REG - Firering Strategic - 2021 Final Results and Notice of AGM
29/06/2022 07:01
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RNS Number : 5178Q Firering Strategic Minerals PLC 29 June 2022
Firering Strategic Minerals plc / EPIC: FRG / Market: AIM / Sector: Mining
29 June 2022
Firering Strategic Minerals plc
("Firering" or "the Company")
2021 Final Results and Notice of AGM
Firering Strategic Minerals plc, an exploration company focusing on critical
minerals, is pleased to release its Final Results for the year ended 31
December 2021. The Company also gives notice that its Annual General Meeting
('AGM') will be held at Hill Dickinson LLP, The Broadgate Tower, 20 Primrose
Street, London EC2A 2EW on 26 July 2022 at 1.00pm BST. The Notice of AGM and
Annual Report & Accounts will be sent to shareholders and will also made
available to download later today on the Company's website www.
(http://www.fireringplc.com) fireringplc (http://www.fireringplc.com) .com
(http://www.fireringplc.com) .
Operational and Corporate Highlights
· Successful listing in November 2021 on the London Stock Exchange's
Alternative Investment Market ("AIM") raising £4 million.
· Appointment of contractors to support a comprehensive exploration
programme at the Atex Lithium-Tantalum Project in Côte d'Ivoire ('Atex' or
'the Project').
· Start of a two-year exploration programme
at Atex Lithium-Tantalum Project to determine the extent and depth of the
potentially lithium bearing pegmatites and define potential coltan resources
with the arrival of the first auger drill on site in December 2021.
· Acquisition of 51% of Alliance Minerals Corporation SARL issued share
capital expanding the Company's mineralised footprint and consolidating its
position in this region of Cote d'Ivoire.
Post Period Highlights
· Completion of first phase of exploration work, which included
detailed geological mapping of the Atex licence area, auger drilling,
trenching and soil sampling at, around and along strike from Spodumene Hill
confirming a pegmatite zone of at least 13 km x 4 km (NNE-SSW-oriented field),
much larger than anticipated.
· Appointment of Diamond Drilling Contractor to spearhead core drilling
campaign at Atex targeting the pegmatites.
· Commencement of drilling programme at Atex in late June 2022.
· Acquisition of Toura Nickel-Cobalt Licence, Côte d'Ivoire, which is
in line with the Company's strategy to focus on critical metals.
Yuval Cohen, Chief Executive of Firering, said:
"The last seven months have been transformational for the Company. The funds
raised when we listed in November 2021 have been instrumental to the
significant progress made on the ground. We wasted no time in putting these
funds to good use by engaging contractors and starting, what will be a
two-year long exploration campaign at Atex.
"Auger drilling, soil sampling and mapping work completed during these last
seven months confirmed what we suspected: the presence of a much larger
pegmatite field and the potential for a significant lithium resource. Looking
ahead, the Company is now commencing the first of two planned diamond drilling
campaigns targeting these pegmatites. Demand for our metals, particularly
lithium, continues to grow, led by the EV market. We remain well positioned to
capitalise on this demand and very much look forward to a busy and successful
2022."
Chairman's Statement
It is safe to say that 2021 was the most pivotal and momentous year yet in our
short life, since Firering was founded in 2019. We spent the majority of 2021
preparing for our listing on AIM in November 2021 and our life as a public
company got off to a flying start, raising £4 million to fund our flagship
Atex Lithium-Tantalum Project.
Our successful debut in London was a clear reflection of the whetted appetite
investors now have for strategic minerals crucial for the Net Zero transition
including lithium, nickel, tantalum and niobium. Cote d'Ivoire is an African
nation which is underexplored but offers huge mineral potential with a stable
government and strong rule of law.
Swiftly in the wake of our successful IPO, we pushed ahead with a two-year
exploration campaign at our flagship Atex Lithium-Tantalum Project, which
included detailed geological mapping of the Atex licence area, auger drilling,
and trenching and soil sampling at and along strike from Spodumene Hill
confirming a pegmatite zone of at least 13 km x 4 km (NNE-SSW-oriented field),
much larger than anticipated. This marked a follow up from our exploratory
work at Atex conducted earlier in 2021, where grab samples showed high-grade
lithium oxide up to 4.91% and tantalum up to 1,610 ppm.
Phase 1 of our inaugural drilling programme at Atex marked a huge milestone
for us - starting off, in December 2021, with an auger drilling campaign
carried out by Royal Mining and which was completed during Q1 2022. This is
now being followed by the commencement of a 3,000m core drilling campaign in
July 2022 carried out by FOREMI. A Phase 2 campaign is planned for later in
2022. This work will help determine the extent and depth of the pegmatites at
Atex and assist in defining a maiden lithium and coltan resource. A total of
2,579 metres of auger drilling were completed and 2,814 samples were sent to
Intertek Laboratories in Yamoussoukro and Perth for sample preparation and
assaying. Assay and geological mapping results were used to define the diamond
drill targets.
Intertek assay results confirmed the presence of pegmatite mineralisation,
reinforcing the board's firm belief that Atex has the potential to become
Africa's next significant lithium pegmatite and coltan resource.
On 9 December 2021, we finalised the acquisition of 51% of Alliance Minerals
Corporation SARL ("Alliance") for FCFA150,000,000 (€230,000) - securing a
controlling stake in the licence application adjacent to Atex, which is
partially contiguous. This 365 km2 area helps to consolidate our position and
offers the potential of an extension to the Atex pegmatites or a secondary
deposit.
Although our focus is on Atex for now, Firering has other licences under
application throughout the underexplored Cote d'Ivoire, which when granted,
will be pursued in the future. A plethora of other new and exciting
opportunities in the strategic metals space exists across the country, which
Firering is actively exploring. Building a strong portfolio of producing
mineral assets in West Africa is our core aim.
There is no doubt that the transition to clean energy is the immediate future,
driven by an increasing demand in battery-powered vehicles and the
implementation of clean energy technologies. And, as a result, the world will
see an increase in demand for critical minerals such as lithium, tantalum,
nickel and niobium to help build the necessary infrastructure and green
technology to deliver this urgent transition to a cleaner, zero carbon future.
Firering hopes to play a key role in this transition and we look forward to
updating the market on our successful exploration at Atex and in our
additional licence areas.
