REG - Andrada Mining Ltd - UNAUDITED INTERIM RESULTS 6 MONTHS ENDED 31/08/23
29/11/2023 07:00
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RNS Number : 9781U Andrada Mining Limited 29 November 2023
29 November 2023
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 (MAR) as in force in the United Kingdom pursuant to the
European Union (Withdrawal) Act 2018. Upon the publication of this
announcement via Regulatory Information Service (RIS), this inside information
will be in the public domain.
Andrada Mining Limited
("Andrada" or "the Company")
Unaudited Interim Financial Results for the six months ended 31 August 2023
Andrada Mining Limited (AIM: ATM, OTCQB: ATMTF), the metals and mining company
with a portfolio of technology metals mining and exploration assets in
Namibia, announces its unaudited interim financial results for the six-months
ended 31 August 2023 ("H1 2024").
The company will be hosting an investor presentation at 9am UK time (11am
SAST) on Thursday 30 November 2023. Please register for
the event at: https://www.investormeetcompany.com/afritin-mining-limited/register-investor
(https://www.investormeetcompany.com/afritin-mining-limited/register-investor)
.
HIGHLIGHTS
FINANCIAL PERFORMANCE
§ 87% increase in revenue to GBP8.7 million (H1 2023: GBP4.7 million).
§ 19% decrease in cost of sales per tonne of contained tin to GBP17 276 (H1
2023: GBP21 903).
§ > 100% increase in gross profit to GBP1.5 million (H1 2023: loss of GBP1
million).
§ 30% reduction in operating loss to GBP2.5 million (H1 2023: loss of GBP3.5
million).
§ 25% reduction in loss before tax to GBP2.8 million (H1 2023: loss of GBP3.7
million).
§ Average C1¹ operating cash cost per tonne of contained tin produced was
USD18 161 (GBP14 324), which is within management guidance.
§ Average C2² operating cost per tonne of contained tin produced was
USD20 796 (GBP16 403), which is within management guidance.
§ All-in sustaining cost ("AISC") ³ per tonne of contained tin produced was
USD24 662 (GBP19 452) which is below management guidance.
§ GBP7.7 million (c. USD10 million) raised through issuance of unsecured
convertible loan notes.
§ Unaudited cash balance on 31 August 2023 was GBP6.7 million (USD8.5
million).
OPERATIONAL PEFORMANCE
§ Successful plant expansion in 2023 resulted in significant improvements in
the H1 2024 performance.
§ 67% increase in tin concentrate to 758 tonnes (H1 2023: 455 tonnes).
§ 58% increase in contained tin metal to 454 tonnes (H1 2023: 287 tonnes).
§ 37% increase in the plant processing rate to 136 tonnes per hour (tph) (H1
2023: 99 tph).
§ 10% increase in plant utilisation to 81% (H1 2023: 74%).
§ Improved safety performance to 0.8714 Lost Time Injury Frequency Rate
("LTIFR") at the end of the period compared to 8.02 at the end of H1 2023.
§ Production of initial bulk saleable petalite concentrate at 85% purity and
Li₂O grade of 4.16%.
§ Construction and commissioning of the lithium (bulk-sampling) pilot plant
("Pilot Plant") completed.
- Production of lithium concentrate from the Pilot Plant has commenced
(see announcement dated 27 November 2023).
§ Construction and commissioning of the tantalum circuit ("the Circuit")
completed.
§ In-house test campaigns have commenced to determine how to produce a
consistent saleable grade of lithium concentrate.
§ Drilling on Spodumene Hill licence area (ML 129) completed with all holes
intersecting mineralised pegmatite
- Inaugural drill results intersected high grade spodumene
mineralisation with grades up to 2.32% lithium oxide (Li₂O).
STRATEGIC
§ Appointment of Barclays Bank PLC as a strategic advisor to the Company's
lithium development programme.
§ Completed the rebranding from Afritin Mining to Andrada Mining to reflect
the Company's expanding lithium, tin, and tantalum resources.
§ Upgraded the OTC listing from pink sheets to the QB tier to enhance access
to the North American investor base.
§ Renewal of the Brandberg West exploration license (EPL 5445) for an
additional 2 years from 1 August 2023.
POST - PERIOD
Operational
§ Renewal of the Thailand Smelting and Refining Co. Limited ("Thaisarco") tin
off-take agreement for three years commencing December 2023.
§ Renewal of the AfriMet Resources AG ("AfriMet") tantalum off-take agreement
for 12 months commencing January 2024.
§ Completion and publication of the 2023 Sustainability Report highlighting
the Company's contribution of GBP33 million to the Namibian national economy
since inception.
Financial
§ On 5 September 2023, the Company finalised the NAD100 million (c. GBP4.2
million OR USD5.3 million) Development Bank of Namibia ("DBN") financing that
is ring-fenced for the implementation of the Uis Mine Stage II Continuous
Improvement Project ("CI2").
§ Finalisation and receipt of USD25 million Financing Package from Orion
Resource Partners ("Orion"). (See announcement dated 15 August 2023 and 16
November 2023).
§ Unaudited cash balance on 27 November 2023 at GBP23 million (USD29 million)
Exploration
§ Reverse Circulation ("RC") drilling programme undertaken on the Lithium
Ridge licence area (ML133).
- All holes intersected mineralised pegmatites with significant
lithium mineralisation along a 6km strike length with spodumene and petalite
identified as the primary lithium minerals.
§ Commencement of an exploration programme on Brandberg West licence area EPL
5445.
- Historically a producer of tin and tungsten with strong indications
of copper.
Chief Executive Officer's Statement
The interim period under review has been nothing short of eventful and
exhilarating. We kicked off the year with a rebranding initiative to
accurately reflect the poly-metallic nature of our extensive resource
portfolio in Namibia's mineral-rich Erongo region. We achieved numerous
milestones across all the Company's departments with a single-mindedness to
expedite the route-to-market for lithium and tantalum. These milestones
include the significant lithium discoveries on Lithium Ridge and Spodumene
Hill license areas which established Andrada as an emerging, formidable
poly-metallic producer. The commentary below further elaborates the various
initiatives we have implemented towards the expanded strategic intent to being
a renowned poly-metallic producer.
OPERATIONAL AND FINANCIAL OVERVIEW
Description Unit H1 2024 H1 2023 YoY % Δ
Feed grade % Sn 0.156 0.147 6%
Plant processing rate tph 136 99 37%
Ore processed t 446 621 286 558 56%
Tin concentrate t 758 455 67%
Contained tin t 454 287 58%
Tin recovery % 65 68 -4%
Plant availability % 92 89 3%
Plant utilisation % 81 74 10%
Uis mine C1 operating cost¹ USD/t contained tin 18 161 20 094 -10%
Uis mine C2 operating cost² USD/t contained tin 20 796 22 668 -8%
Uis mine AISC³ USD/t contained tin 24 662 25 812 -5%
Tin price achieved USD/t contained tin 25 912 25 525 2%
All the numbers are unaudited
¹C1 operating cash costs refers to operating cash costs per unit of
production excluding selling expenses and sustaining capital expenditure
associated with Uis Mine.
