REG - Bezant Resources PLC - Final Results
30/06/2023 07:00
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RNS Number : 4566E Bezant Resources PLC 30 June 2023
30 June 2023
Bezant Resources Plc
("Bezant" or the "Company")
Final Results for period to 31 December 2022
Bezant Resources plc ("Bezant" or the "Company"), the exploration and resource
development company with projects located in Namibia, Botswana, Argentina and
an investment in a project in the Philippines reports its audited full year
results for the year ended 31 December 2022.
The Annual Report and Financial Statements for the year ended 31 December 2022
are being sent to shareholders and will shortly be available on the Company's
website https://www.bezantresources.com/ (https://www.bezantresources.com/)
Please note that page references in the text below refer to the page numbers
in the Annual Report and Financial Statements.
The audited financial information contained in this announcement does not
constitute the Company's full financial statements for the year ended 31
December 2022, but is derived from those financial statements, approved by the
board of directors. The auditors' report on the 2022 financial statements was
unqualified and did not contain any statement under section 498(2) or (3) of
the Companies Act 2006 but did as in 2021 contain a 'material uncertainty'
paragraph relating to going concern. The full audited financial statements
for the year ended 31 December 2022 will be delivered to the Registrar of
Companies and filed at Companies House.
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 contact:
Bezant Resources Plc
Colin Bird
+27 726 118 724
Executive Chairman
Beaumont Cornish (Nominated Adviser) +44 (0) 20 7628 3396
Roland Cornish / Asia Szusciak
Novum Securities Limited (Joint Broker) +44 (0) 20 7399 9400
Jon Belliss
Shard Capital Partners LLP (Joint Broker) +44 (0) 20 7186 9952
Damon Heath
or visit http://www.bezantresources.com (http://www.bezantresources.com)
Chairman's Statement
For the year ended 31 December 2022
Dear Shareholder,
The year under review, has been similar to the previous year, in that projects
have advanced in a very uncertain global environment. The uncertainty has
been both financial and geopolitical with Russia waging a war on Ukraine and
concern amongst some of China doing the same to Taiwan.
The Financial world has been very tumultuous with rising inflation across most
developed countries with the emerging countries taking their consequence.
The inflation was caused by massive disruption in supply lines post Covid,
together with "payday" arising from the huge borrowings made by most
countries. Hence, forecasters are predicting more interest rate hikes to
lower inflation rates to around the 2-3% level.
My own view is that changes in work practices, strikes and social disorder
have taken their toll on productivity and the world is busy normalising post
Covid, experiencing considerable difficulties in so doing. Against this
disruptive backdrop, stock markets have performed particularly well, but only
at the large cap end of the market, whilst the smaller caps have suffered very
badly, particularly natural resource stocks, with the UK, Australia and
Toronto suffering in 2022 & 2023 under investments with secondary
placements being difficult and IPOs very few.
Hope and Gorob Project in Namibia: We have a profound belief in the future
need for copper and as such have employed all available resources to unwrap
the potential of our Hope and Gorob Project in Namibia. Our efforts have
been very successful, and we have delineated potential for an open pit within
the Hope and Gorob area as well as undertaking a shallow drill programme at
various points between Hope and Gorob to establish the presence of near
surface ore. This campaign has been hugely successful, and we currently
await the outcome of a revised mineral resource statement in July/August 2023
from Addison Mining Services.
Previous explorers at the Hope and Gorob project have largely ignored the gold
contribution in their quest for copper, which has provided Bezant with a huge
opportunity to revalue the project, encompassing the gold contribution. The
current status is that both environmental and mining licences are in the
application stage, and we await government response to our submissions. The
project has significant exploration potential beyond Gorob into the Matchless
copper belt, extending some 55km.
Kanye Manganese Project in Botswana: The Kanye Project in Botswana has been
drill tested and is showing significant promise in terms of tonnage, quality,
and metallurgical characteristics. We are awaiting initial metallurgical
test work results in July 2023 and will then plan our next phase of
metallurgical work to test the optimisation of ore for processing as we move
towards the objective of a small battery manganese operation.
Eureka Project Argentina: We maintain our Eureka Project in good standing and
post the year end we have had an updated Environmental Impact Assessment
approved which provides for environmental monitoring and a drill program
encompassing 9 drill holes of 200-300 metres each. The Company will engage
an environmental consultant to conduct the environmental monitoring in 2H 2023
and we are seeking a joint venture partner for the exploration of the Eureka
Project. In 2021 and into 2022 this was hampered by COVID restrictions in
Argentina, but we have recently received expressions of interest in the
project and our focus remains to joint venture or monetise this unique red bed
copper occurrence.
Investment in Mankayan Project in Philippines: During the period under review,
we subscribed to a convertible note in IDM International Limited the holding
company for the Mankayan Project and our year end investment in IDM Mankayan
Pty Ltd (see note 11.1 ) was fair value adjusted to £2.2m. At the time of
writing we hold a 24.2% investment in IDM International Limited. We are
looking for this investment to be monetised either by direct trade sale or
flotation on an individual or combined project basis. IDM International
Limited and Crescent Mining Development Corporation the licence holder are
actively progressing the project, whilst pursuing the various avenues to
secure and advance what is a very large project in a copper hungry world.
As announced in October 2022 by mutual agreement our Cyprus joint venture with
Caerus Minerals was terminated with a de minims effect on the income statement
as detailed in note 12.1. It is always unfortunate when joint venture partners
cannot agree on a way forward but we had various concerns which we could not
resolve and therefore Bezant agreed to the termination of the Joint Venture
Agreement and the original option agreement with Caerus as being the best
course of action to protect the assets and resources of Bezant.
Outlook: During the period the copper price has been volatile but the
consensus remains that there is an impending shortage of copper supplies.
Recognising the above average copper project portfolio, we have been in
several discussions regarding finance and resource collaboration for their
advancement. At the time of writing, we are still in discussions and
negotiations regarding portfolio advancement.
I would like to thank my fellow directors and management for their untiring
efforts to maintain and advance our projects to a point where our portfolio is
well understood by the trade and therefore financeable going forward.
Yours sincerely,
Mr Colin Bird
Executive Chairman
29 June 2023
Board of directors
For the year ended 31 December 2022
Mr Colin Bird (Executive Chairman) (Appointed 2 March 2018)
Experience and Expertise
Executive Chairman Colin is a chartered mining engineer and a Fellow of the
Institute of Materials, Minerals and Mining with more than 40 years'
experience in resource operations management, corporate management, and
finance. Colin has multi commodity mine management experience in Africa,
Spain, Latin America and the Middle East. He has been the prime mover in a
number of public company listings in the UK, Canada and South Africa. His most
notable achievement was founding Kiwara Resources Plc and selling its prime
asset, a copper property in Northern Zambia, to First Quantum Minerals for
US$260 million in November 2009 which closed in January 2010.
Other current directorships
Includes African Pioneer Plc, Kendrick Resources Plc, Bird Leisure and Admin
(Pty) Ltd, Galileo Resources Plc, Galileo Resources South Africa (Pty) Ltd,
Glenover Phosphate (Pty) Ltd, Holyrood Platinum (Pty) Ltd, Lion Mining
Finance Ltd, Mitte Resources Investment Ltd, New Age Metals Inc, , Revelo
Resources Corp, Sandown Holdings, Shamrock Holdings Inc.,Tiger Resource
Finance Plc, Umhlanga Lighthouse Café CC, Virgo Business Solutions (Pty)
Ltd and Xtract Resources Plc.
Former directorships in the last 5 years
1 Braemore Resources Ltd, Camel Valley Holdings Inc, Crocus-Serv Resources
(Pty) Ltd, Dullstroom Plats (Pty) Ltd , Enviro Mining Ltd , Enviro
Processing Ltd, Enviro Props Ltd, Galagen (Pty) Ltd, Kabwe Operations
Mauritius, Maude Mining & Exploration (Pty) Ltd, NewPlats (Tjate) (Pty)
Ltd, Newmarket Holdings, Tjate Platinum Corporation (Pty) Ltd, Windsor
Platinum Investments (Pty) Ltd, Windsor SA Pty Ltd, Tara Bar and Restaurant
CC, Add X Trading 810 CC, Afminco (Pty) Ltd, Dialyn Café CC, Emanual Mining
and Exploration (Pty) Ltd, Europa Metals Ltd, Isigidi Trading 413 CC,
Jubilee Metals Group Plc, Jubilee Smelting & Refining (Pty) Ltd, Jubilee
Tailings Treatment Company (Pty) Ltd , M.I.T. Ventures Group, Mokopane Mining
& Exploration (Pty) Ltd, NDN Properties CC, Orogen Gold Plc, Pilanesberg
Mining Co (Pty) Ltd, Pioneer Coal (Pty) Ltd, PowerAlt (Pty) Ltd, SacOil
Holdings Ltd, Sovereign Energy Plc and Thos Begbie Holdings (Pty) Ltd.
Special responsibilities
Executive Chairman of the Board & Remuneration Committee and member of the
Audit Committee.
Interests in shares and options
307,500,655 ordinary shares in the capital of the Company.
31,250,000 warrants which expired on 26 June 2022 which gave the right to
subscribe for ordinary shares at a price of 0.16p per share.
15,625,000 warrants which expired on 14 September 2022 which gave the right to
subscribe for ordinary shares at a price of 0.16p per share.
30,769,231 warrants expiring on 4 November 2024 which give the right to
subscribe for ordinary shares at a price of 0.25p per share.
The following options over ordinary shares in the Company which all expire 21
June 2028
15,000,000 at an exercise price of 0.5 pence.
12,500,000 at an exercise price of 1 pence.
24,000,000 at an exercise price of 0.425 pence per share.
24,000,000 at an exercise price of 0.564 pence per share.
Dr. Evan Kirby (Non-Executive Director) (Appointed 4 December 2008)
Experience and Expertise
Dr Kirby, is a metallurgist with over 40 years of international involvement.
He worked initially in South Africa for Impala Platinum, Rand Mines and then
Rustenburg Platinum Mines. Then in 1992, he moved to Australia to work for
Minproc Engineers and then Bechtel Corporation. After leaving Bechtel in 2002,
he established his own consulting company to continue with his ongoing mining
project involvement. Evan's personal "hands on" experience covers the
financial, technical, engineering and environmental issues associated with a
wide range of mining and processing projects.
Other current directorships
Technical director of Jubilee Metals Group PLC (Aim listed), Non-executive
director of Europa Metals Ltd (listed on AIM and AltX of the JSE), and
Director of private companies, Metallurgical Management Services Pty Ltd, and
Kendrick Resources Plc
Former directorships in the last 5 years
Balama resources Pty Ltd, New Energy Minerals Limited (formerly Mustang
Resources Limited and ASX listed).
Special responsibilities
Chairman of the Audit Committee and member of the Remuneration Committee.
Interests in shares and options
25,487,449 fully paid ordinary shares in Bezant Resources Plc.
The following options over ordinary shares in the Company which all expire 21
June 2028
5,000,000 at an exercise price of 0.5 pence.
2,500,000 at an exercise price of 1 pence.
10,000,000 at an exercise price of 0.425 pence per share.
10,000,000 at an exercise price of 0.564 pence per share.
Mr Ronnie Siapno (Non-Executive Director) (Appointed 25 October 2007)
Experience and Expertise
Mr Siapno, graduated from the Saint Louis University in the Philippines in
1986 with a Bachelor of Science degree in Mining Engineering and is a lifetime
member of the Philippine Society of Mining Engineers. Since graduation, he has
held various consulting positions such as Mine Planning Engineer to Benguet
Exploration Inc., Mine Production Engineer to Pacific Chrome International
Inc., Exploration Engineer to both Portman Mining Philippines Inc. and Phoenix
Resources Philippines Inc. and Geotechnical Engineer to Pacific Falkon
Philippines Inc.
Other current directorships
President of Crescent Mining and Development Corporation and Director of
Bezant Holdings Inc. Non-Executive President and Director of Cleangrean
Solutions, Inc.
Former directorships in the last 5 years
Former director of Asean Copper Investment Ltd.
Special responsibilities
Member of the Remuneration Committee.
Interests in shares and options
1,333,334 fully paid ordinary shares in Bezant Resources Plc.
The following options over ordinary shares in in the Company which all expire
21 June 2028
7,500,000 at an exercise price of 0.5 pence per share.
5,000,000 at an exercise price of 1 pence per share.
5,000,000 at an exercise price of 0.425 pence per share.
5,000,000 at an exercise price of 0.564 pence per share.
Mr Raju Samtani (Finance Director) (appointed 26 October 2020)
Experience and Expertise
Mr. Samtani, is an Associate Chartered Management Accountant, and is Finance
Director of the AIM-listed Tiger Royalties and Investments Plc and standard
listed African Pioneer Plc. Mr. Samtani's previous experience includes his
position as founder shareholder and Finance Director of Kiwara Plc which was
acquired by First Quantum Minerals Ltd in January 2010. Earlier in his career
he spent three years as Group Financial Controller at marketing services
agency - WTS Group Limited, where he was appointed by the Virgin Group to
oversee their investment in the WTS Group Ltd.
Other current directorships
Myning Ventures Ltd
Former directorships in the last 5 years
None
Special responsibilities
Mr. Samtani is the Company's Finance Director and member of the Audit
Committee.
Interests in shares and options
118,611,078 fully paid ordinary shares in Bezant Resources Plc.
37,500,000 warrants which expired on 26 June 2022 which gave the right to
subscribe for ordinary shares at a price of 0.16p per share.
The following options over ordinary shares in in the Company which all expire
21 June 2028
20,000,000 at an exercise price of 0.425 pence per share.
20,000,000 at an exercise price of 0.564 pence per share.
Mr Edward Slowey (Technical Director) (appointed 26 October 2020)
Experience and Expertise
Mr. Slowey holds a BSc degree in Geology from the National University of
Ireland and is a founder member of The Institute of Geology of Ireland. Mr.
Slowey has more than 40 years' experience in mineral exploration, mining and
project management including working as a mine geologist at Europe's largest
zinc mine in Navan, Ireland and was
exploration manager for Rio Tinto in Ireland for more than a decade, which led
to the discovery of the Cavanacaw gold deposit. Mr. Slowey is an experienced
exploration geologist, having worked in Africa, Europe, America and the FSU
and his experience includes joint venture negotiation, exploration programme
planning and management through to feasibility study implementation for a
variety of commodities. As a professional consultant, Mr. Slowey's work has
included completion of CPR's and 43-101 technical reports for international
stock exchange listings and fundraising, while also undertaking assignments
for the World Bank and European Union bodies. Mr. Slowey has also served as
director of several private and public companies, including the role of CEO
and Technical Director at AIM-listed Orogen Gold Plc which discovered the
Mutsk gold deposit in Armenia.
Other current directorships
Silver Investments Limited
Galileo Resources plc
St Vincent Minerals US Inc
Camel Valley Holdings Inc
Crocus-Serv Resources Pty Ltd
Virgo Business Solutions Pty Ltd
St Vincent Minerals Inc
Fulcrum Metals Ltd
Former directorships in the last 5 years
None
Special responsibilities
Mr. Slowey is the Company's Technical Director with oversight over the
Company's projects.
Interests in shares and options
20,625,000 fully paid ordinary shares in Bezant Resources Plc.
The following options over ordinary shares in in the Company which all expire
21 June 2028
20,000,000 at an exercise price of 0.425 pence per share.
20,000,000 at an exercise price of 0.564 pence per share.
Strategic report
For the year ended 31 December 2022
Principal activity
The Company is registered in England and Wales, having been first incorporated
on 13 April 1994 under the Companies Act 1985 with registered number 02918391
as a public company limited by shares, in the name of Yieldbid Public Limited
Company. On 19 September 1994, the Company changed its name to Voss Net Plc,
with a second change of name to that of Tanzania Gold Plc on 27 September
2006. On 9 July 2007, the Company adopted its current name of Bezant Resources
Plc.
The Company was listed on AIM, a market operated by the London Stock Exchange,
on 14 August 1995.
The principal activity of the Group is natural resource exploration,
development and beneficiation.
Its FTSE Sector classification is that of Mining and FTSE Sub-sector that of
Gold Mining.
Review of Business and future prospects
The Chairman's statement contains a review of 2022 and refers to the Company's
focus on its copper and gold asset portfolio. During the coming year the
Company intends to focus on its projects in Southern Africa where the Company
has projects in Namibia and Botswana, and completing a joint venture
transaction or exploring its Argentina project and its investment in the
Philippines.
Principal risks and uncertainties facing the Company
The principal risks and uncertainties facing the Company are disclosed in the
Directors' report on pages 14 to 24.
Performance of the Company
The Company is an exploration entity whose assets comprise early-stage
projects that are not yet at the production stage. Currently, no revenue is
generated from such projects. The key performance indicators for the Company
are therefore linked to the achievement of project milestones and exploration
activity as detailed in note 12.1 to increase overall enterprise value.
Directors' section 172 statement
The following disclosure describes how the Directors have had regard to the
matters set out in section 172 and forms the Directors' statement required
under section 414CZA of The Companies Act 2006. This new reporting requirement
is made in accordance with the new corporate governance requirements
identified in The Companies (Miscellaneous Reporting) Regulations 2018, which
apply to company reporting on financial years starting on or after 1 January
2019.
The matters set out in section 172(1) (a) to (f) are that a Director must act
in the way they consider, in good faith, would be most likely to promote the
success of the Company for the benefit of its members as a whole, and in doing
so have regard (amongst other matters) to:
a. the likely consequences of any decision in the long term.
b. the interests of the Company's employees.
c. the need to foster the Company's business relationships with suppliers,
customers and others;
d. the impact of the Company's operations on the community and the
environment;
e. the desirability of the Company maintaining a reputation for high
standards of business conduct; and
f. the need to act fairly between members of the Company.
