REG - African Pioneer PLC - Half-year Report
29/09/2023 13:15
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RNS Number : 2131O African Pioneer PLC 29 September 2023
29 September 2023
African Pioneer Plc
("African" or the "Company")
Interim Results for the Six Months Ended 30 June 2023
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 2023 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
1. Operational Review
The Company completed an Initial Public Offering (IPO) on the Standard List of
the London Stock Exchange and the acquisition of its projects in Namibia,
Zambia and Botswana in 2021 and in 2022 granted an option to First Quantum in
relation to 4 of the 5 Zambian exploration licences held by African Pioneer
Zambia more details of which are provided in the Corporate Highlights section
of this 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.
2. Technical review of Projects: After the IPO and having acquired its
projects in Namibia, Zambia and Botswana, the Company commenced technical
reviews and / or programmes on its projects located in Namibia and Zambia. The
primary metal in all countries is copper with by-product potential in all of
our projects. In Zambia we have potential for cobalt, in Botswana for silver
and in Namibia for gold.
2.1 Namibia: During the period on the dates indicated the Company announced;
On 25 April 2023 the successful completion of a key regulatory requirement,
the award of an Environmental Clearance Certificate ("ECC") for the 85% owned
Ongombo (copper-gold) Project located within Exclusive Prospecting Licence EPL
5772, 40km NE of the capital city, Windhoek, Khomas Region, Namibia.
On 16 May 2023 the Company announced an updated mineral resource estimate that
increased the global resource tonnage from 12.05Mt @ 1.39% Cu (30 September
2021) to 29Mt @ 1.1% Cu Eq. The updated estimate included an open pit
component that is expected to be developed ahead of future underground mining.
Highlights
· Increase in Mineral Resource to 29Mt at 1.1% Cu Eq including 5.7Mt
Indicated comprising 4.7Mt underground resource @ 1.1% Cu Eq and a further
0.93Mt open pit resource @ 0.68% Cu Eq. An additional 23Mt of Inferred
underground resource has been defined and is expected to increase in both
tonnage and grade with further increases in drillhole density and assays for
gold where a large proportion of the current resource was not historically
analysed for by-product gold.
· Award of an Environmental Clearance Certificate, the last significant
permitting hurdle in the pathway to production
· Ongombo Mining Licence granted subject to completion of Environmental and
Social Impact Assessment ("ESIA")
· Highly successful drill programme and new Mineral Resource Estimate
resulted in an additional 100,000 tonnes in contained copper metal and an
additional 84,000 oz of gold across all Resource categories.
· Expenditure of approximately US$480,000 on direct drilling costs ahead of
the most recent Mineral Resource update represents a unit resource development
cost for the additional 100,000 tonnes of contained copper metal of
approximately US$4.8 per tonne of contained metal.
· The Ongombo mineralization remains open at depth with scope for the
addition of further tonnage and based on recent twinned drilling, potential
for significantly enhanced gold grades in the East - Ost shoots.
The Ongombo Copper - Gold Project was granted a Mining Licence (ML 240) in
September 2022 and has now been awarded an Environmental Clearance
Certificate (ECC) (No. 23000285: dated 16 April 2023) by the Ministry of
Environment, Forestry and Tourism (MEFT): Department of Environmental Affairs
(DEA). The award of a production-related ECC is an important step as it
achieves compliance with the Environmental Management Act No,7 (2007) and
its associated 2012 regulations, and means that the Project has now surmounted
the last significant permitting hurdle in the pathway to production, initially
by way of low-cost, open-pit extraction of the surface copper gold resource.
In compliance with the requirements of the ECC, an Environmental and Social
Impact Assessment (ESIA) is ongoing as is initial delivery of the now
Ministry-approved Environmental Management Plan that is to accompany mine
development and ore processing operations.
Updated and amended design plans will now be finalised for the initial
open-pit mine and a likely combination of ore sorting, dry magnetic and
gravity separation to produce a high-grade copper-gold concentrate for sale.
