REG - Aterian PLC - Final Results for the Year Ended 31 December 2024
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RNS Number : 9412G Aterian PLC 01 May 2025
Aterian Plc
("Aterian" or the "Company")
Final Results for the Year Ended 31 December 2024
Aterian Plc (LSE: ATN) is pleased to announce its audited results for the
period ended 31 December 2024.
Chairman's Statement:
Dear Shareholder,
The year 2024 was another year of growth for Aterian, marked by several
significant milestones despite ongoing challenges in the capital markets.
In January, we acquired a 90% interest in Atlantis Metals, a
Botswana-registered company, eventually expanding the Kalahari Copper
world-renowned Belt portfolio from a single licence to seven mineral
prospecting licences for copper and silver, as well as three licences for
lithium brine exploration in the Makgadikgadi Pans region. This acquisition
adds a total of 4,486 km(2) to our exploration footprint.
Our partnership with Rio Tinto Mining and Exploration Limited ("Rio Tinto"),
established in late 2023, continues to progress. Rio Tinto has been actively
evaluating the lithium-bearing pegmatite potential of our southern Rwanda
licence. A short diamond drill program commenced in late 2024, and we eagerly
anticipate laboratory results soon. As part of this collaboration, Rio Tinto
has committed up to USD 7.5 million to explore and develop lithium
opportunities in the HCK project. We also received a licence for 350
hectares in the western province which we look forward to exploring.
In Rwanda, our mineral trading operations are now set to begin after many
months of delay. Following a successful trial trading phase in Q3 2024, we
have optimised workflows and refined our trading team's compliance and
traceability procedures and best practices. This phase demonstrated our
ability to purchase minerals from third parties and sell mineral concentrates
effectively to locally based international trading houses.
Meanwhile, in Morocco, we continued to advance our key projects, including
Agdz, Tata, Azrar, and Jebilet Est. The Tata and Azrar projects yielded
promising new copper discoveries. Additionally, a limited-scope scout reverse
circulation (RC) drill program at Agdz tested several geological and
geophysical targets across an 8 km(2) area. Encouraging copper and silver
grades were returned from several near-surface intersections, and we look
forward to further exploration in 2025.
At our Annual General Meeting in June, shareholders approved a share capital
reorganisation aimed at enhancing marketability and liquidity. This process
involved the subdivision and conversion of existing ordinary shares, followed
by a consolidation, resulting in a more streamlined share structure.
These achievements reflect Aterian's commitment to expanding its critical
metals portfolio, strengthening strategic partnerships, and driving long-term
growth across Africa.
We remain dedicated to responsibly exploring and mining critical minerals,
supporting the global energy transition. As demand for strategic metals
continues to rise, driven by the renewable energy, automotive, and electronics
sectors, securing sustainable supply chains is more crucial than ever. Copper,
in particular, remains essential to renewable energy infrastructure and
transportation electrification, reinforcing our confidence in its strong
long-term market fundamentals.
Our vision is to become an ethical, fully integrated exploration, development,
and trading company operating across multiple mineral assets and
jurisdictions.
Rwanda Exploration
Rwanda is emerging as an attractive and increasingly industrialised mining
destination, offering rich mineral resources, a stable political environment,
and investor-friendly policies.
The country hosts significant deposits of tin, tantalum, tungsten (3Ts),
lithium, niobium, and rare earth elements, all of which are critical
components in global supply chains for technology, energy storage, and
electronics.
With a strong commitment to ethical mining and sustainable resource
development, Rwanda is positioning itself as a key hub for critical minerals
essential to the global energy transition and technological advancements.
Aterian's primary asset in Rwanda is Eastinco Limited ("Eastinco"), a
100%-owned, Rwanda-registered exploration and mining company. Eastinco
currently operates two projects through partnerships with local entities. On 1
August 2023, the Company entered into an Earn-In Investment and Joint Venture
Agreement with Rio Tinto Mining and Exploration Ltd. to explore and develop
lithium and associated by-products at the HCK Joint Venture project.
Additionally, Eastinco is actively pursuing opportunities for portfolio
expansion through potential new joint ventures.
Eastinco also holds a mineral trading licence in Rwanda, enabling it to
purchase concentrates from third parties and export them directly to refiners
or international trading houses. This trading business is expected to generate
sufficient revenue to support self-funded exploration, strengthening the
Company's long-term growth strategy.
Morocco Exploration
In 2024, we made significant progress across our key Moroccan projects at
Agdz, Tata, Azrar, and Jebilet Est, delivering positive assay results at all
sites. A limited scout drilling program at Agdz returned encouraging copper
and silver grades from several shallow intersections. At Azrar, we identified
a promising new copper-gold target extending over a 3.8 km strike length,
hosted in quartz veins and fault breccia. The Tata project also demonstrated
strong potential for sedimentary-hosted copper, with visible mineralisation
and promising copper grades reported along a 32 km strike length.
Additionally, a recent re-interpretation of historical airborne data has
enhanced our targeting precision, further refining our exploration strategy.
As part of a strategic review, we assessed our Moroccan assets to streamline
operations and focus on high-priority projects. Following this evaluation, we
decided to relinquish several non-core research permits that were due for
renewal, allowing us to concentrate our resources more effectively on Agdz,
Azrar, Tata, and Jebilet Est, while maintaining the flexibility to pursue new
opportunities within Morocco.
The progress and results achieved across our Moroccan portfolio reinforce our
confidence in Morocco as a highly prospective mining jurisdiction quickly
gaining attention from the mining community, particularly for critical
minerals essential to the global energy transition.
Botswana Exploration
In January 2024, the Company announced the acquisition of a 90% interest in
Atlantis Metals (Pty) Limited, a privately held, Botswana-registered company.
Atlantis Metals now holds seven mineral prospecting licences for copper-silver
exploration in the Kalahari Copperbelt and three licences for lithium brine
exploration in the Makgadikgadi Pans region, covering a total of 4,486 km(2).
To advance exploration, we have completed desktop studies and
target-generation exercises using available airborne geophysical and remote
sensing data. Ground follow-up on these high-priority targets is planned for
2025.
Botswana is rapidly emerging as a key destination for battery metals,
supported by a stable political environment, investor-friendly policies, and
substantial mineral wealth. Traditionally known for its diamond industry, the
country is now diversifying into critical battery metals, including lithium,
nickel, copper, and manganese, which are essential for the global transition
to electric vehicles (EVs) and renewable energy storage.
Financial Review
During the year under review, the Group made a loss before taxation of
£1,632,000 (2023: loss £1,062,000).
The increase in losses for the year is in large part due to the absence of the
gains on disposal of property plant and equipment which in 2023 amounted to
£272,000.
Administration costs increased from £1,471,000 in 2023 to £1,743,000 in
2024, reflecting an increase in staff and associated overhead costs which were
partly offset by a reduction in legal and professional costs. Directors'
remuneration increased from £224,000 to £256,000.
The losses for the year have been funded from the proceeds of borrowings,
convertible loan notes and by new capital issues from Directors, management,
existing shareholders and new investors through the issue of new shares.
Our Earn-In Investment and Joint Venture Agreement, signed with Rio Tinto in
August 2023 for the exploration and development of lithium and by-products on
the HCK Joint Venture project, is continuing to progress.
Loss per share for the year was 14.39 pence against 10.45 pence in 2023 (as
restated to reflect the share consolidation during 2024).
Notwithstanding the progress made in 2024, the Group needs to raise further
capital to undertake its exploration programme and to develop our mineral
trading operations in Rwanda, which are now set to fully begin. The trading
operations are expected to make a positive contribution to cash flows this
year.
At the year-end, cash balances were £64,000. As at the date of this report,
the Group's cash balances totalled £11,000.
Outlook
We maintain a highly positive outlook for Aterian and remain confident in the
significant value potential of our existing asset portfolio for the company,
its shareholders, and other stakeholders. Our strategic joint venture with Rio
Tinto for lithium exploration in Rwanda further reinforces our conviction and
positions us for long-term success, whether our partner ultimately partakes
further in the partnership or not.
Looking ahead, 2025 stands to be a transformative year for Aterian - one
filled with critical milestones, operational progress, and the potential to
deliver meaningful value creation. As we continue to execute our growth
strategy through focused exploration and trading initiatives, we anticipate
significant developments across our portfolio that could materially enhance
our position in the critical minerals space.
We are fully committed to maintaining open and transparent communication with
shareholders as we move through this exciting chapter. With robust market
fundamentals supporting our direction - particularly in the critical minerals
and battery metals sectors - I am more confident than ever in the Company's
trajectory.
On behalf of Aterian, I extend my sincere thanks to my fellow Board members,
our dedicated employees, and our loyal shareholders for their continued
support and patience. Together, we look forward to making 2025 a landmark year
in Aterian's journey.
The Strategic Report was approved by the Board on 30 April 2025 and signed on
its behalf by:
Charles G Bray
Chairman
Date: 30 April 2025
This announcement contains information which, prior to its disclosure, was
inside information as stipulated under Regulation 11 of the Market Abuse
(Amendment) (EU Exit) Regulations 2019/310 (as amended).
For further information, please visit the Company's website:
www.aterianplc.com (http://www.aterianplc.com) or contact:
Aterian Plc:
Charles Bray, Executive Chairman - charles.bray@aterianplc.com
(mailto:charles.bray@aterianplc.com)
Simon Rollason, Director - simon.rollason@aterianplc.com
(mailto:simon.rollason@aterianplc.com)
Financial Adviser and Joint Broker:
Novum Securities Limited
David Coffman
Colin Rowbury
Tel: +44 (0)207 399 9400
Joint Broker:
SP Angel Corporate Finance LLP
Ewan Leggat / Adam Cowl
Tel: +44 20 3470 0470
Financial PR:
Bald Voodoo - ben@baldvoodoo.com
Ben Kilbey
Tel: +44 (0)7811 209 344
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
YEAR ENDED 31 DECEMBER 2024
Group
Notes Year to Year to
31-Dec-24 31-Dec-23
£'000 £'000
Revenue 4 42 -
Cost of sales (42) -
Gross profit / (loss) - -
Administrative expenses 7 (1,728) (1,471)
Share-based payment expense 23 (40) (1)
Disposal of net smelter royalty 19 200 -
Other income 5 - 192
Gains on disposal of property plant and equipment 10 272
Operating loss (1,558) (1,008)
Interest payable and similar charges 8 (59) (54)
Loss before tax (1,617) (1,062)
Tax expense 9 - -
Loss after tax (1,617) (1,062)
Other comprehensive income:
Items that may be reclassified to profit or loss
Loss on translation of foreign operations (232) (111)
Total comprehensive loss (1,849) (1,173)
Loss per share
Basic and diluted loss per share (pence) 10 (14.26) (10.45)*
All activities relate to continuing operations.
* Restated to reflect share consolidation during 2024.
The accompanying notes are an integral part of these financial statements.
CONSOLIDATED AND COMPANY STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
Group Company
Notes 31-Dec-24 31-Dec-23 31-Dec-24 31-Dec-23
£'000 £'000 £'000 £'000
Non-current assets
Investments 11 - - 3,241 3,206
Intangible exploration and evaluation assets 13 3,405 3,285 - -
Property, plant and equipment 14 139 296 7 7
Total non-current assets 3,544 3,581 3,248 3,213
Current assets
Trade and other receivables 16 76 557 62 218
Inventories 15 17 - - -
Cash and cash equivalents 17 64 73 57 17
Total current assets 157 630 119 235
Total assets 3,701 4,211 3,367 3,448
Equity and liabilities
Share capital 22 11,006 10,892 11,006 10,892
Share premium 22 2,753 2,177 2,753 2,177
Share-based compensation reserve 23 2,482 2,442 2,482 2,442
Interest in shares in EBT 23 (839) (839) (839) (839)
Translation reserve (656) (424) - -
Accumulated losses (13,647) (12,030) (14,543) (13,144)
Convertible loan notes - equity component 20 15 - 15 -
Merger relief reserve 1,200 1,200 1,200 1,200
Total equity 2,314 3,418 2,074 2,728
Current liabilities
Trade and other payables 18 560 402 466 329
Provision for loss 24 161 - 161 -
Deferred consideration 19 - 166 - 166
Borrowings 20 666 225 666 225
Total current liabilities 1,387 793 1,293 720
Total equity and liabilities 3,701 4,211 3,367 3,448
The Company made a loss of £1,435,000 for the year 2024 (2023 - loss of
£1,361,000).
