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RNS Number : 4773Q Botswana Diamonds PLC 18 December 2024
18 December 2024
Botswana Diamonds PLC
("Botswana Diamonds" or the "Company")
Annual Results for the Year Ended 30 June 2024
Notice of Annual General Meeting
Botswana Diamonds plc (AIM: BOD) today announces its audited annual results
for the year ended 30 June 2024.
Chairman's Statement
A diamond is forever. That phrase came to mind as I watched recently a
beautiful Indian bride take her vows while laden down with beautiful real
diamonds. The diamonds sparkled, glittered and flashed as she walked around a
small circle seven times as part of the ceremony.
I observed and marvelled that some, if not all of the stones, were up to 2,500
million years old! An Indian belief was that diamonds came down from the Gods
in a meteorite. Lab-grown diamonds - no matter how good they are - are simply
that, grown in a laboratory. A genuine real, natural diamond is a rarity to be
cherished, minded and handed down through the generations.
The ceremony clarified my thinking and reinforced by belief to carry on
exploring for The Real Thing. As you will see in this commentary, we have made
very significant progress in Botswana in identifying kimberlite anomalies that
have never before been reported. This was achieved in a remarkably short time,
using AI on our vast database of historical data which covers over 375,000
kilometres and comes from decades of geological work previously undertaken in
Botswana.
Before reviewing our ongoing projects, let me refer again to the current
upheaval in the international Diamond Market. There are two major factors
adversely affecting the diamond market, one Cyclical and the other Structural.
Luxury goods go through Cycles. Low interest rates help consumer confidence.
Confidence can lead to Exuberance and Euphoria. Consumers and retailers think
the "Good Times" will never stop. Interest rates rise, fear replaces greed,
luxury consumption growth slows or declines. Retailers are overstocked.
Carrying costs rise. They cut back buying which gets exacerbated as they rise
through the chain. Prices fall, sometimes dramatically and production is cut
back. This has been the case with the diamond market for the past two years.
But think for a moment; a 10% cut in retail demand ignores the fact that 90%
of the demand remains. Inventories decline. Interest rates decline and credit
loosens. This is where the diamond market is now. Green shoots begin to
appear.
The Structural Effect of Lab Grown Diamonds (LGD) will wipe out a percentage
of the diamond market previously held by miners. How serious the loss will be
has yet to be estimated but the LGD sector has its own problems. Low cost of
entry and low marginal cost of production have led to vicious price cutting
which is likely to continue until retail prices reach toward the marginal cost
of production.
What will happen? The diamond industry is splitting into two markets: the Real
Diamond Market and the LGD sector. Again, reflecting on India. Perfectly good
cars can be bought new for under $10,000, yet India is also one of the world's
largest markets for high-end, luxury cars. Incidentally India is one of the
world's largest LGD producers and also the second largest market for Real
Diamonds. I really do not believe that a 3 carat LGD stone, beautiful as it
is, can compete with the Dreams, Romance, Mystery and History of a 3 carat
Real Diamond which has lain undiscovered under the Kalahari sand for 2,500
million years and which has eluded efforts of discovery by hundreds, if not
thousands, of men (and increasingly by women) over many decades, with fire in
their eyes and hopes of riches in their hearts. Lest you think I exaggerate
about Romance and Mystery. Diamonds are formed some 280 kilometres toward the
centre of the earth. Molten lava flows through the diamond zone and carries
the stones in a pipe, the kimberlite, to the surface where it explodes into
the atmosphere as a small volcano.
How can a sterile lab compete with that?
Botswana Diamonds Ongoing Activities
I am not so sure the founders, directors and personnel in Botswana Diamonds
can claim to have fire in their eyes and hopes of riches in their hearts,
maybe they do, but for decades they have explored in remote parts of Southern
Africa. Our focus is on the so called Kaapvaal Craton where kimberlites which
may contain diamonds are found. The craton covers much of Botswana and parts
of South Africa and Zimbabwe. That is where we work, mainly in Botswana.
