REG - Eurasia Mining PLC - Annual Results and Notice of AGM
03/07/2023 07:00
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RNS Number : 6535E Eurasia Mining PLC 03 July 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN REGULATION NO.
596/2014 (AS IT FORMS PART OF RETAINED EU LAW AS DEFINED IN THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018) AND IS IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS
UNDER ARTICLE 7 OF THAT REGULATION.
3 July 2023
Eurasia Mining Plc
Annual Results and Notice of AGM
Eurasia Mining Plc ("Eurasia", the "Company" or the "Group"), the palladium,
platinum, rhodium, iridium and gold producing company, announces its audited
financial results and operational summary for the year ending 31 December 2022
(the "Annual Report") as well as a notification of the Annual General Meeting
(the "AGM"), to be held virtual via an electronic meeting platform on 26 July
2023 at 9:00am. More details can be found in the complete notice of AGM below,
which together with the Form of Proxy, is available on the Company's website
from 7:00am today.
Audited Group Reporting for the year ending 31 December 2022
The Company's full Annual Report, including the audited financial statements
for the year ended 31 December 2022, is set out below and will be posted,
along with notice of AGM and form of proxy to those Eurasia shareholders
electing to receive paper format notifications, today. The Company is grateful
to the remaining shareholders choosing to receive digital notifications and
the report is also available for download from the Company's website
at: https://www.eurasiamining.co.uk/investors/financial-reports
(https://www.eurasiamining.co.uk/investors/financial-reports) .
The Company would like to remind shareholders that they may sign up for
digital notifications, and help to reduce the number of paper reports printed
and posted, by logging on to www.signalshares.com
(http://www.signalshares.com/) to amend communications preferences. An
Investor Code is required for initial registration. Alternatively,
shareholders can call the Company's registrar, Link Group, on 0371 664 0300
(calls are charged at the standard geographical rate and may vary by provider)
or +44 371 664 0300 if calling from overseas. Shareholders can also write to
Link Group at 10th Floor, Central Square, 29 Wellington Street, Leeds, LS1
4DL.
A copy of this announcement is also available on Eurasia's website at:
https://www.eurasiamining.co.uk/investors/news-announcements
(https://www.eurasiamining.co.uk/investors/news-announcements)
For further information, please contact:
Eurasia Mining Plc +44 (0) 20 7932 0418
Christian Schaffalitzky / Keith Byrne
SP Angel (Nominated Advisor and Joint Broker) +44 (0) 20 3470 0470
Jeff Keating / David Hignell / Adam Cowl
Optiva Securities (Joint Broker) +44 (0) 20 3137 1902
Christian Dennis
Chairman's statement
The year 2022 stands out as a uniquely challenging year not only for Eurasia,
but also for the entire mining sector. Apart from the Ukraine conflict which
hit the world hard in February, the entire industry has been disrupted by
supply chain interruptions although this has, however, resulted in positive
price changes for EUA's metals.
In the meantime, work has continued on optimising the asset base prior to a
possible sale.
West Kytlim
We took the decision to stockpile the ore from West Kytlim and not to generate
revenue from Russia in 2022 due to our strong cash position and the
expectation of improving prices in the future.
The West Kytlim mine saw significant investment over many years culminating
with a conversion of operations from diesel power to electricity powered
equipment and infrastructure. Hydro-derived grid power and an electric
dragline installed to site. This allows stripping work to continue through the
winter, with the accommodation and office also on the grid. Significant
reductions in operating costs have been achieved.
As previously announced, we took the decision to stockpile the mine product (a
'black sand' concentrate containing platinum, palladium, iridium, rhodium and
gold) from West Kytlim and not to generate revenue from Russia during 2022.
Monchetundra
DFS
At Monchetundra, the DFS study for the several open pits at Loipishnune and
West Nittis was completed for the project's development and submitted at the
end of 2022 and the Company was notified that all authorities were received at
the end of June 2023.
NKT / Monchetundra Flanks
The NKT project comprises a brownfield Tier-1 scale deposit: 305Kt of Nickel,
143Kt of Copper, 57 tons of PGM and Gold (11.2Moz of Platinum equivalent) as
estimated by Wardell Armstrong International as JORC-compliant resources for
an underground mining operation. We continue to look at the potential for
additional mineralisation on the property. For now the NKT Project sits as
considerable upside adjacent the Monchetundra asset.
Nyud Project and Rosgeo agreement
Eurasia retains a right to 75% of the Nyud exploration licence, which was
applied for and later received by Rosgeo's subsidiary OOO Monchegorskoye with
an intention of establishing a joint venture with Eurasia's 100% owned
subsidiary, Yuksporskaya Mining Company, pursuant to the now expired two-year
agreement between Rosgeo and Eurasia as announced 26 March 2021. The project
is now being considered in the context of the Company's proposed asset sale.
Possible sale of Russian Assets
The Board remains of the view that any buyer is likely to be found in BRICS
countries. This process has now run on substantially longer than the Company's
management team had anticipated. We acknowledge shareholder frustration
regarding the duration of the sale process, however, we also note recent
precedent transactions which have successfully completed despite the
geopolitical situation. Further updates will be made as appropriate although
there is currently low visibility as to when this might be. As ever, there can
be no guarantee that Eurasia will enter into binding agreements regarding the
sale process.
Company Cash Position
The Company's cash position, including US treasury notes, at 29 June 2023
stands at approximately £1.686 million*. In addition, the Company's unsold
PGM concentrate is valued at £4.1 million (net of VAT). The Company's cash
reserves are held in USD and GBP accounts outside of Russia and therefore not
exposed to Rouble foreign exchange gains or losses against other major hard
currencies.
*Please note the cash figures provided by the Company in the announcements
dated 21 December 2022 and 11 April 2023 also included US treasury notes held
by Eurasia.
Sanctions
During 2022, the Board has maintained a regular dialogue with the Company's
legal advisers regarding the potential impact of any sanctions. The Board
remains satisfied the Company's activities are not prohibited under the
sanctions' rules. Furthermore, the Group does not engage and has not engaged
with any sanctioned persons, entities or agencies.
Directorate Change
Management of the Company has also evolved in parallel with the other changes.
With the completion of the Monchetundra DFS, the open pit mines are ready for
construction. While we have a EPCF agreement for the development of
Monchetundra, the Board do not believe it is appropriate to commence
immediately due to the ongoing sale process of the Russian assets. It is
expected that counterparties will have their own plans for future development,
and it is important to leave such options open. In that regard, James
Nieuwenhuys, an EPC expert, has retired from Eurasia. The Company is grateful
to James for his excellent work as CEO since 2020 and wish him well for the
future.
Konstantin Firstov, our CEO at Kola has been appointed the Country Manager and
at West Kytlim, newly appointed CEO Vasily Kudrin is in charge of pre-sale
activities. Vasily has a strong audit background with Ernst & Young and
other firms in various senior roles including a partner position.
Following James Nieuwenhuys' departure from the Eurasia board, Christian
Schaffalitzky will take on additional executive responsibilities. As such, the
Company anticipates announcing further board changes to ensure the roles of
the Chairman and CEO are split.
Outlook
In terms of the future development of Eurasia Mining PLC, we continue to look
at expanding the business in various ways, including the development of
hydrogen projects outside of Russia coupled with new mining opportunities in
investment friendly jurisdictions. The Company remains committed to the
continued sale of its assets in Russia.
Our strategy continues to be the eventual sale of the Company's assets in
Russia, being the West Kytlim operating mine, the Monchetundra Project mining
license, the NKT brownfield project, and the entitlement to the Nyud
brownfield project.
In conclusion, and especially for this challenging year, I want to thank my
staff colleagues and fellow directors for their hard work and dedication. I
would also like to thank shareholders, who have shown great patience with us
in recognising that much of our planning assumptions have been altered by the
events of this year past which were outside our control. We look forward to
providing our shareholders with further updates regarding our key objectives,
including the possible sale of our Russian assets.
C. Schaffalitzky
Executive Chairman
02 July 2023
Strategic Report
OPERATIONS UPDATE
Eurasia Mining Plc is a London listed, battery metals, PGM and green hydrogen
Company with a focus on environmental and sustainability focused solutions,
and with awareness of the future outlook for the world energy supply
landscape. Eurasia is an international company incorporated in the UK with its
headquarters in London.
Following construction of a power line to site, an electric dragline was
assembled at the Company's West Kytlim PGM and gold mine to provide a more
environmentally sustainable and attractive asset as well as a lower cost
operation for the ongoing sale discussions.
The Central Kola Peninsula Battery Metals (predominantly Nickel and Copper)
and PGM projects developed around the Company's fully permitted Monchetundra
Project adjacent the town of Monchegorsk, home to Norilsk's Severonickel
nickel and PGM processing facility. A Definitive Feasibility Study was
approved for the Monchetundra Project, while the brown field NKT Mine is
advanced, a former producer.
The Company has demonstrated a consistent approach to creating value by
bringing quality projects from exploration through to mining, as well as
marketing for its proposed strategic sale following the Board's decision to
exit from Russia.
WEST KYTLIM
Open Pit PGM and Gold mine with a sustainability focus. Predominantly powered
by grid (hydro-derived) electric power.
Sustainable Mining
· Shallow open pitting has reduced environmental impact compared to
conventional mining methods, and less long-term environmental footprint - no
blasting on site and no chemicals used in the production process.
· Recovery to previous land use within 5 to 10 years post
remediation and with no remnant pit or tailing dumps. Allows the mine owner
and management team to make provisions for remediation on realistic time
scale.
· Hydro generated electricity powering ore body development
(dragline) and beneficiation (stationary plant).
· Water a key element in beneficiation process - recycled in a
closed loop outside of river course.
· Limiting the use of asphalt and concrete on site, many mine
buildings built from timber milled on site.
Historical CAPEX Highlights
• Three enrichment plants.
· Powerline and electric dragline projects delivered on schedule
including peripherals and high voltage substations and hook ups.
· A large fleet of equipment to support the electric dragline,
including: 2X Komatsu D275 Dozers, 1X Cat D8 Dozer, 1X Shantui SD26AS, 6X Cat
330 excavators as well as one additional washplant.
The Operation at West Kytlim has seen very significant upgrades to machinery
and mining equipment over the past years. Mining at West Kytlim was initially
sub-contracted with Eurasia retaining control of the concentrate upgrade and
refining components for two seasons in 2017 and 2018. From 2019 to 2021
further machinery including additional washplants were procured with stripping
of overburden and parts of the mining operation contracted as required. A 14
kilometre power line was constructed from the nearby town of Kytlim allowing
the mine site and all stationary plant to switch to hydro-derived grid
electricity. A large electric shovel, or dragline was also procured and
assembled on site during 2022 and was available to contribute to the following
winter stripping program. This machine with a 70m boom and 11m(3) bucket
allows stripping at greater efficiency and a fraction of the cost of
excavator/bulldozer pairings.
KOLA BATTERY METALS AND PGM
World class PGM and Nickel-Copper projects on Kola Peninsula - cornerstone to
a proposed new predominantly open-pittable PGM and Battery Metals mining
district.
To enable the sale of the assets and to exit from Russia, the work during 2022
was dominated by the important Definitive Feasibility Study (Russian TEO of
permanent conditions) for the open pits at Loipishnune and West Nittis within
the Monchetundra project (License MUR 16493) which was submitted on time in
December 2022. The study involved a new metallurgical sample collected from
drill core and analysed following from the 2016 (pre-feasibility)
metallurgical work. Land surveying, geophysics and hydrogeological and
geotechnical studies were also completed. The ore at Monchetundra contains
commercial grades of Palladium, Nickel, Copper, Platinum and Gold.
Monchetundra - 2022 Highlights
· Submission of Definitive Feasibility Study for two open pits at
Loipishnune and West Nittis in December 2022.
· Recognition of NKT as a potential Nickel dominant mine relaunch
opportunity, as a standalone project or integrated with Monchetundra.
Monchetundra - 2023 Highlights in the year to date
· Monchetundra DFS final approval received.
· Mine now shovel ready with further developments to be led by a
new owner in the context of the Company's sale-of-assets process.
· No significant expenditure or work programme planned for the
Monchetundra Project during 2023.
NKT (Nittis-Kumuzhya-Travyanaya) Project - Base metals mine relaunch adjacent
the Monchetundra project
Tier-1 scale Nickel deposit with JORC MRE containing: 305Kt Nickel, 143Kt
Copper, and 57 tonnes PGM and Gold (11.2Moz of Platinum equivalent) estimated
by Wardell Armstrong International (WAI) as JORC-compliant resources for a
step room and pillar mining operation, with nickel comprising half of the
value in the metal basket on a Net Smelter Royalty basis.
The NKT Project is being developed under license MUR 00950 BP.
A mine was successfully operated by Norilsk Nickel in the area, put on hold
because of low IRR at a Nickel price in the region of US$2-5/lb versus above
US$10/lb today(1).
Following receipt of the Monchetundra Flanks exploration license in August
2020, work commenced on collation of the very significant body of historic and
recent exploration and mining data available. Originally developed as early as
the 1930's, some further drilling was completed in the early 1990's.
Subsequently, further exploration programs were completed by SeveroNickel,
PechengaNickel, Kolskaya Mining Metallurgical Company (Kolskaya MMC), and more
recently a drilling program undertaken by Rosgeo from 2015 to 2017.
Eurasia commissioned Wardell Armstrong International to complete a JORC
analysis of the principal targets on the site during 2021 leading to
publication of an NKT Competent Persons Report describing the feasibility of a
room and pillar mining operation based on a 93,422kt (room-and-pillar mineable
ore per 2021 WAI CPR) with a total resource of Tier-1 scale: 305Kt of Nickel,
143Kt of Copper, 57 tons of PGM and Gold (11.2Moz of Platinum equivalent) - as
estimated by WAI as JORC-compliant resources. The net present value ("NPV")
using an 8.33% discount rate for the underground part of the NKT project is
$1.2bn under the WAI price forecast and $1.7bn under spot prices. The study
had an IRR of 47% with a payback period of 3 years.
The WAI report also included open pit optimisations for the project area and a
development program progressed to further detail the overall geometry of all
open pittable mineralisation throughout the project area but principally at
Kumuzhya, while also gathering additional information on underground mining
targets. Mineralisation presents in two principal categories throughout the
area, both of which contribute to both open pit and underground mineral
resources;
A. Shallow epigenetic/post-magmatic low sulphide nickel-palladium
disseminated and vein (chalcopyrite-pyrrhotite-pentlandite) mineralisation
more concentrated in the axis of the massif.
B. Bottom lode syngenetic mineralisation (wider interval and lower
grade) occurring on the margins of the massif - Open pit and underground
mining potential.
(1 Nickel price history :)
(https://www.mining.com/markets/commodity/nickel/all/
(https://www.mining.com/markets/commodity/nickel/all/) ) ((early 200's price).
Despite significant volatility from January 2022 Nickel has traded above the
US$10/lb line for much of the past two years.)
Key performance indicators
Results for the year - the Group has made a loss before tax of £7,230,088 for
the year ended 31 December 2022 (2021: loss before tax of £3,138,521). The
single largest item causing this variation is the absence of revenue in 2022.
Shareholder return and share price performance. The Company's shares are
quoted on the AIM market of the London Stock Exchange and the shares have
traded at between 4.1p and 28.5p*(2021: 15p-36.5p) during the year under
review. A range of factors both internal and external to the Company can
impact share price performance, including significant geopolitical
developments and uncertainty therein, commercial and new business
developments, operational performance and metal price and metal price
forecasting fluctuations. The emergence of conflict in Ukraine in February and
March 2022 had an immediate effect on the Company's share price as investor
perception was affected across all business sectors.
Exploration and development.
The Group maintained sufficient funding to develop and expand operations
during the year reported.
The West Kytlim asset, following considerable investment over the past number
of years is considered by management to be fully capitalised and capable of
sustained production at current levels for a life of mine of up to 15 years,
excluding further resources and reserves to be defined in both the West Kytlim
Flanks and Typil license areas adjacent the mining license.
A Definitive Feasibility Study ('DFS') for the Monchetundra project was
completed during 2022. No further significant expenses are forecast for the
Monchetundra project.
The NKT Project is being assessed either as a standalone mine relaunch
adjacent to the Monchetundra Project or with its reserves and resources
integrated with those at the Monchetundra Project for concurrent development.
No funds were raised in equity or debt capital markets and no warrants or
options were exercised in the period reported.
( )
(*Based on yahoo finance closing prices for 01 January 2022 to 31 December
2022)
Non-financial KPIs
Environmental management: the Group has environmental policies in place and
receives annual approvals for development work at West Kytlim, where adherence
to the relevant environmental subsoil licensing laws is clearly stipulated.
All relevant codes in managing exploration programmes (specifically drilling)
are also strictly adhered to. Performance against environmental policies is
continuously monitored and annually audited including a provision for
environmental rehabilitation (note 28).
Health and Safety: the Group has occupational health and safety policies and
procedures in place ensuring that all efforts are made to minimise adverse
personal and corporate outcomes, through best practice training,
implementation and monitoring. These were appropriately reviewed including
appointment of a permanent health and safety office following supply of
high-voltage electric power and oversized machinery to West Kytlim. The
Group's LTIFR (Lost time injury frequency ratio) remains at zero for the year
reported.
Operational: The Group has achieved further milestones at each of the
Monchetundra, NKT and West Kytlim Projects during the year in review, as
discussed in the Operations section herewith. Key deliverables at each project
are the Definitive Feasibility Study at Monchetundra, the provision of
electric power to West Kytlim and the ongoing development program for the NKT
project.
Governance: The Company followed the appointment of two board members during
2021 with the appointment of Artem Matyushok in May 2022. Artem brings
significant international mergers and acquisitions experience to the Board
which now comprises four Directors and an Executive Chairman and Managing
Director. New appointments were made to roles within key subsidiary Kosvinsky
Kamen and the creation of a new Country Manager role in May 2023.