These financial statements were approved by the Board and were authorised for
issue on 30 April 2025 and signed on their behalf by:
Charles G Bray
Chairman
Company number: 07496976
The accompanying notes are an integral part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 31 DECEMBER 2024
Share capital Share premium Share Interest in shares in EBT Translation reserve Convertible loan notes equity component Merger relief reserve Accumu- Total
based compensation reserve lated losses
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 9,647 2,177 2,441 (839) (313) - 1,200 (10,968) 3,345
Loss for the year - - - - - - - (1,062) (1,062)
Other comprehensive loss - - - - (111) - - - (111)
Transactions with owners:
Share based compensation - - 1 - - - - - 1
Issue of new shares 1,245 - - - - - - - 1,245
At 31 December 2023 10,892 2,177 2,442 (839) (424) - 1,200 (12,030) 3,418
Loss for the year - - - - - - - (1,617) (1,617)
Other comprehensive loss - - - - (232) - - - (232)
Transactions with owners:
Issue of convertible loan notes (Note 20) - - - - - 15 - - 15
Share based compensation - - 40 - - - - - 40
Cost of share issues - (35) - - - - - - (35)
Issue of new shares (Note 22) 114 611 - - - - - - 725
At 31 December 2024 11,006 2,753 2,482 (839) (656) 15 1,200 (13,647) 2,314
COMPANY STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 31 DECEMBER 2024
Share capital Share premium Share-based compensation reserve Interest in shares in EBT Convertible loan notes equity component Merger relief reserve Accumulated losses Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 9,647 2,177 2,441 (839) - 1,200 (11,783) 2,843
Loss for the year - - - - - - (1,361) (1,361)
Transactions with owners:
Share based compensation - - 1 - - - - 1
Issue of new shares 1,245 - - - - - - 1,245
At 31 December 2023 10,892 2,177 2,442 (839) - 1,200 (13,144) 2,728
Loss for the year - - - - - - (1,399) (1,399)
Transactions with owners:
Issue of convertible loan notes (Note 20) - - - - 15 - - 15
Share based compensation - - 40 - - - - 40
Cost of share issues - (35) - - - - - (35)
Issue of new shares (Note 22) 114 611 - - - - - 725
At 31 December 2024 11,006 2,753 2,482 (839) 15 1,200 (14,543) 2,074
Reserves Description and purpose
Share capital Nominal value of the contributions made by shareholders in return for the
issue of shares.
Share premium Amount subscribed for share capital in excess of nominal value.
Share-based compensation reserve Cumulative fair value of the charge/(credit) in respect of share options
granted and recognised as an expense in the Income Statement.
Translation reserve The translation reserve comprises translation differences arising from the
translation of financial statements of the Group's foreign entities into
Sterling (£).
Merger relief reserve The merger relief reserve comprises differences between the fair value and at
par value of shares issued for the acquisition of subsidiary
Interest in shares in Employees Benefit Trust (EBT) The Company set up an Employees Benefit Trust on 6 March 2015 (the Equatorial
EBT) for the benefit of its employees. The cost of shares held by the EBT
are presented as a deduction from entity
The proceeds of convertible debt allocated to the conversion option
Convertible loan note- equity component
Accumulated losses Accumulated losses represents cumulative profits and losses, net of dividends
and other adjustments.
The accompanying notes are an integral part of these financial statements.
CONSOLIDATED AND COMPANY STATEMENTS OF CASH FLOWS
YEAR ENDED 31 DECEMBER 2024
Note Group Company
31-Dec-24 31-Dec-23 31-Dec-24 31-Dec-23
£'000 £'000 £'000 £'000
Cash flow from operating activities
Loss after tax (1,617) (1,062) (1,399) (1,361)
Adjustments for:
Depreciation 24 16 1 -
Share-based payment expense 23 40 1 40 1
Liabilities settled by issue of shares 22 95 339 95 339
Interest expense 8 59 54 59 54
Provision for loss 24 161 - 161 -
Cost of share issue (35) (35)
Gain on disposal of Net Smelter Royalty (200) - (200) -
Gains on disposal of property plant and equipment (10) (272) - -
Farm-out gain - (119) - -
Discount on deferred consideration 11 - (35) - -
Operating loss before working capital changes (1,483) (1,078) (1,278) (967)
Changes in working capital:
Increase in inventories (17) - - -
Decrease/ (Increase) in trade & other receivables 250 (87) 156 52
(Decrease) / increase in trade & other payables 108 7 142 (35)
Net cash outflows from operating activities (1,142) (1,158) (980) (950)
Cash flow from investing activities
Purchase of plant and equipment (7) (5) (1) -
Proceeds from disposal of plant and equipment 231 89 - -
Capitalised E&E expenditure (112) (89) - -
Net cash from / (used in) investing activities 112 (5) (1) -
Cash flow from financing activities
Proceeds from borrowings 20 181 342 181 342
Proceeds from issue of loan notes 20 785 - 785 -
Net proceeds from director loans - 127 - 127
Interest paid (31) (22) (31) (22)
Cash proceeds from issue of shares 22 86 679 86 479
Net cash flow from financing activities 1,021 1,126 1,021 926
(9) (37) 40 (24)
Net(decrease) / increase in cash & cash equivalents
Cash & cash equivalents at beginning of the year 73 110 17 41
Exchange (losses)/gains on cash and cash equivalents - - - -
Cash and cash equivalents at end of the year 64 73 57 17
The accompanying notes are an integral part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2024
1. General information
Aterian plc ("the Company") is an investment company, focussed on African
mineral resource investment opportunities. The Company operates through its
100% owned subsidiary, Eastinco Limited ("EME Ltd"), a Rwandan tantalum,
lithium, tin and tungsten exploration company and Aterian Resources Limited
which holds copper-silver and base metal exploration projects in the Kingdom
of Morocco. In January 2024, the Company completed the acquisition of a 90%
interest in Atlantis Metals (Pty) Limited. This private Botswana registered
company holds one mineral prospecting licence for copper-silver in the
Kalahari Copperbelt and three for lithium brine exploration in the
Makgadikgadi Pans region.
On 29 July 2024, the Listing Rules were replaced by the UK Listing Rules
("UKLR") under which the existing Standard Listing category was replaced by
the Equity Shares (transition) category under Chapter 22 of the UKLR.
Consequently, with effect from that date the Company was admitted to the
Equity Shares (transition) category of the Official List under Chapter 22 of
the UKLR and to trading on the London Stock Exchange's Main Market for listed
securities.
The Company is incorporated and domiciled in England and Wales. The address
of its registered office is 27-28 Eastcastle Street, London W1W 8DH.
The registered number of the Company is 07496976.
The consolidated financial information represents the consolidated results of
the Company and its subsidiaries, (together referred to as "the Group").
2. Basis of preparation
2.1 General
These financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS and IFRIC interpretations) as adopted for
use in the United Kingdom ("UK adopted IFRS") and the Companies Act 2006. The
financial statements have been prepared under the historical cost convention
except for the valuation of assets acquired in an asset acquisition which are
measured at fair value.
The financial statements have been rounded to the nearest thousand pounds.
The Company has taken the exemption under s408 Companies Act 2006 and has
therefore not published its own profit and loss account in these financial
statements.
These consolidated financial statements have been prepared in accordance with
the accounting policies set out below, which have been consistently applied to
all the years presented.
The financial statements of the Group are presented in Pounds Sterling, which
is also the functional currency of the Company. The individual financial
statements of each of the Company's wholly owned subsidiaries are prepared in
the currency of the primary economic environment in which it operates (its
functional currency).
2.2 New standards, interpretations and amendments adopted
from 1 January 2024
A number of new standards, interpretations and amendments are in issue which
and which are summarised below:
New currently effective requirements
The table below lists the recent changes to Accounting Standards that are
required to be applied for accounting periods beginning on or after 1 January
2024. None of these changes have had a material impact on the Group's
financial statements.
Effect annual periods beginning before or after
Classification of Liabilities as Current or Non-current - Amendments to IAS 1 1(st) January 2024
Non-current Liabilities with Covenants - Amendments to IAS 1 1(st) January 2024
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16 1(st) January 2024
Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7 1(st) January 2024
Standards and interpretations in issue but not yet effective or not yet
relevant
At the date of authorisation of these financial statements the following
Standards and Interpretations which have not been applied in these financial
statements were in issue but not yet effective. The most significant of these
are as follows:
Effect annual periods beginning before or after
Lack of Exchangeability (Amendment to IAS 21: The Effects of Changes in 1(st) January 2025
Foreign Exchange Rates)
Amendments to the Classification and Measurement for Financial Instruments 1(st) January 2026
(Amendments to IFRS 9 and IFRS 7)
Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and 1(st) January 2026
IFRS 7)
IFRS 18 Presentation and Disclosure in Financial Statements 1(st) January 2027
IFRS 19 Subsidiaries without Public Accountability: Disclosures 1(st) January 2027
The Directors anticipate that the adoption of these Standards and
Interpretations in future periods will have no material impact on the Group's
financial statements.
3. Material accounting policies
3.1 Basis of consolidation
The consolidated financial statements comprise the financial statements of
Aterian Plc and its subsidiaries as at 31 December 2024. Subsidiaries are
entities controlled by the Group. Control exists when the Group is exposed, or
has rights, to variable returns from its involvement with the investee and has
the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if, and only if, the Group has
all of the following:
· Power over the investee (i.e., existing rights that give it the
current ability to direct the relevant activities of the investee)
· Exposure, or rights, to variable returns from its involvement with
the investee
· The ability to use its power over the investee to affect its returns
· Generally, there is a presumption that a majority of voting rights
results in control. When the Group has less than a majority of the voting, or
similar, rights of an investee, it considers all relevant facts and
circumstances in assessing whether it has power over an investee, including:
· The contractual arrangements with the other vote holders of the
investee;
· Rights arising from other contractual arrangements; and
· The Group's voting rights and potential voting rights
The relevant activities are those which significantly affect the subsidiary's
returns. The ability to approve the operating and capital budget of a
subsidiary and the ability to appoint key management personnel are decisions
that demonstrate that the Group has the existing rights to direct the relevant
activities of a subsidiary.
The Group re-assesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control. Consolidation of a subsidiary begins
when the Group obtains control over the subsidiary and ceases when the Group
loses control of the subsidiary. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the year are included in the
statement of profit or loss and other comprehensive income from the date the
Group gains control until the date the Group ceases to control the subsidiary.
When necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies in line with the Group's
accounting policies. All intra-group assets and liabilities, equity, income,
expenses and cash flows relating to transactions between members of the Group
are eliminated in full, on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control,
is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises the related
assets (including goodwill), liabilities, non-controlling interest and other
components of equity, while any resultant gain or loss is recognised in profit
or loss. Any investment retained is recognised at fair value.
The individual financial statements of each entity in the Group are presented
in the currency of the primary economic environment in which the entity
operates, which is the functional currency.
Business combinations are accounted for under the acquisition method. Under
the acquisition method, the results of the subsidiaries acquired or disposed
of are included from the date of acquisition or up to the date of disposal. At
the date of acquisition, the fair values of the subsidiaries' net assets are
determined and these values are reflected in the Consolidated Financial
Statements. The cost of acquisition is measured at the aggregate of the fair
values, at the date of exchange, of assets given, liabilities incurred or
assumed, and equity instruments issued by the Group in exchange for control of
the acquiree, plus any costs directly attributable to the business
combination, and directly expensed.
Any excess of the purchase consideration of the business combination over the
fair value of the identifiable assets and liabilities acquired is recognised
as goodwill. Goodwill, if any, is not amortised but reviewed for impairment at
least annually.
Intra-group transactions, balances and unrealised gains on transactions are
eliminated; unrealised losses are also eliminated unless the cost cannot be
recovered. Where necessary, adjustments are made to the financial statements
of subsidiaries to ensure consistency of accounting policies with those of the
Group.
3.2 Business combinations
A business combination is defined as an acquisition of assets and liabilities
that constitute a business and is accounted for using the acquisition method.
A business is an integrated set of activities and assets that is capable of
being conducted and managed for the purpose of providing goods or services to
customers, generating investment income (such as dividends or interest) or
generating other income from ordinary activities. A business consists of
inputs, including non-current assets, and processes, including operational
processes, that when applied to those inputs, have the ability to create
outputs that provide a return to the Company and its shareholders. A business
also includes those assets and liabilities that do not necessarily have all
the inputs and processes required to produce outputs but can be integrated
with the inputs and processes of the Company to create outputs.
When acquiring a set of activities or assets in the exploration and
development stage, which may not have outputs, the Company considers other
factors to determine whether the set of activities or assets is a business.
The consideration transferred in a business combination is measured at fair
value, which is calculated as the sum of the acquisition-date fair values of
assets transferred by the Group, liabilities incurred by the Group to the
former owners of the acquiree and the equity interest issued by the Group in
exchange for control of the acquiree.
At the acquisition date, the identifiable assets acquired and the liabilities
assumed are recognised at their fair value at the acquisition date, except
that:
· deferred tax assets or liabilities and assets or liabilities related
to employee benefit arrangements are recognised and measured in accordance
with IAS 12 and IAS 19 respectively;
· liabilities or equity instruments related to share-based payment
arrangements of the acquiree or share-based payment arrangements of the Group
entered into to replace share-based payment arrangements of the acquiree are
measured in accordance with IFRS 2 at the acquisition date (see below); and
· assets (or disposal groups) that are classified as held for sale in
accordance with IFRS 5 are measured in accordance with that Standard.
Acquisition-related costs of a business combination, other than costs to issue
equity securities, are expensed as incurred.
3.3 Asset acquisitions
Asset acquisitions
Where the Company has determined that the assets acquired do not meet the
definition of a business, the transaction is accounted for as an asset
acquisition. In such cases, the Company identifies and recognises the
individual assets acquired and liabilities assumed. The cost to the Group is
allocated to the individual identifiable assets and liabilities on the basis
of their fair values at the date of purchase. Such a transaction does not give
rise to goodwill. At the Group level, the transaction is an acquisition of
exploration and evaluation assets. At the Company level, the acquisition is
treated as an investment.
When determining the initial measurement of an asset acquisition, the Company
assesses both the fair value of the consideration paid as well as the fair
value of each asset acquired and liability assumed. The consideration is
presumed to equal to the fair value of the net assets acquired unless there is
evidence to the contrary. The fair value of the consideration determines the
cost to be allocated over the group of assets acquired and liabilities
assumed. The fair values of the individual assets and liabilities are used to
determine the proportional amount of that cost to be allocated to the
identifiable assets and liabilities that make up the transaction. No provision
for deferred tax is recognised on the acquisition.