Youval Rasin
Non-Executive Chairman
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 December
2021 2020
Note Euros in thousands
CURRENT ASSETS
Cash and cash equivalents 3,384 380
Other receivables 30 1
Total current assets 3,414 381
NON-CURRENT ASSETS
Intangible assets 7 2,073 642
Property, plant and equipment 8 305 314
Total non-current assets 2,378 956
Total assets 5,792 1,337
The accompanying notes form an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 December
2021 2020
Note Euros in thousands
CURRENT LIABILITIES
Trade payables 150 14
Other payables 102 442
Convertible loan notes 9 - 723
Lease liabilities - 21
Capital note 214 475
Total current liabilities 466 1,675
NON-CURRENT LIABILITIES
Accrued severance pay, net 8 -
Capital notes 10 514 -
Loan from non-controlling interest in subsidiary 11 92 (*)218
Liability to non-controlling interest in subsidiary 6 130 -
Total non-current liabilities 744 218
Total liabilities 1,210 1,893
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE 12
COMPANY
Share capital 87 1
Share premium 6,878 -
Warrants 20 -
Accumulated deficit (2,973) (697)
Shares to be issued - 50
Capital reserve 327 -
4,339 (646)
Non-controlling interests 243 90
Total equity 4,582 (556)
Total liabilities and equity 5,792 1,377
(*) Reclassified
The accompanying notes form an integral part of the consolidated financial
statements.
June 28, 2022.
Date of approval of the financial statements Yuval Rasin Yuval Cohen Timothy Daniel
Director and Chief Executive Officer CEO CFO
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year ended 31 December
Note 2021 2020
Note Euros in thousands (except per share amounts)
General and administrative expenses 13 (929) (491)
Operating loss (929) (491)
Financial expenses 14 (1,373) (7)
Loss before taxes on income (2,302) (498)
Taxes on income 15 - -
Net loss (2,302) (498)
Other comprehensive loss - (8)
Total comprehensive loss (2,302) (506)
Net loss attributable to:
Equity holders of the Company (2,276) (454)
Non-controlling interests (26) (44)
(2,302) (498)
Total comprehensive loss attributable to:
Equity holders of the Company (2,276) (462)
Non-controlling interests (26) (44)
(2,302) (506)
Loss per share (euro) 16 (0.06) (0.00)
The accompanying notes form an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
Share Shares to be issued Reserves (*) Aaccumulated deficit Total Non-controlling interests Total
capital Share Premium Equity
Warrants
Euros in thousands
As at 1 January 2020 1 - - 50 (235) (184) 134 (50)
Loss for the period - - - - (454) (454) (44) (498)
Other comprehensive income - - - - (8) (8) - (8)
As at 31 December 2020 1 50 (697) (646) 90 (556)
Loss for the period - - - - (2,276) (2,276) (26) (2,302)
Issuance of shares (Note 15) 71 3,962 20 (50) 4,003 4,003
Conversion to equity of convertible loan notes (Note 10) 15 - - - - 2,231 - 2,231
2,216
Share-based compensation (Note 12) - 700 - - - 700 - 700
Contribution to equity - - - - 327 327 31 358
(Note 11)
Non-controlling interests arising from initially consolidated subsidiary (Note - - - - - - - 148 148
6)
As at 31 December 2021 87 6,878 20 - 327 (2,973) 4,339 243 4,582
(*) See Note 12d for details of reserves.
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended 31 December
2021 2020
Euros in thousands
Cash flows from operating activities:
Net loss (2,302) (498)
Adjustments to the profit or loss items:
Depreciation 151 82
Share-based compensation 700 -
Accrued interest on convertible loan notes 111 -
Change in fair value of conversion option of convertible loan notes 669 -
Accrued interest on capital note and Loans from non-controlling interest in 17 -
subsidiary
Decrease (Increase) in other receivables (29) -
Increase (decrease) in trade payables 145 -
Increase (decrease) in other payables (156) 273
Increase in severance pay 8 -
1,616 355
Net cash used in operating activities (686) (143)
Cash flows from investing activities:
Net cash outflow from acquisition of subsidiaries (289) -
Additions to property, plant and equipment (142) (70)
Additions to intangible assets (863) (87)
Net cash used in Investing activities (1,294) (157)
Cash flows from financing activities:
Issuance of shares 4,004 -
Payments on leases (8)
Proceed (Repayment) of loans from shareholders 254 (35)
Proceeds from the issue of convertible loans 726 723
Net cash provided by financing activities 4,984 680
Net change in cash and cash equivalents 3,004 380
Cash and cash equivalents at beginning of year 380 -
Cash and cash equivalents at end of year 3,384 380
Supplemental disclosure of non-cash activities:
Issuance of shares in consideration for conversion of convertible loan notes 2,231
Discount on loans from shareholders and non-controlling interests accounted 358
for as contributions to equity
The accompanying notes are an integral part of the consolidated financial
statements.
NOTE 1:- GENERAL INFORMATION
Firering Strategic Minerals PLC (formerly "Firering Holdings Limited") ("The
Company") is a holding company for a group of exploration and development
companies set up to focus on developing assets towards the ethical production
of critical metals. The Company was incorporated on 8 May 2019 in Cyprus. The
address of its registered office is Ioanni Stylianou 6, 2(nd) Floor, Office
202, 2003, Nicosia, Cyprus.
The Company owns 75% of the issued share capital of Bri Coltan SARL ("Bri
Coltan") a company incorporated in Cote d'Ivoire. The principal activity of
the subsidiary is the exploration and development of mineral projects (in
particular, columbite- tantalite).
On 1 March 2021, the Company purchased 51% of the issued share capital of Atex
Mining Resources SARL ("Atex") a company incorporated in Cote d'Ivoire. The
principal activity of Atex is the exploration and development of mineral
projects (in particular, lithium and columbite-tantalite). Details of the
acquisition are set out in Note 6.
On 22 November 2021, the Company purchased 80% of the issued share capital of
Alliance Minerals Corporation SARL ("Alliance"). A company incorporated in
Cote d'Ivoire. Alliance holds an exploration license request at an area
bordering Atex. Details of the acquisition are set out in Note 6.
On 12 November 2021, the Company completed its Initial Public Offering ("IPO")
and admission to trading on the AIM, a market operated by the London Stock
Exchange ("the AIM"), by issuing 30,769,230 Ordinary shares at a price of £
0.13 per share for a total cash consideration of € 4.68 million (£ 4
million). The net proceeds after expenses were €4.25 million (£ 3.63
million).
Going concern
The Group's operations are at an early stage of development and the continuing
success of the Group will depend on the Group's ability to manage its mineral
projects. Presently, the Group has no projects producing positive cash flow
and the Group is likely to remain cash flow negative in the near future. The
Group's ultimate success will depend on its ability to generate positive cash
flow from active mining operations in the future and its ability to secure
external funding for its development requirements. However, there is no
assurance that the Group will achieve profitability or positive cash flow from
its operating activities,
The Board of Directors and Group management have assessed the ability of the
Group to continue as a going concern. Based on a review of the Group's budget
and forecast cash flows, there is a reasonable expectation that the Group will
have adequate resources to continue in operational existence and meet its
obligations as they become due for at least a period of twelve months from the
date of approval of the financial statements. Thus, the going concern basis of
accounting has continued to be applied in preparing these financial
statements.