The risks inherent in all mineral exploration and development businesses are
kept under constant review by the Board and the executive team. The risks
affecting the Group and the Company are described in detail in the Directors'
report and Notes 2 (Going concern) and 32 (Risk management objectives and
policies) to the financial statements. The principal operating risks affecting
the Group are highlighted below:
Exploration and project development risks
Mineral exploration presents an inherent risk in that information on in-ground
resources is both limited (quantitatively and qualitatively) and in most
instances expensive to obtain. This presents a challenge which if not properly
managed can lead to misallocation of exploration funds, not identifying
reserves and resources or, following discovery, not demonstrating the
economics of an ore reserve to accepted industry standards. The necessary
consents and approvals to conduct exploration and development work must also
be obtained and managed.
Mitigation: The Group maintains appropriate in-house expertise and
long-standing relationships with external consultancies in mining and
metallurgy to keep abreast of their changing requirements, and to make sure
all regulatory obligations are met and duly reported. Together these increase
the prospect of a successful outcome which is measured in terms of a project
meeting its licensing and reporting requirements and the overall financial and
other metrics of the project. The Board impress on senior management the need
to identify and address the major sources of execution risk in any development
project, and to continuously monitor diversion from schedules or targets.
Operating mine risks
Machinery breakdowns, departures from expected grade and other operational
risks may have a significant impact on revenue, which is a component of the
group's financial capacity.
Mitigation: Multiple areas are developed concurrently to mitigate risks of a
lower than calculated grade at any location. In-fill drilling and in pit
sampling are carried out as required, and in addition to resource definition
requirements. The majority of the machinery mine fleet is relatively new,
having been acquired from 2021 onwards. Skilled operators and mechanics were
appointed as required to operate and service this significant new item of
machinery at the mine site, as well as new health and safety protocols.
Political risk and sanctions compliance
In view of sanctions imposed on individuals and entities in Russia, from 2014
until the present time, further legal and economic risks may arise. Further
sanctions were imposed on Russia from late February 2022 and were subject to
further updates during 2022. The group has generated no revenue from Russia
since the beginning of February 2022.
Mitigation: Strict adherence to the Group's sanctions policy. The Group does
not engage with politically exposed or sanctioned persons or entities. The
Company employs expert legal advisors and continues to monitor updates to
international sanctions legislation focussed on Russia and resulting from the
conflict in Ukraine to determine their effect on the businesses operations and
medium and long-term strategies. Two in-depth reviews of operations against
changes in the UK and EU sanctions landscape were carried out in May and
December 2022.
Environmental
The Group's operations are subject to statutory environmental regulation,
including environmental impact assessments and permitting including forestry
permitting. The environmental legislation comprises numerous federal and
regional codes discussed further in the environmental report herewith. The
Group makes an assessment of the environmental impact when applying for
permits and licences. Review and approval of the rehabilitation plan is a
pre-requisite of the mine plan approval for each season of mining.
Mitigation: The Group mitigates risk to the operation arising from
environmental issues by strictly adhering to relevant environmental laws and
codes and by ensuring an appropriate plan for managing the environmental
impact of any operation is in place prior to commencement of on-site activity.
The West Kytlim mine, by nature of the relatively simple beneficiation methods
employed does not require management of hazardous mine and process plant
tailings within a tailings dam, as is necessary in large scale underground and
open pit mining operations.
The regulatory environment
The Company and the group's activities are subject to laws and regulations
governing various matters, including licensing, production, taxes, mine
safety, labour standards, occupational health and safety and environmental
protections.
Mitigation: The Group closely monitors all regulatory requirements and changes
to the laws, rules and regulation taking steps whenever necessary to comply
with regulation. The board considers the regulatory environment for mining
companies to be transparent, not more difficult than other jurisdictions,
sufficiently prescriptive and in general navigable for a company employing
sufficient expertise and resources to manage that aspect of its business.
Sanctions legislation has presented a new challenge to the Company which has
been met by the appointment of suitably qualified and UK based firm.
Commodity risk
A potential fall in commodity prices could result in it becoming uneconomic
for the Group to mine its assets.
Mitigation: The Group closely monitors the markets for platinum group metals
and battery metals, changes in their demand and supply, and the effect these
have on metal prices, with a view to taking necessary measures in response to
such changes, including stockpiling concentrate as has occurred during 2022.
The group continues to consider potential opportunities in other mineral and
energy industries which can diversify risk.
Demand for platinum group metals from their principal use - autocatalysts,
which reduce harmful engine emissions is perceived by market commentators to
remain strong as electric vehicle uptake is offset by tighter emissions
control for traditional internal combustion engine vehicles, and as PGM
continue to find application in emerging transport technologies such as Fuel
Cell Electric Vehicles. For further details see the PGM market summary section
at the front of this report.
Loss of key personnel risk
The loss of key personnel consists of the departure (voluntary or otherwise)
of an important employee, which will, in all likelihood, result in a financial
loss or increased expense to the small or medium business. The expenses may be
of a temporary or a permanent nature. These increased expenses relate to the
search for and hiring of a new employee, training costs for the new hire,
possible "signing" bonus and higher remuneration packages.
Mitigation: The Group takes measures to motivate and retain existing employees
and has retained a significant number of its senior management for more than
ten years. There is not currently a shortage of Mining industry personnel and
expertise and the Group is confident a suitable replacement could be found
should it be necessary to replace any key member of staff.
Financing risk
Historically, the Company has relied on international equity and to a lesser
extent debt capital markets to maintain adequate levels of working capital.
Mitigation: The Group maintains tight financial and budgetary controls as well
as cost controls which with forward planning help ensure the Company is
adequately funded to reach its objectives. The Russian assets' sale process is
in progress.
The Board considers risk assessment to be important in achieving its strategic
objectives. Further details of the Group's financial risk management policies
can be found in note 32.
Research and future development
The Group's activities during the year continued to be concentrated on
advancing mineral exploration projects through feasibility to mine
development. While developing its core projects as discussed in the Operations
Update the Company will continue to consider new directions for the business
in other minerals and energy markets globally.
ENVIRONMENTAL, SOCIAL and GOVERNANCE
Introduction
Environmental, Social and Governance priorities are a clear focus of the
mining industry generally and increasingly mining industry investors. The
Board welcome changes to the international mining landscape particularly with
respect to environmental responsibility, and the example being set by industry
majors in setting net zero emissions targets, as well as developments in
international reporting standards to ensure adequate reporting mechanisms. The
Company's West Kytlim operation has undergone significant changes in energy
usage which will determine its future environmental impact. With the
Monchetundra Project on Kola in pre-mine development, the Board feel it is
premature for the Group to set a net-zero emissions target but has taken steps
to commence appropriate environmental reporting going forward.
This section of the report describes how Directors consider and adopt
principles of corporate governance, as well as environmental and social
governance and apply them through the group of Companies while achieving
corporate objectives and ensuring the overall direction, supervision and
accountability of the organisation. Other key aspects of Corporate Governance
within this report are;
· The Section 172 Statement (Strategic Report above) describes how
Directors promote the Company for the benefit of members as a whole;
· Financial and non-financial Key Performance Indicators which are
outlined to measure performance of the board year on year; and
· Principal Risks and Uncertainties demonstrate an awareness of
potential obstacles to achieving corporate goals.
The Board has adopted the QCA Corporate Governance Code (2018) ("QCA Code")
and strives to follow its 10 principles to the fullest extent possible.
Directors consider the West Kytlim operation, one of the largest mines of its
type in the world, to be an opportunity to demonstrate a potential new style
of lower emissions PGM production, competing with other global sources of PGM
in terms of CO2/oz metal produced as well as long term environmental
disturbance. The Group ensures the land disturbed by mining activities is
returned, post mining, to a safe and stable landform. Rehabilitation plans set
out land and forestry is managed with an equal amount of forest planted as is
removed for mining. Open pits are infilled with the overburden removed prior
to mining, top-soil is replaced and the land regenerates over a period of five
to ten growing seasons.
Environmental report
West Kytlim
The area developed at West Kytlim will itself be replanted with appropriate
local species and will recover to its pre-mine condition within 5 to 10 years
following mining.
Surface mining requires significant disturbance of the upper layers of
top-soil and river sediment terraces which are removed to allow access to
mineral bearing gravels. These areas are then scheduled for remediation
following mining.
Water is a key resource in any stable natural environment. Process water at
the mine site is derived from river water and is fully recirculated meaning
the water used to disintegrate and beneficiate pay gravels is continuously
recycled in a closed loop maintained separate to any free-flowing water
course. This hydro infrastructure of damns, roads and ponds is constructed as
required at washplant sites in the mining area. There have not as yet been
cases of contamination of rivers or streams in the areas under development in
the year under review or in previous years. Tails from the mining operation do
not contain hazardous chemicals but do include large volumes of sediment and
clay, which could damage the ecosystem in a natural river course if not
correctly managed. Several relatively small specially protected water
environments are defined within the mine license and particular care is taken
to not disturb these areas.
Waste management
The tailings of alluvial mining do not contain any hazardous substances as no
chemicals are used in the beneficiation process which is driven by gravity and
hydro-mechanical operations. Measures are taken at site to ensure mine site
water is maintained in a closed loop separate from river courses.
Air emissions
The switch to electric powered draglines as the key machine component for
overburden stripping will remove a significant amount of the vehicle emissions
associated with overburden stripping. Tracked and heavy machinery on site
complies with the latest accepted emissions standards having mostly been
purchased new and is specified to the latest environmental compliance
standards.
Social
Relationship with the local community
Consultation
Giving notice of pre-approved and permitted work such as the West Kytlim Power
line project, and receiving feedback from the local community who may be
affected is a key element of good community relations. No impact on local
communities or their activities has been identified at the West Kytlim Mine
which is situated in an area of unpopulated wilderness without nearby farming
operations. The Monchetundra operation adjacent the town of Monchegorsk is
located in a mining friendly jurisdiction with mining and metallurgical
processing being the largest employer in the town and district.
Health and Safety report
During 2022 and in the year to date there have been no injuries or accidents
on operational sites. Health and safety protocols have been upgraded at the
West Kytlim mine site following the arrival of electric draglines and high
voltage electricity. Appropriate HSE is available to all employees and its use
closely monitored. Signage is a key element of safety awareness which is
maintained by the mine site Health and Safety Officer. The highest risk
situations are during construction and assembly of various components of the
washplants and their peripherals as no on foot presence is required in pit
during excavation, and no drilling and blasting required prior to digging.
Maintaining best-in-class Environmental, Social and Governance position
remains a key focus
OUR MINE SITES ARE ENGAGED WITH LOCAL COMMUNITIES
· Consultation - A key aspect of community involvement for high
impact projects.
· All mine workers and equipment operators are local (within 70km
area), Project companies registered locally and taxes are paid locally.
· The mine has a sustainability focus - for example most mine
building structures and interiors are constructed from timber milled on site
and move to electric power.
ENVIRONMENTAL PROTECTION IS FRONT OF MIND
· Minimise impact - Surface mining with limited remnant waste and
tails heaps
· Limit use of concrete, steel and asphalt at the mine site
· Rehabilitate - Eurasia is committed to ensuring the land
disturbed by mining is returned to a safe and stable landform with no long
term damage to the environment or eco system
· Rehabilitation plans envisage works impacting local climate,
geochemistry of soils, fertility, degree of disturbance, specific landscape
and topography features
· GHG emissions reduction - Installation of electric draglines
powered by mains hydro-derived electricity
OVER 20 YEARS' EXPERIENCE
· Building robust partnerships and developing industry contacts
· Leveraging an in-depth knowledge of the licensing system in
partnership with support from expert international technical consultants
· Group companies maintain strong contacts base amongst machinery
suppliers, contractors, industry consultants, and sub-soil licensing
professionals
Christian Schaffalitzky
Managing Director and Chairman
Directors' report
Directors
The Directors who served during the period were:
Christian Schaffalitzky - Executive Chairman
Anthony James Nieuwenhuys - Chief Executive Officer (retired July 2023)
Tamerlan Abdikeev - Non-Executive Director
David Iain Rawlinson - Non-Executive Director
Kotaro Kosaka - Non-Executive Director
Artem Matyushok - Non-Executive Director (appointed May 2022)
Director's interests
Share interests
The Directors of the Company active at 31 December 2022 held the following
beneficial interests (including interests held by spouses and minor children)
in the ordinary shares of the Company:
31 Dec 2022 31 Dec 2021
No. of shares No. of shares
C. Schaffalitzky 89,569,517 89,569,517
Total 89,569,517 89,569,517
Share options and warrants
31 Dec 2022 31 Dec 2021
Options No. of shares No. of shares
C. Schaffalitzky 20,000,000 20,000,000
Total 20,000,000 20,000,000
All options granted to the Directors vested by 31 December 2021.
No share options were exercised by the Directors during 2022 (2021 - nil).
Dividends and profit retention
No dividend is proposed in respect of the year (2021: nil) and the retained
loss for the year attributable to the equity holders of the parent of
£5,840,245 (2021: loss of £2,910,479) has been taken to reserves.
Share capital
The issued capital of the Company as at 31 December 2022 was:
Number of shares Nominal value Share premium account
Fully paid ordinary of shares at 0.1 pence each 2,853,559,995 2,853,560 51,343,246
Deferred shares of 4.9 pence each 143,377,203 7,025,483 -
2,996,937,198 9,879,043 51,343,246
Risk Management
The Directors consider that assessing and monitoring the inherent risks in the
exploration and mine development business, as well as other financial risks,
is crucial for the success of the Group. The Board regularly reviews the
performance of the Company's projects against plans and forecasts. Further
detail on management of financial risks, which includes foreign currency,
interest rate, credit, liquidity and capital risks are set out in Note 32.
Going Concern
As at 31 December 2022 the Group's net current assets amounted to £5,883,581
(£23,036,966 in 2021) and includes unsold inventory of £4,182,382. As at the
same date, the Group's cash balance was £1,009,908 (£22,009,507 in 2021) and
investment in US treasuries of £3,807,925 (2021: nil). The majority of the
reduction in year on year cash position (2021 to 2022) is attributable to
capital investments and operating costs for the West Kytlim Mine.
The Group's debt consists of lease liabilities set up to acquire mining
machinery for a total amount of £348,269 (at 31 December 2021 - £429,543).
The Group's current (as at 29 June 2023) cash position is around £40,000 and
US treasury Bonds valued at £1,646,255 with the reduction since December 2022
being accounted for by £150,000 in capital expenditure, £950,000 on
development expenditure on its assets portfolio, and £2,031,578 in costs.
These financial statements have been prepared on a going concern basis, which
assumes that the Group will continue in operation for the foreseeable future.
The directors have prepared detailed bottom-up financial forecasts to address
a range of scenarios for the Group's operations. The Group's forecasts and
assumptions reflect key assumptions based on information available at the time
of review and include:
1. Sale of inventory of raw platinum concentrate:
The Company currently has an inventory of raw platinum concentrate, the
product of the 2022 mining season at the Kluchiki and Bolshaya Sosnovka areas,
which has been retained in safe storage for later refining. The concentrate
has a total net weight of 199.3 kg and a realisable value of not less than
£4.1 million. The Company is in advanced negotiations with a number of
parties to realise this value in the near future. These funds will be used to
support the current mining season (see 2 below) and to continuing operating
costs of the Group.
2. Continuing mining operations of the Group
The Group's current mining operations in West Kytlim mine has been running at
reduced capacity at start-up of the season, as we were engaged in stripping
activity only with a commensurate and very significant reduction in diesel and
labour costs. The Board have agreed a new and extensive mining plan for the
remainder of the season, based on electricity powered machinery and equipment.
The mining operations in West Kytlim will contribute significant additional
funds to the Group when the value of the extracted concentrate is realised.
3. Expenditure on Monchetundra asset
The Group has spent £900,000 on a development programme for the Monchetundra
asset during 2022 leading to approval of the DFS in 2023. No further
significant outgoings have been budgeted for this asset.
4. Management of future cash outflows
In addition to the above, the Group have the ability to manage and where
required, reduce expenditure as needed.
As such, the Directors have prepared the financial statements on a going
concern basis and consider it to be reasonable.
2022 Events and sanctions compliance
The Company has satisfied itself that its current activities at the West
Kytlim Mine and on the Kola Peninsula are not prohibited under UK or EU
sanctions rules. For the avoidance of doubt this includes sale of West Kytlim
mine product. Furthermore, the Group does not engage and has not engaged with
any sanctioned persons/ entities or agencies. Two in-depth reviews of the
Company and Group's activities were tested with appropriate legal advice
against EU and UK sanctions legislation in May and December 2022.
The Company has continued to fund Group companies through international
disbursements as required and in compliance with applicable regulation.
Debt and equity capital markets are expected to remain as options for the
Company going forward.
Directors have concluded that the combination of the above factors, with
account of the current applicable sanctions regimes, support the Board's
opinion that it has a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future,
which management has determined to be at least 12 months from the signing of
this Annual Report.
The Board therefore believes it is appropriate to adopt a going concern basis
in preparing the Annual Report and Accounts.
Directors Responsibilities statement
The Directors are responsible for preparing the Strategic report and the
Directors' report.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors must prepare the financial
statements in accordance with the UK adopted International Accounting
Standards and in accordance with the Companies Act 2006. Under company law the
Directors must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs and profit or loss
of the Company and Group for that period. In preparing these financial
statements, the Directors are required to;
• select suitable accounting policies and apply them consistently;
• make judgements and accounting estimates that are reasonable and
prudent;
• state whether applicable accounting standards have been followed,
subject to any material departures being disclosed and explained in the
financial statements;
• with contributions from advisors, set the Company and Group's
corporate strategy including research and development activities (detailed in
the strategic report above);
• prepare the financial statements on a going concern basis unless it is
inappropriate to presume that the Company will continue in business. The
Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time, the financial position of the Company and
Group and enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of
the Company and Group and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Directors confirm that: so far as each Director is aware there is no
relevant audit information of which the Company's auditor is unaware; and the
Directors have taken all the 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 auditor is aware of that information. The
Directors are responsible for the maintenance and integrity of the corporate
and financial information included on the company's website. Legislation in
the United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Revenue
No sale of mine product from the West Kytlim mine occurred in the year under
review. Historically, revenues generated by the Group have been from refining
of PGM concentrates. Refinery receipts record the total of metal sales with
payments received for platinum and gold, at the market rate, on average every
month throughout the mining season. For reasons related to the nature of
metals refining the revenue for other PGM (Rhodium, Iridium and Palladium) are
received when all shipments for that year have been received.
