REG - Altona Rare Earths - Annual Results and Notice of AGM
31/10/2024 07:00
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RNS Number : 3106K Altona Rare Earths PLC 31 October 2024
31 October 2024
ALTONA RARE EARTHS PLC
("Altona" or "the Company")
ANNUAL RESULTS AND NOTICE OF AGM
Altona (LSE: REE), a resource exploration and development company focused on
diversified critical raw materials in Africa, is pleased to announce its
audited results for the year ended 30 June 2024, and give notice of its 2024
Annual General Meeting (AGM).
The Report and Accounts for the year ended 30 June 2024, are now available on
the Company's website at https://investors.altonare.com/
(https://investors.altonare.com/) , a copy will also shortly be made available
on the FCA's National Storage Mechanism ('NSM') in electronic format, as
required under DTR obligations.
PERIOD HIGHLIGHTS
· Publication of the Group's first JORC compliant Mineral Resource
Estimate at Monte Muambe
· 13.6 million tons at 2.42% TREO(1) using a cut-off grade of 1.5% TREO
- Includes 0.31% NdPrO(2) representing 42,500 contained tons NdPrO
· Increase in Altona's holding in its Monte Muambe Rare Earths Project
to 51%
· Mining Licence application lodged with Mozambique Government
· Advanced metallurgical studies ongoing on Monte Muambe, the results
of which are expected to lead to a significant improvement of the project's
opex and capex
· Portfolio expansion and diversification started with the Kabompo
South Copper project in Zambia and the Sesana Copper-Silver project in
Botswana
· £1.3m fundraise through equity and debt and conversion of existing
convertible loans
POST-PERIOD HIGHLIGHTS
· Exercise of option to acquire the Sesana Copper-Silver project
· Confirmation that Kabompo South is prospective for Iron Ore Copper
Gold ("IOCG") copper mineralisation
· Encouraging initial rougher flotation testing results for rare earths
at Monte Muambe
· Assessment of potential short term fluorspar production from
high-grade fluorspar veins at Monte Muambe
NOTICE OF AGM
The Company also hereby gives Notice of its 2024 Annual General
Meeting (AGM), which will be held on 27 November 2024 at 11:00 am UK time at
the office of Orana Corporate LLP, Eccleston Yards, 25 Eccleston Place, London
SW1W 9NF, to transact the business as stated in the Notice of AGM. A copy of
the Notice of AGM and related forms of proxy will be posted to shareholders
shortly and will also be available on the Company's website at
https://investors.altonare.com/documents
(https://investors.altonare.com/documents) . The Company's CEO Cedric Simonet,
Chair Simon Charles and CFO Louise Adrian will be physically present and
shareholders are encouraged to attend in person for an opportunity to interact
with the Company's executives.
The Company will simultaneously stream the meeting via the Investor Meet
Company platform, to enable shareholders to follow the proceedings, but note
that shareholders will not be able to vote online during the meeting.
Therefore, to register to vote prior to the meeting shareholders will need to
visit www.shareregistrars.uk.com and follow the on-screen instructions.
Shareholders who wish to follow the proceedings online should use the
following link to register their interest:
https://www.investormeetcompany.com/altona-rare-earths-plc/register
(https://www.investormeetcompany.com/altona-rare-earths-plc/register-investor)
Shareholders are invited to submit questions for the Board to consider.
Questions can be pre submitted via the Investor Meet Company Platform up until
9am the day before the meeting and can be submitted at any time during the AGM
itself.
Please note that, as in prior years, printed copies of the Annual Report and
Accounts will not be available as Altona focuses on a digital approach to
investor communications in line with its environmental commitments.
Cedric Simonet, CEO of Altona, commented, "The financial year 2024 started
with the completion of the Monte Muambe Phase 2 deliverables (the JORC MRE and
the Scoping Study), which allowed the Company to meet the requirements to
increase its holding in the project to 51%.
"The Scoping Study serves as an affirmative initial validation of the
potential economic viability of the Monte Muambe project, provides a healthy
foundation for its subsequent progression to the Prefeasibility Study stage
and, importantly, underpins the solid value rapidly built by Altona since
project inception in mid-2021 through focused exploration activities.
"The Company's portfolio diversification strategy is taking shape nicely, with
exciting copper exploration acquisitions in Botswana and Zambia, two highly
regarded mining jurisdictions of Africa, which I look forward to advancing
rapidly over the next months. The conceptual study for the potential
short-term production of metallurgical grade fluorspar from high-grade
fluorite veins at Monte Muambe is another important action of this strategy."
Simon Charles, Chair of Altona, commented, "These results show continued
progress for the Company in line with our asset acquisition and
diversification strategy. I look forward to welcoming shareholders to our AGM
on the 27(th) November."
This announcement contains information which, prior to its disclosure, was
inside information as stipulated under Regulation 11 of the Market Abuse
(Amendment) (EU Exit) Regulations 2019/310 (as amended).
-----
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Altona Rare Earths Plc
Cédric Simonet, CEO
+44 (0) 7778 866 108
Louise Adrian,
CFO
+44 (0) 7721 492 922
Novum Securities Ltd (Corporate
Advisory)
+44 (0) 20 7399 9400
David
Coffman
Daniel Harris
About Altona Rare Earths Plc
Altona is a resource exploration and development company focused on critical
raw materials in Africa. The Company is listed on the Main Market of the
London Stock Exchange with the ticker "REE". Rare Earths are a group of 17
chemical elements, many of which are critical to the World's ongoing
transition from carbon-based to renewable energies, and to the defence and
communication sectors.
The Company is currently developing Monte Muambe, its flagship Magnet Rare
Earths Project, located in Northwest Mozambique. The Project was acquired in
June 2021, and the Company has so far drilled over 7,800m, and defined a
maiden JORC Mineral Resource Estimate of 13.6 million tons at 2.42% TREO. A
Competent Person Report including the Scoping Study for Monte Muambe was
published on 18 October 2023. The Project is now at Prefeasibility Study
stage, with a focus on metallurgical testing and process.
Altona is presently diversifying its portfolio by acquiring a limited number
of critical raw material projects to complement Monte Muambe. The acquisition
of the Kabompo South copper project in Zambia and of the Sesana copper-silver
project in Botswana represent the first steps towards the implementation of
this expanded strategy.
