which the asset is derecognized.
i. Impairment of non-financial assets:
The Group evaluates the need to record an impairment of
non-financial assets whenever events or changes in circumstances
indicate that the carrying amount is not recoverable.
If the carrying amount of non-financial assets exceeds their
recoverable amount, the assets are reduced to their recoverable
amount. The recoverable amount is the higher of fair value less
costs of sale and value in use. In measuring value in use, the
expected future cash flows are discounted using a pre-tax discount
rate that reflects the risks specific to the asset. The recoverable
amount of an asset that does not generate independent cash flows is
determined for the cash-generating unit to which the asset belongs.
Impairment losses are recognized in profit or loss.
An impairment loss of an asset, other than goodwill, is reversed
only if there have been changes in the estimates used to determine
the asset's recoverable amount since the last impairment loss was
recognized. Reversal of an impairment loss, as above, shall not be
increased above the lower of the carrying amount that would have
been determined (net of depreciation or amortization) had no
impairment loss been recognized for the asset in prior years and
its recoverable amount. The reversal of impairment loss of an asset
presented at cost is recognized in profit or loss.
j. Intangible assets
The Group has adopted the provisions of IFRS 6 Exploration for
and Evaluation of Mineral Resources.
The Group capitalizes expenditures incurred in exploration and
evaluation activities as project costs, categorized as intangible
assets (exploration and evaluation assets), when those costs are
associated with finding specific mineral resources. The Group has a
policy to expense to profit or loss all short term (i.e., less than
12 months) rental of tools and other equipment, in the same period
in which the relevant equipment is used. Expenditure included in
the initial measurement of project costs, and which are classified
as intangible assets relate to the acquisition of rights to
explore. Capitalization of pre-production expenditure ceases when
the mining property is capable of commercial production. Project
costs are recorded and held at cost and no amortization is recorded
prior to commencement of production.
An annual review is undertaken of each area of interest to
determine the appropriateness of continuing to capitalize and carry
forward project costs in relation to that area of interest, in
accordance with the indicators of impairment as set out in IFRS 6.
Accumulated capitalized project costs in relation to (i) an expired
permit (with no expectation of renewal), (ii) an abandoned area of
interest and / or (iii) a joint venture over an area of interest
which is now ceased, will be written off in full as an impairment
to profit or loss in the year in which (i) the permit expired, (ii)
the area of interest was abandoned and / or (iii) the joint venture
ceased.
Other intangible assets that have an indefinite useful life or
intangible assets not ready to use are not subject to amortization
and are tested annually for impairment. Assets that are subject to
amortization are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognized for the amount by
which the asset's carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset's fair value less
costs of disposal and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there
are largely independent cash inflows (cash-generating units). Prior
impairments of non-financial assets (other than goodwill) are
reviewed for possible reversal at each reporting date.
k. Financial instruments:
1. Financial assets:
Financial assets are measured upon initial recognition at fair
value plus transaction costs that are directly attributable to the
acquisition of the financial assets, except for financial assets
measured at fair value through profit or loss in respect of which
transaction costs are recorded in profit or loss.
The Group classifies and measures debt instruments in the
financial statements based on the following criteria:
- The Group's business model for managing financial assets; and
- The contractual cash flow terms of the financial asset.
Debt instruments are measured at amortized cost when:
The Group's business model is to hold the financial assets in
order to collect their contractual cash flows, and the contractual
terms of the financial assets give rise on specified dates to cash
flows that are solely payments of principal and interest on the
principal amount outstanding. After initial recognition, the
instruments in this category are measured according to their terms
at amortized cost using the effective interest rate method, less
any provision for impairment.
On the date of initial recognition, the Group may irrevocably
designate a debt instrument as measured at fair value through
profit or loss if doing so eliminates or significantly reduces a
measurement or recognition inconsistency, such as when a related
financial liability is also measured at fair value through profit
or loss.
2. Impairment of financial assets:
The Group evaluates at the end of each reporting period the loss
allowance for financial debt instruments which are not measured at
fair value through profit or loss.
The Group has short-term financial assets such as trade
receivables in respect of which the Group applies a simplified
approach and measures the
loss allowance in an amount equal to the lifetime expected
credit losses. An impairment loss on debt instruments measured at
amortized cost is recognized in profit or loss with a corresponding
loss allowance that is offset from the carrying amount of the
financial asset.
3. Financial liabilities:
a) Financial liabilities measured at amortized cost:
Financial liabilities are initially recognized at fair value
less transaction costs that are directly attributable to the issue
of the financial liability.
After initial recognition, the Group measures all financial
liabilities at amortized cost using the effective interest rate
method, except for financial liabilities measured at fair value
through profit or loss.
4. Derecognition of financial instruments:
a) Financial assets:
A financial asset is derecognized when the contractual rights to
the cash flows from the financial asset expire.
b) Financial liabilities:
A financial liability is derecognized when it is extinguished,
that is when the obligation is discharged or cancelled or
expires.
l. Borrowing costs:
The capitalization of borrowing costs commences when
expenditures for the asset are incurred, the activities to prepare
the asset are in progress and borrowing costs are incurred and
ceases when substantially all the activities to prepare the
qualifying asset for its intended use or sale are complete. The
amount of borrowing costs capitalized in a reporting period
includes specific borrowing costs and general borrowing costs based
on a weighted capitalization rate.
Exploration and evaluation assets can be qualifying assets.
However, they generally do not meet the "probable economic
benefits" test. Therefore, any related borrowing costs are
generally recognized in profit or loss in the period incurred.
m. 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.
n. Fair value measurement
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date.
Fair value measurement is based on the assumption that the
transaction will take place in the asset's or the liability's
principal market, or in the absence of a principal market, in the
most advantageous market.
The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their
economic best interest.
Fair value measurement of a non-financial asset takes into
account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the asset
in its highest and best use.
The Group uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to
measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.