Expenses incurred directly in relation to the acquisition are capitalised as
part of the cost of the assets acquired.
3.4 Going concern
The financial statements have been prepared on a going concern basis. The
Group has not yet earned significant revenues and as at 31 December 2024 and
the Group's assets in Morocco, Rwanda and Botswana are in the early stages of
exploration and feasibility assessment. Continuing operations of the Group are
currently financed from funds raised from shareholders and this will likely
continue to be the case until revenue is generated from mining and/or trading
and subsequent ore sales. In the short term the Chairman of the Company has
made available to the Company a working capital facility, but the Group will
likely need to raise further funds in order to progress the Group from the
exploration phase into feasibility and eventually into production of revenues.
The Company expects to raise additional equity capital to fund both day-to-day
expenditure and potential growth. Such funding will be required although there
can be no certainty that such funding will be forthcoming. The Company is
reliant on fundraising activities which if not secured in the next month will
require the directors to source funding through alternative means or provide
capital injection, otherwise this may impact the Group's ability to operate as
a going concern.
As at 31 December 2024, the Group had cash and cash equivalents of £64,000
and a working capital facility which is fully utilsed. As at the date of this
report, cash balances were approximately £11,000.
As part of their assessment, the Directors have prepared financial cash-flow
forecasts on the basis that cost reduction and cost deferral measures can be
implemented over the going concern period The Company's base case financial
projections show that the Group can continue to operate within the available
facilities throughout the next 12 months.
Much of the Group's planned exploration expenditure is discretionary and, if
necessary, could be scaled back to conserve cash should circumstances coincide
with our expectations. The Directors have agreed, if circumstances require,
to defer payment of their fees until such time as adequate funding is received
and if necessary, scale back all discretionary expenditure including
exploration expenditure.
The Directors have concluded that these circumstances give rise to a material
uncertainty relating to going concern, arising from events or conditions that
may cast significant doubt on the entity's ability to continue as a going
concern if a further fund raise was unsuccessful. However, considering recent
successful fund raises the Directors are confident that they can continue to
adopt the going concern basis in preparing the financial statements.
The financial statements do not include any adjustment that may arise in the
event that the Group is unable to raise finance, realise its assets and
discharge its liabilities in the normal course of business.
3.5 Revenue recognition
Revenue represents the value of mineral product supplied in the provision of
the Group's metal trading activities.
Revenue is recognised at an amount that reflects the consideration to which
the entity expects to be entitled in exchange for transferring product to a
customer net of sales taxes and discounts.
Revenue from contracts with customers is recognised using the revenue
recognition principals of IFRS 15 Revenue from Contracts with Customers.
Revenue is recognised when performance obligations are satisfied, which occurs
on delivery of the mineral to the customer. Payment is typically due
immediately after delivery, aligning with the timing of revenue recognition.
Typically, a 90% payment will be made by the customer after receipt of bills
of lading and associated documents. The balance is made following completion
of the inspection results.
In order to meet the core principle, IFRS 15 adopts a five-step model which
are assessed in turn.
1- Identify the contracts(s) with a customer.
2- Identify the performance obligations in the contract.
3- Determine the transaction price.
4- Allocate the transaction price to performance obligations.
5- Recognise revenue when (or as) performance obligations are satisfied.
The Company considers that a performance obligation is satisfied at a point
in time when the ore product is shipped to a customer, whether by air or by
sea. The amount of revenue recognised is the amount allocated to the satisfied
performance obligation.
The underlying contract for each sale involves the delivery of Coltan, which
constitutes the primary performance obligation. Payment terms are standard,
with amounts due on the day of delivery, in most cases. There is no
significant financing component beyond the funding cost for the capital while
in transit prior to delivery.
The consideration is generally fixed, with minimal variability. Any
adjustments, such as discounts or price fluctuations are assessed and
estimated at the point of sale.
The Company guarantees all products are from non-conflict sources and complies
with RBA (RMI) requirements and OECD Due Diligence Guidance. As seller, the
Company bears the inland transportation from the place of origin to port and
Rwandan export costs. If certification at Origin of mineral content is lower
than contracted, the Buyer has the right to renegotiate the price of the
cargo.
3.6 Segment reporting
An operating segment is a component of an entity that engages in business
activities from which it may earn revenues and incur expenses (including
revenue and expenses relating to transactions with other components of the
same entity) whose operating results are reviewed regularly by the entity's
chief operating decision maker to make decision about resources to be
allocated to the segment and assess its performance and for which discrete
financial information is available.
The Directors are of the opinion that the Group is engaged in three operating
segments being exploration activity in Morocco, Rwanda and Botswana. The
Company operates in Morocco, Rwanda and Botswana, and has its Corporate
management team in the UK. Note 25 provides the Company's results by operating
segment in the way information is provided to and used by the Company's CEO as
the chief operating decision maker to make decisions about the allocation of
resources to the segments and assess their performance. The Company considers
each of its exploration projects in Morocco, Rwanda and Botswana each form a
segment. Corporate legal entities are aggregated and presented together as
part of the "other" segment on the basis of them sharing similar economic
characteristics.
3.7 Accounting for interest in own shares held though an Employees Benefit Trust
The funds advanced to acquire the shares have been accounted for under IFRS as
a deduction from equity rather than as an asset.
3.8 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
on entity and a financial liability or equity instrument of another.
(a) Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, and subsequently
measured at amortised cost, fair value through other comprehensive income, or
fair value through profit and loss.
The classification of financial assets at initial recognition that are debt
instruments depends on the financial asset's contractual cash flow
characteristics and the Group's business model for managing them. The Group
initially measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss, transaction costs.
In order for a financial asset to be classified and measured at amortised cost
or fair value through OCI, it needs to give rise to cash flows that are
'solely payments of principal and interest (SPPI)' on the principal amount
outstanding. This assessment is referred to as the SPPI test and is performed
at an instrument level.
The Group's business model for managing financial assets refers to how it
manages its financial assets in order to generate cash flows. The business
model determines whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in
four categories:
· Financial assets at amortised cost
· Financial assets at fair value through OCI with recycling of
cumulative gains and losses (debt instruments)
· Financial assets designated at fair value through OCI with no
recycling of cumulative gains and losses upon derecognition (equity
instruments)
· Financial assets at fair value through profit or loss
Financial assets at amortised cost
This category is the most relevant to the Group.
The Group measures financial assets at amortised cost if both of the following
conditions are met:
· The financial asset is held within a business model with the
objective to hold financial assets in order to collect contractual cash flows;
and
· The contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the
effective interest rate (EIR) method and are subject to impairment. Interest
received is recognised as part of finance income in the statement of profit or
loss and other comprehensive income. Gains and losses are recognised in profit
or loss when the asset is derecognised, modified or impaired. The Group's
financial assets at amortised cost include trade receivables (not subject to
provisional pricing) and other receivables.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part
of a group of similar financial assets) is primarily derecognised (i.e.,
removed from the Group's consolidated statement of financial position) when:
· The rights to receive cash flows from the asset have expired; or
· The Group has transferred its rights to receive cash flows from the
asset or has assumed an obligation to pay the received cash flows in full
without material delay to a third party under a 'pass-through' arrangement;
and either (a) the Group has transferred substantially all the risks and
rewards of the asset, or (b) the Group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred
control of the asset.
Convertible loan notes
The proceeds received on issue of the Group's convertible debt are allocated
into their liability and equity components. The amount initially attributed to
the debt component equals the discounted cash flows using a market rate of
interest that would be payable on a similar debt instrument that does not
include an option to convert. Subsequently, the debt component is accounted
for as a financial liability measured at amortised cost until extinguished on
conversion or maturity of the loan note. The remainder of the proceeds is
allocated to the conversion option and is recognised in equity in the
Convertible Loan Note reserve.
Impairment of financial assets
The Group recognises an allowance for allowance for expected credit losses
("ECLs'') for all debt instruments not held at fair value through profit or
loss. ECLs are based on the difference between the contractual cash flows due
in accordance with the contract and all the cash flows that the Group expects
to receive, discounted at an approximation of the original EIR. The expected
cash flows will include cash flows from the sale of collateral held or other
credit enhancements that are integral to the contractual terms. ECLs are
recognised in two stages. For credit exposures for which there has not been a
significant increase in credit risk since initial recognition, ECLs are
provided for credit losses that result from default events that are possible
within the next 12-months (a 12-month ECL). For those credit exposures for
which there has been a significant increase in credit risk since initial
recognition, a loss allowance is required for credit losses expected over the
remaining life of the exposure, irrespective of the timing of the default (a
lifetime ECL).
For trade receivables (not subject to provisional pricing) and other
receivables due in less than 12 months, the Group applies the simplified
approach in calculating ECLs, as permitted by IFRS 9.
Therefore, the Group does not track changes in credit risk, but instead,
recognises a loss allowance based on the financial asset's lifetime ECL at
each reporting date.
The Group considers a financial asset in default when contractual payments are
90 days past due.
However, in certain cases, the Group may also consider a financial asset to be
in default when internal or external information indicates that the Group is
unlikely to receive the outstanding contractual amounts in full before taking
into account any credit enhancements held by the Group.
A financial asset is written off when there is no reasonable expectation of
recovering the contractual cash flows and usually occurs when past due for
more than one year and not subject to enforcement activity. At each reporting
date, the Group assesses whether financial assets carried at amortised cost
are credit impaired. A financial asset is credit-impaired when one or more
events that have a detrimental impact on the estimated future cash flows of
the financial asset have occurred.
(b) Financial liabilities
Financial liabilities are classified, at initial recognition, as financial
liabilities at fair value through profit or loss, loans and borrowings,
payables, or as derivatives designated as hedging instruments in an effective
hedge, as appropriate. All financial liabilities are recognised initially at
fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs. The Group's financial liabilities
include trade and other payables, accruals and loan notes.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as
described below.
Loans and borrowings, trade and other payables, and accruals.
After initial recognition, interest-bearing loans and borrowings, trade and
other payables, and accruals are subsequently measured at amortised cost using
the effective interest method ("EIR'') method. Gains and losses are recognised
in the statement of profit or loss and other comprehensive income when the
liabilities are derecognised, as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included as finance costs in the statement of profit or loss
and other comprehensive income. This category generally applies to trade
payables, other payables and accruals.
Derecognition
A financial liability is derecognised when the associated obligation is
discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new
liability. The difference in the respective carrying amounts is recognised in
profit or loss and other comprehensive income.
3.9 Taxation
Current tax is calculated according to local tax rules, using tax rates and
laws enacted or substantively enacted at the reporting date. Current and
deferred tax is recognised in profit or loss unless it relates to an item
recognised in other comprehensive income or equity in which case the related
current tax or deferred tax is recognised in other comprehensive income or
equity respectively.
Deferred tax is recognised on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial
statements, determined using tax rates and laws that are substantively enacted
at the reporting date and are expected to apply as or when the temporary
differences reverse. Deferred tax assets are recognised only to the extent
that it is probable that future taxable profit will be available against which
the temporary differences can be utilised.
3.10 Property, plant and equipment
Property, plant, and equipment (PPE) is carried at cost less depreciation and
accumulated impairment losses. Where parts of an item of PPE have different
useful lives, they are accounted for as separate items of PPE. The Group
assesses at each reporting date whether items of PPE are impaired.
Depreciation is provided on PPE, at rates calculated to write off the cost
less the estimated residual value of each asset, on a straight-line basis,
over their expected useful lives as follows:
Mining
equipment
10 years
Mining
Assets
8 years
Office
equipment
4 years
Motor
vehicles
5 years
Computer
equipment
2 years
Land
not depreciated
Mine
site
not depreciated
Depreciation methods, useful lives and residual values are reviewed if there
is an indication of a significant change since the last annual reporting date
in the pattern by which the Group expects to consume an asset's future
economic benefits.
The Company capitalises expenditures incurred in exploration and evaluation
(E&E) activities as project costs, categorised as intangible assets
(exploration and evaluation assets), when those costs are associated with
finding specific mineral resources. Expenditure included in the initial
measurement of project costs and which are classified as intangible assets
relate to the acquisition of rights to explore.
Capitalisation of pre-production expenditure ceases when the mining property
is capable of commercial production. Project costs are recorded and held at
cost and no amortisation is recorded prior to commencement of production. An
annual review is undertaken of each area of interest to determine the
appropriateness of continuing to capitalise and carry forward project costs in
relation to that area of interest, in accordance with the indicators of
impairment as set out in IFRS 6. No impairment provision has been made in
the year ended 31 December 2024 (2023: £nil), as more fully described in Note
14.
3.11 Intangible assets - Goodwill
Goodwill represents the excess of the cost of a business combination over the
Group's interest in the fair value of identifiable assets, liabilities and
contingent liabilities acquired.
Cost comprises the fair value of assets given, liabilities assumed, and equity
instruments issued, plus the amount of any non-controlling interests in the
acquiree. Contingent consideration is included in cost at its acquisition date
fair value and, in the case of contingent consideration classified as a
financial liability, remeasured subsequently through profit or loss.
Goodwill is capitalised as an intangible asset with any impairment in carrying
value being charged to profit or loss. Where the fair value of identifiable
assets, liabilities and contingent liabilities exceed the fair value of
consideration paid, the excess is credited in full to the consolidated
statement of comprehensive income on the acquisition date. No impairment
provision has been made in the year ended 31 December 2024 (2023: £nil) as
goodwill was fully impaired in 2022.