CHAIRMAN'S STATEMENT
Our Company's results for the year ended 30 June 2024 cover a period of
further change, development and progress for our Company, consistent with our
strategy.
Having listed on the Official List in June 2023, we believe this step has
improved our standing in the eyes of potential partners and counterparties. It
has enabled us to access the capital markets more effectively.
We have undertaken fundraises to support the plan for Monte Muambe, and we
have welcomed new shareholders on to our register. Progress has occurred at
Monte Muambe, with our interest having increased to 51% and our formal
application having been made for a 25 year mining concession for that project.
The scoping study results were encouraging and positive.
2023/2024 saw output for rare earths rise globally, demand for rare earth
elements softened due to the global economic downturn, and competition in
production has brought further pressure on producers. The equity markets have
been difficult for junior miners, especially for those of us still in the
exploration phase. Nonetheless, we take a long term view, and believe our
strategy to create and to nurture a diversified portfolio of mineral assets in
Africa to be the right one.
During the period under review, we acquired a copper project in the Mufumbe
district in Zambia, and entered into an option to acquire a copper and silver
exploration licence in Botswana - the Sesana project. These acquisitions are
consistent with our strategy, and we continue to look for appropriate
acquisition opportunities.
We face the future with determination to deliver on our strategy, with a focus
on its implementation, and with resolve to generate value for our
shareholders. Your board is cohesive, aligned, and single minded about
delivering results. Our work continues.
Simon Charles
Chair
Altona Rare Earths Plc
CEO'S STATEMENT
The Financial Year 2024 was a year of significant value building for Altona.
The Company's focused exploration approach at the Monte Muambe rare earths and
fluorspar project led to the production of a maiden JORC mineral resource
estimate ("MRE") and of a positive scoping study barely 2 years after the
acquisition of the project. With 13.6 million tons at 2.42% TREO, out of which
almost 60% is already in the Indicated category, this MRE forms a solid base
for further increase and for a future ore reserve statement. As a result of
the completion of this milestone, Altona's ownership of this important rare
earths resource increased from 20% to 51%. The project is now at
prefeasibility study level.
According to Adamas Intelligence 1 , the global consumption of NdBeB magnets
rose by 13.3% in 2023. This largely reflects the increasing permanent magnets
demand for electric vehicles drive trains, and wind turbines, driven by the
green energy transition. The same analyst forecasts the demand to grow at a
compound annual growth rate ("CAGR") of 8.7% from 2024 through 2040, whereas
the supply is expected to grow at a CAGR of 5.1% over the same period. This
underpins strong long-term market fundamentals, pushed by both decarbonisation
and robotics applications, the latter being expected to become the largest
global demand driver for permanent magnets by 2040.
Rare earths prices, however, after a peak in 2021 and 2022, have failed to
meet analysts' previsions and fell to their current level (about USD 75 per kg
for Neodymium-Praseodymium alloy). Such prices have delayed or hindered the
development and funding of many rare earths projects.
Cognisant of these facts, in early 2024, the Company announced and started to
implement an expansion and diversification strategy in order to mitigate its
exposure to rare earths only, and to build a portfolio of critical raw
materials projects which we hope will open opportunities for early
monetisation of these assets. The Board defined clear selection criteria
covering a limited number of commodities in tier 1 African jurisdictions and
narrowing down on low acquisition cost and low initial exploration cost
opportunities.
The acquisition of the Kabompo South copper project in Zambia in March 2024
and the option to acquire the Sesana copper-silver project in Botswana in
April 2024, (this option being exercised post year end in July 2024) marked
the start of this strategy's implementation.
The Sesana project, located in the heart of the emerging Kalahari Copper Belt
("KCB"), and in a jurisdiction widely regarded as the most mining-friendly in
Africa, is particularly exciting. The Sesana licence covers a well identified
geological feature, the D'Kar - Ngwako Pan formations contact, which is known
to host copper mineralisation in the KCB. It is located just about 25km from
MMG's Khoemacau Zone 5 underground copper-silver mine, where production
capacity is currently being increased.
As part of the implementation of this strategy, Altona has also initiated a
review of the fluorspar production potential of Monte Muambe. This includes
the possibility of rapidly putting the low-tonnage / high-grade (50% to 70%
CaF(2)) fluorspar veins located in the Western part of the intrusion into
production, thus generating much needed cash flow for the Company. I am
particularly excited by this opportunity to turn an existing asset into a
profit centre in the short term.
Fluorspar is a little-known but very important critical raw material.
Fluorspar demand and prices have been steadily increasing over recent years
and are expected to increase further as green energy transition applications
such as the manufacturing of electric vehicles batteries require significant
amounts of fluorspar. High-grade fluorspar veins lend themselves to the
production of metallurgical grade fluorspar through simple extraction,
comminution and gravity concentration methods.
In the meantime, the Company will continue derisking the Monte Muambe rare
earths project in order to unlock the tremendous value it created through 3
years of investment in this project. This will be done through focused
spending on priority activities such as securing a 25 year mining concession
(which is expected to be granted before the end of this year) and on-going
metallurgical testing, as well as continuing to seek a strategic investor
involved in the rare earths supply chain.
Dr Cédric Simonet
CEO
Altona Rare Earths Plc
OPERATIONS REVIEW
Financial Year 2024 activities - Monte Muambe Rare Earths and Fluorspar
project
Maiden JORC Mineral Resource Estimate
On 25 September 2023, Altona published Monte Muambe's maiden JORC Mineral
Resource Estimate, reported in the table below using a 1.5% TREO cut-off.
Notes:
· Million tonnes are rounded to one decimal place. Grades are rounded
to two decimal places for % and whole numbers for ppm.
· The MRE has been reported in consideration of reasonable prospects
for eventual economic extraction (RPEEE) using a pit shell based on a 1.5%
TREO cut-off, revenue of 24.65 USD/kg TREO MREC and average total recovery to
MREC of 48%.
· Mineral resources are reported as dry tonnes on an in-situ basis.
· Rare earth elements are inclusive of the TREO and not additional to
it.
· "NdPr Oxide" is the sum of Nd2O3 and Pr6O11.
