REG - AfriTin Mining Ltd - Unaudited Interim Results 6 Months Ended 31/08/22
17/11/2022 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221117:nRSQ7474Ga&default-theme=true
RNS Number : 7474G AfriTin Mining Ltd 17 November 2022
17 November 2022
AfriTin Mining Limited
("AfriTin", the "Company" or the "Group")
Unaudited Interim Results
for the six months ended August 2022
AfriTin Mining Limited (AIM: ATM), an African technology metals mining company
with a portfolio of mining and exploration assets in Namibia , is pleased to
release its unaudited interim results for the six months ended 31 August 2022
which should be read in conjunction with the Company's previous operational
results communicated on 15 September 2022.
(https://polaris.brighterir.com/public/afritin_mining/news/rns/story/ry59p7w?confirm=1
(https://polaris.brighterir.com/public/afritin_mining/news/rns/story/ry59p7w?confirm=1)
)
Highlights:
§ Six month production up 23% to 454 tonnes of tin concentrate (286 tonnes of
contained tin) compared to H1 2021: 368 tonnes (227 contained);
§ Phase 1 processing plant continued to exceed targets and nameplate
capacity;
§ Revenue of £4.7 million (H1 2021: £5.1 million) impacted by the decrease
in the tin price as well as the impact of the timing of settlement adjustments
(initial prepayment versus final settlement spot prices during reporting
period);
§ Average tin price achieved before settlement adjustment for the six month
period of US$25 227/tonne (H1 2021: US$36 910/tonne);
§ Cost of sales of £5.7 million (H1 2021: £4 million) reflecting
inflationary pressures of high fuel prices and higher maintenance costs;
§ Except for higher fuel prices, aforementioned cost factors are expected to
be resolved during H2 2022;
§ Unit costs expected to improve with the achievement of higher production
volumes from the Phase 1 Expansion Project;
§ Cash and Cash Equivalents of £12.2 million as at 15 November 2022,
subsequent to the US$53.6 million proposed funding package announced in
September 2022; and,
§ Commissioning of the Uis Phase 1 Expansion Project is now complete with
production projected to ramp to more than 1 200 tpa of tin concentrate in H2
2022.
Chief Executive Officer's Statement
I am proud of the AfriTin operational team for once again producing an
impressive half-yearly production performance. The first half of FY2023 has
seen internal tin production targets exceeded at the Uis Mine and an
unwavering focus on bringing lithium and tantalum by-products into production
and thereby consolidating our tech-metal exposure. Our vision is to fast-track
lithium production to become the only producing lithium company on AIM.
Importantly the team aims to capitalise on what we believe is our globally
significant resource and bridge the supply gap that currently exists.
Financially, the group recognised revenue of £4.7 million (Sales: 268t
contained (H1 2021: 230t contained)) net of final price settlements. The
revenue was negatively impacted by the reduction in the tin prices,
specifically related to a few delayed shipments which net settled at prices
much lower than the original prepayment rate. This amounted to an adjustment
to revenue of approximately £1.4 million for which the prepayment was
recognised in H2 2021. We have since changed shipping lines to speed up the
shipping timelines and limit the time exposure for revenue recognition. The
cost of sales for the net of depreciation amounted to £4.8 million, which
equated to approximately US$ 22 219 (H1 2021: US$ 19 470) per tonne of
contained tin sold. The increase in the costs was part of the expansion
commissioning readiness phase as well as higher maintenance costs due to
unplanned stoppages. A portion of these costs are planned to be supported by
the increased production levels, whilst the maintenance costs are expected to
reduce.
After the end of the period under review, AfriTin negotiated a potential
Proposed Funding Package of US$53.6 million (see announcement dated 15
September 2022). Coupled with our cash resources, this package, if completed,
could accelerate the organic growth in tin operations, fund the development of
the lithium and tantalum by-product opportunities, continue the regional
drilling programme, and initiate the Feasibility Study for the Phase 2
production phase at Uis. Whilst there can be no guarantee that the total
funding package will be entered into, the Directors have every expectation
that it will be. Updates will be provided as this progresses.
The Proposed Funding Package has been produced using a diverse range of
funding methods, including debt, convertible notes and an equity raise with
Hamman & Partners Advisory Limited and Stifel Nicolaus Europe Ltd acting
jointly to raise US$22.8 million (c. £19.8 million), through a placing and
subscriptions, a process that successfully closed on 16 September 2022.
The Development Bank of Namibia (DBN) approved a conditional US$5.8 million
lending facility, previously announced on 5 July 2022, and as updated in the
Company's audited financial results, which provides another component of
AfriTin's Proposed Funding Package. Although this has been approved by the
credit committee and board of the Development Bank of Namibia, there are
certain conditions precedent that need to be adhered to, including completion
of final legal documentation. At this stage there can be no guarantee the DBN
facility will be entered into, or that any funds will be drawn down, but
AfriTin Management have every confidence that it will be. The Directors
confirm that this has now been extended such that completion is anticipated
during Q1 2023. A further update will be provided when it is entered into.
Furthermore, global asset management firm Orion has been proposed as a key
strategic investor for AfriTin, providing a conditional US$25 million (c.
£21.5 million) investment, via Royalty (US$12.5 million), Convertible Note
(US$10 million) and Equity Conscription (US$2.5 million), which the firm will
manage. Orion has a strong history of cultivating sustainable shareholder
value in the mining sector, as well as boasting a unique ability to identify
growth opportunities at an early stage. As such, their interest in AfriTin
provides a compelling endorsement of our current work and future endeavours.
This Orion funding package remains subject to the satisfaction of certain
conditions and approvals, including due diligence and agreeing definitive
documentation, but the Directors anticipate it will be concluded in Q1 2023.
From a macroeconomics perspective, we have also seen tin prices drop
drastically in recent months, although the inverse has occurred with regard to
lithium prices. This further cements the Group's strategy to accelerate and
unlock lithium and tantalum, as we continue to organically grow the operations
and move into a lower unit cost position.
We remain conscious of the environment and its people, and this continues to
be woven into our corporate DNA as we strive to become a significant African
multi-commodity tech-metals producer. The foundation has been laid for the
second half of the financial year to deliver on our stated strategy and I
look forward to providing further updates.