²C2 operating cash costs are equivalent to the C1 costs including selling
expenses (logistics, smelting and royalties).
³All-in sustaining cost (AISC) incorporates all costs are related to
sustaining production, capital expenditure associated with developing and
maintaining the Uis operation as well as pre-stripping waste mining costs.
Increased tonnage and revenue
Andrada experienced significant growth in H1 2024, driven by a 67% increase in
tin concentrate production to 758 tonnes, resulting in a 58% increase in
contained tin to 454 tonnes compared to the interim period in the 2023
financial year ("H1 2023"). Consequently, revenue increased to GBP8.7 million
(H1 2023: GBP4.7 million), generating a higher gross profit of GBP1.5 million
(H1 2023: loss of GBP1 million). This impressive performance is attributed to
a 37% increase in plant processing rate and a 10% improvement in capacity
utilisation, following the completion of the modular expansion of the crushing
and tin concentration circuits in Q3 2023.
The enhanced plant performance revealed bottlenecks that needed to be
eliminated to ensure sustainability of the increased output and higher
production rates. To that effect, the CI2 is expected to improve processing
efficiencies to maximise the tin concentrate recovery rate to approximately
70%, establish business sustainability through the enhancement of operational
support infrastructure and to reduce operating costs.
The renewal of the tin off-take with Thaisarco for up to 100% production that
was agreed after the period end, should also secure the expanded output
resulting from the Orion royalty for another three years to 30 November 2026.
(See announcement dated 5 September 2023).
Lower unit cost per tonne
The Company is pleased to report a significant improvement in its financial
performance in the first half of 2024. Despite an increase in the cost of
sales to GBP7.3 million (H1 2023: GBP5.7 million), the cost per tonne of
contained tin decreased by 19% to GBP17 276 (H1 2023: GBP21 903). due to
increased production tonnage and economies of scale. At the same time, as set
out above, the C1 operating cost and AISC decreased by 10% and 5% respectively
due to the higher production tonnage. The increased waste stripping of the
mining pit to access ore contributed to the higher costs during the period
under review. We are pleased that we have exposed additional ore and the
stripping ratios have continued to decrease.
The operating loss decreased by 30% to GBP2.5 million (H1 2023: loss of GBP3.6
million) whilst the loss before tax decreased to GBP2.8 million (H1 2023: loss
of GBP3.7 million). The average C1 and C2 cash costs remained within
management guidance at USD18 161 (GBP14 324) and USD20 796 (GBP16 403),
respectively. We are particularly pleased that the AISC at USD24 662
(GBP19 452) was below management guidance of between USD25 000 (GBP19 719)
and USD30 000 (GBP 23 663) per tonne of contained tin. It is important to
note that due to the higher stripping ratio and Orion tin royalty, the AISC is
expected to increase but remain within our guidance. The CI2 is expected to
improve plant efficiency and to reduce operational costs by 10%, with the
initial impact expected in Q1 2024.
Improved safety performance
At Andrada we are committed to upholding the highest safety standards at Uis.
The concerted effort of supervisors across all functions to instil a culture
of safety have resulted in a significant improvement in safety performance.
The LTIFR decreased from 8.02 at the end of H1 2023 to 0.87 at the end of H1
2024 and there were no fatalities recorded. Various initiatives, such as
quarterly safety audits and training, have been instrumental in promoting the
safety culture.
Strengthened the financial position
To support ongoing capital expansion programs related to lithium and tantalum
development, the Company issued unsecured convertible loan notes totalling
GBP7.7 million (c. USD10 million) in July 2023. These funds were primarily
utilised for working capital purposes, to progress the exploration program,
and to commence a lithium feasibility study. Additionally, the Company secured
a USD25 million funding package from Orion Mining, comprising a USD12.5
million unsecured tin royalty, a USD2.5 million equity subscription, and a
USD10 million unsecured convertible loan note (see announcement dated 16
November 2023, for more details of this completed package). This funding
should provide sufficient capital to progress the expansion programmes at Uis
and to expedite the lithium implementation program. In August 2023, Andrada
signed binding documentation for the USD25 million Orion funding and
ultimately received the funds in November 2023, after the period under review,
following the fulfilment of all precedent conditions. We believe that this
funding from Orion strongly endorses Andrada's corporate and broader
multi-commodity development strategy. (see announcements dated 18 July 2023
and 16 November 2023).
In September 2023, the Company concluded the NAD100 million (c. GBP4.2 million
OR c. USD5.3 million) funding with DBN to expedite the implementation of the
CI2. The Directors consider this DBN funding to be an essential component of
the overall funding and development strategy. The proceeds will be used to
implement improvements at Uis Mine to enhance the plant's productivity and
output. The targeted increase in the tin recovery rate will complement the
royalty portion of the Orion funding by enabling Andrada to achieve the
requisite concentrate tonnages. The improvement in cost efficiencies and
overall productivity at Uis resulting from the CI2, should lay the foundation
for the management of the lithium processing plant and other future
operations. (see announcement dated 5 September 2023).
These capital inflows of almost USD40 million, provide funding for the Company
to pursue the development of lithium and tantalum revenue streams whilst
expanding tin production. Importantly, the DBN and Orion funding will enable
us to implement various strategic initiatives necessary for further production
growth and the stabilisation of the Company's assets.
The Directors believe that partnering with the DBN and gaining the bank's
confidence, should also enable the Company to secure additional infrastructure
development financing potentially required for our future growth aspirations.
LITHIUM & TANTALUM DEVELOPMENT
The production of the initial off- site petalite bulk sample concentrate of
saleable grade in May 2023 from the Lithium Ridge project represents a
significant step towards establishing Andrada as an emerging lithium producer.
Lithium Pilot Plant production
Testing of bulk samples at the Pilot Plant to determine the optimal processing
parameters for lithium extraction from all three mining licences commenced
in October 2023. In addition to the bulk testing campaigns, the Pilot Plant
is also targeting the production of at least 2 400 tpa comprising a saleable
concentrate suitable for glass-ceramics market. To date, the Company, has
delivered high purity petalite concentrate samples to several potential
customers and progress will be provided as these discussions progress. We
believe that our lithium concentrate may potentially be suitable as feedstock
for refineries producing lithium carbonate or lithium hydroxide for the
battery manufacturing industry and will provide further updates on this as our
test work in this area advances. (see announcement 15 and 27 November 2023).