Directors Indemnity
The group maintains Directors and Officers liability insurance as an indemnity
provision renewed annually.
Corporate Governance
Eurasia Mining applies the QCA Code as a Corporate Governance framework to
ensure adequate corporate governance standards for the current business and
mindful of how the business will evolve in-line with its corporate strategy
and business goals. The QCA Code's ten principles describe how the code should
be applied to any company.
Eurasia has established a strategy designed to promote long-term value and a
return on investment for its shareholders, a strategy which also aims to build
the Company to an increasingly profitable enterprise while maintaining good
corporate governance and social and environmental responsibility standards.
Delivering Growth
Eurasia has established a strategy designed to promote long term value and a
return on investment for its shareholders, a strategy which also aims to build
the Company to an increasingly profitable enterprise while maintaining good
corporate governance and social and environmental responsibility standards.
Principle 1: Strategy
The Company's strategy is to self-fund exploration and development of
marketable resource and energy projects in various commodities, and to realise
a return on investment, either by carrying the project through feasibility to
commissioning or by straightforward sale at any stage of development. The
Company recognises that all project development expenditure adds value to a
project by increasing its resource and reserve base. Risk to further
investment in development expenditure, or in mine development, is also reduced
as resources are moved to lower risk categories. The Company has adopted a
dual strategy of both project development towards mining, while also investing
significant resources in active high-level mergers and acquisitions activity.
The Company adapts this strategy in response to external stimulus such as
geopolitical events.
The Company is focused on selling its assets in Russia while maintaining
corporate governance principles in line with the QCA Code. The key commitments
and challenges in adhering to the QCA's 10 principles are set out below.
Principle 2:
Understanding shareholders
Eurasia seeks to maintain open, direct and two-way communication with its
shareholders through various media including press releases, the Company
website, interviews and industry events. The Company employs public relations
professionals and maintains third-party contracts as required to better
disseminate Company news-flow. Through shareholder feedback the Company
ensures that it remains in touch with the information requirements of
shareholders, their expectations regarding their investment, and the
motivation behind their voting decisions. Director's consider shareholder's
expectations to be correlated with that of the Company and the Company's
strategy. The Company aims to update on key operation and commercial events as
appropriate and the Board recognises that shareholders require complete and
timely information as a necessary input to their investment decisions. Working
with its Nominated Advisor the Company maintains strict adherence to the AIM
rules for Companies.
Principle 3:
Stakeholders and social responsibility
Experienced and knowledgeable long-standing employees and service providers
are a recognised key asset within the Company and our Corporate Governance
principles seek to cultivate a productive and fulfilling working environment
within the Company and the Group of companies. Our mining and other operations
are a further key asset and attention is paid to how these operations engage
with society and the various stakeholders important to the project's
continuous success. Any issue arising from any stakeholder will immediately be
dealt with or communicated to the required level to allow for action to be
taken. No material events have occurred in the history of the mining operation
and where an issue may arise it is reported in full to senior management and
Directors. Managing relationships within the Company's workforce, and its
outward interactions with local communities, service providers, and the
environment, all have the potential to impact on the Company's ability to
achieve its medium to long term goals - managing these relationships is
considered a fundamental facet of good Corporate Governance operating at
project level.
Principle 4:
Risk management
The leading risks at operational level relate to the reliability of our
resource and reserve estimations and our ability to manage the mining
operation to achieve its goals. These risks are mitigated by ensuring
qualified and knowledgeable personnel are employed and that they are
adequately resourced and supported by effective management. Resource
exploration involves inherent risks stemming from the fact that information
relating to the mineralisation is not immediately available and is expensive
to obtain. Recognising this risk and then managing it effectively is a
critical aspect of a successful resource exploration and development business.
The Company's annual audit provides an opportunity to reassess the key risks
facing the business at both a corporate and operational level (see principal
risks and uncertainties herewith). These are agreed by directors and
delineated and audited on an annual basis, thus ensuring adequate recognition
and articulation of each risk category.
Principle 5:
Maintaining a dynamic management framework
The Board consists of a Chairman and Managing Director supported by four
Non-Executive Directors. The Board aims to maintain two independent
Non-Executive Director positions at all times. At the date of this revision
Iain Rawlinson, Artem Matyushok and Kotaro Kosaka are considered independent
Non-Executive Directors. In addition, the board maintains appointments made as
strategic advisors with the Mergers and Acquisitions Officer role recognised
as pivotal in the current overall strategy.
The board meets when an executive decision requires board approval, and in any
event no less than once per six-week period. Board members are regularly
consulted on executive decisions which would benefit from specific input
relevant to a board members area of expertise. All board members are aware of
and comfortable with the time and resource requirements associated with their
position. Relevant information relating to a board discussion is prepared and
circulated in advance of board meetings. An attendance record for each
director is maintained and annualised for distribution within the board.
Separately, the Company secretary, is considered a key position necessary in
preserving a functional and ergonomic management framework within the Company
and good communication across the Group of companies.
Principle 6:
Experience and skills
The board has an effective combination of commercial and technical experience,
being led by a chair with a strong background in geology, who is supported by
non-executive directors with commercial, legal and mergers and acquisitions
experience in a range of markets and jurisdictions. Board members retire on a
fixed rota and declare themselves eligible for reappointment by shareholders
at the Company's AGM.
The board considers the skill sets within the current board to be sufficient
for the successful running of the business, and the delivery of the stated
corporate strategy and goals through the medium to long term, however further
appointments may be made in due course. In addition, where more specialised
skills are required, the board has access to a network of individuals and
organisations with whom it can consult for further information. This can
include input to operational decisions relating to the Company's operating
mine, or advice of a commercial nature. Each board member's long-standing
career in the industry is invaluable in this regard. Continuing Professional
Development ('CPD') and membership of institutions which promote best practice
in industry is encouraged in all board members, though not compulsory to board
membership. As an example, the professional accreditations PGeo ('Professional
Geologist', Institute of Geologists of Ireland) and EurGeol ('European
Geologist', European Federation of Geologists), attained by the Executive
Chairman, are maintained by adherence to a programme of CPD activities.
All board members regularly attend industry events and conferences to keep
abreast of developments in their area of expertise. No one board member, or
group of board members, dominates decision making within the Board.
Principle 7:
Board performance
The Remuneration Committee, whose membership is considered annually is
responsible for evaluating the performance of the executive directors. As
mentioned above board members retire on a fixed rota, and efforts are made
with regard to succession planning and appointment of new board members.
The appointment process involves; assessment of suitability based on
qualifications and work history, due diligence by the Company and its
Nominated Adviser, a series of meetings with board members and key personnel,
and finally contract negotiation and appointment. Board evaluations are
internal to the Company and on an ad-hoc basis, as befits the small scale of
the Company currently, but not less than once per year at the time of the
Company AGM. Adhering to the Company's strategy, achieving the Company's
goals, and maintaining good corporate governance standards are the three most
prominent identifiers by which board effectiveness is evaluated. Board
evaluations are not currently made public, and it is the Company's intention
to reconsider this position and ensure continued compliance with the Code as
the Company develops.
Principle 8:
Values
The Company is founded on a culture of following and promoting the highest
ethical standards with regard to its commercial transactions, business
practices, strategy, internal employee relations and outward-facing
stakeholder and community relationships. The Company is incorporated and
domiciled in the UK and governed by the laws of England and Wales and its
corporate culture and values extend from PLC level throughout the organisation
irrespective of jurisdiction. An ability to recognise and promote good ethical
values is seen throughout the organisation as an asset to an employee,
potential employee or board member. The current board members have been chosen
with awareness of the Company's corporate culture and the Company's ethical
standards in mind - new board appointments are also considered in this light.
Corporate culture, and high ethical standards with regard to business
practices are considered a critical element in attaining the Company's
strategy and goals and these standards are reinforced through the nominations
and staff appraisal process. High standards of ethics create a competitive
advantage for the Company and are a core element of the Company's business
model, as they ensure the Company's long-term sustainability. Eurasia is an
equal opportunities employer, and the Board has recognised a lack of board
diversity which it intends to address.
Principle 9:
Governance
Maintaining governance structures that are fit for use as the Company evolves
in size and complexity is an essential element of good corporate governance.
Maintenance of the corporate governance code is the sole remit of the
Chairman, who instigates changes in policy, and ensures the code is applied
throughout the organisation. Non-executive directors are appointed and
participate in all board level decisions and also provide scrutiny and
oversight of the executive director's roles. The board's non-executive
directors are each skilled in different aspects of commerce, law, finance and
the UK regulatory environment, with a combined breath of experience across
various markets, commodities and jurisdictions. They communicate regularly
with the Chairman and executive directors and provide reliable advice in their
areas of expertise. The terms and functions of the audit and risk,
remuneration and nomination committees are set out below. The Company
Secretary is available to non-executive directors to support their information
requirements and decision making and reports directly to the Chairman.
Audit and Risk Committee
The Audit and Risk Committee may examine any matter relating to the financial
affairs of the Group and the Group's audits, this includes reviews of the
annual financial statements and announcements, internal control procedures,
accounting procedures, accounting policies, the appointment, independence,
objectivity, terms of reference and fees of external auditors and such other
related functions as the Board may require. The external Auditors have direct
access to the members of the committee, without presence of the executive
Directors, for independent discussions. Several Audit and Risk Committee
meetings are held during the year, prior to and during the annual audit; and
to approve Interim and Annual Financial Statements. The Audit and Risk
Committee opines on whether accounts are in compliance with International
Financial Reporting Standards.
The Chairman of the Audit and Risk Committee is Iain Rawlinson and the
committee comprises Iain Rawlinson and Tamerlan Abdikeev. The Audit and Risk
Committee is guided by company policy and procedure including the Audit and
Risk Committee terms of reference.
Remuneration Committee
The Remuneration Committee determines the terms and conditions of employment
and annual remuneration of the executive Directors and senior staff. It
consults with the Executive Chairman, takes into consideration external data
and comparative third-party remuneration and has access to professional advice
outside the Company.
The Chairman of the Remuneration Committee is Iain Rawlinson and the committee
comprises Iain Rawlinson and Tamerlan Abdikeev.
The key policy objectives of the Remuneration Committee in respect of the
Company's executive Directors and other senior executives are to ensure that
individuals are fairly rewarded for their personal contribution to the
Company's overall performance, and to act as an independent committee ensuring
that due regard is given to the interests of the Company's Shareholders and to
the financial and commercial health of the Company. Remuneration of executive
Directors comprises basic salary, discretionary bonuses, participation in the
Company's Share Option Scheme and other benefits. The Company's remuneration
policy with regard to options is to maintain an amount of not more than 10% of
the issued share capital in options for the Company's management and employees
which may include the issue of new options in line with any new share issues.
The Remuneration Committee is guided by company policy and procedure including
the Remuneration Committee terms of reference.
Nominations Committee
The Chairman of the Nominations Committee is Christian Schaffalitzky and the
committee comprises Christian Schaffalitzky and Iain Rawlinson. The committee
convenes at a minimum twice annually to consider board composition, and, if
considered necessary, seek further appointments. The committee is conscious of
a need for board diversity when considering future appointments. The
Nominations Committee is guided by company policy and procedure including the
Nominations Committee terms of reference.
Principle 10:
Build trust
The Board seeks to maintain both direct and two-way communication with its
shareholders through its public and investor relations programmes. All
shareholders may at their discretion chose to attend the Company AGM either
virtually or in person. The Company employs Public Relations and Investor
Relations professionals and maintains several third-party contracts to better
disseminate Company news-flow. Through shareholder feedback the Company
ensures that the Board's communication of the Company's progress is thorough
and well understood. A clear statement on the outcomes of board resolutions is
communicated immediately after the Company's AGM by RNS and posted to the
Company's website. This includes a summary of votes for and against the
resolutions put before the shareholders, and where a significant number of
votes is cast against a resolution this is clearly stated, with an explanation
as to possible remediation regarding that voting. A catalogue of historical
annual reports and AGM notices is maintained at an appropriate location on the
Company's website.
Matters which are reserved strictly for the consideration of the board
include, but are not limited to, discussions and decision on Company strategy,
major investment decisions in new business development, commercial
arrangements including funding requirements, high-level decisions on
distribution of funds, and recruitment or dismissal of senior personnel and
board members. The above outline of the Company's corporate governance
framework befits the current scale of the Company but will be subject to
appropriate modifications as the Company grows in line with its stated
strategy.
An annual review of the corporate governance framework outlined above is
undertaken at the board meeting preceding or directly following the Company's
AGM. Changes considered to the current corporate governance framework, to be
assessed in due course, include further appointments to the board, and
establishing independent bodies to review and assess board performance.
UK Code on Takeovers and Mergers: Eurasia Mining is subject to the UK City
code on takeovers and mergers, which was revised and extended to apply to all
companies listed on the AIM market in October 2013.
Auditors Grant Thornton are willing to continue in office and a resolution
proposing their re-appointment as auditors of the Company and a resolution
authoring the Directors to agree their remuneration will be put to
shareholders at the Annual General Meeting.
By order of the Board
K. Byrne
Company Secretary
02 July 2023
Consolidated statement of profit or loss and other comprehensive income
For the year ended 31 December 2022
Note Year to Year to
31 December 31 December
2022 2021
£ £
Sales 8 119,525 2,331,225
Cost of sales 9 (30,173) (2,584,680)
Gross profit/(loss) 89,352 (253,455)
Administrative costs 9 (4,618,351) (2,717,765)
Investment income 61,325 1,394
Finance cost 10 (107,697) (103,445)
Other gains 11 187,592 -
Other losses 11 (2,842,309) (65,250)
Loss before tax (7,230,088) (3,138,521)
Income tax expense 12 - -
Loss for the year (7,230,088) (3,138,521)
Other comprehensive income:
Items that will not be reclassified subsequently to profit and loss:
NCI share of foreign exchange differences on translation of foreign operations 16 (61,656) 36,855
Items that will be reclassified subsequently to profit and loss:
Parent's share of foreign exchange differences on translation of foreign (341,762) (58,679)
operations
Other comprehensive expense for the year, net of tax (403,418) (21,824)
Total comprehensive loss for the year (7,633,506) (3,160,345)
Loss for the year attributable to:
Equity holders of the parent (5,840,245) (2,910,479)
Non-controlling interest 16 (1,389,843) (228,042)
(7,230,088) (3,138,521)
Total comprehensive loss for the year attributable to:
Equity holders of the parent (6,182,007) (2,969,158)
Non-controlling interest 16 (1,451,499) (191,187)
(7,633,506) (3,160,345)
Loss per share attributable to equity holders of the parent:
Basic and diluted loss (pence per share) 30 (0.22) (0.10)
The accompanying notes are an integral part of these financial statements.
Consolidated statement of financial position
As at 31 December 2022
Note 31 December 31 December
2022 2021
£ £
ASSETS
Non-current assets
Property, plant and equipment 13 9,600,231 5,061,743
Assets in the course of construction 13 696,026 640,423
Intangible assets 14 2,859,368 1,389,029
Investment in financial assets 17 3,807,925 -
Investment to potential share in joint venture 15 - 367,464
Total non-current assets 16,963,550 7,458,659
Current assets
Inventories 19 4,182,382 38,673
Trade and other receivables 20 3,171,669 1,681,864
Current tax asset 6,050 5,334
Cash and cash equivalents 21 1,009,908 22,009,507
Total current assets 8,370,009 23,735,378
Total assets 25,333,559 31,194,037
EQUITY
Issued capital 22 61,187,111 61,187,111
Other reserves 24 3,580,929 3,922,691
Accumulated losses (38,954,777) (33,114,532)
Equity attributable to equity holders 25,813,263 31,995,270
of the parent
Non-controlling interest 16 (3,401,548) (1,950,049)
Total equity 22,411,715 30,045,221
LIABILITIES
Non-current liabilities
Lease liabilities 26 181,198 307,136
Provisions 28 254,218 143,268
Total non-current liabilities 435,416 450,404
Current liabilities
Borrowings 25 - 31,953
Lease liabilities 26 167,071 122,407
Trade and other payables 27 2,230,879 486,558
Provisions 28 88,478 57,494
Total current liabilities 2,486,428 698,412
Total liabilities 2,921,844 1,148,816
Total equity and liabilities 25,333,559 31,194,037
These financial statements were approved by the board on 02 July 2023 and were
signed on its behalf by:
C. Schaffalitzky
Executive Chairman
The accompanying notes are an integral part of these financial statements.
Company statement of financial position
As at 31 December 2022
Note 31 December 31 December
2022 2021
£ £
ASSETS
Non-current assets
Property, plant and equipment 13 419 804
Investments in financial assets 17 3,807,925 -
Investments in subsidiaries 16 1,132,246 1,132,246
Total non-current assets 4,940,590 1,133,050
Current assets
Trade and other receivables 20 434,040 308,485
Other financial assets 18 28,157,840 12,681,450
Cash and cash equivalents 21 136,733 21,892,793
Total current assets 28,728,613 34,882,728
Total assets 33,669,203 36,015,778
EQUITY
Issued capital 22 61,187,111 61,187,111
Other reserves 24 3,924,026 3,924,026
Accumulated losses (31,878,477) (29,371,048)
Total equity 33,232,660 35,740,089
LIABILITIES
Current liabilities
Trade and other payables 27 436,543 275,689
Total current liabilities 436,543 275,689
Total liabilities 436,543 275,689
Total equity and liabilities 33,669,203 36,015,778
In accordance with section 408(3) of the Companies Act 2006, Eurasia Mining
plc is exempt from the requirement to present its own statement of profit or
loss. The amount of loss for the financial year recorded within the financial
statements of Eurasia Mining plc is £2,507,429 (2021: loss of £2,004,556).
These financial statements were approved by the board on 02 July 2023 and were
signed on its behalf by:
C. Schaffalitzky
Executive Chairman
The accompanying notes are an integral part of these financial statements.