Anthony Viljoen
CEO
AfriTin Mining Limited +27 (11) 268 6555
Anthony Viljoen, CEO
Nominated Adviser +44 (0) 207 220 1666
WH Ireland Limited
Katy Mitchell
Corporate Advisor and Joint Broker
H&P Advisory Limited +44 (0) 20 7907 8500
Andrew Chubb
Jay Ashfield
Stifel Nicolaus Europe Limited +44 (0) 20 7710 7600
Ashton Clanfield
Callum Stewart
Tavistock Financial PR (United Kingdom) +44 (0) 207 920 3150
Emily Moss
Catherine Drummond
Adam Baynes
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the 6 months ended 31 August 2022
Notes 6 months ended 6 months 12 months
31 August 2022 (unaudited) ended ended
£ 31 August 28 February
2021 2022
(unaudited) (audited)
£ £
Continuing operations
Revenue 5 4 726 609 5 073 337 13 615 045
Cost of Sales 6 (5 724 376) (3 959 149) (9 302 518)
Gross Profit (997 767) 1 114 188 4 312 527
Administrative expenses 7 (2 557 296) (1 390 177) (3 674 662)
Other income - - 61 753
Operating loss (3 555 063) (275 989) 699 619
Finance income 21 368 - 6 545
Finance cost 8 (186 874) (228 285) (316 365)
Profit/(loss) before tax (3 720 569) (504 274) 389 798
Tax credit/(charge) 9 888 933 - (864 199)
Loss for the period (2 831 636) (504 274) (474 401)
Other comprehensive income/(loss)
Items that will or may be reclassified to profit or loss:
Exchange differences on translation of share-based payment reserve 126 1 180 767
Exchange differences on translation of foreign operations 394 000 658 735 526 779
Exchange differences on non-controlling interest 5 508 (7 788) (6 700)
Total comprehensive income/(loss) for the period (2 432 002) 147 853 46 445
Profit/((loss) for the period attributable to:
Owners of the parent (2 680 820) (692 252) (815 645)
Non-controlling interests (150 816) 187 978 341 244
(2 831 636) (504 274) (474 401)
Total comprehensive income/(loss) for the period attributable to:
Owners of the parent (2 286 694) (32 337) (288 098)
Non-controlling interests (145 308) 180 190 334 543
(2 432 002) 147 853 46 445
Loss per ordinary share
Basic and diluted loss per share (in pence) 10 (0.25) (0.07) (0.08)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 August 2022
Company number: 63974
Notes 31 August 31 August 28 February
2022 2021 2022
(unaudited) (unaudited) (audited)
£ £ £
Assets
Non-current assets
Intangible assets 11 6 812 947 6 195 625 5 147 782
Property, plant and equipment 12 26 142 978 15 095 878 19 150 092
Total non-current assets 32 955 925 21 291 503 24 297 875
Current assets
Inventories 13 1 429 829 1 429 694 1 451 933
Trade and other receivables 14 2 830 985 1 136 053 3 953 382
Cash and cash equivalents 15 1 675 245 6 290 694 7 365 379
Total current assets 5 936 059 8 856 441 12 770 694
Total assets 38 891 984 30 147 944 37 068 569
Equity and liabilities
Equity
Share capital 20 38 655 078 38 297 431 38 655 078
Accumulated deficit (13 420 141) (10 733 570) (10 739 321)
Warrant reserve 21 192 632 192 632 192 632
Share-based payment reserve 1 074 125 769 658 704 828
Foreign currency translation reserve (1 140 560) (1 402 604) (1 534 560)
Equity attributable to the owners of the parent 25 361 134 27 123 547 27 278 657
Non-controlling interests 37 892 28 846 183 200
Total equity 25 399 026 27 152 393 27 461 857
Non-current liabilities
Environmental rehabilitation liability 18 319 440 202 242 295 151
Borrowings 16 4 198 763 - 4 095 405
Lease liability 19 89 776 232 858 167 216
Deferred tax liability - - 861 784
Total non-current liabilities 4 607 979 435 100 5 419 556
Current liabilities
Trade and other payables 17 3 881 051 1 890 700 2 969 833
Borrowings 16 4 829 492 505 267 1 024 736
Lease liability 19 174 436 164 484 192 586
Total current liabilities 8 884 979 2 560 451 4 187 155
Total equity and liabilities 38 891 984 30 147 944 37 068 569
The notes that follow in this report form part of this interim financial
information.
This interim financial information was authorised and approved for issue by
the Board of Directors and authorised for issue on 16 November 2022
ANTHONY VILJOEN
Chief Executive Officer
16 November 2022
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 31 August 2022
Share capital Convertible loan note reserve Accumulated deficit Warrant reserve Share-based payment reserve Foreign currency translation reserve Total Non-controlling interests Total equity
£ £ £ £ £ £ £ £ £
Total equity at 28 February 2021 25 608 001 2 170 645 (10 030 679) 211 348 743 615 (2 061 339) 16 641 591 (151 344) 16 490 247
Loss for the period (692 252) (692 252) 187 978 (504 274)
Other comprehensive income/(loss) - - - 1 180 658 735 659 915 (7 788) 652 127
Transactions with owners:
Issue of shares 13 019 672 - - - (10 000) - 13 009 672 - 13 009 672
Share issue costs (823 447) - - - - - (823 447) - (823 447)
Share-based payments - - - - 34 863 - 34 863 - 34 863
Warrants exercised 63 150 18 716 (18 716) - - 63 150 63 150
Issue costs reclassified to accumulated deficit - 29 355 (29 355) - - - - - -
Settlement of convertible loan note in shares 430 055 (430 055) - - - - - - -
Settlement of convertible loan note in cash - (1 769 945) - - - - (1 769 945) - (1 769 945)
Total equity at 31 August 2021 38 297 431 - (10 733 570) 192 632 769 658 (1 402 604) 27 123 547 28 846 27 152 393
Loss for the period - - (123 393) - (123 393) 153 266 29 873
Other comprehensive income/(loss) - - - - (413) (131 956) (132 369) 1 088 (131 281)
Transactions with owners:
Issue of shares 49 101 - - - - 49 101 - 49 101
Share options exercised 308 546 - 117 642 - (117 642) - 308 546 - 308 546
Share-based payments - - - - 53 225 - 53 225 - 53 225
Total equity at 28 February 2022 38 655 078 - (10 739 321) 192 632 704 828 (1 534 560) 27 278 657 183 200 27 461 857
Loss for the period - - (2 680 820) - - - (2 680 820) (150 816) (2 831 637)
Other comprehensive income/(loss) - - - - 126 394 000 394 126 5 508 399 634
Transactions with owners:
Share-based payments - - - - 369 171 - 369 171 - 369 171
Total equity at 31 August 2022 38 655 078 - (13 420 141) 192 632 1 074 125 (1 140 560) 25 361 134 37 892 25 399 026
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 31 August 2022
Notes Period ended 31 August 2022 (unaudited) Period ended 31 August 2021 (unaudited) Year ended
£ £ 28 February
2022
(audited)
£
Cash flows from operating activities
Loss before taxation (3 720 569) (504 274) 389 798
Adjustments for:
Fair value adjustment to customer contract 5 30 726 (15 238) (137 019)
Depreciation of property, plant and equipment 12 949 884 736 792 1 861 023
Depreciation of intangible assets 11 5 285 6 086 28 198
Share-based payments 267 401 22 527 55 793
Equity-settled transactions - 9 672 66 101
Finance income (21 368) - (6 545)
Finance costs 8 186 874 228 285 316 365
Changes in working capital:
Decrease/(increase) in receivables 1 189 937 124 981 (2 866 192)
Decrease/(increase) in inventory 57 917 (382 786) (418 556)
Increase in payables 851 750 334 662 1 006 060
Net cash (used)/generated in operating activities (202 163) 560 707 569 064
Cash flows from investing activities
Purchase of intangible assets (1 606 380) (822 753) (1 442 774)
Purchase of property, plant and equipment (7 466 335) (1 511 632) (4 543 884)
Net cash used in investing activities (9 072 715) (2 334 385) (5 986 658)
Cash flows from financing activities
Finance income 21 368 - 6 545
Finance costs 8 (153 901) (157 458) (224 061)
Lease payments 19 (120 977) (91 258) (213 661)
Net proceeds from issue of shares 20 - 12 239 703 12 548 248
Settlement of convertible loan notes - (1 769 945) (1 769 945)
Proceeds from borrowings 16 3 997 799 5 298 880 5 024 727
Repayment of borrowings 16 (166 932) (8 700 696) (3 907 086)
Net cash generated from financing activities 3 577 357 6 819 226 11 464 767
Net decrease/(increase) in cash and cash equivalents (5 697 521) 5 045 548 6 047 173
Cash and cash equivalents at the beginning of the period 7 365 379 1 351 200 1 351 200
Exchange differences 7 387 (106 054) (32 994)
Cash and cash equivalents at the end of the period 1 675 245 6 290 694 7 365 379
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL INFORMATION
For the period ended 31 August 2022
1. Corporate information and principal activities
AfriTin Mining Limited ("AfriTin") was incorporated and domiciled in Guernsey
on 1 September 2017, and admitted to the AIM market in London on 9 November
2017. The Company's registered office is PO Box 282, Oak House, Hirzel Street,
St Peter Port, Guernsey GY1 3RH and operates from Illovo Edge Office Park, 2nd
Floor, Building 3, Corner Harries and Fricker Road, Illovo, Johannesburg,
2116, South Africa.