The updated Indicated and Inferred Mineral Resource Estimate for the Ongombo
copper project in Namibia, was completed by independent consultants Addison
Mining Services Ltd ("AMS") and reported in accordance with the JORC Code 2012
edition. Resources are of Indicated and Inferred categories and include a
total Indicated Resources of 5.7 million tonnes at 1.1 % Cu Equivalent
("CuEq"), 0.94 % Cu, 0.23 g/t Au and 4.4 g/t Ag, for 53,000 t Cu, 42,000 oz Au
and 800,000 oz Ag, including an open pit Resource of 0.93 million tonnes at
0.68% CuEq, 0.57 % Cu, 0.19 g/t Au and 2.6 g/t Ag, for 5,300 t Cu, 5,700 oz Au
and 78,000 oz Ag, above a cut-off grade of 0.25% CuEq and a further
underground Resource of 4.7 million tonnes at 1.2% CuEq, 1.0% Cu, 0.24 g/t Au
and 4.7 g/t Ag, for 48,000 t Cu, 36,000 oz Au and 72,000 oz Ag, above a
cut-off grade of 0.5% CuEq. A further Inferred underground resource of 23
million tonnes at 1.1% CuEq, 0.95% Cu, 0.24 g/t Au and 5.8 g/t Ag, for 220,000
t Cu, 180,000 oz Au and 4.3 million oz Ag, above a cut-off grade of 0.5% CuEq
has also been estimated by AMS.
In addition, AMS has highlighted a number of areas both down-plunge and
down-dip of defined mineralisation where the external consultant believes the
delineation of further mineralisation is extremely likely. In addition, a
large proportion of the drilling and assaying undertaken on the East-Ost Shoot
did not assay for gold. Therefore, AMS also indicates that scope for a further
increase in the Cu Eq grade of the East - Ost Shoot is likely once infill or
twin drilling is undertaken. This is potentially significant as the East-Ost
Shoot is notably thicker than the Central Shoot and offers an easier more
efficient mining target than the narrower Central Shoot. Addition of gold at
East - Ost Shoot may increase the global resource tonnage as the addition of
further value will increase the Cu Eq grade above the 1% cu cut-off currently
being used for resource estimation.
The pending renewal application for EPL 5772 which expired on 8 March 2023 is
now reflected on the Namibian Mines and Energy Cadastre Map Portal and is for
an additional two-year extension. A conditional Environmental Clearance
Certificate for mining activities was granted on EPL 5772 and is valid until
16 April 2026. A 20 Year Mining Licence, ML 240, was granted on 10 August 2022
and covers a portion of EPL 5772 and approximately one third of the open pit
resource. An extension to the Mining Licence was submitted on 6 September 2022
to encompass the wider Resource Area.
The company is in advanced discussions with several parties that have
expressed interest in non-equity based funding of the capital requirements of
the Ongombo Project. The Company will update shareholders in relation to these
matters, project advancement and milestones as they are progressed.
2.2 Zambia: As described at paragraph 4.5 below on 19 January 2022 African
Pioneer Zambia Ltd, which is 80% owned by the Company, entered into an option
agreement with First Quantum (listed on the Toronto Stock Exchange FM.TO
(http://FM.TO) ) over 4 of the 5 Zambian exploration licences held by a
subsidiary company, African Pioneer Zambia.
On 6 June 2023 the Company provided an update on the ongoing exploration
activities undertaken by First Quantum during Q1 2023, an update on progress
in 2022 and the exploration plans and priorities for 2023 for the 4 Zambian
licences subject to the Option Agreement and these are summarized below.
Highlights
· Exploration has demonstrated that the geological setting,
regional geology and architectural vectors evident on the JV licences show
apparent similarities to that needed to facilitate the large-scale deposition
of high-grade copper mineralisation of the Kamoa-Kakula-type.
· Sufficient drilling and geophysics have been completed by First
Quantum to generate a 3D model of the Western Foreland, the regional setting
evident at Kamoa-Kakula in the DRC.
· Multiple high-grade copper intercepts peaking at 8m @ 1.25% Cu in
the Fold and Thrust Belt to the east of the Foreland will be followed up on
the Turacao prospect.
· High-grade cobalt mineralisation has also been identified peaking
at 0.23% Co over 4m within the Fold and Thrust Belt terrain offering potential
for a future significant value-add by-product.
· Further aircore drilling in 2023 is expected at Chibwika and
Chipopa targets and on the other cumulative >35km of anomalous soil
geochemical targets broadly defined and reported at the end of the 2022 field
season where First Quantum has noted that mineralisation is of the
Kolwezi-type.
First Quantum's Update on Progress in 2022
The 4th Quarter 2022 report to African Pioneer from Joint Venture partner
FIRST QUANTUM announced on 6 February 2023 confirmed encouraging copper oxide
intercepts at three shallow drill targets and potentially significant copper
mineralisation in two holes on a separate licence being explored for
geological settings similar to those that host the giant Kamoa-Kakula deposits
of Ivanhoe Mines Limited located in the Democratic Republic of Congo (DRC).