The analysis is divided into two sections, the first to address Stakeholder
engagement, which provides information on stakeholders, issues and methods of
engagement. The second section addresses principal decisions made by the Board
and focuses on how the regard for stakeholders influenced decision-making.
Section 1: Stakeholder mapping and engagement activities within the reporting
period
The Company continuously interacts with a variety of stakeholders important to
its success, such as equity investors, employees, government bodies, local
community and professional service providers. The Company works within the
limitations of what can be disclosed to the various stakeholders with regards
to maintaining confidentiality of market and/or commercially sensitive
information.
Who are the key stakeholder groups Why is it important to engage this group of stakeholders How did Bezant engage with the stakeholder group What resulted from the engagement
Equity investors As an exploration company without a revenue generating project access to The key mechanisms of engagement include The Company engaged with investors on topics of strategy, governance, project
capital is of vital importance to the long-term success of our business to be
updates and performance.
able to continue developing exploration projects and cover corporate • The AGM and Annual and Interim Reports.
overheads.
All significant shareholders that own more than 3 per cent. of the Company's
• Investor roadshows and presentations.
shares are listed on page 18 of the Directors' Report.
Please see "Relationship with shareholders" section of the Corporate
• Access to the Company's brokers and advisers governance report on page 28.
Through our engagement activities, we strive to obtain investor buy-in into
our strategic objectives. • Regular news and project updates.
Company is an exploration entity whose assets comprise early-stage projects
that are not yet at the production stage. Currently, no revenue is generated
from such projects. As such, existing equity investors and potential
investment partners are important stakeholders. We are seeking to promote an investor base that is interested in a long term
holding in the Company and will support the Company in achieving its strategic
objectives.
Employees The number of and location of future employees will be dependent upon the • The Company maintained an open line of communication between its, The Board met to discuss long term remuneration strategy.
development of its exploration projects which at the date of this report are professional service providers and Board of Directors.
The Company has one part-time employee and at the year-end had five directors situated in Namibia ,Botswana and Argentina and the Company has an equity
Board reporting has been optimised to include sections on engagement with
4 of whom are resident outside the U.K. with one resident in the U.K. investment in a project in the Philippines The Directors consider workforce • The Executive Chairman reported regularly to the Board, including the local communities and prospects for future employment.
issues holistically for the Group as a whole and the Company's long-term provision of board information.
success in developing its exploration projects will be predicated on the
Directors trained in aspects of corporate policies and procedures to engender
development of a local workforce in the countries of its exploration projects. • There is a formalised director induction into the Company's corporate positive corporate culture aligned with the Company code of conduct.
(see the principal risk and uncertainty starting on page 19). governance policies and procedures.
Meetings were held with directors to provide project updates and ongoing
business objectives.
Governmental bodies The Group will only be able to develop its exploration projects once it The Group maintained its good relations with the respective government bodies The Group has given general corporate presentations to senior federal
receives relevant licences and permits from local governments to explore, mine and frequently communicates progress. government officials.
The Group is impacted by national, regional and local governmental and undertake mineral processing.
organisations in the UK where it is incorporated and in countries in which it • The Group engages with the relevant departments of the relevant government
has interests in exploration projects or investments which includes, Botswana, in order to progress the operational licences it will require
Namibia, Argentina and the Philippines.
To date, the Group has received its requisite environmental and land use
• The Group engages local in-country experts to advise it on regulatory permits to enable its exploration activities.
matters.
Community The community provides social licence to operate. • The Company identifies key stakeholders within the local community based The Company has systems in place to engage with the local community as part
on work programs within the reporting period. its sustainability initiatives.
The local community at the Company's exploration projects in Botswana, We need to engage with the local community to build trust. Having the
Namibia, and Argentina and the surrounding area. community's trust will mean it is more likely that any fears the community has • Bezant's modus operandi is to have open dialogue with the local government
can be assuaged and our plans and strategies are more likely to be accepted. and community leaders regarding project development.
Community engagement will inform better decision making.
Stakeholder identification enables the Company to identify representatives of
• The Company has existing CSR policies and management structure at stakeholder groups and community groups to engage with as it develops its
corporate level. The Company will expand on these policies and structures at a projects.
local project level as the Company moves into further exploration activities
The Company will in due course have a social and economic impact on the local and ultimately into construction and then production.
community and surrounding area. The Company is committed to ensuring
sustainable growth minimising adverse impacts. The Company will engage these
stakeholders as appropriate.
Professional service providers Our professional service providers are fundamental to ensuring that the • The Company continues to work closely with professional service providers The use of third-party exploration services for analysis and field operations
Company can complete projects on time and budget. to meet deliverables. as required rather than the Company maintaining its own full time in-house
During the exploration phase, we will be using key professional service
exploration department and conducting its own exploration activities in
providers who provide drilling, geochemical, geological analysis, assaying and Using quality professional service providers ensures that as a business we • One on one meetings and regular project and work assignment updates with multiple countries with an in-house team provides very significant cost
other services under commercial contracts. meet the high standards of performance that we expect of ourselves and those professional service providers. savings to the Company whilst enabling the Company to diversify its project
we work with. and jurisdiction risks.
At a local level, we also partner with a variety smaller companies/providers,
some of whom are independent, or family run businesses.
Section 2: Principal decisions by the board post year end
Principal decisions are defined as both those that have long-term strategic
impact and are material to the Group, but also those that are significant to
key stakeholder groups. In making the following principal decisions, the Board
considered the outcome from its stakeholder engagement, the need to maintain a
reputation for high standards of business conduct and the need to act fairly
between the members of the Company. The Company makes regular announcements of
decisions that strategically impact the Company with decisions during the year
being reported in the Chairman's letter to shareholders (page 4) and
Directors' report on page 14. Decisions post the year end are referred to in
note 26 to the financial statements which is a summary of post balance sheet
events.
On behalf of the Board
Mr Colin Bird
Executive Chairman
29 June 2023
Directors' report
For the year ended 31 December 2022
The Directors present their report together with the audited financial
statements of Bezant Resources Plc (the "Company") and its subsidiary
undertakings (together, the "Group" or "Bezant") for the year ended 31
December 2022.
The principal activity, review of the business and future development
disclosures are contained in the Chairman's Statement on pages 4 to 5 and the
Strategic Report on page 10 to 13.
Results and dividends
The Group's results for the year are set out in the financial statements. The
Directors do not propose recommending any distribution by way of dividend for
the year ended 31 December 2022.
Directors
The following directors have held office during and subsequent to the
reporting year:
Colin Bird
Ronnie Siapno
Evan Kirby
Raju Samtani
Edward Slowey
Directors' interests
The beneficial and non-beneficial interests of the current directors and
related parties in the Company's shares were as follows:
Ordinary Percentage of issued share capital
shares of
0.002p each
C. Bird 320,000,655 4.25%
E. Kirby 25,487,449 0.33%
R. Siapno 1,333,334 0.02%
R Samtani 118,611,078 1.55%
E Slowey 20,625,000 0.27%
( )
Options awarded and warrants
On 23 August 2018, 87,500,000 options over ordinary shares of 0.002p each in
the capital of the Company ("Ordinary Shares") were granted pursuant to the
Executive Share Option Scheme approved at the Company's Annual General Meeting
("AGM") held on 22 June 2018 (the "Options"). Of the 87,500,000 Options,
75,000,000 were awarded to directors of the Company as detailed on the next
page:
Options exercisable at 0.5 pence (vested on 23 August 2018) Options exercisable at 1 pence (vested on 31 January 2019)
C. Bird((1)(2)(3)) 15,000,000 12,500,000
L. Read (ex director) 15,000,000 12,500,000
E. Kirby 5,000,000 2,500,000
R. Siapno 7,500,000 5,000,000
( )
On 9 November 2020, 220,000,000 options over ordinary shares of 0.002p each in
the capital of the Company ("Ordinary Shares") were granted pursuant to the
Executive Share Option Scheme approved at the Company's Annual General Meeting
("AGM") held on 22 June 2018 (the "Options"). Of the 220,000,000 Options,
158,000,000 were awarded to directors of the Company as detailed below:
( )
Options exercisable at 0.425 pence (vested on 9 November 2020) Options exercisable at 0.565 pence (vested on 31 March 2021)
C. Bird((1)(2)(3)) 24,000,000 24,000,000
E. Kirby 10,000,000 10,000,000
R. Siapno 5,000,000 5,000,000
R Samtani((4)) 20,000,000 20,000,000
E Slowey 20,000,000 20,000,000
( )
(1) Colin Bird also had 31,250,000 warrants which expired on 26 June 2022
which gave the right to subscribe for ordinary shares at 0.16p per share which
were issued to him on 26 June 2020 on the same terms as all other participants
in the £350,000 Equity fundraising announced on 19 June 2020
(2) Colin Bird also had 15,625,000 warrants which expired on 14 September 2022
which gave the right to subscribe for ordinary shares at a price of 0.16p per
share which were issued to him on 14 September 2020 on the same terms as all
other participants in the £625,000 Equity fundraising announced on 28 August
2020
(3) Colin Bird also has 30,769,231 warrants expiring on 4 November 2024 which
give the right to subscribe for ordinary shares at a price of 0.25p per share
which were issued to him 6 January 2022 in lieu of outstanding fees.
(4) Raju Samtani had 37,500,000 warrants which expired on 26 June 2022 which
gave the right to subscribe for ordinary shares at a price of 0.16p per share
which were issued to him on 26 June 2020 prior to his appointment as a
director of the company, on the same terms as all other participants in the
£350,000 Equity fundraising announced on 19 June 2020.
Report on directors' remuneration and service contracts
This report has been prepared in accordance with the requirements of Chapter 6
of Part 15 of the Companies Act 2006 and describes how the Board has applied
the principles of good governance relating to Directors' remuneration set out
in the QCA Corporate Governance Code.
Executive remuneration packages are prudently designed to attract, motivate
and retain Directors of the necessary calibre and to reward them for enhancing
value to shareholders. The performance measurement of the Executive Directors
and key members of senior management and the determination of their annual
remuneration packages is undertaken by the Remuneration Committee. The
remuneration of Non-Executive Directors is determined by the Board within
limits set out in the Articles of Association.
Executive Directors are entitled to accept appointments outside the Company
providing the Board's permission is sought.
Aside from the Finance Director whose fees in 2022 were £39,996, the other
Directors are entitled to receive between £12,500 / £19,000 per annum as
Directors' Fees along with relevant Consulting Fees as applicable, with the
aggregate of Salary, Directors' Fees and Consulting Fees detailed in the
Directors' Remuneration Summary Table on the next page and in note 22.
Each Director is also paid all reasonable expenses incurred wholly,
necessarily and exclusively in the proper performance of his duties.
Pensions
The Group does not operate a pension scheme and has not paid any contributions
to any pension scheme for Directors or employees.
Directors' remuneration
Remuneration of the Directors for the years ended 31 December 2022 and 2021
was as follows:
2022
Total Share based payment - share options Total
cash paid year ended
cash and share based
Salary and Consulting Fees
Directors' Fees
£ £ £ £ £
C. Bird 12,000 48,000 60,000 17,969((1)) 77,969
E. Kirby 14,484 - 14,484 - 14,484
R. Siapno 12,000 - 12,000 - 12,000
R. Samtani 40,000 - 40,000 - 40,000
E. Slowey 18,000 19,650 37,650 - 37,650
Total 96,484 67,650 164,134 17,969 182,103
(1) Includes the issue on 6 January 2022 of 30,769,231 Warrants over ordinary
shares exercisable at 0.25 pence per ordinary shares valid until 4 November
2024 as part settlement of outstanding fees of £ 80,000 which were valued at
$17,969 using a Black and Scholes option pricing model using a risk-free rate
of 0.25% and a volatility rate of 86.86%.
2021
Total Share based payment - share options Total
cash paid year ended
cash and share based
Salary and Consulting Fees
Directors' Fees
£ £ £ £ £
C. Bird 12,500 50,000 62,500 34,961 97,461
E. Kirby 14,226 - 14,226 14,567 28,793
R. Siapno 13,000 - 13,000 7,284 20,284
R. Samtani 41,500 - 41,500 29,135 70,635
E. Slowey 19,000 24,600 43,600 29,135 72,735
Total 100,226 74,600 174,826 115,082 289,908
An amount of £15,000 was paid during 2022 (2021: £15,000) to Lion Mining
Finance Limited, a company controlled by C. Bird, for administration services
and use of an office.
Notes:
1. Mr Bird and Mr Samtani's Directors' fees include NIC and UK payroll tax.
2. In accordance with the requirements of IFRS 2 Share-based Payments, the
estimated fair value for the share options granted in 2020 (£273,142) was
calculated using a Black and Scholes option pricing model. None of the 2020
share options have been exercised as they are out of the money. In the event
that the share options are not exercised or forfeited before expiry, the
option cost will be credited to the Profit and Loss or if expired will be
added back to retained earnings. Note 18 to the accounts provides information
on Share-based payments.
Environment, Health, Safety and Social Responsibility Policy Statement
The Company adheres to the above Policy, whereby all operations are conducted
in a manner that protects the environment, the health and safety of employees,
third parties and the entire local communities in general.
The Company is currently principally involved in exploration projects, located
within, Namibia, Botswana and Argentina and has an equity investment in a
project in the Philippines.
The Company is in the process of renewing its Environmental Impact Assessment
approvals in respect of its "Eureka Project" in Argentina.
During the year, current operations were closely managed in order to maintain
our policy aims, with no matters of concern arising. There have been no
convictions in relation to breaches of any applicable legislation recorded
against the Group during the year.
Substantial & Significant Shareholdings
The Company has been notified, in accordance with DTR 5 of the FCA's
Disclosure Guidance and Transparency Rules, or is aware, of the following
interests in its ordinary shares as at 21 June 2023 of those shareholders with
a 3% and above equity holding in the Company based on the Company having
7,637,973,036 ordinary shares in issue on 21 June 2023 ("21 June 2023 Shares
in Issue").
Shareholders per share register Number of ordinary shares Issued
Share Capital
720,127,695 9.43%
The Bank Of New York (Nominees)
Hargreaves Lansdown (Nominees) 501,021,412 6.56%
Hargreaves Lansdown (Nominees) 500,337,154 6.55%
Jim Nominees Limited 489,017,772 6.40%
Interactive Investor Services 377,990,908 4.95%
Barclays Direct Investing Nominees 347,558,164 4.55%
Interactive Investor Services 301,949,904 3.95%
GHC Nominees Limited 299,956,382 3.93%
Vidacos Nominees Limited 277,713,260 3.64%
Hargreaves Lansdown (Nominees) 259,083,811 3.39%
4,074,756,462 53.35%
On 4 November 2021 Christian Cordier submitted a TR-1 notification to the
Company that he has an indirect interest in 313,906,504 ordinary shares in
relation to the following shareholdings Tonehill Pty Ltd acting for the
("aft") The Tonehill Trust 80,705,492 shares, Coreks Super Pty Ltd aft Coreks
Superannuation Fund 66,163,350 shares and Breamline Pty Ltd aft Breamline
Ministries 167,037,662 shares. Mr Cordier's interest represented 6.455% at the
date of issue of the TR-1 and 4.11% based on the 7,637,973,036 shares in
issue on 21 June 2023.
On 15 June 2023 the Company announced that Sanderson Capital Partners Ltd had
confirmed that they and associates would on 21 June 2023 be interested in
761,469,231 Shares which represents 9.97% based on the 7,637,973,036 shares
in issue on 21 June 2023.
Political and charitable contributions
There were no political or charitable contributions made by the Group during
the year ended 31 December 2022 (2021: nil).
Information to Shareholders - Website
The Company has its own website (www.bezantresources.com
(http://www.bezantresources.com) ) for the purposes of improving information
flow to shareholders, as well as to potential investors.
Statement of Directors' responsibilities
The Directors are responsible for preparing the financial statements in
accordance with applicable laws and UK adopted International Accounting
Standards. Company law requires the Directors to prepare financial statements
for each financial year which give a true and fair view of the state of
affairs of the Group and of the Company and of the profit or loss of the Group
for that year.
In preparing those financial statements, the Directors are required to:
- select suitable accounting policies and then apply them
consistently;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the financial
statements; and
- prepare the financial statements on a going concern basis, unless it
is inappropriate to presume that the Group will continue in business.
The Directors confirm that the financial statements comply with the above
requirements.
The Directors are responsible for keeping adequate accounting records which at
any time disclose with reasonable accuracy the financial position of the
Company (and the Group) and enable them to ensure that the financial
statements comply with the Companies Act 2006. The Directors are also
responsible for safeguarding the assets of the Company (and the Group) and for
taking steps for the prevention and detection of fraud and other
irregularities.
In addition, they are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Statement of disclosure to auditor
So far as all the Directors, at the time of approval of their report, are
aware:
- there is no relevant audit information of which the Company's
auditors are unaware, and
- the Directors have taken all steps that they ought to have taken as
Directors in order to make themselves aware of any relevant audit information
and to establish that the Company's auditors are aware of that information.
Auditors
UHY Hacker Young LLP have expressed their willingness to continue as the
auditors of the Company, and in accordance with section 489 of the Companies
Act 2006, a resolution to re-appoint them will be proposed at the Company's
forthcoming Annual General Meeting.
Principal risks and uncertainties
The Group has identified the following risks to the ongoing success of the
business and has taken various steps to mitigate these, the details of which
in relation to its Continuing Operations are as follows:
Risk of development, construction, mining operations and uninsured risks
The Group's ability to meet any production, timing and cost estimates for its
properties cannot be assured. The Group does not currently have any mining
operations.