Tantalum Circuit production
After the end of the period under review, the Company renewed its tantalum
offtake agreement with AfriMet. This will commence on 1 January 2024 for a
period of 12 months and should absorb all the concentrate produced by the
Circuit at the Uis Mine. The renewal of the off-take agreement should enable
us to realise additional value from a the newly commissioned magnetic
separation circuit. Optimisation of the Circuit is on-going, and we foresee
commercial production commencing in or around December 2023. (see announcement
15 November 2023).
Spodumene Hill: Mining Licence 129
An initial drill programme over the B1 and C1 pegmatites returned positive
results with spodumene mineralisation identified within all holes drilled. The
results revealed notable intersections of up to 2.32% Li₂O grade,
highlighting the tantalum potential of this area, which further enhances the
relevance of the recently constructed Tantalum Circuit. The proximity of
Spodumene Hill to the existing operations at Uis provides an immediate
opportunity for additional revenues from the licence area by blending material
to increase tantalum grades. (see announcement dated 6 July 2023)
Lithium Ridge: Mining Licence 133
Lithium Ridge infill channel sampling programme confirmed the presence of
continuous mineralisation at surface over a 6 km strike length along multiple
mineralised pegmatites. An initial RC drilling programme investigated the
continuation of several pegmatites at depth and found that the mineralisation
continues within the pegmatite lithologies. The primary lithium minerals
identified through drilling and channel sampling were spodumene and petalite,
notable lithium intersections including 9m with grades exceeding 2% Li₂O.
(See announcement dated 29 August 2023, 6 September 2023 & 18 September
2023).
Off-site Testing Update
Metallurgical test work to date has focused on the concentration of petalite
due to its prevalence within the mining areas. The Lithium processing testwork
has therefore focussed on petalite recovery, whilst the feasibility of
concentrating other lithium bearing minerals present within the mineralised
pegmatites is also being investigated. A substantial metallurgical programme
focussing on spodumene production is planned to commence in Q4 2024. Three
processing technologies are currently being evaluated to determine the optimal
process for the extraction and concentration of petalite. Some test work has
indicated that it may be possible to upgrade ore to a saleable concentrate
solely through DMS technology.
STRATEGIC OVERVIEW
Resource upgrade
Simultaneously, we upgraded the Uis Mineral Resource Estimate for the V1 and
V2 pegmatites, confirming 81 million tonnes (Mt) of ore with an enhanced
average tin grade of 0.15% and an updated Lithium Carbonate Equivalent of
1.45Mt at a noteworthy average grade of 0.73% Li₂O. (See announcement dated
6 February 2023 for full details of the MRE).
Enhanced governance
As we embarked on the new financial year commencing in March 2023, we further
strengthened the Board's expertise by welcoming Hiten Ooka, our Chief
Financial Officer, as an executive director and Ms. Gida Sekandi as a
non-executive director. Hiten's appointment bolstered the Board's financial
acumen, while Gida's expertise deepened our sustainability knowledge. (See
announcement dated 11 May 2023).
Strategic Assessment Process
The Strategic Process is on-going with further updates to be released in due
course. (See announcement dated 11 May 2023 and 27 November 2023).
Expansion into the North American capital market
The admission to the OTCQB® Market was a key step in Andrada's strategy to
broaden the Company's investor base by increasing accessibility to Andrada
shares by North American institutional and retail investors. This investor
base is known for its understanding of, and strong appetite, for mining
companies with strong growth potential, particularly in lithium equities. (See
announcement dated 5 June 2023).
Sustainability focus
Sustainability is one of our foundational pillars and is intricately woven
into our business model. Our approach goes beyond the mine as we strive to
make a positive impact on the Erongo region in which we operate and on Namibia
as a whole. Since inception, we have contributed significantly to the national
economy through job creation and procurement. We estimate that we have
contributed GBP33 million (NAD690 million) to the Namibian economy through
procurement, royalties, and taxes since inception. In the 2023, the Company's
procurement outlay was GBP 9.1 million (NAD203 million) through 225 Namibian
suppliers of which 107 are situated within the Erongo region where Uis is
located. The Company further contributed c. GBP2 million (NAD45 million) in
royalties and taxes during the year ending 28 February 2023. As focus shifts
globally towards climate-smart economies, there is an increased focus on the
natural environment. To that effect, we have concentrated our efforts on the
sustainable management of the surrounding resources including biodiversity and
water whilst producing minerals that are integral to the green energy
transition. We are committed to creating long lasting value for all our
stakeholders. (See announcement dated 27 October 2023).
CONCLUSION
As we approach the final quarter of 2024, we look forward to achieving the key
milestones regarding the lithium development strategy and tin production in
line with the Orion tin royalty. The CI2 will be implemented into 2025 and is
instrumental in achieving the tin production targeted volumes and cost
efficiencies. We also look forward to providing further updates on the many
initiatives.
Glossary of abbreviations
GBP Great British Pound
NAD Namibian Dollar
USD United States Dollar
ANDRADA MINING LIMITED
INTERIM REPORT AND CONDENSED CONSOLDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
GBP (£) Notes 6 months ended 6 months ended 31 August 2022 12 months ended
28 February 2023
31 August 2023 (unaudited) (unaudited)
(audited)
Continuing operations
Revenue 5 8 846 997 4 726 609 9 827 474
Cost of Sales 6 (7 325 039) (5 724 376) (10 509 418)
Gross profit / (loss) 1 521 958 (997 767) (681 944)
Administrative expenses 7 (4 031 304) (2 557 296) (7 451 352)
Idle Pant Costs - - (258 177)
Other income 20 583 - 52 196
Operating loss (2 488 763) (3 555 063) (8 339 277)
Finance income 22 354 21 368 39 054
Finance cost 8 (309 832) (186 874) (669 824)
Loss before tax (2 776 241) (3 720 569) (8 970 047)
Tax credit/(charge) 9 - 888 933 866 203
Loss for the period (2 776 241) (2 831 636) (8 103 844)
Other comprehensive income/(loss)
Items that will or may be reclassified to profit or loss:
Exchange differences on translation of share-based payment reserve (325) 126 (441)
Exchange differences on translation of foreign operations (2 207 455) 394 000 (2 298 674)
Exchange differences on non-controlling interest 13 410 5 508 19 395
Total comprehensive loss for the period (4 970 611) (2 432 002) (10 383 564)
Profit/((loss) for the period attributable to:
Owners of the parent (2 755 819) (2 680 820) (7 753 819)
Non-controlling interests (20 422) (150 816) (350 025)
(2 776 241) (2 831 636) (8 103 844)
Total comprehensive income/(loss) for the period attributable to:
Owners of the parent (4 963 600) (2 286 694) (10 052 933)
Non-controlling interests (7 012) (145 308) (330 631)
(4 970 611) (2 432 002) (10 383 564)
Loss per ordinary share
Basic and diluted loss per share (in pence) 10 (0.18) (0.25) (0.60)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
GBP (£) Notes 6 months ended 6 months ended 31 August 2022 12 months ended 28 February2023
31 August 2023 (unaudited) (unaudited) (audited)
Assets
Non-current assets
Intangible assets 11 8 401 278 6 812 947 7 279 593
Property, plant, and equipment 12 29 571 064 26 142 978 26 723 218
Total non-current assets 37 972 342 32 955 925 34 002 811
Current assets
Inventories 13 3 171 674 1 429 829 2 667 193
Trade and other receivables 14 2 896 972 2 830 985 2 592 770
Cash and cash equivalents 15 6 686 921 1 675 245 8 205 705
Total current assets 12 755 567 5 936 059 13 465 668
Total assets 50 727 909 38 891 984 47 468 479
Equity and liabilities
Equity
Share capital 20 56 944 408 38 655 078 56 883 908
Accumulated deficit (21 089 934) (13 420 141) (18 334 115)
Warrant reserve 21 338 903 192 632 50 307
Share-based payment reserve 22 994 087 1 074 125 1 049 663
Convertible loan note reserve 4 595 614 - -
Foreign currency translation reserve (6 040 689) (1 140 560) (3 833 234)
Equity attributable to the owners of the parent 35 742 389 25 361 134 35 816 529
Non-controlling interests (154 442) 37 892 (147 430)
Total equity 35 587 947 25 399 026 35 669 099
Non-current liabilities
Environmental rehabilitation liability 18 912 550 319 440 965 578
Borrowings 16 4 328 373 4 198 763 3 287 121
Lease liability 19 568 076 89 776 707 355
Deferred tax liability - - -
Total non-current liabilities 5 808 999 4 607 979 4 960 054
Current liabilities
Trade and other payables 17 5 289 812 3 881 051 3 655 126
Borrowings 16 3 839 746 4 829 492 2 915 917
Lease liability 19 201 405 174 436 268 283
Total current liabilities 9 330 963 8 884 979 6 839 326
Total equity and liabilities 50 727 909 38 891 984 47 468 479
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 28 November 2023.