Analyses from two diamond drillholes at the Ikatu target, IKDD001A and
IKDD002, returned peak grades of 1% Cu and 19.3g/t Ag over 1.1m (IKDD001A) and
0.22% Cu and 541ppm Co over 1.3m and 0.14% Ni and 541ppm Co over 4.3m
(IKKDD002). Lithogeochemical assessment of these results further support the
view that the oxidised diamictite unit intersected is likely to be Petit
Conglomerat, whilst the tuff unit logged near the base of IKDD001A has
elevated Nb/Ti, a characteristic diagnostic of the Grand Conglomerate
elsewhere in the Katangan. These results were sufficiently encouraging
alongside the regional mapping completed to define the location of the Western
Foreland for First Quantum to commit to further deep drilling targeting
Kamoa-style mineralisation in 2023.
During 2022, aircore drilling at Turaco target within the Fold-and-Thrust Belt
domain, intersected several significant copper intercepts, including an oxide
mineralised zone with 8 m @ 1.19% Cu (pXRF assay) from 5 m. A selection
of samples, previously analysed in-house by pXRF only, were subject to
external analysis by ALS Laboratories in Johannesburg to check for cobalt and
other pathfinders, as well as to verify pXRF data. Results for Cu were
consistent with those previously reported by pXRF (Table 2). Furthermore,
several significant Co intercepts were identified, the best being 4 m @ 0.23%
and 10 m @ 0.14% Co in drillhole TUAC012 (Table 1). The results are subject to
ongoing review but are an encouraging indicator of prospective shallow
resources of the Kolwezi-type within the Fold-and-Thrust belt, which is
renowned for Cu-Co deposits in the DRC.
Table 1 : Cobalt grades (by ICP) and intercepts from drillhole TUAC012
Table 2 : Copper grades (by ICP and pXRF) and intercepts from drillhole
TUAC012
2023 Exploration Plans and Priorities
First Quantum has advised African Pioneer of its forthcoming Audio-magneto
telluric AMT) geophysical exploration and combined diamond core (DDH) and
air core (AC) drill programme for the 2023 field season.
A priority focus is further AMT at Ikatu target, within the Western Foreland
domain, aimed at better constraint of the basin architecture and evaluation of
interpreted NW-SE trending structures. At Kamoa-Kakula, there is evidence that
NW-SE trending structures are important for controlling the sedimentary
facies, thickness of units and grades of mineralisation. In addition to
Ikatu, AMT work planned by First Quantum will target the Fold- and Thrust
Belt at the Chipopa and Chibwika prospects, both within licence 27771-HQ-LEL
where substantial copper in soil anomalies have already been broadly defined.
Further aircore drilling will test the northern and southern extents of the
copper in soil anomalies at Turaco target in licence 27770-HQ-LEL along with
further follow up of the Chibikwa and Chipopa targets both located in licence
27771-HQ-LEL.
Later in the 2023 field season, 4000m of diamond drilling (DDH) by First
Quantum is scheduled. The main objectives will be to test for thicker,
reduced diamictite facies at Ikatu target along strike from Kamoa in the
Western Foreland, and also test depth extent of mineralization at Turaco and
other targets looking for Kolwez-type mineralisation within the Fold and
Thrust Belt.
The Company is expecting the further updates from First Quantum to be very
encouraging.
The Lusaka licence is under review and remains prospective for gold.
2.3 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 have been the subject of a two
year Sandfire Option Agreement further details of which are set out at
paragraph 4.6 below.
During the period on 29 March 2023 the Company announced an update on
exploration completed and planned by Sandfire over the Kalahari Copper Belt
Licences, Botswana:
Highlights
· PL101/2020 - Assays pending for a soil survey with further
surveys planned over copper surface sample anomalies together with a scheduled
Airborne Gravity Gradiometry survey ("AGG") over the Kuke Prospect
· Sandfire planned to mobilise a diamond rig to the Kuke Prospect
to drill test a copper soil anomaly coincident with the Kuke Fault
· PL100/2020 - Ongoing target generation and a scheduled AGG survey
over the licence
· Sandfire also planned to undertake drilling on this licence to
test the Lower D'kar/Ngwako Pan contact zone which is the horizon hosting most
of the Kalahari Copperbelt deposits
The Company is yet to receive a subsequent update from Sandfire on the
exploration activities during the period on the four licences subject to the
Sandfire Option Agreement. Sandfire has now notified the Company that it will
not be exercising its option under the Sandfire Option Agreement - please
refer to paragraph 7.2 below for further information.