The MRE's tonnage and grade compares favourably to Ore Reserve Statements of
more advanced carbonatite REE-projects in Monte Muambe's peer group in Africa
and in Australia.
The MRE covers two (Target 1 and Target 4) of 11 identified REE targets at
Monte Muambe and there is considerable scope to increase its size. As part of
the Prefeasibility Study, the Company intends to increase the tonnage and the
level of confidence of the existing MRE through:
· In-fill drilling at Target 1 and Target 4 (to take the MRE on these
two mineralised bodies to Measured and Indicated levels);
· Down-dip drilling at Target 1 and Target 4 (to increase the tonnage);
· A re-evaluation of the potential viability of Target 6, which has
known high-grade mineralisation at a depth of 30 to 50m below the surface;
· Resource drilling at Targets 3, 9 and 11 among others.
Scoping Study
On 18 October 2023, Altona published an updated CPR including a Scoping Study
(the "Study") for the Monte Muambe project.
The Study was prepared by geology and mining consultancy firm Snowden-Optiro,
to assess the potential viability of an open pit mining and MREC production
operation, to assess project development options, and to give sufficient
confidence to the Company to advance to the Prefeasibility Study stage.
The Study is preliminary in nature and includes material assumptions outlined
in the CPR, including product price assumptions. Capex estimates qualify as
Class 4 estimates as per the Association for the Advancement of Cost
Engineering (AACE) Recommended Practice 47R-11. The accuracy of the opex and
of the initial capex estimate is assessed at +35 % to −30 %. The base case
includes an indicative life of mine extraction and production schedule, which
is based on a Mineral Resource Estimate, 58% of which classified as Indicated
and 42% as Inferred.
The Study takes into consideration open-pit mining of Target 1 and Target 4,
at a Life of Mine ("LOM") strip ratio of 1.6, over a period of 18 years. An
anticipated 750,000 tonnes of ore per annum will be extracted and processed
through a beneficiation plant to produce a rare earths concentrate. The
beneficiation process will include crushing, milling and flotation. The
concentrate will then be processed through a hydrometallurgical plant to
produce an average of about 15,000 tonnes of MREC per annum. The
hydrometallurgical process will involve a weak acid gangue leach, followed by
rare earths leaching and purification. The MREC product will be packaged and
transported via existing road infrastructure to the port of Beira, in
Mozambique, for export.
Schematic layout of the Monte Muambe project
Base Case Technical and Economic parameters are summarised in the table below:
Parameter Unit Value
Ore processed Mt 13.5
MREC produced kt 270.7
Initial Capex M US$ 276.3
Sustaining Capex M US$ 63.0
Opex LoM M US$ 1,519
Opex per ton MREC US$/t 5,613
Gross Revenue LoM M US$ 3,670
Net Revenue LoM M US$ 3,193
EBITDA LoM M US$ 1,674
Revenue per ton MREC US$/t 13,558
Payback from first MREC years 2.5
Post tax NPV 8 M US$ 283.3
Post tax NPV 10 M US$ 207.0
Post tax NPV 8 (Upside Scenario) M US$ 409.9
Post tax IRR % 25%
Operating margin % 42%
Using an NPV of US$283.3 million with an applied real discount rate of 8%, the
Project is most sensitive to revenue (price, recovery, grade and exchange
rates), less sensitive to opex and least sensitive to capex.
Project sensitivity analysis
The Scoping Study demonstrates the potential for Monte Muambe to become a
viable mining operation.
Considerable upside potential has been identified in the Scoping Study and
will be developed further in the Prefeasibility Study ("PFS"). This includes:
· Increase of the resource base, as well as of the LoM and/or ore
extraction rate;
· Mining parameters optimisation;
· Processing and Metallurgy, both for the beneficiation and
hydrometallurgical plants;
· Energy sources mix and logistics options;
· Evaluation of the possibility of doing further onsite, in-country or
regional separation and refining;
· Setting up Responsible Sourcing systems.
Completion of Phase 2 and holding increase to 51%
On 24 October, in accordance with the Farm-Out Agreement, the Company notified
the original shareholders of Monte Muambe Mining Lda of the successful
completion of Phase 2 and of its intention to proceed to Phase 3. This
triggered the transfer of an additional 31% of Monte Muambe Mining Lda, which
was completed on 5 December 2023 and received the formal approval from the
Minister on 14 December 2023.
On 14 December 2023, Monte Muambe Mining Lda applied for a Mining Concession
over the area of Prospecting Licence 7573L for a duration of 25 years. At the
date of this report, the application is in the final stages of its process and
the Mining Concession is expected to be granted shortly.
Phase 3 - Prefeasibility Study
During the 3(rd) quarter of 2023, the Company carried out additional drilling
(10 RC holes totalling 790m) and trenching at Monte Muambe, with a view to
define better the mineralised envelope at Target 4, and to test Target 3.
Significant intercepts, based on on-site p-XRF assays, include:
Hole Target From (m) To (m) Length (m) TREO% ((1))
MM086 T4 25 67 42 1.570
MM102 T4 33 84.4 51.4 2.620
MM103 T4 Surface 80 80 1.897
MM105 T4 Surface 76 76 3.426
MM106 T4 Surface 28 28 1.590
MM107 T4 27 70 43 1.865
MM090 T4 44 77.5 33.5 1.675
MM110 T3 Surface 30 30 2.735
(1) Sum of La, Ce, Nd, Pr and Y from Altona's pXRF assays, in oxide
percent.
Other Prefeasibility Study activities carried out during the financial year
include the thorough mineralogical characterisation of a representative 100kg
ore sample from Target 1, which was sent to SGS Lakefields in Canada.
Financial Year 2024 activities - Other projects
In February 2024, the Company carried out a review of its strategy and
announced its intention to expand and diversify its portfolio of projects in
Africa into other critical raw materials. The Company started assessing
potential new opportunities with a focus on projects having a low entry-cost
and a clear pathway to early results and to majority ownership. During the
financial year, the Company advanced on the acquisition of two projects: the
Kabompo South copper project in Zambia and the Sesana copper-silver project in
Botswana.
