REG - African Pioneer PLC - Half-year Report
30/09/2022 07:01
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220930:nRSd1822Ba&default-theme=true
RNS Number : 1822B African Pioneer PLC 30 September 2022
30 September 2022
African Pioneer Plc
("African" or the "Company")
Interim Results for the Six Months Ended 30 June 2022
African Pioneer Plc a company engaging in development of natural resources
exploration projects in Sub-Saharan Africa, announces its unaudited interim
results for the six months ended 30 June 2022 as set out below. A copy of the
Interims is available on the Company's website https://africanpioneerplc.com/
(https://africanpioneerplc.com/)
OPERATIONAL, FINANCIAL CORPORATE and STRATEGY REVIEWS
Operational Review
The Company completed an Initial Public Offering (IPO) on the Standard List
of the London Stock Exchange on 1 June 2021. From the IPO the Group has been
engaged in development of natural resources exploration projects in
Sub-Saharan Africa, and it has projects in Namibia, Zambia and Botswana.
Since 19 January 2022 four of our five 80% owned Zambian exploration licences
are the subject of an option agreement with First Quantum Minerals Ltd (listed
on the Toronto Stock Exchange FM.TO) (the "First Quantum Option Agreement")
and since 2 October 2021 four of our eight wholly owned Botswanan prospecting
licences have been the subject of an option agreement with Sandfire Resources
Limited (ASX:SFR) (the "Sandfire Option Agreement") (together the "Options")
as further described under the Corporate Review.
The Company's main focus during the period was on evaluating and advancing its
85% owned Namibian Projects, including the Ongombo mining licence application,
and those Zambian and Botswana Projects that are not the subject of Options.
Post the period end on 29 September 2022 the Company announced, in relation to
its Ongombo project in Namibia, the granting of a mining licence and drilling
results in relation to 26 drill holes targeting an additional open pit mineral
resource to complement the existing underground resource.
Technical review of Projects: The primary metal of all the Company's projects
in Namibia, Zambia and Botswana is copper with by-product potential in all of
our projects. In Namibia we have the potential for gold, Zambia for cobalt,
and in Botswana potential for silver. During the period the Company continued
its technical reviews and / or programmes on its projects.
Namibia: In Namibia, the Company commenced a drilling programme and continued
its data review subsequent to applying for a mining licence for the Ongombo
licence which is located on the Matchless Copperbelt in late 2021. Post period
end on 29 September 2022 the Company announced the issue of a mining licence
in relation to its Ongombo licence subject to the completion of an
environmental and social impact assessment ("ESIA").
Work has been ongoing at Ongombo with a focus on a near-surface drill
programme to test the up-dip extensions of known mineralisation with a view to
defining a potential open pit copper - gold resource.
Engineering consultant Practara (Pty) Limited along with project design
engineers Nurizon, have both validated the Scoping Study assumptions based on
a detailed assessment of the Ongombo Project following a site visit and as a
result recommended changes to the proposed mine layout. Subject to the results
of near-surface drilling, a box cut and portal excavated in the floor of any
future open pit will provide a convenient location for underground access and,
could result in a meaningful reduction in total metres of development and a
corresponding reduction in capital expenditure. This information has been
passed onto the external environmental consultant to include in the ESIA.
Simple, well-understood processing technologies are expected to be implemented
at Ongombo and the current preferred plant design offers a model that is being
successfully applied in similar mining scenarios elsewhere in Africa.
Zambia: The Zambian project portfolio consists of four large copper/cobalt
licences in Northwest Zambia (the "First Quantum Option Projects") which since
19 January 2022 have been the subject of the First Quantum Option Agreement
and one more licence in the Lusaka province. The Northwest projects are
considered to be highly prospective resembling the geology of the DRC which is
in close proximity in the North. The licences have been flown for air borne
geophysics as well as ground geochemistry and post the period end on 23 August
2022 the Company reported on the subsequent exploration programme entered into
by First Quantum which highlighted the initial exploration work undertaken by
First Quantum on the First Quantum Option Projects since 19 January 2022:
• pXRF assay results for the first two batches of soil samples over
targets within the Licences resulted in First Quantum reporting "significant
copper anomalies".
• Sufficient mapping and sampling completed on the initial anomalies
to trigger immediate follow-up Air-Core drilling to pre-define targets for
detailed diamond drilling.
• Targets defined to date represent a significant cumulative strike
length of anomalouscopper in soils.
· Targets are associated with rock types and regional structures
diagnostic of Copperbelt type mineralisation.
· Completion of soil geochemical survey and mapping underway and
expected to outline further targets of merit.
· Planned work as part of the First Quantum Option Agreement, includes
completion of the soil geochemical surveys and associated pXRF in soils,
continued mapping of new target areas, Air-core drilling and RC/diamond
drilling.
First Quantum are continuing with their exploration programme and have
reported that detailed geochemical sampling completed earlier in 2022 defined
three (3) targets within the project area. The three high priority targets
Turaco, Eagle and Kanyika were selected for follow up with aircore drilling. A
total of 34 holes (27 holes at Turaco and 7 holes at Eagle) for 2,593 metres
were completed by the end of August, for which analytical results are
currently awaited. Visual sulphide mineralisation (chalcopyrite) was
encountered in one hole on the Turaco target.