All assets and liabilities measured at fair value or for which
fair value is disclosed are categorized into levels within the fair
value hierarchy based on the lowest level input that is significant
to the entire fair value measurement:
Level 1 - quoted prices (unadjusted) in active markets
for identical assets or liabilities.
Level 2 - inputs other than quoted prices included within
Level 1 that are observable either directly
or indirectly.
Level 3 - inputs that are not based on observable market
data (valuation techniques which use inputs
that are not based on observable market data).
o. Provisions
The Group provides for the costs of restoring a site where a
legal or constructive obligation exists. The estimated future costs
for known restoration requirements are determined on a site-by-site
basis and are calculated based on the present value of estimated
future costs. All provisions are discounted to their present
value.
p. Taxes on income
Current or deferred taxes are recognized in profit or loss,
except to the extent that they relate to items which are recognized
in other comprehensive income or equity.
1. Current taxes:
The current tax liability is measured using the tax rates and
tax laws that have been enacted or substantively enacted by the end
of reporting period as well as adjustments required in connection
with the tax liability in respect of previous years.
2. Deferred taxes
Deferred taxes are computed in respect of temporary differences
between the carrying amounts in the financial statements and the
amounts attributed for tax purposes.
Deferred taxes are measured at the tax rate that is expected to
apply when the asset is realized or the liability is settled, based
on tax laws that have been enacted or substantively enacted by the
reporting date.
Deferred tax assets are reviewed at each reporting date and
reduced to the extent that it is not probable that they will be
utilized. Temporary differences for which deferred tax assets had
not been recognized are reviewed at each reporting date and a
respective deferred tax asset is recognized to the extent that
their utilization is probable.
Taxes that would apply in the event of the disposal of
investments in investees have not been taken into account in
computing deferred taxes, as long as the disposal of the
investments in investees is not probable in the foreseeable
future.
Also, deferred taxes that would apply in the event of
distribution of earnings by investees as dividends have not been
taken into account in computing deferred taxes, since the
distribution of dividends does not involve an additional tax
liability or since it is the Company's policy not to initiate
distribution of dividends from a subsidiary that would trigger an
additional tax liability.
q. Revenue recognition
The Group had no sales or revenue during the years ended 31
December 2022 and 2021.
r. Share-based payment transactions:
The Company's employees and other service providers are entitled
to remuneration in the form of equity-settled share-based payment
transactions and certain employees and other service providers are
entitled to remuneration in the form of cash-settled share-based
payment transactions that are measured based on the increase in the
Company's share price.
Equity-settled transaction
The cost of equity-settled transactions with employees is
measured at the fair value of the equity instruments granted at
grant date. The fair value is determined using an acceptable option
pricing model.
As for other service providers, the cost of the transactions is
measured at the fair value of the goods or services received as
consideration for equity instruments granted.
The cost of equity-settled transactions is recognized in profit
or loss together with a corresponding increase in equity during the
period which the performance and/or service conditions are to be
satisfied ending on the date on which the relevant employees become
entitled to the award ("the vesting period"). The cumulative
expense recognized for equity-settled transactions at the end of
each reporting period until the vesting date reflects the extent to
which the vesting period has expired and the Group's best estimate
of the number of equity instruments that will ultimately vest.
No expense is recognized for awards that do not ultimately vest,
except for awards where vesting is conditional upon a market
condition, which are treated as vesting irrespective of whether the
market condition is satisfied, provided that all other vesting
conditions (service and/or performance) are satisfied.
If the Company modifies the conditions on which
equity-instruments were granted, an additional expense is
recognized for any modification that increases the total fair value
of the share-based payment arrangement or is otherwise beneficial
to the employee/other service provider at the modification
date.
If a grant of an equity instrument is canceled, it is accounted
for as if it had vested on the cancelation date and any expense not
yet recognized for the grant is recognized immediately. However, if
a new grant replaces the canceled grant and is identified as a
replacement grant on the grant date, the canceled and new grants
are accounted for as a modification of the original grant, as
described above.
s. Earnings (loss) per share:
Earnings per share are calculated by dividing the net income
attributable to equity holders of the Company by the weighted
number of Ordinary shares outstanding during the period.
Potential Ordinary shares are included in the computation of
diluted earnings per share when their conversion decreases earnings
per share from continuing operations. Potential Ordinary shares
that are converted during the period are included in diluted
earnings per share only until the conversion date and from that
date in basic earnings per share. The Company's share of earnings
of investees is included based on its share of earnings per share
of the investees multiplied by the number of shares held by the
Company.
t. Changes in accounting policies - initial application of new
financial reporting and accounting standards and amendments to
existing financial reporting and accounting standards:
1. Amendment to IAS 16, "Property, Plant and Equipment":
In May 2020, the IASB issued an amendment to IAS 16, "Property,
Plant and Equipment" ("the Amendment"). The Amendment prohibits a
company from deducting from the cost of property, plant and
equipment ("PP&E") consideration received from the sales of
items produced while the company is preparing the asset for its
intended use. Instead, the company should recognize such
consideration and related costs in profit or loss.
The Amendment is effective for annual reporting periods
beginning on or after January 1, 2022. The Amendment is applied
retrospectively, but only to items of PP&E made available for
use on or after the beginning of the earliest period presented in
the financial statements in which the company first applies the
Amendment.
The cumulative effect of initially applying the Amendment is
recognized as an adjustment to the opening balance of retained
earnings (or other component of equity, as applicable) at the
beginning of the earliest period presented.
The application of the Amendment did not have a material impact
on the Company's financial statements.
2. Amendment to IAS 37, "Provisions, Contingent Liabilities and Contingent Assets":
In May 2020, the IASB issued an amendment to IAS 37, regarding
which costs a company should include when assessing whether a
contract is onerous ("the Amendment").
According to the Amendment, costs of fulfilling a contract
include both the incremental costs (for example, raw materials and
direct labor) and an allocation of other costs that relate directly
to fulfilling a contract (for example, depreciation of an item of
property, plant and equipment used in fulfilling the contract).