Kabompo South Copper project, Zambia
On 28 March 2024, the Company announced entering into an agreement with
Sustineri Group Ltd and with the beneficial owners of Phelps Dodge Mining
(Zambia) Limited to acquire the entire issued share capital of Phelps Dodge
Mining (Zambia) Limited, the registered holder of Large Scale Exploration
Licence 21403-HQ-LEL ("the Kabompo South Licence"), located in the Mufumbe
District of Northwestern Province of Zambia.
The Kabompo South Licence has a surface area of approximately 616 km2 and is
valid for copper, cobalt, nickel, lead, zinc, gold and diamonds. The Licence
is located 4 km west of the Kamweji copper mine, and 60 km southwest of the
Mufumbwe copper mine (22 million tonnes at 1.6% Cu), along strike.
The Kabompo South Licence was previously held by copper giant Freeport McMoRan
until this company's strategic decision to exit Zambia in April 2020. The
Kabompo South Licence has seen prior grassroot exploration including 4,000
line kilometre of ground magnetometer survey and a partial leach soil
geochemistry survey over a 4 kilometre square grid. This work highlighted the
presence of a large copper gold silver anomaly in the Northeastern part of the
licence area, overlapping a possible demagnetised zone.
Sesana Copper-Silver project, Botswana
On 9 April 2024, the Company announced that it entered into a binding option
agreement ("BOA") with Ignate African Mining P/L, with respect to exploration
for copper and silver on Prospecting Licence PL2329/2023 (the "Sesana
Licence"), located in the Northwest District of Botswana. This option was
exercised post year end and at the date of this document the parties are in
the process of finalising the final agreement.
The Sesana Licence is located in the heart of the highly prospective Kalahari
Copper Belt ("KCB"), close to major copper-silver discoveries. The Project is
located 25 km from the producing Khoemacau underground copper-silver mine and
situated in an active exploration area of the KCB (Khoemacau, Galileo
Resources, ARC Minerals). Recent airborne geophysical data interpretation
shows prospective geological structures for copper-silver mineralisation
passing through the Tenement. Botswana is considered one of the most
attractive mining investment jurisdictions in Africa, and indeed, in the
world.
The Sesana Licence has a surface area of about 274 km2 and is valid until 31
March 2026, after which it can be renewed twice for periods of up to 2 years
each. It is valid for copper, cobalt, gold, silver, lead, zinc, aluminium,
chromium, iron, titanium and platinum group metals.
Renowned Kalahari Copper Belt expert David Catterall was subsequently hired to
guide and advise the Company with respect to its exploration program for the
Sesana Licence.
Post-Financial Year activities
Monte Muambe Rare Earths and Fluorspar
The Company's post-financial year activities are focused on continuing to
derisk the project, through the grant of the Mining Concession, and through
key metallurgical testing activities.
As at the date of this report, the process of the Mining Concession
application is believed to be in its final stage.
The representative ore sample sent to SGS Lakefields is currently undergoing
metallurgical testing, with a focus on flotation rougher tests. Initial test
results, received in September 2024, are highly encouraging and show a rare
earth recovery of 69.3%, and a good selectivity between rare earths and
fluorspar.
On-going flotation metallurgical testing is expected to improve the
characteristics of the rare earths concentrate which will be produced on site
and subsequently processed through a hydrometallurgy plant, also on site, to
produce Mixed Rare Earths Carbonate.
This is expected to lead to a significant reduction of the hydrometallurgy
plant opex and capex, and to an improvement of the financial results outlined
in the scoping study.
In October 2024, the Company started a re-assessment of the potential of Monte
Muambe for fluorspar production. Disseminated fluorspar in rare earth ore from
Target 1 and Target 4 is considered as a potential by-product of future rare
earths mining and is covered in the scope of current metallurgical testing. In
addition, low-tonnage high-grade hydrothermal fluorspar veins located in the
western part of the carbonatite intrusion may lend themselves to short-term
development into a producing mine.
Kabompo South Copper
A field visit was undertaken by the Company's CEO and lead geologist Cedric
Simonet in September 2024. Subsequently, geophysical consultant Earthmaps
Consulting was hired to carry out the reprocessing and interpretation of
legacy geophysical data to generate soil geochemistry follow up for copper and
possibly for diamonds.
Sesana Copper and Silver
On 29 July 2024 the Company announced that it notified Ignate African Mining
P/L of the exercise of the option over the Sesana Project. At the date of this
document the parties are in the process of finalising the final agreement.
Outlook
2024 has been an important year for Altona, which saw the completion of key
milestones for the Monte Muambe Rare Earths and Fluorspar project, including a
maiden JORC MRE, a scoping study, an application for a 25 year Mining
Concession, and the increase of the Company's ownership of the project from
20% to 51%.
The Company also made a strategic decision to expand and diversify its
portfolio of critical raw materials projects in Africa, targeting
opportunities which:
· Are located in tier 1 African mining jurisdictions
· Have a low acquisition cost and a clear path to majority ownership
· Have a low initial exploration cost and can be fast-tracked
· Will contribute to building a portfolio of assets widening
monetization and early revenue options
The acquisition of the Kabompo South copper project in Zambia and the Sesana
copper-silver project in Botswana were two important steps towards the
implementation of this strategy.
Over the past year, green energy transition driven demand for rare earths has
tremendously increased. The supply chain remains largely dominated by China,
but alternative supply chains are steadily developing in Europe, America,
Australia and Asia. Neodymium and praseodymium prices, however, remain
depressed, well below the peak levels of late 2021 and early 2022. In this
situation, the Company is convinced that its diversification strategy is sound
and appropriate.
Over the next year, Altona will continue to build a balanced portfolio of
assets in accordance with the above strategy, through carefully selected
acquisitions and targeted exploration. This is expected to open up early
monetisation opportunities, through disposal or through short-term development
of suitable assets.
The Company will continue to derisk Monte Muambe through investment in
priority activities including the completion of the Mining Concession process,
an application for land rights, the on-going metallurgical studies, as well as
securing a strategic investor involved in the rare earths mid-stream or
down-stream value chain for the project.