BOD owns the KX36 discovery a 3.5-hectare pipe in the Kalahari. Extensive work
led to an Indicated Resource of 17.9 million tonnes or ore at a grade of 35
carats per hundred tonnes (cpht). To date KX36 is the only discovered
diamond-containing kimberlite pipe in the area. This is very unusual as
kimberlites come in clusters. We have undertaken extensive exploration on
surrounding licences which we hold and have identified anomalies, of which two
are 12 hectares and 6 hectares respectively in size. BOD has undertaken an
Environmental Assessment Study on a proposed plan to drill 5 holes on these
large anomalies. We have received approvals to drill from the Botswana
Authorities.
BOD has a stake in the Maibwe joint venture which holds prospecting licences
in the Kalahari south of KX36 - drilling encountered diamonds in four
kimberlite pipes. The joint venture made little progress until recently due to
the fact that a 50% stake was held by BCL, a state-owned copper miner in
receivership. The ownership issues have been resolved. BOD increased its stake
to a net 26% of the JV. The other partner in the JV is a local consortium. The
next steps are to finance and undertake a drilling programme.
The ongoing AI analyse of our vast data bank has thrown up some startling
results. To find seven previously unknown kimberlites is simply mind boggling.
One in particular stands out from a geological perspective.
A bonus of the current research and analysis is that the technique is being
applied to other minerals with equally impressive results. Indicative results
suggest that opportunities in copper, zinc, lead and possibly other minerals.
We await further details on this part of the analysis.
South Africa
For years exploration in South Africa languished due to political and fiscal
concerns. The climate has improved. BOD using the old explorer's mantra "The
best place to find a mine is where there was a mine" secured ground in areas
close to the fabulously rich, mined out Marsfontein mine. In recent years
multiple BOD exploration programmes have traced a 7km dyke in the area
containing a diamond grade of between 46 and 74 cpht. Dyke mining is
specialised; the dyke can be as wide as 7 metres or as small as 30cm. Waste
control is vital. There are specialised contractors in this area. We agreed a
deal on the Thorny River part of our claims where BOD received a 15% royalty
on production. Mining started but was put on care and maintenance when diamond
prices fell. We applied for and obtained a prospecting licence on the
Marsfontein farm adjacent to Thorny River. The licence contains a number of
known kimberlites, of which M3 is of particular interest.
Zimbabwe
We have kept a watching brief on opportunities in Zimbabwe. The country is
prospective for diamonds but due to political and fiscal uncertainty it has
been impossible to invest. We are in ongoing dialogue with a group on how an
exploration project can be put together.
Future
We have confidence in the future of the diamond industry. Three billion people
worldwide will enter the middle class in the coming generation. They will want
the things that many in the West have, including diamonds. We already see this
happening in the demand for diamonds in China and India.
The current massive disruption and dislocation in the traditioned diamond
industry will pass. Already interest rates are declining and there are signs
of rising prices. The impact of Lab Grown Diamonds has yet to be fully felt.
It will be tough on many with casualties.
As a junior explorer listed in London we have been battered by many
unfavourable winds. As an explorer we spend money. In BOD we have generated
income through Thorny River but a restart awaits better diamond prices.
As I have outlined above, we have a number of very exciting and prospective
projects. They await finance. The only true lie detector in exploration is a
drillhole.
We have a loyal bunch of shareholders, who we very much appreciate, and are
seeking ways to expand our base.
John Teeling
Chairman
17 December 2024
Annual Report and Notice of Annual General Meeting
The Company's Annual Report and Accounts for the year ended 30 June 2024 (the
"Annual Report") will be mailed shortly only to those shareholders who have
elected to receive it. Otherwise, shareholders will be notified that the
Annual Report and Accounts will be available on the website at
www.botswanadiamonds.co.uk (http://www.botswanadiamonds.co.uk) . Copies of
The Annual Report will also be available for collection from the company's
registered office at 124 City Road, London, EC1V 2NX, United Kingdom.
The Annual General Meeting ("AGM") is due to be held at Canal Court Hotel,
Merchants Quay, Newry, BT35 8HF, United Kingdom on 23(rd) January 2025 at
11.00 am. A Notice of the AGM will be included in the Annual Report.