This financial information is for the period ended 31 August 2022 and the
comparative figures for the 6 month period ended 31 August 2021 and for the
year ended 28 February 2022 are shown.
The AfriTin Group comprises AfriTin Mining Limited and its subsidiaries as
noted below.
AfriTin Mining Limited ("AML") is an investment holding company and holds 100%
of Guernsey subsidiary, Greenhills Resources Limited ("GRL").
GRL is an investment holding company that holds investments in resource-based
tin and tantalum exploration companies in Namibia and South Africa. The
Namibian subsidiary is AfriTin Mining (Namibia) Pty Limited ("AfriTin
Namibia"), in which GRL holds 100% equity interest. The South African
subsidiaries are Mokopane Tin Company Pty Limited ("Mokopane") and Pamish
Investments 71 Pty Limited ("Pamish 71"), in which GRL holds 100% equity
interest.
AfriTin Namibia owns an 85% equity interest in Uis Tin Mining Company Pty
Limited ("UTMC"). The minority shareholder in UTMC is The Small Miners of Uis
who own 15%.
Mokopane owns a 74% equity interest in Renetype Pty Limited ("Renetype") and a
50% equity interest in Jaxson 641 Pty Limited ("Jaxson").
The minority shareholders in Renetype are African Women Enterprises
Investments Pty Limited and Cannosia Trading 62 CC who own 10% and 16%
respectively.
The minority shareholder in Jaxson is Lerama Resources Pty Limited who owns a
50% interest in Jaxson. Pamish 71 owns a 74% interest in Zaaiplaats Mining Pty
Limited ("Zaaiplaats"). The minority shareholder in Zaaiplaats is Tamiforce
Pty Limited who owns 26%.
AML holds 100% of Tantalum Investment Pty Limited, a company containing
Namibian exploration licenses EPL5445 and EPL5670 for the exploration of tin,
tantalum and associated minerals.
As at 31 August 2022, the AfriTin Group comprised:
Company Equity holding and voting rights Country of incorporation Nature of activities
AfriTin Mining Limited N/A Guernsey Ultimate holding company
Greenhills Resources Limited(1) 100% Guernsey Holding company
AfriTin Mining Pty Limited(1) 100% South Africa Group support services
Tantalum Investment Pty Limited(1) 100% Namibia Tin & tantalum exploration
AfriTin Mining (Namibia) Pty Limited(2) 100% Namibia Tin & tantalum operations
Uis Tin Mining Company Pty Limited(3) 85% Namibia Tin & tantalum operations
Mokopane Tin Company Pty Limited(2) 100% South Africa Holding company
Renetype Pty Limited(4) 74% South Africa Tin & tantalum exploration
Jaxson 641 Pty Limited(4) 50% South Africa Tin & tantalum exploration
Pamish Investments 71 Pty Limited(2) 100% South Africa Holding company
Zaaiplaats Mining Pty Limited(5) 74% South Africa Property owning
(1) Held directly by AfriTin Mining Limited
(2) Held by Greenhills Resources Limited
(3) Held by AfriTin Mining (Namibia) Pty Limited
(4) Held by Mokopane Tin Company Pty Limited
(5) Held by Pamish Investments 71 Pty Limited
This financial information presented in Pound Sterling (£) because that is
the currency in which the Group has raised funding on the AIM market in the
United Kingdom. Furthermore, Pound Sterling (£) is the functional currency of
the ultimate holding company, AfriTin Mining Limited.
The Group's key subsidiaries, AfriTin Namibia and UTMC, use the Namibian
Dollar (N$) as their functional currency. The period-end spot rate used to
translate all Namibian Dollar balances was £1 = N$19.84 and the average rate
for the period was £1 = N$19.70.
2. Significant accounting policies
Basis of accounting
The Consolidated interim financial information has been prepared in accordance
with UK Adopted International Accounting Standards. The Consolidated interim
financial information also complies with the AIM Rules for Companies, NSX
Listing Requirements and the Companies (Guernsey) Law, 2008 and show a true
and fair view.
The significant accounting policies applied in preparing this information are
set out below. These policies have been consistently applied throughout the
period. This information has been prepared under the historical cost
convention except as where stated.
The interim financial information for the six months to 31 August 2022 is
unaudited and does not constitute statutory financial information. The
statutory accounts for the year ended 28 February 2022 are available on the
Company's website.
Going concern
This interim financial information has been prepared on the basis of
accounting principles applicable to a going concern which assumes the company
will be able to continue in operation for the upcoming 12 months and will be
able to realize its assets and discharge its liabilities in the normal course
of operations.
At 31 August 2022, the company had cash in the bank of £1.7m. Subsequent to
the period end, the group successfully concluded a successful completion of
the Placing and Subscription of 396,021,660 new Ordinary Shares raising gross
proceeds of £19.8 million (approximately US$22.8million).
Management have prepared a detailed cash flow forecast for the period to 31
October 2022 and stress tests of those forecasts. The base case forecast
demonstrates that the Group will have sufficient funds to meet its liabilities
as they fall due and includes the following key assumptions:
· Prices have been set at $19,000 per tonne of tin.
· The base case forecast assumes continuing steady state production
for the current mining and processing facility post the successful expansion,
which was commissioned in November 2022.
· The base case forecast includes capital expenditure required for
the pilot lithium and tantalum production facilities. This expenditure will be
funded by the secured equity.
· The base case forecast includes exploration drilling programme
expenditure for lithium and tantalum. This expenditure will be funded by the
secured equity.
In addition, the Board have considered downside scenarios in relation to
commodity pricing and production across the period. The scenarios demonstrated
that the Group will be able to maintain liquidity.