The Group seeks to mitigate these risks in relation to exploration and mine
planning activities by using the geological and mining expertise of Board
members to oversee and plan exploration and mine planning activities and by
engaging the services of reputable external geologists, mine engineering and
other experts with appropriate skills and experience to provide exploration
and mine planning services for the Group.
Furthermore, the business of mining is subject to a variety of risks such as
actual production and costs varying from estimated future production, cash
costs and capital costs; revisions to mine plans; risks and hazards associated
with mining; natural phenomena; unexpected labour shortages or strikes; delays
in permitting and licensing processes; and the timely completion of expansion
projects, including land acquisitions required for the expansion of operations
from time to time. Geological grade and product value estimations are based
on independent resource calculations, studies and historical sales records.
Geological risk factors and adverse market conditions could cause actual
results to materially deviate from estimated future production and revenue.
Failure to achieve production or cost estimates or material increases in costs
could have an adverse impact on the future business, cash flows,
profitability, results of operations and financial condition. While steps,
such as production and mining planning are in place to limit these risks,
occurrences of such incidents do exist and should be noted.
Currency risk
The Group reports its financial results and maintains its accounts in Pounds
Sterling, the currency in which the Group primarily operates. The Group's
operations in Namibia, Botswana and Argentina and an equity investment in a
project in the Philippines held via an Australian company make it subject to
foreign currency fluctuations and such fluctuations may materially affect the
Group's financial position and results (see note 16). The Group does not have
any currency hedges in place and is exposed to foreign currency movements but
seeks to mitigate this risk by converting funds from Pounds Sterling to other
currencies when making material commitments in other currencies.
Copper-gold price volatility
The profitability going forward of the Group's operations is significantly
affected by changes in realisable copper-gold prices. The price of copper-gold
can fluctuate widely and is affected by numerous factors beyond the Group's
control, including demand, inflation and expectations with respect to the rate
of inflation, the strength of the Pound Sterling and of other currencies,
interest rates, global or regional political or financial events, and
production and cost levels. The Group does not have any commodity price hedges
in place as it is not mining and does not produce any copper and its
investment in exploration projects are exposed to fluctuations in the prices
of underlying commodities.
Economic, political, judicial, administrative, taxation or other regulatory
factors
The Group's assets are located in Namibia, Botswana and Argentina and it has
an equity investment in a project in the Philippines held via an Australian
company and mineral exploration and mining activities may be affected to
varying degrees by political stability and government regulations relating to
the mining industry.
The Group is exposed to sovereignty risks relating to potential changes of
local Governments and possible subsequent changes in jurisdiction concerning
the maintenance or renewal of licences and the equity position permitted to be
held in the Company's subsidiaries. Which the group seeks to mitigate by
working with local advisors and / or partners familiar with the local
regulatory environment.
Loss of critical processes
The Group's future mining, processing, development and exploration activities
depend on the continuous availability of the Group's operational
infrastructure, in addition to reliable utilities and water supplies and
access to roads.
Any failure or unavailability of operational infrastructure, for example,
through equipment failure or disruption, could adversely affect future
production output and/or impact exploration and development activities. The
group would seek to mitigate this risk by ensuring that access to operational
infrastructure is included in any pre mining feasibility studies.
Competition
The Group competes with numerous other companies and individuals, in the
search for and acquisition of exploration and development rights on attractive
mineral properties and also in relation to the future marketing and sale of
precious metals. There is no assurance that the Group will continue to be able
to compete successfully with its competitors in acquiring exploration and
development rights on such properties and also in relation to the future
marketing and sale of precious metals.
Future funding requirements
As referred to in note 1.1 of these financial statements, the Group made a
profit from all operations for the year ended 31 December 2022 after tax of
£1,436,000 after a fair value adjustment (see note 11). Excluding the fair
value adjustment the loss from all operations for the year ended 31 December
2022 after tax was £697,000 (2021 restated: £1,266,000), the Group had
negative cash flows from operations and is currently not generating revenues.
Cash and cash equivalents were £57,000 as at 31 December 2022. Post year
ended on 12 April 2023 the Company announced a £750,000 fundraising from
directors, existing shareholders and investors to facilitate copper gold
mining operations, the issue of shares to Directors and PDMR at a premium to
the share price to settle £174,961 of accrued fees ("Conversion Shares") and
the settling of £101,250 of consultancy fees by the issue of shares to
consultants ("Consultant Shares") to conserve the Company's working capital.
An operating loss is expected in the year subsequent to the date of these
accounts and even though further funding was raised during the year, the
Company will need to raise funding to provide additional working capital to
finance its ongoing activities. Management has successfully raised money in
the past, but there is no guarantee that adequate funds will be available when
needed in the future.
Dependence on key personnel
The success of the Group is, and will continue to be, to a significant extent,
dependent on retaining the services of the directors and senior management and
the loss of one or more could have a materially adverse effect on the Group. A
Group-wide share incentive scheme has been implemented.
COVID-19 pandemic
The COVID-19 pandemic announced by the World Health Organisation in 2020
initially had a markedly negative impact on global stock markets although many
sectors and stock market losses have been recovered there is increased
volatility as stock markets react to ongoing news in relation to the
short-term and long-term impact of COVID-19 and the financially implications
of the economic stimulus packages adopted by most governments to protect and /
or support their economies this has also, affected currencies and general
business activity and supply chains.
The Company developed a work at home policy and adopted local procedures for
exploration activities to address the health and wellbeing of its directors,
consultants and contractors, and their families, from COVID-19.
Whilst in many countries, including the United Kingdom with universal
vaccination programmes, COVID-19 appears to be under control the timing and
extent of the impact and recovery from COVID-19 in other countries is still
not certain as many countries particularly in the developing world have yet to
fully implement successful vaccination programs accordingly COVID-19 remains
an issue that requires ongoing monitoring in 2023.
Impact Of War in Ukraine
The Directors are aware of the war in Ukraine and related sanctions and there
is no impact on the Company as it has no assets or business activities or
suppliers with links in Ukraine or Russia and is not aware of any persons
sanctioned in relation to the Ukraine conflict owning shares in the Company.
An indirect impact of the conflict in Ukraine is the effect that the conflict
and sanctions have had on energy and other prices as many countries are now
experiencing inflation rates not experienced for several years and this may
have an effect on the Company's costs. The Company seeks to mitigate this risk
by obtaining quotes for and agreeing on material expenditure commitments in
advance of engaging services so costs are known in advance but is not in a
position to reduce inflation.
Going Concern
As disclosed in Note 1.1 to the accounts and the Corporate Governance
Statement, based on the Board's assessment that the Company will be able to
raise additional funds, as and when required, to meet its working capital and
capital expenditure requirements, the Board have concluded that they have a
reasonable expectation that the Group can continue in operational existence
for the foreseeable future. For these reasons, the Group continues to adopt
the going concern basis in preparing the annual report and financial
statements.
Post Balance Sheet events
As disclosed in note 26 to the Accounts:
a) on 9 January 2023 the Company announced it had issued 7,926,024 shares
to settle £6,000 of consultancy fees;
b) on 27 March 2023 the Company announced the completion of the sale of
its 44 IDM Mankayan Pty Ltd shares for 19,381,054 fully paid ordinary shares
if IDM International Ltd ("IDM International") and that an Independent
Expert's Report by BDO Corporate Finance (WA) Pty Ltd dated 3 February 2023
included a valuation of an IDM International share on a diluted minority basis
following IDM International's acquisition of IDM Mankayan and the following
table shows these valuations and the corresponding valuation of the
19,381,054 IDM International shares issued to Bezant using an FX rate of
A$1= GBP0.56 as at 28 February 2023.
Valuation in Independent Expert's Report
Low Preferred High
Expert Report Valuation per IDM International share AUD 0.232 AUD 0.470 AUD 0.726
No. of Consideration Shares to be issued to Bezant 19,381,054 IDM International shares
Value in A$ AUD 4,496,405 AUD 9,109,095 AUD 14,070,645
Value in £ £ 2,517,987 £ 5,101,093 £ 7,879,561
c) On 12 April 2023 the Company announced a fundraising of £750,000 from
directors, existing shareholders and investors to facilitate copper gold
mining operation, the issue of shares to Directors and PDMR at a premium to
the share price to settle £174,961 of accrued fees ("Conversion Shares") and
the settling of £101,250 of consultancy fees by the issue of shares to
consultants ("Consultant Shares") to conserve the Company's working capital;
d) On 5 May 2023 the Company announced the issue of 104,875,000 new
Ordinary Shares (the "Professional Fee Shares") at 0.04 pence per share, which
was the fundraising price for the fundraising which the Company announced on
12 April 2023. The Professional Fee Shares were issued to settle fees of
£41,950;
e) On 15 June 2023, the Company announced, further to its announcements of
23 November 2021 and 30 June 2022 that it had by an agreement dated 14 June
2023 agreed with Sanderson Capital Partners Limited ("Sanderson Capital" or
the "Lender") a long-term shareholder in the Company to extend the repayment
date for the £700,000 drawn down under the unsecured convertible loan funding
facility entered into with Sanderson Capital on 22 November 2021 (the
"Facility") (the "Agreement"). The £700,000 drawdown is now repayable by 23
December 2024 and convertible by the Lender at the fixed price of 0.08 pence
per share (the "New Conversion Price"). No further amounts can be drawn down
under the Facility. The Company as a loan extension fee i) paid the Lender a
£70,000 facility extension and documentation fee equivalent to 6.67% per year
which was settled by the issue of 87,500,000 new ordinary shares of 0.002p
each ("Shares") at the New Conversion Price ("Facility Extension Fee
Shares"); and ii) issued the Lender 437,500,000 warrants over Shares
exercisable at 0.12 pence per Share (the "Warrant Exercise Price") exercisable
for two years from the date of the Agreement. (the "Facility Extension Fees").
The Company has an option to convert all or part of the £700,000 drawdown if
the Company's share price exceeds 0.14 pence for 10 or more business days. The
New Conversion Price was at a 113% premium to the closing price of 0.0375
pence per share on 14 June 2023 and a 100% premium to the placing price in
relation to the Company's £750,000 fundraising announced on 12 April 2023.
The Warrant Exercise Price is at a 220% premium to the closing price on 14
June 2023.
Relations with Shareholders
The Company plan to hold an Annual General Meeting in late July or August 2023
and the wording of each resolution to be tabled will be set out in a formal
Notice of Annual General Meeting to be sent to shareholders.
Shareholders who are unable to attend the Annual General Meeting and who wish
to appoint a proxy in their place must ensure that their proxy is appointed in
accordance with the provisions set out in the Notice of Annual General
Meeting.
On behalf of the Board
Mr Colin Bird
Executive Chairman
29 June 2023
Corporate Governance Statement
As an AIM-quoted company, Bezant Resources PLC ("Bezant" or the "Company") and
its subsidiaries are required to apply a recognised corporate governance code
and demonstrate how the Group complies with such corporate governance code and
where it departs from it.
The Directors of the Company have formally taken the decision to apply the QCA
Corporate Governance Code (the "QCA Code"). The Board recognises the
principles of the QCA Code, which focus on the creation of medium to long-term
value for shareholders without stifling the entrepreneurial spirit in which
small to medium sized companies, such as Bezant, have been created. The
Company is committed to providing annual updates on its compliance with the
QCA Code further details of which are set out below.
The Board
The Board comprises (for the time being) five Directors of which three are
executive and two are non-executives, reflecting a blend of different
experience and backgrounds. The Board considers Dr. Evan Kirby and Ronnie
Siapno to be independent non-executives in terms of the QCA guidelines
notwithstanding the period they have been in office given they do not have
significant shareholdings in the Company. The Company's Executive Director is
Colin Bird who is also Chairman of the Board. Given the stage of the Company's
early-stage exploration mining projects and the experience of the Chair Mr.
Bird in managing such international exploration mining projects and his
familiarity with the Company's projects the Company believes that it is
appropriate for the roles of Chairman and Chief Executive Officer to be
combined at this stage. The Company will keep this under review as the
Company's projects develop with a view to splitting the roles when it is clear
which projects will become the principal activities of the Company and can
justify the need for and benefit from a separate CEO. The Company will
therefore consider making further appropriate appointments to the Board as an
when considered appropriate.
The Board is responsible for determining policy and business strategy, setting
financial and other performance objectives and monitoring achievement. It
meets throughout the year and all major decisions are taken by the full Board.
The Chairman takes responsibility for the conduct of the Company and Board
meetings and ensures that directors are properly briefed to enable full and
constructive discussions to take place. The Group's day-to-day operations are
managed by the Executive Director Colin Bird as assisted by the Group Company
Secretary in respect of corporate matters generally, compliance and company
administration. All Directors have access to the Company's Solicitors, along
with the Group Company Secretary and any Director needing independent
professional advice in the furtherance of his/her duties may obtain this
advice at the expense of the Group. However, no formal procedure has been
agreed with the Board regarding the circumstances in which individual
directors may take independent professional advice.
The Board is satisfied that it has a suitable balance between independence on
the one hand, and knowledge of the Company on the other, to enable it to
discharge its duties and responsibilities effectively, and that all Directors
have adequate time to fulfil their roles.
Details of the current Directors, biographical details are set out on pages 6
to 9 and their roles and background are set out on the Company's website at
www.bezantresources.com (http://www.bezantresources.com)
The role of the Chairman is to provide leadership of the Board and ensure its
effectiveness on all aspects of its remit to maintain control of the Group. In
addition, the Chairman is responsible for the implementation and practice of
sound corporate governance.
Under the Company's Articles of Association, the appointment of all new
Directors must be approved by shareholders in a general meeting. In
addition, one third of Directors are required to retire and to submit
themselves for re-election at each Annual General Meeting.
Application of the QCA Code
In the spirit of the QCA Code, it is the Board's task to ensure that the Group
is managed for the long-term benefit of all shareholders and other
stakeholders with effective and efficient decision-making. Corporate
governance is an important part of that task, reducing risk and adding value
to the Group. The Board will continue to monitor the governance framework of
the Group as it grows.
Bezant is an exploration entity whose assets comprise early-stage projects
that are not yet at the production stage. It currently has interests in two
copper-gold projects, in Namibia and Argentina and has an equity investment in
a copper - gold project in the Philippines an interest in a manganese project
in Botswana. Currently, no revenue is generated from such projects. The
Company seeks to promote long-term value creation for its shareholders by
leveraging the technical knowledge and experience of its directors and senior
management to develop and realise value from its projects. The key performance
indicators for the Company are therefore linked to the achievement of project
milestones and the increase in overall enterprise value which could be through
a combination of the development of these projects by the Company or with
joint venture or other partners and / or the sale of the projects.
All operations are conducted in a manner that protects the environment and the
health and safety of employees, third parties and local communities in
general. Bezant believes that a successful project is best achieved through
maintaining close working relationships with local communities, such social
ideology being at the forefront of all of Bezant's exploration initiatives via
establishing and maintaining co-operative relationships with local
communities, hiring local personnel and using local contractors and suppliers.
Where issues are raised, the Board takes the matters seriously and, where
appropriate, steps are taken to ensure that findings are integrated into the
Company's strategy.
Careful attention is given to ensure that all exploration activity is
performed in an environmentally responsible manner and abides by all relevant
mining and environmental acts. Bezant takes a conscientious role in all of its
operations and is aware of its social responsibility and its environmental
duty.
Both the engagement with local communities and the performance of all
activities in an environmentally and socially responsible way are closely
monitored by the Board which ensures that ethical values and behaviours are
recognised.
Corporate Governance Committees
The Board has established two committees comprising Non-Executive Directors
and Executive Directors.
The composition of the committees is as follows:
Audit Remuneration
Dr. Evan Kirby (Chairman) Colin Bird (Chairman)
Raju Samtani Dr. Evan Kirby
Colin Bird Ronnie Siapno
The Audit Committee
The audit committee receives reports from management and the external auditors
relating to the interim report and the annual report and financial statements,
reviews reporting requirements and ensures that the maintenance of accounting
systems and controls is effective.
The audit committee has unrestricted access to the Company's auditors. The
audit committee also monitors the controls which are in force and any
perceived gaps in the control environment.
The Board believes that the current size of the Group does not justify the
establishment of an independent internal audit department.
The Audit Committee meets twice during the year to review the published
financial information, the effectiveness of external audit and internal
financial controls including the specific matters set out below.
Significant issues considered by the Audit Committee during the year have been
the Principal Risks and Uncertainties and their effect on the financial
statements. The Audit Committee tracked the Principal Risks and Uncertainties
through the year and kept in contact with the Group's Management, External
Service Providers and Advisers. The Audit Committee is satisfied that there
has been appropriate focus and challenge on the high-risk areas.
UHY Hacker Young LLP, the current external auditors, have been in office since
2007 which was the last time a tender for the audit took place. The external
auditors present their annual audit findings to the audit committee.
Remuneration Committee
The Remuneration Committee determines the scale and structure of the
remuneration of the executive Directors and approves the granting of options
to Directors and senior employees and the performance related conditions
thereof. The Remuneration Committee also recommends to the Board a framework
for rewarding senior management, including Executive Directors, bearing in
mind the need to attract and retain individuals of the highest calibre and
with the appropriate experience to make a significant contribution to the
Group and ensures that the elements of the remuneration package are
competitive and help in underpinning the performance-driven culture of the
Group.
The Company does not currently have a separate Nominations Committee, with the
entire Board involved in the identification and approval of Board members
which the Board considers to be appropriate given the Company's size and
nature, but it will continue to monitor the situation as it grows.
Internal control
The Board is responsible for establishing and maintaining the Group's system
of internal control. Internal control systems manage rather than eliminate
the risks to which the Group is exposed and such systems, by their nature, can
provide reasonable but not absolute assurance against misstatement or loss.