ANTHONY VILJOEN
Chief Executive Officer
28 November 2023
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
GBP (£) 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 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) (2 831 636)
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
Loss for the period - - (5 072 999) - - - (5 072 999) (199 209) (5 272 208)
Other comprehensive income/(loss) - - - - (567) (2 692 674) (2 693 241) 13 887 (2 679 354)
Transactions with owners:
Issue of shares 19 801 083 - - - - - 19 801 083 - 19 801 083
Share issue costs (1 962 253) - - - - - (1 962 253) - (1 962 253)
Share-based payments - - - - (23 895) - (23 895) - (23 895)
Warrants exercised in the year 390 000 - 159 025 (159 025) - - 390 000 - 390 000
Warrants modified in the year - - - 16 700 - - 16 700 - 16 700
Total equity at 28 February 2023 56 883 908 - (18 334 115) 50 307 1 049 663 (3 833 234) 35 816 529 (147 430) 35 669 099
Loss for the period - - (2 755 819) - - - (2 755 819) (20 422) (2 776 241)
Other comprehensive income/(loss) - - - - (325) (2 207 455) (2 207 780) 13 410 (2 194 370)
Transactions with owners:
Issue of shares 60 500 - - - (60 500) - - - -
Share-based payments - - - - 5 249 - 5 249 - 5 249
Issue of convertible loan notes - 5 124 235 - - - - 5 124 235 - 5 124 235
Convertible loan notes issue costs - (528 621) - - - - (528 621) - (528 621)
Issue of warrants - - - 288 596 - - 288 596 - 288 596
Total equity at 31 August 2023 56 944 408 4 595 614 (21 089 934) 338 903 994 087 (6 040 689) 35 742 388 (154 442) 35 587 946
CONSOLIDATED STATEMENT OF CASH FLOWS
GBP (£) Notes 6 months ended 6 months ended 31 August 2022 (unaudited) 12 months ended
31 August 2023 (unaudited) 28 February 2023 (audited)
Cash flows from operating activities
Loss before taxation (2 776 241) (3 720 569) (8 970 047)
Adjustments for:
Fair value adjustment to customer contract 5 40 866 30 726 261 689
Depreciation of property, plant, and equipment 12 1 692 332 949 884 2 377 349
Depreciation of intangible assets 11 3 499 5 285 10 290
Share-based payments 5 250 267 401 345 276
Equity-settled transactions - - 16 700
Finance income (22 354) (21 368) (39 054)
Finance costs 8 309 832 186 874 669 824
Changes in working capital:
Decrease/(increase) in receivables (530 322) 1 189 937 869 458
Decrease/(increase) in inventory (706 531) 57 917 (1 471 706)
Increase in payables 1 910 817 851 750 997 469
Net cash (used)/generated in operating activities (72 853) (202 163) (4 932 752)
Cash flows from investing activities
Purchase of intangible assets (1 477 104) (1 606 380) (2 580 267)
Purchase of property, plant, and equipment (6 415 069) (7 466 335) (10 677 505)
Net cash used in investing activities (7 892 173) (9 072 715) (13 257 772)
Cash flows from financing activities
Finance income 22 354 21 368 39 054
Finance costs 8 (209 479) (153 901) (499 621)
Lease payments 19 (193 149) (120 977) (363 959)
Net proceeds from issue of shares 20 - - 18 228 830
Proceeds from equity component of convertible loan notes 4 848 214 - -
Proceeds from borrowings (incl. debt component of convertible loan notes) 2 816 215 3 997 799 1 729 454
Repayment of borrowings (425 792) (166 932) (89 014)
Net cash generated from financing activities 6 858 363 3 577 357 19 044 744
Net decrease/(increase) in cash and cash equivalents (1 106 663) (5 697 521) 854 220
Cash and cash equivalents at the beginning of the period 8 205 705 7 365 379 7 365 379
Exchange differences (412 121) 7 387 (13 894)
Cash and cash equivalents at the end of the period 6 686 921 1 675 245 8 205 705
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL INFORMATION
For the period ended 31 August 2023
1. Corporate information and principal activities
Andrada Mining Limited ("Andrada") 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 2023 and the comparative figures for the 6-month period ended 31 August
2022 and for the year ended 28 February 2023 are shown.
As at 31 August 2023, the Andrada Group comprised:
Company Equity holding and voting rights Country of incorporation Nature of activities
Andrada Mining Limited N/A Guernsey Ultimate holding company
Greenhills Resources Limited(1) 100% Guernsey Holding company
Andrada Mining Pty Limited(1) 100% South Africa Group support services
Tantalum Investment Pty Limited(1) 100% Namibia Tin & tantalum exploration
Andrada Mining (Namibia) Pty Limited(2) 100% Namibia Tin, tantalum & lithium operations
Uis Tin Mining Company Pty Limited(3) 85% Namibia Tin, tantalum & lithium 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
Uis Tin Mining Company Rwanda Limited(2) 100% Rwanda Tin & tantalum exploration
(1) Held directly by Andrada Mining Limited
(2) Held by Greenhills Resources Limited
(3) Held by Andrada 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, Andrada Mining Limited. The Group's key
subsidiaries, Andrada 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$23.87 and the average rate for the period was £1
= N$23.25.
2. SIGNIFICANT ACCOUNTING POLICIES
a. 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, OTCQB 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 2023 is
unaudited and does not constitute statutory financial information. The
statutory accounts for the year ended 28 February 2023 are available on the
Company's website.
b. Going concern
These financial statements have been prepared on the basis of accounting
principles applicable to a going concern which assumes the Group will be able
to continue in operation for the foreseeable future and will be able to
realize its assets and discharge its liabilities in the normal course of
operations. At period end, the Group had cash in the bank of £6.7m and had
drawn down £1.5m of the Standard Bank working capital facility.