The group has also entered into a conditional US$30.8 million funding
arrangement made up as follows:
· US$25 million (c. £21.5m) investment with a fund managed by
Orion Resource Partners ("Orion").
· US$5.8 million (c£5m) lending facility with the Development Bank
of Namibia. This was announced on 5 July 2022 (and updated by the disclosures
in the Company's Annual Report) ("DBN Debt Financing")
Accordingly, the Directors have concluded that the going concern basis in the
preparation of this financial information is appropriate and that there are no
material uncertainties that would cast doubt on that basis of preparation.
Critical accounting estimates and judgements
In the application of the Group's accounting policies, the Directors are
required to make judgements, estimates and assumptions about the carrying
amounts of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual
results may differ from these estimates. In particular, information about
significant areas of estimation uncertainty considered by management in
preparing the interim financial information is provided below.
Estimates and judgements are continually evaluated. Revisions to accounting
estimates are recognised in the year in which the estimates are revised if the
revision affects only that year, or in the year of revision and in future
years if the revision affects both current and future years.
i) Going concern and liquidity
Significant estimates were required in forecasting cash flows used in the
assessment of going concern including tin and tantalum prices, the levels of
production, operating costs, and capital expenditure requirements. For further
details, refer to going concern considerations laid out earlier in Note 2.
ii) Decommissioning and rehabilitation obligations
Estimating the future costs of environmental and rehabilitation obligations is
complex and requires management to make estimates and judgements, as most of
the obligations will be fulfilled in the future and contracts and laws are
often not clear regarding what is required. The resulting provisions (see Note
18) are further influenced by changing technologies, and by political,
environmental, safety, business, and statutory considerations.
The Group's rehabilitation provision is based on the net present value of
management's best estimates of future rehabilitation costs. Judgement is
required in establishing the disturbance and associated rehabilitation costs
at period end, timing of costs, discount rates, and inflation. In forming
estimates of the cost of rehabilitation which are risk adjusted, the Group
assessed the Environmental Management Plan and reports provided by internal
and external experts. Actual costs incurred in future periods could differ
materially from the estimates, and changes to environmental laws and
regulations, life of mine estimates, inflation rates, and discount rates could
affect the carrying amount of the provision.
In determining the amount attributable to the rehabilitation liability,
management used a discount rate of 13% (August 2021: 12.8% and February 2022:
10%), an inflation rate of 7% (August 2021: 6% and February 2022: 5%) and an
estimated mining period of 16.5 years, being the Phase 1 expansion life of
mine.
iii) Impairment indicator assessment for exploration and evaluation
assets
Determining whether an exploration and evaluation asset is impaired requires
an assessment of whether there are any indicators of impairment, including
specific impairment indicators prescribed in IFRS 6: Exploration for and
Evaluation of Mineral Resources. If there is any indication of potential
impairment, an impairment test is required based on value in use of the asset.
The valuation of intangible exploration assets is dependent upon the discovery
of economically recoverable deposits which, in turn, is dependent on future
tin prices, future capital expenditures, environmental and regulatory
restrictions, and the successful renewal of licences. The Group considers the
South African exploration and evaluation assets to be non-core as it continues
to primarily focus on developing its Namibian assets. Accordingly, the
capitalised exploration and evaluation expenditure relating to the South
African assets was impaired to nil in the prior year on the basis that the
Group did not intend on incurring any further expenditure on its South African
licences. The directors have concluded that there are no indications of
impairment in respect of the carrying value of Namibian intangible assets at
28 February 2022 based on planned future development of the Namibian projects,
and current and forecast tin prices. Exploration and evaluation assets are
disclosed fully in Note 11.
iv) Impairment assessment for property, plant and equipment
Management have reviewed the Uis mine for indicators of impairment and have
considered, among other factors, the operations to date at the Uis Tin Mine,
the Phase 1 Stage II expansion of the Uis operations, forecast commodity
prices, and market capitalisation of the Group. In undertaking the indicator
review, management have also reviewed the underlying LoM valuation model for
Uis and have concluded that no indicators of impairment have been noted at
period end. The LoM valuation model is on a fair value less cost to develop
basis and includes assessments of different scenarios associated with capital
development and expansion opportunities.
The forecasts required estimates regarding forecast tin prices, ore resources
and production, and operating and capital costs. The discounted cash flows use
a discount rate of 8.3% post tax nominal. Under the base case forecast using a
nominal consensus tin price of $25 000 per tonne, rising to $31 000 per
tonne by 2028, the forecast indicates headroom as at 31 August 2022.
As an additional test, management performed certain sensitivity calculations.
These included raising the discount rate to 11% post tax nominal, lowering the
forecast tin prices by 5%, lowering plant recovery by 5% and increasing
operating costs by 10%. In each of these circumstances, the forecast indicated
headroom as at 31 August 2022.
v) Depreciation
Judgement is applied in making assumptions about the depreciation charge for
mining assets when using the unit-of-production method in estimating the ore
tonnes held in reserves. The relevant reserves are those included in the
current approved LoM plan which relates to the Phase 1 expansion. Judgement is
also applied when assessing the estimated useful life of individual assets and
residual values. The assumptions are reviewed at least annually by management
and the judgement is based on consideration of the LoM plan, as well as the
nature of the assets. The reserve assumptions included in the LoM plan are
evaluated by management.
vi) Capitalisation and depreciation of waste stripping
The Group has elected to capitalise the costs of waste stripping activities as
these are necessary to allow improved access to the ore and, therefore, will
result in future economic benefits. The costs of drilling, blasting and load
& haul of waste material is capitalised until such time that the
underlying ore is used in production. These costs are then expensed on a
proportional basis. The capitalised costs are included in the mining asset in
property, plant & equipment and are expensed back into the statement of
comprehensive income as depreciation. Capitalisation of waste stripping
requires the Group to make judgements and estimates in determining the amounts
to be capitalised. These judgements and estimates include, amongst others, the
expected life of mine stripping ratio for each separate open pit, the
determination of what defines separate pits, and the expected volumes to be
extracted from each component of a pit for which the stripping asset is
depreciated.
vii) Determination of ore reserves
The estimation of ore reserves primarily impacts the depreciation charge of
evaluated mining assets, which are depreciated based on the quantity of ore
reserves. Reserve volumes are also used in calculating whether an impairment
charge should be recorded where an impairment indicator exists.
The Group estimates its ore reserves and mineral resources based on
information, compiled by appropriately qualified persons, relating to
geological and technical data on the size, depth, shape, and grade of the ore
body and related to suitable production techniques and recovery rates. The
estimate of recoverable reserves is based on factors such as tin prices,
future capital requirements and production costs, along with geological
assumptions and judgements made in estimating the size and grade of the ore
body.