Whilst the exploration to date on the licences which were the subject of the
Sandfire Option Agreement does not currently indicate prospectivity for a
large scale mining operation the Board believes that there is prospectivity
for a smaller to medium sized mining operation targeting in the range of 5,000
to 10,000 tonnes of contained copper per annum. Although too small for a large
scale miner a mine of this size would fit very well into the demand for small
to medium mines to help bridge the gap in the predicted shortfall of copper to
meet future projected demand. Once exploration information has been delivered
by Sandfire, the Company will assess potential in the context of surrounding
geology, any recent copper discoveries and the results of in-house exploration
undertaken by African Pioneer before deciding on the next phase of
exploration.
In addition all the Company's Botswana prospecting licences are being reviewed
by an external geological consultant with specific expertise of Botswana
copper geology and further work will be based on recommendations generated by
the review.
3. Financial Review
3.1 Financial highlights:
· £301K loss after tax (2021: £331K)
· Approximately £390K cash at bank at the period end (Dec 2022:
£72k).
· Fundraising Debtors £414k at 30 June 2023 received post period
end
· The basic and diluted losses per share are summarised in the
table below
Loss per share (pence) 2023 2022
Basic Note 3 (0.16)p (0.17)p
Diluted Note 3 (0.13)p (0.15)p
· The net asset value as at 30 June 2023 was £5.24m (31 December
2022 £5.24m)
3.2 Fundraisings:
On 19 June 2023 the Company announced a fundraising of £790,000 at 2.25 pence
per Ordinary Share through the issue of 35,111,111 new Ordinary Shares from
existing shareholders, new investors and Directors to facilitate drilling at
Ongombo and exploration in the Kalahari Cu belt. The Company also issued
1,222,222 ordinary shares to settle £27,500 of accrued consultancy fees.
Directors' participation in Fundraising: Three Directors participated in the
Fundraising. Colin Bird, the Company's Executive Chairman and Christian
Cordier, the Company's Commercial Director through Coreks Super Pty Ltd, a
company controlled and owned by him, have each subscribed £50,000 for
2,222,222 Fundraising Shares, and Raju Samtani, the Company's Finance Director
subscribed £40,000 for 1,777,778 Fundraising Shares. The Directors' Share
Subscriptions represented in aggregate 17.7 per cent. of the gross Fundraising
proceeds.
3.3 Liquid Investments:
The Company disposed of the remainder of its listed investments during the
period for the sum of £441,000 making a profit of £35,000 in order to
generate additional liquidity.
4. Corporate Review
4.1 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
4.2 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").
4.3 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").
4.4 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.
4.5 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%.
4.6 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 with 60% of the Exploration
Commitment to be on drilling and assay costs 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").
5. 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) 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.
6. Outlook
Outlook for Copper: Our assessment of the outlook for copper has not changed
since we reported in the 2022 accounts that during the second half of 2022 and
into 2023 the copper price has recovered and forecasts for the price of copper
and its by-product metals remain positive in the range of US$10-US$15,000 per
tonne. During the period there was no new major positive news on copper supply
so the outlook for copper supply remains quite pessimistic but we anticipate
and from mid '24 onwards this will lead to both smaller but profitable mines
being developed , and junior mining companies with good copper resources in
reliable jurisdictions becoming potential targets for acquisitions by major
mining companies. As a result, the Company believes it is well positioned with
all its projects, to take part in a potential acquisition boom or
alternatively to attract financing for its own operations which might not
otherwise have been available.
The major mining companies are seeking new projects for acquisition and all
our projects have the fundamentals which may attract the attention of larger
companies as reflected in the fact that as reported below under Post Period
Events we are in negotiations with First Quantum in relation to them
exercising their options over certain of the Zambian Projects.
We feel that there is a strong possibility that the current inflationary
pressures and higher interest rates may slow down stock markets but these
conditions will be beneficial for the smaller metal producers who have
historically outperformed under these economic conditions.
7. Post Period Events
7.1 The Company is in negotiations with First Quantum as to;
a) the basis on which First Quantum will exercise its Option on
exploration Licences XE27767-HQ - LEL and XE27771-HQ - LEL so commencing the
First Earn In Period under the First Quantum Option Agreement for these two
exploration licences. During the First Earn In Period, First Quantum 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 referred to above; and
b) an extension of the initial option period under the First Quantum
Option Agreement on exploration Licences XE27770HQ - LEL and XE277768HQ - LEL.
During the extended initial period First Quantum has the right but not the
obligation to spend US500,000 and it is envisioned that during the extended
period First Quantum will fund further work to assess the prospectivity of
these two exploration licences with First Quantum having the right to exercise
its option over these two licences at the end of the extended initial option
period.