3.12 Impairment of non-financial assets (excluding inventories and deferred tax assets)
Impairment tests on goodwill and other intangible assets with indefinite
useful economic lives are undertaken annually at the financial year end. Other
non-financial assets are subject to impairment tests whenever events or
changes in circumstances indicate that their carrying amount may not be
recoverable. Where the carrying value of an asset exceeds its recoverable
amount (i.e. the higher of value in use and fair value less costs to sell),
the asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of an individual
asset, the impairment test is carried out on the smallest group of assets to
which it belongs for which there are separately identifiable cash flows; its
cash generating units ('CGUs').
Goodwill is allocated on initial recognition to each of the Group's CGUs that
are expected to benefit from a business combination that gives rise to the
goodwill. Impairment charges are included in profit or loss, except to the
extent they reverse gains previously recognised in other comprehensive income.
An impairment loss recognised for goodwill is not reversed.
3.13 Investment in subsidiaries
The Company, through its 100% owned Rwanda registered subsidiary, Eastinco
Limited which was acquired on 15 October 2019, is actively engaged
in mineral exploration and development of its portfolio of critical and
strategic metals in Rwanda, with the focus on extracting and recovery of
lithium, tantalum and tin.
Eastinco Limited also holds a metal trading licence, issued by the
authorities in Rwanda, which allows for the trading of metals from our mine
supply and third-party producers and suppliers.The Company also holds a
portfolio of 15 highly prospective copper-silver and other base metal
exploration projects in Morocco through its 100% owned Moroccan subsidiary,
Aterian Resources Limited.
In January 2024, the Company announced the acquisition of a 90% interest in
Atlantis Metals. This private Botswana registered company holds one mineral
prospecting licence for copper-silver in the Kalahari Copperbelt and three for
lithium brine exploration in the Makgadikgadi Pans region.
The Directors have reviewed evidence which might suggest whether the
investments in the subsidiaries have become impaired.
In particular, the Directors reviewed whether there exist:
· significant financial difficulty in the subsidiaries;
· a breach of contract, such as a default or past-due event;
· it is becoming probable that the subsidiaries will enter bankruptcy
or another financial reorganisation;
· the disappearance of any market for the debt of the subsidiaries
because of financial difficulties; or
· the financial liabilities of the subsidiaries trade at a deep
discount that reflects likely incurred credit losses.
As more fully described in Note 11, the Directors have considered the evidence
in respect of the Company's investments in its subsidiaries and concluded that
there were no indicators of impairment. The Company made full impairment
against its investment in its Rwandan subsidiaries in the year ended 31
December 2022, amounting to £2,261,000.
3.14 Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash
equivalents includes cash on hand and deposits held at call with financial
institutions and deposits with maturities of three months or less from
inception.
3.15 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is
based on the weighted average principle and includes expenditure incurred in
acquiring the inventories and other costs in bringing them to their existing
location and condition.
3.16 Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at
the rates of exchange ruling at the reporting date. Transactions in foreign
currencies are translated into sterling at the rate of exchange ruling at the
date of the transaction. Exchange differences are taken into account in
arriving at the operating result.
On consolidation of a foreign operation, assets and liabilities are translated
at the closing rate at the reporting date, income and expenses where the
average rate is not materially different to the rates of exchange ruling at
the dates of the transactions are translated at average exchange rates. All
resulting exchange differences shall be recognised in other comprehensive
income and are accumulated in a separate component of equity.
On disposal of the foreign operation the accumulated gains or losses
previously recognised in entity are transferred to profit or loss and are
recognised as a part of the overall profit or loss on disposal of the foreign
operation.
3.17 Share-based payment arrangements
Equity-settled share-based payments are measured at fair value at the date of
issue.
Aterian Plc has granted both share options and warrants that will be settled
through the issuance of shares of the Company.
The cost of equity-settled transactions is measured by reference to the fair
value at the date on which they were granted and is recognised as an expense
over the vesting period,
which ends on the date the recipient becomes fully entitled to the award. Fair
value is determined by using the Black-Scholes option pricing model.
In valuing equity-settled transactions, no account is taken of any service and
performance conditions (vesting conditions), other than performance conditions
linked to the price of the shares of the Company
(market conditions). Any other conditions which are required to be met in
order for the recipients to become fully entitled to an award are considered
to be non-vesting conditions. Market performance conditions and non-vesting
conditions are taken into account in determining the grant date's fair value.
No expense is recognised for awards that do not ultimately vest, except for
awards where vesting is conditional upon a market or non-vesting condition,
which are vesting irrespective of whether or not the market or non-vesting
condition is satisfied, provided that all other performance or service
conditions are satisfied.
At each reporting date before vesting, the cumulative expense is calculated;
representing the extent to which the vesting period has expired and
management's best estimate of the number of equity instruments that will
ultimately vest. The movement in the cumulative expense since the previous
reporting date is recognised in profit and loss, with a corresponding entry in
equity.
Where the terms of the equity-settled award are modified, or a new award is
designated as replacing a cancelled or settled award, the cost based on the
original award terms continues to be recognised over the original vesting
period. In addition, an expense is recognised over the remainder of the new
vesting period for the incremental fair value of any modification, based on
the difference between the fair value of the original award and the fair value
of the modified award, both as measured on the date of the modification. No
reduction is recognised if the difference is negative.
Where an equity-based award is cancelled (including when a non-vesting
condition within the control of the entity or employee is not met), it is
treated as if it had vested on the date of the cancellation, and the cost not
yet recognised in profit and loss for the award is expensed immediately. Any
compensation paid up to the fair value of the award at the cancellation or
settlement date is deducted from equity, with any excess over fair value being
treated as an expense.
3.18 Retirement and termination benefit costs
Payments to defined contribution retirement benefit plans are recognised as an
expense when employees have rendered service entitling them to the
contributions. Payments made to state-managed retirement benefit plans are
accounted for as payments to defined contribution plans where the Group's
obligations under the plans are equivalent to those arising in a defined
contribution retirement benefit plan.
3.19 Exploration, evaluation and development expenditures
Exploration expenditure
Exploration expenditures reflect the costs related to the initial search for
mineral deposits with economic potential or obtaining more information about
existing mineral deposits. Exploration expenditures typically include costs
associated with the acquisition of mineral licences, prospecting, sampling,
mapping, geophysical survey, laboratory work, diamond drilling and other work
involved in searching for mineral deposits.
These assets relate to the exploration and evaluation expenditures incurred in
respect of resource projects that are in the exploration and evaluation stage.
Exploration and evaluation expenditures include costs which are directly
attributable to acquisition and evaluation activities, assessing technical
feasibility and commercial viability.
These expenditures are capitalised using the full cost method until the
technical feasibility and commercial viability of extracting the mineral
resource of a project are demonstrable. During the exploration period,
exploration and evaluation assets are not amortised.
Drilling and related costs that are for general exploration, incurred on sites
without an existing mine, or on areas outside the boundary of a known mineral
deposit which contains proven and probable reserves are classified as
greenfield exploration expenditures and capitalised in accordance with IFRS 6.
Drilling and related costs incurred to define and delineate a mineral deposit
that has not been classified as proven and probable reserves at a development
stage or production stage mine are classified as brownfield activities and are
capitalised as part of the carrying amount of the related property in the
period incurred, when management determines that there is sufficient evidence
that the expenditure will result in a future economic benefit to the Group.
Evaluation expenditure
Evaluation expenditures reflect costs incurred at projects related to
establishing the technical and commercial viability of mineral deposits
identified through exploration or acquired through a business combination or
asset acquisition.
Evaluation expenditures include the cost of:
· establishing the volume (tonnage) and grade of deposits through
drilling of core samples, trenching and sampling activities for an ore body
that is classified as either a mineral resource or a proven and probable
reserve;
· determining the optimal methods of extraction and metallurgical and
treatment processes;
· studies related to surveying, transportation and infrastructure
requirements;
· permitting activities; and
· economic evaluations to determine whether development of the
mineralised material is commercially viable, including scoping, prefeasibility
and final feasibility studies.
Evaluation expenditures are capitalised if management determines that there is
evidence to support probability of generating positive economic returns in the
future. A mineral resource is considered to have economic potential when it is
expected that the technical feasibility and commercial viability of extraction
of the mineral resource can be demonstrated considering long-term metal
prices. Therefore, prior to capitalising such costs, management determines
that the following conditions have been met:
· There is a probable future benefit that will contribute to future
cash inflows;
· The Group can obtain the benefit and control access to it; and
· The transaction or event giving rise to the benefit has already
occurred.
The evaluation phase is complete once technical feasibility of the extraction
of the mineral deposit has been determined through the preparation of a
reserve and resource statement, including a mining plan as well as receipt of
required permits and approval of the Board of Directors to proceed with
development of the mine. On such date, capitalised evaluation costs are
assessed for impairment and reclassified to development costs.
The Group classifies its E&E assets as intangible assets.
Development expenditure
Development expenditures are those that are incurred during the phase of
preparing a mineral deposit for extraction and processing. These include
pre-stripping costs and underground or open-pit development costs to gain
access to the ore that is suitable for sustaining commercial mining, preparing
land, construction of plant, equipment and buildings and costs of
commissioning the mine and processing facilities. It also includes proceeds
received from pre-commercial production.
Expenditures incurred on development projects continue to be capitalised until
the mine and mill move into the production stage.
The Group assesses each mine construction project to determine when a mine
moves into the production stage. The criteria used to assess the start date
are determined based on the nature of each mine construction project, such as
the complexity of a plant or its location.
Various relevant criteria are considered to assess when the mine is
substantially complete and ready for its intended use and moved into the
production stage.
The criteria considered include, but are not limited to, the following:
· the level of capital expenditures compared to construction cost
estimates;
· the completion of a reasonable period of testing of mine plant and
equipment;
· the ability to produce minerals in saleable form (within
specification); and
· the ability to sustain ongoing production of minerals.
If the factors that impact the technical feasibility and commercial viability
of a project change and no longer support the probability of generating
positive economic returns in the future, expenditures will no longer be
capitalised and the capitalised development costs will be assessed for
impairment.
3.20 Farm-outs in the exploration and evaluation stage
On 31 July 2023, the Company signed a definitive Earn-In Investment and Joint
Venture Agreement ("Agreement") with Rio Tinto Mining and Exploration Ltd
("RIO") and Kinunga Mining Ltd ("Kinunga"). The Agreement is for the
exploration and development of lithium and by-products at its HCK Joint
Venture project ("Project") holding the HCK licence (the "Licence") in the
Republic of Rwanda. For accounting purposes, the agreement has been treated as
a farm-out arrangement.
RIO has the option to incur work expenditure of US$3 million over a two-year
period ("Stage 1") to earn an initial 51% interest in the Licence. RIO will
also make cash payments to Aterian, totalling US$300,000, to reimburse
previous operational expenses incurred by Aterian. An initial payment of
US$200,000 was due upon completion of satisfactory due diligence by RIO, and
an additional payment of US$100,000 will be due at the start of Stage 2.
Upon earning a 51% interest in the Licence, RIO can earn an additional 24%
interest in the Licence by funding additional work expenditures of US$4.5
million over a three-year period ("Stage 2"). After Stage 2 RIO will, provided
it contributes the additional funding, hold a 75% interest in the Licence.
RIO has agreed to a 2% net smelter royalty (NSR) over the project with a US$50
million cap that will be due by the future Joint Venture between RIO and
Kinunga to a holder/holders to be notified by Aterian to RIO prior to the NSR
agreement being entered into and such holder/holders to be subject to
completion of satisfactory due diligence by RIO. No production had commenced
as at 31 December 2024 and therefore no royalty was earnt in that period.
Under the terms of the Agreement, RIO has an exclusivity option to invest into
Aterian's two other existing Rwandan projects, which are subject to their own
separate agreements. A management committee comprising representatives of both
RIO and Aterian has been formed to provide financial and operational
oversight. RIO acts as the operator for the Project. Management has determined
that the fair value of the option is immaterial at 31 December 2024 on the
basis that the agreement is in its early stages and the ultimate likelihood of
a successful outcome to the arrangement is uncertain. Accordingly, no value
has been recognised in respect of the option.
In effect, the Group has entered into a farm-out agreement with RIO whereby in
return for a working interest in the Project. RIO is responsible for and will
contribute up to US$7.5m of operating costs and capital expenditure. RIO has
been appointed as operator.
With effect from the Execution Date, Rio Tinto will undertake, operate and
manage all exploration activities on the Project as Operator as approved by
the Management Committee.
The Operator shall charge an operator fee, which shall be calculated as five
percent (5%) of all Project Expenditures (the "Operator Fee").
The Operator Fee will form part of Project Expenditure required to be spent by
Rio Tinto to earn its Participating Interest. If the Joint Venture Entity is
formed, the Operator Fee shall be charged to the Joint Venture Entity.
The Group does not record any expenditure made by RIO (the "farmee'') on its
account. It also does not recognise any gain or loss on its exploration and
evaluation farm-out arrangements but redesignates any costs previously
capitalised in relation to the whole interest as relating to the partial
interest retained. Any cash consideration received directly from the farmee is
credited against costs previously capitalised in relation to the whole
interest with any excess accounted for by the Company (as "farmor'') as a gain
on disposal.
In developing an accounting policy for such farm-out arrangements, the Company
has considered IFRS 6 which effectively provides two options. Either:
(a) Develop an accounting policy under IAS 8
(b) Develop an accounting policy under IFRS 6
Aterian has used the second option by developing and applying an accounting
policy to these arrangements.
As farmor, Aterian accounts for the farm-out arrangement as follows:
- The Company does not record any expenditure made by the farmee on
its behalf.