The Amendment is effective for annual periods beginning on or
after January 1, 2022 and applies to contracts for which all
obligations in respect thereof have not yet been fulfilled as of
January 1, 2022. The application of the Amendment does not require
of property, plant and equipment the restatement of comparative
data. Instead, the opening balance of retained earnings on the date
of initial application date is adjusted for the cumulative effect
of the Amendment.
The application of the Amendment did not have a material impact
on the Company's financial statements.
NOTE 3:- FINANCIAL RISK MANAGEMENT
a. Financial risk factors
The Group's activities expose it to a variety of financial
risks: market risk and credit risk. The Group's overall risk
management program focuses on the unpredictability of financial
markets and seeks to minimize potential adverse effects on the
Group's financial performance.
Risk management is carried out by the management team under
policies approved by the Board of Directors.
1. Market risk
The Group is exposed to market risk, primarily relating to
interest rate and foreign exchange. The Company does not hedge
against market risks as
the exposure is not deemed sufficient to enter into forward
contracts. The Company has not sensitized the figures for
fluctuations in interest rates and foreign exchange as the
Directors are of the opinion that these fluctuations would not have
a significant impact on the consolidated financial statements of
the Company at the present time. The Directors will continue to
assess the effect of movements in market risks on the Group's
financial operations and initiate suitable risk management measures
where necessary.
2. Credit risk
Credit risk arises from cash and cash equivalents as well as
outstanding receivables. To manage this risk, The Company
periodically assesses the financial reliability of customers and
counterparties.
The amount of exposure to any individual counterparty is subject
to a limit, which is assessed by the Board of Directors.
The Company considers the credit ratings of banks in which it
holds funds in order to reduce exposure to credit risk.
b. Capital risk management
The Company's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern, in order to
enable the Company to continue its material development activities,
and to maintain an optimal capital structure to reduce the cost of
capital.
In order to maintain or adjust the capital structure, the
Company may adjust the issue of shares or sell assets to reduce
debts.
The Company defines capital based on the total equity of the
Company. The Company monitors its level of cash resources available
against future planned operational activities and may issue new
shares in order to raise further funds from time to time.
NOTE 4:- SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND
ASSUMPTIONS USED IN THE PREPARATION OF THE FINANCIAL STATEMENTS
a. Judgments:
In the process of applying the significant accounting policies,
the Group has made the following judgments which have a significant
effect on the amounts recognized in the financial statements:
Determining the fair value of share-based payment
transactions:
The fair value of share-based payment transactions is determined
upon initial recognition by an acceptable option pricing model. The
inputs to the model include share price, exercise price and
assumptions regarding expected volatility, expected life of share
option and expected dividend yield.
b. Estimates and assumptions:
The preparation of the financial statements requires management
to make estimates and assumptions that have an effect on the
application of the accounting policies and on the reported amounts
of assets, liabilities, revenues and expenses. Changes in
accounting estimates are reported in the period of the change in
estimate.
Significant items subject to such estimates and assumptions are
as follows:
Intangible assets - exploration and evaluation assets
An annual review is undertaken of each area of interest to
determine the appropriateness of continuing to capitalize and carry
forward project costs in relation to that area of interest in
accordance with the indicators of impairment as set out in IFRS 6.
The annual review includes an assessment of budgeted and planned
expenditures and indications of whether sufficient data exist to
determine recovery of accumulated capitalized project costs.
NOTE 5:- DISCLOSURE OF NEW STANDARDS IN THE PERIOD PRIOR TO THEIR ADOPTION
a. Amendment to IAS 1, "Presentation of Financial Statements":
In January 2020, the IASB issued an amendment to IAS 1,
"Presentation of Financial Statements" regarding the criteria for
determining the classification of liabilities as current or
non-current ("the Original Amendment"). In October 2022, the IASB
issued a subsequent amendment ("the Subsequent Amendment").
According to the Subsequent Amendment:
-- Only covenants with which an entity must comply on or before
the reporting date will affect a liability's classification as
current or non-current.
-- An entity should provide disclosure when a liability arising
from a loan agreement is classified as non-current and the entity's
right to defer settlement is contingent on compliance with future
covenants within twelve months from the reporting date. This
disclosure is required to include information about the covenants
and the related liabilities. The disclosures must include
information about the nature of the future covenants and when
compliance is applicable, as well as the carrying amount of the
related liabilities. The purpose of this information is to allow
users to understand the nature of the future covenants and to
assess the risk that a liability classified as non-current could
become repayable within twelve months. Furthermore, if facts and
circumstances indicate that an entity may have difficulty in
complying with such covenants, those facts and circumstances should
be disclosed.
According to the Original Amendment, the conversion option of a
liability affects the classification of the entire liability as
current or non-current unless the conversion component is an equity
instrument.
The Original Amendment and Subsequent Amendment are both
effective for annual periods beginning on or after January 1, 2024
and must be applied retrospectively. Early application is
permitted.
The Company is evaluating the possible impact of the Amendment
on its current loan agreements.
b. Amendment to IAS 8, "Accounting Policies, Changes to Accounting Estimates and Errors":
In February 2021, the IASB issued an amendment to IAS 8,
"Accounting Policies, Changes to Accounting Estimates and Errors"
("the Amendment"), in which it introduces a new definition of
"accounting estimates".
Accounting estimates are defined as "monetary amounts in
financial statements that are subject to measurement uncertainty".
The Amendment clarifies the distinction between changes in
accounting estimates and changes in accounting policies and the
correction of errors.
The Amendment is to be applied prospectively for annual
reporting periods beginning on or after January 1, 2023 and is
applicable to changes in accounting policies and changes in
accounting estimates that occur on or after the start of that
period. Early application is permitted.