7.2 Sandfire has notified the Company that it will not be exercising its
option under the Sandfire Option Agreement and the Company is awaiting an
expenditure report from Sandfire for the option period so it can review
Sandfire's Exploration Commitment which was to fund US$1 million of
exploration expenditure on the Included Licences (the "Exploration
Commitment") within the Option Period with 60% of the Exploration Commitment
to be on drilling and assay costs. If the Exploration Commitment is not spent,
any shortfall is due to be paid by Sandfire to African Pioneer. Sandfire
have confirmed that they will provide Exploration Information that it holds in
relation to the Licences.
All the Botswana licences are currently under review by the Company in
cooperation with its external geological consultant with specific expertise of
Botswanan copper geology. The region represents a significant copper
exploration and resource development destination and as such all exploration
ground has potential strategic importance particularly in the case of African
Pioneer which has several licences in the general area.
Whilst the exploration to date on the licences which were the subject of the
Sandfire Option Agreement does not currently indicate prospectivity for a
large scale mining operation the Board believes that there is prospectivity
for a smaller to medium sized mining operation targeting in the range of 5,000
to 10,000 tonnes of contained copper per annum. Although too small for a large
scale miner a mine of this size would fit very well into the demand for small
to medium mines to help bridge the gap in the predicted shortfall of copper to
meet future projected demand.
Once exploration information has been delivered by Sandfire, the Company will
assess potential in the context of surrounding geology, any recent copper
discoveries and the results of in-house exploration undertaken by African
Pioneer before deciding on the next phase of exploration.
In Namibia the Ongombo Mining Licence has been granted subject to the
completion of the ESIA which is approximately 85% complete and well within the
permitted timeframe for completion and the Company are now undertaking
detailed metallurgical test work, mine design and mining method design with
the objective of leading to a more detailed financial model and therefore
the inclusion of Modifying Factors that will assist with the conversion of
Mineral Resources to Mineral Reserves.
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 2023.
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 2023.
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 2022 Annual Accounts also provided a detailed summary
of the principal risks and uncertainties faced by the Company, a copy of the
2022 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
Three Directors participated in the Fundraising announced on 19 June 2023.
Colin Bird, the Company's Executive Chairman and Christian Cordier, the
Company's Commercial Director through Coreks Super Pty Ltd, a company
controlled and owned by him, each subscribed £50,000 for 2,222,222
Fundraising Shares, and Raju Samtani, the Company's Finance Director
subscribed £40,000 for 1,777,778 Fundraising Shares. The Directors' Share
Subscriptions represented in aggregate 17.7 per cent. of the gross Fundraising
proceeds.
The table below shows the shareholdings of Directors and their related parties
after the Directors' Shae Subscriptions and as at 30 June 2023.
Shareholdings
Director & Position Prior to Share Subscriptions Shares Subscriptions Resultant shareholding % at
30 June 2023
Colin Bird: 21,061,728 2,222,222 23,283,950 10.21%
Chairman
Raju Samtani: 16,061,728 1,777,778 17,839,506 7.82%
Finance Director
Christian Cordier Commercial Director 15,000,000 2,222,222 17,222,222 7.55%
Kjeld Thygesen: 200,000 - 200,000 0.09%
Non Executive
James Cunnigham-Davis: Non Executive - - - Nil
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
Related Party transactions described in the annual report to 31 December 2022
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 2022 that could have a material effect on the financial
position or performance of the Company in the first six months of the current
financial year.
Responsibility Statement
The Directors, whose names and functions are set out in this report under the
heading Company Board, are responsible for preparing the Unaudited Interim
Condensed Consolidated Financial Statements in accordance with the Disclosure
Guidance and Transparency Rules of the United Kingdom's Financial Conduct
Authority ('DTR') and with International Accounting Standard 34 on Interim
Financial reporting (IAS34). The Directors confirm that, to the best of
their knowledge, this Unaudited Interim Condensed Consolidated Report, which
has been prepared in accordance with IAS34, gives a true and fair view of the
assets, liabilities, financial position and profit or loss of the Group and
the interim management report includes a fair review of the information
required by DTR 4.2.7 R and by DTR 4.2.8 R, namely:
· an indication of key events occurred during the period and their
impact on the Unaudited Interim Condensed Consolidated Financial Statements
and a description of the principal risks and uncertainties for the second half
of the financial year; and
· material related party transactions that have taken place during
the period and that have materially affected the financial position or the
performance of the business during that period.