The information communicated within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No
596/2014 which is part of UK law by virtue of the European Union (Withdrawal)
Act 2018. The person who arranged for the release of this announcement on
behalf of the Company was John Teeling, Director.
A copy of this announcement is available on the Company's website,
at www.botswanadiamonds.co.uk (http://www.botswanadiamonds.co.uk/)
Enquiries:
Botswana Diamonds PLC
John Teeling, Chairman
+353 1 833 2833
James Campbell, Managing Director
+27 83 457 3724
Jim Finn, Director
+353 1 833 2833
Nominated & Financial Adviser +44 (0) 20 7409 3494
Strand Hanson Limited
Ritchie Balmer
Rory Murphy
David Asquith
Broker +44 (0) 207 374 2212
First Equity Limited
Jason Robertson
Public Relations +44 (0) 207 138 3204
BlytheRay
Megan Ray
Said Izagaren
Teneo
Luke Hogg +353 (0) 1 661 4055
Alan Tyrrell +353 (0) 1 661 4055
Fia Long
Alan Reynolds
www.botswanadiamonds.co.uk (http://www.botswanadiamonds.co.uk)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2024
2024 2023
£ £
REVENUE
Royalties 23,606 15,231
Operating Expenses (9,796) (5,503)
Operating Profit 13,810 9,728
Administrative expenses (577,916) (566,935)
Impairment of exploration and evaluation assets - (3,124,284)
OPERATING LOSS (564,106) (3,681,491)
LOSS FOR THE YEAR BEFORE TAXATION (564,106) (3,681,491)
Income tax expense - -
LOSS AFTER TAXATION (564,106) (3,681,491)
Other Comprehensive Income
Items that may be reclassified subsequently to profit or loss
Exchange difference on translation of foreign operations 3,132 299,492
TOTAL COMPREHENSIVE INCOME FOR THE YEAR (560,974) (3,381,999)
Loss per share - basic (0.05p) (0.38p)
Loss per share - diluted (0.05p) (0.38p)
CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2024
30 June 2024 30 June 2023
£ £
ASSETS:
NON CURRENT ASSETS
Intangible assets 5,512,127 5,442,385
Plant and equipment 207,640 207,640
5,719,767 5,650,025
CURRENT ASSETS
Other receivables 276,132 282,553
Cash and cash equivalents 77,546 199,438
353,678 481,991
TOTAL ASSETS 6,073,445 6,132,016
LIABILITIES:
CURRENT LIABILITIES
Trade and other payables (937,731) (802,428)
TOTAL LIABILITIES (937,731) (802,428)
NET ASSETS 5,135,714 5,329,588
EQUITY
Called-up share capital - deferred shares 1,796,157 1,796,157
Called-up share capital - ordinary shares 2,799,695 2,609,695
Share premium 12,397,714 12,220,614
Share based payment reserves 111,189 111,189
Retained deficit (10,985,754) (10,424,780)
Other reserve (983,287) (983,287)
TOTAL EQUITY 5,135,714 5,329,588
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2024
Called-up Share Capital Share Premium Share based Payment Reserve Retained Deficit Translation Reserve Other Reserves Total
£ £ £ £ £ £
At 30 June 2022 3,993,837 11,487,087 111,189 (6443,797) (299,492) (983,287) 7,865,537
Issue of shares 412,015 733,527 - - - - 1,145,542
Transfer of reserves - - - (299,492) 299,492 - -
Loss for the year and total comprehensive income - - - (3,681,491) - (3,681,491)
At 30 June 2023 4,405,852 12,220,614 111,189 (10,424,780) - (983,287) 5,329,588
Issue of shares 190,000 190,000 - - - - 380,000
Share issue expenses - (12,900) - - - - (12,900)
Loss for the year and total comprehensive income - - - (560,974) - - (560,974)
At 30 June 2024 4,595,852 12,397,714 111,189 (10,985,754) - (983,287) 5,135,714
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2024
30 June 2024 30 June 2023
£ £
CASH FLOW FROM OPERATING ACTIVITIES
Loss for the year (564,106) (3,681,491)
Foreign exchange losses 4,948 1,626
Impairment of exploration and evaluation assets - 3,124,284
(559,158) (555,581)
MOVEMENTS IN WORKING CAPITAL
Increase in trade and other payables 135,303 68,247
Decrease in other receivables 6,421 15,344
NET CASH USED IN OPERATING ACTIVITIES (417,434) (471,990)
CASH FLOW FROM INVESTING ACTIVITIES
Additions to exploration and evaluation assets (69,742) (132,322)
NET CASH USED IN INVESTING ACTIVITIES (69,742) (132,322)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from share issue 380,000 646,900
Share issue costs (12,900) -
NET CASH GENERATED FROM FINANCING ACTIVITIES 367,100 646,900
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (120,076) 42,588
Cash and cash equivalents at beginning of the financial year 199,438 158,476
Effect of foreign exchange rate changes (1,816) (1,626)
CASH AND CASH EQUIVALENTS AT END OF THE financial YEAR 77,546 199,438
1. ACCOUNTING POLICIES
The accounting policies
and methods of computation followed in these financial statements are
consistent with those published in the Group's Annual Report for the year
ended 30 June 2023. The financial statements have also been prepared in
accordance with International Financial Reporting Standards (IFRSs) as issued
by the International Accounting Standards Board (IASB).