NOTE 1:- GENERAL INFORMATION (Cont.)
The recent outbreak of COVID-19 had no significant impact on the Company's
operations during 2021. The outbreak of COVID-19 may resume its negative
effect on economic conditions regionally as well as globally, disrupt
operations situated in countries particularly exposed to the contagion, affect
the Company's suppliers or business practices previously applied by those
entities, or otherwise impact the Company's activities. Governments in
affected countries have imposed travel bans, quarantines and other emergency
public safety measures. Those measures, though apparently temporary in nature,
may continue and increase depending on developments in the COVID-19 pandemic.
The ultimate severity of the COVID-19 outbreak is uncertain at this time and
therefore the Company cannot reasonably estimate the impact it may have on its
end markets and its future revenues, profitability, liquidity and financial
position.
Definitions:
The Company - Firering Strategic Minerals PLC (formerly "Firering Holdings Limited")
Subsidiaries - Companies that are controlled by the Company - Bri Coltan SARL; Atex Mining -
Resources SARL & Alliance Minerals Corporation SARL
The Group - The Company and its subsidiaries
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies have been applied consistently in the
financial statements for all periods presented, unless otherwise stated.
a. Basis of preparation of the financial statements
These financial statements of the Company have been prepared in accordance
with International Financial Reporting Standards as adopted by the European
Union ("IFRS").
The financial statements have been prepared on a cost basis, except for
financial liability (embedded loan conversion option) which is presented at
fair value through profit or loss.
The Group has elected to present the profit or loss items using the function
of expense method.
b. Consolidation
Subsidiaries are all entities over which the Group has control.The Group
controls an entity when the Group is exposed to, or has rights to, variable
returns from its involvement with the entity and can affect those returns
through its power over the entity. Subsidiaries are
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
fully consolidated from the date on which control is transferred to the Group.
They are deconsolidated from the date that control ceases.
The financial statements of the Company and of the subsidiaries are prepared
as of the same dates and periods. The consolidated financial statements are
prepared using uniform accounting policies by all companies in the Group.
Significant intragroup balances and transactions and gains or losses resulting
from intragroup transactions are eliminated in full in the consolidated
financial statements.
A change in the ownership interest of a subsidiary, without a change of
control, is accounted for as a change in equity by adjusting the carrying
amount of the non-controlling interests with a corresponding adjustment of the
equity attributable to equity holders of the Company less / plus the
consideration paid or received.
c. Business combinations
The Group applies the acquisition method to account for business combinations.
The consideration transferred for the acquisition of a subsidiary is the fair
values of the assets transferred, the liabilities incurred to the former
owners of the acquiree, and the equity interests issued by the Group. The
consideration transferred includes the fair value of any asset or liability
resulting from a contingent consideration arrangement. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the acquisition
date. The Group recognizes any non-controlling interest in the acquire on an
acquisition-by-acquisition basis, either at fair value or at the
non-controlling interest's proportionate share of the recognized amounts of
acquiree's identifiable net assets.
Direct acquisition costs are recorded in profit or loss as incurred.
d. Functional currency, presentation currency and foreign currency:
1. Functional and presentation currency
The local currency used in Cote d'Ivoire is the West African CFA Franc
("FCFA"), which has a fixed exchange rate with the Euro (Euro 1 = FCFA
655.957). A substantial portion of the Group's expenses and expenditures for
acquisitions is incurred in or linked to the FCFA or the Euro. The Group
obtains certain debt financing in FCFA, or Euro and the funds of the Group are
held in FCFA. Therefore, the Company's management has determined that the Euro
is the currency of the primary economic environment of the Company and its
subsidiaries, and thus its functional currency. The presentation currency is
Euro.
2. Transactions, assets and liabilities in foreign currency
Transactions denominated in foreign currency are recorded upon initial
recognition at the exchange rate at the date of the transaction. After initial
recognition, monetary assets and liabilities denominated in foreign currency
are translated at each reporting date into the functional currency at the
exchange rate at that date. Exchange rate
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
differences, other than those capitalized to qualifying assets or accounted
for as hedging transactions in equity, are recognized in profit or loss.
Non-monetary assets and liabilities denominated in foreign currency and
measured at cost are translated
at the exchange rate at the date of the transaction. Non-monetary assets and
liabilities denominated in foreign currency and measured at fair value are
translated into the functional currency using the exchange rate prevailing at
the date when the fair value was determined.
e. Cash equivalents:
Cash equivalents are considered as highly liquid investments, including
unrestricted short-term bank deposits with an original maturity of three
months or less from the date of investment or with a maturity of more than
three months, but which are redeemable on demand without penalty and which
form part of the Group's cash management.
f. Property, plant and equipment
Property, plant and equipment are measured at cost, including directly
attributable costs, less accumulated depreciation, accumulated impairment
losses and any related investment grants and excluding day-to-day servicing
expenses. Cost includes spare parts and auxiliary equipment that are used in
connection with plant and equipment.
The cost of an item of property, plant and equipment comprises the initial
estimate of the costs of dismantling and removing the item and restoring the
site on which the item is located.
Depreciation is calculated on a straight-line basis over the useful life of
the assets at annual rates as follows:
%
Plant and equipment 18%
Motor vehicles 33%
The useful life, depreciation method and residual value of an asset are
reviewed at least each year-end and any changes are accounted for
prospectively as a change in accounting estimate. Depreciation of assets is
discontinued the earlier of the date on which the asset is classified as held
for sale, or the date on which the asset is derecognized.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
g. Impairment of non-financial assets:
The Group evaluates the need to record an impairment of non-financial assets
whenever events or changes in circumstances indicate that the carrying amount
is not recoverable.
If the carrying amount of non-financial assets exceeds their recoverable
amount, the assets are reduced to their recoverable amount. The recoverable
amount is the higher of fair value less costs of sale and value in use. In
measuring value in use, the expected future cash flows are discounted using a
pre-tax discount rate that reflects the risks specific to the asset. The
recoverable amount of an asset that does not generate independent cash flows
is determined for the cash-generating unit to which the asset belongs.
Impairment losses are recognized in profit or loss.
An impairment loss of an asset, other than goodwill, is reversed only if there
have been changes in the estimates used to determine the asset's recoverable
amount since the last impairment loss was recognized. Reversal of an
impairment loss, as above, shall not be increased above the lower of the
carrying amount that would have been determined (net of depreciation or
amortization) had no impairment loss been recognized for the asset in prior
years and its recoverable amount. The reversal of impairment loss of an asset
presented at cost is recognized in profit or loss.
h. Intangible assets
The Group has adopted the provisions of IFRS 6 Exploration for and Evaluation
of Mineral Resources.