Consolidated statement of changes in equity
For the year ended 31 December 2022Consolidated statement of changes in equity
Note Share capital Share premium Deferred shares Other reserves Translation reserve Accumulated losses Attributable to equity holders of the parent Non-controlling interest Total
£ £ £ £ £ £ £ £ £
Balance at 1 January 2021 2,758,702 28,028,671 7,025,483 3,924,026 57,344 (30,204,053) 11,590,173 (1,758,862) 9,831,311
Issue of ordinary share capital for cash 94,858 24,834,836 - - - - 24,929,694 24,929,694
Share issue cost - (1,555,439) - - - - (1,555,439) (1,555,439)
Transaction with owners 94,858 23,279,397 - - - - 23,374,255 - 23,374,255
Loss for the year - - - - - (2,910,479) (2,910,479) (228,042) (3,138,521)
-
Other comprehensive income
Exchange differences on translation - - - - (58,679) - (58,679) 36,855 (21,824)
of foreign operations
Total comprehensive loss - - - - (58,679) (2,910,479) (2,969,158) (191,187) (3,160,345)
for the year ended 31 December 2021
Balance at 31 December 2021 2,853,560 51,308,068 7,025,483 3,924,026 (1,335) (33,114,532) 31,995,270 (1,950,049) 30,045,221
Note Share capital Share premium Deferred shares Other reserves Translation reserve Accumulated losses Attributable to equity holders of the parent Non-controlling interest Total
£ £ £ £ £ £ £ £ £
Balance at 1 January 2022 2,853,560 51,308,068 7,025,483 3,924,026 (1,335) (33,114,532) 31,995,270 (1,950,049) 30,045,221
Transaction with owners - - - - - - - - -
Loss for the year - - - - - (5,840,245) (5,840,245) (1,389,843) (7,230,088)
-
Other comprehensive income
Exchange differences on translation - - - - (341,762) - (341,762) (61,656) (403,418)
of foreign operations
Total comprehensive loss - - - - (341,762) (5,840,245) (6,182,007) (1,451,499) (7,633,506)
for the year ended 31 December 2022
Balance at 31 December 2022 2,853,560 51,308,068 7,025,483 3,924,026 (343,097) (38,954,777) 25,813,263 (3,401,548) 22,411,715
The accompanying notes are an integral part of these financial statements.
Company statement of changes in equity
For the year ended 31 December 2022
Note Share capital Share premium Deferred shares Other reserves Accumulated losses Total
£ £ £ £ £ £
Balance at 1 January 2021 2,758,702 28,028,671 7,025,483 3,924,026 (27,366,492) 14,370,390
Issue of ordinary share capital for cash 94,858 24,834,836 - 24,929,694
Share issue cost - (1,555,439) - (1,555,439)
Transactions with owners 94,858 23,279,397 - - - 23,374,255
Loss and total comprehensive income - - - - (2,004,556) (2,004,556)
Balance at 31 December 2021 2,853,560 51,308,068 7,025,483 3,924,026 (29,371,048) 35,740,089
Note Share capital Share premium Deferred shares Other reserves Accumulated losses Total
£ £ £ £ £ £
Balance at 1 January 2022 2,853,560 51,308,068 7,025,483 3,924,026 (29,371,048) 35,740,089
Transactions with owners - - - - - -
Loss and total comprehensive income - - - - (2,507,429) (2,507,429)
Balance at 31 December 2022 2,853,560 51,308,068 7,025,483 3,924,026 (31,878,477) 33,232,660
The accompanying notes are an integral part of these financial statements.
Consolidated statement of cash flows
For the year ended 31 December 2022
Note Year to Year to
31 December 31 December
2022 2021
£ £
Cash flows from operating activities
Loss for the year (7,230,088) (3,138,521)
Adjustments for:
Depreciation of non-current assets 13 1,006,210 422,752
Asset value write offs to cost of sales/production 2,365,988 149,882
Finance costs recognised in profit or loss 25 107,697 103,445
Investment income recognised in profit or loss (61,325) (1,394)
Loss recognised on disposal of investments 814,158 -
Loss recognised on valuation of inventory 2,028,151 -
Gain on disposal of property, plant and equipment (4,952) -
Rehabilitation cost recognised in profit or loss 99,725 145,785
Net foreign exchange (gains)/losses 11 (182,640) 65,250
(1,057,076) (2,252,801)
Movement in working capital
Increase in inventories (6,166,681) (24,862)
Increase in trade and other receivables (1,300,887) (1,395,059)
Increase in trade and other payables 1,716,777 197,728
Cash outflow from operations (6,807,867) (3,474,994)
Income tax paid - -
Net cash used in operating activities (6,807,867) (3,474,994)
Cash flows from investing activities
Payments for investment securities (7,030,548) -
Proceeds from sale of investment securities 2,835,299 -
Investment income 11,943 1,394
Investment to acquire interest in other entities (354,769) (367,464)
Purchase of property, plant and equipment 13 (7,190,406) (1,910,033)
Proceeds from disposal of property, plant and equipment 4,952 -
Payment for exploration and evaluation assets 14 (1,239,085) (682,419)
Net cash used in investing activities (12,962,614) (2,958,522)
Cash flows from financing activities
Proceeds from issue of equity shares - 24,929,694
Share issue costs - (1,555,439)
Repayment of borrowings (36,232) -
Repayment of lease liability (141,528) (101,674)
Interest paid (90,446) (101,048)
Net cash proceeds (used in) from financing activities (268,206) 23,171,533
Net (decrease)/increase in cash and cash equivalents (20,038,687) 16,738,017
Effects of exchange rate changes on the balance of cash held in foreign (960,912) (132,611)
currencies
Cash and cash equivalents at beginning of year 22,009,507 5,404,101
Cash and cash equivalents at end of year 1,009,908 22,009,507
The accompanying notes are an integral part of these financial statements.
Company statement of cash flows
For the year ended 31 December 2022
Note Year to Year to
31 December 31 December
2022 2021
£ £
Cash flows from operating activities
Loss for the year (2,507,429) (2,004,556)
Adjustments for:
Depreciation of non-current assets 385 703
Investment revenue recognised in profit or loss (49,382)
Impairment loss on investments 11 389,292 -
Net foreign exchange loss 64,219 26,576
(2,102,915) (1,977,277)
Movement in working capital
Increase in trade and other receivables (124,319) (202,443)
Increase/(decrease) in trade and other payables 160,854 (66,998)
Cash outflow from operations (2,066,380) (2,246,718)
Income tax paid - -
Net cash used in operating activities (2,066,380) (2,246,718)
Cash flows from investing activities
Payments for investment securities (7,030,548) -
Proceeds on sale of investment securities 2,835,299 -
Amounts advanced to related party (15,476,390) (4,455,274)
Investments to acquire interest in other entities (354,769) -
Net cash used in investing activities (20,026,408) (4,455,274)
Cash flows from financing activities
Proceeds from issue of equity shares - 24,929,694
Share issue costs - (1,555,439)
Net cash proceeds from financing activities - 23,374,255
Net (decrease)/increase in cash and cash equivalents (22,092,788) 16,672,263
Effects of exchange rate changes on the balance of cash held in foreign 336,728 (26,576)
currencies
Cash and cash equivalents at beginning of year 21,892,793 5,247,106
136,733 21,892,793
Cash and cash equivalents at end of year
The accompanying notes are an integral part of these financial statements.
Notes to the financial statements
1 General information
Eurasia Mining Plc (the "Company") is a public limited company incorporated
and domiciled in Great Britain with its registered office at International
House, 142 Cromwell Road, London SW7 4EF, United Kingdom and principal place
of business at Clubhouse Holborn, 20 St Andrew Street, EC4A 3AG, United
Kingdom. The Company's shares are listed on the AIM Market of the London Stock
Exchange plc. The principal activities of the Company and its subsidiaries
(collectively "Group") are related to the exploration for and development of
battery metals, platinum group metals, gold and other minerals as well as
green hydrogen projects.
Eurasia Mining Plc's consolidated financial statements are presented in Pounds
Sterling (£), which is also the functional currency of the parent company.
2 Going concern
As at 31 December 2022 the Group's net current assets amounted to £5,883,581
(£23,036,966 in 2021) and includes unsold inventory of £4,182,382. As at the
same date, the Group's cash balance was £1,009,908 (£22,009,507 in 2021) and
investment in US treasuries of £3,807,925 (2021: nil). The majority of the
reduction in year on year cash position (2021 to 2022) is attributable to
capital investments and operating costs for the West Kytlim Mine.
The Group's debt consists of lease liabilities set up to acquire mining
machinery for a total amount of £348,269 (at 31 December 2021 - £429,543).
The Group's current (as at 29 June 2023) cash position is around £40,000 and
US treasury Bonds valued at £1,646,255 with the reduction since December 2022
being accounted for by £150,000 in capital expenditure, £950,000 on
development expenditure on its assets portfolio, and £2,031,578 in costs.
These financial statements have been prepared on a going concern basis, which
assumes that the Group will continue in operation for the foreseeable future.
The directors have prepared detailed bottom-up financial forecasts to address
a range of scenarios for the Group's operations. The Group's forecasts and
assumptions reflect key assumptions based on information available at the time
of review and include:
1. Sale of inventory of raw platinum concentrate:
The Company currently has an inventory of raw platinum concentrate, the
product of the 2022 mining season at the Kluchiki and Bolshaya Sosnovka areas,
which has been retained in safe storage for later refining. The concentrate
has a total net weight of 199.3 kg and a realisable value of not less than 4.1
million. The Company is in advanced negotiations with a number of parties to
realise this value in the near future. These funds will be used to support the
current mining season (see 2 below) and to continuing operating costs of the
Group.
2. Continuing mining operations of the Group
The Group's current mining operations in West Kytlim mine has been running at
reduced capacity at start-up of the season, as we were engaged in stripping
activity only with a commensurate and very significant reduction in diesel and
labour costs. The Board have agreed a new and extensive mining plan for the
remainder of the season, based on electricity powered machinery and equipment.
The mining operations in West Kytlim will contribute significant additional
funds to the Group when the value of the extracted concentrate is realised.
3. Expenditure on Monchetundra asset
The Group has spent £900,000 on a development programme for the Monchetundra
asset during 2022 leading to approval of the DFS in 2023. No further
significant outgoings have been budgeted for this asset.
4. Management of future cash outflows
In addition to the above, the Group have the ability to manage and where
required, reduce expenditure as needed.
As such, the Directors have prepared the financial statements on a going
concern basis and consider it to be reasonable.
3 Changes in accounting policies
3.1 New and revised relevant standards that are effective for annual periods commencing on or after 1 January 2022
Reference to the Conceptual Framework - Amendments to IFRS 3
In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations -
Reference to the Conceptual Framework. The amendments are intended to replace
a reference to the Framework for the Preparation and Presentation of Financial
Statements, issued in 1989, with a reference to the Conceptual Framework for
financial Reporting issued in March 2018 without significantly changing its
requirements.
The Board also added an exception to the recognition principle of IFRS 3 to
avoid the issue of potential 'day 2' gains or losses arising for liabilities
and contingent liabilities that would be within the scope of IAS 37 or IFRIC
21 Levies, if incurred separately.
At the same time, the Board decided to clarify existing guidance in IFRS 3 for
contingent assets that would not be affected by replacing the reference to the
Framework for the Preparation and Presentation of Financial Statements.
These amendments are effective for annual periods beginning on or after 1
January 2022 and are applied prospectively.
These amendments did not have an impact on the Group.
Property, Plant and Equipment: Proceeds before Intended Use - Amendments to
IAS 16
In May 2020, the IASB issued Property, Plant and Equipment - Proceeds before
Intended Use, which prohibits entities deducting from the cost of an item of
property, plant and equipment, any proceeds from selling items produced while
bringing that asset to the location and condition necessary for it to be
capable of operating in the manner intended by management. Instead, an entity
recognises the proceeds from selling such items, and the costs of producing
those items, in profit or loss.
These amendments are effective for annual reporting periods beginning on or
after 1 January 2022 and must be applied retrospectively to items of property,
plant and equipment made available for use on or after the beginning of the
earliest period presented when the entity first applies these amendments.
These amendments did not have an impact on the Group.
Onerous Contracts - Costs of Fulfilling a Contract - Amendments to IAS 37
In May 2020, the IASB issued amendments to IAS 37 to specify which costs an
entity needs to include when assessing whether a contract is onerous or
loss-making.
The amendments apply a "directly related cost approach". The costs that relate
directly to a contract to provide goods or services include both incremental
costs and an allocation of costs directly related to contract activities.
General and administrative costs do not relate directly to a contract and are
excluded unless they are explicitly chargeable to the counterparty under the
contract.
These amendments are effective for annual periods beginning on or after 1
January 2022. The Group will apply these amendments to contracts for which it
has not yet fulfilled all its obligations at the beginning of the annual
reporting period in which it first applies the amendments.
These amendments did not have an impact on the Group.
IFRS 1 First-time Adoption of International Financial Reporting Standards -
Subsidiary as a first-time adopter
As part of its 2018-2021 annual improvements to IFRS standards process, the
IASB issued an amendment to IFRS 1 First-time Adoption of International
Financial Reporting Standards. The amendment permits a subsidiary that elects
to apply paragraph D16(a) of IFRS 1 to measure cumulative translation
differences using the amounts reported by the parent, based on the parent's
date of transition to IFRS. This amendment is also applied to an associate or
joint venture that elects to apply paragraph D16(a) of IFRS 1.
This amendment is effective for annual periods beginning on or after 1 January
2022 with earlier adoption is permitted.
These amendments did not have an impact on the Group.
IFRS 9 Financial Instruments - Fees in the '10 per cent' test for
derecognition of financial liabilities
As part of its 2018-2020 annual improvements to IFRS standards process the
IASB issued amendment to IFRS 9. The amendment clarifies the fees that an
entity includes when assessing whether the terms of a new or modified
financial liability are substantially different from the terms of the original
financial liability. These fees include only those paid or received between
the borrower and the lender, including fees paid or received by either the
borrower or lender on the other's behalf. An entity applies the amendment to
financial liabilities that are modified or exchanged on or after the beginning
of the annual reporting period in which the entity first applies the
amendment.
This amendment is effective for annual periods beginning on or after 1 January
2022. Early adoption is permitted. The Company will apply the amendment to
financial liabilities that are modified or exchanged on or after the beginning
of the annual reporting period in which the Company first applies the
amendment.
These amendments did not have an impact on the Group.
Amendment to IAS 41 Agriculture - Taxation in fair value measurements
As part of its 2018-2020 annual improvements to IFRS standards process the
IASB issued amendment to IAS 41 Agriculture. The amendment removes the
requirement in paragraph 22 of IAS 41 that entities exclude cash flows for
taxation when measuring the fair value of assets within the scope of IAS 41.
An entity applies the amendment prospectively to fair value measurements on or
after the beginning of the first annual reporting period beginning on or after
1 January 2022. Early adoption is permitted.
These amendments did not have an impact on the Group.
3.2 Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early by the Group
IFRS 17 Insurance Contracts
In May 2017, the IASB issued IFRS 17 Insurance Contracts (IFRS 17), a
comprehensive new accounting standard for insurance contracts covering
recognition and measurement, presentation and disclosure. Once effective, IFRS
17 replaces IFRS 4 Insurance Contracts (IFRS 4) that was issued in 2005. IFRS
17 applies to all types of insurance contracts (i.e., life, non-life, direct
insurance and re-insurance), regardless of the type of entities that issue
them, as well as to certain guarantees and financial instruments with
discretionary participation features. There are several scope exceptions. The
overall objective of IFRS 17 is to provide an accounting model for insurance
contracts that is more useful and consistent for insurers. In contrast to the
requirements in IFRS 4, which are largely based on grandfathering previous
local accounting policies, IFRS 17 provides a comprehensive model for
insurance contracts, covering all relevant accounting aspects. The core of
IFRS 17 is the general model, supplemented by:
· A specific adaptation for insurance contracts with
direct participation terms (the variable fee approach).
· A simplified approach (the premium allocation approach)
is mainly for short-duration contracts.
IFRS 17 is effective for reporting periods starting on or after 1 January
2023, with comparative figures required. Early application is permitted,
provided the entity also applies IFRS 9 and IFRS 15 on or before the date it
first applies IFRS 17. This standard is not applicable to the Group.
Amendments to IAS 1 - Classification of Liabilities as Current or Non-current
In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to
specify the requirements for classifying liabilities as current or
non-current. The amendments clarify:
· What is meant by a right to defer settlement;
· That a right to defer must exist at the end of the
reporting period;
· That classification is unaffected by the likelihood
that an entity will exercise its deferral right;
· That only if an embedded derivative in a convertible
liability is itself an equity instrument would the terms of a liability not
impact its classification.
These amendments are effective for annual periods beginning on or after 1
January 2023 and are applied retrospectively. The Group is currently assessing
the possible impact the amendments will have on current liabilities and
whether existing loan agreements may require renegotiation.
Definition of Accounting Estimates - Amendments to IAS 8
In February 2021, the IASB issued amendments to IAS 8, in which it introduces
a definition of 'accounting estimates. The amendments clarify the distinction
between changes in accounting estimates and changes in accounting policies and
the correction of errors. It also explains how organizations use measurement
methods and inputs to develop accounting estimates.
The amendments are effective for annual reporting periods beginning on or
after 1 January 2023 and apply to changes in accounting policies and changes
in accounting estimates that occur on or after the start of that period. Early
application is permitted and must be disclosed.
These amendments are not expected to have an impact on the Group.
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice
Statement 2
In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice
Statement 2 Making Materiality Judgments, which provide guidance and examples
to help entities apply materiality judgments to accounting policy disclosures.
The amendments should help entities disclose more useful information about
accounting policies by replacing the requirement for entities to disclose
"significant accounting policies" with a requirement to disclose "material
accounting policy information", and by adding guidance on how entities should
apply materiality judgements to disclosure of accounting policies.
The amendments to IAS 1 apply for annual periods beginning on or after 1
January 2023, early application is permitted. Since the amendments to the
Practice Statement 2 provide non-mandatory guidance on the application of the
definition of material to accounting policy information, an effective date for
these amendments is not necessary.
The Group is currently assessing the impact these amendments.