In September 2023, N$50m (c. £2.1m) of the N$100m (c. £4.2m) funding from
the Development Bank of Namibia was received. These funds will be used to
expedite the implementation of the Uis Mine Stage II Continuous Improvement
Project.
In November 2023, US$25m (c. £19.8m) was received from Orion Resource
Partners. This includes US$2.5m (c. £2.0m) equity, a US$10m (c. £7.9m)
Convertible Loan Note and a US$12.5m (c. £9.9m) unsecured tin royalty. The
equity and loan note will be used to accelerate Andrada's overall strategy of
achieving commercial production of its lithium, tin and tantalum revenue
streams. The royalty funds will be used for the sole purpose of increasing
Andrada's tin production as it ramps up its capital programmes over the next 2
years.
Management has prepared a detailed cash flow forecast for the period to 30
November 2024 and have performed stress tests of these forecasts. The base
case forecast demonstrates that the Group will have sufficient funds to meet
its liabilities as they fall due. The main estimates considered as part of
management's going concern assessment are production profiles, tin, lithium
and tantalum prices, exchange rates and committed capital. The production
profile is based on the Group's current achieved production post the
completion of the expansion project, as well as the additional production on
the successful completion of the continuous improvement capital project. The
Group also retains the ability to flex its ongoing exploration and
metallurgical capital expenditures in line with cash availability as well as
macro-economic circumstances.
The forecast revenue and funding raised to date supports the liquidity
requirements of the Group and its ability to meet its obligations in the
ordinary course of business until February 2025. Accordingly, the Directors
have concluded that the going concern basis in the preparation of the
financial statements is appropriate and that there are no material
uncertainties that would cast doubt on that basis of preparation.
c. 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 relevant. Actual results may differ from
these estimates. 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.
d. Going concern and liquidity
Significant estimates were required in forecasting cash flows used in the
assessment of going concern including tin, tantalum and lithium 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(b).
e. 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 risk-free discount rate of 13% (August 2022: 13% and
February 2023: 13%), an inflation rate of 5.3% (August 2022: 7% and February
2023: 5.3%) and an estimated mining period of 12.9 years (August 2022: 16.5
years and February 2023: 13.4 years), being the Phase 1 expansion life of
mine. The rates used are in line with the Namibian market rates.
f. 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 directors have
concluded that there are no indications of impairment in respect of the
carrying value of Namibian intangible assets at 28 February 2023 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.
g. 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,
forecast commodity prices, production profile, inflation rate, post-tax real
discount rate and market capitalisation of the Group. Management identified
the reduction in the tin price as an indicator of impairment. In undertaking
the impairment review, management have also reviewed the underlying LoM
valuation model for Uis. The LoM valuation model is on a fair value less
cost to develop basis and includes assessments of different scenarios
associated with capital improvements and expansion opportunities. The
impairment testing performed by management did not result in an impairment.
The forecasts require estimates regarding forecast tin, tantalum and lithium
prices, ore resources, production, operating and capital costs. Under the base
case forecast scenario, management used a forecast tin price of $26 000,
tantalum price of $150 000, lithium price of $2 960 dropping to $1 051 in
FY2027, a post-tax real discount rate of 8.7%, an inflation rate of 5.5% and a
life of mine of 30 years. The forecast indicates sufficient headroom as at 31
August 2023.
The complex judgement in determining the recoverable amount of mining assets
is an estimation of the future tin price. The estimation of future tin price
is subject to uncertainty considering the volatility of market. Management has
therefore compared the forecast tin price with the economic consensus
estimates. Furthermore, a sensitivity analysis was performed by lowering the
forecast tin prices by 5% which also indicated sufficient headroom as at 31
August 2023.
As an additional test, management performed certain sensitivity calculations.
These included raising the discount rate to 9.7% post tax real rate, lowering
plant recovery by 5% and increasing operating costs by 5%. In each of these
circumstances, the forecast indicated sufficient headroom as at 31 August
2023.
h. 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.
i. 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.
j. 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.
k. 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.
l. 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.
m. 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 the best estimate of the incremental rate and requires
management's judgement as there are no observable rates available.
n. 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 2023, the Group recognised a receivable at fair value through
profit or loss of £432 220 (August 2022: receivable of £519 321 and
February 2023: receivable of £126 125).
3. Adoption of new and revised standards
Several 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 2023 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.
a. Accounting standards and interpretations not applied
There are several 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 the chief operating decision-makers) by the way that the Group's
operations are organised. The Group has previously reported a Namibian and a
South African operating segment. In the 2021 financial year, the Group made
the decision to impair the full value of the South African mining licences as
it chose to focus on developing its Namibian assets and it did not intend to
incur any further expenditure on its South African licences. The Group now has
a single operating segment, consisting of the Namibian operations.
5. Revenue
GBP (£) 6 months ended 6 months ended 12 months ended
31 August 2023 (unaudited) 31 August 2022 (unaudited) 28 February 2023 (audited)
Revenue from the sale of tin 8 863 854 4 723 857 10 024 487
Revenue from the sale of sand 24 009 33 478 64 676
Total revenue from customers 8 887 863 4 757 335 10 089 163
Other revenue - change in fair value of (40 866) (30 726) (261 689)
customer contract
8 846 997 4 726 609 9 827 474
6. Cost of sales
GBP (£) 6 months ended 6 months ended 12 months ended
31 August 2023 (unaudited) 31 August 2022 (unaudited) 28 February 2023 (audited)
Costs of production 6 340 380 5 049 956 9 334 142
Smelter charges 643 468 339 978 757 459
Logistics costs 79 401 59 328 106 626
Government royalties 261 790 275 114 311 191
7 325 039 5 724 376 10 509 418
7. Administrative expenses
The loss for the period has been arrived at after charging:
GBP (£) 6 months ended 6 months ended 12 months ended
31 August 2023 (unaudited) 31 August 2022 (unaudited) 28 February 2023 (audited)
Staff costs 1 216 022 1 083 726 3 025 406
Depreciation of property, plant & equipment 209 960 113 185 366 190
Professional fees 1 089 805 443 781 1 201 984
Travelling expenses 153 875 150 450 350 884
Uis administration expenses 484 264 266 779 916 238
Auditor's remuneration 5 350 5 000 190 000
Foreign exchange losses 305 870 315 510 696 621
IT costs 199 685 105 846 285 408
Other costs 366 473 73 018 418 621
4 031 304 2 557 296 7 451 352
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
GBP (£) 6 months ended 6 months ended 12 months ended
31 August 2023 (unaudited) 31 August 2022 (unaudited) 28 February 2023 (audited)
Interest on lease liability 50 506 15 882 156 118
Interest on environmental rehabilitation liability 13 851 17 209 14 085
Bank interest 150 915 95 900 338 812
Interest on convertible loan notes 19 809 - -
Interest on warrants 16 187 - -
Other interest 58 564 57 882 160 809
309 832 186 874 669 824
9. Taxation
The tax expense represents the sum of the tax currently payable and
deferred tax.