The Company is evaluating the effects of the Amendment on its
financial statements.
c. Amendment to IAS 12, "Income Taxes":
In May 2021, the IASB issued an amendment to IAS 12, "Income
Taxes" ("IAS 12"), which narrows the scope of the initial
recognition exception under IAS 12.15 and IAS 12.24 ("the
Amendment").
According to the recognition guidelines of deferred tax assets
and liabilities, IAS 12 excludes recognition of deferred tax assets
and liabilities in respect of certain temporary differences arising
from the initial recognition of certain transactions. This
exception is referred to as the "initial recognition exception".
The Amendment narrows the scope of the initial recognition
exception and clarifies that it does not apply to the recognition
of deferred tax assets and liabilities arising from transactions
that are not a business combination and that give rise to equal
taxable and deductible temporary differences, even if they meet the
other criteria of the initial recognition exception.
The Amendment applies for annual reporting periods beginning on
or after January 1, 2023, with earlier application permitted. In
relation to leases and decommissioning obligations, the Amendment
is to be applied commencing from the earliest reporting period
presented in the financial statements in which the Amendment is
initially applied. The cumulative effect of the initial application
of the Amendment should be recognized as an adjustment to the
opening balance of retained earnings (or another component of
equity, as appropriate) at that date.
The Company estimates that the initial application of the
Amendment is not expected to have a material impact on its
financial statements.
d. Amendment to IAS 1 - Disclosure of Accounting Policies:
In February 2021, the IASB issued an amendment to IAS 1,
"Presentation of Financial Statements" ("the Amendment"), which
replaces the requirement to disclose 'significant' accounting
policies with a requirement to disclose 'material' accounting
policies. One of the main reasons for the Amendment is the absence
of a definition of the term 'significant' in IFRS whereas the term
'material' is defined in several standards and particularly in IAS
1.
The Amendment is applicable for annual periods beginning on or
after January 1, 2023. Early application is permitted.
The Company is evaluating the effects of the Amendment on its
financial statements.
NOTE 6: - ACQUISITION OF SUBSIDIARIES
a. Acquisition of Atex Mining Resources SARL
On 1 March 2021, the Company purchased 51% of the issued share
capital of Atex Mining Resources SARL ("ATEX") for a total
consideration of 40m FCFA (EUR61 thousands). Atex holds a license
that covers exploration rights for lithium in a certain area in
Cote d'Ivoire. The license which was granted in 2017 was renewed in
2021 for a period ending in 2024.
In addition, the Company was granted an option to acquire a
further total 39% of the issued share capital of Atex in two
stages. The first stage is an option to acquire a further 16%
during the 12 months following the acquisition for a total
consideration of 210m FCFA (EUR320 thousand). The second stage is
an additional option to acquire a further 23% during the 24 months
following the acquisition for a total consideration of 300m FCFA
(EUR450 thousand).
Pursuant to the agreement, it has been agreed that the Company
will procure that the Seller is paid a net smelter royalty equal to
0.5% of net smelter returns, such royalty to be paid each
trimester.
These royalties will be recorded when production commences, and
the project generates net smelter returns.
At the date of acquisition, the exploration license and related
capitalized exploration costs are the sole asset of Atex. Atex had
no employees. Accordingly, the purchase transaction is accounted
for as an acquisition of an intangible asset.
The Company has determined that as of the acquisition date the
fair value of the options to acquire an additional 39% interest in
Atex is immaterial and accordingly no portion of the consideration
paid has been attributed to these options.
Pursuant to IFRS 3, the Company records the intangible asset and
liability at their fair value on date of acquisition. Details of
the net assets acquired, and the non-controlling interests are as
follows (Euros in thousands):
Intangible asset 120
Liabilities acquired (1)
----
Net assets acquired 119
Non-controlling interest (49%) (58)
Total purchase cost and cash paid 61
====
On 4th July 2022 the Company purchased an additional 26% of the
issued shares in Atex. 10% of the issued shares in Atex were
purchased in exchange for 1,158,200 Ordinary shares of the Company
(with a value of GBP76,441 at the closing share price on 4 July
2022 of 6.6p per share; EUR88,672 based on GBP1 = EUR1.16). The
additional 16% of the issued shares in Atex were purchased by way
of exercising the first option under the agreement between Firering
and Atex dated 31 March 2021 for a total consideration of
c.EUR320,000. Subsequent to this acquisition, the Company holds a
77% interest in Atex - see Note 20 for details of the purchase of
an additional 13% interest in March 2023.
As these acquisitions resulted in a change of ownership
interests in a subsidiary that was already under the control of the
Company, they were accounted for as a change in the equity of the
Company. The difference between the total consideration and the
carrying amount of the non-controlling interest attributed to the
interest acquired, in the amount of EUR 378 was charged to the
Reserve for Transactions with Non-Controlling Interests in
equity.
See Note 6c below regarding deconsolidation of Atex.
b. Acquisition of Alliance Minerals Corporation SARL
On 22 November 2021, the Company purchased 51% of the issued
share capital of Alliance Minerals Corporation SARL ("Alliance")
for a total consideration of EUR228,000, executing the first stage
of the purchase agreement with Alliance Minerals Corporation SARL
("Alliance") and setting out the Company's commitment to purchase a
total of 80% of the entire issued share capital of Alliance. The
payments for the acquisition of shares will take place in four
stages as follows:
-- 51% of the entire issued share capital of Alliance for a
total consideration of 150 million FCFA (EUR228 thousand) to be
paid within 10 days of Admission. As mentioned above, this stage
was executed on 22 November 2021.
-- 7.25% of the issued share capital of Alliance for 100 million
FCFA (EUR152,000) following the analysis at least 1,000 tons of
coltan, calculated based on the Auger drilling program.
-- 7.25% of the issued share capital of Alliance for 100 million
FCFA (EUR152,000) following the analysis at least 1,000 tons of
coltan, calculated based on the RC drilling program.
-- 14.5% of the issued share capital of Alliance for 200 million
FCFA (EUR304,000) following a commercial reserve.