4 Summary of significant accounting policies
4.1 Basis of preparation
The consolidated financial statements of the Group and the Company financial
statements have been prepared in accordance with UK-adopted International
Accounting Standards in conformity with the requirements of the Companies Act
2006.
These financial statements have been prepared under the historical cost
convention. The accounting policies have been applied consistently throughout
the Group for the purposes of preparation of these consolidated financial
statements.
4.2 Presentation of financial statements
The consolidated financial statements are presented in accordance with IAS 1
Presentation of Financial Statements. The Group has elected to present the
"Consolidated Statement of Profit or Loss" in one statement.
4.3 Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company. Control is achieved where
the Company has all of the following:
· Power over investee;
· Exposure, or rights, to variable returns from its
involvement with the investee;
· The ability to use its power over the investee to
affect the amount of investor's returns.
The results of subsidiaries acquired or disposed of are included in the
Consolidated Statement of Profit or Loss from the effective date of
acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies in line with those used by
other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated in
full on consolidation.
Non-controlling interests in the net assets of consolidated subsidiaries are
identified separately from the Group's equity therein. Non-controlling
interests consist of the amount of those interests at the date of the original
business combination and the non-controlling party's share of changes in
equity since the date of the combination.
4.4 Business combinations
The Group applies the acquisition method in accounting for business
combinations. The consideration transferred by the Group to obtain control of
a subsidiary is calculated as the sum of the acquisition-date fair values of
assets transferred, liabilities incurred, and the equity interests issued by
the Group, which includes the fair value of any asset or liability arising
from a contingent consideration arrangement. Acquisition costs are expensed as
incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a
business combination regardless of whether they have been previously
recognised in the acquiree's financial statements prior to the acquisition.
Assets acquired and liabilities assumed are generally measured at their
acquisition-date fair values.
Goodwill is stated after separate recognition of identifiable intangible
assets. It is calculated as the excess of the sum of a) fair value of
consideration transferred, b) the recognised amount of any non-controlling
interest in the acquiree and c) acquisition-date fair value of any existing
equity interest in the acquiree, over the acquisition-date fair values of
identifiable net assets. If the fair values of identifiable net assets exceed
the sum calculated above, the excess amount (i.e. gain on a bargain purchase)
is recognised as a profit or loss immediately.
In a business combination achieved in stages, the Group re-measure its
previously held equity interest in the acquiree at its acquisition-date fair
value and recognise the resulting gain or loss, if any, in profit or loss or
other comprehensive income, as appropriate.
4.5 Foreign currencies
Functional and presentation currency
The individual financial statements of each group entity are prepared in the
currency of the primary economic environment in which the entity operates
("the functional currency"). The consolidated financial statements are
presented in GBP, which is the functional and the presentation currency of the
Company.
Transaction 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 profit or
loss.
Non-monetary items that are measured in terms of historical cost in a foreign
currency are not retranslated.
Group companies
The results and financial position of all the Group entities (none of which
has the currency of a hyperinflationary economy) that have a functional
currency different from the presentation currency are translated into the
presentation currency as follows:
• assets and liabilities for each statement of financial position presented
are translated at the closing rate at the date of that statement of financial
position;
• income and expenses for each Statement of Profit or Loss are translated at
average exchange rates (unless this average is not a reasonable approximation
of the cumulative effect of the rates prevailing on the transaction dates, in
which case income and expenses are translated at the rate on the dates of the
transactions); and
• all resulting exchange differences are recognised as a separate component
of other comprehensive income.
4.6 Share-based payments
Equity-settled share-based payments to employees and others providing similar
services are measured at the fair value of the equity instrument at the grant
date. Fair value is measured by use of Black Scholes model. The expected life
used in the model has been adjusted, based on management's best estimate, for
the effects of non-transferability, exercise restrictions and behavioural
considerations.
The fair value determined at the grant date of the equity-settled share-based
payments is expensed on a straight-line basis over the vesting period, based
on the Group's estimate of shares that will eventually vest.
Equity-settled share-based payment transactions with other parties are
measured at the fair value of the goods and services received, except where
the fair value cannot be estimated reliably, in which case they are measured
at the fair value of the equity instruments granted, measured at the date the
entity obtains the goods or the counterparty renders the service.
All equity-settled share-based payments are ultimately recognised as an
expense in the profit or loss with a corresponding credit to "Share-based
payments reserve".
Upon exercise of share options, the proceeds received net of attributable
transaction costs are credited to share capital, and where appropriate share
premium. No adjustment is made to any expense recognised in prior periods if
share options ultimately exercised are different to that estimated on vesting
or if the share options vest but are not exercised.
When share options lapse or are forfeited the respective amount recognised in
the Share-based payment reserve is reversed and credited to accumulated profit
and loss reserve.
4.7 Revenue
To determine whether to recognise revenue, the Group follows a 5-step process:
1 Identifying the contract with a customer;
2 Identifying the performance obligations;
3 Determining the transaction price;
4 Allocating the transaction price to the performance obligations;
5 Recognising revenue when/as performance obligation(s) are satisfied.
The Group earns its revenues primarily from the sale of platinum group metals
from the West Kytlim mine. The Company enters into a contract with its main
customer to deliver all mined metals extracted from the mine. There is one
performance obligation under the sales contract, and that is the delivery of
metals. As such, the entire price under the contract is allocated to the
single performance obligation. Revenue is recognised when control over the
metals passes to the customer.
The Group has determined that it is the principal in the sales transactions as
the Group holds the mining license and has the rights to the underlying
resources. The Group controls the sales process, from selecting the customer
to determining sales price.
4.8 Taxation
Income tax expense represents the sum of the tax currently payable and
deferred tax.
Current tax
The tax payable is based on taxable profit for the year. Taxable profit
differs from profit as reported in the statement of comprehensive income
because it excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are never taxable or
deductible. The Group's liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the statement of
financial position date.
Deferred tax
Deferred income tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated financial statements. However,
the deferred income tax is not accounted for if it arises from initial
recognition of goodwill, initial recognition of an asset or liability in a
transaction other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss. Deferred
income tax is determined using tax rates (and laws) that have been enacted or
substantively enacted by the statement of financial position date and are
expected to apply when the related deferred income tax asset is realised, or
the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable
that future taxable profit will be available against which the temporary
differences can be utilised.
Deferred income tax is provided on temporary differences arising on
investments in subsidiaries and associates, except where the timing of the
reversal of the temporary difference is controlled by the Group and it is
probable that the temporary difference will not reverse in the foreseeable
future.
4.9 Property, plant and equipment
Mining assets
Mining assets are stated at cost less accumulated depreciation. Mining assets
include the cost of acquiring and developing mining assets and mineral rights,
buildings, vehicles, plant and machinery and other equipment located on mine
sites and used in the mining operations.
Mining assets, where economic benefits from the asset are consumed in a
pattern which is linked to the production level, are depreciated using a unit
of production method based on the volume of ore reserves. This results in a
depreciation charge proportional to the depletion of reserves
Stripping activity asset costs
In alluvial mining operations, it is necessary to remove overburden and other
waste in order to access or improve access to the ore body. Associated costs
are recognised as a stripping activity asset. A stripping activity asset is
initially measured at cost and subsequently carried at cost or its revalued
amount less depreciation or amortisation and impairment losses.
A stripping activity asset is depreciated or amortised on a systematic basis,
over the expected useful life of the identified component of the ore body that
becomes more accessible as a result of the stripping activity. The units of
production method is used.
Assets under construction
Assets under construction are fixed asset investments that have not been
commissioned by the year-end. The expenses associated with acquisition,
building, delivery and other allowed expenses are first capitalised as assets
under construction and then, once completed, depreciated over their useful
life.
Other assets
Freehold properties held for administrative purposes, are stated in the
statement of financial position at cost.
Fixtures and equipment are stated at cost less accumulated depreciation and
any accumulated impairment losses.
Depreciation is charged to write off the cost or valuation of assets over
their estimated useful lives, using the straight-line method. The estimated
useful lives, residual values and depreciation method are reviewed at each
year end, with the effect of any changes in estimate accounted for on a
prospective basis.
The estimated useful lives are as follows:
Property 30
years
Plant & machinery 3-30 years
Office, fixture and fittings 3-5 years
The gain or loss arising on the disposal or retirement of an item of property,
plant and equipment is determined as the difference between the sales proceeds
and the carrying amount of the asset and is recognised in profit or loss.
4.10 Intangible assets
Exploration and evaluation of mineral resources
Exploration and evaluation expenditure comprise costs that are directly
attributable to:
· researching and analysing existing exploration data;
· conducting geological studies, exploratory drilling and sampling;
· examining and testing extraction and treatment methods; and/or
· compiling prefeasibility and feasibility studies.
4.11 Investments in subsidiary undertakings
Investments in subsidiaries are measured at cost less accumulated impairment.
The carrying values of non-financial assets are reviewed annually for
impairment when events or changes in circumstances indicate the carrying value
may not be recoverable. The recoverable amount of non-financial assets is the
greater of net selling price and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. For an asset that does not
generate largely independent cash inflows, the recoverable amount is
determined for the cash generating unit to which the asset belongs. If such
indication of impairment exists and where the carrying values exceed the
estimated recoverable amount, the assets or cash generating units are written
down to their recoverable amount. Impairment losses are recognised within
operating loss.
4.12 Impairment testing intangible assets and property, plant and equipment
At each statement of financial position date, the Group reviews the carrying
amounts of the assets to determine whether there is any indication that those
assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where it is not possible to estimate the
recoverable amount of an individual asset, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs. Where a
reasonable and consistent basis of allocation can be identified, corporate
assets are also allocated to individual cash-generating units, or otherwise
they are allocated to the smallest group of cash-generating units for which a
reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet
available for use are tested for impairment annually, and whenever there is an
indication that the asset may be impaired.
In assessing whether an impairment is required, the carrying value of the
asset is compared with its recoverable amount. The recoverable amount is the
higher of the fair value less costs of disposal (FVLCD) and value in use
(VIU).The FVLCD is estimated based on future discounted cash flows expected to
be generated from the continued use of the asset, including any expansion
prospects and eventual disposal, using market-based commodity prices, exchange
assumptions, estimated quantities of recoverable minerals, production levels,
operating costs and capital requirements based on the latest Life of mine
plans. These cash flows were discounted using a real post-tax discount rate
that reflect the current market assessments of time value of money.
Value in use is determined as the present value of the estimated cash flows
expected to arse from continued use in its current form and eventual disposal.
Value in use cannot take into consideration future development. The
assumptions used in the calculation are often different than those used in a
FVLCD and therefore is likely to yield a different result.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount. An impairment
loss is recognised immediately in profit or loss, unless the relevant asset is
carried at a revalued amount, in which case the impairment loss is treated as
a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognised for the asset (cash-generating unit) in prior years.
A reversal of an impairment loss of the assets is recognised immediately in
profit or loss, unless the relevant asset is carried at a revalued amount, in
which case the reversal of the impairment loss is treated as a revaluation
increase.
4.13 Inventories
Inventories are measured at the lower of cost and net realisable value. The
cost of inventories is based on the first-in first-out principle, and includes
expenditure incurred in acquiring the inventories, production or conversion
costs and other costs incurred in bringing them to their existing location and
condition. In the case of manufactured inventories and work in progress, cost
includes an appropriate share of production overheads based on normal
operating capacity.
Net realisable value is the estimated selling price in the ordinary course of
business, less the estimated costs of completion and selling expenses.
4.14 Cash
Cash and cash equivalents comprise cash balances, call deposits and highly
liquid investments with maturities of three months or less from the
acquisition date that are subject to insignificant risk of changes in their
fair value.
4.15 Financial instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group
becomes a party to the contractual provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash
flows from the financial asset expire, or when the financial asset and
substantially all the risks and rewards are transferred.
A financial liability is derecognised when it is extinguished, discharged,
cancelled or expires.
Classification and initial 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).
Financial instruments, other than those designated and effective as hedging
instruments, are classified into the following categories:
• amortised cost
• fair value through profit or loss (FVTPL)
• fair value through other comprehensive income (FVOCI).
The classification is determined by both:
• the entity's business model for managing the financial asset
• the contractual cash flow characteristics of the financial asset.
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 impairment of trade receivables which is presented
within other expenses.
Subsequent measurement of 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 FVTPL):
• 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 as well as listed bonds.
Financial assets at fair value through profit or loss (FVTPL)
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 FVTPL. All derivative financial instruments fall
into this category, except for those designated and effective as hedging
instruments, for which the hedge accounting requirements apply. The category
also contains an equity investment. Assets in this category are measured at
fair value with gains or losses recognised in profit or loss.
The fair values of financial assets in this category are determined by
reference to active market transactions or using a valuation technique where
no active market exists.
Financial assets at fair value through other comprehensive income (FVOCI)
The Group accounts for financial assets at FVOCI if the assets meet the
following conditions:
• they are held under a business model whose objective it is "hold to
collect" the associated cash flows and sell and
• 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.
Any gains or losses recognised in other comprehensive income (OCI) will be
recycled upon derecognition of the asset.
Impairment of financial assets
IFRS 9's impairment requirements use more forward-looking information to
recognise expected credit losses - the 'expected credit loss (ECL) model'.
Instruments within the scope of the new requirements included loans and other
debt-type financial assets measured at amortised cost and FVOCI, trade
receivables, contract assets recognised and measured under IFRS 15 and loan
commitments and some financial guarantee contracts (for the issuer) that are
not measured at fair value through profit or loss.
Recognition of credit losses is no longer dependent on the Group first
identifying a credit loss event. Instead 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').
'Stage 3' would cover financial assets that have objective evidence of
impairment at the reporting date.
'12-month expected credit losses' are recognised for the first category while
'lifetime expected credit losses' are recognised for the second category.
Measurement of the expected credit losses is determined by a
probability-weighted estimate of credit losses over the expected life of the
financial instrument.
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting for trade and other
receivables as well as contract assets and records the loss allowance as
lifetime expected credit losses. These are the expected shortfalls in
contractual cash flows, considering the potential for default at any point
during the life of the financial instrument. In calculating, the Group uses
its historical experience, external indicators and forward-looking information
to calculate the expected credit losses using a provision matrix.
The Group assess impairment of trade receivables on a collective basis as they
possess shared credit risk characteristics they have been grouped based on the
days past due.
Borrowings
Amounts borrowed from third parties are recorded initially at fair value,
being the amount received under the agreements less issuance costs, and
subsequently measure at amortised cost using an effective interest rate. There
are times when there are conversion options included in the Group's borrowing
agreements. The conversion options are analysed under IAS 32 - Financial
Instruments: presentation to determine the proper classification. If the
option is determined to be equity, the fair value of the conversion option is
included in other reserves, with the fair value of the liability portion being
recorded as a liability with interest accruing under the effective interest
rate. If the conversion option is determined to be a liability, it is treated
as a derivative financial instrument measured at fair value through profit or
loss.
When a conversion option is exercised, the fair value of the shares issued is
recorded in share capital and share premium. The amortised carrying value of
the liability portion is extinguished. If the conversion option is an equity
instrument, this is closed to retained earnings. If the conversion option is a
liability component, it is extinguished. Any difference between the carrying
value of the liability and the conversion option and the fair value of share
issued is taken to the profit and loss as gain or loss on extinguishment.
If debt agreements are modified, any difference between the fair value of the
original debt and the modified debt is included as a gain or loss on
modification. If the modification is significant, this is considered an
extinguishment of the old debt and recognition of new debt.
Warrants
The Company will issue warrants in association with debt and equity issuances
and as compensation to suppliers or vendors in exchange for services. These
are determined to be equity instruments. When warrants are issued with debt or
as compensation to suppliers or vendors, the value of the warrants are
included within the share-based payments reserve that sits within the other
reserve. When warrants are issued together with equity issuances any fair
value associated with these are recognised when the warrants are exercised
within share premium. On exercise of the warrants, the value of the warrants
will be transferred from other reserves to the profit and loss reserve as
applicable.
4.16 Provisions
A provision is recognised if, as a result of a past event, the Group has a
present legal or constructive obligation that can be estimated reliably, and
it is probable that an outflow of economic benefits will be required to settle
the obligation. Provisions are determined by discounting the expected future
cash flows at a pre-tax rate that reflects current market assessments of the
time value of money and the risks specific to the liability. The unwinding of
the discount is recognised as finance cost.
Environmental protection, rehabilitation and closure costs
Provision is made for close down, restoration and environmental rehabilitation
costs (which include the dismantling and demolition of infrastructure, removal
of residual materials and remediation of disturbed areas) in the financial
period when the related environmental disturbance occurs, based on the
estimated future costs using information available at the reporting date. The
provision is discounted using a discount rate equal to yield to maturity of
relevant state bonds and the unwinding of the discount is included in interest
expense.
The provision is reviewed on an annual basis for changes to obligations,
legislation or discount rates that impact estimated costs or lives of
operations.
4.17 Leases
The Group as lessee
The Group assesses whether a contract is or contains a lease, at inception of
the contract. The Group recognises a right-of-use asset and a corresponding
lease liability with respect to all lease arrangements in which it is the
lessee, except for short-term leases (defined as leases with a lease term of
12 months or less) and leases of low value assets (such as tablets and
personal computers, small items of office furniture and telephones). For these
leases, the Group recognises the lease payments as an operating expense on a
straight-line basis over the term of the lease unless another systematic basis
is more representative of the time pattern in which economic benefits from the
leased assets are consumed.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted by using the
rate implicit in the lease. If this rate cannot be readily determined, the
Group uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
Fixed lease payments (including in-substance fixed payments), less any lease
incentives receivable;
Variable lease payments that depend on an index or rate, initially measured
using the index or rate at the commencement date;
The amount expected to be payable by the lessee under residual value
guarantees;
The exercise price of purchase options, if the lessee is reasonably certain to
exercise the options; and
Payments of penalties for terminating the lease, if the lease term reflects
the exercise of an option to terminate the lease.
The lease liability is presented as a separate line in the consolidated
statement of financial position.
The lease liability is subsequently measured by increasing the carrying amount
to reflect interest on the lease liability (using the effective interest
method) and by reducing the carrying amount to reflect the lease payments
made.