The financial
information set out below does not constitute the Group's financial statements
for the year ended 30 June 2024 or 30 June 2023 but is derived from those
accounts. The financial statements for the year ended 30 June 2023 have been
delivered to Companies House and those for the year ended 30 June 2024 will be
delivered to Companies House shortly
The auditors have
reported on the 2023 and 2024 statements; their report was unqualified and did
not contain a statement under section 498(2) or 498(3) of the Companies Act
2006.
2. GOING CONCERN
The Group incurred a loss for the year of £560,974 (2023: loss of
£3,381,999) after exchange differences on retranslation of foreign operations
of £3,132 (2023: £299,492) at the balance sheet date. The Group had net
current liabilities of £584,053 (2023: £320,437) at the balance sheet date.
These conditions represent material uncertainties that may cast doubt on the
Group's ability to continue as a going concern.
The directors have prepared cashflow projections and forecasts for a period of
not less than 12 months from the date of this report which indicate that the
group will require additional funding for working capital requirements and
develop existing projects. As the Group is not revenue or cash generating it
relies on raising capital from the public market. Subsequent to the year end,
the Company has raised a total of £250,000 from a placing as an interim
measure. Further details are outlined in Note 9.
As in previous years the Directors have given careful consideration to the
appropriateness of the going concern basis in the preparation of the financial
statements and believe the going concern basis is appropriate for these
financial statements. The financial statements do not include any adjustments
that would result if the Group was unable to continue as a going concern.
3. LOSS PER SHARE
Basic loss per share is computed by dividing the loss after taxation for the
year available to ordinary shareholders by the weighted average number of
ordinary shares in issue and ranking for dividend during the year. Diluted
earnings per share is computed by dividing the profit or loss after taxation
for the year by the weighted average number of ordinary shares in issue,
adjusted for the effect of all dilutive potential ordinary shares that were
outstanding during the year.
The following table sets forth the computation for basic and diluted earnings
per share (EPS):
2024 2023
£ £
Numerator
For basic and diluted EPS Loss after taxation (564,106) (3,681,491)
Denominator
For basic and diluted EPS 1,088,730,358 977,271,808
Basic EPS (0.05p) (0.38p)
Diluted EPS (0.05p) (0.38p)
The following potential ordinary shares are anti-dilutive and are therefore
excluded from the weighted average number of shares for the purposes of the
diluted earnings per share:
No.
Share options 11,410,000 11,410,000
4. INTANGIBLE ASSETS
Exploration and evaluation assets:
Group Group
2024 2023
£ £
Cost:
At 1 July 10,188,545 9,806,497
Additions 69,742 382,048
- -
At 30 June 10,258,287 10,188,545
Impairment:
At 1 July 4,746,160 1,621,876
Impairment - 3,124,284
At 30 June 4,746,160 4,746,160
Carrying Value:
At 1 July 5,442,385 8,184,621
At 30 June 5,512,127 5,442,385
Segmental analysis Group Group
2024 2023
£ £
Botswana 3,572,184 3,549,716
South Africa 1,939,943 1,892,669
Zimbabwe - -
5,512,127 5,442,385
Exploration and evaluation assets relate to expenditure incurred in
exploration for diamonds in Botswana and South Africa. The directors are aware
that by its nature there is an inherent uncertainty in exploration and
evaluation assets and therefore inherent uncertainty in relation to the
carrying value of capitalized exploration and evaluation assets.