- Management has determined that the fair value of the option is
immaterial at 31 December 2024 on the basis that the agreement is in its early
stages and the ultimate likelihood of a successful outcome to the arrangement
is uncertain. Accordingly, no value has been recognised in respect of the
option;
- The Company does not recognise a gain or loss on the farm-out
arrangement but rather, redesignates any costs previously capitalised in
relation to the whole interest as relating to the partial interest retained;
and
- Any cash consideration received is credited against costs
previously capitalised in relation to the whole interest with any excess
accounted for by the Company as a gain on disposal.
The initial payment of US$ 200,000 (approximately £164,000) received from RIO
in 2023 was credited against £45,000 of costs previously capitalised in
relation to the whole interest with the excess of £119,000 accounted for by
the Company as a gain on disposal. No further amounts were received in 2024
but an additional payment of US$100,000 will be due at the start of Stage 2.
3.21 Critical accounting estimates and judgements
The preparation of the Group's consolidated financial statements requires
management to make judgements, estimates and assumptions that affect the
reported amounts of revenues, expenses, assets and liabilities, the
accompanying disclosures, and the disclosure of contingent liabilities at the
date of the consolidated financial statements.
Estimates and assumptions are continually evaluated and are based on
management's experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. Uncertainty
about these assumptions and estimates could result in outcomes that require a
material adjustment to the carrying amount of assets or liabilities affected
in future periods.
In particular, the Group has identified a number of areas where significant
judgements, estimates and
assumptions are required. Further information on each of these areas and how
they impact the various
accounting policies are described and highlighted separately with the
associated accounting policy note within the related qualitative and
quantitative note, as described below.
Key judgements, estimates and assumptions:
a) Exploration and evaluation expenditure
The application of the Group's accounting policy for E&E expenditure
requires judgement to determine whether future economic benefits are likely
from either future exploitation or sale, or whether activities have not
reached a stage that permits a reasonable assessment of the existence of
reserves.
In addition to applying judgement to determine whether future economic
benefits are likely to arise from the Group's E&E assets or whether
activities have not reached a stage that permits a reasonable assessment of
the existence of reserves, the Group has to apply a number of estimates and
assumptions.
The determination of a resource is itself an estimation process that involves
varying degrees of uncertainty depending on how the resources are classified
(i.e., measured, indicated or inferred). The estimates directly impact when
the Group defers E&E expenditure.
The deferral policy requires management to make certain estimates and
assumptions about future events and circumstances, particularly, whether an
economically viable extraction operation can be established. Any such
estimates and assumptions may change as new information becomes available. If,
after expenditure is capitalised, information becomes available suggesting
that the recovery of expenditure is unlikely, the relevant capitalised amount
is written off to the statement of profit or loss and other comprehensive
income in the period when the new information becomes
available.
b) Investments
The Company's investments in its subsidiaries are stated at cost less
impairment provisions. Management has applied judgement in a review assessing
whether or not its investments are impaired.
As noted below, in the year ended 31 December 2022, the review concluded that
the recoverable amount of the Rwandan assets did not support either the
Company's investment carrying value of £2,261,000 or the Group's goodwill of
£2,168,000. In 2024, the review concluded that there were no indicators of
impairment to the Group's investment in its Moroccan or Botswanan subsidiaries
and no provision has been made.
c) Farm-out arrangements in the exploration phase
The Group undertakes certain of its business activities through farm-out
arrangements. A farm-out arrangement typically involves an entity (the farmor)
agreeing to provide a working interest in a mining property to a third party
(the farmee), provided that the farmee makes a cash payment to the farmor
and/or incurs certain expenditures on the property to earn that interest.
In developing an accounting policy for such arrangements, management has made
a judgement in applying the terms of the agreement with RIO and considers that
there is no joint control arising out of the arrangement, as RIO effectively
manages expenditure and related committee and will ultimately gain control of
the licence / Kinunga if they continue in the agreement via the two stages. As
such the agreement is not regarded as a joint arrangement under IFRS 11.
The Group recognises only cash payments received and does not recognise any
consideration in respect of the value of the work to be performed by the
farmee and instead carries the remaining interest at the previous cost of the
full interest reduced by the amount of any cash consideration received for
entering the agreement. The effect is that there is no gain recognised on the
disposal unless the cash consideration received exceeds the carrying value of
the entire asset held.
Management has also considered the position that RIO has an option to either
request Kinunga to transfer the licence to a newly formed company or for
Kinunga to issue shares to RIO so that the latter obtains 51% at stage 1 or up
to 75% for stage 2. If RIO exercises its Purchase Option right in accordance
with the Earn-In and Joint Venture Agreement, RIO shall be entitled to acquire
all the Participating Interests held by Kinunga at the fair market value of
such Participating Interests.
Management has determined that the fair value of the option is immaterial at
31 December 2024 on the basis that the agreement is in its early stages and
the ultimate likelihood of a successful outcome to the arrangement is
uncertain. Accordingly, no value has been recognised in respect of the option.
d) Going concern
In their assessment of going concern, the Directors have prepared cash flow
forecasts which require a number of judgments to be made including the
Directors' ability to access further financing and to implement cost saving
and deferral measures, where necessary.
The Directors have prepared a cash flow forecast to September 2026 which
assumes that the Group is not able to raise additional funds within the going
concern period and if that was the case, the forecasts demonstrate that
mitigating measures can be implemented, or significant project expenditure
delayed to reduce the cash outflows to the minimal contracted and committed
expenditure while also maintaining the Group's licences and permits.
In this going concern analysis, the base case cash flow forecast has been
prepared on the following bases:
- Separate budgets have been prepared for each of the projects in
Morocco, Rwanda and Botswana, as well as the Rwanda trading operations and
corporate expenditure for the period to September 2026.
- Each project has an assumed a limited exploration programme with
supporting overhead functions and capital expenditure in a phased approach.
- Corporate expenditure is assumed to continue at current levels.
- New debt or equity funds are not assumed although the Directors are in
discussion with advisors and investors for an additional funding round. We
have similarly excluded fundraising costs.
- Inflationary assumptions have not been specifically factored into
revenue or costs as the impact is not considered material.
The significant judgements involved in this going concern assessment included
consideration of a heightened inflationary environment and the availability of
working capital facilities. In the Directors' judgement, many of the Group's
expenditures are fixed in nature and consequently inflation doesn't represent
a significant source of estimation uncertainty.
The Directors have concluded that these circumstances give rise to a material
uncertainty relating to going concern, arising from events or conditions that
may cast significant doubt on the entity's ability to continue as a going
concern if a further fund raise was unsuccessful. However, considering recent
successful fund raises the Directors are confident that they can continue to
adopt the going concern basis in preparing the financial statement. The
Company is reliant on fundraising activities which if not secured in the next
month will require the directors to source funding through alternative means
or provide capital injection, otherwise this may impact the Group's ability to
operate as a going concern.
Based on their assessment of the financial position, the Directors have a
reasonable expectation that the Group will be able to continue in operational
existence for the next twelve months and continue to adopt the going concern
basis of accounting in preparing these financial statements. Management uses
internal estimates to forecast operating costs and capital expenditure for
future periods, which are subject to various uncertainties. These are based on
current and anticipated levels of activity.
e) Impairment of goodwill and exploration and evaluation
assets
The Group tests annually for impairment or more frequently if there are
indications that the Company's investments or the Group's goodwill and
exploration and evaluation assets might be impaired.
IFRS requires management to test for impairment if events or changes in
circumstances indicate that the carrying amount of a finite life asset may not
be recoverable.
For the year ended 31 December 2024, the Group performed a review for
indicators of impairment in the values of its intangibles and evaluated key
assumptions. These included considering any revisions to the mine plan,
including current estimates of recoverable mineral reserves and resources,
recent operating results and future expected production. This review concluded
that no impairment was necessary.
In the year ended 31 December 2022, the review concluded that the recoverable
amount of the Rwandan assets did not support either the Company's investment
carrying value of £2,261,000 or the Group's goodwill of £2,168,000.
Management determined that all expenditure capitalised in relation to the
Group's Musasa Project should be fully impaired on the basis that all
production activity has been suspended. Accordingly, the Group's goodwill of
£2,168,000 and the Company's investment in Eastinco ME Limited, amounting to
£2,261,000 were fully impaired in 2022.
The Group's review for the year ended 31 December 2024 has concluded that
there has been no change to these circumstances and that no reversal of such
impairment should be made.
Assumptions used in estimating recoverable amounts included future commodity
prices, future operating expenses and capital expenditure estimates and fiscal
regimes.
The Directors have not conducted detailed impairment testing of its
exploration and evaluation assets at 31 December 2024 as no impairment
triggers have been identified during the year. The data generated since
acquisition and published on the Company's website demonstrates the strong
potential for economic discovery.
f) Share-based payments
The Group accounts for equity-settled share-based payments at fair value at
the date of issue.
The Board has exercised judgement in determining whether the warrants issued
during the year should be treated as a financial instrument (IAS 32) or share
based payments (IFRS 2). IFRS 2 applies to any transaction in which an entity
receives goods or services as part of a share-based payment arrangement. That
determination requires careful consideration of all the facts and
circumstances, such as the respective rights of the warrant holders.
The board has determined that all of the 362,685 warrants issued to investors
during 2024 were for the purpose of obtaining funding via equity and debt from
investors. Accordingly, these warrants issued to shareholders and investors do
not fall within the scope of IFRS 2.
f) Convertible loan notes
The convertible loan notes issued in the year are considered to be a hybrid
financial instrument comprising a financial liability (loan) and an embedded
derivative (share option).
The Board has considered the key conversion terms in the loan notes as to
whether they meet the definition of a derivative. Convertible loan notes can
only be classified as equity if they meet the definition of equity, commonly
referred to as the fixed for fixed criterion. As the derivative may be settled
by the Company exchanging a fixed amount of cash for a fixed number of its own
equity instruments, this element is considered to be equity rather than a
liability.
The analysis of each component part means that the loan notes are compound
instruments containing both liability and equity components. As noted above,
the standard approach under IFRS requires that a convertible instrument is
dealt with by an issuer as having two 'components', being a liability host
contract plus a separate conversion feature which, in the case of the
convertible loan notes issued to date, are to be classified as a fair value
liability.
Convertible loan notes have an embedded derivative given the option to convert
into cash. On initial recognition, the contractual cash flows are discounted
at the interest rate that would apply to a note without a conversion feature,
which the Company has estimated to be 20%. This is in order to calculate the
fair value of the liability component of the compound financial instrument.
The fair value of the liability component has then deducted from the fair
value of the compound financial instrument as a whole, with the balance being
taken directly to equity.
4. Revenue
2024 2023
£'000 £'000
Sale of ore 42 -
42 -
All sales in the year ended 31 December 2024 were made to the same customer.
5. Other income
2024 2023
£'000 £'000
Drone survey services - 32
Gain on farm-out (Note 3.20) - 119
Others - 41
- 192
6. Directors' remuneration
Director salaries Fees and salaries Other 2024 2023
benefits Totals Totals
£'000 £'000 £'000 £'000
Executive Directors
Charles Bray 108 1 109 66
Simon Rollason 96 - 96 106
Non-Executive Directors
Devon Marais 28 - 28 28
Alister Hume 12 - 12 12
Kasra Pezeshki 12 - 12 12
256 1 257 224
In addition to the remuneration paid to directors of the Company, Tshepo Janie, a director of Atlantis Metals (Pty) Ltd received remuneration of £22,000 for the year ended 31 December 2024.
7. Administrative expenses
2024 2023
£'000 £'000
Directors' remuneration 256 224
Staff costs 250 115
Auditor's remuneration 125 114
Travel expenses 101 24
Metallurgical tests - 4
Legal expenses 99 84
Professional fees 260 513
Accounting fees 50 45
Provision for loss (Note 24) 161 -
Depreciation 24 16
Other expenses 402 332
1,728 1,471
Auditor's remuneration
2024 2023
£'000 £'000
Auditors' remuneration:
- Audit fee for the current year 82 77
- Under provision in respect of prior year 43 37
125 114
Auditors' remuneration:
- Amounts paid to Group auditor 113 109
- Amounts paid to auditors overseas 12 5
125 114
Staff costs
During the year the average number of employees (including Directors) was 21
(2023: 24).
Aggregate staff costs including directors comprise: 2024 2023
£'000 £'000
Salaries and wages 428 290
Staff welfare 1 1
Social security and pension contributions 77 48
506 339
Key management personnel of the Group comprised the directors of Aterian Plc.
8. Finance costs
2024 2023
£'000 £'000
Interest expense on loan notes 8 -
Interest expense on Timberdale loan 20 -
Interest on related party loan 31 54
59 54
9. Taxation
2024 2023
£'000 £'000
Current tax:
UK taxation - -
Overseas taxation - -
Total tax - -
Reconciliation of income tax
2024 2023
£'000 £'000
Loss before tax (1,617) (1,022)
UK corporation tax rate 25.0% 23.5%
Tax at expected rate of corporation tax (404) (249)
Effects of:
Effect of overseas tax rates (16) (16)
Unutilised tax losses carried forward 420 265
Total tax - -
Since 1 April 2023, there has no longer been a single Corporation Tax rate in
the United Kingdom for non-ring fence profits. The main rate for Corporation
Tax increased from 19% to 25% from this date for profits above £250,000. A
small profits rate of 19% was also announced for companies with profits of
£50,000 or less. Companies with profits between £50,000 and £250,000 pay
tax at the main rate, reduced by a marginal relief. This provides a gradual
increase in the effective Corporation Tax rate. Rwanda has a 30% tax rate and
Morocco has a 31% tax rate.