GBP (£) 6 months ended 6 months ended 12 months ended
31 August 2023 (unaudited) 31 August 2022 (unaudited) 28 February 2023 (audited)
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 (2 776 241) (3 720 569) (8 970 048)
Profit/ (Loss) before taxation multiplied by the Guernsey: Corporation tax - - -
charge rate of 0%
Effects of:
Differences in tax rates (overseas jurisdictions) (548 888) (615 188) (1 791 238)
Tax losses carried forward 548 888 615 188 1 791 238
Movement in deferred tax - 888 933 866 203
Tax for the period - 888 933 866 203
Accumulated losses in the subsidiary undertakings for which there is an
unrecognised deferred tax asset are £9 379 913 (August 2022: £5 131 401
and February 2023: £8 100 173).
10. Loss per share from continuing operations
The calculation of a basic loss per share of 0.18 pence (February 2022: loss
per share of 0.25 pence and February 2023: loss per share of 0.60 pence), is
calculated using the total loss for the period attributable to the owners of
the Company of £2 755 819 (February 2022: £2 680 820 and February 2023:
£7 753 819 and the weighted average number of shares in issue during the
period of 1 538 528 155 (August 2022: 1 064 247 295 and February 2023: 1
291 331 804). 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 2023 is 76 309 563 (August 2022: 97 310 649 and February
2023: 77 636 918). These potentially dilutive ordinary shares may have a
dilutive effect on future earnings per share.
11. Intangible assets
GBP (£) Exploration and evaluation assets Computer software Total
Cost
As at 31 August 2022 6 723 897 122 418 6 846 315
Additions for the period 957 860 - 957 860
Exchange differences (476 995) (10 104) (487 099)
As at 28 February 2023 7 204 762 112 313 7 317 076
Additions for the period 1 477 104 - 1 477 104
Exchange differences (346 855) (5 155) (352 010)
As at 31 August 2023 8 335 011 107 159 8 442 170
Accumulated Depreciation
As at 31 August 2022 - 33 368 33 368
Charge for the period - 5 005 5 005
Exchange differences - (890) (890)
As at 28 February 2023 - 37 483 37 483
Charge for the period - 3 499 3 499
Exchange differences - (91) (91)
As at 31 August 2023 - 40 892 40 892
Net Book Value
As at 31 August 2023 8 335 011 66 268 8 401 278
As at 28 February 2023 7 204 762 74 831 7 279 593
As at 31 August 2022 6 723 897 89 050 6 812 947
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 test work programme, environmental studies, and
region exploration projects.
12. Property, plant, and equipment
GBP (£) 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 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 30 084 927
Additions for the period - 2 151 424 (122 546) 808 190 750 363 1 121 536 72 089 85 000 104 577 (7 960) 232 099 5 194 772
Disposals for the period - - (309 259) - - (61 435) - - - - - (370 694)
Transfer from exploration and evaluation asset - (9 532 184) 9 532 184 - - - - - - - - -
Exchange differences (1 351) (119 492) (2 500 783) (279 125) (97 049) (172 923) (31 466) (28 470) (32 449) (44 458) (25 272) (3 332 838)
As at 28 February 2023 11 262 1 240 874 23 662 690 2 612 227 928 572 1 558 697 283 040 254 492 328 396 436 819 259 098 31 576 167
Additions for the period - 3 953 001 380 379 1 838 423 - 22 458 68 646 66 240 85 926 - - 6 415 073
Disposals for the period - - - - - - - - - - - -
Exchange differences (776) (763 865) (963 365) (227 596) (63 968) (112 191) (21 231) (19 211) (24 850) (30 092) (17 849) (2 244 994)
As at 31 August 2023 10 486 4 430 010 23 079 70 4 223 054 864 604 1 468 964 330 455 301 521 389 472 406 727 241 249 35 746 246
Accumulated Depreciation
As at 31 August 2022 - - 2 330 648 840 539 17 585 425 950 145 881 88 373 72 793 19 527 653 3 941 949
Charge for the period - - 532 865 624 439 7 567 168 863 25 354 21 703 18 605 19 591 8 479 1 427 466
Exchange differences - - (264 204) (138 298) (2 380) (69 973) (17 358) (10 876) (9 085) (3 475) (817) (516 466)
As at 28 February 2023 - - 2 599 309 1 326 680 22 772 524 840 153 877 99 200 82 313 35 643 8 315 4 852 949
Charge for the period - - 802 796 587 519 32 511 156 332 36 216 27 251 30 183 17 422 2 104 1 692 334
Exchange differences - - (182 819) (106 619) (2 411) (49 187) (11 564) (7 515) (6 452) (2 907) (627) (370 101)
As at 31 August 2023 - - 3 219 286 1 807 580 52 872 631 985 178 529 118 936 106 044 50 158 9 792 6 175 182
Net Book Value
As at 31 August 2023 10 486 4 430 010 19 860 418 2 415 474 811 732 836 979 151 926 182 585 283 428 356 569 231 457 29 571 064
As at 28 February 2023 11 262 1 240 874 21 063 381 1 285 547 905 800 1 033 857 129 163 155 292 246 083 401 176 250 783 26 723 218
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
Additions to the mining asset under construction include capitalised costs and
equipment purchased as part of the construction of the Bulk Sample Processing
Facility. This includes a Lithium pilot plant, a Tantalum pilot plant and an
ore sorting plant. Additions to the mining asset include capitalised costs
and equipment purchased as part of the Uis Phase 1 Continuous Improvement
project
13. Inventories
GBP (£) 6 months ended 31 August 2023 (unaudited) 6 months ended 31 August 2022 (unaudited) 12 months ended
28 February 2023 (audited)
Run-of-mine stockpile 1 669 176 605 258 589 725
Tin concentrate on hand 723 747 204 236 1 364 286
Consumables 778 752 620 335 713 182
3 171 674 1 429 829 2 667 193
14. Trade and other receivables
6 months ended 31 August 2023 (unaudited) 6 months ended 31 August 2022 (unaudited) 12 months ended
28 February 2023 (audited)
Trade receivables 305 410 160 188 27 678
Trade receivables at fair value through profit 432 220 (519 321) 126 125
or loss
Other receivables 951 525 538 218 1 369 867
VAT receivables 1 207 817 2 651 899 1 069 100
2 896 972 2 830 984 2 592 770
15. Cash and cash equivalents
GBP (£) 6 months ended 31 August 2023 (unaudited) 6 months ended 31 August 2022 (unaudited) 12 months ended
28 February 2023 (audited)
Cash on hand and in bank 6 686 921 1 675 245 8 205 705
16. Borrowings
6 months ended 31 August 2023 (unaudited) 6 months ended 31 August 2022 (unaudited) 12 months ended
28 February 2023 (audited)
Standard Bank term loan facility 3 387 437 4 467 960 4 083 503
Standard Bank VAT facility 313 186 376 709 336 357
Standard Bank Vehicle Asset Financing 528 064 503 444 484 373
Standard Bank Short-term Loan Facility - 2 005 565 -
Standard Bank working capital facility 1 472 644 1 674 577 1 298 805
Convertible Loan Note (debt component) 2 466 788
6 168 120 9 028 255 6 203 038
On 18 November 2022, a term loan facility of N$90 000 000 (c.£3 771 000), a
VAT facility of N$8 000 000 (c.£335 000) and a working capital facility of
N$35 000 000 (c. £1 476 000) was entered into between the Company's
subsidiary, Uis Tin Mining Company (Pty) Ltd and Standard Bank Namibia. During
the prior year, a vehicle asset financing facility to the value of N$15 000
000 (c. £629 000) was provided.