There are numerous uncertainties inherent in estimating ore reserves and
mineral resources. Consequently, assumptions that are valid at the time of
estimation may change significantly if or when new information becomes
available.
viii) Valuation of inventories
Judgement is applied in making assumptions about the value of inventories and
inventory stockpiles, including tin prices, plant recoveries and processing
costs, to determine the extent to which the Group values inventory and
inventory stockpiles. The Group uses forecast tin prices to determine the net
realisable value of the ROM stockpile and the tin concentrate inventory on
hand at period end. Inventory stockpiles are measured using actual mining and
processing costs.
ix) Determining the lease term
In determining the lease term, management considers all facts and
circumstances that create an economic incentive to exercise, or not to
exercise, an extension option. Extension options are only included in the
lease term where the company is reasonably certain that it will extend or
will not terminate the lease when the lease expires. For all leases, the most
relevant factors include:
· Historical lease durations;
· Costs incurred in replacing the leased asset;
· Possible business disruption due to replacing the leased asset;
· Likelihood of extension of the lease - if there are significant
penalties to terminate, then it's reasonably certain that the Group will
extend.
The lease term is reassessed on an ongoing basis, especially when the option
to extend becomes exercisable, or on occurrence of a significant event or a
significant change in circumstances which affects this assessment, and that is
within the control of the Group.
x) Determining the incremental borrowing rate to measure lease
liabilities
The interest rate implicit in leases is not available, therefore the Group
uses the relevant incremental borrowing rate (IBR) to measure its lease
liabilities. The IBR is estimated to be the interest rate that the Group would
pay to borrow:
· over a similar term;
· with similar security;
· the amount necessary to obtain an asset of a similar value to the
right of use asset; and
· in a similar economic environment.
The IBR, therefore, is considered to be the best estimate of the incremental
rate and requires management's judgement as there are no observable rates
available.
xi) Determining the fair value of trade receivables classified at fair
value through profit or loss
The consideration receivable in respect of certain sales for which performance
obligations have been satisfied at period end and for which the Group has
received prepayment under the terms of the offtake agreement, remain subject
to pricing adjustments with reference to market prices at the date of
finalisation. Under the Group's accounting policies, the fair value of the
consideration is determined, and the remaining receivable is adjusted to
reflect fair value. Management estimated the forward price based on the LME
3-month tin price that is expected when the open shipments will be finalised.
As at 31 August 2022, the tin price had declined significantly since the
provisional payments received and therefore the Group recognised a negative
receivable at fair value through profit or loss of £519 321 (August 2021:
receivable of £465 529 and February 2022: receivable of £812 594).
3. Adoption of new and revised standards
A number of new and amended standards and interpretations issued by IASB have
become effective for the first time for financial periods beginning on (or
after) 1 March 2021 and have been applied by the Group in this interim
financial information. None of these new and amended standards and
interpretations had a significant effect on the Group because they are either
not relevant to the Group's activities or require accounting which is
consistent with the Group's current accounting policies.
Accounting standards and interpretations not applied
There are a number of standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods and which have not been adopted early.
4. Segmental reporting
The reporting segments are identified by the management steering committee
(who are considered to be the chief operating decision-makers) by the way that
the Group's operations are organised. As at 31 August 2022, the Group operated
within two operating segments, tin exploration and operational activities in
Namibia and tin exploration activities in South Africa.
Segment results
The following is an analysis of the Group's results by reportable segment.
South Africa Namibia Total
£ £ £
Period ended 31 August 2022
Results
Revenue 33 478 4 693 131 4 726 609
Associated costs (5 229) (6 485 826) (6 491 056)
Segmental profit/(loss) 28 249 (1 792 695) (1 764 446)
Period ended 31 August 2021
Results
Revenue 17 778 5 055 559 5 073 337
Associated costs (2 006) (4 498 287) (4 500 293)
Segmental profit 15 772 557 271 573 044
Year ended 28 February 2022
Results
Revenue 34 444 13 580 600 13 615 045
Associated costs (30 843) (10 693 637) (10 724 480)
Segmental profit 3 601 2 886 963 2 890 564
The reconciliation of segmental gross loss to the Group's loss before tax is
as follows:
Period ended Period ended Year ended
31 August 2022 31 August 2021 28 February 2022
£ £ £
Segmental loss (1 764 446) 573 044 2 890 564
Unallocated costs (1 790 616) (849 033) (2 252 700)
Other income - - 61 755
Finance income 21 368 - 6 545
Finance costs (186 874) (228 285) (316 365)
Profit/(loss) before tax (3 720 569) (504 274) 389 798
Unallocated costs are mainly comprised of corporate overheads and costs
associated with being listed in London.
Other segmental information
South Africa Namibia Total
£ £ £
As at 31 August 2022
Intangible assets 12 871 6 711 027 6 723 898
Other reportable segmental assets 95 428 30 766 260 30 861 688
Other reportable segmental liabilities (66 939) (13 437 197 (13 504 136)
Unallocated net liabilities - - 1 317 576
Total consolidated net assets 41 360 24 040 089 25 399 025
As at 31 August 2021
Intangible assets 12 718 6 182 907 6 195 625
Other reportable segmental assets 98 119 17 326 294 17 424 413
Other reportable segmental liabilities (63 974) (2 080 988) (2 144 962)
Unallocated net assets - - 5 677 317
Total consolidated net assets 46 863 21 428 214 27 152 393
As at 28 February 2022
Intangible assets 12 565 5 043 165 5 055 730
Other reportable segmental assets 70 564 24 119 470 24 190 033
Other reportable segmental liabilities (63 006) (4 038 840) (4 101 846)
Unallocated net assets - - 2 317 939
Total consolidated net assets 20 122 25 123 795 27 461 857
Unallocated net assets/liabilities are mainly comprised of cash and cash
equivalents and the borrowings which are managed at a corporate level.
5. Revenue
Period ended Period ended Year ended
31 August 2022 31 August 2021 28 February 2022
£ £ £
Revenue from the sale of tin 4 723 857 5 040 321 13 717 620
Revenue from the sale of sand 33 478 17 778 34 444
Total revenue from customers 4 757 335 5 058 099 13 752 064
Other revenue - change in fair value of (30 726) 15 238 (137 019)
customer contract
4 726 609 5 073 337 13 615 045
6. Cost of sales
Period ended Period ended Year ended
31 August 2022 31 August 2021 28 February 2022
£ £ £
Costs of production 5 049 956 3 510 718 8 057 083
Smelter charges 339 978 268 818 748 892
Logistics costs 59 328 41 523 126 086
Government royalties 275 114 138 090 370 457
5 724 376 3 959 149 9 302 518
7. Administrative expenses
The loss for the period has been arrived at after charging:
Period ended Period ended Year ended
31 August 2022 31 August 2021 28 February 2022
£ £ £
Staff costs 1 083 726 506 904 1 269 882
Depreciation of property, plant & equipment 113 185 97 166 221 948
Professional fees 443 781 132 991 621 379
Travelling expenses 150 450 56 969 96 956
Uis administration expenses 266 779 230 007 660 476
Auditor's remuneration 5 000 1 500 95 000
Other costs 494 374 364 641 709 022
2 557 296 1 390 177 3 674 662
Other costs are mainly comprised of corporate overheads necessary to run the
South African head office and the costs associated with being listed in
London.
8. Finance cost
Period ended Period ended Year ended
31 August 2022 31 August 2021 28 February 2022
£ £ £
Interest on lease liability 15 882 21 060 42 630
Interest on environmental rehabilitation liability 17 209 12 173 12 080
Bank interest 95 900 60 891 102 655
Interest on loan notes - 68 836 68 836
Amortisation of warrant charge - 37 594 37 594
Other interest 57 882 27 731 52 570
186 874 228 285 316 365
9. Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax.