An audiomagnetic (AMT) survey completed earlier in 2022 has been used to
target a diamond drill hole that will help to define the structural framework
and stratigraphic context of the target area. Drilling is currently in
progress with an expected depth/metres of 700m.
The Lusaka licence is under review and remain prospective for gold.
Botswana: The Botswana projects are in the Kalahari Copperbelt and are
considered highly prospective since they are in the general area of mining
development being carried out by Sandfire Resources of Australia. Sandfire
subscribed to a Pre-IPO funding round and earned a 15% interest in the Company
post IPO as a result of the funding. Since 2 October 2021 four of our eight
wholly owned Botswanan prospecting licences projects have been the subject of
the Sandfire Option Agreement. The Botswana prospecting licences which are not
the subject of the Sandfire Option Agreement are being reviewed by external
geological consultants with vast experience operating in the Country and
further work will be based on recommendations generated by the review.
Financial Review
Financial highlights:
· £331K loss after tax (2021: £184K)
· Approximately £762K cash at bank at the period end (Dec 2021:
£1.19m).
· The basis and diluted losses per share are summarised in the table
below
Loss per share (pence) 2022 2021
Basic Note 3 (0.17)p (0.45)p
Diluted Note 3 (0.15)p (0.39)p
· The net asset value as at 30 June 2022 was £5.7m (31 December 2021
£6.06m)
Fundraisings:
In light of the funds raised at IPO on 1 June 2021 the Company did not raise
any funds during the period.
Liquid Investments:
As at 30 June 2022 the Company held £382,599 of listed investments at market
value. The Company has adopted the provisions of IFRS9 and has elected to
treat all available for sale investments at fair value with changes through
the profit and loss.
The Company's intention following its Listing is not to purchase any new
investments and to hold its residual portfolio as realisable investments as a
source of liquidity to cover explorations costs and general overheads of the
Company.
Corporate Review
Company Board: The Board of the Company comprises Colin Bird, Executive
Chairman Raju Samtani, Finance Director Christian Cordier, Business
Development Director Kjeld Thygesen, Independent Non-executive Director James
Nicholas Cunningham-Davis, Non-executive Director
Listing: The Company was admitted to the Official List (Standard Segment) and
commenced trading on the Main Market for listed securities of the London Stock
Exchange on 1 June 2021 (the "Listing" or "IPO").
Corporate Acquisitions and Group: As previously reported the Company completed
the acquisition of projects based in Namibia, Zambia, and Botswana and on 27
August 2021 announced that it had acquired a further 15% interest in its
Namibian Projects. During the period the Company did not make any corporate
acquisitions and as at the period end it owns;
1) 100% of Zamcu Exploration Pty Ltd ("Zamcu"). Zamcu via its subsidiaries
holds a 85 per cent. interest in two Namibia Exclusive Prospecting Licenses
("EPLs") located within the Matchless amphibolite Belt of central Namibia (the
"Namibian Projects");
2) 80% of African Pioneer Zambia Limited ("APZ"). APZ holds a 100 per cent.
interest in five Zambian Prospecting Licenses (PLs) located in two areas
namely the Central Africa Copperbelt (Copperbelt), which comprises four PLs
which are the subject of the First Quantum Option Agreement and the Zambezi
area which comprises one PL (the "Zambian Projects"); and
3) 100% of Resource Capital Partners Pty Ltd ("RCP"). RCP which holds a 100
per cent. interest in eight Botswana Prospecting Licenses ("PLs") located in
two areas namely (1) the Kalahari Copperbelt (KC), which comprises six PLs ,
four of these six PLs are the subject of the Sandfire Option Agreement and (2)
the Limpopo Mobile Belt (Limpopo), which comprises two PLs (the "Botswanan
Projects") (together the "Projects") (the "Subsidiaries") (together the
"Group").
Lock Up and Orderly Market: All the Ordinary Shares issued to vendors at
Listing to acquire Zamcu, APZ and RCP were subject to a 12 month lock up from
the IPO followed by a 12 month orderly market arrangement.
First Quantum Option Agreement: The First Quantum Option Agreement was
announced on 20 January 2022 and the highlights of the agreement are:
· The four exploration licences the subject of the Option Agreement are
in the highly prospective Central Africa Copperbelt in northwest Zambia which
is the largest and most prolific mineralized sediment- hosted copper province
in the world and are located less than 100km from First Quantum's giant
Sentinel copper mine.
• The exploration licenses include geological formations similar in
age and rock type to that hosting the major copper deposits of the Copperbelt.
• During the initial 18 month option period First Quantum has the
right but not the obligation to spend US500,000 on each of the exploration
licences 27767-HQ-LEL, 27768-HQ-LEL, 27770-HQ-LEL, and 27771-HQ-LEL (the
"First Quantum Projects"). At this stage First Quantum will not have earned
any shares in African Pioneer Zambia, just the right to proceed to take one or
more of the properties into the First Earn In Period by issuing an Option
Exercise Notice.
• During the First Earn In Period, First Quantum then has 2 years
when it has the right but not the obligation to prepare a Technical Report in
respect of the Zambian Projects demonstrating an Indicated Mineral Resource of
at least 300,000 tonnes of contained copper (the "Technical Report
Requirement"). First Quantum is to fund the Technical Report. Once the
Technical Report is issued First Quantum has the right to be issued shares
equal to a 51% shareholding in African Pioneer Zambia. This will also trigger
the Second Earn-In Period.