The Group capitalizes expenditures incurred in exploration and evaluation
activities as project costs, categorized as intangible assets (exploration and
evaluation assets), when those costs are associated with finding specific
mineral resources. The Group has a policy to expense to the statement of
income all short term (i.e., less than 12 months) rental of tools and other
equipment, in the same period in which the relevant equipment is used.
Expenditure included in the initial measurement of project costs and which are
classified as intangible assets relate to the acquisition of rights to
explore. Capitalization of pre-production expenditure ceases when the mining
property is capable of commercial production. Project costs are recorded and
held at cost and no amortization is recorded prior to commencement of
production.
An annual review is undertaken of each area of interest to determine the
appropriateness of continuing to capitalize and carry forward project costs in
relation to that area of interest, in accordance with the indicators of
impairment as set out in IFRS 6. Accumulated capitalized project costs in
relation to (i) an expired permit (with no expectation of renewal), (ii) an
abandoned area of interest and / or (iii) a joint venture over an area of
interest which is now ceased, will be
written off in full as an impairment to the statement of income in the year in
which (i) the permit expired, (ii) the area of interest was abandoned and / or
(iii) the joint venture ceased.
Other intangible assets that have an indefinite useful life or intangible
assets not ready to use are not subject to amortization and are tested
annually for impairment. Assets that are subject to amortization are reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognized for
the amount by which the asset's carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset's fair value less
costs of disposal and value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are largely
independent cash inflows (cash-generating
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
units). Prior impairments of non-financial assets (other than goodwill) are
reviewed for possible reversal at each reporting date.
i. Financial instruments:
1. Financial assets:
Financial assets are measured upon initial recognition at fair value plus
transaction costs that are directly attributable to the acquisition of the
financial assets, except for financial assets measured at fair value through
profit or loss in respect of which transaction costs are recorded in profit or
loss.
The Group classifies and measures debt instruments in the financial statements
based on the following criteria:
- The Group's business model for managing financial assets; and
- The contractual cash flow terms of the financial asset.
Debt instruments are measured at amortized cost when:
The Group's business model is to hold the financial assets in order to collect
their contractual cash flows, and the contractual terms of the financial
assets give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding. After initial
recognition, the instruments in this category are measured according to their
terms at amortized cost using the effective interest rate method, less any
provision for impairment.
On the date of initial recognition, the Group may irrevocably designate a debt
instrument as measured at fair value through profit or loss if doing so
eliminates or significantly reduces a measurement or recognition
inconsistency, such as when a related financial liability is also measured at
fair value through profit or loss.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
2. Impairment of financial assets:
The Group evaluates at the end of each reporting period the loss allowance for
financial debt instruments which are not measured at fair value through profit
or loss.
The Group has short-term financial assets such as trade receivables in respect
of which the Group applies a simplified approach and measures the
loss allowance in an amount equal to the lifetime expected credit losses. An
impairment loss on debt instruments measured at amortized cost is recognized
in profit or loss with a corresponding loss allowance that is offset from the
carrying amount of the financial asset.
3. Financial liabilities:
a) Financial liabilities measured at amortized cost:
Financial liabilities are initially recognized at fair value less transaction
costs that are directly attributable to the issue of the financial liability.
After initial recognition, the Group measures all financial liabilities at
amortized cost using the effective interest rate method, except for financial
liabilities measured at fair value through profit or loss.
Financial liabilities measured at profit or loss include an embedded
derivative (loan conversion option). At initial recognition, the Group
measures these financial liabilities at fair value. Transaction costs are
recognized in profit or loss. After initial recognition, changes in fair value
are recognized in profit or loss.
4. Derecognition of financial instruments:
a) Financial assets:
A financial asset is derecognized when the contractual rights to the cash
flows from the financial asset expire.
b) Financial liabilities:
A financial liability is derecognized when it is extinguished, that is when
the obligation is discharged or cancelled or expires.
j. Borrowing costs:
The capitalization of borrowing costs commences when expenditures for the
asset are incurred, the activities to prepare the asset are in progress and
borrowing costs are incurred and ceases when substantially all the activities
to prepare the qualifying asset for its intended use or sale are complete. The
amount of borrowing costs capitalized in a reporting period includes specific
borrowing costs and general borrowing costs based on a weighted capitalization
rate.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Exploration and evaluation assets can be qualifying assets. However, they
generally do not meet the "probable economic benefits" test. Therefore, any
related borrowing costs are generally recognized in profit or loss in the
period incurred.
k. Share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
l. Fair value measurement:
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date.
Fair value measurement is based on the assumption that the
transaction will take place in the asset's or the liability's principal
market, or in the absence of a principal market, in the most advantageous
market.
The fair value of an asset or a liability is measured using the assumptions
that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.
Fair value measurement of a non-financial asset takes into account a market
participant's ability to generate economic benefits by using the asset in its
highest and best use or by selling it to another market participant that would
use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances
and for which sufficient data are available to measure fair value, maximizing
the use of relevant observable inputs and minimizing the use of unobservable
inputs.
All assets and liabilities measured at fair value or for which fair value is
disclosed are categorized into levels within the fair value hierarchy based on
the lowest level input that is significant to the entire fair value
measurement:
Level 1 - quoted prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2 - inputs other than quoted prices included within Level 1 that are observable
either directly or indirectly.
Level 3 - inputs that are not based on observable market data (valuation techniques
which use inputs that are not based on observable market data).
m. Provisions
The Group provides for the costs of restoring a site where a legal or
constructive obligation exists. The estimated future costs for known
restoration requirements are determined on a site-by-site basis and are
calculated based on the present value of estimated future costs. All
provisions are discounted to their present value.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
n. Taxes on income
Current or deferred taxes are recognized in profit or loss, except to the
extent that they relate to items which are recognized in other comprehensive
income or equity.
1. Current taxes:
The current tax liability is measured using the tax rates and tax laws that
have been enacted or substantively enacted by the end of reporting period as
well as adjustments required in connection with the tax liability in respect
of previous years.
2. Deferred taxes
Deferred taxes are computed in respect of temporary differences between the
carrying amounts in the financial statements and the amounts attributed for
tax purposes.
Deferred taxes are measured at the tax rate that is expected to apply when the
asset is realized or the liability is settled, based on tax laws that have
been enacted or substantively enacted by the reporting date.
Deferred tax assets are reviewed at each reporting date and reduced to the
extent that it is not probable that they will be utilized. Temporary
differences for which deferred tax assets had not been recognized are reviewed
at each reporting date and a respective deferred tax asset is recognized to
the extent that their utilization is probable.
Taxes that would apply in the event of the disposal of investments in
investees have not been taken into account in computing deferred taxes, as
long as the disposal of the investments in investees is not probable in the
foreseeable future.