The maturity date of the term loan facility is November 2026 and the capital
balance of the loan together with accrued interest will be repaid in quarterly
instalments over the next 5 years. Interest is charged on the outstanding
capital balance of the loan at a rate of 3-month JIBAR plus a margin of 4.5%.
The Group is required to meet the following covenants each year on 28 February
as part of the term loan facility agreement:
§ EBITDA ÷ total interest must not be lower than 4.5 times
§ Total debt ÷ EBITDA must not exceed 4 times in year 1, 3.5 times in year 2
and 3 times thereafter
§ Free cash flow before Debt Service Cover ÷ Principal and Interest Senior
Debt Service Payments must not be lower than 1.3 times
§ Free cash flow before Debt Service Cover + Total Cash Collateral ÷
Principal and Interest Senior Debt Service Payments must not be lower than 2
times
The Group received a covenant waiver from Standard Bank for the year ended 28
February 2023. The next measurement date will be 28 February 2024.
The VAT facility is secured by assessed/audited VAT returns (refunds) which
have not been paid by Namibia Inland Revenue. Standard Bank Namibia provides a
facility amounting to the unpaid refunds. Any drawdowns against this facility
are repaid to the bank upon receipt of cash from Namibia Inland Revenue.
The VAT facility and the working capital facility have no fixed maturity date
but are both renewed on an annual basis. Interest accrues on these facilities
at the Namibian prime rate less 1%.
Standard Bank Namibia have provided a N$ 5 956 100 (c. £250 000) 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.
On 21 July 2023 the Group issued 77 unsecured convertible loan notes of £100
000 each to new and existing investors. The notes have a term of 3 years, bear
interest at a rate of 12% per annum and can be redeemed in cash only at the
option of the Group or converted into ordinary shares at a fixed price of
9.45p by mutual agreement between the Group and the note holders. As per IAS
32 and IFRS 9, the convertible loan notes have been classified as a compound
financial instrument. The principal amount is classified as equity because, at
the election of the Group, they can avoid paying cash by delivering a fixed
number of shares. The interest payments are classified as a liability because
there is a contractual obligation to either pay cash or to deliver a variable
number of the Group's shares. Refer to the Statement of Changes in Equity for
the equity portion of this instrument and Note 24 for further details of the
transaction.
17. Trade and other payables
GBP (£) 6 months ended 31 August 2023 (unaudited) 6 months ended 31 August 2022 (unaudited) 12 months ended
28 February 2023 (audited)
Trade payables 2 652 507 3 344 593 1 624 816
Other payables 518 574 168 378 202 127
Accruals 2 118 731 368 080 1 828 183
5 289 812 3 881 051 3 655 126
18. Environmental rehabilitation liability
GBP (£)
Balance at 31 August 2022 319 441
Increase in provision 750 363
Interest expense (3 006)
Foreign exchange differences (101 219)
Balance at 28 February 2023 965 578
Increase in provision -
Interest expense 13 851
Foreign exchange differences (66 877)
Balance at 31 August 2023 912 552
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 2023.
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 2022: 13% and February 2023:
13%), an inflation rate of 5.3% (August 2022: 7% and February 2023: 5.3%) and
an estimated mining period of 12.9 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 9.75%
years.
Residential housing 5 years The lease will continue automatically after the initial period for an 11.75%
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.
Vehicles 5 years The lessee will own the vehicles after the after the lease period of 5 years. 11.25%
GBP (£) Office Building Workshop Housing Mobile Units Vehicles Total
Balance at 31 August 2022 130 669 9 276 95 717 28 550 - 264 212
Additions 534 606 43 507 153 388 - 208 892 940 393
Disposals (22 035) (22 035)
Interest expense 45 733 14 862 58 016 601 21 025 140 237
Lease payments (104 824) (31 229) (32 144) (18 086) (56 699) (242 982)
Foreign exchange differences (55 866) (4 075) (26 752) (1 900) (15 594) (104 187)
Balance at 28 February 2023 528 283 32 341 248 225 9 165 157 624 975 638
Additions - - - - - -
Interest expense 29 952 815 12 137 103 7 500 50 507
Lease payments (94 822) (23 819) (42 970) (7 901) (23 637) (193 149)
Foreign exchange differences (34 712) (1 631) (16 302) (430) (10 440) (63 515)
Balance at 31 August 2023 428 702 7 706 201 090 937 131 047 769 481
The following is the split between the current and the non-current portion of
the liability:
GBP (£) 6 months ended 31 August 2023 (unaudited) 6 months ended 31 August 2022 (unaudited) 12 months ended
28 February 2023
(audited)
Non-current liability 568 076 89 776 707 355
Current liability 201 405 174 436 268 283
769 481 264 212 975 638
20. Share capital
Number of ordinary shares of no-par value issued and fully paid Share Capital
Balance at 31 August 2022 1 121 841 684 38 655 078
Capital raise - 16 September 2022 222 701 660 11 135 083
Capital raise - 10 October 2022 173 320 000 8 666 000
Share issue costs - (1 962 253)
Warrants exercised - 25 January 2023 20 000 000 390 000
Balance at 28 February 2023 1 537 863 344 56 883 908
Shares issued in lieu of Directors fees - 11 May 1 092 189 60 500
Balance at 31 August 2023 1 538 955 533 56 944 408
Authorised: 1 617 600 762 ordinary shares of no-par value
Allotted, issued, and fully paid: 1 538 955 533 ordinary shares of no-par
value
On 16 September 2022, the Group completed an equity fundraising by way of a
placing and direct subscription of 222 701 660 ordinary shares of no-par value
in the Group at a price of 5 pence per share. A further 173 320 000 660
ordinary shares of no-par value in the Group at a price of 5 pence per share
were issued on 10 October 2022 as part of the same capital raise.
On 25 January 2023, warrant holders exercised 20 000 000 warrants at an
exercise price of 1.95.
On 11 May 2023, the Group issued 1 092 189 Ordinary Shares ("New Shares") to
Directors in lieu of their fees for the financial years ended February 2022
and 2023. This is in accordance with the terms of their contracts.