Period ended Period ended Year ended
31 August 2022 31 August 2021 28 February 2022
£ £ £
Factors affecting tax for the period:
The tax assessed for the period at the Guernsey corporation
tax charge rate of 0%, as explained below:
Loss before taxation (3 720 569) (504 274) 389 798
Loss before taxation multiplied by the Guernsey - - -
Corporation tax charge rate of 0%
Effects of:
Differences in tax rates (overseas jurisdictions) (615 188) (452 848) (525 598)
Tax losses carried forward 615 188 452 848 525 598
Movement in deferred tax 888 933 - (864 199)
Tax for the period 888 933 - (864 199)
Accumulated losses in the subsidiary undertakings for which there is an
unrecognised deferred tax asset are £5 131 401 (August 2021: £3 919 522
and February 2022: £4 290 665).
10. Loss per share from continuing operations
The calculation of a basic loss per share of 0.25 pence (August 2021: loss per
share of 0.07 pence and February 2022: loss per share of 0.08 pence), is
calculated using the total loss for the period attributable to the owners of
the Company of £2 680 820 (August 2021: £692 251 and February 2022: £815
645) and the weighted average number of shares in issue during the period of
1 064 247 295 (August 2021: 1 016 465 204 and February 2022: 1 064 247
295).
Due to the loss for the period, the diluted loss per share is the same as the
basic loss per share. The number of potentially dilutive ordinary shares, in
respect of share options, warrants and shares to be issued as at 31 August
2022 is 131 220 649 (August 2021: 84 895 572 and February 2022: 76 261
762). These potentially dilutive ordinary shares may have a dilutive effect on
future earnings per share.
11. Intangible assets
Exploration and evaluation assets Computer software Total
Cost £ £ £
As at 31 August 2021 6 080 069 121 637 6 201 706
Additions for the period 741 977 741 977
Transfer to mining asset (1 058 602) (1 058 602)
Transfer to mining asset under construction (678 467) (678 467)
Exchange differences (29 248) (1 465) (30 713)
As at 28 February 2022 5 055 729 120 172 5 175 901
Additions for the period 1 622 407 - 1 622 407
Exchange differences 45 761 2 246 48 007
As at 31 August 2022 6 723 897 122 418 6 846 315
Accumulated Depreciation
As at 31 August 2021 - 6 081 6 081
Charge for the period - 22 112 22 112
Exchange differences - (75) (75)
As at 28 February 2022 - 28 119 28 119
Charge for the period - 5 285 5 285
Exchange differences - (36) (36)
As at 31 August 2022 - 33 368 33 368
Net Book Value
As at 31 August 2022 6 723 897 89 050 6 812 947
As at 28 February 2022 5 055 729 92 053 5 147 782
As at 31 August 2021 6 080 069 115 556 6 195 625
The additions to the evaluation and exploration asset during the period mainly
comprise of expenses capitalised as part of the Phase 2 exploration drilling
project, the metallurgical testwork programme, environmental studies and
region exploration projects.
12. Property, plant and equipment
Land Mining asset under construction Mining Asset Mining Asset - Stripping Decommissioning asset Right-of-use Computer Equipment Furniture Vehicles Mobile equipment Buildings Total
Asset (crane)
Cost £ £ £ £ £ £ £ £ £ £ £ £
As at 31 August 2021 12 463 390 218 14 629 402 745 755 175 501 594 193 169 898 121 973 79 294 - - 16 918 697
Additions for the period - 2 210 779 395 160 589 604 95 585 68 073 42 256 58 844 - 176 273 - 3 636 574
Disposals for the period - - - - - - (12 831) - (12 523) - - (25 354)
Transfer from exploration and evaluation asset - 678 467 1 058 602 - - - - - - - - 1 737 069
Exchange differences (150) 304 389 (473 395) (3 233) (2 382) (6 735) (1 851) (1 487) (920) (493) - (186 258)
As at 28 February 2022 12 312 3 583 853 15 609 768 1 332 128 268 704 655 530 197 472 179 330 65 851 175 780 - 22 080 728
Additions for the period - 5 112 760 1 106 936 723 532 - - 40 407 14 370 190 122 311 316 52 634 7 552 078
Disposals for the period - - - - - - - - - - - -
Exchange differences 300 44 513 346 390 27 502 6 554 15 989 4 537 4 262 295 2 141 (363) 452 120
As at 31 August 2022 12 613 8 741 126 17 063 094 2 083 162 275 258 671 519 242 417 197 962 256 268 489 237 52 271 30 084 926
Accumulated Depreciation
As at 31 August 2021 - - 1 377 680 - 4 775 237 798 97 721 48 676 56 169 - 1 822 819
Charge for the period - - 492 511 489 372 4 683 97 285 20 931 16 932 (715) 3 231 - 1 124 231
Exchange differences - - (10 416) (1 368) (23) (2 459) (1 047) (516) (576) (9) - (16 414)
As at 28 February 2022 - - 1 859 775 488 005 9 435 332 624 117 605 65 091 54 878 3 222 2 930 635
Charge for the period - - 431 992 342 996 7 975 85 804 25 574 21 853 16 692 16 339 658 949 884
Exchange differences - - 38 881 9 538 175 7 521 2 701 1 428 1 223 (34) (5) 61 429
As at 31 August 2022 - - 2 330 648 840 539 17 585 425 950 145 881 88 373 72 793 19 527 653 3 941 948
Net Book Value
As at 31 August 2022 12 613 8 741 126 14 732 446 1 242 624 257 673 245 569 96 536 109 589 183 475 469 710 51 618 26 142 978
As at 28 February 2022 12 312 3 583 853 13 749 993 844 123 259 269 322 906 79 867 114 239 10 973 172 558 - 19 150 092
As at 31 August 2021 12 463 390 218 13 251 722 745 755 170 726 356 395 72 177 73 297 23 125 - - 15 095 878
The additions to the mining asset under construction during the period mainly
comprise of the construction of the Uis Phase 1 Stage II expansion. The
construction costs of the expansion will remain in mining asset under
construction until the project has been completed and a commission certificate
has been issued.
Additions to the mining asset include capitalised costs and equipment
purchased as part of the Uis Phase 1 Continuous Improvement project
13. Inventories
31 August 2022 31 August 2021 28 February 2022
£ £ £
Run-of-mine stockpile 605 258 962 781 909 180
Tin concentrate on hand 204 236 167 367 155 389
Consumables 620 335 299 546 387 364
1 429 829 1 429 694 1 451 933
14. Trade and other receivables
31 August 2022 31 August 2021 28 February 2022
£ £ £
Trade receivables 160 188 120 042 96 173
Trade receivables at fair value through profit (519 321) 465 529 812 594
or loss
Other receivables 538 218 165 475 1 875 561
VAT receivables 2 651 899 385 007 1 169 053
2 830 984 1 136 053 3 953 382
Due to the decline in the tin price between receipt of provisional payment and
finalisation of tin sales, the trade receivables carried at fair value through
profit and loss resulted in a negative balance.