Also, deferred taxes that would apply in the event of distribution of earnings
by investees as dividends have not been taken into account in computing
deferred taxes, since the distribution of dividends does not involve an
additional tax liability or since it is the Company's policy not to initiate
distribution of dividends from a subsidiary that would trigger an additional
tax liability.
o. Revenue recognition
The Group had no sales or revenue during the years ended 31 December 2021 and
2020.
p. Leases
The Group leases various offices, equipment and vehicles. Rental contacts are
typically made for fixed periods of 12 months but may have extension options.
As of 31 December 2021, all Group leases are for terms of up to 12 months or
for which the underlying asset is of low value. For these leases, the Group
has elected to recognize the lease payments as an expense in profit or loss on
a straight-line basis over the lease term.
q. Share-based payment transactions:
The Company's employees and other service providers are entitled to
remuneration in the form of equity-settled share-based payment transactions
and certain employees and other service providers are entitled to remuneration
in the form of cash-settled share-based payment transactions that are measured
based on the increase in the Company's share price.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Equity-settled transaction
The cost of equity-settled transactions with employees is measured at the fair
value of the equity instruments granted at grant date. The fair value is
determined using an acceptable option pricing model.
As for other service providers, the cost of the transactions is measured at
the fair value of the goods or services received as consideration for equity
instruments granted.
The cost of equity-settled transactions is recognized in profit or loss
together with a corresponding increase in equity during the period which the
performance and/or service conditions are to be satisfied ending on the date
on which the relevant employees become entitled to the award ("the vesting
period"). The cumulative expense recognized for equity-settled transactions at
the end of each reporting period until the vesting date reflects the extent to
which the vesting period has expired and the Group's best estimate of the
number of equity instruments that will ultimately vest.
No expense is recognized for awards that do not ultimately vest, except for
awards where vesting is conditional upon a market condition, which are treated
as vesting irrespective of whether the market condition is satisfied, provided
that all other vesting conditions (service and/or performance) are satisfied.
If the Company modifies the conditions on which equity-instruments were
granted, an additional expense is recognized for any modification that
increases the total fair value of the share-based payment arrangement or is
otherwise beneficial to the employee/other service provider at the
modification date.
If a grant of an equity instrument is canceled, it is accounted for as if it
had vested on the cancelation date and any expense not yet recognized for the
grant is recognized immediately. However, if a new grant replaces the canceled
grant and is identified as a
replacement grant on the grant date, the canceled and new grants are accounted
for as a modification of the original grant, as described above.
r. Earnings (loss) per share:
Earnings per share are calculated by dividing the net income attributable to
equity holders of the Company by the weighted number of Ordinary shares
outstanding during the period.
Potential Ordinary shares are included in the computation of diluted earnings
per share when their conversion decreases earnings per share from continuing
operations. Potential Ordinary shares that are converted during the period are
included in diluted earnings per share only until the conversion date and from
that date in basic earnings per share. The Company's share of earnings of
investees is included based on its share of earnings per share of the
investees multiplied by the number of shares held by the Company
NOTE 3:- FINANCIAL RISK MANAGEMENT
a. Financial risk factors
The Group's activities expose it to a variety of financial risks: market risk
and credit risk. The Group's overall risk management program focuses on the
unpredictability of financial markets and seeks to minimize potential adverse
effects on the Group's financial performance.
Risk management is carried out by the management team under policies approved
by the Board of Directors.
1. Market risk
The Group is exposed to market risk, primarily relating to interest rate,
foreign exchange and commodity prices. The Company does not hedge against
market risks as
the exposure is not deemed sufficient to enter into forward contracts. The
Company has not sensitized the figures for fluctuations in interest rates,
foreign exchange or commodity prices as the Directors are of the opinion that
these fluctuations would not have a significant impact on the consolidated
financial statements of the Company at the present time. The Directors will
continue to assess the effect of movements in market risks on the Group's
financial operations and initiate suitable risk management measures where
necessary.
2. Credit risk
Credit risk arises from cash and cash equivalents as well as outstanding
receivables. To manage this risk, The Company periodically assesses the
financial reliability of customers and counterparties.
The amount of exposure to any individual counterparty is subject to a limit,
which is assessed by the Board of Directors.
The Company considers the credit ratings of banks in which it holds funds in
order to reduce exposure to credit risk.
b. Capital risk management
The Company's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern, in order to enable the Company to
continue its material development activities, and to maintain an optimal
capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust
the issue of shares or sell assets to reduce debts.
The Company defines capital based on the total equity of the Company. The
Company monitors its level of cash resources available against future planned
operational activities and may issue new shares in order to raise further
funds from time to time.
NOTE 4:- SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND
ASSUMPTIONS USED IN THE PREPARATION OF THE FINANCIAL STATEMENTS
a. Judgments:
In the process of applying the significant accounting policies, the Group has
made the following judgments which have a significant effect on the amounts
recognized in the financial statements:
Determining the fair value of share-based payment transactions:
The fair value of share-based payment transactions is determined upon initial
recognition by an acceptable option pricing model. The inputs to the model
include share price, exercise price and assumptions regarding expected
volatility, expected life of share option and expected dividend yield.
b. Estimates and assumptions:
The preparation of the financial statements requires management to make
estimates and assumptions that have an effect on the application of the
accounting policies and on the reported amounts of assets, liabilities,
revenues and expenses. Changes in accounting estimates are reported in the
period of the change in estimate.
Significant items subject to such estimates and assumptions are as follows:
Intangible assets - exploration and evaluation assets
An annual review is undertaken of each area of interest to determine the
appropriateness of continuing to capitalize and carry forward project costs in
relation to that area of interest in accordance with the indicators of
impairment as set out in IFRS 6. The annual review includes an assessment of
budgeted and planned expenditures and indications of whether sufficient data
exist to determine recovery of accumulated capitalized project costs.
NOTE 5:- DISCLOSURE OF NEW STANDARDS IN THE PERIOD PRIOR TO THEIR ADOPTION
a. Amendment to IAS 16, "Property, Plant and Equipment":
In May 2020, the IASB issued an amendment to IAS 16, "Property, Plant and
Equipment" ("the Amendment"). The Amendment prohibits a company from deducting
from the cost of property, plant and equipment ("PP&E") consideration
received from the sales of items produced while the company is preparing the
asset for its intended use. Instead, the company should recognize such
consideration and related costs in profit or loss.
The Amendment is effective for annual reporting periods beginning on or after
January 1, 2022, with earlier application permitted. The Amendment is to be
applied retrospectively, but only to items of PP&E made available for use
on or after the beginning of the earliest period presented in the financial
statements in which the company first applies the Amendment. The company
should recognize the cumulative effect of initially applying the Amendment as
an adjustment to the opening balance of retained earnings at the beginning of
the earliest period presented.