The Group remeasures the lease liability (and makes a corresponding adjustment
to the related right-of-use asset) whenever:
The lease term has changed or there is a significant event or change in
circumstances resulting in a change in the assessment of exercise of a
purchase option, in which case the lease liability is remeasured by
discounting the revised lease payments using a revised discount rate.
The lease payments change due to changes in an index or rate or a change in
expected payment under a guaranteed residual value, in which cases the lease
liability is remeasured by discounting the revised lease payments using an
unchanged discount rate (unless the lease payments change is due to a change
in a floating interest rate, in which case a revised discount rate is used).
The Group did not make any such adjustments during the periods presented.
The right-of-use assets comprise the initial measurement of the corresponding
lease liability, lease payments made at or before the commencement day, less
any lease incentives received and any initial direct costs. They are
subsequently measured at cost less accumulated depreciation and impairment
losses.
Whenever the Group incurs an obligation for costs to dismantle and remove a
leased asset, restore the site on which it is located or restore the
underlying asset to the condition required by the terms and conditions of the
lease, a provision is recognised and measured under IAS 37. To the extent that
the costs relate to a right-of-use asset, the costs are included in the
related right-of-use asset, unless those costs are incurred to produce
inventories.
Right-of-use assets are depreciated over the shorter period of lease term and
useful life of the underlying asset. If a lease transfers ownership of the
underlying asset or the cost of the right-of-use asset reflects that the Group
expects to exercise a purchase option, the related right-of-use asset is
depreciated over the useful life of the underlying asset. The depreciation
starts at the commencement date of the lease.
The right-of-use assets are presented within property plant and equipment in
the consolidated statement of financial position.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired
and accounts for any identified impairment loss as described in the
'Impairment testing intangible assets and property, plant and equipment'
policy.
4.18 Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the Chief Operating Decision-Maker. The Chief Operating
Decision-Maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Executive
Directors of the Group that make the operating decisions.
5 Critical accounting judgements and key sources of estimation uncertainty
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
5.1 Key sources of estimation uncertainty
The following are the key assumptions / uncertainties at the statement of
financial position date, which have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next
financial year.
5.1.1 Provision for environmental rehabilitation
Provision is made for close down, restoration and environmental rehabilitation
costs based on the estimated future costs using information available at the
reporting date. Costs are estimated based on the observable local prices, fees
and already agreed contract for specific jobs. The provision is discounted
using a risk-free discount rate from 6.99% to 8.31% attributed to the Russian
Federal bonds with corresponding maturity.
5.1.2 Impairment review of the mining assets
The impairment assessment of the West Kytlim mining asset was performed by
calculating the higher of fair value less cost of disposal and value in use
and compared against the carrying value of the mining assets. Projected cash
flows from 2023 to 2043were used to assess the fair value less costs of
disposal. The chosen period is consistent with the quantity of the approved
reserves and resources and available for mining operations. No impairment has
been recognised.
Assumptions used throughout 20232-2043:
Pt grade 0.454g/tonne
Process recovery 89.7%
Platinum/Gold price $1,172-1,381/oz / $1,825/oz
Post-tax discount rate 7.74%
5.1.3 Impairment review of the intangible asset
Intangible asset represents the Monchetundra development and
Nittis-Kumuzhya-Travyanaya (the "NKT") exploration and evaluation assets. NKT,
previously referred to as The Monchetundra Flanks, is a northeast extension of
the Monchetundra mineralisation. Monchetundra has been assessed as an
economically viable asset for the purpose of preparing and submitting a
Definitive Feasibility Study for the mines development. Parameters of the
assessment have been evaluated by an expert panel of mining industry
professionals and are being regularly evaluated by the Company for signs which
can trigger impairment of the asset. The NKT exploration and evaluation asset
falls under the IFRS 6 treatment. There were no indicators of impairment
identified during the course of the year ended 31 December 2022.
5.1.4. Impairment of investments in subsidiary and receivables from subsidiaries
The Company's financial statements, and in particular its investments in and
receivables from subsidiaries, are affected by certain of the critical
accounting judgements and key sources of estimation uncertainty.
The critical estimates and judgments referred to application of the expected
credit loss model to intercompany receivables (note 32). Management determined
that the interest free on demand loans were required to be assessed on the
lifetime expected credit loss approach and assessed scenarios considering
risks of loss events and the amounts which could be realised on the loans. In
doing so, consideration was given to factors such as the cash held by
subsidiaries and the underlying forecasts of the Group's divisions and their
incorporation of prospective risks and uncertainties.
In relation to impairment of investments in subsidiary please refer to Note
4.11.
6 Segmental information
During the year under review management identified the Group consisting of
separate segments:
West Kytlim Monchetundra Corporate and other segments Total
Geographical location Urals Mountains, Russia Kola Peninsula, Russia London, UK
Activity Operating mine and revenue generating unit Licenced mining project Management and investment
2022 £ £ £ £
Non-current assets 9,726,366 2,797,496 4,439,688 16,963,550
Total assets 16,948,963 3,237,597 5,146,999 25,333,559
Total liability 2,397,851 51,042 472,951 2,921,844
Revenue 119,525 - - 119,525
Loss for the year (4,397,875) 87,385 (2,919,598) (7,230,088)
2021 £ £ £ £
Non-current assets 5,362,684 1,376,006 719,969 7,458,659
Total assets 6,730,257 1,546,716 22,917,064 31,194,037
Total liability 826,471 15,653 306,692 1,148,816
Revenue 2,331,225 - - 2,331,225
Loss for the year (621,695) (145,502) (2,371,324) (3,138,521)
7 Employees
Average number of staff (excluding Non-Executive Directors) employed
throughout the year was as follows:
2022 2021
By the Company 4 4
By the Group 116 74
8 Revenue
Disaggregation of by primary markets is as follows:
Year to 31 December 2022 Year to 31 December 2021
Group Company Group Company
£ £ £ £
Revenue from sale of platinum and other precious metals 61,075 - 2,331,225 -
Revenue from management services - 120,000 - 120,000
Revenue from other services 58,450 - - -
119,525 120,000 2,331,225 120,000
Disaggregation of revenue from contracts with customers:
Year to 31 December 2022 Year to 31 December 2021
Group Company Group Company
Russia Cyprus Russia Cyprus
£ £ £ £
Revenue from external customers
- Sale of platinum and other precious metals 61,075 - 2,331,225 -
- Other services 58,450 - - -
Revenue from related parties
- Management services - 120,000 - 120,000
119,525 120,000 2,331,225 120,000
Timing of revenue recognition
At a point of time 119,525 - 2,331,225 -
Over time - 120,000 - 120,000
119,525 120,000 2,331,225 120,000
There was no sale of PGM concentrate from the 2022 mining season at West
Kytlim. Revenue recognised in 2021 relates to the sale of PGM concentrate from
the West Kytlim mine to a single customer "Ekaterinburg Non-ferrous Metals
Refinery", being the only regional refinery, processing platinum group metals
and being duly licenced to deal with precious metals.
9 Profit/(loss) for the year
Profit/(loss) for the year has been arrived at after charging:
Year to 31 December 2022 Year to 31 December 2021
Group Company Group Company
£ £ £ £
Cost of sales (30,173) - (2,584,680) -
Administrative expenses (4,618,351) (2,223,300) (2,717,765) (2,296,563)
Cost of sales includes:
Staff benefits expenses - - 433,872 -
Depreciation* - - 421,987 -
Administration expenses include:
Staff benefits expenses 1,174,636 823,106 1,517,088 1,275,474
Depreciation* 8,602 385 765 702
Audit fees payable 145,000 145,000 110,000 110,000
Mineral extraction tax** 1,953,851 - 149,918 -
Staff benefits expense:
Wages, salaries and Directors' fees (note 29) 1,073,952 804,174 1,958,156 1,253,471
Social security costs 99,364 17,592 196,319 20,684
Other short-term benefits 1,321 1,321 1,319 1,319
1,174,637 823,087 2,155,794 1,275,474
* Total depreciation for the year ended 31 December 2022 was £1,006,210
(2021: £422,588)
** Mineral extraction tax contains a provision of £1,652,122 reflecting a
recent change to mineral tax legislation and its application to the product of
the West Kytlim mine. This is made as a conservative measure as the Group is
taking the necessary steps to have the decision reconsidered.
10 Finance cost
Year to 31 December 2022 Year to 31 December 2021
Group Company Group Company
£ £ £ £
Interest on obligations under finance leases 90,446 - 101,048 -
Unwinding of discounts on provisions 17,251 - 2,397 -
107,697 - 103,445 -
11 Other gains and losses
Year to 31 December 2022 Year to 31 December 2021
Group Company Group Company
£ £ £ £
Gains
Net foreign exchange gain 182,640 - - -
Gain on disposal of property, plant and equipment 4,952 - - -
187,592 - - -
Losses
Net foreign exchange loss - (64,219) (65,250) (26,576)
Loss on revaluation of stock to net realisable value (2,028,151) - - -
Impairment loss on investments (814,158) (389,292) - -
(2,842,309) (453,511) (65,250) (26,576)
The majority of the foreign exchange gains and losses are a result of the
revaluation of monetary assets and liabilities in the subsidiary accounts as a
result of movements in the Rouble exchange rates.
In 2022 the Group took a decision to postpone the sale of platinum and other
metals due to a strong Ruble and low platinum price. Stock available at 31
December 2022 represents platinum concentrate ready for refining, which was
valued (i) using methodology set in the refining and sale and purchase
agreement made with local refinery in 2021 and (ii) exchange rate and metal
prices at 31 December 2022.
The Group recognised an impairment loss on (i) the investment made to build a
joint venture with Rosgeo (Note 15) due to uncertainty of any near-term
development in that regard due to limitations enforced by current sanctions
legislation (ii) a loss on an investment in to a UK "waste to electricity"
project the company decided not to immediately carry through to binding
agreements.
12 Income taxes
(a) tax charged in the statement of profit and loss
Year to Year to
31 December 2022 31 December 2021
Group Group
£ £
Current tax - -
There was no tax payable by the Company for the year ended 31 December 2022
(2021: nil) due to the Company having taxable losses.
(b) Reconciliation of the total tax charge
Year to Year to
31 December 2022 31 December 2021
Group Group
£ £
Loss before tax (7,230,088) (3,182,199)
Current tax at 19% (2021: 19%) (1,373,717) (604,618)
Adjusted for the effect of:
Expenses not deductible for tax purposes - -
Profits not subject to tax - -
Tax losses utilised - -
Unrecognised tax losses carried forward 1,373,717 604,618
Actual tax expense - -
The Group operates in the following jurisdictions with the following
applicable tax rates:
Jurisdiction Year to Year to
31 December 2022 31 December 2021
United Kingdom 19% 19%
Russia 20% 20%
Cyprus 12.5% 12.5%
No tax is payable for the year ended 31 December 2022 (2021: nil) due to the
Group and the Company having taxable losses.
13 Property, plant and equipment
(a) Group property, plant and equipment
Mining asset Stripping asset Property Plant and machinery Right of use assets Office fixture and fittings Total
£ £ £ £ £ £
Cost
Balance at 1 January 2021 3,704,511 148,618 23,037 483,147 682,691 10,142 5,052,146
Additions 64,371 609,968 - 622,745 - 1,729 1,298,813
Disposals - - - (2,834) - (868) (3,702)
Transferred to inventory - (149,882) - - - - (149,882)
Exchange differences 35,380 1,264 56 4,106 5,802 66 46,674
Balance at 31 December 2021 3,804,262 609,968 23,093 1,107,164 688,493 11,069 6,244,049
Additions 49,950 2,391,500 - - 2,477 2,443,927
Transfer from assets under construction - - - 4,776,644 - - 4,776,644
Disposals - - - (61,910) - (2,389) (64,299)
Transferred to inventory - (2,365,988) - - - - (2,365,988)
Exchange differences 527,350 81,689 883 148,276 92,206 1,175 851,579
Balance at 31 December 2022 4,381,562 717,169 23,976 5,970,174 780,699 12,332 11,885,912
Depreciation
Balance at 1 January 2021 (561,978) - (1,048) (92,612) (92,277) (8,323) (756,238)
Disposals - 2,834 - 868 3,702
Depreciation expense (127,280) - (87) (156,536) (137,699) (1,150) (422,752)
Exchange differences (5,372) - (10) (787) (784) (65) (7,018)
Balance at 31 December 2021 (694,630) - (1,145) (247,101) (230,760) (8,670) (1,182,306)
Disposals - - - 61,910 - 2,389 64,299
Depreciation expense (81,361) - (99) (766,873) (156,139) (1,738) (1,006,210)
Exchange differences (96,354) - (153) (33,093) (30,904) (960) (161,464)
Balance at 31 December 2022 (872,345) - (1,397) (985,157) (417,803) (8,979) (2,285,681)
Carrying amount:
at 31 December 2022 3,509,217 717,169 22,579 4,985,017 362,896 3,353 9,600,231
at 31 December 2021 3,109,632 609,968 21,948 860,063 457,733 2,399 5,061,743
The Group's right of use assets represents plant and machinery type assets
acquired under lease terms (note 26).
The stripping asset is also a component of the mining assets; however, this is
being shown separate from the mining assets for presentational purposes. There
was no depreciation of the stripping asset in the current period.
(b) Assets in the course of construction
2022 2021
£ £
Cost
Balance at 1 January 640,423 28,957
Additions 4,746,479 611,220
Commissioned assets (4,776,644) -
Exchange differences 85,768 246
Balance at 31 December 696,026 640,423
Assets in the course of construction represent the Group's investment in the
asset taken time to construct and bring into operation. Such items include
powerline, dragline and field workers' camp structures.
(c) Company's office fixture and fittings
2022 2021
£ £
Cost
Balance at 1 January 2,298 2,298
Additions - -
Disposal - -
Balance at 31 December 2,298 2,298
Depreciation
Balance at 1 January (1,494) (791)
Depreciation expense (385) (703)
Disposals - -
Balance at 31 December (1,879) (1,494)
419 804
Carrying amount
The Company's property, plant and equipment are free from any mortgage or
charge.
14 Intangible assets
In 2022 intangible assets represented only capitalised costs associated with
the Group's exploration, evaluation and development of mineral resources.
2022 2021
£ £
Cost
Balance at 1 January 1,389,029 696,504
Additions 1,239,085 682,420
Exchange differences 231,254 10,105
Balance at 31 December 2,859,368 1,389,029
At 31 December 2022 and 31 December 2021, the Group's intangible asset
consisted of the Monchetundra development and Nittis-Kumuzhya-Travyanaya (the
"NKT") exploration and evaluation assets.
The Company did not directly own any intangible assets at 31 December 2022
(2021: nil)
No impairment loss has been recognised in 2022 (2021: nil)
15 Investment to potential share in joint venture
In 2021 the Group entered into an agreement with Rosgeo a Russian registered
and state funded exploration Company, to set up a series of joint ventures.
The Rosgeo agreement allowed the Group to gain a 75% equity stake in several
new assets with the remaining 25% equity stakes to be held by Rosgeo.
In 2021 the Company invested RUB37,180,000 (£367,464 at a prevailing exchange
rate at the transaction date). Owing to the uncertainty of any near-term
development in that regard due principally to limitations enforced by current
sanctions legislation the Group had made provision for impairment loss on this
investment in full.
16 Subsidiaries
Details of the Company's subsidiaries at 31 December 2022 are as follows:
Name of subsidiary Place of incorporation Proportion of ordinary shares held Principal activity
Urals Alluvial Platinum Limited Cyprus 100% Holding Company
ZAO Eurasia Mining Service Russia 100% Holding Company
ZAO Kosvinsky Kamen Russia 68% Mineral Evaluation
ZAO Terskaya Mining Company Russia 80% Mineral Evaluation
ZAO Yuksporskaya Mining Company Russia 100% Mineral Evaluation
OOO Kola Mining Russia 100% Mineral Evaluation
OOO Kola Nickel Russia 100% Mineral Evaluation
Eurasia Mining (UK) Limited UK 100% Dormant company
The Company's investments in subsidiaries presented on the basis of direct
equity interest and represent the following:
2022 2021
£ £
Investment in subsidiaries (i) 1,132,246 1,132,246
1,132,246 1,132,246
Investment in subsidiaries represents the Company investments made into its
100% subsidiary Urals Alluvial Platinum Limited (the "UAP"), which in turn
controls other subsidiaries within the Group.
Subsidiaries with material non-controlling interests ("NCI")
Summary of non-controlling interest
2022 2021
£ £
As at 1 January (1,950,049) (1,758,862)
Loss attributable to NCI (1,389,843) (228,042)
Exchange differences (61,656) 36,856
As at 31 December (3,401,548) (1,950,049)
Non-controlling interest on subsidiary basis
2022 2021
£ £
ZAO Kosvinsky Kamen (2,702,482) (1,218,383)
ZAO Terskaya Mining Company (699,066) (731,666)
(3,401,548) (1,950,049)
ZAO Kosvinsky Kamen
2022 2021
£ £
Non-current assets 9,726,366 5,362,684
Current assets 7,222,597 1,367,573
Total assets 16,948,963 6,730,257
Non-current liabilities 21,083,191 7,874,026
Current liabilities 2,184,055 570,275
Total liabilities 23,267,246 8,444,301
Net assets (6,318,283) (1,714,044)
Equity attributable to owners of the parent (3,615,801) (495,661)
Non-controlling interests (2,702,482) (1,218,383)
Loss for the year attributable to owners of the parent (3,053,367) (449,647)
Loss for the year attributable to NCI (1,407,320) (198,942)
Loss for the year (4,460,687) (648,589)
Total comprehensive expense for the year attributable to owners of the parent (3,120,140) (367,601)
Total comprehensive expense for the year attributable to NCI (1,484,099) (163,234)
Total comprehensive expense for the year (4,604,239) (530,835)
ZAO Terskaya Mining Company
2022 2021
£ £
Non-current assets 2,797,496 1,376,006
Current assets 440,101 170,710
Total assets 3,237,597 1,546,716
Non-current liabilities 3,073,744 2,097,248
Current liabilities 776,399 66,434
Total liabilities 3,850,143 2,163,682
Net assets (612,546) (616,966)
Equity attributable to owners of the parent 86,520 114,700
Non-controlling interests (699,066) (731,666)
Profit (loss) for the year attributable to owners of the parent 69,908 (116,402)
Profit (loss) for the year attributable to NCI 17,477 (29,100)
Profit (loss) for the year 87,385 (145,502)
Total comprehensive expense for the year attributable to owners of the parent (28,180) (121,793)
Total comprehensive income (expense) for the year attributable to NCI 32,600 (27,953)
Total comprehensive income (expense) for the year 4,420 (149,746)
17 Financial assets
2022 2021
Group Company Group Company
£ £ £ £
Non-current
Financial assets at amortised cost:
US treasury notes 3,807,925 3,807,925 - -
3,807,925 3,807,925 - -
US treasury notes return interest of 1.25% to 2.125% per annum payable
semi-annually, and mature between August and October 2024.