Pursuant to the agreement, it has been agreed that the Company
will procure that the Seller is paid a net smelter royalty equal to
0.5% of net smelter returns, such royalty to be paid each
trimester.
These royalties will be recorded when production commences, and
the project generates net smelter returns.
Alliance has applied for an exploration license adjacent to the
Atex project. At the date of acquisition, the license application
is the sole asset of Alliance. Alliance has no employees.
Accordingly, the purchase transaction is accounted for as an
acquisition of an intangible asset. As of 31 December 2022, the
application is still pending.
The Company is accounting for the commitment to purchase the
additional 29% interest in Alliance as a forward purchase contract,
and effectively for accounting purposes the Company has an 80%
interest in Alliance. Accordingly, a liability in the amount of
EUR130,000 has been recorded at the acquisition date based on the
estimated timing of the future payments discounted at a rate of 24%
(level 3 of the fair value hierarchy). The interest (unwinding of
the discount) in 2022 in the amount of EUR31,000 was recorded as
financial expense.
Pursuant to IFRS 3, the Company records the intangible asset at
its fair value on date of acquisition as follows:
Intangible asset 448
Non-controlling interests (20%) (90)
====
Total purchase cost 358
====
Comprised of:
Cash consideration 228
Liability for forward purchase 130
Total 358
See Note 6c below regarding deconsolidation of Alliance.
c. Deconsolidation of Atex and Alliance
As described in Notes 1 and 19, in accordance with the earn-in
agreement signed with Ricca in November 2022, the Company is to
transfer its entire shareholdings in Atex and Alliance to a new
entity (joint venture) in which Ricca and the Company will have
joint control. Due to the loss of control, the Company ceased to
consolidate the accounts of Alex and Alliance and will record its
investment in these companies held by the joint venture based on
the equity method.
As of the date of loss of control, following are the assets,
liabilities and non-controlling interests that have been
deconsolidated (Euros in thousands):
Cash 33
Other current assets 144
Property, plant and equipment 112
Intangible assets 2,062
Liability to non-controlling interest
in subsidiary ) 161 (
NCI (116)
Net - investment in joint venture (see
Note 19) 2,073
NOTE 7: - INTANGIBLE ASSETS
Intangible assets relate to project costs capitalized as of 31
December 2022 and 2021.
31 December
--------------------
2022 2021
----------- -------
Euros in thousands
--------------------
As of 1 January 2,073 642
Acquired through business combinations
(Note 6) - 568
Deconsolidation (Note 6) (2,062) -
Additions 1,265 863
----------- -------
As of 31 December 1,276 2,073
=========== =======
During 2022 the Company invested EUR15 thousand in purchasing a
Nickel Cobalt concession in the west of Cote d'Ivoire. The
concession status is at the stage of a request for exploration
which still needs to be granted by the authorities. According to
the purchase agreement the seller is entitled to receive royalties
from future potential connection revenues as follows:
-- If the Nickel LME price is less than US $12,000 no royalties will be paid
-- If the Nickel LME price is between US $12,000 to US$18,000
the royalties shall be 0.5% of the concession revenues
-- If the Nickel LME price is higher than US$18,000 the
royalties shall be 1% of the concession reveniews.
The remaining balance of intangible assets at the end of 2022
totalling to EUR1,261 thousand relates to Bri coltan concessions.
During 2022 the Company signed a loan agreement for future funding
of a potential columbite-tantalite extraction plant. The loan
amount is up to EUR7.2 million and is for 7 years with two years
grace period over principal payments. The loan will bear interest
at the rate of 8.5% per annum. The Company is required to meet
certain conditions prior to first withdrawal.
The loan may be utilized only when and if the Company decides to
start exploring for columbite-tantalite.
NOTE 8: - PROPERTY, PLANT AND EQUIPMENT
Computers, peripheral equipment &
Plant and equipment Motor vehicles furniture Total
------------------- -------------- ------------------------------------- ------
Cost
As of 1 January 2021 392 21 - 413
Additions 17 100 25 142
------------------- -------------- ------------------------------------- ------
As of 31 December 2021 409 121 25 555
Addition 2 49 17 68
Deconsolidation (Note 6) (2) (141) (19) (162)
As of 31 December 2022 409 29 23 461
------------------- -------------- ------------------------------------- ------
Depreciation
As of 1 January 2021 78 21 - 99
Charge for the year 145 2 4 151
------------------- -------------- ------------------------------------- ------
As of 31 December 2021 223 23 4 250
Charge for the year 41 47 7 9 5
Deconsolidation (Note 6) (47) ( 3 ) (5 0 )
As of 31 December 2022 264 23 8 295
------------------- -------------- ------------------------------------- ------
Net carrying amount
As of 31 December 2022 145 6 15 166
------------------- -------------- ------------------------------------- ------
As of 31 December 2021 186 98 21 305
------------------- -------------- ------------------------------------- ------
NOTE 9: - CONVERTIBLE LOAN NOTES
On 2 November 2020 the Company executed a convertible loan note
instrument pursuant to which the Company was authorized to issue up
to GBP1,000,000 unsecured loan notes for general working capital
purposes and to advance the Company's proposed IPO. The Company
also executed a supplement loan note instrument on 4 February 2021
constituting a further GBP300,000 of convertible loan notes on the
same terms (together the "Loan Note Instruments"). Interest accrues
in respect of the Loan Notes at the rate of 10% per annum,
compounded on a daily basis.
As of the date of the IPO and admission to trading the Company
had issued EUR1,441 thousands (GBP1,231 thousands) pursuant to the
Loan Note Instruments. The Loan Notes shall be converted into fully
paid New Ordinary Shares on Admission at an issue price equal to
the Placing Price less 30%.