On 11 November 2014 the Brightstone block was farmed out to BCL Investments
(Proprietary) Limited, a Botswana Company, who assumed responsibility for the
work programme. Botswana Diamonds had retained a 15% equity interest in the
project. On 20 July 2022 the Group increased its' stake to 26% equity interest
in the project.
On 6 February 2017 the Group entered into an Option and Earn-In Agreement with
Vutomi Mining Pty Ltd and Razorbill Properties 12 Pty Ltd (collectively known
as 'Vutomi'), a private diamond exploration and development firm in South
Africa.
On 28 September 2022 the Board announced that it had exercised its pre-emptive
right to acquire the outstanding third-party interests in Vutomi. The Company
also agreed that immediately on completion of the Acquisition, the Company
would sell 26% of Vutomi for a deferred consideration of US$316,333 to the
Company's local South African Empowerment partner, Baroville Trade and
Investments 02 Proprietary Limited ("Baroville"), in order to comply with
South African requirements on empowerment ownership, which will be funded by a
loan from Botswana Diamonds. On completion, the Company therefore owns 74% of
Vutomi.
On 23 May 2024 the Company announced that it has been granted four Prospecting
Licenses in the Kalahari of Botswana. These Prospecting Licenses cover a
total area of 2,331.81 square kilometres and have reference numbers PL0213,
0214, 0218 and 0219 of 2024 which adds to the Company's existing acreage in
the Kalahari. These Prospecting Licenses are in the same general area as the
Company's KX36 project.
The realisation of these intangible assets is dependent on the successful
discovery and development of economic diamond resources and the ability of the
Group to raise sufficient finance to develop the projects. It is subject to a
number of significant potential risks, as set out below.
The Group's exploration activities are subject to a number of significant and
potential risks including:
- licence obligations;
- exchange rate risks;
- uncertainties over development and operational costs;
- political and legal risks, including arrangements with governments
for licenses, profit sharing and taxation;
- foreign investment risks including increases in taxes, royalties
and renegotiation of contracts;
- title to assets;
- financial risk management ;
- going concern; and
- operational and environmental risks.
Included in additions for the year are £28,125 (2023: £71,521) of directors'
remuneration which has been capitalized. This is for time spent directly on
the operations rather than on corporate activities.
5. PLANT AND EQUIPMENT
2024 2023
£ £
At 1 July 207,640 207,640
Additions - -
Exchange variance - -
At 30 June 207,640 207,640
On 18 July 2020 the Group entered into an agreement to acquire the KX36
Diamond discovery in Botswana, along with two adjacent Prospecting Licences
and a diamond processing plant. These interests are part of a package held by
Sekaka Diamond Exploration (Pty) Ltd. The acquisition was completed on 20
November 2020. The diamond processing plant is a recently constructed,
fit-for-purpose bulk sampling plant on site. The sampling plant includes
crushing, scrubbing, dense media separation circuits and x-ray recovery
modules within a secured area. Further details are set out in Note 6 below.
6. INVESTMENT IN SUBSIDIARES
2024 2023
At 1 July 1,212,929 224,850
Transfer from Intangible Assets - 738,353
Additions - 498,642
Less 26% transfer to BEE partners - (248,916)
At 30 June 1,212,929 1,212,929
Botswana Diamonds entered into a Sale of Shares Agreement with Petra Diamonds
Limited ("Petra") and Kalahari Diamonds Limited ("Kalahari Diamonds") on 18
July 2020 to acquire the entire issued share capital of Sekaka Diamond
Exploration (Pty) Ltd ("Sekaka") currently held by Kalahari Diamonds, a
wholly-owned subsidiary of Petra. The acquisition was completed on 20 November
2020.