The Company estimates that the application of the Amendment is not expected to
have a material impact on the financial statements.
NOTE 5:- DISCLOSURE OF NEW STANDARDS IN THE PERIOD PRIOR TO THEIR ADOPTION (Cont.)
b. Amendment to IAS 37, "Provisions, Contingent Liabilities and
Contingent Assets":
In May 2020, the IASB issued an amendment to IAS 37, regarding which costs a
company should include when assessing whether a contract is onerous ("the
Amendment"). According to the Amendment, costs of fulfilling a contract
include both the incremental costs (for example, raw materials and direct
labor) and an allocation of other costs that relate directly to fulfilling a
contract (for example, depreciation of an item of property, plant and
equipment used in fulfilling the contract).
The Amendment is effective for annual periods beginning on or after January 1,
2022 and applies to contracts for which all obligations in respect thereof
have not yet been fulfilled as of January 1, 2022. Early application is
permitted.
The Company estimates that the application of the Amendment is not expected to
have a material impact on the financial statements.
c. Amendment to IAS 1, "Presentation of Financial Statements":
In January 2020, the IASB issued an amendment to IAS 1, "Presentation of
Financial Statements" ("the Amendment") regarding the criteria for determining
the classification of liabilities as current or non-current.
The Amendment includes the following clarifications:
· 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.
The Amendment is effective for annual periods beginning on or after January 1,
2023 and must be applied retrospectively. Early application is permitted
The Company is evaluating the possible impact of the Amendment on its current
loan agreements.
NOTE 6: - ACQUISITION OF SUBSIDIARIES
A. Acquisition of Atex Mining Resources SARL
On 1 March 2021, the Company purchased 51% of the issued share capital of Atex
Mining Resources SARL ("ATEX") for a total consideration of 40m FCFA
(€61 thousands). Atex holds a license that covers exploration rights for
lithium in a certain area in Cote d'Ivoire. The license which was granted in
2017 was renewed in 2021 for a period ending in 2024.
In addition, the Company was granted an option to acquire a further total 39%
of the issued share capital of Atex in two stages. The first stage is an
option to acquire a further 16% during the 12 months following the acquisition
for a total consideration of 210m FCFA (€320 thousand). The second stage is
an and additional option to acquire a further 23% during the 24 months
following the acquisition for a total consideration of 300m FCFA (€450
thousand).
Pursuant to the agreement, it has been agreed that the Company will procure
that the Seller is paid a net smelter royalty equal to 0.5% of net smelter
returns, such royalty to be paid each trimester
These royalties will be recorded when production commences, and the project
generates net smelter returns.
Non-current assets
Intangible Assets 120
Current liabilities
Trade and other payables (1)
Net Assets 119
At the date of acquisition, the exploration license and related capitalized
exploration costs are the sole asset of Atex. Atex had no employees.
Accordingly, the purchase transaction is accounted for as an acquisition of an
intangible asset.
The Company has determined that as of the acquisition date the fair value of
the options to acquire an additional 39% interest in Atex is immaterial and
accordingly no portion of the consideration paid has been attributed to these
options.
Pursuant to IFRS 3, the Company records the intangible asset and liability at
them
fair value on date of acquisition. Details of the net assets acquired, and
the non-controlling interests are as follows:
Intangible asset 120
Liabilities acquired (1)
Net assets acquired 119
Non-controlling interest (49%) (58)
Total purchase cost and cash 61
paid
NOTE 6: - ACQUISITION OF SUBSIDIARY (Cont.)
B. Acquisition of Alliance Minerals Corporation SARL
On 22 November 2021, the Company purchased 51% of the issued share capital of
Alliance Minerals Corporation SARL ("Alliance") for a total consideration of
€228 thousand, executing the first stage of the purchase agreement with
Alliance Minerals Corporation SARL ("Alliance") and setting out the Company's
commitment to purchase a total of 80% of the entire issued share capital of
Alliance. The payments for the acquisition of shares will take place in four
stages as follows:
· 51% of the entire issued share capital of Alliance for a total
consideration of 150 million FCFA (€228 thousand) to be paid within 10 days
of Admission. As mentioned above, this stage was executed on 22 November 2021.
· 7.25% of the issued share capital of Alliance for 100 million FCFA
(€152 thousands) following the analysis at least 1,000 tons of coltan,
calculated based on the Auger drilling program.
· 7.25% of the issued share capital of Alliance for 100 million FCFA
(€152 thousands) following the analysis at least 1,000 tons of coltan,
calculated based on the RC drilling program.
· 14.5% of the issued share capital of Alliance for 200 million FCFA
(€304 thousands) following a commercial reserve.
Pursuant to the agreement, it has been agreed that the Company will procure
that the Seller is paid a net smelter royalty equal to 0.5% of net smelter
returns, such royalty to be paid each trimester.
These royalties will be recorded when production commences, and the project
generates net smelter returns.
Alliance has applied for an exploration license adjacent to the Atex project.
At the date of acquisition, the license application is the sole asset of
Alliance. Alliance has no employees. Accordingly, the purchase transaction is
accounted for as an acquisition of an intangible asset.
The Company is accounting for the commitment to purchase the additional 29%
interest in Alliance as a forward purchase contract. Accordingly, a
liability in the amount of €130 thousand has been recorded at the
acquisition date based on the estimated timing of the future payments
discounted at a rate of 24% (level 3 of the fair value hierarchy).
Pursuant to IFRS 3, the Company records the intangible asset at its
fair value on date of acquisition as follows:
Intangible asset 448
Non-controlling interests (20%) (90)
Total purchase 358
cost
Comprised of:
Cash 228
consideration
Liability for forward 130
purchase
Total 358
The Company has agreed that it will
fund the exploration activities of Alliance for a period of 24 months
following completion of the share purchase agreement and receiving the
exploration license in the estimated amount of 550 million FCFA (€836
thousand)
NOTE7: - INTANGIBLE ASSETS
Intangible assets relate to project costs capitalized as at 31 December 2021
and 2020.
31 December
2021 2020
Euros in thousands
As at 1 January 642 555
Acquired through business combinations (Note 6) 568 -
Additions (see below) 863 87
As at 31 December 2,073 642
Additions were all in respect of exploration and evaluation activities.