• In the Second Earn-In Period First Quantum shall have the right
but not the obligation to complete all necessary mining, metallurgical and
development studies to establish a mine at the Property and make a public
announcement that it intends to proceed towards commercial development of a
Mine on the Property (a "Decision to Mine"). First Quantum is to fund all
costs related to the Decision to Mine. Once First Quantum announces a Decision
to Mine First Quantum has the right to be issued shares in African Pioneer
Zambia to increase their 51% shareholding in African Pioneer Zambia to 75%.
Sandfire Option Agreement: The Sandfire Option Agreement was announced on 4
October 2021 and the highlights of the agreement are:
• the option is for two years from 2 October 2021 and relates to PL
100/2020, PL 101/2020, PL 102/2020 and PL 103/2020.
• Sandfire paid US$500K and issued 107,272 Sandfire ordinary shares
to the Company.
• Exercise and Option Period: The option can then be exercised
within 2 years of the Option Agreement (the "Option Period") to acquire the
Included Licences for US$1. Sandfire has the right to extend the Option Period
by 1 year by the payment of a US$500,000 option extension fee.
• Exploration Commitment: Sandfire to fund US$1 million of
exploration expenditure by the Company on the Included Licences (the
"Exploration Commitment") within the Option Period and if the US$1 million is
not spent, any shortfall will be paid to African Pioneer. Sandfire can
withdraw from the Option Agreement at any time after meeting the Exploration
Commitment.
• A Success Payment: a one-off success payment to be paid to the
Company for the first ore reserve reported under JORC Code 2012 edition on the
Included Licences which exceeds 200,000 tonnes of contained copper (the "First
Ore Reserve") in the range of US$10 million to US$80 million depending on the
amount of contained copper in the First Ore Reserve (the "Success Payment").
Strategy Review
The Company's short to medium term strategic objectives are to enhance the
value of its mineral resource Projects through exploration and technical
studies conducted by the Company or through joint venture or other
arrangements (such as the First Quantum Option Agreement and the Sandfire
Option Agreement) with a view to establishing the Projects can be economically
mined for profit. With a positive global outlook for both base and precious
metals, the Directors believe that the Projects provide a base from which the
Company will seek to add significant value through the application of
structured and disciplined exploration.
Outlook
Outlook for Copper: Whilst the future price forecasts for copper are
extremely positive as is the forecast for the by-product metals stockmarkets
are currently down from highs as they digest the effect of significant spikes
in oil and gas prices and the increased cost of living in the U.K. and
elsewhere plus the recent run on sterling in the foreign exchange markets. The
outlook for copper supply has not improved and we are likely to see more
smaller mines being developed since many large mining copper projects have
been shelved for political or economic reasons. Thus the Company is well
positioned with all its projects, to take part in an acquisition boom or
alternatively be a subject which attracts financing which might not have
been available in the immediate past.
As with last year the major mining companies are seeking new projects for
acquisition and all of our projects have fundamentals which may attract the
attention of larger companies and we have already entered into option
agreements with First Quantum in relation to four of our Zambian Projects and
Sandfire in relation to four of our Botswana Projects.
Last year inflation was seen as a distant issue but it and the cost of living
are now front and centre of financial headlines. This has already slowed down
major stock markets but may be good for the small mines sector since as in
such times they have been seen to outperform.
The Board remains confident they have assembled an enviable portfolio of
projects and are pleased that Sandfire have elected to take a position in the
Company and that we have entered into option agreement with both First Quantum
and Sandfire. We look forward to advancing all our projects in the second half
and providing our shareholders with the prospects of enhanced value flowing
into next year.
Post Period Events
On 29 September 2022 the Company announced in relation to its Ongombo project
in Namibia the granting of a mining licence and positive drilling results in
relation to 26 drill holes.
On 23 August 2022 the Company reported on the subsequent exploration programme
entered into by First Quantum since 20 January 2022 which highlighted the
initial exploration work undertaken by First Quantum on the First Quantum
Option Projects under the First Quantum Option Agreement.
INTERIM MANAGEMENT REPORT
The Directors are required to provide an Interim Management Report in
accordance with the Financial Conduct Authorities ("FCA") Disclosure Guidance
and Transparency Rules ("DTR"). The Directors consider the preceding
Operational, Financial, Corporate and Strategy Review of this Half Yearly
Financial Report provides details of the important events which have occurred
during the period and their impact on the financial statements as well as the
outlook for the Company for the remaining six months of the year ended 31
December 2022.
The following statement of the Principal Risks and Uncertainties, the Related
Party Transactions, the Statement of Directors' Responsibilities and the
Operational, Financial, Corporate and Strategy Review constitute the Interim
Management Report of the Company for the six months ended 30 June 2022.
Principal Risks and Uncertainties
The principal risks that are specific to the Company were detailed under this
heading in Part 1 Summary of the Company's prospectus which was published on
26 May 2021 (the "Prospectus") which is available on the Company's website at
https://africanpioneerplc.com/company-documents-circulars-and-notices/
(https://africanpioneerplc.com/company-documents-circulars-and-notices/) .