On 28 September 2022 the Board announced that it had exercised its pre-emptive
right to acquire the outstanding third-party interests in Vutomi and had
increased its' interest from 45.94% to 74%. The value of the investment of
£988,079 relates to the 74% interest in the Vutomi project. Further
information is detailed in Note 5 above.
In the opinion of the directors, at 30 June 2024, the fair value of the
investments in subsidiaries is not less than their carrying amounts.
7. CALLED-UP SHARE CAPITAL
Deferred Shares - nominal value of 0.75p
Number Share Capital Share Premium
£ £
At 1 July 2021 and 2022 239,487,648 1,796,157 -
At 30 June 2022 and 2023 239,487,648 1,796,157 -
Ordinary Shares - nominal value of 0.25p
Allotted, called-up and fully paid:
Number Share Capital Share Premium
£ £
At 1 July 2022 879,071,902 2,197,680 11,487,087
Issued during the year 164,805,997 412,015 733,527
Share issue expenses - - -
At 30 June 2023 1,043,877,899 2,609,695 12,220,614
Issued during the year 76,000,000 190,000 190,000
Share issue expenses - - (12,900)
At 30 June 2024 1,119,877,899 2,799,695 12,397,715
Movements in share capital
On 27 November 2023 the Company raised £380,000 via a placing of 76,000,000
new ordinary shares of 0.25p each at a placing price of 0.50p per share. Each
Placing Share has one warrant attached with the right to subscribe for one new
Ordinary Share at 0.50p per new Ordinary Share for a period of two years from
27 November 2023. Proceeds raised were used to fund development costs and
provide additional working capital.
8. SHARE-BASED PAYMENTS
SHARE OPTIONS
The Group issues equity-settled share-based payments to certain directors and
individuals who have performed services for the Group. Equity-settled
share-based payments are measured at fair value at the date of grant.
Fair value is measured by use of a Black-Scholes valuation model.
The Group plan provides for a grant price equal to the average quoted market
price of the ordinary shares on the date of grant.
30/06/2024 2024 30/06/2023 2023
Options Weighted average exercise price in pence Options Weighted average exercise price in pence
Outstanding at beginning of year 11,410,000 5.14 11,410,000 5.14
Issued - - - -
Outstanding at end of the year 11,410,000 5.14 11,410,000 5.14
Exercisable at end of the year 11,410,000 5.14 11,410,000 5.14
WARRANTS
30/06/2024 2024 30/06/2023 2023
Warrants Weighted average exercise price in pence Warrants Weighted average exercise price in pence
Outstanding at beginning of year 55,000,000 2.0 162,816,667 1.07
Issued 76,000,000 0.5 - -
Exercised - - (107,816,667) 0.60
Expired - - - -
Outstanding at end of the year 131,000,000 1.13 55,000,000 2.0
Refer to note 7 Called up Share Capital for the
details of the share options and warrants.
9. POST BALANCE SHEET EVENTS
On 7 August 2024 the Company raised £250,000 via the placing of 78,125,000
new ordinary shares of 0.25p each at a placing price of 0.32p per share.
Each Placing Share has one share purchase warrant attached with the right to
subscribe for one new Ordinary Share at 0.5p per Ordinary Share with an expiry
date of two years from 7th August 2024.
There were no other significant post balance sheet events since year end.
10. GENERAL INFORMATION
The Company's Annual Report and Accounts for the year ended 30 June 2024 will
be mailed shortly only to those shareholders who have elected to receive it.
Otherwise, shareholders will be notified that the Annual Report and Accounts
will be available on the website at www.botswanadiamonds.co.uk
(http://www.botswanadiamonds.co.uk) . Copies of The Annual Report will also
be available for collection from the company's registered office at 124 City
Road, London, EC1V 2NX, United Kingdom.
11. ANNUAL GENERAL MEETING
The Annual General Meeting ("AGM") is due to be held at Canal Court Hotel,
Merchants Quay, Newry, BT35 8HF, United Kingdom on 23(rd) January 2025 at
11.00 am. A Notice of the AGM will be included in the Annual Report.
ENDS
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