NOTE 8: - PROPERTY, PLANT AND EQUIPMENT
Plant and equipment Motor vehicles Computers, peripheral equipment & furniture Right of use assets Total
Euros in thousands
Cost
As at 1 January 2020 319 7 - - 326
Additions 40 - - 30 70
As at 31 December 2020 359 7 - 30 396
Additions 17 100 25 - 142
As at 31 December 2021 376 107 25 30 538
Depreciation
As at 1 January 2020 - - - - -
Charge for the year 74 7 - 1 82
As at 31 December 2020 74 7 - 1 82
Charge for the year 116 2 4 29 151
As at 31 December 2021 190 9 4 30 233
Net carrying amount
As at 31 December 2021 186 98 21 - 305
As at 31 December 2020 285 - - 29 314
NOTE 9: - CONVERTIBLE LOAN NOTES
On 2 November 2020 the Company executed a convertible loan note instrument
pursuant to
which the Company was authorized to issue up to £1,000,000 unsecured loan
notes for general
working capital purposes and to advance the Company's proposed IPO. The
Company also
executed a supplement loan note instrument on 4 February 2021 constituting a
further £300,000
of convertible loan notes on the same terms (together the "Loan Note
Instruments"). Interest
accrues in respect of the Loan Notes at the rate of 10% per annum, compounded
on a daily basis.
As at the date of the IPO and admission to trading the Company had issued
€1,441 thousands (£1,231 thousands) pursuant to the Loan Note Instruments.
The Loan Notes shall be converted into fully paid New Ordinary Shares on
Admission at an issue price equal to the Placing Price less 30%.
On admission date, the Loan Notes and accumulated interest totaling to
€1,562 thousand (£1,334 thousand) were converted to 14,660,746 Ordinary
shares of the Company with a market value of € 2,231 thousand based on
preferred conversion price of £0.091 per share that represents 30% discount
to the share price on admission. The fair value of the conversion option
equivalent to €699 thousand (£572 thousands) was recorded as financial
expense in 2021 (see also Note 18).
As of 31 December 2020, the Company had issued €717 thousand pursuant to the
Loan Note Instruments. The present value of the liability was calculated using
cash flows discounted at a rate based on a borrowings rate of 11%, estimated
as being a market value interest for similar loans without the conversion
option. The difference between the book value and present value is
immaterial and as such no amount was recognized in equity in respect of the
conversion option.
NOTE 10: - CAPITAL NOTES
The capital notes are comprised of two notes in the face amounts of €393
thousand and €350 thousand, which do not bear interest and for which the
repayment terms commencing from November 2021 are as follows:
Capital note of €393 thousand - (i) no repayment shall take place within two
years of Admission (ii) repayment can only be made after the Company has
achieved a market capitalization of £50 million (iii) the Company must have
minimum cash on hand of 5x the outstanding debt, with sufficient funds for the
Company to operate for a two-year period and (iv) any repayment will be
subject to final approval of the Directors of the Company.
Capital note to shareholders and officers for services during the period from
1 June 2019 until 30 June 2021 totaling to €350 thousand (i) no repayment
shall take place within two years of Admission (ii) the Company must have
minimum cash on hand of 5x the outstanding debt, with sufficient funds for the
Company to operate for a two-year period and (iii) any repayment will be
subject to final approval of the Directors of the Company.
The combined carrying amount of the capital notes as of November 2021is €507
thousand which amount reflects the estimated timing of the future repayments
discounted at a rate of 10% (level 3 of the fair value hierarchy). The
difference in the amount of €236 thousand between the face amount of the
capital notes and the carrying amount as of November 2021 has been recorded as
a contribution to equity. In 2021 interest expense on the loan (unwinding of
discount) amounted to €6 thousand.
NOTE 11: - LOAN FROM NON-CONTROLLLING INTERESTS
Loan in the face amount of € 205 thousand from the minority interests of Bri
Coltan upon acquisition of Bri Coltan. It was agreed that the loan will be
repaid from up to 5% of the yearly net earnings of Bri Coltan following
publication of its annual financial report. As of 31 December 2021, the
carrying amount of the loan is €93 thousand which amount reflects the
estimated timing of future repayments discounted at a rate of 12% (level 3 of
the fair value hierarchy). The difference in the amount of €122 thousand
between the face amount of the loan and the carrying amount on 1 January 2021
has been recorded as a contribution to equity. In 2021 interest expense on
the loan (unwinding of discount) amounted to €10 thousand.
NOTE 12: - EQUITY
a. Composition of share capital:
31 December 31 December
2021 2020 2021 2020
Authorized Issued and outstanding
Number of shares
Ordinary shares of € 0.001 par value each 100,000,000 100,000,000 86,885,360 30,000,000
Since incorporation and until 31 December 2020, the Company's authorized,
issued and outstanding capital structure comprised 1,000 Ordinary shares at a
par value of €1 and there were no other securities on issue and outstanding.
Prior to admission in 2021, the Company issued 6,822,000 Ordinary shares to
its funders to represent their holdings at incorporation, increased its share
capital and performed a share split such that the authorized share capital
increased to 100 million Ordinary shares of €0.001 par value each. Share and
per share amounts in these financial statements have been adjusted
retroactively to reflect the share split.
In 2021, the Company issued 3,377,000 Ordinary shares to certain investors in
convertible loan notes for no additional consideration. The fair value of
these shares on date of issuance amounted to € 514 thousand and was recorded
as finance expense.
In 2021, the Company issued 827,000 Ordinary shares to certain consultants for
their services. The fair value of these shares on date of issuance amounted to
€ 126 thousand and was recorded as share-based compensation in Contractors
& service providers expenses.
On 12 November 2021, the Company completed its Initial Public Offering ("IPO")
on the AIM, a market operated by the London Stock Exchange ("the AIM"), by
issuing 30,769,230 Ordinary shares at a price of £ 0.13 per share for a total
consideration of € 4.68 million (£ 4 million) and
net proceeds of €4.25 million (£ 3.63 million).
In 2019, an agreement was signed with a subcontractor to provide services in
relation to due diligence. As part of the agreement, a total of €50k was
payable in shares in respect of certain services provided by the
subcontractor. On admission the expense was settled by issuing 314,000
Ordinary shares of the company. On 31 December 2020, these shares had not been
issued and were included as 'Shares to be issued' within
equity
In 2021 the Company issued 115,384 Ordinary shares to certain brokers in
consideration for services provided. The fair value of the shares issued
amounting to €18 thousand was recorded in general and administrative
expenses
NOTE 12: - EQUITY (Cont.)
Issuance of 14,660,746 Ordinary shares upon conversion of convertible loan
notes - see Note 11.
b. Share option plan:
On admission, 12 November 2021, the Company adopted a share option plan under
which it granted a total of 6,950,832 options to directors, employees and
consultants of the Company.
Each option is exercisable to one Ordinary share at an exercise price of £
0.13. The options vested immediately upon grant. The options expire 5 years
after date of grant. As of 31 December 2021, all of the options are
outstanding.
The fair value of the options granted calculated based on Black-Scholes option
pricing model was approximately €61 thousand.