The Company has also started to review the potential for fluorspar production
at Monte Muambe. Fluorspar is an important critical raw material which is used
in many industrial manufacturing processes, including for the production of
electric vehicles batteries. Because fluorspar has been used in many other
application, its price is not subject to the sharp variations that rare earths
have experienced over the past years. Fluorspar is often associated to rare
earths in carbonatites. At Monte Muambe fluorspar occurs both in disseminated
form in the rare earths ore (on-going metallurgical testing is also aimed at
recovering fluorspar as a by-product of rare earths), but also in low-tonnage
high-grade fluorspar veins.
The high-grade fluorspar veins will be the object of a conceptual study to
assess the possible short-term development of a fluorspar mining operation at
Monte Muambe, thus opening up the possibility for early cash flow from this
asset.
The Company will also commence exploration activities at Kabompo South and
Sesana, with the aim of rapidly building the value of these two assets.
Dr Cédric Simonet
CEO
Altona Rare Earths Plc
CORPORATE REVIEW
Financial Review
Statement of Financial Position
During the financial year to 30 June 2024, the Company experienced growth in
key areas, reflecting strategic investments and capital expenditures.
Investments increased from £1.6 million to £2.1 million, driven by an
increase in ownership in the underlying asset, Monte Muambe Mining Lda, from
20% to 51%, and additional capital contributions to fund the ongoing
development of this asset. Intangible assets also grew from £1.3 million to
£1.6 million, primarily due to continued expenditure on the mining asset,
demonstrating the Company's commitment to developing and enhancing its core
operations. Trade receivables and payables remained stable, while loans
increased by £0.4 million, reflecting additional financing secured during the
year.
Equity saw a slight increase during the year, rising from £25.2 million to
£25.4 million. Post year end equity increased by a further £0.8 million to
reflect the equity raise of £0.4 million, the conversion of outstanding CLNs
of £0.3m and the settlement of creditors through shares in lieu of cash
payment of £0.1 million.
Income Statement
The Company's income statement highlights a stable operating performance, with
the operating loss remaining steady at £1.1 million for both 2023 and 2024.
However, finance costs increased significantly from £0.2 million to £0.5
million, primarily due to the finance costs associated with the increased debt
taken on in the year and the warrants issued with respect to this raising of
finance. This increase in finance costs underscores the impact of the
Company's financing strategies on its overall financial performance. During
the year the Company renegotiated the outstanding CLNs which led to the
conversion, post year end, of £0.3 million debt into equity, improving the
Company's balance sheet and another £0.2 million of CLNs being reprofiled as
debt with a repayment date of 30 October 2025.
Liquidity and Cash Flow
The Company's liquidity position saw a reduction in cash reserves, decreasing
from £1.1 million to £0.4 million by year end. This reduction was mainly due
to the corporate costs of being a public company and the ongoing capital
expenditure on the mining asset at MMM. The Company received a further £0.3
million in loans during the year and as mentioned above
renegotiated/reprofiled its existing CLNs. It also received subscription
funds of £0.3 million for equity that was issued post year end.
Despite this decrease in the cash position, the Company strengthened its
liquidity position with a new loan package of £0.9 million from two investors
with a fixed interest rate of 12% and repayment date of 30 October 2025.
This money is being received in 8 tranches with £0.1 million received before
year end.
This investment will allow the Company to enhance its asset base, manage its
financial obligations, and position itself for future growth while maintaining
stability in its core operations.
Board Changes
There were no Board changes during the financial year. However, post year
end the Board saw a significant revision with the resignation of Audrey
Mothupi on the 1 August 2024 and Martin Wood, the Chair on 10 August 2024.
The Company appointed Kristoffer Andersson on the 1 August 2024, as a
Non-Executive Director and we were pleased that Simon Charles was willing to
step up to fill the Chair's position, effective from 10 August 2024.
Post Balance Sheet Events
On 19 July 2024, the Company announced the issue of 76,248,759 new ordinary
shares as follows.
· 39,400,000 Shares were issued to raise funds of £394,000
· 33,300,000 Shares were issued for the conversion of existing
convertible loan notes of £303,000; and
· 3,548,759 Shares were issued to certain Directors in lieu of fees and
to various other creditors.
On 29 July 2024, the Company announced it had exercised its option to acquire
a 51% share in the prospecting licence PL2329/2023, in Botswana from Ignate
African Mineral (Pty) Ltd for an initial consideration of USD$10,000 in cash
and USD$50,000 in shares. The minimum expenditure commitment is USD$100,000
for a 12 month period.
Louise Adrian
CFO
Altona Rare Earths Plc
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ALTONA RARE EARTHS PLC
Opinion
We have audited the financial statements of Altona Rare Earths plc (the
'parent company') and its subsidiaries (the 'group') for the year ended 30
June 2024 which comprise the Statement of Consolidated Profit or Loss and
Other Comprehensive Income, the Statement of Consolidated Financial Position
and the Parent Company Statement of Financial Position, the Statement of
Consolidated Cash Flows and the Parent Company Statement of Cash Flows, the
Consolidated Statement of Changes in Equity and the Parent Company Statement
of Changes in Equity and notes to the financial statements, including
significant accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and UK-adopted
international accounting standards and as regards the parent company financial
statements, as applied in accordance with the provisions of the Companies Act
2006.