For and on behalf of the Board of Directors
Colin Bird
Executive Chairman
29 September 2023
African Pioneer Plc
+44 (0) 20 7581 4477
Colin Bird
Executive Chairman
Beaumont Cornish (Financial Adviser) +44 (0) 20 7628 3396
Roland Cornish/Asia Szusciak
Novum Securities Limited (Broker) +44 (0) 20 7399 9400
Jon Belliss
Beaumont Cornish (Financial Adviser)
Roland Cornish/Asia Szusciak
+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 2023
Notes Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2023 2022
£ £
Income
Dividend receivable - 911
Realised gain on sale of investments 34,799 -
Unrealised gain/(loss) on investments - (119,857)
Total income (34,799) (118,946)
Operating expenses (336,176) (211,960)
(301,377) (330,906)
Group operating loss
Interest costs (3) -
Loss before taxation (301,380) (330,906)
- -
Taxation
Loss for the period (301,380) (330,906)
Loss per share (pence)
Basic 3 (0.16)p (0.17)p
Diluted 3 (0.13)p (0.15)p
Group Statement of Other Comprehensive Income
For the six months ended 30 June 2023
Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2023 2022
£ £
Other comprehensive income:
Loss for the period (301,380) (330,906)
Items that may be reclassified to profit or loss:
Foreign currency reserve movement (25) (18,209)
(301,405) (349,115)
Total comprehensive loss for the period
Attributable
Owners of the Company (301,405) (349,115)
Non-controlling interest - -
(301,405)
(349,115)
GROUP STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2023
Share capital Capital contribution Retained earnings Foreign exchange reserve Warrant reserve Non Total equity
Controlling interest
£ £ £ £ £ £ £
Unaudited - six months ended 30 June 2023
Balance at 1 January 2023 5,475,204 - (949,716) 2,083 23,901 687,348 5,238,820
Current period loss - - (301,380) (25) - - (301,405)
Total comprehensive loss for the period - - (301,380) (25) - - (301,405)
Share based payment charge (7,129) - - - 7,129 - -
Net proceeds from shares issued 746,100 - - - - - 746,100
Balance at 30 June 2023 6,214,175 - (1,2512,096) 2,058 31,030 687,348 5,683,515
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 - -
As at 30 June 2022 5,482,699 - (487,528) 16,130 16,406 687,348 5,715,055
Group Statement of Financial Position
As at 30 June 2023
Unaudited Audited
30 31
June December
2023 2022
Notes £ £
ASSETS
Non-current assets
Exploration and evaluation assets 6 5,235,797 5,112,856
Total non-current assets 5,235,797 5,112,856
Current assets
Trade and other receivables 21,785 11,023
Fundraising debtor 414,600 -
Cash and cash equivalents 389,519 71,674
Available -for-sale investments 4 - 395,750
Total current assets 825,904 478,447
TOTAL ASSETS 6,061,701 5,591,303
LIABILITIES
Current liabilities
Trade and other payables 255,964 230,260
Taxation 122,222 122,222
Total current liabilities 378,186 352,482
NET CURRENT ASSETS 447,718 125,965
Non-current liabilities
Loans - -
Total non-current liabilities - -
TOTAL LIABILITIES 378,186 352,482
5,683,515 5,238,820
NET ASSETS
EQUITY
Share capital 7 6,214,175 5,475,204
Warrant reserve 31,030 23,901
Foreign exchange reserve 2,058 2,083
Retained earnings (1,251,096) (949,716)
4,996,167 4,551,472
Non controlling interest 687,348 687,348
5,683,515 5,238,820
TOTAL EQUITY
Group Statement of Cash Flows
For the six months ended 30 June 2023
Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2023 2022
£ £
Cash flows from operating activities
Loss before tax (301,380) (330,906)
Adjustments for:
Dividends received - (911)
(Gain)/Loss on sale of investments 34,799 -
Unrealised loss/(gain) on investments - 119,857
(Increase)/decrease in receivables (425,362) (17,693)
Increase in payables 25,704 109,223
Net cash inflow from operating activities (666,239) (120,430)
Cash flows from/(used) in investing activities
Dividends received - 911
Net movement in Investments held 360,950 -
Purchase of Exploration and Evaluation assets (122,941) (291,156)
238,009 (290,245)
Cash flows from financing activities
Proceeds from Issue of shares, net of issue costs 746,100 -
Shares issued to acquire subsidiaries - -
746,100 -
(Decrease)/Increase in cash 317,870 (410,675)
Effect of foreign exchange rate changes (25) (18,210)
Cash and cash equivalents at beginning of period 71,674 1,190,979
Cash and cash equivalents at end of period 389,519 762,094
Notes to the interim financial information
For the six months ended 30 June 2023
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 2023 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
2022 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 2022.