On admission date, the Loan Notes and accumulated interest
totaling to EUR1,562 thousand (GBP1,334 thousand) were converted to
14,660,746 Ordinary shares of the Company with a market value of
EUR 2,231 thousand based on preferred conversion price of GBP0.091
per share that represents 30% discount to the share price on
admission. The fair value of the conversion option equivalent to
EUR699 thousand (GBP572 thousands) was recorded as financial
expense in 2021.
NOTE 10: - CAPITAL NOTES
The capital notes are comprised of two notes in the face amounts
of EUR393 thousand and EUR350 thousand, which do not bear interest
and for which the repayment terms commencing from November 2021 are
as follows:
Capital note of EUR393 thousand - (i) no repayment shall take
place within two years of Admission (ii) repayment can only be made
after the Company has achieved a market capitalization of GBP50
million (iii) the Company must have minimum cash on hand of 5x the
outstanding debt, with sufficient funds for the Company to operate
for a two-year period and (iv) any repayment will be subject to
final approval of the Directors of the Company.
Capital note to shareholders and officers for services during
the period from 1 June 2019 until 30 June 2021 totaling to EUR350
thousand (i) no repayment shall take place within two years of
Admission (ii) the Company must have minimum cash on hand of 5x the
outstanding debt, with sufficient funds for the Company to operate
for a two-year period and (iii) any repayment will be subject to
final approval of the Directors of the Company.
The combined carrying amount of the capital notes as of November
2021 is EUR507 thousand which amount reflects the estimated timing
of the future repayments discounted at a rate of 10% (level 3 of
the fair value hierarchy). The difference in the amount of EUR236
thousand between the face amount of the capital notes and the
carrying amount as of November 2021 has been recorded as a
contribution to equity. The balance of the capital notes at 31
December 2022 is EUR565 thousand (2021 - EUR514 thousand). In 2022
interest expense on the loan (unwinding of discount) amounted to
EUR51 thousand (2021 - EUR7 thousand).
NOTE 11: - LOAN FROM NON-CONTROLLLING INTERESTS
Loan in the face amount of EUR 205 thousand from the minority
interests of Bri Coltan upon acquisition of Bri Coltan. It was
agreed that the loan will be repaid from up to 5% of the yearly net
earnings of Bri Coltan following publication of its annual
financial report. As of 31 December 2021, the carrying amount of
the loan is EUR92 thousand which amount reflects the estimated
timing of future repayments discounted at a rate of 12% (level 3 of
the fair value hierarchy). The difference in the amount of EUR122
thousand between the face amount of the loan and the carrying
amount on 1 January 2021 has been recorded as a contribution to
equity. In 2022 interest expense on the loan (unwinding of
discount) amounted to EUR11 thousand.
NOTE 12: - EQUITY
a. Composition of share capital:
31 December 31 December
------------------------ ------------------------
2022 2021 2022 2021
----------- ----------- ----------- -----------
Authorized Issued and outstanding
------------------------ ------------------------
Number of shares
Ordinary shares
of EUR 0.001 par
value each 100,000,000 100,000,000 88,043,560 86,885,360
=========== =========== =========== ===========
Prior to admission in 2021, the Company issued 6,822,000
Ordinary shares to its funders to represent their holdings at
incorporation, increased its share capital and performed a share
split such that the authorized share capital increased to 100
million Ordinary shares of EUR0.001 par value each. Share and per
share amounts in these financial statements have been adjusted
retroactively to reflect the share split.
In 2021, the Company issued 3,377,000 Ordinary shares to certain
investors in convertible loan notes for no additional
consideration. The fair value of these shares on date of issuance
amounted to EUR 514 thousand and was recorded as finance
expense.
In 2021, the Company issued 827,000 Ordinary shares to certain
consultants for their services. The fair value of these shares on
date of issuance amounted to EUR 126 thousand and was recorded as
share-based compensation in Contractors & service providers
expenses.
On 12 November 2021, the Company completed its Initial Public
Offering ("IPO") on the AIM, a market operated by the London Stock
Exchange ("the AIM"), by issuing 30,769,230 Ordinary shares at a
price of GBP 0.13 per share for a total consideration of EUR 4.68
million (GBP 4 million). Net proceeds of EUR4.25 million (GBP 3.63
million).
In 2021 the Company issued 115,384 Ordinary shares to certain
brokers in consideration for services provided. The fair value of
the shares issued amounting to EUR18 thousand was recorded in
general and administrative expenses.
Issuance in 2021 of 14,660,746 Ordinary shares upon conversion
of convertible loan notes - see Note 9.
On 4th July 2022 the Company purchased an additional 26% of the
issued shares in Atex. 10% of the issued shares in Atex in exchange
for 1,158,200 shares in the Company (with a value of GBP76,441 at
the closing share price on 1 July 2022 of 6.6p per share; EUR88,672
based on GBP1 = EUR1.16). the additional 16% of the issued shares
in Atex were purchased by way of exercising the first option under
the agreement between Firering and Atex dated 31 March 2021 for a
total cash consideration of c.EUR320,000.
b. Share option plan:
On admission, 12 November 2021, the Company adopted a share
option plan under which it granted a total of 6,950,832 options to
directors, employees and consultants of the Company.
Each option is exercisable to one Ordinary share at an exercise
price of GBP 0.13. The options vested immediately upon grant. The
options expire 5 years after date of grant. As of 31 December 2022,
all of the options are outstanding.
The fair value of the options granted calculated based on
Black-Scholes option pricing model was approximately EUR61
thousand.
The following table lists the inputs used in the measurement of
the fair value of options, in accordance with the Black and Scholes
option pricing model, with respect to the above grants:
Risk-free interest rate (%) 0.58%
Dividend yield (%) 0%
Expected volatility (%) 70%
Expected term (in years) 5
c. Warrants
On admission, 12 November 2021, the Company granted a total of
2,599,622 warrants to some service providers of the Company as part
of their compensation for the services provided in the initial
public offering process. Each warrant is exercisable to one
Ordinary share at an exercise price of GBP 0.13.
868,854 warrants expire 5 years after date of grant, and
1,538,461 warrants expire 3 years after date of grant.