In our opinion:
· the financial statements give a true and fair view of the state of
the group's and of the parent company's affairs as at 30 June 2024 and of the
group's loss for the year then ended;
· the group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
· the parent company financial statements have been properly prepared
in accordance with UK-adopted international accounting standards and as
applied in accordance with the provisions of the Companies Act 2006; and
· the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the group and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 1 in the financial statements, the ability of the
Group to meet its projected expenditure is dependent on these further equity
injections and / or the raising of cash through bank loans or other debt
instruments, and/or government grants, and/or loans. These conditions indicate
that a material uncertainty exists that may cast significant doubt over the
Group's ability to continue as a going concern and therefore their ability to
realise their assets and discharge their liabilities in the normal course of
business. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the director's
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the group's and company's ability to continue to adopt the going
concern basis of accounting included:
· Reviewing the cashflow forecast and budgets for the going concern
period being twelve months from the anticipated date of signing the financial
statements and the corresponding key assumptions and inputs used. This
included inflows from capital fundraises that management anticipate being
achieved in the going concern period;
· Discussing with management regarding the future plans of the group;
· Comparing actual results for the year to forecasts to assess
management's forecasting abilities and the accuracy of its forecasts;
· Challenging management's key assumptions and inputs of forecast cash
receipts from fundraising and cash outflows in respect of committed costs;
· Testing the arithmetical accuracy of the cashflow forecasts; and,
· Performing a sensitivity analysis on the key assumptions and inputs.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
The scope of our audit was influenced by our application of materiality. We
set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and
the nature, timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements
as a whole. Based on our professional judgement, we determined the materiality
thresholds for the financial statements as follows:
Group financial statements Parent company financial statements
Material for the financial statements as a whole £55,000 (2023: £58,000) £37,500 (2023: £55,000)
Performance materiality £38,500 (2023: £40,600) £26,250 (2023: £38,570)
Basis for materiality for the financial statements as a whole 5% (2023: 3%) of the group's net assets 3% (2023: 3%) of the parent company's net assets
Rationale The group is still in the exploration stage and is not revenue generating. Net
assets are therefore viewed as the key area of relevance to stakeholders in
assessing the financial performance of the group in its early years of
exploration, as the net asset value is driven by the exploration assets which
will ultimately drive future profitability of the group.
The percentage applied to the benchmark has been selected to bring into scope
all significant classes of transactions, account balances and disclosures
relevant for the members, and also to ensure that matters that would have a
significant impact on the results were appropriately considered.
Performance materiality has been set at 70% (2023: 70%) of materiality for the
financial statements as a whole, for both the group and company.
The percentage applied was determined based on our risk assessment of the
control environment and our cumulative knowledge of the group and company.
We use performance materiality to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements
exceeds overall materiality. The audit of Monte Muambe Mining, Lda, the wholly
owned subsidiary, was performed by a component auditor, with materiality set
by us at £45,000 (2023: £26,000). Performance materiality was set at
£31,500 (2023: £18,200). We agreed with the audit committee that we would
report to them misstatements identified during our audit above £2,250 (2023:
£1,300) for the group audit and £1,875 (2023: £2,755) for the company
audit, as well as misstatements below those amounts that, in our view,
warranted reporting for qualitative reasons.
Our approach to the audit
The group includes the listed parent company and its subsidiary. We tailored
the scope of our audit to ensure that the planned procedures allowed us to
gain sufficient appropriate audit evidence to be able to give an opinion on
the financial statements as a whole, taking into account the structure of the
group and the parent company, the accounting processes, and the industry in
which they operate.
As part of our planning, we assessed the risk of material misstatement
including those that required significant auditor consideration at the
component and group level. In particular, we looked at areas of estimation,
for example in respect of the valuation of exploration and evaluation assets,
the valuation of investments in subsidiaries and the matters set out in the
material uncertainty related to going concern paragraph above. We performed
procedures to address the risks identified and for the most significant
assessed risks of misstatement, the procedures performed are outlined below in
the key audit matters section of this report.
An audit was performed on the financial information of the group's significant
operating components which, for the period ended 30 June 2024, were located in
the United Kingdom and Mozambique. The component in Mozambique was audited by
a component auditor operating under our instruction to undertake a full scope
audit. We communicated regularly with the component auditors and we were
responsible for the scope and oversight of the audit process. This, in
conjunction with additional procedures performed by us, provided sufficient
appropriate audit evidence for our opinion on the group and parent company
financial statements.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to
going concern section of our report, we have determined the matters
described below to be the key audit matters to be communicated in our report.
Key Audit Matter How our scope addressed this matter
Valuation of investment in subsidiary (parent company)
The parent company holds a material investment in Monte Muambe Mining, LDA Our work in this area included:
("MMM") as at 30 June 2024 of £2,051,000, the balance of which includes loans
reclassified as capital contributions to its subsidiary. · Obtaining management's impairment review for all investments held and
challenging the key assumptions;
· Confirming the ownership of MMM, including evidence of the additional
Given that MMM is loss making and the exploration and evaluation assets are 31% acquired during the year;
the main assets of the group, there is a risk that the investment and
intragroup loan balance may not be recoverable. Consequently, the valuation of · Reviewing the accounting and disclosure of the additional share
these balances is considered to be a key audit matter. capital purchased in MMM;
· Ensuring that no impairment indicators exist in accordance with IAS
36 Impairment of Assets;
· Challenging the judgements and estimates used by management to assess
the recoverability of the investment including the reclassified intragroup
loans; and
· Considering the recoverability of investments and intragroup loans by
comparing these to underlying asset values and exploration projects.
Key observations
We found management's assessment of the valuation of investments including the
reclassified intragroup loans to be reasonable.
Valuation of exploration and evaluation assets
The group has material intangible assets of £1,607,000, being capitalised Our audit work included:
exploration costs in respect of exploration and evaluation activities in
Mozambique. Confirming, through the review of the component auditor's files, that the
group has good title to the applicable exploration licence;
There is a risk that these assets have been incorrectly capitalised in
accordance with IFRS 6 Exploration for and Evaluation of Mineral Resources and Reviewing the terms and conditions of the exploration licence;
that there could be indicators of impairment as at 30 June 2024.
Reviewing the component auditor's work over capitalised costs including
Management's assessment of the IFRS 6 indicators of involves judgement, consideration of appropriateness for capitalisation under IFRS 6;
particularly in early-stage exploration projects.
Assessing the progress of the project during the period and post
There is a risk that the carrying value of these intangible assets are year-end and reviewing forward-looking exploration budgets;
overstated. Given that exploration and evaluation assets are subject to
judgement and estimation, this area is considered to be a key audit matter. Reviewing and challenging management's indicator of impairment assessment;
and
Reviewing the JORC Mineral Resource Estimate and Scoping Study to assess
the IFRS 6 indicators of impairment.
Key observations
Based on the audit procedures performed, we are satisfied that management's
assessment of the valuation of intangible assets is reasonable. However, we
draw attention to the disclosure within notes 11 and 2a to the Report and
Accounts, which state that the group's existing exploration licence will
expire in May 2025 and that the group has applied for a mining licence in
December 2023.