There is a continuous process for identifying, evaluating and managing the
significant risks faced by the Group. The key procedures which the Directors
have established with a view to providing effective internal control, are as
follows:
¨ Identification and control of business risks
The Board identifies the major business risks faced by the Group and
determines the appropriate course of action to manage those risks.
¨ Budgets and business plans
Each year the Board approves the business plan and annual budget. Performance
is monitored and relevant action taken throughout the year through the regular
reporting to the Board of changes to the business forecasts.
¨ Investment appraisal
Capital expenditure is controlled by budgetary process and authorisation
levels. For expenditure beyond specified levels, detailed written proposals
have to be submitted to the Board. Appropriate due diligence work is carried
out if a business or asset is to be acquired.
¨ Annual review and assessment
In 2018, the Board conducted a detailed review and assessment of the
effectiveness of the Group's strategy, a process that is maintained on an
ongoing basis.
Relations with shareholders
The Board attaches considerable importance to the maintenance of good
relationships with shareholders. Presentations by the Directors to
institutional shareholders and City analysts was significantly reduced in 2020
and 2021 due to COVID-19 restrictions but the Company participated in various
investor focussed podcasts and as COVID-19 restrictions have been lifted the
Company will with the Company's advisers look at ways in which the Company can
engage with shareholders.
Departures from the QCA Code:
In accordance with the requirements of the AIM Rules for Companies, Bezant
departs from the QCA Code in the following ways:
Principle 7 - "Evaluate board performance based on clear and relevant
objectives, seeking continuous improvement."
Bezant's board is extremely focussed on implementing the Company's strategy.
Given the size and nature of Bezant, the Board does not consider it
appropriate to have a formal performance evaluation procedure in place, as
described and recommended in Principle 7 of the QCA Code. The Board will
closely monitor the situation as the Group grows.
No Nominations Committee
The QCA Code states that there should be a nomination committee to deal with
the appointment of both executive and non-executive Directors except in
circumstances where the Board is small. The Directors consider the size of the
current Board to be small and have not therefore established a separate
nomination committee. The appointment of executive and non-executive Directors
is currently a matter for the Board as a whole. This position will be reviewed
should the number of directors increase.
Chair is also Chief Executive officer
The QCA Code states that the role of Chair and chief Executive Officer should
be separate. Given the stage of the Company's early-stage exploration mining
projects and the experience of the Chair Mr. Bird in managing such
international exploration mining projects and his familiarity with the
Company's projects the Company believes that it is appropriate for the roles
of Chairman and Chief Executive Officer to be combined at this stage. The
Company will keep this under review as the Company's projects develop with a
view to splitting the roles when it is clear which projects will become the
principal activities of the Company and can justify the need for and benefit
from a separate CEO. The Company will therefore consider making further
appropriate appointments to the Board as an when considered appropriate.
Going concern
The Group made a profit for the year ended 31 December 2022 of £1,436,000
after a fair value adjustment (see note 11) excluding the fair value
adjustment the loss from all operations for the year ended 31 December 2022
after tax was £697,000 (2021 restated: £1,266,000), had negative cash
flows from operations and is currently not generating revenues. Cash and cash
equivalents were £57,000 as at 31 December 2022. Post year ended on 12 April
2023 the Company announced a £750,000 fundraising from directors, existing
shareholders and investors to advance the Hope Copper-Gold Project in Namibia
whilst the Company awaits the award of a mining licence ahead of facilitating
copper gold mining operations, for the metallurgical test work on the Kanye
manganese project in Botswana and for the Company's other projects as well as
working capital. The Company also issued shares to Directors and PDMR at a
premium to the share price to settle £174,961 of accrued fees ("Conversion
Shares") and the settling of £101,250 of consultancy fees by the issue of
shares to consultants ("Consultant Shares") to conserve the Company's working
capital An operating loss is expected in the year subsequent to the date of
these accounts and as a result the Company will need to raise funding to
provide additional working capital to finance its ongoing activities.
Management has successfully raised money in the past, but there is no
guarantee that adequate funds will be available when needed in the future.
Based on the Board's assessment that the Company will be able to raise
additional funds, as and when required, to meet its working capital and
capital expenditure requirements, the Board have concluded that they have a
reasonable expectation that the Group can continue in operational existence
for the foreseeable future. For these reasons, the Group continues to adopt
the going concern basis in preparing the annual report and financial
statements.
There is a material uncertainty related to the conditions above that may cast
significant doubt on the Group's ability to continue as a going concern and
therefore the Group may be unable to realise its assets and discharge its
liabilities in the normal course of business.
The financial report does not include any adjustments relating to the
recoverability and classification of recorded asset amounts or liabilities
that might be necessary should the entity not continue as a going concern.
Dr. Evan Kirby
Non-Executive Director
29 June 2023
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BEZANT RESOURCES PLC
FOR THE YEAR ENDED 31 DECEMBER 2022
Opinion
We have audited the financial statements of Bezant Resources Plc (the
'Company') and its subsidiaries (the 'Group') for the year ended 31 December
2022 which comprise the Consolidated Statement of Profit and Loss, the
Consolidated Statement of Other Comprehensive Income, the Consolidated and
Company Statements of Changes in Equity, the Consolidated and Company Balance
Sheets, the Consolidated and Company Statements of Cash Flows and notes to the
financial statements, including significant accounting policies. The financial
reporting framework that has been applied in the preparation of the group's
and company's financial statements is applicable law and UK adopted
International Accounting Standards.
In our opinion:
· the financial statements give a true and fair view of the state of
the Group's and Company's affairs as at 31 December 2022 and of the Group's
profit for the year then ended;
· the financial statements have been properly prepared in accordance
with UK adopted International Accounting Standards; and
· the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the Group and Company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Material uncertainty relating to going concern
We draw attention to the Going Concern section of the Accounting Policies of
the Group financial statements (note 1.1) concerning the Group's and Company's
ability to continue as a going concern. The Group incurred an operating loss
of £697k during the year ended 31 December 2022 and is still incurring
operating losses. As discussed in note 1.1, post year-end the Group raised
£750,000 to fund operations and settled accrued fees through the issue of
shares to conserve cash flows. However, an operating loss is expected in the
year subsequent to the date of these accounts and as a result the Company will
need to raise funding to provide additional working capital to finance its
ongoing activities. The financial statements do not include the adjustments
(such as impairment of assets) that would result if the Group and Company were
unable to continue as a going concern. These conditions, along with other
matters discussed in the Principal Accounting Policies indicate the existence
of a material uncertainty which may cast significant doubt about the Group's
and Company's ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the director's
use of going concern basis of accounting in the preparation of the financial
statements is appropriate. Our evaluation of the director's assessment of
the entity's ability to continue to adopt the going concern basis of
accounting included an assessment of the risk and audit procedures to address
this risk:
The risk
The group currently does not generate any revenue, therefore in order to
provide sufficient working capital to fund the group commitments as they fall
due over the next 12 months the group is reliant on further fundraisings in
order to fund its ongoing activities.
We understand it is the group's intention to fund future exploration
programmes by a combination of farm in and/or further fundraising which the
group will need to complete in the next 12 months. Accordingly, the Group will
require additional funding and/or a working capital reduction within twelve
months from the date when the financial statements are authorised for issue.
Given the above factors, we consider going concern to be a significant audit
risk area.
The directors' conclusion of the risks and circumstances described in the
Going Concern section of the Principal Accounting Policies of the Group
financial statements represent a material uncertainty over the ability of the
Group and Company to continue as a going concern for a period of at least a
year from the date of approval of the financial statements. However, clear
and full disclosure of the facts and the directors' rationale for the use of
the going concern basis of preparation, including that there is a related
material uncertainty, is a key financial statement disclosure and so was the
focus of our audit in this area. Auditing standards require that to be
reported as a key audit matter.
How our audit addressed the key audit matter
Our audit procedures included:
· Assessing the transparency and the completeness and accuracy of the
matters covered in the going concern disclosure by evaluating management's
cash flow projections for the next 12 months and the underlying assumptions.
· We obtained cash flow forecasts, reviewed the methodology behind
these, ensured arithmetically correct and challenged the assumptions.
· We performed a sensitivity analysis for an increase in costs to
consider the impact of inflation and other unforeseen additional costs
incurring.
· We discussed plans for the Group going forward with management,
ensuring these had been incorporated into the budgeting and would not have an
impact on the going concern status of the Group.
Key observations:
It is clear the group will need to raise funds in order to fund any further
exploration costs. The Group has been able to raise funds in the past, however
there is no guarantee that adequate funds will be available when needed in the
future.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our approach to the audit
As part of designing our audit, we determined materiality and assessed the
risks of material misstatement in the financial statements. In particular, we
looked at where the directors made subjective judgements, for example in
respect of impairment reviews on exploration assets that involved making
assumptions and considering future events that are inherently uncertain.
We tailored the scope of our audit to ensure that we performed enough work to
be able to give an opinion on the financial statements as a whole, taking into
account an understanding of the structure of the Company and the Group, their
activities, the accounting processes and controls, and the industry in which
they operate. Our planned audit testing was directed accordingly and was
focused on areas where we assessed there to be the highest risk of material
misstatement.
Our Group audit scope includes all of the group companies. At the Company
level, we also tested the consolidation procedures. During the audit we
reassessed and re-evaluated audit risks and tailored our approach accordingly.
The audit testing included substantive testing on significant transactions,
balances and disclosures, the extent of which was based on various factors
such as our overall assessment of the control environment, the effectiveness
of controls and the management of specific risk.
We communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and significant findings
that we identified during the course of the audit.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on the overall audit strategy, the allocation of
resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. This is not a complete list of
all risks identified during our audit. Going concern is a significant key
audit matter and is described above. In arriving at our audit opinion above,
the other key audit matters were as follows:
Key audit matter How the matter was addressed during the audit
Impairment of exploration and evaluation assets in the Group Our audit work included, but was not restricted to:
The Group has capitalised costs in respect of the Group's licence interests in · Obtaining each of the licences along with supporting information
accordance with IFRS 6 'Exploration for and Evaluation of Mineral Resources' available for each exploration project to assess whether the licenses remain
(IFRS 6). The Directors need to assess the exploration assets for indicators in good standing.
of impairment and where they exist to undertake a full review to assess the
need for impairment charge. This involves significant judgements and · We discussed each of the licence areas with the directors and
assumptions. considered their assessment in conjunction with the available information for
each exploration project and reviewed available information to assess whether
the licenses remain in good standing.
We therefore identified the impairment of exploration and evaluation assets as · We reviewed the future plans of the projects in respect of funding,
a key audit matter, which was one of the most significant assessed risks of viability and development to assess whether there were any indicators of
material misstatement. impairment.
Key observations
We obtained evidence that the licenses remain valid and are in good
standing.
Where licenses had expired and renewal applications not yet granted, we
reviewed correspondence with the mining departments to determine the status of
the renewal and whether there were any indications the renewals would not be
granted. The Mining Acts of the relevant countries were also reviewed to
confirm work could be continued whilst renewals were in process. There we no
significant matters identified which indicated the licenses would not be
renewed.
Whilst the limited spending on the Eureka Project was identified as an
indicator of impairment, based on a review of the expiry dates of the
licences, potential future funding and the intention to continue the
exploration and evaluation of this asset, the directors' assessment that no
impairment was required was considered to be appropriate.
Impairment of investments and loans in the Parent Company Our audit work included, but was not restricted to:
Under International Accounting Standard 36 'Impairment of Assets', companies · Reviewing the investments balances for indicators of impairment in
are required to assess whether there is any indication that an asset may be accordance with IAS 36;
impaired at each reporting date.
· Assessing the appropriateness of the methodology applied by
management in their assessment of the recoverable amount of intragroup loans
by comparing it to the Group's accounting policy and IAS 36;
Management assessment involves significant judgements and assumptions such as
the timing and extent and probability of future cash flow. · Assessing management's evaluation of the recoverable amounts of
intergroup loans including review of the impairment provisions and net asset
values of components that have intercompany debt;
The Company has investments of £9.3m (2021: £6.07m) comprising investments · Checking that intergroup loans have been reconciled and confirming
and loans to subsidiaries of £7.1m (2021: £5.8m), investments in joint that there are no material differences.
ventures £nil (2021: £228k) and investments held at FVPL of £2.3m (2021:
£78k). In conjunction with the exploration assets, the investments represent
the primary balance on the Company balance sheet and there is a risk it could
be impaired and that intragroup loans may not be recoverable as a result of
the subsidiary companies incurring losses.
Key observations
The investment balance correlates with the Mankayan Project, Eureka Project,
We therefore identified the impairment of loans due from subsidiary companies Hope Copper Gold Project, and Kanye Manganese Project, held by subsidiaries.
as a key audit matter in the Company financial statements, which was one of Our impairment review was therefore linked to our assessment of indicators of
the most significant assessed risks of material misstatement. impairment on the corresponding exploration assets.
No further impairments were considered necessary.
Valuation and accounting treatment of convertible loan facility Our audit work included, but was not restricted to:
· Obtaining and reviewing the convertible loan agreement for key terms
which determine the accounting treatment
The Company and Group has a convertible loan instrument of £700k (2021:
£Nil). · Assessing appropriateness of the accounting treatment under IFRS 9
Financial Instruments and IAS 32 Presentation of Financial Instruments
· Review of the key assumptions used to determine the fair value of the
Convertible instruments can be complex, containing a number of features which liability and equity component
can have a significant impact on the accounting. Therefore, management were
to determine the correct treatment for the individual components.
Key observations
We therefore identified the valuation and accounting treatment of the The convertible loan comprises a liability and equity component. The fair
convertible loan as a key audit matter in the Company and Group financial value of equity component has been calculated at 25% being the estimated rate
statements. available on an unsecured loan with no convertible option.
Our application of materiality
The scope and focus of our audit was influenced by our assessment and
application of materiality. We apply the concept of materiality both in
planning and performing our audit, and in evaluating the effect of
misstatements on our audit and on the financial statements.
We define financial statement materiality as the magnitude by which
misstatements, including omissions, could reasonably be expected to influence
the economic decisions taken on the basis of the financial statements by
reasonable users.
In order to reduce to an appropriately low level the probability that any
misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of identified
misstatements, and the particular circumstances of their occurrence, when
evaluating their effect on the financial statements as a whole.
Materiality Measure Group Parent
Overall materiality £194,000 (2021: £170,000) £194,000 (2021: £170,000)
We determined materiality for the financial statements as a whole to be:
How we determine it Based on the main key indicator, being 2% of the net assets of the Group 2% of net assets of the Parent Company exceeded the Group materiality amount
therefore this was capped at Group materiality.
Rationale for benchmarks applied We believe the net assets are the most appropriate benchmark due to the size
and stage of development of the Company and Group. This is further supported
by the Group not yet generating any revenue.
Performance materiality £145,500 (2021: £127,500)
On the basis of our risk assessment, together with our assessment of the
Group's control environment, our judgment is that performance materiality for
the financial statements should be 75% of materiality.
Specific materiality We also determine a lower level of specific materiality for certain areas such
as directors' remuneration and related party transactions of £2,000 (2021:
£2,000) as these are considered to be material by nature.
Reporting threshold We agreed with the Audit Committee that we would report to them all
misstatements over 5% of Group materiality identified during the audit, as
well as differences below that threshold that, in our view, warrant reporting
on qualitative grounds. We also report to the Audit Committee on disclosure
matters that we identified when assessing the overall presentation of the
financial statements.
Other information
The other information comprises the information included in the annual report
other than the financial statements and our auditors' report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial
statements themselves.
If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the strategic report and the directors' report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and Company and
its environment obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the Company, or
returns adequate for our audit have not been received from branches not
visited by us; or
· the Company financial statements are not in agreement with the
accounting records and returns; or
· certain disclosures of directors' remuneration specified by law are
not made; or
· we have not received all the information and explanations we require
for our audit.
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities, set
out on page 19, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the Group's and the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to
liquidate the group or Company or to cease operations, or have no realistic
alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below:
Based on our understanding of the Group and the industry in which it operates,
we identified that the principal risks of non-compliance with laws and
regulations related to exploration laws and regulations in the countries the
Group operates, and company law and we considered the extent to which
non-compliance might have a material effect on the financial statements. We
also considered those laws and regulations that have a direct impact on the
preparation of the financial statements such as the Companies Act 2006 and QCA
code. We evaluated management's incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of override of
controls),and determined that the principal risks were related to
overstatement of assets.
Audit procedures performed included: review of the financial statement
disclosures to underlying supporting documentation, review of legal and
professional expenditure, enquiries of management, and testing of journals and
evaluating whether there was evidence of bias by the Directors that
represented a risk of material misstatement due to fraud.