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
2023 after tax of £301,000 (2022: £331,000), had negative cash flows from
operations and is currently not generating revenues. During the period, on
19 June 2023 the Company raised £790,000 (gross). On 30 June 2023 Cash and
cash equivalents were £390,000 and monies due from the capital raise were
£414,000. The £414,000 has been received post the period end. 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.
The management team has successfully raised funding for exploration projects
in the past, but there is no guarantee that adequate funds will be available
when needed in the future.
There is a material uncertainty relating to the conditions above that may cast
significant doubt on the Group's ability to continue as a going concern and
therefore the Group may be unable to realise its assets and discharge its
liabilities in the normal course of business.
This financial report does not include any adjustments relating to the
recoverability and classification of recorded assets amounts or liabilities
that might be necessary should the entity not continue as a going concern.
3. Earnings per share
Unaudited Unaudited
30 30
June June
2023 2022
£ £
(Loss) attributable to equity holders of the Company (301,380) (330,906)
Weighted average number of shares 191,908,586 191,707,845
Weighted average number of shares and warrants 229,640,660 227,181,925
Basic loss per ordinary share (0.16)p (0.17)p
Diluted loss per ordinary share (0.13)p (0.15)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 2023 31 Dec 2022
£ £
Balance at beginning of period 5,112,856 4,432,962-
Acquisitions during the period - -
Exploration expenditure in period 122,941 679,894
Carried forward 5,235,797 5,112,856
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):
On 16 May 2023 the Company announced an updated Indicated and Inferred Mineral
Resource Estimate for the Ongombo copper project in Namibia, was completed by
independent consultants Addison Mining Services ("AMS"). AMS has highlighted a
number of areas both down-plunge and down-dip of defined mineralisation where
the external consultant believes the delineation of further mineralisation is
extremely likely. In addition, a large proportion of the drilling and assaying
undertaken on the East-Ost Shoot did not assay for gold. Therefore, AMS also
indicates that scope for a further increase in the Cu Eq grade of the East -
Ost Shoot is likely once infill or twin drilling is undertaken. This is
potentially significant as the East-Ost Shoot is notably thicker than the
Central Shoot and offers an easier more efficient mining target than the
narrower Central Shoot. Addition of gold at East - Ost Shoot may increase
the global resource tonnage as the addition of further value will increase the
Cu Eq grade above the 1% cu cut-off currently being used for resource
estimation.
The Company's' main focus during the period was on evaluating and advancing
its 85% owned Namibian Projects and those Zambian and Botswana Projects which
are not the subject of either the First Quantum Option Agreement or the
Sandfire Option Agreement described at paragraphs 4.5 and 4.6 of the Corporate
Review above.
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 2023
Number £
Authorised:
1,000,000,000 ordinary shares of no par value 1,000,000,000 n/a
30 June 2023
Group Number of shares Share
capital
£
As at 1 January 2023 191,707,845 5,475,204
Shares issued during the period 36,333,333 817,500
Share issue costs (71,400)
Share based payment charge - (7,129)
As at 30 June 2023 228,041,178 6,214,175
Movement in shares issued during the period
Shares issued from placing and subscription 35,111,111 790,000
Adviser's fees settled by shares 1,222,222 27,500
Total 36,333,333 817,500
The Company issued the following warrants during the period
On 23 January 2023 the Company announced that in aggregate, 16,850,000 options
over ordinary shares of no par value in the capital of the Company ("Ordinary
Shares") have been granted fully vested pursuant to the Executive Share Option
Scheme (the "Options"). Of the 16,850,000 Options, 6,600,000 have been awarded
to directors of the Company, as detailed further below and the balance of
10,250,000 to other eligible participants. The exercise price is at 4.5p with
an expiry date of 22 January 2033 and the vesting conditions upon being
granted. The Company has not previously issued any Options.
Directors No. of Options
Colin Bird Executive Chairman 5,000,000
Raju Samtani 600,000
Christian Cordier 500,000
Kjeld Thygesen 500,000
Total Directors 6,600,000
The Company also issued further warrants during the period in line with the
fundraising as follows
Number Date granted Exercise price Expiry Vesting conditions
1,755,556 30/06/2023 2.25p 30 Jun 26 upon being granted
On 19 June 2023 the Company announced a £790,000 fundraising before expenses
(the "Fundraising") at 2.25 pence per Ordinary Share through the issue of
35,111,111 new Ordinary Shares (the "Fundraising Shares") The Fundraising
comprised of a placing of 18,444,444 Fundraising Shares raising £415,000 via
the Company's broker Novum Securities Limited, and the Company arranged share
subscriptions for 16,666,667 Fundraising Shares raising £375,000. The Company
also issued 1,222,222 ordinary shares at the Fundraising price to settle
£27,500 of accrued consultancy fees.