Should the application not be successful, this may result in impairment to the
carrying value of the exploration and evaluation assets and to the investment
in MMM.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the group and parent company financial
statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and,
· the strategic report and the directors' report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent
company and their environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent company,
or returns adequate for our audit have not been received from branches not
visited by us; or,
· the parent company financial statements and the part of the directors'
remuneration report to be audited are not in agreement with the accounting
records and returns; or,
· certain disclosures of directors' remuneration specified by law are
not made; or,
· we have not received all the information and explanations we require
for our audit.
Responsibilities of directors
As explained more fully in Statement of Directors' Responsibilities, the
directors are responsible for the preparation of the group and parent company
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors
are responsible for assessing the group's and the parent company's ability to
continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the parent company or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the group and parent company and the
natural resources sector to identify laws and regulations that could
reasonably be expected to have a direct effect on the financial statements. We
obtained our understanding in this regard through detailed discussions with
management about and potential instances of non-compliance with laws and
regulations both in the UK and in Mozambique. We also selected a specific
audit team based on experience with auditing entities of a similar size within
this industry.
· We determined the principal laws and regulations relevant to the group
and parent company in this regard to be those arising from:
o Listing Rules and Disclosure Guidance and Transparency Rules listing rules
o Quoted Companies Alliance (QCA) Corporate Governance code
o Anti-Bribery and Money Laundering Regulations
o Local industry regulations in Mozambique
o Local tax laws in the UK and Mozambique
· We designed our audit procedures to ensure the audit team considered
whether there were any indications of non-compliance by the group and parent
company with those laws and regulations. These procedures included, but were
not limited to: enquiries of management and discussions with the component
auditor, review of board minutes and a review of legal expenses and review of
Regulatory News Services (RNS) announcements.
· We also identified the risks of material misstatement of the
financial statements due to fraud.
· We considered, in addition to the non-rebuttable presumption of a
risk of fraud arising from management override of controls, that the potential
for management bias was identified in relation to the valuation of investment
in a subsidiary and the valuation of exploration and evaluation assets as
described in the Key Audit Matters section above. We addressed this by
challenging the assumptions and judgements made by management when auditing
these significant accounting estimates and ensuring that there were adequate
disclosures included in the respective notes of the financial statements.
· As in all of our audits, we addressed the risk of fraud arising from
management override of controls by performing audit procedures which included
but were not limited to: the testing of journals; reviewing accounting
estimates for evidence of bias; and evaluating the business rationale of any
significant transactions that are unusual or outside the normal course of
business.
· Compliance with laws and regulations at the subsidiary level was ensured
through conducting enquiries of management and reviewing correspondence for
any instances of non-compliance.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Other matters which we are required to address
We were appointed by the directors of Altona Rare Earths plc on 24 June 2021
to audit the financial statements for the period ending 30 June 2021 and
subsequent financial periods. Our total uninterrupted period of engagement is
4 years, covering the periods ending 30 June 2021 to 30 June 2024.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the group or the parent company and we remain independent of the
group and the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit
committee.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone, other than the company and the company's members as
a body, for our audit work, for this report, or for the opinions we have
formed.
Daniel Hutson (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor
London E14 4HD
30 October 2024
STATEMENT OF CONSOLIDATED PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2024
2024 2023
£'000 £'000
Continuing operations:
Administrative expenses (971) (1,068)
Exploration costs (not capitalised) (102) -
Fundraise costs (72) (48)
Operating loss (1,145) (1,116)
Finance costs (527) (180)
Loss before taxation (1,672) (1,296)
Income tax - -
Loss for the year from continuing operations (1,672) (1,296)
Total loss for the year attributable to:
Owners of Altona Rare Earths Plc (1,618) (1,221)
Non-controlling interests (54) (75)
(1,672) (1,296)
Other comprehensive income
Items that may be reclassified subsequently to profit and loss:
Exchange differences on translation of foreign operations 15 17
(1,657) (1,279)
Total comprehensive loss attributable to:
Owners of Altona Rare Earths Plc (1,606) (1,205)
Non-controlling interests (51) (74)
(1,657) (1,279)
Earnings per share (expressed in pence per share)
- Total Basic and Diluted earnings per share (1.97)p (3.23)p
STATEMENT OF CONSOLIDATED FINANCIAL
POSITION
As at 30 June 2024
2024 2023
£'000 £'000
ASSETS
Non-current assets
Intangible assets 1,607 1,290
Tangible assets 117 146
Total non-current assets 1,724 1,436
Current assets
Trade and other receivables 174 168
Cash and cash equivalents 392 1,130
Total current assets 566 1,298
TOTAL ASSETS 2,290 2,734
LIABILITIES
Non-current liabilities
Loans (322) -
Total non-current liabilities (322) -
Current liabilities
Trade and other payables (585) (593)
Convertible loan notes (362) (256)
Total current liabilities (947) (849)
TOTAL LIABILITIES (1,269) (849)
NET ASSETS 1,021 1,885
EQUITY
Share capital 2,283 2,239
Share premium 23,072 22,950
Paid in share capital to issue 345 -
Share-based payment reserve 474 121
Other equity - CLN reserve 12 12
Foreign exchange reserve 29 17
Retained deficit (25,097) (23,360)
1,118 1,979
Non-controlling interest (97) (94)
TOTAL EQUITY 1,021 1,885
The financial statements were approved by the Board and authorised for issue
on 30 October 2024 and signed on its behalf by:
Cédric Simonet - Chief Executive
STATEMENT OF CONSOLIDATED CASH FLOWS
For the year ended 30 June 2024
2024 2023
£'000 £'000
Cash flows from operating activities
Loss for the year before taxation (1,672) (1,296)
Adjustments for:
Shares/warrants issued for fees and services 487 306
Interest paid and payable 157 65
Depreciation 40 24
Foreign exchange movements 15 25
Operating cashflows before movements in working capital
(973) (876)
Decrease in trade and other receivables (6) (49)
(Decrease)/increase in trade and other payables (8) 277
(14) 228