Part II Risk factors of the Prospectus provides more details of risk factors
specific and material to the Group and to the Natural Resources Sector. The
Strategic Report in the 2021 Annual Accounts also provided a detailed summary
of the principal risks and uncertainties faced by the Company, a copy of the
2021 Annual Accounts are available on the Company's website at
https://africanpioneerplc.com/financial-reports/ .
The Board are of the opinion that these risk factors will continue to remain
unchanged for the forthcoming six month period.
The principal risks and uncertainties facing the group are as follows:
· There are significant risks associated with any exploration project
and the ability of the Company to explore, develop and generate operational
cashflows from its projects
· No assurances can be given that minerals will be discovered in
economically viable quantities at the Company's projects
· Adverse foreign exchange fluctuations
· Volatility in financial markets and commodity markets
Related Party Transactions during the period
2. Directors' Letters of Appointment and Service Agreements as disclosed
in the Prospectus, and which remained in force during the period:
(a) Pursuant to an agreement dated 24 May 2021, the Company renewed the
appointment of James Cunningham-Davis as a Director. The appointment continues
unless terminated by either party giving to the other 3 months' notice in
writing. James Cunningham-Davis is entitled to director's fees of £12,000 per
annum for being a director of the Company plus reasonable and properly
documented expenses incurred during the performance of his duties which will
be invoiced by Cavendish Trust Company Ltd an Isle of Man Trust Company that
James Cunningham-Davis is a founder and managing director of. James
Cunningham-Davis is not entitled to any pension, medical or similar employee
benefits. The agreement replaces all previous agreements with James
Cunningham-Davis and/or Cavendish Trust Company Ltd in relation to the
appointment of James Cunningham-Davis as a director of the Company.
(b) Pursuant to an agreement dated 24 May 2021, the Company appointed
Kjeld Thygesen as a non-executive Director with effect from the date of the
IPO. The appointment continues unless terminated by either party giving to the
other 3 months' notice in writing and Kjeld Thygesen is entitled to director's
fees of £18,000 per annum for being a director of the Company plus reasonable
and properly documented expenses incurred during the performance of his
duties. Kjeld Thygesen is not entitled to any pension, medical or similar
employee benefits.
(c) Pursuant to an agreement dated 24 May 2021, the Company renewed the
appointment of Colin Bird as a Director. The appointment continues unless
terminated by either party giving to the other 3 months' notice in writing.
Colin Bird is entitled to director's fees of £18,000 per annum for being a
director of the Company plus reasonable and properly documented expenses
incurred during the performance of his duties. Colin Bird is not entitled to
any pension, medical or similar employee benefits. The agreement replaces all
previous agreements with Colin Bird in relation to his appointment as a
director of the Company.
(d) Pursuant to a consultancy agreement dated 24 May 2021, the Company
has, with effect from the date of the IPO, appointed Colin Bird as a
consultant to provide technical advisory services in relation to its current
and future projects including but not limited to assessing existing geological
data and studies, existing mine development studies and developing exploration
programs and defining the framework of future geological and mine study
reports (the "Colin Bird Services"). The appointment continues unless
terminated by either party giving to the other 3 months' notice in writing.
Colin Bird is entitled to fees of £3,500 per month for being a consultant to
the Company plus reasonable and properly documented expenses incurred during
the performance of the Colin Bird Services.
(e) Pursuant to an agreement dated 24 May 2021, the Company renewed the
appointment of Raju Samtani. The appointment continues unless terminated by
either party giving to the other 3 months' notice in writing. Raju Samtani is
entitled to director's fees of £18,000 per annum for being a director of the
Company plus reasonable and properly documented expenses incurred during the
performance of his duties. Raju Samtani is not entitled to any pension,
medical or similar employee benefits. The agreement replaces all previous
agreements with Raju Samtani in relation to his appointment as a director of
the Company.
(f) Pursuant to a consultancy agreement dated 24 May 2021, the Company
has ,with effect from the date of Admission, appointed Raju Samtani as a
financial consultant to provide financial advisory services to the Company
(the "Raju Samtani Services"). The appointment continues unless terminated
by either party giving to the other 3 months' notice in writing. Raju
Samtani is entitled to fees of £2,667 per month for being a consultant to the
Company plus reasonable and properly documented expenses incurred during the
performance of the Raju Samtani Services.
(g) Pursuant to an agreement dated 24 May 2021, the Company appointed
Christian Cordier as a Director with effect from the date of Admission. The
appointment continues unless terminated by either party giving to the other 3
months' notice in writing. Christian Cordier is entitled to director's fees of
£18,000 per annum for being a director of the Company plus reasonable and
properly documented expenses incurred during the performance of his duties.
Christian Cordier is not entitled to any pension, medical or similar employee
benefits.
(h) Pursuant to a consultancy agreement dated 24 May 2021, with Mystic
Light Pty Ltd a personal service company of Christian Cordier the Company has
secured the services of Christian Cordier, with effect from the date of the
IPO, as a business development consultant to provide business development l
advisory services to the Company in relation to its existing and future
projects (the "Christian Cordier Services"). The appointment continues
unless terminated by either party giving to the other 3 months' notice in
writing. Mystic Light Pty Ltd is entitled to fees of £1,000 per month for
providing the Christian Cordier Services plus reasonable and properly
documented expenses incurred during the performance of the Christian Cordier
Services.