The remaining 192,307 warrants expire 3 years after date of
grant with 50% vesting once the 5 day volume-weighted average price
("VWAP") of the Company's shares has traded at a 100% premium to
the Placing Price (GBP 0.13) and 50% vesting once the 5 day VWAP of
the Company's shares has traded at a 200% premium to the Placing
Price. None of these warrants have vested as of 31 December
2022.
The fair value of the Warrants granted calculated based on
Black-Scholes option pricing model was approximately EUR20
thousand.
The following table lists the inputs used in the measurement of
the fair value of the warrants, in accordance with the Black and
Scholes pricing model:
Warrants for Warrants for 3 years
5 years
------------ --------------------
Risk-free interest
rate (%) 0.58% 0.50%
Dividend yield (%) 0% 0%
Expected volatility
(%) 70% 70%
Expected term (in years) 5 3
The fair value of the warrants was recorded as part of the IPO
fund-raising costs and deducted from share premium in equity.
d. Capital reserves
Capital reserves are comprised of the following:
31 December
--------------------
2022 2021
------------ ------
Euros in thousands
--------------------
Reserve for transactions with non-controlling
interests (Note 11) 91 91
Reserve for transactions with principal
shareholders (Note 10) 236 236
Reserve for transactions with non-controlling
interests (Note 6) (378) -
(51) 327
============ ======
NOTE 13:- GENERAL AND ADMINISTRATIVE EXPENSES
Year ended 31 December
------------------------
2022 2021
------------- ---------
Euros in thousands
------------------------
Salaries & employee related expenses 663 414
Contractors & service providers 333 210
Travel & transportation 12 63
Legal and professional 206 124
Office expenses 66 -
Nomad & broker fees 54 23
Public relations 45 24
Insurance 27 3
Share based compensation - 61
Depreciation 47 -
Exploration costs 25 -
Overhead costs 26 7
------------- ---------
Total 1,504 929
============= =========
NOTE 14:- FINANCIAL EXPENSES
Year ended 31 December
------------------------
2022 2021
---------- ------------
Euros in thousands
------------------------
Interest on convertible loan notes - 111
Interest on capital notes and loan from
non-controlling interest 63 17
Interest on liability to non-controlling
interest 31 -
Change in fair value of conversion option
of convertible loan notes - 669
Financial expenses settled by share based
compensation - 514
Bank fees 196 62
---------- ------------
290 1,373
========== ============
NOTE 15:- TAXES ON INCOME
a. Tax rates applicable to the income of the Company and its
subsidiaries:
The Company and its subsidiaries, Firering Strategic Minerals
PLC was incorporated in Cyprus and are taxed according to Cyprus
tax laws. The statutory tax rate is 12.5%.
The carryforward losses of the Company are approximately EUR12
thousands. No other subsidiary has carryforward losses.
The subsidiary, FH Colton CI-II, was incorporated in Cote
d'Ivoire and is taxed according to Cote d'Ivoire tax laws. The
statutory tax rate is 25%.
The subsidiary, Bri Coltan SARL, was incorporated in Cote
d'Ivoire and is taxed according to Cote d'Ivoire tax laws. The
statutory tax rate is 25%.
The subsidiary, Atex Mining Resources SARL, was incorporated in
Cote d'Ivoire and is taxed according to Cote d'Ivoire tax laws. The
statutory tax rate is 25%.
The subsidiary Alliance Minerals Corporation SARL Ltd was
incorporated in Cote d'Ivoire and is taxed according to Cote
d'Ivoire tax laws. The statutory tax rate is 25%.
b. Tax assessments:
As of 31 December 2022, the Company and all its other
subsidiaries had not yet received final tax assessments.
NOTE 16: - EARNINGS PER SHARE
The calculation of the basic and fully diluted loss per share
attributable to the equity shareholders is based on the following
data:
Year ended 31 December
------------------------
2022 2021
----------- -----------
Euros in thousands
------------------------
Net loss attributable to equity shareholders (84) (2,276)
Average number of shares for the purpose
of basic and diluted earnings per share 87,457,527 38,320,172
Share options and warrants are excluded from the calculation of
diluted loss per share as their effect is antidilutive.
NOTE 17:- RELATED PARTIES
Year ended
31 December
--------------------
2022 2021
--------- ---------
Euros in thousands
--------------------
a. Balances:
Current liabilities:
Other payables 54 -
Capital note (*) 214 214
Non- current liabilities:
Capital note 266 242
(*) The capital note bears no interest
and is payable on demand.
b. Compensation of key management personnel
of the Company:
Short-term employee benefits 535 443
Share-based compensation - 61
a.
Interest on capital note (see also
c. Note 10) 24 3
A Director and the CEO of the Company was entitled to salary of
EUR84 thousands which increased, with effect from Admission, to
EUR120 thousands per annum and shall be entitled to certain bonuses
upon the Company achieving certain milestones.
In addition, the CEO is entitled to additional benefits
including medical insurance, school fees for his family (capped at
EUR84 thousands per annum), accommodation in Cote d'Ivoire (capped
at EUR1.2 thousands per month) as well as travel costs for himself
and his family to have home leave.
NOTE 18:- FINANCIAL INSTRUMENTS
Foreign exchange risk:
The Company is exposed to foreign exchange risk resulting from
the exposure to different currencies, mainly, USD and GBP. Since
the FCFA is fixed to the Euro, the Group is not exposed to foreign
exchange risk in respect of the FCFA. As of 31 December 2021, the
foreign exchange risk is immaterial.