There are inherent limitations in the audit procedures described above and the
further removed non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less likely we
would become aware of it. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at
www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Use of our report
This report is made solely to the Company's members, as a body, in accordance
with part 3 of Chapter 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
James Astley
(Senior Statutory Auditor)
For and on behalf of UHY Hacker Young
Chartered Accountants and Statutory Auditor
UHY Hacker Young
4 Thomas More Square
London E1W 1YW
29 June 2023
Consolidated Statement of Profit and Loss
For the year ended 31 December 2022
Notes Year ended 31 December 2022 Restated
£'000 Year ended 31 December 2021
£'000
CONTINUING OPERATIONS
Group revenue - -
Cost of sales - -
Gross profit/(loss) - -
Operating expenses 3 (668) (788)
Share based payments 3 (29) (160)
4 (697) (948)
Operating loss
Other gains 11 2,133 -
Impairment of assets 5 - (318)
Profit/(loss)before taxation 1,436 (1,266)
6 - -
Taxation
Profit/(loss) for the financial year from continuing operations 1,436 (1,266)
Profit/(loss) for the financial year 1,436 (1,266)
Attributable to: 1,436 (1,266)
Owners of the Company
- Continuing operations 1,436 (1,266)
- Discontinued operations - -
Non-controlling interest - -
1,436 (1,266)
Profit/(loss) per share (pence)
Basic profit/loss per share from continuing operations 7 0.03 (0.03)
Diluted profit/loss per share from continuing operations 7 0.02 (0.03)
Consolidated Statement of Other Comprehensive Income
For the year ended 31 December 2022
Year ended 31 December 2022 Restated
£'000 Year ended 31 December 2021
£'000
Other comprehensive income:
Loss for the financial year 1,436 (1,266)
Items that may be reclassified to profit or loss:
Foreign currency reserve movement (120) (40)
Non-controlling interest 12 -
1,328 (1,306)
Total comprehensive loss for the financial year
Attributable to: 1,328 (1,306)
Owners of the Company
Non-controlling interest - -
1,328 (1,306)
Consolidated Statement of Changes in Equity
For the year ended 31 December 2022
Share Capital Share Premium Other Reserves(1) Retained Losses Non Total
£'000 £'000 £'000 £'000 Controlling interest Equity
£'000 £'000
Year ended 31 December 2022
Balance at 1 January 2022 restated 2,076 39,303 3,781 (37,160) (12) 7,988
Current year profit - - - 1,436 12 1,448
Foreign currency reserve - - (120) - - (120)
Total comprehensive loss for the year - - (120) 1,436 12 1,328
Shares issued - In lieu of fees 2 162 - - - 164
Warrants issued to shareholders - - 30 - - 30
Warrants exercised 1 42 (6) 6 - 43
Warrant expired - - (167) 167 - -
Equity component of borrowings - - 154 - - 154
Balance at 31 December 2022 2,079 39,507 3,672 (35,551) - 9,707
Share Capital Share Premium Other Reserves(1) Retained Losses Non Total
£'000 £'000 £'000 £'000 Controlling interest Equity
£'000 £'000
Year ended 31 December 2021
Balance at 1 January 2021 2,049 39,125 1,523 (35,674) (12) 7,011
Current year loss - - - (1,058) - (1,058)
Foreign currency reserve - - (40) - - (40)
Prior year adjustment (Note 25) - - - (208) - (208)
Total comprehensive loss for the year restated - - (40) (1,266) - (1,306)
Proceeds from shares issued 18 1,182 - - - 1,200
Share issue costs - (144) - - - (144)
Shares issued - Acquisitions 6 44 711 - - 761
Shares issued - Acquisitions (2020)(2) - (1,120) 1,120 - - -
Shares issued - Legal fees 1 71 - - - 72
Warrants issued to shareholders - - 300 (270) - 30
Warrants exercised 2 145 (50) 50 - 147
Share options granted - - 217 - - 217
Balance at 31 December 2021 restated 2,076 39,303 3,781 (37,160) (12) 7,988
(1) Other reserves is made up of the share-based payment, foreign exchange and
merger reserve.
(2) Share premium on acquisitions during the year to 31 December 2020 have
been reclassified to merger reserves during the previous year.
( )
Company Statement of Changes in Equity
For the year ended 31 December 2022
Share Capital Share Premium Other Reserves(1) Retained Losses Total
£'000 £'000 £'000 £'000 Equity
£'000
Year ended 31 December 2021
Balance at 1 January 2022 2,076 39,303 3,298 (35,249) 9,428
Current year loss - - - 1,737 1,737
Total comprehensive loss for the year - - - 1,737 1,737
Shares issued - In lieu of fees 2 162 - - 164
Warrants issued to shareholders - - 30 - 30
Warrants exercised 1 42 (6) 6 43
Warrant expired - - (167) 167 -
Equity component of borrowings - - 154 - 154
Balance at 31 December 2022 2,079 39,507 3,309 (33,339) 11,556
Share Capital Share Premium Other Reserves(1) Retained Losses Total
£'000 £'000 £'000 £'000 Equity
£'000
Year ended 31 December 2021
Balance at 1 January 2021 2,049 39,125 1,000 (33,818) 8,356
Current year loss - - - (1,211) (1,211)
Total comprehensive loss for the year - - - (1,211) (1,211)
Proceeds from shares issued 18 1,182 - - 1,200
Share issue costs - (144) - - (144)
Shares issued - Acquisitions 6 44 711 - 761
Shares issued - Acquisitions (2020)(2) - (1,120) 1,120 - -
Share Issued - Legal fees 1 71 - - 72
Warrants issued to shareholders - - 300 (270) 30
Warrants exercised 2 145 (50) 50 147
Share options granted - - 217 - 217
Balance at 31 December 2021 2,076 39,303 3,298 (35,249) 9,428
(1) Other reserves is made up of the share-based payment, foreign exchange and
merger reserve.
(2) Share premium on acquisitions during the year to 31 December 2020 have
been reclassified to merger reserves during the previous year.
( )
Consolidated and Company Balance Sheets
As at 31 December 2022
Consolidated Company
Restated
2022 2021 2022 2021
Notes £'000 £'000 £'000 £'000
ASSETS
Non-current assets
Plant and equipment 10 2 2 - -
Investments 11 2,260 49 9,328 6,066
Exploration and evaluation assets 12 8,398 7,692 3,129 3,129
Total non-current assets 10,660 7,743 12,457 9,195
Current assets
Trade and other receivables 13 76 48 54 26
Cash and cash equivalents 57 728 47 710
133 776 101 736
Total current assets 133 776 101 736
TOTAL ASSETS 10,793 8,519 12,558 9,931
LIABILITIES
Current liabilities
Trade and other payables 14 463 531 379 503
Borrowings 15 623 - 623 -
Total current liabilities 1,086 531 1,002 503
9,707 7,988 11,556 9,428
NET ASSETS
EQUITY
Share capital 17 2,079 2,076 2,079 2,076
Share premium 17 39,507 39,303 39,507 39,303
Share-based payment reserve 18 1,181 1,325 1,181 1,325
Foreign exchange reserve 506 625 143 142
Merger reserve 1,831 1,831 1,831 1,831
Other reserves 15 154 - 154 -
Retained losses (35,551) (37,160) (33,339) (35,249)
9,707 8,000 11,556 9,428
Non-controlling interests - (12) - -
9,707 7,988 11,556 9,428
TOTAL EQUITY
In accordance with the provisions of Section 408 of the Companies Act 2006,
the Parent Company has not presented a separate income statement. A profit for
the year ended 31 December 2022 of £1,737,000 (2021 loss: £1,211,000) has
been included in the consolidated income statement.
These financial statements were approved by the Board of Directors on 29 June
2023 and signed on its behalf by:
Mr Colin Bird
Executive
Chairman
Company Registration No. 02918391
Consolidated and Company Statements of Cash Flows
For the year ended 31 December 2022
Consolidated Company
Year ended 31 December 2022 Year ended 31 December 2021 Year ended 31 December 2022 Year ended 31 December 2021
Notes £'000 £'000 £'000 £'000
Net cash outflow from operating activities 20 (368) (837) (356) (507)
Cash flows from investing activities
Exploration expenditure (968) (801) - -
Investment in subsidiary - - - (345)
Loans to subsidiaries - - (972) (766)
Payments to acquire investments (78) - (78) -
(1,046) (801) (1,050) (1,111)
Cash flows from financing activities
Proceeds from issuance of ordinary shares 21 43 1,235 43 1,235
Proceeds from borrowings 700 - 700 -
743 1,235 743 1,235
(Decrease)/increase in cash (671) (403) (663) (383)
Cash and cash equivalents at beginning of year 728 1,128 710 1,094
Foreign exchange movement 3 - (1)
Cash and cash equivalents at end of year 57 728 47 710
Notes to the Financial Statements
For the year ended 31 December 2022
General Information
Bezant Resources Plc (the "Company") is a company incorporated in England and
Wales. The address of its registered office and principal place of business is
disclosed in the corporate directory. The Company is quoted on the AIM Market
("AIM") of the London Stock Exchange and has the TIDM code of BZT.
Information required by AIM Rule 26 is available in the section of the
Group's website with that heading at www.bezantresources.com
(http://www.bezantresources.com) .
1. Accounting policies
1.1 Accounting policies
The principal accounting policies applied in the preparation of these
financial statements are set out below. These policies have been consistently
applied to all the years presented, unless otherwise stated below.
Going concern basis of accounting
The Group made a profit from all operations for the year ended 31 December
2022 after tax of £1,436,000 after a fair value adjustment (see note 11).
Excluding the fair value adjustment the loss from all operations for the
year ended 31 December 2022 after tax was £697,000 (2021 restated:
£1,266,000). The Group had negative cash flows from operations and is
currently not generating revenues. Cash and cash equivalents were £57,000 as
at 31 December 2022. Post year ended on 12 April 2023 the Company announced a
£750,000 fundraising from directors, existing shareholders and investors
advance the Hope Copper-Gold Project in Namibia whilst the Company awaits the
award of a mining licence ahead of facilitating copper gold mining operations,
for the metallurgical test work on the Kanye manganese project in Botswana and
for the Company's other projects as well as working capital. The Company
also the issued shares to Directors and PDMR at a premium to the share price
to settle £174,961 of accrued fees ("Conversion Shares") and the settling of
£101,250 of consultancy fees by the issue of shares to consultants
("Consultant Shares") to conserve the Company's working capital. An operating
loss is expected in the year subsequent to the date of these accounts and as a
result the Company will need to raise funding to provide additional working
capital to finance its ongoing activities. Management has successfully raised
money in the past, but there is no guarantee that adequate funds will be
available when needed in the future.
Based on the Board's assessment that the Company will be able to raise
additional funds, as and when required, to meet its working capital and
capital expenditure requirements, the Board have concluded that they have a
reasonable expectation that the Group can continue in operational existence
for the foreseeable future. For these reasons the Group continues to adopt the
going concern basis in preparing the annual report and financial statements.
There is a material uncertainty related to the conditions above that may cast
significant doubt on the Group's ability to continue as a going concern and
therefore the Group may be unable to realise its assets and discharge its
liabilities in the normal course of business.
The financial report does not include any adjustments relating to the
recoverability and classification of recorded asset amounts or liabilities
that might be necessary should the entity not continue as a going concern.
Basis of preparation
The financial information, which incorporates the financial information of the
Company and its subsidiary undertakings (the "Group"), has been prepared using
the historical cost convention and in accordance with UK adopted International
Accounting Standards including IFRS 6 'Exploration for and Evaluation of
Mineral Resources'.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and its subsidiary undertakings and have been prepared using the
principles of acquisition accounting, which includes the results of the
subsidiaries from their dates of acquisition.
All intra-group transactions, income, expenses and balances are eliminated
fully on consolidation.
A subsidiary undertaking is excluded from the consolidation where the interest
in the subsidiary undertaking is held exclusively with a view to subsequent
resale and the subsidiary undertaking has not previously been consolidated in
the consolidated accounts prepared by the parent undertaking.
Business combination
On acquisition, the assets and liabilities and contingent liabilities of a
subsidiary are measured at their fair values at the date of acquisition. Any
excess of the cost of acquisition over the fair values of the identifiable net
assets acquired is recognised as goodwill. Any deficiency of the cost of
acquisition below the fair values of the identifiable net assets acquired
(i.e. discount on acquisition) is credited to profit and loss in the year of
acquisition. The interest of non-controlling shareholders is stated at the
minority's proportion of the fair values of the assets and liabilities
recognised. Subsequently, any losses applicable to the non-controlling
interest in excess of the non-controlling interest are allocated against the
interests of the parent.
New IFRS standards and interpretations
At the date of authorisation of these financial statements, the company has
not early adopted the following amendments to Standards and Interpretations
that have been issued but are not yet effective:
Standard or Interpretation Effective for annual periods commencing on or after
Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting 1 January 2023
Policies
Amendments to IAS 8: Definition of Accounting Estimates 1 January 2023
Amendments to IAS 12: Deferred Tax Related to Assets and Liabilities arising 1 January 2023
from a Single Transaction.
Amendments to IAS 1: Classification of Liabilities as Current or Non-Current 1 January 2024
Amendments to IFRS 16 Leases: Liability in a Sale and Leaseback 1 January 2024
As yet, none of these have been endorsed for use in the UK and will not be
adopted until such time as endorsement is confirmed. The directors do not
expect any material impact as a result of adopting the standards and
amendments listed above in the financial year they become effective.
1.2 Significant accounting judgments, estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined
based on estimates and assumptions of future events. The key estimates and
assumptions that have a significant risk of causing a material adjustment to
the carrying amounts of certain assets and liabilities within the next annual
reporting year are:
Share-based payment transactions:
The Group measures the cost of equity-settled transactions with directors,
consultants and employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is
determined by using a Black and Scholes model which takes into account
expected share volatility, strike price, term of the option and the dividend
policy.
Impairment of investments, options and deferred exploration expenditure:
The Group determines whether investments (including those acquired during the
period), options and deferred exploration expenditure are impaired when
indicators, based on facts and circumstances, suggest that the carrying amount
may exceed its recoverable amount. Such indicators include the point at which
a determination is made as to whether or not commercial mining reserves exist
in the subsidiary or associate in which the investment is held or whether
exploration expenditure capitalised is recoverable by way of future
exploitation or sale, obviously pending completion of the exploration
activities associated with any specific project in each segment.
Fair value of assets and liabilities acquired on acquisition of subsidiaries
The Group determines the fair value of assets and liabilities acquired on
acquisition of subsidiaries by reference to the carrying value at the date of
acquisition and by reference to exploration activities undertaken and/or
information that the Directors become aware of post acquisition (note 12).
Investments at fair value through profit and loss ('Equity investments')
Equity investments are initially measured at cost, including transaction
costs. At each reporting date, the fair value is assessed and any resultant
gains and losses are included directly in the Consolidated Statement of Profit
and Loss under IFRS 9.
Valuation of Equity Instruments Convertible Loan (Borrowings)
Convertible instruments can be complex, containing a number of features which
can have a significant impact on the accounting under IFRS 9 Financial
Instruments and IAS 32 Presentation of Financial Instruments. The Company
determined that the £700,000 convertible note drawndown during the period
(note 15) was an equity instrument as the conversion feature results in the
conversion of a fixed amount of stated principal into a fixed number of
shares, it satisfies the 'fixed for fixed' criterion and, therefore, it is
classified as an equity instrument which requires the valuation of the
liability component and the equity conversion component. The fair value of the
liability component, included in current borrowings, at inception was
calculated using a market interest rate for an equivalent instrument without
conversion option. The discount rate applied was 25%.
1.3 Interest income
Interest revenue is recognised on a time proportionate basis that takes into
account the effective yield on the financial asset.
1.4 Share-based payments
The Company offered share-based payments to certain directors and advisers by
way of issues of share options, none of which to date have been exercised. The
fair value of these payments is calculated by the Company using the Black
Scholes option pricing model. The expense is recognised on a straight-line
basis over the year from the date of award to the date of vesting, based on
the Company's best estimate of shares that will eventually vest (note 18).
1.5 Financial instruments
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Group
becomes a party to the contractual provisions of the financial instrument, and
are measured initially at fair value adjusted by transactions costs, except
for those carried at fair value through profit or loss, which are measured
initially at fair value. Subsequent measurement of financial assets and
financial liabilities are described below.
Financial assets are derecognised when the contractual rights to the cash
flows from the financial asset expire, or when the financial asset and all
substantial risks and rewards are transferred. A financial liability is
derecognised when it is extinguished, discharged, cancelled or expires.
Classification and subsequent measurement of financial assets
Except for those trade receivables that do not contain a significant financing
component and are measured at the transaction price in accordance with IFRS
15, all financial assets are initially measured at fair value adjusted for
transaction costs (where applicable).
For the purpose of subsequent measurement, financial assets other than those
designated and effective as hedging instruments are classified into the
following categories upon initial recognition:
• amortised cost
• fair value through profit or loss ("FVPL")
• equity instruments at fair value through other comprehensive
income ("FVOCI")
• debt instruments at FVOCI
All income and expenses relating to financial assets that are recognised in
profit or loss are presented within finance costs, finance income or other
financial items, except for expected credit losses of trade receivables which
is presented within other expenses.
Classifications are determined by both:
• The entities business model for managing the financial asset;
• The contractual cash flow characteristics of the financial assets.
Subsequent measurement financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the
following conditions (and are not designated as FVPL):
• they are held within a business model whose objective is to hold
the financial assets and collect its contractual cash flows
• the contractual terms of the financial assets give rise to cash
flows that are solely payments of principal and interest on the principal
amount outstanding
After initial recognition, these are measured at amortised cost using the
effective interest method. Discounting is omitted where the effect of
discounting is immaterial. The Group's cash and cash equivalents, trade and
most other receivables fall into this category of financial instruments.
Financial assets at fair value through profit or loss (FVPL)
Financial assets that are held within a different business model other than
'hold to collect' or 'hold to collect and sell' are categorised at fair value
through profit and loss. Further, irrespective of business model financial
assets whose contractual cash flows are not solely payments of principal and
interest are accounted for at FVPL. All derivative financial instruments fall
into this category, except for those designated and effective as hedging
instruments, for which the hedge accounting requirements apply (see below).
Investments at fair value through profit and loss ('Equity investments')
Equity investments are initially measured at cost, including transaction
costs. At each reporting date, the fair value is assessed and any resultant
gains and losses are included directly in the Consolidated Statement of Profit
and Loss under IFRS 9.