(i) The Company entered into a contract, dated first August 2013 with
Lion Mining Finance Limited ("LMF") a company controlled by Colin Bird, under
which LMF provides administrative services to the Company for £750 plus VAT
per calendar month
2. Related Party transactions described in the annual report to 31 December
2021
Other than disclosed above and the intra group loans made by Company to its
subsidiaries to finance their ongoing activities there have been no changes in
the related parties transactions described in the annual report for the year
ended 31 December 2021 that could have a material effect on the financial
position or performance of the Company in the first six months of the current
financial year.
Responsibility Statement
The Directors, whose names and functions are set out in this report under the
heading Company Board, are responsible for preparing the Unaudited Interim
Condensed Consolidated Financial Statements in accordance with the Disclosure
Guidance and Transparency Rules of the United Kingdom's Financial Conduct
Authority ('DTR') and with International Accounting Standard 34 on Interim
Financial reporting (IAS34). The Directors confirm that, to the best of
their knowledge, this Unaudited Interim Condensed Consolidated Report, which
has been prepared in accordance with IAS34, gives a true and fair view of the
assets, liabilities, financial position and profit or loss of the Group and
the interim management report includes a fair review of the information
required by DTR 4.2.7 R and by DTR 4.2.8 R, namely:
· an indication of key events occurred during the period and their
impact on the Unaudited Interim Condensed Consolidated Financial Statements
and a description of the principal risks and uncertainties for the second half
of the financial year; and
· material related party transactions that have taken place during
the period and that have materially affected the financial position or the
performance of the business during that period.
For and on behalf of the Board of Directors
Colin Bird
Executive Chairman
30 September 2022
African Pioneer Plc
+44 (0) 20 7581 4477
Colin Bird
Executive Chairman
Beaumont Cornish (Financial Adviser) +44 (0) 20 7628 3396
Roland Cornish
Novum Securities Limited (Broker) +44 (0) 20 7399 9400
Jon Belliss
Beaumont Cornish (Financial Adviser)
Roland Cornish
+44 (0) 20 7628 3396
Novum Securities Limited (Broker)
Jon Belliss
+44 (0) 20 7399 9400
or visit https://africanpioneerplc.com/ (https://africanpioneerplc.com/)
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the
European Union (Withdrawal) Act 2018 ("UK MAR").
Group Statement of Profit and Loss
For the six months ended 30 June 2022
Notes Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2022 2021
£ £
Income
Dividend receivable 911 139
Realised loss on sale of investments - -
Unrealised (loss)/gain on investments (119,857) 16,942
Total income (118,946) 17,081
Operating expenses (211,960) (195,900)
(330,906) (178,819)
Group operating loss
Interest costs - (4,830)
Loss before taxation (330,906) (183,649)
- -
Taxation
Loss for the period (330,906) (183,649)
Loss per share (pence)
Basic 3 (0.17)p (0.45)p
Diluted 3 (0.15)p (0.39)p
Group Statement of Other Comprehensive Income
For the six months ended 30 June 2022
Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2022 2021
£ £
Other comprehensive income:
Loss for the period (330,906) (183,649)
Items that may be reclassified to profit or loss:
Foreign currency reserve movement (18,209) -
(349,115) (183,649)
Total comprehensive loss for the period
GROUP STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2022
Share capital Capital contribution Retained earnings Foreign exchange reserve Warrant reserve Non Total equity
Controlling interest
£ £ £ £ £ £ £
Unaudited - six months ended 30 June 2022
Balance at 1 January 2022 5,490,271 - (156,622) 34,339 8,834 687,348 6,064,170
Current period loss - - (330,906) (18,209) - - (349,115)
Total comprehensive loss for the period - - (330,906) (18,209) - - (349,115)
Share based payment charge (7,572) - - - 7,572 - -
Balance at 30 June 2022 5,482,699 - (487,528) 16,130 16,406 687,348 5,715,055
As at 1 January 2021 452,983 186,446 (552,315) - - - 87,114
Unaudited - six months ended 30 June 20221
Balance at 1 January 2021 452,983 186,446 (552,315) - - - 87,114
Current period loss - - (183,649) - - - (183,649)
Total comprehensive loss for the period - - (183,649) - - - (183,649)
Net proceeds from shares issued 1,844,431 - - - 1,844,431
Acquisition of subsidiaries 2,962,500 - - - - - 2,962,500
Loan notes converted into shares 186,446 (186,446) - - - - -
As at 30 June 2021 5,446,360 - (735,964) - - - 4,710,396
Group Balance Sheet
As at 30 June 2022
Unaudited Audited
30 31
June December
2022 2021
Notes £ £
ASSETS
Non-current assets
Investments 4 382,599 502,456
Exploration and evaluation assets 6 4,724,118 4,432,962
Total non-current assets 5,106,717 4,935,418
Current assets
Trade and other receivables 39,416 21,722
Cash and cash equivalents 762,094 1,190,979
Total current assets 801,510 1,212,701
TOTAL ASSETS 5,908,227 6,148,119
LIABILITIES
Current liabilities
Trade and other payables 193,172 83,949
Total current liabilities 193,172 83,949
NET CURRENT ASSETS 608,338 1,128,752
Non-current liabilities
Loans - -
Total non-current liabilities - -
TOTAL LIABILITIES 193,172 83,949
5,715,055 6,064,170
NET ASSETS
EQUITY
Share capital 7 5,482,699 5,490,271
Warrant reserve 16,406 8,834
Foreign exchange reserve 16,130 34,339
Retained earnings (487,528) (156,622)
5,027,707 5,376,822
Non controlling interest 687,348 687,348
5,715,055 6,064,170
TOTAL EQUITY
Group Statement of Cash Flows
For the six months ended 30 June 2022
Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2022 2021
£ £
Cash flows from operating activities
Loss before tax (330,906) (183,649)
Adjustments for:
Dividends received (911) (139)
Loss on sale of investments - -
Unrealised loss/(gain) on investments 119,857 (16,942)
(Increase)/decrease in receivables (17,693) (41,112)
Increase in payables 109,223 119,656
Net cash inflow from operating activities (120,430) (122,186)
Cash flows from/(used) in investing activities
Dividends received 911 139
Net movement in Investments held - -
Purchase of Exploration and Evaluation assets (291,156) (3,152,373)
(290,245) (3,152,234)
Cash flows from financing activities
Proceeds from Issue of shares, net of issue costs - 1,844,431
Shares issued to acquire subsidiaries - 2,962,500
- 4,806,931
(Decrease)/Increase in cash (410,675) 1,532,511
Effect of foreign exchange rate changes (18,210)
Cash and cash equivalents at beginning of period 1,190,979 87,462
Cash and cash equivalents at end of period 762,094 1,619,973
Notes to the interim financial information
For the six months ended 30 June 2022
1. General information
This financial information is for African Pioneer Plc ("the Company") and its
subsidiary undertakings. The principal activity of African Pioneer Plc (the
'Company') and its subsidiaries (together the 'Group') is the development of
natural resources exploration projects in Sub-Saharan Africa. The Company is a
public limited company and was listed on to the Official List (Standard
Segment) and commenced trading on the Main Market for listed securities of the
London Stock Exchange on 1 June 2021. The Company is domiciled in the Isle of
Man and was incorporated on 20th July 2012 under the Isle of Man Companies Act
2006 with company registration number 00859IV, and with registered address
being 34 North Quay, Douglas, Isle of Man, IM1 4LB.
2. Basis of preparation
The unaudited interim financial information set out above, which incorporates
the financial information of the Company and its subsidiary undertakings (the
"Group"), has been prepared using the historical cost convention and in
accordance with International Financial Reporting Standards ("IFRS").
These interim results for the six months ended 30 June 2022 are unaudited and
do not constitute statutory accounts as defined in section 434 of the
Companies Act 2006. The financial statements for the year ended 31 December
2021 were audited and the auditors' report on those financial statements was
unqualified and contained a material uncertainty pertaining to going
concern.
The same accounting policies, presentation and methods of computation have
been followed in these unaudited interim financial statements as those which
were applied in the preparation of the company's annual financial statements
for the year ended 31 December 2021.
The interim consolidated financial information incorporates the financial
statements of African Pioneer Plc and its subsidiaries.
Going concern basis of accounting
The Group made a loss from all operations for the six months ended 30 June
2022 after tax of £331,000 (2021: £184,000), had negative cash flows from
operations and is currently not generating revenues. However, the Company
raised £1,750,000 at the time of the Company's Listing in May 2021 and
£365,000 by a share subscription by Sandfire Resources Limited and Cash and
cash equivalents were £762,000 as at 30 June 2022, which will enable the
Company to continue its exploration activities on its projects. An operating
loss is expected in the year subsequent to the date of these accounts and as a
result the Company will need to raise funding to provide additional working
capital to finance its ongoing activities. Management has successfully raised
money in the past, but there is no guarantee that adequate funds will be
available when needed in the future.
Based on the Board's assessment that the Company will be able to raise
additional funds, as and when required, to meet its working capital and
capital expenditure requirements, the Board have concluded that they have a
reasonable expectation that the Group can continue in operational existence
for the foreseeable future. For these reasons the financial statements have
been prepared on the going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and discharge of
liabilities in the normal course of business.
3. Earnings per share
Unaudited Unaudited
30 30
June June
2022 2021
£ £
(Loss) attributable to equity holders of the Company (330,906) (183,649)
Weighted average number of shares 191,707,845 41,187,791
Weighted average number of shares and warrants 227,181,925 47,440,119
Basic loss per ordinary share (0.17)p (0.45)p
Diluted loss per ordinary share (0.15)p (0.39)p
The use of the weighted average number of shares in issue in the period
recognises the variations in the number of shares throughout the period and is
in accordance with IAS 33.
4. Investments
The company has adopted the provisions of IFRS9 and has elected to treat all
available for sale investments at fair value with changes through the profit
and loss.
Available-for-sale investments under IFRS9 are initially measured at fair
value plus incidental acquisition costs. Subsequently, they are measured at
fair value in accordance with IFRS 13. This is either the bid price or the
last traded price, depending on the convention of the exchange on which the
investment is quoted. All gains and losses are taken to profit and loss.
The Company's intention following its Listing is not to purchase any new
investments and to hold its residual portfolio as realisable investments as a
source of liquidity to cover explorations costs and general overheads of the
Company.