Liquidity risk:
The table below summarizes the maturity profile of the Group's
financial liabilities based on contractual undiscounted payments
(including interest payments):
31 December 202 2
Less 2 to
than 1 to 3 3 to 4 to > 5
one year 2 years years 4 years 5 years years Total
--------- -------- ------ -------- -------- ------ -----
Euros in thousands
--------------------------------------------------------------
Trade payables 61 - - - - - 61
Other payables 451 - - - - - 451
Capital note 214 - 743 - - - 957
Loan from non-controlling
interest in subsidiary - - - - - 205 205
726 - 743 - - 205 1,674
========= ======== ====== ======== ======== ====== =====
31 December 2021
Less 2 to
than 1 to 3 3 to 4 to > 5
one year 2 years years 4 years 5 years years Total
--------- -------- ------ -------- -------- ------ -----
Euros in thousands
--------------------------------------------------------------
Trade payables 150 - - - - - 150
Other payables 102 - - - - - 102
Capital note 214 - - 743 957
Loan from non-controlling
interest in
subsidiary - - - - - 205 205
Liability to
non-controlling
interest in
subsidiary - - - - - 608 608
--------- -------- ------ -------- -------- ------ -----
466 - - 743 - 813 2,022
========= ======== ====== ======== ======== ====== =====
NOTE 19:- INVESTMENT IN JOINT VENTURE
On 2 November 2022 the Company signed an earn-in agreement (the
Agreement") with Ricca Resources Pty Limited ("Ricca"), an
Australian diversified minerals company to advance the Atex
Lithium-Tantalum Project ("Atex") and the adjacent Alliance
exploration licence (once granted).
According to the Agreement, Ricca will have the exclusive right
to undertake and fund at Ricca's sole cost the exploration of the
Atex Project and adjacent Alliance licence for up to US$18.6
million (EUR 17.4 million). The total amount of US$18.6 million to
be paid by Ricca pursuant to the Agreement includes:
-- US$1million (EUR977 thousand) cash consideration (received in
November 2022); and
-- issue of ordinary shares of Ricca to the value of AUD
$1million (EUR 637 thousand) upon the earlier of: its planned IPO
on the Australian Securities Exchange (ASX), or by 31 January 2024.
The shares shall be issued at the completion price of the IPO or at
a price per share equal to the latest price used in a fund raising
carried out by Ricca prior to that date, by 31 January 2024
-- Funding and completing four stage earn-in of up to 50% equity
interest in the Project through the funding of up to US$14.7million
(EUR13.8 million), with the aim of achieving a Definitive
Feasibility Study ("DFS") on the Project. Beyond the US$17 million
expenditure to be spent to advance the Project, Ricca has agreed to
fund a further US$2 million (EUR1.9 million) (to take total
expenditure to US$19 million (EUR17.8 million) if the JORC inferred
Mineral Resource Estimate ("MRE") surpasses 20m tones at the
concentration of 1.0% of Li2O.
In order to undertake exploration of the Atex and Alliance
Tenements, the Company has an SPV (FH Coltan CI-III SARL which
changed its name to Marvella SA, hereafter "Marvella") to which the
Company shall transfer its entire shareholdings in the Atex
agreement and the Alliance agreement, including the forward
purchase obligation (see Note 6).
As of the date of the financial statements the Company is in the
process of implementing the above transfers.
The Company holds 100% of the equity interest of Marvella as of
the date of the financial statements and will continue to hold the
majority of the equity interest until the completion of stage 4 of
the earn-in period. However, according to the shareholders'
agreement signed with Ricca as of the date of the Agreement, the
Company cannot unilaterally make decisions on the significant
relevant activities of Marvella, as they are driven by the Board
and the Joint operating committee of Marvella which consists of
equal representation (joint control) of both the Company and
Ricca.
Accordingly, the Company ceased to consolidate the financial
statements of Atex and Alliance (which are being transferred to
Marvella) as of the date of the Agreement - see Note 6.
The investment in Marvella is considered a joint venture.
Accordingly, commencing from the date of the Agreement, the
investment in the joint venture is accounted for using the equity
method in accordance with IAS 28.
As described above, the consideration to which the Company is
entitled upon signing the Agreement is comprised of EUR977 thousand
in cash (received in November 2022) and shares of Ricca with a fair
value of EUR637 thousand (to be received by 31 January 2024 and
presented as non-current receivable in the statement of financial
position as of 31 December 2022). Accordingly, the total initial
consideration of EUR1614 thousand has been recorded as a gain on
the earn-in arrangement in the statement of comprehensive
income.
Summarized financial data of the joint venture.
Year ended 31 December
------------------------
2022 2021
-------------- --------
Euros in thousands
------------------------
Statement of financial position of
joint venture at reporting date:
Current assets 178 -
Property, plant and equipment 112 -
Intangible assets 2,314 -
Current liabilities ) 1 ( -
Liability to non-controlling interest
in subsidiary (161) -
( 2,073
Loan from Firering ) -
Total equity -NCI (369) -
============== ========
Investment in joint venture 2,073 -
============== ========
During the period from establishment of the joint venture in
November 2022 through 31 December 2022, the joint venture had no
revenues and no expenses.
For the period ending at 31 December 2022, Ricca funded
exploration expenditures of the joint venture in the amount of US$
267 thousand (EUR253 thousand). Subsequent to 31 December 2022 and
up to close to the date of approval of the financial statements,
Ricca funded additional exploration expenditures of the joint
venture in the amount of US$ 562 thousand (EUR533 thousand).
NOTE 20:- OTHER PAYABLES
31 December
--------------------
2022 2021
--------- ---------
Euros in thousands
--------------------
Accrued expenses 262 82
Employees and payroll accruals 152 -
Other accounts payable 37 20
451 102
========= =========
NOTE 21:- EVENTS AFTER THE REPORTING DATE
On 9 March 2023 Marvella exercised the remaining existing option
originally between Firering and Atex's shareholder (see Note 6a)
and purchased an additional 13% of the issued shares in Atex and
reached a total holding of 90% in Atex for a total consideration of
EUR259 thousand. According to the agreement with Ricca Resources,
Ricca will pay EUR200 thousand out of the EUR259 thousand. (See
also Note 19)
- - - -- - - - - - - - - - - - - - - - -
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