Net cash used in operating activities (987) (648)
Cash flows from investing activities
Payment for additional equity in subsidiary (107) (40)
Purchases of property, plant and equipment (11) (3)
Purchases of intangible assets (250) (462)
Net cash used in investing activities (368) (505)
Cash flows from financing activities
Proceeds from issue of shares (paid in not issued) 345 2,000
Costs of issue - (207)
Proceeds from convertible loan notes - 275
Costs of convertible loan notes - (28)
Proceeds from loans 313 150
Repayment of loans - (150)
Interest paid (41) (40)
Net cash generated from financing activities 617 2,000
Net (decrease)/increase in cash and cash equivalents (738) 847
Cash and cash equivalents at beginning of the year 1,130 283
Cash and cash equivalents at the end of the year 392 1,130
Significant non-cash transactions
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2024
Share capital Share premium Paid in share capital to be issued Foreign exchange reserve Share-based payment reserve CLN Issue Retained deficit NCI Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 30 June 2022 1,790 21,404 - 1 14 - (22,139) (20) 1,050
Comprehensive income
Loss for the year - - - - - - (1,221) (75) (1,296)
Currency translation - - - 17 - - - - 17
NCI share in translation difference - - - (1) - - - 1 -
Total comprehensive income - - 16 - - (1,221) (74) (1,279)
Transactions with owners recognised directly in equity
Issue of shares 449 1,797 - - - - - - 2,246
Cost of shares issued - (251) - - 41 - - - (210)
Share-based payments - - - - 66 - - - 66
CLN Issue - - - - - 12 - - 12
Total transactions with owners recognised directly in equity 1,546 - - 107 12 - - 2, 114
449
Balance at 30 June 2023 2,239 22,950 - 17 121 12 (23,360) (94) 1,885
Comprehensive income
Loss for the year - - - - - - (1,618) (54) (1,672)
Currency translation - - - 12 - - - 3 15
Total comprehensive income - - - 12 - - (1,618) (51) (1,657)
Transactions with owners recognised directly in equity
Issue of shares 44 122 - - - - - - 166
Shares to be issued - - 345 - - - - - 345
Share-based payments - - - - 353 - - - 353
Additional transactions with NCI - - - - - - (119) 48 (70)
Total transactions with owners recognised directly in equity 44 122 345 - 353 (119) 48 793
-
Balance at 30 June 2024 2,283 23,072 345 29 474 12 (25,097) (97) 1,021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
ACCOUNTING POLICIES
GENERAL INFORMATION
Altona Rare Earths Plc (the "Company") is a publicly listed company
incorporated and domiciled in England & Wales. Its registered offices are
at Eccleston Yards, 25 Eccleston Place, London SW1W 9NF.
On 9 June 2023, the Company announced the admission of the Company's entire
issued share capital to the Official List of the Financial Conduct Authority
by way of a Standard Listing under Chapter 14 of the Listing Rules and to
trading on the London Stock Exchange's Main Market for listed securities
("Admission"). The Company's shares are listed under the new ticker "REE".
From 29 July 2024, this two tier system was replaced and the Company is now in
the "Equity Shares - Transition" category.
The Company's principal activity is focused on the discovery and development
of Critical Raw Materials mining projects in Africa.
BASIS OF PREPARATION
The consolidated financial statements have been prepared in accordance with
UK-adopted international accounting standards and the requirements of the
Companies Act 2006. The principal accounting policies are summarised below.
They have been applied consistently throughout the year. The financial
statements have been prepared on the historical cost basis, except for the
assets acquisition which was measured at fair value.
The functional currency for each entity in the Group is determined as the
currency of the primary economic environment in which it operates. The
functional currency of the parent company is Pounds Sterling (£) as this is
the currency that finance is raised in. The functional currency of its main
subsidiary is Mozambique Meticals (MTN) as this is the currency that mainly
influences labour, material and other costs of providing services. The Group
has chosen to present its consolidated financial statements in Pounds Sterling
(£), as the Directors believe it is the most relevant presentational currency
for users of the consolidated financial statements. All values are rounded
to the nearest thousand pounds (£'000) unless otherwise stated. Foreign
operations are included in accordance with the policies set out below.
The preparation of financial statements requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in
the process of applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the financial information are disclosed in Note 2
to the Report and Accounts.
GOING CONCERN
The Group and Company raise money for exploration and capital projects as and
when required. There can be no assurance that the Group and/or Company's
projects will be fully developed in accordance with current plans or completed
on time or to budget. Future work on the development of these projects, the
levels of production and financial returns arising therefrom, may be adversely
affected by factors outside the control of the Group or Company.
An operating loss is expected in the 12 months subsequent to the date of these
financial statements. As a result the Group and Company will need to raise
funding to provide additional working capital within the next 12 months. The
ability of the Group and Company to meet its projected expenditure is
dependent on these further equity injections and / or the raising of cash
through bank loans or other debt instruments/and or government grants and/or
loans. These conditions necessarily indicate that a material uncertainty
exists that may cast significant doubt over the Group and Company's ability to
continue as a going concern and therefore their ability to realise their
assets and discharge their liabilities in the normal course of business.
Whilst acknowledging this material uncertainty, the Directors remain confident
of raising finance and therefore, the Directors consider it appropriate to
prepare the consolidated and parent company financial statements on a going
concern basis. The consolidated and parent company financial statements do not
include the adjustments that would result if the Group and Company were unable
to continue as a going concern.
The Auditors have made reference to going concern by way of a material
uncertainty within the financial statements.
POST REPORTING DATE EVENTS
On 19 July 2024, the Company announced the issue of 76,248,759 new ordinary
shares as follows:
· 39,400,000 Shares were issued to raise funds of £394,000;
· 33,300,000 Shares were issued for the conversion of existing
convertible loan notes of £303,000; and
· 3,548,759 Shares were issued to certain Directors in lieu of fees and
to various other creditors.
On 29 July 2024, the Company announced it had exercised its option to acquire
a 51% share in the prospecting licence PL2329/2023, in Botswana from Ignate
African Mineral (Pty) Ltd for an initial consideration of USD$10,000 in cash
and USD$50,000 in shares. The minimum expenditure commitment is USD$100,000
for a 12 month period.
1
https://www.adamasintel.com/new-report-rare-earth-magnet-market-outlook-to-2040/
(https://www.adamasintel.com/new-report-rare-earth-magnet-market-outlook-to-2040/)
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