5. Acquisition of subsidiaries
Acquisition of Zamcu Exploration Pty Limited (Namibian Projects)
On 1 June 2021 the Company completed the acquisition of 100% of Zamcu
Exploration Pty Ltd ("Zamcu"), which via its subsidiaries, holds a 70 per
cent. interest in two Namibian Exclusive Prospecting Licenses ("EPLs")
comprising the Ongombo and Ongeama projects, located within the Matchless
amphibolite Belt of central Namibia that hosts copper-gold mineralization. On
27 August 2021 the Company entered into an agreement to acquire a further 15%
interest in its Ongombo Project and Ongeama Project in Namibian (the "Namibian
Projects") increasing its interest in the Namibian Projects to 85%
The fair value of the assets and liabilities acquired were as follows:
£
Consideration
Equity consideration
- Ordinary shares (issued) 687,500
Cash consideration 149,149
836,649
Fair value of assets and liabilities acquired
- Assets -
- Liabilities (262)
(262)
Deemed fair value of 836,911
exploration assets acquired
Additional 15% acquired 331,240
Total 85% acquisition value 1,168,151
Attributable to non-controlling interest 206,098
Gross fair value of exploration assets acquired 1,374,249
Acquisition of African Pioneer Zambia Limited ("APZ") (Zambia Projects)
On 1 June 2021 the Company completed the acquisition of 80% of APZ, which
holds a 100 per cent. interest in five Zambian Prospecting Licenses (PLs)
located in two areas namely (i) the Central Africa Copperbelt (Copperbelt),
which is the largest and most prolific mineralized sediment- hosted copper
province known on Earth and which comprises four PLs and (ii) the Zambezi area
located within the Zambezi Belt of southern Zambia that hosts a lower Katanga
Supergroup succession which, although less studied than its northern
counterpart, also hosts a number of Copperbelt-style occurrences and which
comprises one PL
The fair value of the assets and liabilities acquired were as follows:
Oct 2020
£
Ordinary shares (issued) 1,925,000
Fair value of assets and liabilities acquired
- Assets 743
- Loan for exploration licenses (41,205)
(40,462)
Deemed fair value of 1,965,462
exploration assets acquired
Attributable to non-controlling
interest 481,250
Acquisition of African Pioneer Zambia Limited ("APZ") (Zambia Projects)
On 1 June 2021 the Company completed the acquisition of 80% of APZ, which
holds a 100 per cent. interest in five Zambian Prospecting Licenses (PLs)
located in two areas namely (i) the Central Africa Copperbelt (Copperbelt),
which is the largest and most prolific mineralized sediment- hosted copper
province known on Earth and which comprises four PLs and (ii) the Zambezi area
located within the Zambezi Belt of southern Zambia that hosts a lower Katanga
Supergroup succession which, although less studied than its northern
counterpart, also hosts a number of Copperbelt-style occurrences and which
comprises one PL
The fair value of the assets and liabilities acquired were as follows:
Oct 2020
£
Ordinary shares (issued)
1,925,000
Fair value of assets and liabilities acquired
- Assets
743
- Loan for exploration licenses
(41,205)
(40,462)
Deemed fair value of
exploration assets acquired
1,965,462
Attributable to non-controlling
interest 481,250
Gross fair value of exploration assets
acquired 2,446,712
Resource Capital Partners Pty Ltd ("RCP") (Botswana Projects)
On 1 June 2021 the Company completed the acquisition of 100% of Resource
Capital Partners Pty Ltd ("RCP"), which holds a 100 per cent. interest in
eight Botswana Prospecting Licenses ("PLs") located in two areas namely (i)
the Kalahari Copperbelt (KC) that contains copper-silver mineralisation and
which is generally stratabound and hosted in metasedimentary rocks that have
been folded, faulted and metamorphosed to greenschist facies during the Damara
Orogeny and which comprises six PLs and (ii) the Limpopo Mobile Belt
("Limpopo") set within the Motloutse Complex of eastern Botswana, a
transitional boundary between the Zimbabwe Craton to the north and the Limpopo
Mobile Belt to the south which comprises two PLs;
The fair value of the assets and liabilities acquired were as follows:
Oct 2020
£
Consideration
Equity consideration
- Ordinary shares (issued) 350,000
Fair value of assets and liabilities acquired
- Assets -
- Liabilities -
-
Deemed fair value of 350,000
exploration assets acquired
6. Exploration and evaluation assets
30 June 2022 31 Dec 2021
£ £
Balance at beginning of period - -
Acquisitions during the period
- Namibia Projects (note 5) 1,374,279 1,374,249
- Zambia Projects (note 5) 2,446,712 2,446,712
- Botswana Projects (note 5) 350,000 350,000
- Exploration expenditure 553,127 262,001
Carried forward 4,724,118 4,432,962
at end of period
6.1. Exploration assets
The Company's principal business is to explore opportunities within the
natural resources sector in Sub-Saharan Africa, with a focus on base and
precious metals including but not limited to copper, nickel, lead and zinc.
The Company has acquired the Namibia Projects, Zambia Projects and Botswana
Projects (see Note 5 for details):
As announced on 20 December 2021 the Ongombo Mineral Resource in the Measured
& Indicated category is 10.47Mt @ 1.4% Cu, 7g/t Ag at a cut-off of 1.0%
Cu, with 0.35g/t Au categorised as Inferred following a JORC (2012) compliant
review by external consultant, Red Bush Analytics.