The Group had losses for tax purposes of approximately £9.1 million as at 31
December 2024 (£7.5 million as at 31 December 2023) which, subject to
agreement with taxation authorities, are available to carry forward against
future profits. Such losses have no expiry date. The tax value of such losses
amounted to approximately £2.1 million (£1.8 million as at 31 December
2023). A deferred tax asset has not been recognised in respect of such losses
carried forward at the year end, as there is insufficient evidence that
taxable profits will be available in the foreseeable future against which the
deductible temporary difference can be utilised.
10. Loss per share
The calculation of the basic and diluted loss per share is based on the
following data:
2024 2023
Earnings £'000 £'000
Loss from continuing operations for the year attributable to the equity (1,617) (1,062)
holders of the Company
Number of shares
Weighted average number of ordinary shares for the purpose of basic and
diluted earnings per share
11,342,198 10,158,535
Basic and diluted earnings per share (pence) (14.26) (10.45)
The earnings per share for the year ended 31 December 2023 has been
restated and presented in line with retrospective adjustments as per IAS 33,
on the basis of the share consolidation approved in June 2024, as described in
Note 22.
The potential number of shares which could be issued following the exercise
of convertible loan notes, options and warrants currently outstanding
amounts to 5,470,805.
Dilutive earnings per share equals basic earnings per share as, due to the
losses incurred, there is no dilutive effect from the existing share options
and warrants or convertible loan notes.
11. Investments
Investment in Subsidiaries
2024 2023
£'000 £'000
Investment
Cost:
At the beginning of the year 5,502 5,502
Additions 35 -
At 31 December 5,537 5,502
Impairment
At the beginning of the year (2,296) (2,261)
Impairment provision - -
Discounting effect on deferred consideration (Note 19) - (35)
At 31 December (2,296) (2,296)
Carrying Amount
At 31 December 3,241 3,206
The Company's subsidiaries as at 31 December 2024 were as follows:
Shareholding Nature of Business Country of Incorporation
Held directly:
Eastinco Limited 100% Mining & exploration Rwanda
Eastinco ME Ltd 100% Mining & exploration UK
Aterian Resources Ltd 100% Mining & exploration UK
Held indirectly:
Musasa Mining Ltd 85% Dormant Rwanda
Kinunga Mining Ltd 70% Mining & exploration Rwanda
Atlantic Minerals Ltd 100% Mining & exploration Seychelles
Adrar Resources S.A.R.L.A.U. 100% Mining & exploration Morocco
Azru Resources S.A.R.L.A.U. 100% Mining & exploration Morocco
Strat Co Limited 100% Dormant Isle of Man
Atlantis Minerals (Pty) Ltd 90% Mining & exploration Botswana
Future Frontier Limited 100% Dormant Rwanda
Stratum Limited 100% Dormant Rwanda
Notes:
(i) The registered office of each of the UK subsidiaries is: Eastcastle
House, 27/28 Eastcastle Street, London, United Kingdom, W1W 8DH.
(ii) The registered office of each of the Rwandan subsidiaries is: Remera,
Gasabo, Umujyi wa Kigali, Rwanda.
(iii) The registered office of each of the Morrocann subsidiaries is: 18 Rue
Jabel Tazekka, 4ème Etage, Appt 9, Agdal, Rabat, Morocco.
(iv) The registered office of Strat Co Limited is: Alma House, 7 Circular
Road, Douglas, Isle of Man, IM1 1AF.
0
(v) The registered office of Atlantis Minerals (Pty) Ltd is Plot 56740,
Block 10, Gaborone, Botswana.
(vi) The registered office of Atlantic Minerals Ltd is Suite 24, First Floor,
Eden Plaza, Edensland, Victoria, PO Box 438, Mahé, Seychelles.
Mining activity at the Group's Musasa Project was suspended in 2022.
Management concluded that the mine assets capitalised in Eastinco Limited
should be fully impaired. Accordingly, the carrying value of the Company's
investment was considered be fully impaired on the basis that the carrying
value represented the Company's investment cost in acquiring the Musasa
Project. Accordingly, an impairment provision of the full carrying value of
£2,261,000 was recognised in the year ended 31 December 2022. The Directors
have considered evidence in respect of the Company's other investments and
concluded that there were no indicators of impairment.
12. Acquisition of Atlantis Minerals (Pty) Ltd
On 8 January 2024, the Company entered into a Sale and Purchase Agreement
(SPA) to acquire a controlling 90% interest in Atlantis Metals (Pty) Ltd
("Atlantis"), a private Bostwana registered entity holding mineral prospecting
licences in the Republic of Botswana. Atlantis currently holds four licences
covering a combined area of 3,516 km2, with one licence targeting copper in
the Kalahari Copperbelt and three licences for lithium brine exploration
within the Makgadikgadi region of northern Botswana. On the basis of the
above, management has concluded that the acquired set of activities and assets
is not a business. The consideration of US$30,000 was settled by the issue of
shares in the Company.
The SPA was subject to certain conditions precedent, including the change of
control approval by the relevant authorities, completion of financial and
corporate due diligence and the transfer of shares in Atlantis to a nominated
subsidiary of Aterian. Change of Control approval was received from the
Ministry of Minerals and Energy in April 2024 allowing the Company to formally
complete the acquisition of its interest in Atlantis. Atlantis was also
awarded six new prospecting licences totalling 970.08 km2 in the Kalahari
Copperbelt bringing its portfolio to ten strategically located copper-silver
("Cu-Ag") and lithium (''Li'') projects in Botswana, covering 4,486.11 km2.
The holder of the outstanding 10% interest in Atlantis is a private Botswana
citizen who is a professional geologist is retained to provide management and
exploration services. Exploration expenditure commitments, acquisition
consideration, and professional service fees totalled a minimum of US$ 80,000
and was payable over the 12 months following the signing of the Sale and
Purchase Agreement.
13. Intangible E&E Assets
Rwandan Moroccan Botswana Other Total
Assets Assets Assets Assets
Cost £'000 £'000 £'000 £'000 £'000
At 1 January 2024 - 3,285 - - 3,285
Additions 2 92 21 5 120
At 31 December 2024 2 3,377 21 5 3,405
Impairment
At 1 January 2024 - - - - -
Charge for the year - - - - -
At 31 December 2024 - - - - -
Net book value
At 31 December 2024 2 3,377 - 26 3,405
Cost £'000 £'000 £'000 £'000 £'000
At 1 January 2023 - 3,241 - - 3,241
Additions 45 44 - - 89
Farmed-out (45) - - - (45)
At 31 December 2023 - 3,285 - - 3,285
Impairment
At 1 January 2023 - - - - -
Charge for the year - - - - -
At 31 December 2023 - - - - -
Net book value
At 31 December 2023 - 3,285 - - 3,285
14. Property, plant and equipment
Group
Mine Mining Equipment Office Equipment Motor Computer Equipment Processing Equipment Land Total
vehicles
Cost £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2024 624 299 6 6 5 1 27 968
Foreign exchange - (123) - - (1) - (6) (130)
adjustment
Disposals (10) (10)
Additions - 1 6 - - - 7
At 31 December 2024 624 166 7 12 4 1 21 835
Depreciation
At 1 January 2024 624 40 6 - 2 - - 672
Charge for the year - 18 1 2 2 1 - 24
At 31 December 2024 624 58 7 2 4 1 - 696
Net book value
At 31 December 2024 - 108 - 10 - - 21 139
Mine Office Equipment Motor vehicles Computer Equipment Processing Equipment Land Total
Mining Equipment
Cost £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 624 671 7 6 2 3 32 1,345
Foreign exchange - (27) (1) - 1 (2) (5) (34)
adjustment
Disposals - (348) - - - - - (348)
Additions - 3 - - 2 - - 5
At 31 December 2023 624 299 6 6 5 1 27 968
Depreciation
At 1 January 2023 624 295 4 - 1 - - 924
Charge for the year - 13 2 - 1 - - 16
Disposals - (268) - - - - - (268)
At 31 December 2023 624 40 6 - 2 - - 672
Net book value
At 31 December 2023 - 259 - 6 3 1 27 296
The Property, Plant and Equipment held by the Company is immaterial.
Impairment reviews
IFRS requires management to undertake an annual test for impairment of
indefinite lived assets and, for finite lived assets, to test for impairment
if events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable.
At the end of June 2022, the Company temporarily suspended operations on the
Musasa Project based on the recommendation of Quiver Ltd, an independent
processing consultancy, to undertake additional metallurgical test work to
improve overall metal recoveries.
On the basis that mining was suspended and low metal recovery, management has
concluded that the mine assets capitalised in Eastinco Limited should be fully
impaired on the basis they related specifically to capitalised exploration
costs of the Musasa mine site, which is now essentially halted. Accordingly,
an impairment provision of the full PPE mine site and associated equipment
value of £877,000 was considered necessary in 2022.
In 2023, certain of the wash plant assets were sold for a sum of US$400,000
(approximately equal to £320,000) and the impairment provision was reversed
in 2023. A total of £89,000 had been received as at 31 December 2023 and
£231,000 was received in 2024.
15. Inventories
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Ore concentrate 17 - - -
17 - - -
Inventories are stated at the lower of cost and net realisable value.
In the year ended 31 December 2024 inventories recognised as an expense within
cost of sales amounted to £42,000 (2023: £nil).
16. Trade and other receivables
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Amounts owed by group undertakings* - - - -
Other debtors 6 347 - 33
Amounts due from farmee (Note 3.20) - 157 - 157
Taxes receivable 43 28 62 28
Prepayments 27 25 - -
76 557 62 218
*Amounts owed by group undertakings are stated net of a provision of
£3,163,000 (2023: £2,812,000), summarised as follows:
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Gross value of loans to group undertakings - - 3,163 2,812
ECL provision brought forward - - (2,812) (2,444)
ECL expense for the year - - (351) (368)
Net value of loans to group undertakings - - - -
17. Cash and cash equivalents
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Cash at bank and in hand 64 73 57 17
There are no restrictions imposed on the cash balances.
18. Trade and other payables
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Trade payables 206 194 112 94
Other payables 281 99 281 88
VAT payable - 34 - -
Amounts due by group undertakings due in less than one year - - - 72
Accruals 73 75 73 75
560 402 466 329
19. Deferred consideration
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Deferred consideration - 166 - 166
- 166 - 166
Deferred consideration was payable to Altus Exploration Management Ltd in
respect of the acquisition of Aterian Resources Limited. In April 2024, the
Company reached an agreement for the disposal of its portion of the Net
Smelter Return Royalty ("NSR") over the HCK Project in Rwanda for a £200,000
gross consideration. Under the agreement the Company sold its interest of 1.40
% of the Rio Tinto Joint Venture NSR to Elemental Altus Royalties Corporation
("Elemental Altus") in exchange for a repayment in full of the total debt
consideration owing to Elemental Altus by the Company. This royalty reduces to
1.25% upon the Musasa licence being issued The debt relates to historical
exploration costs in Morocco owing to Elemental Altus following the
acquisition of the Moroccan exploration portfolio.
20. Borrowings
Group Company
Loan from related party 2024 2023 2024
2023
£'000 £'000 £'000 £'000
Current liability 225 225 225 225
225 225 225 225
Group Company
Loan - others 2024 2023 2024
2023
£'000 £'000 £'000 £'000
Current liability
Trade finance loan 159 - 159 -
Convertible loan notes 282 - 282 -
441 - 441 -
Total borrowings 666 225 666 225
Loan from a related party
On 17 October 2022, the Company entered into a working capital facility with
the trustees of the C Bray Transfer Trust pursuant to which the C Bray
Transfer Trust agreed to make available to the Company a working capital
facility of up to £500,000.
The facility was secured by a fixed and floating charge over all the property
or undertaking of the Company. Interest of 2% per annum accrued on undrawn
amounts and interest of Base Rate + 7.5% per annum on drawn amounts.
C Bray, a director, is a beneficiary of the C Bray Transfer Trust. On 9 August
2023, £300,000 of the loan balance was converted to Ordinary Shares, as
described in Note 22 below. Interest of £31,357 was payable for the year
ended 31 December 2024.
Trade Finance Loan issued with warrants
On 28 August 2024, the Company entered into a trade finance funding agreement
for an aggregate amount of $250,000 (equivalent to approximately £193,000),
being the First Advance under the Agreement (and, subject to agreement between
the parties, further amounts up to a maximum aggregate amount of $1,000,000).
The initial term for the First Advance was 3 months, which was subsequently
extended. The maturity date for each subsequent advance is 24 months from the
applicable drawdown date. The embedded derivative element of the loan is
considered to be trivial and therefore has not been separately valued.
As described in Note 22, with respect to the First Advance, which was made on
25 September 2024, the Company granted warrants over the Company's ordinary
shares representing 30% of the First Advance at 70 pence per ordinary share,
exercisable at £1 per Warrant. The warrants have a 36-month term from the
date of grant. Accordingly, the Company granted the investor 81,256 warrants
to subscribe for new ordinary shares, exercisable at £1.00 per share at any
time until 30 August 2027.
Upon each subsequent drawdown date for a further advance, the Noteholders
shall be granted such number of warrants which represents 30% of the Advance
divided by the applicable Reference Price (70 pence for the initial drawdown
and the average of the daily VWAPs for the five trading days prior to the date
of each subsequent drawdown date). The warrants will have a 36-month term from
the date of grant and will be exercisable at a 40% premium to the relevant
reference price.