Equity instruments at fair value through other comprehensive income (Equity
FVOCI)
Investments in equity instruments that are not held for trading are eligible
for an irrevocable election at inception to be measured at FVOCI. Under Equity
FVOCI, subsequent movements in fair value are recognised in other
comprehensive income and are never reclassified to profit or loss. Dividends
from these investments continue to be recorded as other income within the
profit or loss unless the dividend clearly represents return of capital.
Debt instruments at fair value through other comprehensive income (Debt FVOCI)
Financial assets with contractual cash flows representing solely payments of
principal and interest and held within a business model of collecting the
contractual cash flows and selling the assets are accounted for at debt FVOCI.
Any gains or losses recognised in OCI will be reclassified to profit or loss
upon derecognition of the asset.
IFRS 9's impairment requirements use more forward-looking information to
recognize expected credit losses - the 'expected credit losses ("ECL") model'.
The Group considers a broader range of information when assessing credit risk
and measuring expected credit losses, including past events, current
conditions, reasonable and supportable forecasts that affect the expected
collectability of the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is made between:
• financial instruments that have not deteriorated significantly in
credit quality since initial recognition or that have low credit risk ('Stage
1') and
• financial instruments that have deteriorated significantly in
credit quality since initial recognition and whose credit risk is not low
('Stage 2').
1.6 Cash and cash equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term,
highly liquid investments that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of changes in value. For
the purposes of the Cash Flow Statement, cash and cash equivalents consist of
cash and cash equivalents as defined above, net of outstanding bank
overdrafts.
1.7 Trade and other receivables
Trade receivables are recognised and carried at original invoice amount less
an allowance for any expected credit loss amounts.
1.8 Foreign currency transactions and balances
(i) Functional and presentational currency
Items included in the Group's financial statements are measured using Pounds
Sterling ("£"), which is the currency of the primary economic environment in
which the Group operates ("the functional currency"). The financial statements
are presented in Pounds Sterling ("£"), which is the functional currency of
the Company and is the Group's presentational currency.
The individual financial statements of each Group company are presented in the
functional currency of the primary economic environment in which it operates.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions
and from the translation at year end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the income
statement.
Transactions in the accounts of individual Group companies are recorded at the
rate of exchange ruling on the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are translated at the rates
ruling at the balance sheet date. All differences are taken to the income
statement.
For the purpose of presenting consolidated financial statements, the assets
and liabilities of the Group's foreign operations are translated at exchange
rates prevailing on the balance sheet date. Income and expense items are
translated at the average exchange rates for the year. Exchange differences
arising recognised in other comprehensive income and transferred to the
Group's translation reserve within equity as 'Other reserves'. Upon disposal
of foreign operations, such translation differences are derecognised as an
income or as expenses in the year in which the operation is disposed of in
other comprehensive income.
1.9 Taxation
Current tax for current and prior periods is, to the extent unpaid, recognised
as a liability. If the amount already paid in respect of current and prior
periods exceeds the amount due for those periods, the excess is recognised as
an asset. Deferred tax is provided in full in respect of taxation deferred by
timing differences between the treatment of certain items for taxation and
accounting purposes. A deferred tax asset is recognised for all deductible
temporary differences to the extent that it is probable that taxable profit
will be available against which the deductible temporary difference can be
utilised. A deferred tax asset is not recognised when it arises from the
initial recognition of an asset or liability in a transaction at the time of
the transaction, affects neither accounting profit nor taxable profit.
Deferred tax balances are not discounted.
1.10 Plant and equipment
Plant and equipment are stated at historical cost less depreciation.
Historical cost includes expenditure that is directly attributable to the
acquisition of the items. Subsequent costs are included in the asset's
carrying amount, only when it is probable that future economic benefits
associated with the item will flow to the Group and the cost of the item can
be measured reliably. All other repairs and maintenance are charged to the
profit and loss account during the financial year in which they are incurred.
Depreciation on these assets is calculated using the diminishing value method
to allocate the cost less residual values over their estimated useful lives as
follows:
Plant and equipment - 33.33%
Fixtures and fittings - 7.5%
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate at the balance sheet date.
1.11 Impairment of assets
At each reporting date, the Company reviews the carrying values of its
tangible and intangible assets to determine whether there is any indication
that those assets have been impaired. If such an indication exists, the
recoverable amount of the asset, being the higher of the asset's fair value
less costs to sell and value in use, is compared to the asset's carrying
value. Any excess of the asset's carrying value over its recoverable amount is
expensed to the profit and loss account.
1.12 Trade and other payables
Trade payables and other payables are carried at amortised costs and represent
liabilities for goods and services provided to the Group prior to the end of
the financial year that are unpaid and arise when the Group becomes obliged to
make future payments in respect of the purchase of these goods and services.
1.13 Exploration, evaluation and development expenditure
Exploration, evaluation and development expenditure incurred is accumulated in
respect of each identifiable area of interest. These costs are only carried
forward to the extent that they are expected to be recouped through the
successful development of the area or where activities in the area have not
yet reached a stage which permits reasonable assessment of the existence of
economically recoverable reserves. Accumulated costs in relation to an
abandoned area are written off in full in the year in which the decision to
abandon the area is made. When production commences, the accumulated costs for
the relevant area of interest are transferred to development assets and
amortised over the life of the area according to the rate of depletion of the
economically recoverable reserves. A regular review is undertaken of each area
of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest.
Costs of site restoration are provided when an obligating event occurs from
when exploration commences and are included in the costs of that stage. Site
restoration costs include the dismantling and removal of mining plant,
equipment and building structures, waste removal and rehabilitation of the
site in accordance with clauses of the mining permits. Such costs have been
determined using estimates of future costs, current legal requirements and
technology on a discounted basis.
Any changes in the estimates for the costs are accounted for on a prospective
basis. In determining the costs of site restoration, there is uncertainty
regarding the nature and extent of the restoration due to community
expectations and future legislation. Accordingly, the costs have been
determined on the basis that the restoration will be completed within one year
of abandoning the site.
1.14 Investments
Investments in subsidiaries, joint ventures and associated companies are
carried at cost less accumulated impairment losses in the Company's balance
sheet. On disposal of investments in subsidiaries, joint ventures and
associated companies, the difference between disposal proceeds and the
carrying amounts of the investments are recognised in profit or loss.
2. Segment reporting
For the purposes of segmental information, the operations of the Group are
focused in geographical segments, namely the UK, Argentina, Namibia, and
Botswana, and comprise one class of business: the exploration, evaluation and
development of mineral resources. The UK is used for the administration of the
Group and includes equity investments in non-group companies.
The Group's loss before tax arose from its operations in the UK, Argentina,
Namibia, and Botswana
For the year ended 31 December 2022
Continuing operations
UK Argentina Namibia Botswana Total
£'000 £'000 £'000 £'000 £'000
Consolidated loss before tax 1,554 (119) (1) 1,436
2
Included in the consolidated loss before tax are the following
income/(expense) items:
Foreign currency loss 125 - - - 125
Total Assets 2,386 4,856 2,522 1,029 10,793
Total Liabilities (1,004) (82) - - (1,086)
For the year ended 31 December 2021
Continuing operations
UK Argentina Namibia Botswana Total
£'000 £'000 £'000 £'000 £'000
Consolidated loss before tax restated (1,175) (87) (3) (1,266)
(1)
Included in the consolidated loss before tax are the following
income/(expense) items:
Foreign currency loss (22) - - - (22)
Total Assets restated 686 5,201 1,840 792 8,519
Total Liabilities (506) (25) - - (531)
3. Operating expenses
Year ended 31 December 2022 Year ended 31 December
2021
£'000 £'000
On-going operating expenses 668 788
Share option expense 29 160
697 948
4. Operating loss
Year ended 31 December 2022 Year ended 31 December
2021
The Group's operating loss is stated after charging: £'000 £'000
Parent Company auditor's remuneration - audit services 42 32
Parent Company auditor's remuneration - tax services 3 -
Parent Company auditor's remuneration - other services 7 2
Operating lease - premises 14 15
Foreign exchange (gain)/ loss (125) 22
5. Impairment of assets
Restated
Year ended 31 December 2022 Year ended 31 December
2021
£'000 £'000
Provision for impairment of investment - Kalengwa Project (Zambia) ((1)) - 318
- 318
((1)) As per note 12.1 In light of technical and regulatory issues related to
the Kalengwa project the Company has with the agreement of its partners agreed
to pause work on this project pending resolution of these issues and
accordingly has decided to make a full provision against its investment in the
Kalengwa project.
6. Taxation
Restated
Year ended 31 December 2022 Year ended 31 December
2021
UK Corporation tax £'000 £'000
- current year - -
- -
Total current tax charge
Factors affecting the tax charge for the year:
Profit/(loss) on ordinary activities before tax 1,436 (1,266)
Profit/(loss) on ordinary activities multiplied by the
standard rate of UK corporation tax of 19% (2021: 19%) 273 (240)
Effects of:
Non-deductible expenses - -
Tax losses (unprovided deferred tax) (273) 240
- -
Total tax charge
At 31 December 2022, the Group had unused losses carried forward of
£12,597,000 (2021 restated: £14,033,000) available for offset against
suitable future profits. Most of the losses were sustained in the United
Kingdom.
The Group's deferred tax asset as at 31 December 2022 that arose from these
losses has not been recognised in respect of such losses due to the
uncertainty of future profit streams. The contingent deferred tax asset, which
has been measured at 25%, is estimated to be £3,149,000 (2021 restated:
£3,508,250). A net deferred tax asset arising from these losses has not been
established as the Directors have assessed the likelihood of future profits
being available to offset such deferred tax assets is uncertain.
7. Loss per share
The basic and diluted profit per share have been calculated using the profit
attributable to equity holders of the Company for the year ended 31 December
2022 of £1,436,000 (2021 restated: £1,266,000 loss) of which £1,436,000
(2021 restated: £1,266,000 loss) was from Continuing Operations and £nil
(2021: nil) was from Discontinued Operations. The basic loss per share was
calculated using a weighted average number of shares in issue of 5,051,721,316
(2021: 4,015,035,915).
The diluted loss per share has been calculated using a weighted average number
of shares in issue and to be issued of 6,262,005,415 (2021: 4,813,590,723).
The diluted loss per share and the basic loss per share are recorded as the
same amount, as conversion of share options decreases the basic loss per
share, thus being anti-dilutive.
8. Directors' emoluments
Year ended 31 December 2022 Year ended 31 December
2021
£'000 £'000
The Directors' emoluments of the Group are as follows:
Wages, salaries, fees and share options 182 290
Refer to page 17 for details of the remuneration of each director.
9. Employee information
Year ended 31 December 2022 Year ended 31 December
2021
Average number of employees including directors and consultants:
Management and technical 5 5
Year ended 31 December 2022 Year ended 31 December
2021
£'000 £'000
Salaries (excluding directors' remuneration) - -
10. Plant and equipment
Consolidated Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Plant and equipment
Cost
At beginning of year 67 67 60 60
Exchange differences - - - -
At end of year 67 67 60 60
Depreciation
At beginning of year 65 64 60 59
Charge for the year - 1 - 1
Exchange differences - - - -
At end of year 65 65 60 60
2 2 - -
Net book value at end of year
11. Investments
Consolidated Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Loan to associate - 211 - 124
Impairment provision - (211) - (124)
Investments under fair value through profit and loss (note 11.1) 2,182 49 2,182 49
Debt instruments under fair value through profit and loss (note 11.1) 78 - 78 -
Investment in subsidiaries (note 11.2) - - 2,771 2,978
Impairment Provision - - - (208)
Investments in Joint Ventures - - - 228
Loan to subsidiaries - - 4,297 3,779
Provision for subsidiary loan recoverability - - - (760)
2,260 49 9,328 6,066
11.1 Investments
On 13 September 2021 the Company, entered into a conditional agreement with
IDM Mankayan Pty Ltd ("IDM Mankayan"), a company incorporated in Australia, to
take the Mankayan Project in the Philippines forward (the "IDM Mankayan
Agreement"). The IDM Mankayan Agreement completed on 20 October 2021 and the
Company paid A$90,000 (GBP49K)_to IDM Mankayan and owns 44 IDM Mankayan
shares (the "IDM Mankayan Investment") of the 160 shares issued by IDM
Mankayan but has no management control over or right to appoint directors of
IDM Mankayan which is why the IDM Mankayan Investment is held as an equity
investment under IFRS 9. The Mankayan project's MPSA was originally issued for
a standard 25 year period, which expired on 11 November 2021, and as
announced by the Company on 18 March 2022 has been renewed for a second 25
year term with effect from 12 November 2021.
On 26 October 2022 the Company entered into a conditional share purchase
agreement with IDM International Ltd ("IDM International") the parent company
of IDM Mankayan to sell the IDM Mankayan Investment for 19,381,054 fully paid
ordinary shares of IDM International (the "IDM International SPA"). The IDM
International SPA was conditional on approval of the IDM International SPA by
the shareholders of IDM International and completed post the year end on 27
March 2023.
On 26 October 2022 the Company entered into a convertible loan note agreement
with IDM International to invest A$137,500 (GBP 78K) in IDM International to
acquire 137,500 notes (the "IDM International Convertible Loan Note
Investment"). The Company has the right to convert the whole but not part of
the face value of each Note into IDM International Shares at A$0.20 at any
time (and as many times) prior to the Maturity Date which is 11 November 2026.
As at 31 December 2022, the fair value of the debt instrument was £78k and no
unrealised gain/loss was recognised.
Consolidated Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Investments under fair value through profit and loss
Unquoted investments 1 January 2022 49 49 49 49
Increase in fair value during year(1) 2,133 - 2,133 -
Unquoted investments at 31 December 2022
2,182 49 2,182 49
(1) 19,381,054 shares valued at AUD$0.20 (£0.112) being the share
subscription price at which at which third parties subscribed for shares in
IDM International on 4 April 2023.
Investments are initially valued at cost. At each reporting date these
investments are measured at fair value with any gains or losses recognised
through the Consolidated Statement of Profit and Loss. In 2022, the Group and
Company had unrealised gains of £2,133,000.
This along with other valuations are estimates based on the Directors'
assessment of the performance of the underlying investment and reliable
information such as recent fundraising. There is however inherent uncertainty
when valuing private companies such as these in the natural resources sector.
(1) 19,381,054 shares valued at AUD$0.20 (£0.112) being the share
subscription price at which at which third parties subscribed for shares in
IDM International on 4 April 2023.
Investments are initially valued at cost. At each reporting date these
investments are measured at fair value with any gains or losses recognised
through the Consolidated Statement of Profit and Loss. In 2022, the Group and
Company had unrealised gains of £2,133,000.
This along with other valuations are estimates based on the Directors'
assessment of the performance of the underlying investment and reliable
information such as recent fundraising. There is however inherent uncertainty
when valuing private companies such as these in the natural resources sector.
11.2 Investments - subsidiary undertakings
The Company's significant subsidiary undertakings held as fixed asset
investments as at 31 December 2022 were as follows:
Company Name and Country of Principal Percentage of
registered office incorporation Activity ordinary share
capital held
Held directly
Tanzania Gold Limited Ireland Holding Company 100%
FDW House, Blackthorn Business Park Coes Road, Dundalk, Co. Louth, Ireland
Virgo Resources Limited Australia Holding Company 100%
Minerva Corporate Level 8, 99 St Georges Terrace, Perth, WA 6000, Australia
Hope Copper Gold Investments Ltd BVI Holding Company 100%
Tortola Pier Park, Building 1, Second Floor, Wickhams Cay 1, Road Town,
Tortola, British Virgin Islands
Held indirectly
Anglo Tanzania Gold Limited England Gold and copper exploration 100%
Quadrant House, 4 Thomas More Square, London, E1W 1YW
Eureka Mining & Exploration SA Argentina Gold and copper exploration 100%
Independencia 219, San Salvador de Jujuy, Provincia de Jujuy, Argentina 4600
Puna Metals SA Argentina Gold and copper exploration 100%
Independencia 219, San Salvador de Jujuy, Provincia de Jujuy, Argentina 4600
Hepburn Resources Pty Ltd Australia Gold and copper exploration 100%
Minerva Corporate Level 8, 99 St Georges Terrace, Perth, WA 6000, Australia
Hope and Gorob Mining Pty Ltd Namibia Gold and copper exploration 70%
Unit 3, 2(nd) Floor, Ausspannn Plaza, Dr Agostinho Neto Road, Ausspannplatz,
Windhoek, Namibia
Hope Namibia Exploration Pty Ltd Namibia Gold and copper exploration 80%
Unit 3, 2(nd) Floor, Ausspannn Plaza, Dr Agostinho Neto Road, Ausspannplatz,
Windhoek, Namibia
Metrock Resources Pty Ltd Australia Holding Company 100%
Minerva Corporate Level 8, 99 St Georges Terrace, Perth, WA 6000, Australia
Coastal Resources Pty Ltd Australia Gold and copper exploration 100%
Minerva Corporate Level 8, 99 St Georges Terrace, Perth, WA 6000, Australia
Coastal Minerals Proprietary Limited Botswana Gold and copper exploration 100%
Plot 102 ,Unit 13, Gaborone International Commerce
Park, Gaborone, Botswana
Cypress Sources Proprietary Limited Botswana Gold and copper exploration 100%
Plot 102 ,Unit 13, Gaborone International Commerce
Park, Gaborone, Botswana
12. Exploration and evaluation assets
Consolidated Company
Restated
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Balance at beginning of year 7,692 6,405 3,129 3,129
Acquisitions during year
- Botswana (note 12.1) - 532 - -
Exploration expenditure 934 1,073 - -
Write back of liability in relation to joint venture expenditure (note 12.1)
(228) - - -
Provision for impairment (note 5) - (318) - -
Carried forward 8,398 7,692 3,129 3,129
at end of year
12.1 Exploration Assets
Argentina
The amount of capitalised exploration and evaluation expenditure relates to 12
licences comprising the Eureka Project and are located in north-west Jujuy
near to the Argentine border with Bolivia and are formally known as Mina
Eureka, Mina Eureka II, Mina Gino I, Mina Gino II, Mina Mason I, Mina Mason
II, Mina Julio I, Mina Julio II, Mina Paul I, Mina Paul II, Mina Sur Eureka
and Mina Cabereria Sur, covering, in aggregate, an area in excess of
approximately 5,500 hectares and accessible via a series of gravel roads. All
licences remain valid.