8. Concert party
At the period end the concert party, as defined and further details of which
were disclosed in the Company's prospectus dated 26 May 2021, held an
aggregated interest of 45.3%.
9. Subsequent events
On 29 August 2023 Wilhelm Shali a member of the concert party sold
3,333,335 ordinary shares of no par value each in the Company ("Shares")
("Share Sale") at 1.8 pence per Share reducing his shareholding in the Company
to 3,657,817 Shares representing 1.6% of the Company's issued share capital
("Total Voting Rights"). Of the Shares sold by Wilhelm Shali 2,222,223 Shares
representing in aggregate 0.97% of the Total Voting Rights were acquired by
the Company's Directors Colin Bird (833,334 Shares for £15,000), Raju Samtani
(555,556 Shares for £10,000) and Kjeld Thygesen (833,334 Shares for £15,000)
("Directors' Share Purchases"). As a result of the Share Sale and the
Directors' Share Purchases, the aggregated Concert Party interest has been
reduced from 45.3% to 44.8%.
The table below shows the shareholdings of Directors and their related parties
and their shareholdings as a percentage of Total Voting Rights following the
Directors' Share Purchases as at the date of these accounts:
Shareholdings
Director & Position Current Directors' Share Purchases Resultant shareholding %
of TVR
Colin Bird 23,283,950 833,334 23,283,950 10.58%
Raju Samtani 17,839,506 555,555 17,839,506 8.07%
Christian Cordier 17,222,222 - 17,222,222 7.55%
Kjeld Thygesen 200,000 833,334 1,033,334 0.45%
James Cunningham-Davis - - - Nil
As disclosed in the Operational, Financial, Corporate and Strategy reviews
accompanying these unaudited accounts for the six month period ended 30 June
2023:
· The Company is in negotiations with First Quantum as to;
a) the basis on which First Quantum will exercise its Option on
exploration Licences XE27767-HQ - LEL and XE27771-HQ - LEL so commencing the
First Earn In Period under the First Quantum Option Agreement for these two
exploration licences. During the First Earn In Period, First Quantum 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 referred to above; and
b) an extension of the initial option period under the First Quantum
Option Agreement on exploration Licences XE27770HQ - LEL and XE277768HQ - LEL.
During the initial period First Quantum has the right but not the obligation
to spend US500,000 and it is envisioned that during the extended period First
Quantum will fund further work up to assess the prospectivity of these two
exploration licences with First Quantum having the right to exercise its
option over these two licences at the end of the extended initial option
period .
· Sandfire has notified the Company that it will not be exercising
its option under the Sandfire Option Agreement and the Company is awaiting an
expenditure report from Sandfire for the option period so it can review
Sandfire's Exploration Commitment which was to fund US$1 million of
exploration expenditure on the Included Licences (the "Exploration
Commitment") within the Option Period with 60% of the Exploration Commitment
to be on drilling and assay costs. If the Exploration Commitment is not spent,
any shortfall is due to be paid by Sandfire to African Pioneer. Sandfire
have confirmed that they will provide Exploration Information that it holds in
relation to the Licences.
The Botswana licences are currently under review by the Company in cooperation
with its external geological consultant with specific expertise of
Botswanan copper geology. The region represents a significant copper
exploration and resource development destination and as such all exploration
ground has potential strategic importance particularly in the case of African
Pioneer which has other licences in the general area.
Whilst the exploration to date on the licences which were the subject of the
Sandfire Option Agreement does not currently indicate prospectivity for a
large scale mining operation the Board believes that there is prospectivity
for a smaller to medium sized mining operation targeting in the range of 5,000
to 10,000 tonnes of contained copper per annum. Although too small for a large
scale miner a mine of this size would fit very well into the demand for small
to medium mines to help bridge the gap in the predicted shortfall of copper to
meet future projected demand.
Once exploration information has been delivered by Sandfire, the Company will
assess potential in the context of surrounding geology, any recent copper
discoveries and the results of in-house exploration undertaken by African
Pioneer before deciding on the next phase of exploration.
Other than the matters above no significant events have occurred subsequent to
the reporting date that would have a material impact on the consolidated
financial statements.
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