21. Warrant reserve
The following warrants were granted during the period ended 31 August 2023:
Date of grant 21 July 2023
Number granted 15 400 000
Vesting period 2 years
Contractual life 2 years
Estimated fair value per option (pence) 1.874
The estimated fair values were calculated by applying the Black Scholes
pricing model. The model inputs were:
Date of grant 21 July 2023
Share price at grant date (pence) 7.70
Exercise price (pence) 9.45
Expiry date 21 July 2025
Expected volatility 52%
Expected dividends Nil
Risk-free interest rate 3.70%
The warrants in issue during the period are as follows:
Outstanding at 31 August 2022 22 613 334
Exercisable at 31 August 2022 22 613 334
Granted during the period -
Expired during the period -
Exercised during the period (20 000 000)
Outstanding at 28 February 2023 2 613 334
Exercisable at 28 February 2023 2 613 334
Granted during the period 15 400 000
Expired during the period -
Exercised during the period -
Outstanding at 31 August 2023 18 013 334
Exercisable at 31 August 2023 2 613 334
On 21 July 2023, 15 400 000 warrants were issued as part of the convertible
loan note transaction. Each note holder received 2 warrants for every £1
subscribed for. Each warrant enables the holder to subscribe for one ordinary
share at a subscription price of 9.45p. The Warrants are exercisable at any
time from the date of issue for a period of two years. Please refer to note 24
for further details.
22. Share-based payment reserve
Director share options
The following director share options were granted during the period ended 28
February 2023:
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 2022 25 850 000
Exercisable at 31 August 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 28 February 2023 41 450 000
Exercisable at 28 February 2023 23 850 000
Granted during the period -
Forfeited during the period -
Exercised during the period -
Expired during the period -
Outstanding at 31 August 2023 41 450 000
Exercisable at 31 August 2023 23 850 000
a. Employee share options
The following employee share options were granted during the period ended 28
February 2023:
Date of grant 8 April 2022 8 April 2022 8 April 2022
Number granted 2 400 000 1 200 000 1 200 000
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 employee share options in issue during the period are as follows:
Outstanding at 31 August 2022 27 371 229
Exercisable at 31 August 2022 27 371 229
Granted during the period 4 800 000
Forfeited during the period -
Exercised during the period -
Expired during the period -
Outstanding at 28 February 2023 32 171 229
Exercisable at 28 February 2023 27 371 229
Granted during the period -
Forfeited during the period -
Exercised during the period -
Expired during the period -
Outstanding at 31 August 2023 32 171 229
Exercisable at 31 August 2023 27 371 229
23. Events after balance sheet date
a. Funding:
On 5 September 2023, the Development Bank of Namibia ("DBN") served notice confirming that all conditions had been fulfilled or waived and that financial close had occurred. Accordingly, the Group received the 1(st) drawdown of NAD50 million (c. £2.1m) of a total NAD100 million (c. £4.2m). These Funds are being used to expedite the implementation of the Uis Mine Stage II Continuous Improvement Project
On 14 November 2023, a US$25m (c. £19.8m) funding packing was concluded with Orion Resource Partners. This includes US$2.5m (c. £2.0m) equity, a US$10m (c. £7.9m) Convertible Loan Note and a US$12.5m (c. £9.9m) unsecured tin royalty. The equity and loan note will be used to accelerate Andrada's overall strategy of achieving commercial production of its lithium, tin and tantalum revenue streams. The royalty funds will be used for the sole purpose of increasing Andrada's tin production as it ramps up its capital programmes over the next 2 years.
b. Exercise of share options:
On 29 September 2023, the Group issued 3 473 684 Ordinary Shares to satisfy
the following employee share option exercises:
§ 1 736 842 share options at an exercise price of 3p
§ 868 421 share options at an exercise price of 3.5p
§ 868 421 share options at an exercise price of 4p
On 3 October 2023, the Group issued 7 315 786 Ordinary Shares to satisfy the
following employee share option exercises:
§ 3 407 894 share options at an exercise price of 3p
§ 1 953 946 share options at an exercise price of 3.5p
§ 1 953 946 share options at an exercise price of 4p
24. reserves within equity
a. Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
b. Convertible loan note reserve
The convertible loan note reserve represents the equity component of the outstanding convertible loan notes.
On 21 July 2023 the Group raised £7.7m through the issue of 77 unsecured convertible loan notes of £100 000 each to new and existing investors. The notes have a term of 3 years, bear interest at a rate of 12% per annum and can be redeemed in cash only at the option of the Group or converted into ordinary shares at a fixed price of 9.45p by mutual agreement between the Group and the note holders. As per IAS 32 and IFRS 9, the convertible loan notes have been classified as a compound financial instrument. The principal amount is classified as equity because, at the election of the Group, they can avoid paying cash by delivering a fixed number of shares. The interest payments are classified as a liability because there is a contractual obligation to either pay cash or to deliver a variable number of the Group's shares (based on the 30-day VWAP share price). Issues costs have been proportionally deducted for the liability and the equity component.
c. Warrant reserve
The warrant reserve represents the cumulative charge to date in respect of unexercised share warrants at the balance sheet date.
d. Share-based payment reserve
The share-based payment reserve represents the cumulative charge to date in respect of unexercised share options at the balance sheet date as well as fees/salaries owed to directors/employees to be settled through the issuing of shares.
e. Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of entities with a functional currency other than Pound Sterling.
f. Retained earnings/accumulated deficit
The retained earnings/accumulated deficit represents the cumulative profit and loss net of distribution to owners.
CONTACT
Andrada Mining Limited +27 (11) 268 6555
Anthony Viljoen, CEO investorrelations@andradamining.com
Sakhile Ndlovu, Investor Relations
Nominated Adviser
WH Ireland Limited +44 (0) 207 220 1666
Katy Mitchell
Corporate Adviser and Joint Broker
H&P Advisory Limited +44 (0) 20 7907 8500
Andrew Chubb
Jay Ashfield
Matt Hasson
Stifel Nicolaus Europe Limited +44 (0) 20 7710 7600
Ashton Clanfield
Calum Stewart
Varun Talwar
Tavistock Financial PR (United Kingdom) +44 (0) 207 920 3150
Jos Simson andrada@tavistock.co.uk (mailto:andrada@tavistock.co.uk)
Catherine Drummond
Adam Baynes
About Andrada Mining Limited
Andrada Mining Limited, is a London-listed technology metals mining company
with a vision to create a portfolio of globally significant, conflict-free,
production and exploration assets. The Company's flagship asset is the Uis
Mine in Namibia, formerly the world's largest hard-rock open cast tin mine. An
exploration drilling programme is currently underway at Uis with the aim of
expanding the tin resource over the fourteen additional, historically mined
pegmatites, all of which occur within a 5 km radius of the current processing
plant. The Company has set a mineral resource target of 200 Mt to be
delineated within the next 5 years. The existing mine, together with its
substantial mineral resource potential, allows the Company to consider
economies of scale.
Andrada is managed by a board of directors with considerable industry
knowledge and a management team with extensive commercial and technical
skills. Furthermore, the Company is committed to the sustainable development
of its operations as demonstrated by the way the leadership team places
emphasis on creating value for the wider community, investors, and other key
stakeholders. Andrada has established an environmental, social and governance
system that has been implemented at all levels of the Company and aligns with
international standards.
END
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