A new Environmental Impact Assessment (EIA) was presented in 2021 and approved
in February 2023 in respect of Mina Eureka, Mina Gino I, Mina Gino II,
Mina Mason I, Mina Mason II, Mina Julio I, Mina Julio II, Mina Paul I, Mina
Paul II, being the 9 northern most licences which are the intended focus of a
future exploration programme. The new EIA approval covers environmental
monitoring and a drill program encompassing 9 drill holes of 200-300 metres
each. The Company will engage an environmental consultant to conduct the
environmental monitoring in Q3 2023 and is seeking a joint venture partner to
work with in relation to an exploration drilling program.
Notwithstanding the absence of new exploration activities on-site during the
period the directors, given their intention post COVID-19 in Argentina to
focus on finding a joint venture partner for the project have assessed the
value of the intangible asset having considered any indicators of impairment,
and in their opinion, based on a review of the expiry dates of licences,
future expected availability of funds to develop the Eureka Project and the
intention to continue exploration and evaluation, no impairment is necessary.
The capitalised cost at 31 December 2022 was £4,775,249.
Namibia
On 14 August 2020 the Company completed the acquisition of 100% of Virgo
Resources Ltd and its interests in the Hope Copper-Gold Project in Namibia
which comprise i) 70% of Hope and Gorob Mining Pty Ltd incorporated in Namibia
which owns EPL5796, and ii) 80% of Hope Namibia Mineral Exploration Pty Ltd
Incorporated in Namibia which owns EPL6605 and iEPL7170. The balance of the
project is held by local Namibian partners.
JORC Resource: The Hope project area on EPL5796 contains a combined gross
mineral resource within three closely-spaced deposits (namely Hope,
Gorob-Vendome and Anomaly) of 10.18Mt at 1.89% Cu and 0.3 g/t Au at 0.7% Cu
cut-off reported in accordance with the JORC code (2012), with 192kt of
contained Cu and 3,190kg of contained Au. Approximately 30% of the Mineral
Resource tonnage is classified in the Indicated Mineral Resource category with
the balance in the Inferred Mineral Resource category and was based on 339
drill holes for a total of 63,855 metres.
The Hope deposit itself has an Indicated Mineral Resource of 3.09Mt @ 2.53%
Cu and 0.84g/t Au at a 0.7% Cu cut-off. Historic drill intersections
include 23.31m @ 1.59% Cu & 0.23g/t Au from 464.09m, including 9.68m @
3.18% Cu & 0.42g/t Au from 477.17m (hole HDD82) and 10.12m @ 5.72% Cu
& 0.56g/t Au from 525.57m (hole HDD91).
During the period on 7 February 2022, 15 March 2022, 14 June 2022 and 9 August
2022 the Company announced positive results in relation to exploration
activities undertaken post acquisition which support the Company's confidence
in the Hope Copper-Gold Project. The 9 August 2022 announcement highlighted
that; the Company has submitted a mining licence application for the
Hope-Gorob copper-gold project area on EPL5796 to the Namibian authorities;
the Mining Licence application is based on an updated Scoping Study completed
in May 2022 by external consultants incorporating historic mineral resource
estimates which did not yet include additional near-surface copper-gold
resources generated by the Company's shallow drill programme completed in
early 2022; the Scoping Study indicated that the potential for the development
of a surface and underground copper mine exists at the Hope and Gorob deposits
and recommended completion of the additional work required for optimisation of
mine development plans including the work necessary to obtain granting of
environmental permits and also recommended that further exploration work
continues to fully define resource potential at these deposits; the recently
completed shallow drilling has continued to extend the strike and up-dip
extension of mineralisation at both the Hope and Vendome prospects. The new
drillholes have added more than 1.5km to the mineralised strike length, with
the potential to add significantly to the previously estimated mineral
resource; and continuous copper and gold mineralisation has been intersected
in drill intercepts over substantial downhole widths of up to 29.74m.
Reported downhole assay peak intercepts from the shallow drill programme on
EPL5796 include:
o 4.6% Cu, 2.80g/t Au over 3.81m from 39.32m depth in hole VED001
o 2.4% Cu, 0.36g/t Au over 14.28m from 25.2m depth in hole HPD003
o 1.90% Cu, 0.36g/t Au over 9.30m from 33.80m depth in hole HPD005
o 1.49% Cu, 0.23g/t Au over 16.97m from 15.50m depth in hole HPD004
It was also noted that gold values typically return grades of approximately
0.3g/t Au providing a significant potential by-product value addition; and the
drill programme was successful in confirming the presence of shallow
mineralisation at three prospects to date. Results are sufficiently
encouraging to warrant further drilling along strike to evaluate an estimated
additional linear 10km or more of projected mineralisation never previously
tested.
A renewal application has been made for EPL6605 to be renewed to 25 September
2024 which the Company anticipates will be granted once the Ministry of Mines
and Energy review has been completed.
Post acquisition there have been no indications that any impairment provisions
are required in relation to the carrying value of the Hope Copper-Gold
Project. The capitalised cost at 31 December 2022 was £2,596,041 which
included capitalised exploration expenditure during the period of £683,648
(2021 £627,477).
Botswana
On 12 February 2021 the Company further to its announcement on 22 December
2020 announced the completion of the acquisition of 100% of Metrock Resources
Ltd ("Metrock") and its manganese mineral exploration licences in Southern
Botswana comprising the Kanye Manganese Project (the "Kanye Manganese
Project"). The Kanye Manganese Project i) comprises a 1,668 sq. km land
package with 125 km of potential on trend manganese mineralisation across the
licences ii) has historical trenching results have yielded in the case on one
prospect of between 53% and 74% manganese oxide ("MnO"), and iii) project area
is near the ground of a TSX listed public company that has a preliminary
economic assessment showing high rates of return based on a MnO grade of 27.3.
The Kanye Manganese Project comprises collection of five prospecting licenses,
namely PLs 129/2019 , 421/2018, 423/2018, 424/2018, and PL 425/2018 (the
"Project Licences"), located in south-central Botswana south of the town of
Jwaneng and west of the town of Kanye and 150 km by road from the capital
Gaborone. The licenses cover a total area of 1,668 sq. km and provide the
holder with the right to prospect for Metals. Four licenses are held by
Cypress Sources Pty Ltd, a 100% owned subsidiary of Coastal Resources Pty Ltd
which in turn is 100% owned by Metrock Resources Limited. The fifth licence PL
129/2019 s held by Coastal Minerals Pty Ltd which is 100% owned by Coastal
Resources Pty Ltd.
Reconnaissance mapping, prospecting and sampling work on the Kanye property
since acquisition in February 2021 (through October 2022) has been focussed on
PL 129/2019 has highlighted the following; in relation to PL 129/2019 up to
four historic manganese occurrences were successfully located and sampled in
the field within an 8km-belt; 40 grab samples were obtained which assayed from
traces up to high-grade results of 67.18% MnO occurring at the Moshaneng
borrow pit and 68.01% MnO at the Mheelo prospect; geological mapping indicates
that the target horizon hosting high-grade manganese may extend continuously
for at least 4km between the Loltware and Moshaneng prospects on the Bezant
ground; laboratory assays from trench sampling by Bezant at the Loltware
manganese prospect (announced on 22 March 2022) returned in-situ chip/grab
sample peak results of 41.4% MnO, 49.23% MnO and 40.83% MnO from one metre
wide zones of siliceous manganese mineralisation within a continuously
mineralised zone of 40m @ 11.53% MnO; At the Moshaneng Borrow Pit, excavation
of shallow clays by a local contractor for road fill has exposed further
manganese-rich pods over a width of approximately 12-15m and a strike length
of about 300m within a continuous 2km long soil anomaly.
Maiden drill testing for both the Moshaneng and Loltware targets commenced in
October 2022 and comprised 11 mainly shallow, angled RC holes totaling 682m at
Moshaneng prospect as well as one short diamond drill hole at Loltware
prospect the results of which were announced on 9 February2023 and
highlighted; Moshaneng drilling intersected a zone of flat-lying detrital,
supergene manganese-iron mineralisation which appears to infill an irregular
karst surface over a minimum strike length of 400m; potential for at least
another 100m of strike extension to the southeast of holes MS-RC-07 and
MS-RC-012 would extend the total strike length to a minimum of 500m; less than
25% of the more than 2km potential extent of the target defined by soil
geochemistry has been drill tested; grades compare favourably with reported
grades on neighbouring more advanced manganese projects and therefore the
Kanye project warrants detailed evaluation and drilling with a view to
establishing the mineral resource potential; drilling at Loltware encountered
encouraging manganese enhancement in core, warranting further investigation.
The Moshaneng drill results included the following assay intervals:
· 6m @ 28.64% MnO from 6m depth in hole MS-RC-12
§ Including 4m @ 35.38% MnO from 8m depth
· 3m @ 21.85% MnO from 4m depth in hole MS-RC-06
3m @ 21.20% MnO from 2m depth in hole MS-RC-07
Post-acquisition there have been no indications that any impairment provisions
are required in relation to the carrying value of the Kanye Manganese Project.
The capitalised cost at 31 December 2022 was £1,028,984 which included
capitalised exploration expenditure during the period of £237,133 (2021
£260,024).
Cyprus
On 11 November 2021 the Company announced that it had entered into a Joint
Venture Agreement with Caerus Mineral Resources PLC in relation to three of
Caerus's copper gold projects in Cyprus.
The Bezant interims to 30 June 2022 ("Bezant Interims") and 2021 accounts
recognised a carrying value of GBP228,307 under exploration and evaluation
assets and a liability of GBP227,549 as Bezant's share of the Joint Venture
expenditure. Following the change of management and business direction
announced by Caerus in 2022 the Company entered into discussions with Caerus
in relation to the Joint Venture. On 18 October 2022 the Company announced
that following these discussions, it was not possible for the parties to agree
on a mutual way forward in relation to the Joint Venture and it was mutually
agreed to terminate the Joint Venture.
The Company therefore in the period made the following provisions in its
Company and consolidated accounts in relation to the Cyprus Joint venture:
2022
£
Provision against exploration and evaluation assets 228,307
Write back of liability in relation to joint venture expenditure (227,549)
Charge to Operating Expenses 758
Zambia
On 27 April 2020 the Company entered into a binding agreement with KPZ
International Limited ("KPZ Int") (the "KPZ Agreement") in relation to the
acquisition of a 30 per cent. interest in the approximate 974 km(2) large
scale exploration licence numbered 24401-HQ-LEL in the Kalengwa greater
exploration area in The Republic of Zambia (the "Licence") (the "Kalengwa
Project"). Cash consideration for the acquisition was US$250,000 (₤202,493)
which was settled on 6 November 2020 by the issue of 76,923,077 shares and
costs of £23,775. On 30 June 2022 the Company announced in light of technical
and regulatory issues related to the Kalengwa project the Company had with the
agreement of its partners agreed to pause work on this project pending
resolution of these issues. Accordingly in 2021 the Company made a provision
of ₤318,000 in relation to the Kalengwa Project to reduce its carrying value
as at 31 December 2021 to Nil.
13. Trade and other receivables
Consolidated Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Due within one year:
VAT recoverable 47 19 25 19
Other debtors 29 29 29 7
76 48 54 26
14. Trade and other payables
Consolidated Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Trade creditors 256 113 172 85
Directors 120 135 120 135
Accruals 44 240 44 240
Deferred acquisition costs (note 12) 43 43 43 43
463 531 379 503
15. Borrowings
Consolidated Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Balance at beginning of year - - - -
Convertible loan receipts 700 - 700 -
Equity allocation (154) - (154) -
Finance charge accrued 77 - 77 -
623 - 623 -
As announced on 30 June 2022 the Company further to its announcement of 23
November 2021 confirmed that it had issued two drawdown notices of £350,000
each ("Tranche 1" and "Tranche 2") for a total amount of £700,000 (the
"Drawdowns") under its £1,000,000 interest free unsecured convertible loan
funding facility with Sanderson Capital Partners Ltd (the "Lender"), a
long-term shareholder in the Company (the "Facility"). The amount drawdown is
interest free and repayable in 12 months or can be converted at any time at
the Lender's option into Bezant shares at fixed prices for Tranche 1 of
£350,000, at 0.19 pence per share and for Tranche 2 of £350,000 at 0.225
pence per share. As the conversion feature results in the conversion of a
fixed amount of stated principal into a fixed number of shares, it satisfies
the 'fixed for fixed' criterion and, therefore, it is classified as an equity
instrument it is classified as an equity instrument. The value of the
liability component of £546,000 and the equity conversion component of
£154,000 were determined at the date of the Drawdowns. The fair value of the
liability component, included in current borrowings, at inception was
calculated using a market interest rate for an equivalent instrument without
conversion option. The discount rate applied was 25%.
Under the terms of the Facility the Lender is due;
i) a drawdown fee of £14,000 being 2% of the amount drawdown which was
settled by the issue of 12,522,361 new ordinary shares of £0.00002 each
("Shares") credited as fully paid at 0.1118 pence per share being the five-day
VWAP on 28 June 2022 (the "Drawdown Fee Shares"); and
ii) £350,000 of three year warrants over Shares (the "Warrants"). The
exercise price for the Warrants are as follows:
· £175,000 at 0.25 pence per share for the drawdown of Tranche 1; and
· £175,000 at 0.30 pence per share for the drawdown of Tranche 2.
16. Financial instruments
(a) Interest rate risk
As the Group has no borrowings, it is not exposed to interest rate risk on
financial liabilities. The Group's interest rate risk arises from its cash
held on short term deposit, which is not significant.
(b) Net fair value
The net fair value of financial assets and financial liabilities approximates
to their carrying amount as disclosed in the balance sheet and in the related
notes.
(c) Foreign currency risk
The Group undertakes certain transactions denominated in foreign currencies,
hence exposure to exchange rate fluctuations arise. The Group has not hedged
against currency depreciation but continues to keep the matter under review.
The carrying amount of the Group's foreign currency denominated monetary
assets and monetary liabilities at the reporting date is as follows:
Assets Liabilities
2022 2021 2022 2021
£'000 £'000 £'000 £'000
US Dollars 2 9 2 15
AU Dollars 1 2 7 111
AR Pesos 8 9 82 42
NA Dollars - - - 1
11 20 91 169
Sensitivity analysis
A 10 per cent strengthening of the British Pound against the foreign
currencies listed above at 31 December would have increased/(decreased)
profit or loss by the amounts shown below. The analysis assumes that all
other variables remain the same. The analysis is performed on the same basis
as at 31 December 2021.
2022 2021
£'000 £'000
US Dollars 3 (1)
AU Dollars (1) -
AR Pesos (5) 1
A 10 per cent weakening of the British Pound against the foreign currencies
listed above at 31 December would have had the equal but opposite effect to
the amounts shown above, on the basis that all other variables remain
constant.
(d) Financial risk management
The Directors recognise that this is an area in which they may need to develop
specific policies should the Group become exposed to wider financial risks as
the business develops.
(e) Liquidity risk management
The Directors have regard to the maintenance of sufficient cash resources to
fund the Group's immediate operating and exploration activities. Cash
resources are managed in accordance with planned expenditure forecasts.
(f) Capital risk management
The Directors recognise that the Group's capital is its equity reserves. The
Group's current objective is to manage its capital in a manner that ensures
that the funds raised meet its operating and exploration expenditure
commitments. Currently, the Company does not seek any borrowings to operate
the Company and all future supplemental funding is raised through investors as
and when required in order to finance working capital requirements and
potential new project opportunities, as they may develop.
17. Share capital
2022 2021
Number £'000 £'000
Authorised
5,000,000,000 ordinary shares of 0.002p each 100 100
5,000,000,000 deferred shares of 0.198p each 9,900 9,900
10,000 10,000
Allotted ordinary shares, called up and fully paid
As at beginning of the year 98 71
Share subscription - 18
Shares issued for exploration project acquisitions - 6
Shares issued on exercise of warrants 1 2
Shares issued to settle directors' and management fees 1 -
Shares issued to settle third party fees 1 1
Total ordinary shares at end of year 101 98
Allotted deferred shares, called up and fully paid
As at beginning of the period 1,978 1,978
Total deferred shares at end of period ( (1)) 1,978 1,978
2,079 2,076
Ordinary and deferred as at end of year
Number of shares 2022 Number of shares 2021
Ordinary share capital is summarised below:
As at beginning of the year 4,913,028,538 3,543,699,116
Share subscription - 923,076,923
Shares issued for exploration project acquisitions - 304,064,999
Shares issued on exercise of warrants 41,562,500 92,187,500
Shares issued to settle directors' and management fees 100,000,000((2)) -
Shares issued to settle third party fees 26,808,075((3)) 50,000,000
5,081,399,113 4,913,028,538
As at end of year
Deferred share capital is summarised below:
As at beginning of the year ((1)) 998,773,038 998,773,038
998,773,038 998,773,038
As at end of year
((1)) The Deferred Shares have very limited rights and are effectively
valueless as they have no voting rights and have no rights as to dividends and
only very limited rights on a return of capital. The Deferred Shares are not
admitted to trading or listed on any stock exchange and are not freely
transferable.( )
((2)) On 6 January 2022 the Company issued 100,000,000 shares to directors and
management and 50,000,000 warrants over ordinary shares exercisable at 0.25
pence per ordinary shares valid until 4 November 2024 to settle outstanding
fees of £130,000.