18 Other financial assets
2022 2021
Group Company Group Company
£ £ £ £
Current
Advances to related parties - 28,157,840 - 12,681,450
- 28,157,840 - 12,681,450
The maximum exposure to credit risk at the reporting date is the carrying
value of each class of assets mentioned above.
The Group has assessed the estimated credit losses of these loans and given
the effective interest rate of the loans is 0%, there would be an immaterial
loss expected on these loans.
Amounts due from related parties are non-interest bearing and are repayable on
demand. Advances made in 2022 were used to acquire earth moving machineries,
fund mine operating cost and exploration programme.
19 Inventories
2022 2021
Group Company Group Company
£ £ £ £
Platinum concentrate 4,131,104 - -
Stores 51,278 - 38,673 -
4,182,382 - 38,673 -
Platinum Concentrate is the PGM and gold bearing concentrate produced at the
West Kytlim Mine for full year 2022 which was held in stock at 31 December
2022 ready for later refining. Inventories held by the Group are stated at the
lower of cost and net realisable value.
20 Trade and other receivables
2022 2021
Group Company Group Company
£ £ £ £
Trade receivables - - 480,588 -
Advances made* 822,280 - 520,385 -
Prepayments 135,447 128,425 140,335 134,661
VAT recoverable 1,942,410 97,817 361,906 25,796
Other receivables 271,532 171,529 178,652 120,000
Due from related parties - 36,269 - 28,028
3,171,669 434,040 1,681,864 308,485
* The Group had made several advances to and down payments to secure new earth
moving machinery to be acquired for the West Kytlim mine.
The fair value of trade and other receivables is not materially different to
the carrying values presented. None of the receivables are provided as
security or past due.
21 Cash and cash equivalents
2022 2021
Group Company Group Company
£ £ £ £
Cash at bank 1,009,908 136,733 22,009,507 21,892,793
1,009,908 136,733 22,009,507 21,892,793
All amounts are short -term. The carrying value of cash and cash equivalents
is considered a reasonable approximation of fair value.
22 Issued capital
2022 2021
Issued and fully paid ordinary shares
with a nominal value of 0.1p
Number 2,853,559,995 2,853,559,995
Nominal value (£) 2,853,560 2,853,560
Issued and fully paid deferred shares
with a nominal value of 4.9p
Number 143,377,203 143,377,203
Nominal value (£) 7,025,483 7,025,483
Share premium
Value (£) 51,308,068 51,308,068
Total issued capital (£) 61,187,111 61,187,111
Fully paid ordinary shares carry one vote per share and carry the right to
dividends.
Deferred shares have attached to them the following rights and restrictions:
- they do not entitle the holders to receive any dividends and distributions;
- they do not entitle the holders to receive notice or to attend or vote at
General Meetings of the Company;
- on return of capital on a winding up the holders of the deferred shares are
only entitled to receive the amount paid up on such shares after the holders
of the ordinary shares have received the sum of 0.1p for each ordinary share
held by them and do not have any other right to participate in the assets of
the Company.
No shares were issued in 2022.
Issue of ordinary share capital in 2021:
Price Number Nominal value
in pence per share £
As at 1 January 2021 2,758,701,681 2,758,702
20-May-2021 - Share placing for cash 26.5 53,306,751 53,307
20-September-2021 - Share placing for cash 26.0 41,551,563 41,551
94,858,314 94,858
As at 31 December 2021 2,853,559,995 2,853,560
23 Share based payments
Share options and warrants outstanding at the end of the year have the
following expiry date and exercise prices:
Expiry date Exercise price in pence per share Number of options as at Number of options as at
31 December 2022 31 December 2021
Share options
02 November 2023 0.42 55,000,000 55,000,000
02 November 2023 0.60 40,000,000 40,000,000
02 November 2023 0.90 35,000,000 35,000,000
Weighted average exercise price 0.60 130,000,000 130,000,000
Warrants
20 May 2024 26.5 53,306,751 53,306,751
23 September 2024 26.0 41,551,563 41,551,563
Weighted average exercise price 26.28 94,858,314 94,858,314
Total contingently issuable shares 224,858,314 224,858,314
at 31 December
All the listed options and warrants were exercisable as at 31 December 2022
(2021 - all).
Share options
Movement in number of share options outstanding and their related weighted
average exercise prices are as follows:
(Price expressed in pence per share) 2022 2021
Average exercise price No. of share options Average exercise price No. of share options
Share options
At 1 January 0.60 130,000,000 0.60 130,000,000
At 31 December 0.60 130,000,000 0.60 130,000,000
No options were granted by the Group in 2022 (2021 - nil) to the Directors,
Group employees and consultants to the Group. 21,000,000 options have been
authorised in 2018 to be granted at later date. No amounts are paid or payable
by the recipient on receipt of the option. The options carry neither right to
dividends nor voting rights. Options may be exercised at any time from the
vesting date to the date of their expiry. The Group has no legal or
constructive obligation to repurchase or settle the options in cash.
Out of 173,000,000 options granted by the Group in 2018:
- 72,000,000 options issued with exercise price of 0.42p and
vested on the issue date.
- 53,000,000 options issued with exercise price of 0.6p and were
due to vest at the date when VWAP has been 0.6 p or above for 10 consecutive
days, or at the latest 31 December 2018. Options vested on 22 November 2018.
- 48,000,000 options issued with exercise price of 0.9p vesting at
the date when VWAP has been 0.9 p or above for 10 consecutive days, or at the
latest 30 June 2019. Options vested on 30 June 2019.
All options granted in 2018 were due to expire on 02 November 2022 and were
extended to 02 November 2023.
Warrants
No warrants were granted by the Group in 2022 (94,838,314 warrants were
granted by the Group in 2021).
Movement in number of warrants outstanding and their related weighted average
exercise prices are as follows:
(Price expressed in pence per share) 2022 2021
Average exercise price No. of warrants Average exercise price No. of warrants
Warrants
At 1 January 26.28 94,858,314 - -
Granted - - 26.5 53,306,751
Granted - - 26.0 41,551,563
At 31 December 26.28 94,858,314 26.28 94,858,314
24 Other reserves
2022 2021
Group Company Group Company
£ £ £ £
Capital redemption reserve 3,539,906 3,539,906 3,539,906 3,539,906
Foreign currency translation reserve:
At 1 January (1,335) - 57,344 -
Recognised in the period (341,762) - (58,679) -
At 31 December (343,097) - (1,335) -
Share-based payments reserve:
At 1 January 384,120 384,120 384,120 418,181
Recognised in the period - - - (18,483)
Utilised on exercise of warrants - - - (15,578)
At 31 December 384,120 384,120 384,120 384,120
3,580,929 3,924,026 3,922,691 3,924,026
The capital redemption reserve was created as a result of a share capital
restructure in earlier years.
The foreign currency translation reserve represents exchange differences
relating to the translation from the functional currencies of the Group's
foreign subsidiaries into GBP.
The share-based payments reserve represents (i) reserve arisen on the grant of
share options to employees under the employee share option plan and (ii)
reserve arisen on the grant of warrants under terms of professional service
agreements and/or issued under terms of financing arrangements.
25 Borrowings
2022 2021
Group Company Group Company
£ £ £ £
Current borrowings
Unsecured loan - - 31,953 -
- - 31,953 -
In 2017 the Group entered into unsecured loan facility to borrow up to 57
million RUB at 14% per annum, from Region Metal, the then contractor and the
West Kytlim mine operator. The Group had drawn RR 4.18 million and repaid
RR0.9 million by 31 December 2021. As the contractor's arrangements have been
discontinued the Group has no intention to utilise any more funds from this
facility. The loan was due for repayment in 2021 but the Group received a
court order not to repay the loan due to ongoing court arbitrage between the
lender and its creditors.
The Group is not a party of this arbitrage and/or not linked to any party. The
loan was repaid in full in 2022.
26 Lease liabilities
Leases
The Group leases certain of its plant and equipment. The average lease term is
2.5 years (2021: 3.5 years). The Group has option to purchase the equipment
for a nominal amount at the maturity of the finance lease. The Group's
obligation under finance leases are secured by the lessor's title to the
leased assets.
Interest rates underlying all obligations under finance leases are fixed at
respective contract dates ranging from 21.9% to 23.5% per annum.
Minimum lease payments Present value of minimum lease payments
2022 2021 2022 2021
£ £ £ £
Less than one year 224,700 200,633 167,071 122,407
Between one and five years 202,820 377,027 181,198 307,136
More than five years - - - -
427,520 577,660 348,269 429,543
Less future finance charges (79,251) (148,117) - -
Present value of minimum lease payments 348,269 429,543 348,269 429,543
Reconciliation of movements in lease liabilities
2022 2021
Group Company Group Company
£ £ £ £
At 1 January 429,543 - 526,929 -
Interest accrued 90,446 - 101,048 -
Interest paid in cash (90,446) - (101,048) -
Principle paid in cash (141,528) - (101,674) -
Exchange differences 60,254 - 4,288 -
At 31 December 348,269 - 429,543 -
27 Trade and other payables
2022 2021
Group Company Group Company
£ £ £ £
Trade payables 270,214 - 210,665 -
Accruals 1,825,269 159,583 161,035 121,565
Social security and other taxes 46,460 7,998 18,751 4,965
Other payables 88,936 268,962 96,107 149,159
2,230,879 436,543 486,558 275,689
The fair value of trade and other payables is not materially different to the
carrying values presented. The above listed payables were all unsecured.
28 Provisions
2022 2021
£ £
Long term provision:
Environment rehabilitation 254,218 143,268
Short term provision:
Environment rehabilitation 88,478 57,494
342,696 200,762
Movement in provision is as follows
2022 2021
£ £
At 1 January 200,762 52,137
Recognised in the period 54.612 138,020
Results of re-measurement or settlement without cost 45,446 7,487
Unwinding of discount and effect of changes in the discount rate 17,251 2,397
Exchange differences 24,625 721
At 31 December 342,696 200,762
Provision is made for the cost of restoration and environmental rehabilitation
of the land disturbed by the West Kytlim mining operations, based on the
estimated future costs using information available at the reporting date.
The provision is discounted using a risk-free discount rate of from 6.99% to
8.31% (2021: 8.39% to 8.66%) depending on the commitment terms, attributed to
the Russian Federal Bonds.
Provision is estimated based on the sub-areas within general West Kytlim
mining licence the Company has carried down its operations on by the end of
the reporting period. Timing is stipulated by the forestry permits issued at
the pre-mining stage for each of sub-areas. Short term provision relates to
technical and biological recultivation and forest compensation to be completed
by the end of financial year end 2023.
29 Related party transactions
Transactions with subsidiaries
In the normal course of business, the Company provides funding to its
subsidiaries for reinvestment into exploration projects.
2022 2021
£ £
Receivables from subsidiaries 36,269 28,028
Loans provided to subsidiaries 28,157,840 12,681,450
Service charges to subsidiary 120,000 120,000
The amounts owed by subsidiaries are unsecured and receivable on demand.
Transactions with key management personnel
The Group considers that the key management personnel are the Directors of the
Company.
The following amounts were paid and/or accrued to the Directors of the Company
who held office at 31 December 2022:
2022 2021
£ £
Short-term benefits 580,194 638,288
580,194 638,288
The remuneration of the Directors is determined by the remuneration committee
having regard to the performance of individuals and market trends. No pension
contribution has been made for the Directors in 2022 (2021: nil).
An analysis of remuneration for each Director of the Company during 2022:
Name Position Salaries, bonuses and allowances Directors fees Payment to entity controlled by director Total
£ £ £ £
C. Schaffalitzky Executive Chairman 120,000 - - 120,000
J. Nieuwenhuys Executive Director 180,000 - - 180,000
T. Abdikeev Non-Executive Director 90,000 26,250 - 116,250
I. Rawlinson Non-Executive Director - 55,000 - 55,000
K. Kosaka Non-Executive Director 15,000 45,000 - 60,000
A. Matyushok Non-Executive Director - 27,944 21,000 48,944
405,000 154,194 21,000 580,194
30 Loss per share
Basic loss per share is calculated by dividing the loss attributable to equity
holders of the Company by the weighted average number of ordinary shares in
issue during the year.
2022 2021
£ £
Loss attributable to equity holders of the Company (6,045,421) (2,910,479)
Weighted average number of ordinary shares in issue 2,853,559,995 2,803,433,563
Basic loss per share (pence) (0.22) (0.10)
Potential number of shares that could be issued following exercise of share
options or warrants:
Number of exercisable instruments: 2022 2021
£ £
Share options 130,000,000 130,000,000
Warrants 94,858,314 94,858,314
224,858,314 224,858,314
There is no dilutive effect of share options or warrants (2021: nil) as the
Group was in a loss position.
31 Commitments
At the time of the award of the Monchetundra mining license a royalty payment
was calculated by the Russian Federal Reserves Commission. 20% of this payment
was paid in December of 2018 and the remaining 80%, or RUB16.68 mln
(approximately £187,000) to be paid by November 2023.
During 2020 the Group entered into several lease agreements to lease mining
plant and equipment. As at 31 December 2022 the average lease term was 2.5
years and present value of minimum lease payments £348,269 (2021: £429,543).
The Group has no other material commitments.
32 Risk management objectives and policies
Financial risk management objectives
The Group's operations are limited at present to investing in entities that
undertake mineral exploration. All investments in exploration are capitalised
on project basis, which are funded by shareholders funds and fixed rate
borrowings. The Group's activities expose it to a variety of financial risks
including currency, fair value and liquidity risk. The Group seeks to minimise
the effect of these risks on a daily basis, though due to its limited
activities the Group has not applied policy of using any financial instruments
to hedge these risks exposures.
Risk management is carried out by the Company under close board supervision.
Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk
arising from various currency exposures, primarily with respect to US Dollars
and Russian Roubles. Foreign exchange risk arises from future commercial
transactions, recognised assets and liabilities and net investments in foreign
operations. The Group's policy is not to enter into currency hedging
transactions.
The following significant exchange rates have been applied during the year:
GBP Average rate Reporting date spot rate
2022 2021 2022 2021
USD 1.238 1.376 1.204 1.348
RUB 87.51 101.37 89.23 101.18
Sensitivity analysis
A reasonably possible strengthening (weakening) of the USD and RUB, as
indicated below, against GBP at 31 December would have affected the
measurement of financial instruments denominated in a foreign currency and
affected equity and profit or loss before taxes by the amounts shown below.
The analysis assumes that all other variables, in particular interest rates,
remain constant and ignores any impact of forecast sales and purchases.
Strengthening Weakening
Equity Profit or loss Equity Profit or loss
£ £ £ £
31 December 2022
USD (5% movement) 89,077 (22,834) (80,597) 20,660
RUB (5% movement) 387,517 266,807 (350,616) (241,394)
Strengthening Weakening
Equity Profit or loss Equity Profit or loss
£ £ £ £
31 December 2021
USD (5% movement) 100,534 69,642 (90,957) (63,013)
RUB (5% movement) 111,281 43,678 (100,700) (39,523)
Interest rate risk
The Group has investment into US treasury notes returning fixed interest of
1.25% to 2.125% per cent per annum payable semi-annually, and mature between
August and October 2024. The group's operating cash flows dependent on changes
in note price prevailing on the time of selling the notes for cash prior to
maturity date.
The Group has lease liabilities disclosed in the notes 26. All lease
liabilities are at a fixed rate of interest.
Fair values
In the opinion of the Directors, there is no significant difference between
the fair values of the Group's and the Company's assets and liabilities and
their carrying values.
Credit risk
The Group's exposure to credit risk is limited to the carrying amount of
financial assets recognised at the consolidated statement of financial
position date, as summarised below:
2022 2021
Group Company Group Company
£ £ £ £
Non-current financial assets 3,807,925 - - -
Current loans and advances - 28,157,840 - 12,681,450
Trade and other receivables 3,171,669 434,040 1,681,864 275,689
Cash and cash equivalents 1,009,908 136,733 22,009,507 21,892,793
7,989,502 28,728,613 23,691,371 34,849,932
The Group's risk on cash at bank is mitigated by holding of the majority of
funds at "A" rated bank.
No significant amounts are held at banks rated less than "B". Cash is held
either on current account or on short-term deposit at floating rate. Interest
is determined by the relevant prevailing base rate. The fair value of cash and
cash equivalents at 31 December 2022 are not materially different from its
carrying value.
Recoverability of the loans is dependent on the borrower's ability to
transform them into cash generating units through discovery of economically
recoverable reserves and their development into profitable production.
The Company continuously monitors defaults by the counterparties, identified
either individually or by group, and incorporates this information into its
credit risk control. Management considers that all of the above financial
assets that are not impaired are of good credit quality.
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the board of
Directors, which has built an appropriate liquidity risk management framework
for the management of the Group's short, medium and long term funding and
liquidity management requirements. The Group manages liquidity risk by
maintaining adequate reserves, borrowing facilities, cash and cash equivalent
by continuously monitoring forecast and actual cash flows and matching the
maturity profiles of financial assets and liabilities.
The following table details the Group's remaining contractual maturity for its
non-derivative financial liabilities.