An Implementation Fee equal to 5% of the principal amount of the First Advance
was settled in shares (such number of shares being calculated using the
Reference Price). On the First Advance, such fee amounted to $12,500, equating
to £9,497 for which 13,567 shares were issued at the Reference Price of 70
pence per share. An additional agreement fee of $12,500 was charged and
deducted from the loan proceeds.
The loan accrues a fixed coupon of 3.5% of the gross advance on the drawdown
date, In addition, an additional 1.333% per month ("Default Rate") shall apply
to any and all outstanding principal, interest and fees.
Conversion clause
The Noteholders shall be entitled to convert any amount of the loan and/or any
interest and/or fees under this Agreement as has not been settled in cash into
shares by serving a subscription notice on the Company on the following terms:
(a) During the term of the agreement the Noteholders may convert any part of
the loan at the Fixed Premium Placing Price (for the First Advance being
£1.00 per Share and, with respect to any Further Advance, being a 40% premium
to the relevant Reference Price); and
(b) From the expiry of the Initial Term (being 3 months from the drawdown
date) as a result of an elected missed repayment by the Company and until the
balance of the loan is settled in full, the Noteholders may convert any part
of the loan at the Adjusted Subscription Price (being an amount equal to 95
per cent. of the average of the five lowest daily VWAPs (as chosen by the
Noteholder) in the ten trading days prior to the date of the relevant
subscription).
This conversion component is considered to be a derivative because:
- Its value changes in response to the Company's share price
- It requires a net investment that is smaller than otherwise would be
required
The conversion feature also meets the definition of a liability because the
variable amount to be settled varies in responses to the foreign exchange
rate.
The conversion feature has therefore been classified as a derivative
liability.
Repayment in November 2024
On 8 November 2024, the Company made a partial repayment of $58,750, pursuant
to the terms of the Agreement, comprising $50,000 of principal and $8,750 of
interest. This repayment was settled through the issuance of 100,000 ordinary
shares of the Company. As 31 December 2024, $200,000 of principal remained
outstanding and due according to the terms and conditions of the Agreement.
Extension of maturity
The term or maturity of the loan was extended to 28 January 2025 in exchange
for the grant of 50,000 warrants with a maturity of no less than one year
from their issue date and an exercise price of 70 pence per share.
Trade finance loan - summary of movements Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Proceeds received from First Advance 193 - 193 -
Implementation fee (9) (9)
Interest accrued 20 - 20 -
Repaid by issue of shares (45) - (45) -
Balance carried forward 159 - 159 -
Convertible loan notes
Convertible loan notes issued to shareholders
On 3 May 2024, the Company issued £500,000 of Convertible Loan Notes (CLNs)
to two existing shareholders, Altus Exploration Management Ltd., a subsidiary
of Elemental Altus Royalties Corp., a substantial shareholder in the Company,
and Mr. Simon Rollason, the Company's CEO. On 26 June 2024, the Company
announced that it had received notices to convert £500,000 or the full amount
of outstanding CLNs.
The Company therefore converted the £500,000 of CLNs at 70 pence per share in
exchange for the issue of an aggregate of 714,286 new ordinary shares of 10p
each in the Company.
Convertible loan notes due June 2025:
On 9 July 2024, the Company completed the issue of convertible loan note
instruments for an aggregate amount of £140,000.
Any Noteholder has the right (but not the obligation) to serve a conversion
notice on the Company to convert all of the Notes that they hold that are
outstanding and accrued interest into fully paid Ordinary Shares at a fixed
Conversion Price of £0.70 per ordinary share. The Loan Notes fall due for
repayment on 30 June 2025.
The Loan Notes bear interest:
(i) at the rate of 1% per calendar month from the first calendar day
falling one month after the Issue Date: and
(ii) at an increased rate of 2% per calendar month from the first calendar
day falling 5 calendar months after the Issue Date.
Convertible notes are financial instruments that fall within the scope of IAS
32 Financial Instruments: Presentation and IFRS 9 Financial Instruments. On
initial recognition, the contractual cash flows are discounted at the interest
rate that would apply to a note without a conversion feature, which the
Company estimated to be 25%. This is in order to calculate the fair value of
the liability component of the compound financial instrument.
The equity component on initial recognition was £7,840.
Issue of three-month convertible bonds and warrants
On 30 December 2024, the Company completed the issue of £150,000 of
three-month convertible bonds alongside the granting of associated warrants to
existing key shareholders. The convertible bonds fall due for repayment on 29
March 2025 and was structured to provide Aterian with short-term funding to
support its strategic and operational objectives.
The convertible bonds have a 12% per annum coupon rate and convert into new
ordinary shares of £0.10 each in the Company at a fixed price of £0.70 per
share.
The equity component on initial recognition was £7,357.
The convertible bond subscribers also received 231,429 three-year warrants
allowing for exercise into an equivalent number of shares at £0.70 per
ordinary share, as provided for by the Convertible Bonds' terms and more fully
described in Note 23.
Equity instruments granted by a borrower to a lender as part of a financing
agreement may fall within the scope of IFRS 2 if they were issued in exchange
for services provided by the lender, as opposed to forming part of the overall
return to the lender (which would fall under IFRS 9 instead). Management has
considered whether the equity instruments transferred are remuneration for a
distinct service versus the fees that form part of the lender's return. In
these circumstances, the issue of warrants was considered to fall outside the
scope of IFRS 2 and no share-based payment has been recognised on the warrants
issued.
Convertible loan notes - summary of movements Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Proceeds received from issue of loan notes 790 - 790 -
Interest accrued 7 - 7 -
Equity component of loan notes (15) - (15) -
Loans notes converted to share capital (500) - (500) -
Balance carried forward 282 - 282 -
21. Financial instruments
Categories of financial instruments Group Company
2024 2023 2024 2023
Financial assets measured at amortised cost £'000 £'000 £'000 £'000
Receivables 49 532 62 218
Cash and cash equivalents 64 73 57 17
113 605 119 235
Financial liabilities measured at amortised cost
Trade and other payables 560 402 466 329
Provision for litigation 161 - 161 -
Deferred consideration - 166 - 166
Borrowings 384 225 384 225
Convertible loan notes 282 - 282 -
1,387 793 1,293 720
Financial risk management objectives and policies
The Group is exposed through its operations to credit risk and liquidity risk.
In common with all other businesses, the Group is exposed to risks that arise
from its use of financial instruments.
This note describes the Group's objectives, policies and processes for
managing those risks and the methods used to measure them. Further
quantitative information in respect of these risks is presented throughout
this financial information.
General objectives, policies and processes
The Directors have overall responsibility for the determination of the Group's
risk management objectives and policies. Further details regarding these
policies are set out below:
Capital management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
The capital structure of the Group consists of issued capital, reserves and
retained earnings. The Directors review the capital structure on a semi-annual
basis. As a part of this review, the Directors consider the cost of capital,
the risks associated with each class of capital and overall capital structure
risk management through the new share issues and share buy-backs as well as
the issue of new debt or the redemption of existing debt.
The Group is not subject to externally imposed capital requirements.
Market price risk
Market risk is the risk that changes in market prices, such as foreign
exchange rates, interest rates and equity prices will affect the Group's
income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return.
The development and success of any project of the Group will be primarily
dependent on the future prices of various minerals being exploited. Mineral
prices are subject to significant fluctuation and are affected by a number of
factors which are beyond the control of the Company.
Future production from the projects is dependent on mineral prices that are
adequate to make the projects economic. The Group reviews current and
anticipated future mineral prices and adjusts the allocation of financial
resources accordingly.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group's receivables and cash and
cash equivalents.
The Group manages its exposure to credit risk by the application of monitoring
procedures on an ongoing basis. The amount of expected credit losses is
updated at each reporting date to reflect changes in credit risk since initial
recognition of the respective financial instrument. For other financial assets
(including cash and bank balances), the Group minimises credit risk by dealing
exclusively with high credit rating counterparties.
Interest rate risk
A majority of the Group's borrowings are at non-variable rates. Accordingly,
the Group is not exposed to material interest rate risk.
Liquidity risk
Liquidity risk arises from the Company's management of working capital. It is
the risk that the Company will encounter difficulty in meeting its financial
obligations as they fall due.
The Company's policy is to ensure that it will always have sufficient cash to
allow it to meet its liabilities when they become due. The principal
liabilities of the Group arise in respect of trade payables and borrowings
which are all payable within 12 months. At 31 December 2024, total payables
and borrowings due within one year were £1,203,000, which is more than the
Group's cash held at the year-end of £65,000. The Board monitors cash flow
projections on a regular basis as well as information on cash balances, and
manages such cash flows through short-term borrowings, including a working
capital facility, and the raising of equity to support long-term expenditure.
Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk
arising from various currency exposures, primarily with respect to the Rwandan
Franc ("RWF").
Foreign exchange risk arises from future commercial transactions, recognised
monetary assets and liabilities and net investments in foreign operations.
At 31 December 2024, had the exchange rate between the Sterling and RWF
increased or decreased by 10% with all other variables held constant, the
increase or decrease respectively in net assets would amount to approximately
£24k/£(29k). Similarly, the exchange rate between the Sterling and MAD
increased or decreased by 10% with all other variables held constant, the
increase or decrease respectively in net assets would amount to approximately
£14k/(£17k). Also the exchange rate between the Sterling and BWP increased
or decreased by 10% with all other variables held constant, the increase or
decrease respectively in net assets would amount to approximately
£3.5k/(£4k).The Group does not hedge against foreign exchange movements.
22. Share capital
The Ordinary Shares issued by the Company have a 10p par value. The Ordinary
Shares rank pari passu in all respects, including the right to attend and vote
in general meetings, to receive dividends and any return of capital.
Details of changes in the year ended 31 December 2024 are summarised in the
table below.
Year ended 31 December 2024
Number of Number of Number of Share Capital Share Premium
ordinary shares of £0.01
ordinary shares of £0.10
deferred
£'000
£'000
shares of
£0.009
Brought forward at 1 January 2024 1,089,170,115 - - 10,892 2,177
Share split (Note (a)) (1,089,170,115) 1,089,170,115 1,089,170,115 - -
Share consolidation (Note (b)) - (1,078,278,405) - - -
Shares issued in the year (Notes (c)-(f)) - 1,145,334 - 114 576
As at 31 December 2024 - 12,037,044 1,089,170,115 11,006 2,753
Year ended 31 December 2023
Number of Share Capital Share Premium
shares of £0.01
£'000
£'000
Brought forward at 1 January 964,694,093 9,647 2,177
Shares issued in the year 124,476,022 1,245 -
As at 31 December 2023 1,089,170,115 10,892 2,177
Notes:
a) By way of an ordinary resolution passed at the Company's AGM on 10
June 2024, every one ordinary share of £0.01 each ("Existing Ordinary
Shares") was split into one ordinary share of £0.001 each ("New 0.1p Ordinary
Shares") and one deferred share of £0.009 each ("Deferred Shares").
b) On the same date, every existing 100 New 0.1p Ordinary Shares in
issue were consolidated into one ordinary share of £0.10 each ("New Ordinary
Shares") such New Ordinary Shares having the same rights, and being subject to
the same restrictions, as the Existing Ordinary Shares.
c) On 3 May 2024, the Company issued £500,000 of Convertible Loan
Notes (CLNs) to two existing shareholders, Altus Exploration Management Ltd.,
a subsidiary of Elemental Altus Royalties Corp., a substantial shareholder in
the Company, and Mr. Simon Rollason, the Company's CEO. On 26 June 2024, the
Company announced that it had received notices to convert £500,000 or the
full amount of outstanding CLNs.
Additionally, following requests from three suppliers seeking an increased
shareholding in Aterian, the Company agreed to convert £42,197 of creditor
balances. The Company therefore converted an aggregate of £542,197 at 70
pence per share in exchange for the issue of 774,566 new ordinary shares of
10p each in the Company.
d) On 19 September 2024, the Company issued 13,534 new ordinary shares
of 10p at a price of 70p per share to a financial investor as part of a trade
finance funding arrangement. The Company also granted the investor 81,256
warrants to subscribe for new ordinary shares, exercisable at £1.00 per share
at any time until 30 August 2027.
e) On 8 November 2024, holders of the Company's warrants were given
the opportunity to voluntarily accept a change to their terms such that the
exercise price was lowered from 150 pence to 50 pence and the expiration date
amended to 14 November 2024. The holders of 170,834 warrants elected to
accept these amended terms with the remainder choosing to remain on the
original terms. Consequently, the Company issued a total of 170,834 shares at
a price of 50 pence per share from the exercise of warrants and issued an
additional 86,400 ordinary shares at 50 pence per share to certain suppliers
in lieu of outstanding fees.
f) On the same date, the Company made a partial repayment of $58,750,
pursuant to the terms a convertible loan note agreement comprising $50,000 of
principal and $8,750 of interest (equal to approximately £50,000). This
repayment was settled through the issuance of 100,000 ordinary shares.
The Deferred Shares have no right to vote or participate in the capital of the
Company save in respect of insolvency and the Company has not issued any
certificates or credited CREST accounts in respect of them. The Deferred
Shares have not been admitted to trading on any exchange.
2024 2023
Summary of share issue proceeds: £'000 £'000
Shares issued for cash 86 479
Non-cash: 95 245
Shares issued in lieu of cash compensation
Payables settled by issue of shares - 94
Conversion of loan notes 500 -
Director's loan converted to equity - 127
Short-term debt converted to equity 44 300
Total proceeds from share issues 725 1,245
23. Share-based payment arrangements
Options
Equity settled share-option plan
The Company has established a trust for the benefit of the employees and
former employees of the Company's Group and their dependants. The EBT is
managed by a Trustee, who exercises independent decision making with respect
to any voting of shares on behalf of Summerhill Trust. The following changes
have occurred during the year ended 31 December 2024:
- A total 13,257,400 options in issue expired without being exercised
during 2024.