((3)) (a) On 6 January 2022 the Company issued 14,285,714 shares to settle
professional fees of £20,000.
(b) On 30 June 2022 the Company issued 12,522,361 to settle loan
drawdown fees.
2022 2021
£'000 £'000
The share premium was as follows:
As at beginning of year 39,303 39,125
Share subscription - 1,181
Shares issued to settle third party fees 34 71
Shares issued - Acquisitions - 44
Shares issued - 2020 Acquisitions - (1,120)
Shares issued - Directors' and Management Fees 128 -
Share issue costs - (144)
Warrants exercised 42 146
39,507 39,303
As at end of year
Each fully paid ordinary share carries the right to one vote at a meeting of
the Company. Holders of ordinary shares also have the right to receive
dividends and to participate in the proceeds from sale of all surplus assets
in proportion to the total shares issued in the event of the Company winding
up.
( )
18. Share-based payments
At the year end, the Company had the following share-based payment plans
involving equity settled share options and warrants in existence:
Share Options
Number Date granted Exercise price Maximum term Vesting dates
50,000,000 23/08/2018 0.5p Expire on 21/06/28 23 August 2018
37,500,000 23/08/2018 1.0p Expire on 21/06/28 31 January 2019
110,000,000 06/11/2020 0.425p Expire on 21/06/2028 Upon being granted
110,000,000 06/11/2020 0.565p Expire on 21/06/2028 31 March 2021
31,800,000 12/02/2021 0.40p Expire on 30/09/2024 Upon being granted
Warrants
Number Date granted Exercise price Maximum term Vesting dates
461,538,462 29/12/2021 0.25p 3 years Upon being granted
46,153,846 29/12/2021 0.13p 2 years Upon being granted
50,000,000 06/01/2022 0.25p Expire on 04/11/2024 Upon being granted
70,000,000 01/07/2022 0.25p Expire on 24/06/2025 Upon being granted
58,333,333 01/07/2022 0.30p Expire on 24/06/2025 Upon being granted
The number and weighted average exercise prices of the above options and
warrants are as follows:
31 December 2022 31 December 2021
Number Weighted average exercise price Number Weighted average exercise price
Outstanding at beginning of year 1,282,654,694 0.30p 835,349,886 0.33p
Share options issued - - 31,800,000 0.40p
Lapsed/exercised warrants/options (435,662,386) 0.20p (92,187,500) 0.16p
Warrants issued ((1)) 178,333,333 0.27p 507,692,308 0.24p
Outstanding at end of year 1,025,325,641 0.35p 1,282,654,694 0.30p
( (1)) 128,333,333 Warrants were issued as free attaching warrants part of
the loan funding facility and valued using a Black Scholes option pricing
model using a risk-free rate 1.67% and a volatility rate of 100%.
50,000,000 Warrants were issued to directors and management in lieu of fees
and were valued using a Black and Scholes option pricing model using a
risk-free rate of 0.25% and a volatility rate of 86.86%.
19. Reconciliation of movements in shareholders' funds
Consolidated Company
Restated Year ended 31 December 2022 Year ended 31 December 2021
Year ended 31 December 2022 Year ended 31 December 2021
£'000 £'000 £'000 £'000
Total comprehensive loss for the year 1,328 (1,306) 1,737 (1,211)
Shares issued 164 1,056 164 1,056
Currency translation differences on - - - -
foreign currency operations
Share option expense - 217 - 217
Warrants exercised/expired 43 147 43 147
Warrants issued 30 102 30 102
Shares issued - Acquisitions - 761 - 761
Equity component of borrowings 154 - 154 -
Non-controlling interests on acquisition of subsidiary - - - -
Opening shareholders' funds 7,988 7,011 9,428 8,356
Closing shareholders' funds 9,707 7,988 11,556 9,428
20. Reconciliation of operating loss to net cash outflow from operating activities
Consolidated Company
Year ended 31 December 2022 Year ended 31 December 2021 Year ended 31 December 2022 Year ended 31 December 2021
£'000 £'000 £'000 £'000
Operating profit/(loss) from all operations (697) (948) (401) (832)
Share options 29 160 29 160
Shares issued - Legal/finance fees 92 72 92 72
Foreign exchange gain - (6) - (6)
(Increase)/decrease in receivables (28) (20) (28) (10)
Increase in payables 236 (95) (48) 109
Net cash outflow from operating activities (368) (837) (356) (507)
21. Proceeds from the issuance of ordinary shares
Consolidated Company
Year ended 31 December 2022 Year ended 31 December 2021 Year ended 31 December 2022 Year ended 31 December 2021
£'000 £'000 £'000 £'000
Share capital and premium at end of year (note 17) 41,586 41,379 41,586 41,379
Shares issued - Legal and finance fees (34) (72) (34) (72)
Shares issued - Directors and management fees (130) - (130) -
Share issued on acquisition on subsidiaries - 989 - 989
Share issue costs - 113 - 113
Share capital and premium at beginning of year (41,379) (41,174) (41,379) (41,174)
43 1,235 43 1,235
22. Related party transactions
(a) Parent entity
The parent entity within the Group is Bezant Resources Plc.
(b) Subsidiaries
Interests in subsidiaries are set out in note 11.
(c) Associates
Interests in associates are set out in note 11.
(d) Transactions with related parties
The following table provides details of remuneration and fees to related
parties during the year and outstanding balances at the year-end date:
31 December 2022 31 December 2021
Paid Due by at Paid Due by at
in year-end in year-end
the date the date
year year
£'000 £'000 £'000 £'000
Colin Bird ((1)) 42 50 85 80
Metallurgical Management Services Pty. Ltd 4 10 29 -
R Siapno 12 - 20 -
R. Samtani - 33 71 -
E. Slowey 13 24 73 -
71 117 278 80
(1) Includes the issue of 30,769,231 Warrants issued to in lieu of fees and
were valued at $17,969 using a Black and Scholes option pricing model using a
risk-free rate of 0.25% and a volatility rate of 86.86%.
An amount of £15,000 was incurred during 2022 (2021: £15,000) to Lion Mining
Finance Limited, a company controlled by C. Bird, for administration services
and use of an office as well as a deposit of £2,500 which is included in
trade and other receivables.
Related parties
Metallurgical Management Services Pty. Ltd is a consultancy company controlled
by the director Dr. Evan Kirby.
Silver Investments Ltd is a consultancy company controlled by the director
Edward Slowey.
23. Commitments
Non-cancellable lease rentals payable as follows:
2022 2021
£'000 £'000
Less than one year - -
Between two and five years - -
- -
Payments represent rentals payable by the Company for administration services
and office occupancy.
24. Control
Bezant Resources Plc is listed on the AIM market of the London Stock Exchange
and not under the control of any one party.
25. Prior Year Adjustment
In 2021 an impairment provision of £110,000 was recognised against the
investment in the Kalengwa Project. The impairment provision has been restated
to £318,000 to include additional capitalised exploration expenditure related
to this project.
26. Subsequent events
On 9 January 2023 the Company announced that it issued 7,926,024 new Ordinary
Shares at 0.0757 pence per share, which is the 3 month VWAP of the Bezant
share price for the three months to 9 December 2022, to settle consultancy
fees of £6,000 due in relation to the three months to 9 December 2022.
On 27 March 2023 following a general meeting of IDM International shareholders
on 24 Match 2023 (the "IDM International Shareholders Meeting") to approve the
IDM International SPA and the acquisition by IDM International of the shares
of the other shareholder of IDM Mankayan (the "Proposed IDM International
Transaction"). The Company announced the completion of the IDM International
SPA (see note 11.1) and the sale of its 44 IDM Mankayan shares for 19,381,054
fully paid ordinary shares of IDM International. The Notice of meeting of the
IDM International Shareholders meeting incorporated as Annexure 1 an
Independent Expert's Report by BDO Corporate Finance (WA) Pty Ltd dated 3
February 2023 as to whether the Proposed Transaction was fair and reasonable
for existing IDM International shareholders ("Independent Expert's Report").
IDM International's sole asset following the Proposed Transaction is its
interest in the Mankayan Project. The Independent Expert's Report included a
valuation of an IDM International share on a diluted minority basis following
the Proposed IDM International Transaction and the table below shows these
valuations and the corresponding valuation of the 19,381,054 IDM
International shares to be issued to Bezant following the completion of the
IDM International SPA using an FX rate of A$1= GBP0.56 as at 28 February 2023.
Valuation in Independent Expert's Report
Low Preferred High
Expert Report Valuation per IDM International share AUD 0.232 AUD 0.470 AUD 0.726
No. of Consideration Shares to be issued to Bezant 19,381,054 IDM International shares
Value in A$ AUD 4,496,405 AUD 9,109,095 AUD 14,070,645
Value in £ £ 2,517,987 £ 5,101,093 £ 7,879,561
On 12 April 2023 the Company announced a fundraising of £750,000 from
directors, existing shareholders and investors to facilitate copper gold
mining operation, the issue of shares to Directors and PDMR at a premium to
the share price to settle £174,961 of accrued fees ("Conversion Shares") and
the settling of £101,250 of consultancy fees by the issue of shares to
consultants ("Consultant Shares") to conserve the Company's working capital,
Fundraising: The Company raised £750,000 before expenses (the "Fundraising")
at 0.04 pence per Ordinary Share (the "Fundraising Price") for the issue of
1,875,000,000 new Ordinary Shares (the "Fundraising Shares") conditional upon
admission of the Fundraising Shares to trading on AIM ("Admission"). The
Fundraising comprised a placing of 1,375,000,000 new Ordinary Shares (the
"Placing Shares") for £550,000 at the Fundraising Price (the "Placing"), via
Shard Capital Partners LLP, and share subscriptions for 500,000,000 new
Ordinary Shares at the Fundraising Price to raise £200,000 (the "Share
Subscriptions"). The Fundraising included £25,000 by Colin Bird, Bezant's
Executive Chairman for 62,500,000 Fundraising Shares and £15,000 by Raju
Samtani, Bezant's Finance Director for 37,500,000 Fundraising Shares together
representing 5.33 per cent. of the total Fundraising amount.
On 12 April 2023 the Company announced a fundraising of £750,000 from
directors, existing shareholders and investors to facilitate copper gold
mining operation, the issue of shares to Directors and PDMR at a premium to
the share price to settle £174,961 of accrued fees ("Conversion Shares") and
the settling of £101,250 of consultancy fees by the issue of shares to
consultants ("Consultant Shares") to conserve the Company's working capital,
Fundraising: The Company raised £750,000 before expenses (the "Fundraising")
at 0.04 pence per Ordinary Share (the "Fundraising Price") for the issue of
1,875,000,000 new Ordinary Shares (the "Fundraising Shares") conditional upon
admission of the Fundraising Shares to trading on AIM ("Admission"). The
Fundraising comprised a placing of 1,375,000,000 new Ordinary Shares (the
"Placing Shares") for £550,000 at the Fundraising Price (the "Placing"), via
Shard Capital Partners LLP, and share subscriptions for 500,000,000 new
Ordinary Shares at the Fundraising Price to raise £200,000 (the "Share
Subscriptions"). The Fundraising included £25,000 by Colin Bird, Bezant's
Executive Chairman for 62,500,000 Fundraising Shares and £15,000 by Raju
Samtani, Bezant's Finance Director for 37,500,000 Fundraising Shares together
representing 5.33 per cent. of the total Fundraising amount.
Director & other PDMR Conversion Shares: The Company agreed to settle
£174,960 of outstanding remuneration due to its directors, another PDMR and
their related parties (the "Outstanding Fees") at 0.08 pence per new ordinary
shares ("Director's Conversion Price") _to conserve the Company's cash by the
issue of 218,700,942 new ordinary shares (the "Conversion Shares") (the "Fee
Conversion). The Director's Conversion Price represented a premium of 21 per
cent. to the closing middle market price of an Ordinary Share of .066 pence on
11 April 2023, being the latest practicable date prior to the announcement of
the Fundraising. As shown in the table below £128,406 of the Outstanding
Fees was owed to directors of the Company (or their service companies) and
related parties and £46,554 was owed to Quantum Capital & Consulting
Limited, a personal service company of Michael Allardice who is a person
discharging managerial responsibilities on behalf of the Company.
Person Period of Outstanding Fees Accrued Fees (£) Conversion Shares
Colin Bird March 22 - March 23 71,500 89,375,000
Raju Samtani March 22 - March 23 26,000 32,499,967
Ed Slowey May 22 - March 23 16,500 20,625,000
Dr. Evan Kirby May 22 - Mach 23 14,406 18,008,075
Directors Total 128,406 160,508,042
Michael Allardice March 22 - March 23 46,554 58,192,900
Other PDMRs Total 46,554 58,192,900
Total Directors and PDMR 174,960 218,700,942
Consultant Shares: Consultant Shares comprised 246,808,068 new Ordinary
Shares issued to settle £101,250 of fees due to consultants. Of the
Consultant Shares issued 238,125,000 new Ordinary shares were issued at the
Fundraising Price to settle £95,250 of fees and 8,683,068 new Ordinary shares
were issued at 0.691 pence per share, which is the 3 month VWAP of the Bezant
share price for the three months to 9 March 2023, to settle consultancy fees
of £6,000 due in relation to the three months to 9 March 2023.
On 5 May 2023 the Company announced the issue of 104,875,000 new Ordinary
Shares (the "Professional Fee Shares") at 0.04 pence per share, which was the
fundraising price for the fundraising which the Company announced on 12 April
2023. The Professional Fee Shares were issued to settle fees of £41,950.
On 15 June 2023, the Company announced, further to its announcements of 23
November 2021 and 30 June 2022 confirms that it has by an agreement dated 14
June 2023 agreed with Sanderson Capital Partners Limited ("Sanderson Capital"
or the "Lender") a long-term shareholder in the Company to extend the
repayment date for the £700,000 drawn down under the unsecured convertible
loan funding facility entered into with Sanderson Capital on 22 November 2021
(the "Facility") (the "Agreement"). The £700,000 drawdown is now repayable by
23 December 2024 and convertible by the Lender at the fixed price of 0.08
pence per share (the "New Conversion Price"). No further amounts can be
drawn down under the Facility.
The Company will as a loan extension fee i) pay the Lender a £70,000 facility
extension and documentation fee equivalent to 6.67% per year which was settled
by the issue of 87,500,000 new ordinary shares of 0.002p each ("Shares") at
the New Conversion Price ("Facility Extension Fee Shares"); and ii) issue
the Lender 437,500,000 warrants over Shares exercisable at 0.12 pence per
Share (the "Warrant Exercise Price") exercisable for two years from the date
of the Agreement. (the "Facility Extension Fees"). The Company has an option
to convert all or part of the £700,000 drawdown if the Company's share price
exceeds 0.14 pence for 10 or more business days.
The New Conversion Price was at a 113% premium to the closing price of 0.0375
pence per share on 14 June 2023 and a 100% premium to the placing price in
relation to the Company's £750,000 fundraising announced on 12 April 2023.
The Warrant Exercise Price is at a 220% premium to the closing price on 14
June 2023.
Other that these matters, no significant events have occurred subsequent to
the reporting date that would have a material impact on the consolidated
financial statements
Consultant Shares: Consultant Shares comprised 246,808,068 new Ordinary
Shares issued to settle £101,250 of fees due to consultants. Of the
Consultant Shares issued 238,125,000 new Ordinary shares were issued at the
Fundraising Price to settle £95,250 of fees and 8,683,068 new Ordinary shares
were issued at 0.691 pence per share, which is the 3 month VWAP of the Bezant
share price for the three months to 9 March 2023, to settle consultancy fees
of £6,000 due in relation to the three months to 9 March 2023.
On 5 May 2023 the Company announced the issue of 104,875,000 new Ordinary
Shares (the "Professional Fee Shares") at 0.04 pence per share, which was the
fundraising price for the fundraising which the Company announced on 12 April
2023. The Professional Fee Shares were issued to settle fees of £41,950.
On 15 June 2023, the Company announced, further to its announcements of 23
November 2021 and 30 June 2022 confirms that it has by an agreement dated 14
June 2023 agreed with Sanderson Capital Partners Limited ("Sanderson Capital"
or the "Lender") a long-term shareholder in the Company to extend the
repayment date for the £700,000 drawn down under the unsecured convertible
loan funding facility entered into with Sanderson Capital on 22 November 2021
(the "Facility") (the "Agreement"). The £700,000 drawdown is now repayable by
23 December 2024 and convertible by the Lender at the fixed price of 0.08
pence per share (the "New Conversion Price"). No further amounts can be
drawn down under the Facility.
The Company will as a loan extension fee i) pay the Lender a £70,000 facility
extension and documentation fee equivalent to 6.67% per year which was settled
by the issue of 87,500,000 new ordinary shares of 0.002p each ("Shares") at
the New Conversion Price ("Facility Extension Fee Shares"); and ii) issue
the Lender 437,500,000 warrants over Shares exercisable at 0.12 pence per
Share (the "Warrant Exercise Price") exercisable for two years from the date
of the Agreement. (the "Facility Extension Fees"). The Company has an option
to convert all or part of the £700,000 drawdown if the Company's share price
exceeds 0.14 pence for 10 or more business days.
The New Conversion Price was at a 113% premium to the closing price of 0.0375
pence per share on 14 June 2023 and a 100% premium to the placing price in
relation to the Company's £750,000 fundraising announced on 12 April 2023.
The Warrant Exercise Price is at a 220% premium to the closing price on 14
June 2023.
Other that these matters, no significant events have occurred subsequent to
the reporting date that would have a material impact on the consolidated
financial statements
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