Current Non-current
within 1 to 2 later
12 months years than 2 years
£ £ £
2022
Lease liabilities 224,700 202,820 -
Trade and other payables 2,230,879 - -
2,455,579 202,820 -
2021
Borrowings 31,953 - -
Lease liabilities 200,633 377,027 -
Trade and other payables 486,558 - -
719,144 377,027 -
The following table details the Company's remaining contractual maturity for
its non-derivative financial liabilities.
Current Non-current
within 1 to 2 later
12 months years than 2 years
£ £ £
2022
Trade and other payables 436,543 - -
436,543 - -
2021
Trade and other payables 275,689 - -
275,689 - -
The tables above have been drawn up based on the undiscounted cash flows of
financial liabilities based on the earliest date on which the Group can be
required to pay. The table includes both interest and principal cash flows.
The contractual maturities reflect the gross cash flows, which may differ to
the carrying values of the liabilities at the statement of financial position
date.
Capital risk
At present the Group's capital management objective is to ensure the Group's
ability to continue as a going concern.
Capital is monitored on the basis of its carrying amount and summarised as
follows:
2022 2021
Group Company Group Company
£ £ £ £
Total borrowings 348,269 - 461,496 -
Less cash and cash equivalents (1,009,908) (136,733) (22,009,507) (21,892,793)
Net debt - - - -
Total equity 25,813,263 33,232,660 31,995,270 35,740,089
Total capital 25,813,263 33,232,660 31,995,270 35,740,089
Gearing 0% 0% 0% 0%
Capital structure is managed depending on economic conditions and risk
characteristics of underlying assets. In order to maintain or adjust capital
structure, the Group may issue new shares and debt financial instruments or
sell assets to reduce debt.
33 Events after the statement of financial position date
The Group's assets are located in Russia. In 2022 additional sanctions to
those which had existed since 2014 were imposed on certain activities,
entities and individuals connected with Russia, which continue to evolve and
which are being carefully monitored by the Group in accordance with the
Group's sanctions compliance policy, and with the assistance of its external
legal advisers. The Company has satisfied itself that neither of its current
activities at the West Kytlim Mine or on the Kola Peninsula are prohibited
under UK or EU sanctions rules. Furthermore, the Group does not engage and has
not engaged with any sanctioned persons/ entities or agencies.
To date there has been no significant impact on the Group's activities as a
result of recent updates to the UK and EU sanctions legislation. Sanctions
introduced by the Russian Federal government have also not affected the Group,
although this is being closely monitored. The Group closely monitors all
regulatory requirements and changes to the laws, rules and regulations, taking
steps whenever necessary to ensure compliance with new legislation.
There have been no further adjusting events after the statement of financial
position.
Notice of 2022 Annual General Meeting
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Eurasia Mining Plc,
('AGM'), (company number 03010091), will be held virtually via an electronic
meeting platform on 26 July 2023 at 09:00am, to consider the below
resolutions.
Annual Report for the year ended 31 December 2022
The Company's full Annual Report including the audited financial statements to
year end 31 December 2022 is now available for download at the following
address: https://www.eurasiamining.co.uk/investors/financial-reports and will
be posted, along with notice of AGM and form of proxy to those of our members
electing to receive paper format notifications.
Please note that this notice is important and requires your immediate
attention. If you are in any doubt as to the action to be taken, please
consult an independent adviser immediately. If you have sold or transferred
or otherwise intend to sell or transfer all of your holding of ordinary shares
in the Company prior to the record date (as described in Note 1) for the
meeting, you should send this document to the (intended) purchaser or
transferee, or to the stockbroker, bank or other agent through whom the sale
or transfer was or is to be effected for transmission to the (intended)
purchaser or transferee.
Voting on the resolutions will be available electronically during the meeting
for those wishing to virtually attend the meeting via the electronic meeting
platform, however the Company would still encourage shareholders to exercise
their votes by submitting their proxy appointment electronically or by post in
advance of the meeting. Lodging of a proxy will not preclude shareholders from
attending and voting virtually via the electronic meeting platform. A vote
submitted during the meeting will override a vote submitted in advance by
proxy, further details below.
The formal business of the (AGM) will be to consider and vote on the
resolutions set out in this notice of meeting. Shareholders wishing to vote,
or appoint the Chairman of the meeting as proxy, on any of the matters of
business may do so electronically at www.signalshares.com
(http://WWW.SIGNALSHARES.COM) , or by following instructions in Note 2 below.
A form of proxy is available at the Company's website
(https://www.eurasiamining.co.uk/investors/circulars-notices
(https://www.eurasiamining.co.uk/investors/circulars-notices) ), or can be
requested from the Company's registrar ("Registrar"), and must be completed
and submitted in accordance with the instructions thereon to be received by
the Registrar before 09:00 am on 24 July 2023. Further information on voting
procedures follow the resolutions below. Queries regarding these procedures
may be directed to info@eurasiamining.co.uk or the Company's registrars, Link
Group, https://www.linkgroup.eu/get-in-touch/shareholders-in-uk-companies/
(https://www.linkgroup.eu/get-in-touch/shareholders-in-uk-companies/) ;
telephone number: 0371 664 0300 from the United Kingdom and +44 371 664 0300
from overseas.
Shareholders who wish to attend the annual general meeting virtually will be
able to attend, ask questions and vote in real time via the electronic meeting
platform, Lumi (see note 14 for more details).
The following resolutions will be proposed at the AGM, Resolutions 1 to 6 to
be proposed as ordinary resolutions and Resolutions 7 and 8 to be proposed as
special resolutions.
Ordinary Resolutions
To consider, and if thought fit, pass the following resolutions as ordinary
resolutions:
1. To receive and consider the audited accounts for the
period ended 31 December 2022 together with the Directors' and the auditors'
reports therein.
2. To re-appoint Grant Thornton LLP as auditors of the
Company.
3. To authorise the Directors to determine the remuneration
of the auditors of the Company.
4. To re-appoint Christian Schaffalitzky as executive
Chairman, who retires for reappointment in accordance with Article 47.1.2 of
the Company's Articles of Association.
5. To re-appoint David Iain Rawlinson as a Non-Executive
Director, who retires in accordance with Article 47.1.2 of the Company's
Articles of Association.
6. That, in accordance with section 551 of the Companies Act
2006, the Directors be generally and unconditionally authorised to allot
shares in the Company or grant rights to subscribe for or to convert any
security into shares in the Company ("Rights") up to an aggregate nominal
amount of £500,000 provided that this authority shall, unless renewed, varied
or revoked by the Company, expire at the earlier of 18 months and the end of
the next Annual General Meeting of the Company to be held after the date on
which this resolution is passed, save that the Company may, before expiry,
make an offer or agreement which would or might require shares to be allotted,
or Rights to be granted and the Directors may allot shares or grant Rights in
pursuance of such offer or agreement notwithstanding that the authority
conferred by this resolution has expired. This authority is in substitution
for all previous authorities conferred on the Directors in accordance with
section 551 of the 2006 Act, but without prejudice to any allotment of equity
securities already made or agreed to be made pursuant to this authority.
Special Resolutions
To consider, and if thought fit, pass the following resolutions as special
resolutions:
7. That, subject to the passing of resolution 6, the
Directors be given the general power to allot equity securities pursuant to
section 570 (as defined by section 560 of the 2006 Act) for cash, either
pursuant to the authority conferred by resolution 6 or by way of a sale of
treasury shares, as if section 561(1) of the 2006 Act did not apply to any
such allotment, provided that this power shall be limited to the allotment of
equity securities up to an aggregate nominal amount of £500,000.
The power granted by this resolution will expire on the earlier of 18 months
and conclusion of the Company's next annual general meeting (unless renewed,
varied or revoked by the Company prior to or on that date) save that the
Company may, before this expiry, make offers or agreements which would or
might require equity securities to be allotted after the expiry and the
Directors may allot equity securities in pursuance of any offer or agreement
notwithstanding that the power conferred by this resolution has expired.
This resolution revokes and replaces all unexercised powers previously granted
to the Directors to allot equity securities as if section 561(1) of the 2006
Act did not apply, but without prejudice to any allotment of equity securities
already made or agreed to be made pursuant to this authority.
8. To authorise the Directors, in accordance with the Company's Articles
of Association, to call a general meeting of the Company, other than an annual
general meeting, on not less than 14 clear days' notice.
Notice of Meeting Notes:
The following notes explain your general rights as a shareholder and your
right to attend, ask questions and vote electronically at this Meeting or to
appoint someone else to vote on your behalf.
1. To be entitled to attend, ask questions or
vote electronically at the Annual General Meeting (and for the purpose of the
determination by the Company of the number of votes they may cast),
shareholders must be registered in the Register of Members of the Company at
close of trading on 24 July 2023. Changes to the Register of Members after the
relevant deadline shall be disregarded in determining the rights of any person
to vote at the AGM.
2. You can vote, or appoint a proxy, by:
· logging on to the Registrar's website at
www.signalshares.com and following the instructions;
· through your relevant Nominee account platform - Please
note:
§ the Registrar will only accept voting instructions from the legal holder of
a shareholding.
§ Nominee providers may require voting instructions to be submitted by their
clients up to one week in advance of the Registrar/Company's submission
deadline;
· by requesting a hard copy Form of Proxy directly from
Link Group by telephoning 0371 664 0300 (calls are charged at the standard
geographic rate and will vary by provider. Calls outside the United Kingdom
will be charged at the applicable international rate. Lines are open 09:00 am
to 5.30pm Monday to Friday, excluding public holidays in England and Wales);
The form of proxy can also be downloaded and printed from the Eurasia Mining
website - https://www.eurasiamining.co.uk/investors/circulars-notices
(https://www.eurasiamining.co.uk/investors/circulars-notices) .
· In the case of CREST members, by utilising the CREST
electronic voting and proxy appointment service in accordance with the
procedures set out in 7, 8 and 9 below.
· If you are an institutional investor you may also be
able to appoint a proxy electronically via the Proxymity platform, a process
which has been agreed by the Company and approved by the Registrar. For
further information regarding Proxymity, please go to www.proxymity.io. Your
proxy must be lodged by 09:00 am on 24 July 2023 in order to be considered
valid or, if the meeting is adjourned, by the time which is 48 hours before
the time of the adjourned meeting. Before you can appoint a proxy via this
process you will need to have agreed to Proxymity's associated terms and
conditions. It is important that you read these carefully as you will be bound
by them and they will govern the electronic appointment of your proxy. An
electronic proxy appointment via the Proxymity platform may be revoked
completely by sending an authenticated message via the platform instructing
the removal of your proxy vote.
In order for a proxy appointment to be valid, it must be received,
electronically or by post by the Registrar at:
Link Group,
PXS1,
Central Square,
29 Wellington Street,
Leeds,
LS1 4DL.
During normal business hours by 09:00 am on 24 July 2023 or, in the event of
any adjournment of the meeting, 48 hours before the time of the adjourned
meeting).
3. A vote withheld is not a vote in law, which means
that the vote will not be counted in the calculation of votes for or against
the resolution. If no voting indication is given, your proxy will vote or
abstain from voting at his or her discretion. Your proxy will vote (or abstain
from voting) as he or she thinks fit in relation to any other matter which is
put before the Meeting.
4. If you return more than one proxy appointment, either
by paper or electronic communication, the appointment received last by the
Registrar before the latest time for the receipt of proxies will take
precedence. You are advised to read the terms and conditions of use carefully.
Electronic communication facilities are open to all shareholders and those who
use them will not be disadvantaged.
5. The return of a completed form of proxy, electronic
filing or any CREST Proxy Instruction will not prevent a shareholder from
attending the meeting and voting electronically, if he/she wishes to do so.
6. CREST members who wish to appoint a proxy or proxies
through the CREST electronic proxy appointment service may do so for the
Meeting (and any adjournment of the Meeting) by using the procedures described
in the CREST Manual (available from www.euroclear.com). CREST Personal
Members or other CREST sponsored members, and those CREST members who have
appointed a service provider(s), should refer to their CREST sponsor or voting
service provider(s), who will be able to take the appropriate action on their
behalf.
7. In order for a proxy appointment or instruction made
by means of CREST to be valid, the appropriate CREST message (a 'CREST Proxy
Instruction') must be properly authenticated in accordance with Euroclear UK
& Ireland Limited's specifications and must contain the information
required for such instructions, as described in the CREST Manual. The message
must be transmitted so as to be received by the issuer's agent (ID RA10)
by 09:00 am on 24 July 2023 (being not less than 48 hours before the time for
the holding of the meeting or any adjourned meeting). For this purpose, the
time of receipt will be taken to mean the time (as determined by the timestamp
applied to the message by the CREST application host) from which the issuer's
agent is able to retrieve the message by enquiry to CREST in the manner
prescribed by CREST. After this time, any change of instructions to proxies
appointed through CREST should be communicated to the appointee through other
means.
8. CREST members and, where applicable, their CREST
sponsors or voting service providers should note that Euroclear UK &
International Limited does not make available special procedures in CREST for
any particular message. Normal system timings and limitations will, therefore,
apply in relation to the input of CREST Proxy Instructions. It is the
responsibility of the CREST member concerned to take (or, if the CREST member
is a CREST personal member, or sponsored member, or has appointed a voting
service provider(s), to procure that his CREST sponsor or voting service
provider(s) take(s)) such action as shall be necessary to ensure that a
message is transmitted by means of the CREST system by any particular time. In
this connection, CREST members and, where applicable, their CREST sponsors or
voting system providers are referred, in particular, to those sections of the
CREST Manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the
circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities
Regulations 2001.
9. Any corporation which is a shareholder can appoint
one or more corporate representatives who may exercise on its behalf all of
its powers as a shareholder provided that no more than one corporate
representative exercises powers in relation to the same shares.
10. As at 30 June 2023 (being the latest practicable
business day prior to the publication of this Notice), the Company's ordinary
issued share capital consists of 2,858,559,995 ordinary shares, carrying one
vote each. Therefore, the total voting rights in the Company as at 30 June
2023 are 2,858,559,995.
11. Under Section 527 of the Companies Act 2006,
shareholders meeting the threshold requirements set out in that section have
the right to require the Company to publish on a website a statement setting
out any matter relating to: (i) the audit of the Company's financial
statements (including the Auditor's Report and the conduct of the audit) that
are to be laid before the Meeting; or (ii) any circumstances connected with an
auditor of the Company ceasing to hold office since the previous meeting at
which annual financial statements and reports were laid in accordance with
Section 437 of the Companies Act 2006 (in each case) that the shareholders
propose to raise at the relevant meeting. The Company may not require the
shareholders requesting any such website publication to pay its expenses in
complying with Sections 527 or 528 of the Companies Act 2006. Where the
Company is required to place a statement on a website under Section 527 of the
Companies Act 2006, it must forward the statement to the Company's auditor not
later than the time when it makes the statement available on the website. The
business which may be dealt with at the Meeting for the relevant financial
year includes any statement that the Company has been required under Section
527 of the Companies Act 2006 to publish on a website.
12. You may not use any electronic address (within the
meaning of Section 333(4) of the Companies Act 2006) provided in either this
Notice or any related documents (including the form of proxy) to communicate
with the Company for any purposes other than those expressly stated.
13. A copy of this Notice and any other information required
by Section 311A of the Companies Act 2006, can be found on the Company's
website at www.eurasiamining.co.uk (http://www.eurasiamining.co.uk) .
14. Virtual Meeting Attendance
The Company is pleased to be able to offer facilities for Shareholders to
attend, ask questions and vote at the AGM electronically in real time should
they wish to do so. The details are set out below.
Instructions on how to join the virtual meeting, vote and ask questions via
the video webcast.
Logging in:
In order to join the AGM electronically, vote and ask questions via the
platform, Shareholders will need to connect to the following site
https://web.lumiagm.com (https://web.lumiagm.com) . Lumi is available as a
mobile web client, compatible with the latest browser versions of Chrome,
Firefox, Edge and Safari and can be accessed using any web browser, on a PC or
smartphone device.
Once you have accessed https://web.lumiagm.com from your web browser on a
tablet or Computer, you will be asked to enter the Lumi Meeting ID, which is
156-228-828. You will then be prompted to enter your unique 11 digit Investor
Code (IVC) including any leading zeros and 'PIN'. Your PIN is the last 4
digits of your IVC. This will authenticate you as a shareholder.
For certificated holdings, Your IVC can be found on your share certificate.
Signal Shares users will also find their IVC under 'Manage your account' when
logged in to the Signal Shares portal (www.signalshares.com
(http://www.signalshares.com) ). You can also obtain your IVC by contacting
Link Group, our Registrar, by calling +44 (0) 371 277 1020*
For holdings through Nominee accounts, your Nominee will provide you with a
unique IVC and PIN codes with which to access the meeting, upon request.
Please contact the Corporate Actions team at your Nominee, or login to your
Nominee client account.
Access to the virtual AGM will be available from 30 minutes before meeting
start time, although the voting functionality will not be enabled until the
Chairman of the meeting declares a poll open. During the AGM, you must ensure
you are connected to the internet at all times in order to vote when the
Chairman commences polling on the Resolutions. Therefore, it is your
responsibility to ensure connectivity for the duration of the AGM via your
wi-fi. A user guide to the Lumi platform is available on our website at:
https://www.eurasiamining.co.uk/investors/circulars-notices.
If you wish to appoint a proxy other than the Chair of the meeting and for
them to attend the virtual meeting on your behalf, please submit your proxy
appointment in the usual way before contacting Link Group on +44 (0) 371 277
1020* in order to obtain your appointee's IVC and PIN. It is suggested that
you do this as soon as possible and at least 48 hours (excluding non-business
days) before the meeting.
If your shares are held within a Nominee you should receive further
instructions from your Nominees Corporate Actions teams in due course, or will
be notified through your online Nominee client account/ portal. If you do not
receive a notification please contact your Nominee provider as soon as
possible. Your nominee will need to present a corporate letter of
representation to Link Group, the Company's registrar, as soon as possible and
at least 72 hours (excluding non-business days) before the meeting, in order
that they can obtain for you your unique IVC and PIN to enable you to attend
the virtual meeting.
*Lines are open from 9.00 a.m. to 5.30 p.m. Monday to Friday, calls are
charged at the standard geographic rate and will vary by provider. Calls
outside the UK will be charged at the applicable international rate.
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