15. Cash and cash equivalents
31 August 2022 31 August 2021 28 February 2022
£ £ £
Cash on hand and in bank 1 675 245 6 290 694 7 365 379
16. Borrowings
31 August 2022 31 August 2021 28 February 2022
£ £ £
Standard Bank term loan facility 4 467 960 - 4 523 414
Standard Bank VAT facility 376 709 - 367 739
Standard Bank Vehicle Asset Financing 503 444 - -
Standard Bank Short-term Loan Facility 2 005 565 - -
Standard Bank working capital facility 1 674 577 - 228 988
Nedbank working capital facility - 505 267 -
9 028 255 505 267 5 120 141
On 18 November 2021, a term loan facility of N$90 000 000 (c. £4 536 000),
a VAT facility of N$8 000 000 (c. £403 000) and a working capital facility
of N$35 000 000 (c. £1 764 000) was entered into between the Company's
subsidiary, Uis Tin Mining Company (Pty) Ltd and Standard Bank Namibia.
The maturity date of the term loan facility is November 2026 and the capital
balance of the loan together with accrued interest will be repaid in quarterly
instalments over the next 5 years. Interest is charged on the outstanding
capital balance of the loan at a rate of 3-month JIBAR plus a margin of 4.5%.
The Group is required to meet the following covenants each year on 28 February
as part of the term loan facility agreement:
· EBITDA ÷ total interest must not be lower than 4.5 times
· Total debt ÷ EBITDA must not exceed 4 times in year 1, 3.5 times
in year 2 and 3 times thereafter
· Free cash flow before Debt Service Cover ÷ Principal and
Interest Senior Debt Service Payments must not be lower than 1.3 times
· Free cash flow before Debt Service Cover + Total Cash Collateral
÷ Principal and Interest Senior Debt Service Payments must not be lower than
2 times
The Group met all the above covenant requirements at 28 February 2022.
The VAT facility is secured by assessed/audited VAT returns (refunds) which
have not been paid by Namibia Inland Revenue. Standard Bank Namibia provides a
facility amounting to the unpaid refunds. Any drawdowns against this facility
are repaid to the bank upon receipt of cash from Namibia Inland Revenue.
The VAT facility and the working capital facility have no fixed maturity date,
but are both renewed on an annual basis. Interest accrues on these facilities
at the Namibian prime rate less 1%.
Standard Bank have recently provided vehicle asset financing of N$10 000 000
(c. £504 000) and a short-term loan facility of N$40 000 000 (c.
£2 016 000).
Standard Bank Namibia have provided a N$ 4 117 500 (c. £195 000) guarantee
to the Namibia Power Corporation Pty Limited in relation to a deposit for the
supply of electrical power. As a result of the guarantee provided by Standard
Bank, no cash was paid over for the deposit.
The full working capital facility that was previously held with Nedbank
Namibia was repaid during the previous year as the Group's facilities were
moved over to Standard Bank.
Reconciliation of net cash flow to movement in combined Long and Short term
Borrowings
Balance as at 31 August 2021 505 267
Incoming cash flows 5 024 727
Proceeds from term loan facility 4 428 000
Proceeds from VAT facility 367 739
Proceeds from working capital facility 228 988
Outgoing cash flows (505 267)
Repayment of working capital facility (505 267)
Non-cash flows 95 414
Interest accrued on term loan facility 95 414
Balance as at 28 February 2022 5 120 141
Incoming cash flows 3 997 799
Proceeds from vehicle asset financing facility 506 939
Proceeds from short-term loan facility 2 019 492
Proceeds from working capital facility 1 450 001
Interest received on bank balances 21 368
Outgoing cash flows (116 932)
Repayment of capital balance of term loan (68 512)
Interest paid on facilities (98 420)
Non-cash flows 77 247
Interest accrued on facilities (a portion has been capitalised to mining asset 175 864
under construction)
Foreign exchange differences (98 617)
Balance as at 31 August 2022 9 028 255
17. Trade and other payables
31 August 2022 31 August 2021 28 February 2022
£ £ £
Trade payables 3 344 593 1 436 435 2 293 471
Other payables 168 378 78 520 341 276
Accruals 368 080 375 745 335 087
3 881 051 1 890 700 2 969 833
18. Environmental rehabilitation liability
£
Balance at 31 August 2021 202 240
Increase in provision 95 585
Interest expense (93)
Foreign exchange differences (2 581)
Balance at 28 February 2022 295 151
Increase in provision -
Interest expense 17 091
Foreign exchange differences 7 199
Balance at 31 August 2022 319 441
Provision for future environmental rehabilitation and decommissioning costs
are made on a progressive basis. Estimates are based on costs that are
regularly reviewed and adjusted appropriately for new circumstances. The
environmental rehabilitation liability is based on disturbances and the
required rehabilitation as at 31 August 2021.
The rehabilitation provision represents the present value of decommissioning
costs relating to the dismantling of mechanical equipment and steel structures
related to the Phase 1 Pilot Plant, the demolishing of civil platforms and
reshaping of earthworks. A provision for this requires estimates and
assumptions to be made around the relevant regulatory framework, the magnitude
of the possible disturbance and the timing, extent and costs of the required
closure and rehabilitation activities. In calculating the appropriate
provision, cost estimates of the future potential cash outflows based on
current studies of the expected rehabilitation activities and timing thereof
are prepared. These forecasts are then discounted to their present value using
a risk-free rate specific to the liability. In determining the amount
attributable to the rehabilitation liability, management used a discount rate
of 13% (August 2021: 12.8% and February 2022: 10%), an inflation rate of 7%
(August 2021: 6% and February 2022: 5%) and an estimated mining period of 16.5
years, being the Phase 1 expansion life of mine. Actual rehabilitation and
decommissioning costs will ultimately depend upon future market prices for the
necessary rehabilitation works and timing of when the mine ceases operation.
19. Lease liability
The Company assessed all rental agreements and concluded that the following
rentals fall within the scope of IFRS 16: Leases and therefore a lease
liability has been recognised:
Lease term Option to extend/terminate Incremental borrowing rate
Office building 5 years Option to extend not specified in contract. Term of lease determined to be 5 13.75%
years.
Workshop facility 2 years Option to extend not specified in contract. Term of lease determined to be 2 7.5%
years.
Residential housing 5 years The lease will continue automatically after the initial period for an 8.5%
open-ended period. Either party must provide written notice if they wish to
terminate. Lease term determined to be 5 years.
Mobile Units 2 years The lessee is granted the option to purchase the units after the lease period 7.5%
of 2 years.