The Company's' main focus is on evaluating and advancing the Namibian Projects
and the Zambian Projects as the Botswana Projects which are not the subject of
the First Quantum Option Agreement or the Sandfire Option Agreement described
below.
First Quantum Option Agreement: The First Quantum Option Agreement was
announced on 20 January 2022 and the highlights of the agreement are:
• The four exploration licences the subject of the Option Agreement are in
the highly prospective Central Africa Copperbelt in northwest Zambia which is
the largest and most prolific mineralized sediment- hosted copper province in
the world and are located less than 100km from First Quantum's giant Sentinel
copper mine.
• The exploration licenses include geological formations similar in age and
rock type to that hosting the major copper deposits of the Copperbelt
• During the initial 18 month option period First Quantum has the right but
not the obligation to spend US500,000 on each of the exploration licences
27767-HQ-LEL, 27768-HQ-LEL, 27770-HQ-LEL, and 27771-HQ-LEL (the "First Quantum
Projects"). At this stage First Quantum will not have earned any shares in
African Pioneer Zambia, just the right to proceed to take one or more of the
properties into the First Earn In Period by issuing an Option Exercise Notice.
• During the First Earn In Period, First Quantum then has 2 years when it
has the right but not the obligation to prepare a Technical Report in respect
of the Zambian Projects demonstrating an Indicated Mineral Resource of at
least 300,000 tonnes of contained copper (the "Technical Report Requirement").
First Quantum is to fund the Technical Report. Once the Technical Report is
issued First Quantum has the right to be issued shares equal to a 51%
shareholding in African Pioneer Zambia. This will also trigger the Second
Earn-In Period.
• In the Second Earn-In Period First Quantum shall have the right but not
the obligation to complete all necessary mining, metallurgical and development
studies to establish a mine at the Property and make a public announcement
that it intends to proceed towards commercial development of a Mine on the
Property (a "Decision to Mine"). First Quantum is to fund all costs related to
the Decision to Mine. Once First Quantum announces a Decision to Mine First
Quantum has the right to be issued shares in African Pioneer Zambia to
increase their 51% shareholding in African Pioneer Zambia to 75%.
Sandfire Option Agreement: The Sandfire Option Agreement was announced on 4
October 2021 and the highlights of the agreement are:
• the option is for two years from 2 October 2021 and relates to PL
100/2020, PL 101/2020, PL 102/2020 and PL 103/2020.
• Sandfire paid US$500K and issued 107,272 Sandfire ordinary shares to the
Company.
• Exercise and Option Period: The option can then be exercised within 2
years of the Option Agreement (the "Option Period") to acquire the Included
Licences for US$1. Sandfire has the right to extend the Option Period by 1
year by the payment of a US$500,000 option extension fee.
• Exploration Commitment: Sandfire to fund US$1 million of exploration
expenditure by the Company on the Included Licences (the "Exploration
Commitment") within the Option Period and if the US$1 million is not spent,
any shortfall will be paid to African Pioneer. Sandfire can withdraw from the
Option Agreement at any time after meeting the Exploration Commitment.
• A Success Payment: a one-off success payment to be paid to the Company for
the first ore reserve reported under JORC Code 2012 edition on the Included
Licences which exceeds 200,000 tonnes of contained copper (the "First Ore
Reserve") in the range of US$10 million to US$80 million depending on the
amount of contained copper in the First Ore Reserve (the "Success Payment").
6.2. Exploration assets accounting policy
Exploration, evaluation and development expenditure incurred is accumulated in
respect of each identifiable area of interest. These costs are only carried
forward to the extent that they are expected to be recouped through the
successful development of the area or where activities in the area have not
yet reached a stage which permits reasonable assessment of the existence of
economically recoverable reserves. Accumulated costs in relation to an
abandoned area are written off in full in the year in which the decision to
abandon the area is made. When production commences, the accumulated costs for
the relevant area of interest are transferred to development assets and
amortised over the life of the area according to the rate of depletion of the
economically recoverable reserves. A regular review is undertaken of each area
of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest.
7. Share Capital
The share capital of African Pioneer Plc consists only of fully paid ordinary
shares with no par value. All shares are equally eligible to receive dividends
and the repayment of capital and represent one vote at shareholders' meetings
of the Company.
30 June 2022
Number £
Authorised:
1,000,000,000 ordinary shares of no par value 1,000,000,000 n/a
30 June 2022
Group Number of shares Share
capital
£
As at 1 January 2022 191,707,845 5,490,271
Share based payment charge - (7,572)
As at 30 June 2022 191,707,845 5,482,699
8. Concert party
At the period end the Concert Party held an aggregated interest of 51.72%
further details of which were disclosed in the Company's prospectus dated 26
May 2021.
9. Subsequent events
On 29 September 2022 the Company announced the issue of a mining licence in
relation to its Ongombo licence subject to the completion of an environmental
and social impact assessment ("ESIA").
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR KKLBLLKLEBBDRecent news on African Pioneer
See all newsREG - African Pioneer PLC - Annual Financial Report
AnnouncementREG - African Pioneer PLC - Award of Environmental Clearance Certificate
AnnouncementREG - African Pioneer PLC - Ongombo Project - Approval of ECC
AnnouncementREG - African Pioneer PLC - Fundraising, Issue of Equity and TVR
AnnouncementREG - African Pioneer PLC - Interim Results for Six Months Ended 30 June 2024
Announcement