- On 10 June 2024, following the resolution which approved the
sub-division and conversion of each existing ordinary share described in Note
22 above, every 100 existing options in issue were consolidated into one new
EBT option for each new ordinary share of £0.10 each.
- On 20 June 2024, the Company granted 130,000 new EBT options to
Directors, Employees and former Directors. 58% of each new option shall become
available for exercise after twelve months from the Date of Grant of the
Option (the first "Anniversary Date") with a further 11% of the options
exercisable as the twenty four month Anniversary Date. 31% of the options have
no vesting period. The options may be exercised up to 30 December 2030 at a
price of £0.10 per ordinary share.
The fair values of the new options granted for services have been calculated
using Black-Scholes model assuming the inputs shown below:
Share price £0.59
Exercise price £0.10
Time to maturity 6.42 years
Risk free rate 4.05%
Volatility 30.0%
Value £0.5181
The total expense recognised in the Statement of Comprehensive Income during
the period in respect of options over Ordinary Shares was £40,151 (2023:
£nil).
Summary of EBT Options 2024 2023
Number of EBT Options Number of EBT Options
Outstanding at beginning of year 96,397,400 96,397,400
Expired during the year (13,257,400)
Adjustment on share consolidation (82,308,600) -
Granted during the year 130,000 -
Outstanding at end of the year 961,400 96,397,400
The weighted average remaining life of the options at the end of 2024 was 6.0
years (2023: 5.70 years).
Warrants 2024 2023
Average exercise price per warrant Number of warrants Average exercise price per warrant Number of warrants
Outstanding at beginning of year 1.64p 389,531,345 2.04p 289,531,345
Adjustment on share consolidation 162.36p (385,636,031) - -
Issued during the year 76.72p 362,685 1.12p 104,000,000
Exercised during the year (50.0)p (170,834) - -
Lapsed during the year (211.9)p (1,134,903) (1.5p) (4,000,000)
Outstanding at end of the year 154.74p 2,952,262 1.64p 389,531,345
The following changes have occurred during the year ended 31 December 2024:
- On 10 June 2024, every existing 100 warrants in issue were
consolidated into one warrant for each new ordinary share of £0.10 each as a
result of the share consolidation described in Note 22.
- A total of 1,134,903 warrants expired without being exercised.
- In September 2024, the Company issued in aggregate 81,256 new
warrants over Ordinary Shares as described in Note 22.
- In November 2024, holders of 1,295,718 were offered warrants to
subscribe for new ordinary shares of 10 pence each at an exercise price of 150
pence, exercisable at any time until 30 December 2025 were given the
opportunity to voluntarily accept a change to these terms such that the
exercise price was lowered to 50 pence and the expiration date amended to 14
November 2024.
- The holders of 170,834 warrants elected to accept these amended
terms with the remainder choosing to remain on the original terms.
Consequently, the Company issued a total of 170,834 shares at a price of 50
pence per share from the exercise of such warrants as described in Note 22.
Those warrant holders not taking up the offer retained their warrant positions
which remain as they were prior to the offer.
- In December 2024, the Company issued of £150,000 of three-month
convertible bonds (as described in Note 20 above) alongside the granting of
231,429 associated warrants to existing key shareholders. The Convertible Bond
subscribers receive 231,429 three-year warrants allowing for exercise into an
equivalent number of shares at £0.70 per share.
- The term or maturity of the trade finance loan was extended to 28
January 2025 in exchange for the grant of 50,000 warrants with a maturity of
no less than one year from their issue date and an exercise price of 70 pence
per share.
- In aggregate, the Company issued 362,685 new warrants over Ordinary
Shares as described in Note 22.
The total share-based payment expense recognised in respect of warrants in the
Statement of Comprehensive Income during the year was £nil (2023: £946).
The weighted average remaining life of the warrants at the end of 2024 was
1.61 years (2023: 2.00 years).
24. Provision for loss
In 2024 Aterian suffered an adverse judgment in the Rwandan employment court
regarding claims brought by Mr. Daniel Hogan, the former Managing Director of
Eastico Limited, despite the existence of a signed waiver agreement which, in
Aterian's view, explicitly released all claims arising from or in connection
with his engagement. This breach of the waiver terms has prompted Aterian to
act prudently by recognising a provisional loss of £161,000, reflecting the
amount of the initial judgment. Simultaneously, Aterian will pursue redress in
the UK courts to recover both the claim amount, damages, and associated legal
costs, asserting its contractual rights under the waiver. In parallel, Aterian
intends to lodge an appeal in Rwanda, challenging the employment court's
decision and reaffirming the validity and enforceability of the waiver
agreement executed with Mr. Hogan.
25. Notes to statement of cash flows
Changes in liabilities arising from financing activities:
Company and Consolidated cash flows Borrowings Total
Year ended 31 December 2024 £'000 £'000
At 1 January 2024 225 225
Proceeds from borrowings 181 181
Proceeds from issue of loan notes 785 785
Payment of interest (31) (31)
Net proceeds 1,160 1,160
Non-cash items:
Converted to equity (Note 22) (500) (500)
Shares issued to Timberdale as repayment of loan (50) (50)
Loan costs (9) (9)
Equity component of loan notes (15) (15)
Accrued interest 80 80
Total liabilities from financing activities at 31 December 2024 666 666
Current 666 666
Year ended 31 December 2023 £'000 £'000
At 1 January 2023 151 151
Cash proceeds 342 342
Payment of interest (22) (22)
Net proceeds 471 471
Non-cash items:
Converted to equity (Note 22) (300) (300)
Accrued interest 54 54
Total liabilities from financing activities at 31 December 2023 225 225
Current 225 225
26. Operating segments
The Directors are of the opinion that the Group is engaged in a three
operating segments being exploration activity in Morocco, Rwanda and
Botswana. The Company operates in Morocco, Rwanda and Botswana and has its
Corporate management team in the UK.
The table below provides the Company's results by operating segment in the way
information is provided to and used by the Company's CEO as the chief
operating decision maker to make decisions about the allocation of resources
to the segments and assess their performance.
The Company considers its exploration projects in Morocco, Rwanda and Botswana
each form a segment. Corporate legal entities are aggregated and presented
together as part of the "other" segment on the basis of them sharing similar
economic characteristics.
Management monitors the operating results of its business units separately for
the purpose of making decisions about resource allocation and performance
assessment and is considered to be the Group's Chief Operating Decision Maker
(CODM). Segment performance is evaluated based on operating profit or loss and
is measured consistently with operating profit or loss in the consolidated
financial statements.
However, the Group's financing (including finance costs and finance income)
and income taxes are managed on a group basis and are not allocated to
operating segments.
Transfer prices between operating segments are on an arm's length basis in a
manner similar to transactions with third parties.
The accounting policies used by the Group in reporting segments internally are
the same as those contained in Note 3 and the respective quantitative and
qualitative notes of the financial statements.
Moroccan segment Rwandan segment Botswana segment Other Group
Year to
31-Dec-24 31-Dec-24 31-Dec-24 31-Dec-24 31-Dec-24
£'000 £'000 £'000 £'000 £'000
Revenue - 42 - 42
Cost of sales - (42) - - (42)
Administrative expenses (177) (291) (40) (1,220) (1,728)
Share-based payment expense - - - (40) (40)
Other income - - - 210 210
Gains on disposal of property plant and equipment - - - - -
Operating loss (177) (291) (40) (1,050) (1,558)
Interest payable and similar charges - - - (59) (59)
Loss before tax (177) (291) (40) (1,109) (1,617)
Tax expense - - - - -
Loss after tax (177) (291) (40) (1,109) (1,617)
Segment assets 92 160 27 3,422 3,701
Segment liabilities - (94) - (1,293) (1,387)
Moroccan segment Rwandan segment Other Group
Year to
31-Dec-23 31-Dec-23 31-Dec-23 31-Dec-23
£'000 £'000 £'000 £'000
Revenue - - - -
Administrative expenses (62) (297) (1,112) (1,471)
Share-based payment expense - - (1) (1)
Other income - 27 165 192
Gains on disposal of property plant and equipment - 272 - 272
Operating loss (62) 2 (948) (1,008)
Interest payable and similar charges - - (54) (54)
Loss before tax (62) 2 (1,002) (1,062)
Tax expense - - - -
Loss after tax (62) 2 (1,002) (1,062)
Segment assets 61 674 3,476 4,211
Segment liabilities (3) (135) (655) (793)
27. Related party transactions
Transactions with subsidiary companies
Eastinco Ltd is a subsidiary and during the year, paid total funds of £3,372
(2023: £254,661) from the Company. Eastinco Ltd owes £2,641,075 (before
impairment provisions) to Aterian PLC at the end of the year (2023:
£2,477,476).
Eastinco ME Ltd is a subsidiary and is owed £6,501 by Aterian PLC at the end
of the year (2023: £50,746).
Transactions with Directors
Directors' remuneration is disclosed in Note 6 above. In addition to the
remuneration paid to directors of the Company, Tshepo Janie, a director of
Atlantis Metals (Pty) Ltd received remuneration of £22,000 for the year ended
31 December 2024.
Charles Bray is a Director of the Company and during the year, Charles Bray
received total fees of £107,736 (2023: £65,914). Charles Bray is owed
£1,124 by the Company at the end of the year (2023: £3,041).
The Company received loans totalling £nil (2023: £342,000) from IQ EQ
(Jersey) Limited, trustee of The Charles Bray Transfer Trust. IQ EQ is owed
£3,280 by the Company at the end of the year (2023: £nil).
Simon Rollason is a Director of the Company and during the year, Simon
Rollason received total fees of £95,489 (2023: £106,000: £81,000 in cash
and £25,000 settled by the issue of 2,500,000 ordinary shares). The Company
is owed £1,054 by Simon Rollason at the end of the year (2023: £nil).
On 3 May 2024, the Company issued £42,666 of Convertible Loan Notes (CLNs) to
Mr. Simon Rollason, the Company's CEO. On 26 June 2024, the Company announced
that it had received notices to convert the full amount of outstanding CLNs
issued.
At the year end, Directors held interests in Ordinary Shares, warrants and
options as below:
Name No. of Warrants No. of Options No. of Shares
Charles Bray 140,667 222,500 1,260.700
Edlin Holdings Limited* 133,333 - -
IQ EQ (Jersey) Limited** 151,443 - 300,000
Kasra Pezeshki - 20,000 100,000
Alister Masterton-Hume - 20,000 -
Simon Rollason 12,500 - 225,000
Devon Marais - 60,000 -
Reba Global Pty Ltd*** - - 146,700
*: Edlin Holdings Limited is an Isle of Man company which invests and operates
non-US based investments. The ultimate beneficial owners of Edlin Holdings
Limited are Bray family members.
**: IQ EQ (Jersey) Limited is a trustee of The Charles Bray Transfer Trust.
***: Devon Marais is the founder and beneficial owner of Reba Global Pty Ltd.
Other transactions
Included in trade payables at 31 December 2024 is an amount of £4,800 owing
to Graham Duncan Limited, a company owned by Graham Duncan who is the Group
CFO and a shareholder in the Company.
The Company is an associated company of Elemental Altus Royalties Corporation
to whom the Company sold a portion of its Net Smelter Royalty for £200,000
as described in Note 19 above. The transaction was made in the normal course
of business and at terms that correspond to those on normal arms-length
transactions with third parties.
Aterian is an associate in the group for which Elemental Altus is a member of
as Altus Exploration Management Ltd holds 20% of the Company.
28. Ultimate controlling party
The Directors consider that there is no controlling or ultimate controlling
party of the Company.
29. Capital commitments
As at 31 December 2024, the were no capital commitments entered into by the
Group (31 December 2023: nil).
30. Contingencies
As at 31 December 2024, the were no contingent liabilities requiring
disclosure in these financial statements.
31. Events after the reporting date
In February 2025, the Company announced that it had completed a small private
placement of 200,000 new ordinary shares of 10p each at a price of 70 pence
per share, raising gross proceeds of £140,000.
Additionally, the Company issued 365,000 new shares to the Company's Employee
Benefit Trust for use as incentive and compensation for its senior executives
and directors. As part of the Placing, the investors also received a total of
100,000 warrants, with each warrant exercisable at a strike price of 70 pence
per ordinary share and a maturity date of 30 December 2027.
The EBT allocation was subsequently raised from 365,000 shares to 565,000
shares, reflecting the Company's commitment to aligning the interests of
senior executives and directors with shareholders through long-term equity
incentives.
The additional EBT shares will be used as part of the Company's ongoing
incentive and compensation framework, reinforcing its strategy to reward and
retain key personnel as it advances its critical metals projects.
On 22 April 2025, the Company signed a trade finance agreement with a global
commodity trading and financial house ("Financier"). This Agreement marks a
transformational step forward for Aterian's trading division and represents a
tangible execution of the Company's strategic vision to build a scalable,
revenue-generating platform supporting its exploration and development
activities across Africa.
Under the terms of the agreement, the Financier will provide a USD 4,500,000
operational trading facility ("Trade Facility") to provide funding of traded
minerals and will be utilised immediately to fund the additional trading of
tantalum, niobium, and cassiterite. The Trade Facility has an interest rate of
1-month SOFR (Secured Overnight Financing Rate) plus 3.5%. The Agreement has
a five-year facility period.
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