Office Building Workshop Housing Mobile Units Total
£ £ £ £ £
Balance at 31 August 2021 211 841 61 892 123 609 - 397 342
Additions (616) - - 68 689 68 073
Interest expense 11 910 1 648 4 601 3 411 21 570
Lease payments (50 167) (27 046) (18 298) (26 892) (122 403)
Foreign exchange differences (2 147) (922) (1 584) (126) (4 779)
Balance at 28 February 2022 170 821 35 572 108 328 45 082 359 803
Additions - - - - -
Interest expense 9 645 750 4 182 1 305 15 882
Lease payments (54 272) (28 103) (19 541) (19 061) (120 977)
Foreign exchange differences 4 475 1 057 2 748 1 224 9 504
Balance at 31 August 2022 130 669 9 276 95 717 28 550 264 212
The following is the split between the current and the non-current portion of
the liability:
31 August 2022 31 August 2021 28 February 2022
£ £ £
Non-current liability 89 776 232 858 167 215
Current liability 174 436 164 484 192 588
264 212 397 342 359 803
20. Share capital
Number of ordinary shares of no par value issued and fully paid Share Capital
£
Balance at 31 August 2021 1 112 334 912 38 297 431
Shares issued to suppliers - 15 Dec 798 001 49 101
Exercising of employee share options - 14 Jan 2 185 087 72 059
Exercising of employee share options - 27 Jan 1 250 000 56 250
Exercising of employee share options - 22 Feb 5 273 684 180 237
Balance at 28 February 2022 1 121 841 684 38 655 078
Balance at 31 August 2022 1 121 841 684 38 655 078
Authorised: 1 220 486 913 ordinary shares of no par value
Allotted, issued and fully paid: 1 121 841 684 ordinary shares of no par value
On 15 December 2021, 798 001 ordinary shares of no par value were issued to
settle a contractual liability at 4.90 pence in lieu of fees in relation to a
consulting agreement.
On 14 January 2022, the Company received notice from share option holders to
exercise 1 300 877 share options at an exercise price of 3 pence, 467 105
share options at an exercise price of 3.5 pence and 417 105 share options at
an exercise price of 4 pence.
On 27 January 2022, the Company received notice from share option holders to
exercise 1 250 000 share options at an exercise price of 4.5 pence.
On 22 February 2022, the Company received notice from share option holders to
exercise 2 336 842 share options at an exercise price of 3 pence,
1 468 421 share options at an exercise price of 3.5 pence, and 1 468 421
share options at an exercise price of 4 pence.
21. Warrant reserve
The warrants in issue during the period are as follows:
Outstanding at 31 August 2021 22 613 334
Exercisable at 31 August 2021 22 613 334
Granted during the period -
Expired during the period -
Exercised during the period -
Outstanding at 28 February 2022 22 613 334
Exercisable at 28 February 2022 22 613 334
Granted during the period -
Expired during the period -
Exercised during the period -
Outstanding at 31 August 2022 22 613 334
Exercisable at 31 August 2022 22 613 334
The warrants outstanding at the end of the period have an average exercise
price of 2.2 pence, with a weighted average remaining contractual life of 0.65
years.
22. Share-based payment reserve
Director share options
The following director share options were granted during the period ended 31
August 2022:
Date of grant 8 April 2022 8 April 2022 8 April 2022
Number granted 7 800 000 3 900 000 3 900 000
Vesting period 1 year 2 years 3 years
Contractual life 3 years 3 years 3 years
Estimated fair value per option (pence) 2.0830 2.8490 3.4090
The estimated fair values were calculated by applying the Black Scholes
pricing model. The model inputs were:
Date of grant 8 April 2022 8 April 2022 8 April 2022
Share price at grant date (pence) 9.35 9.35 9.35
Exercise price (pence) 9.80 10.30 10.80
Expiry date 8 April 2025 8 April 2025 8 April 2025
Expected volatility 60% 60% 60%
Expected dividends Nil Nil Nil
Risk-free interest rate 1.24% 1.24% 1.24%
The director share options in issue during the period are as follows:
Outstanding at 31 August 2021 27 100 000
Exercisable at 31 August 2021 8 389 999
Granted during the period -
Forfeited during the period -
Exercised during the period (1 250 000)
Expired during the period -
Outstanding at 28 February 2022 25 850 000
Exercisable at 28 February 2022 23 850 000
Granted during the period 15 600 000
Forfeited during the period -
Exercised during the period -
Expired during the period -
Outstanding at 31 August 2022 41 450 000
Exercisable at 31 August 2022 23 850 000
The director share options outstanding at period end have an average exercise
price of £0.067, with a weighted average remaining contractual life of 1.78
years.
Employee share options
The following employee share options were granted during the period ended 31
August 2022:
Date of grant 8 April 2022 8 April 2022 8 April 2022
Number granted 19 355 000 9 677 500 9 677 500
Vesting period 1 year 2 years 3 years
Contractual life 3 years 3 years 3 years
Estimated fair value per option (pence) 2.0830 2.8490 3.4090
The estimated fair values were calculated by applying the Black Scholes
pricing model. The model inputs were:
Date of grant 8 April 2022 8 April 2022 8 April 2022
Share price at grant date (pence) 9.35 9.35 9.35
Exercise price (pence) 9.80 10.30 10.80
Expiry date 8 April 2025 8 April 2025 8 April 2025
Expected volatility 60% 60% 60%
Expected dividends Nil Nil Nil
Risk-free interest rate 1.24% 1.24% 1.24%
The employee share options in issue during the period are as follows:
Outstanding at 31 August 2021 34 830 000
Exercisable at 31 August 2021 26 610 001
Granted during the period -
Forfeited during the period -
Exercised during the period (7 458 771)
Expired during the period -
Outstanding at 28 February 2022 27 371 229
Exercisable at 28 February 2022 27 371 229
Granted during the period 38 710 000
Forfeited during the period -
Exercised during the period -
Expired during the period -
Outstanding at 31 August 2022 66 081 229
Exercisable at 31 August 2022 27 371 229
The employee share options outstanding at the period end have an average
exercise price of £0.074, with a weighted average remaining contractual life
of 2.13 years.
23. Events after balance sheet date
Funding:
Subsequent to the period end, the group successfully concluded a successful
completion of the Placing and Subscription of 396,021,660 new Ordinary Shares
raising gross proceeds of £19.8 million (approximately US$22.8million).
The group has also entered into a conditional US$30.8 million funding
arrangement made up as follows:
· US$25 million (c. £21.5m) investment with a fund managed by
Orion Resource Partners ("Orion").
· US$5.8 million (c£5m) lending facility with the Development Bank
of Namibia. This was announced on 5 July 2022 (and updated by the disclosures
in the Company's Annual Report) ("DBN Debt Financing")
Decline in tin price:
The recent volatility in the tin prices has placed additional pressures on the
Company with regards to funding of capital expansion project via internal
sources. Management had anticipated the declines and have secured the
necessary funding in order to continue its growth ambitions. Furthermore, the
consensus view of the forward-looking range of prices used by management in
the forecast modelling still results in a positive recoverability of assets.
Recovery of VAT receivable:
Full balance of the outstanding VAT receivables were recovered from the
Namibian Revenue Agency in September and October
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR DZMMMVNNGZZGRecent news on Andrada Mining
See all newsREG - Andrada Mining Ltd - Uis Exploration Drilling Results
AnnouncementREG - Andrada Mining Ltd - FY Operational Update For Period Ended 28 Feb 2025
AnnouncementREG - Andrada Mining Ltd - Notification of Major Holdings
AnnouncementREG - Andrada Mining Ltd - Notification of Major Holdings
AnnouncementREG - Andrada Mining Ltd - Director/PDMR Shareholding
Announcement