The following table lists the inputs used in the measurement of the fair value
of options, in accordance with the Black and Scholes option pricing model,
with respect to the above grants:
Risk-free interest rate (%) 0.58%
Dividend yield (%) 0%
Expected volatility (%) 70%
Expected term (in years) 5
c. Warrants
On admission, 12 November 2021, the Company granted a total
of 2,599,622 warrants to some service providers of the Company as part of
their compensation for the services provided in the initial public offering
process. Each warrant is exercisable to one Ordinary share at an exercise
price of £ 0.13.
868,854 warrants expire 5 years after date of grant, and 1,538,461 warrants
expire 3 years after date of grant. The remaining 192,307 warrants expire f
3 years after date of grant with 50% vesting once the 5 day volume-weighted
average price ("VWAP") of the Company's shares has traded at a 100% premium
to the Placing Price (£ 0.13) and 50% vesting once the 5 day VWAP of the
Company's shares has traded at a 200% premium to the Placing Price.
The fair value of the Warrants granted calculated based on Black-Scholes
option pricing model was approximately €20 thousand.
The following table lists the inputs used in the measurement of the fair value
of the warrants, in accordance with the Black and Scholes pricing model:
Warrants for 5 years Warrants for 3 years
Risk-free interest rate (%) 0.58% 0.50%
Dividend yield (%) 0% 0%
Expected volatility (%) 70% 70%
Expected term (in years) 5 3
The fair value of the warrants was recorded as part of the IPO fund-raising
costs and deducted from share premium in equity.
NOTE 12: - EQUITY (Cont.)
d. Other reserves
Other reserves are comprised of the
following:
Year ended 31 December
2021 2020
Euros in thousands
Reserve for transactions with non-controlling
interests (Note 91 -
11)
Reserve for transactions with principal
shareholders (Note 236 -
10)
327 -
NOTE 13:- GENERAL AND ADMINISTRATIVE EXPENSES
Year ended 31 December
2021 2020
Euros in thousands
Salaries & employee related expenses 414 250
Contractors & service providers 210 33
Travel & transportation 63 24
Legal and professional 124 31
Office rent - 7
Nomad & broker fees 23 -
Public relations 24 -
Insurance 3 -
Share based compensation 61 -
Depreciation - 82
Overhead costs 7 64
Total administrative expenditure 929 491
NOTE 14:- FINANCIAL EXPENSES
2021 2020
Euros in thousands
Interest on convertible loan notes 111 6
Interest on capital notes and loan from non-controlling interest 17 -
Change in fair value of conversion option of convertible loan notes 669 -
Financial expenses settled by share based compensation 514
Bank fees 62 1
1,373 7
NOTE 15:- TAXES ON INCOME
a. Tax rates applicable to the income of the Company and its
subsidiaries:
The Company and its subsidiaries, Firering Strategic Minerals PLC was
incorporated in Cyprus and are taxed according to Cyprus tax laws. The
statutory tax rate is 12.5%.
The carryforward losses of the Company are approximately €12 thousands
The subsidiary, FH Colton CI-II, was incorporated in Cote d'Ivoire and is
taxed according to Cote d'Ivoire tax laws. The statutory tax rate is 25%.
The subsidiary, Bri Coltan SARL, was incorporated in Cote d'Ivoire and is
taxed according to Cote d'Ivoire tax laws. The statutory tax rate is 25%.
The subsidiary, Atex Mining Resources SARL, was incorporated in Cote d'Ivoire
and is taxed according to Cote d'Ivoire tax laws. The statutory tax rate is
25%.
The subsidiary Alliance Minerals Corporation SARL Ltd was incorporated in Cote
d'Ivoire and is taxed according to Cote d'Ivoire tax laws. The statutory tax
rate is 25%.
b. Tax assessments:
As of 31 December 2021, the Company and all its other subsidiaries had not yet
received final tax assessments
NOTE 16: - EARNINGS PER SHARE
The calculation of the basic and fully diluted loss per share attributable to
the equity shareholders is based on the following data:
Year ended 31 December
2021 2020
Euros in thousands
Net loss attributable to equity shareholders (2,276) (454)
Average number of shares for the purpose of basic and diluted earnings per 38,320,172 30,000,000
share
Share options and warrants are excluded from the calculation of diluted loss
per share as their effect is antidilutive.
NOTE 17:- RELATED PARTIES
Year ended
31 December
2021 2020
Euros in thousands
a. Balances:
Other payables 206 40
Capital note 242 280
b. Compensation of key management personnel of the Company:
Short-term employee benefits 443 250
Share-based compensation 61 -
b.
c. Interest on capital note (see also Note 13) 3 -
c.
A Director and the CEO of the Company was entitled to €84 thousands which
increased, with effect from Admission, to €120 thousands per annum and shall
be entitled to certain bonuses upon the Company achieving certain milestones.
In addition, the CEO is entitled to additional benefits including medical
insurance, school fees for his family (capped at €84 thousands per annum),
accommodation in Cote d'Ivoire (capped at €1.2 thousands per month) as well
as travel costs for himself and his family to have home leave.
NOTE 18:- FINANCIAL INSTRUMENTS
Foreign exchange risk:
The Company is exposed to foreign exchange risk resulting from the exposure to
different currencies, mainly, USD and GBP. Since the FCFA is fixed to the
Euro, the Group is not exposed to foreign exchange risk in respect of the
FCFA. As of 31 December 2021, the foreign exchange risk is immaterial.
Liquidity risk:
The table below summarizes the maturity profile of the Group's financial
liabilities based on contractual undiscounted payments (including interest
payments):
31 December 2021
Less than one year 1 to 2 years 2 to 3 3 to 4 years 4 to 5 years > 5 years Total
years
Euros in thousands
Trade payables 150 - - - - - 150
Other payables 102 - - - - - 102
Capital note 214 - - 743 957
Loan from non-controlling interest in subsidiary - - - - - 205 205
Liability to non-controlling interest in subsidiary - - - - - 608 608
466 - - 743 - 813 2022
NOTE 18:- FINANCIAL INSTRUMENTS (Cont.)
31 December 2020
Less than one year 1 to 2 years 2 to 3 3 to 4 years 4 to 5 years > 5 years Total
years
Euros in thousands
Trade payables 14 - - - - - 14
Other payables 442 - - - - - 442
Convertible loan note 723 - - - - - 723
Lease liability 21 - - - - - 21
Capital note 475 - - - - - 475
Loan from non-controlling interest in subsidiary - - - - - 218 218
1,675 - - - - 218 1,893
NOTE 19:- EVENTS AFTER THE REPORTING DATE
On 14 March 2022 the Company purchased 100% interest in Altar Resources
Limited ("Altar"), a company incorporated in Seychelle. Altar is the 100%
owner of Apalex SARL, an Ivorian incorporated company which has an application
for a nickel-cobalt mineral prospecting license with an area of approximately
168 sq km, in western Côte d'Ivoire.
The consideration for the purchase is comprised of €15,000 in cash on
completion and a Gross Revenue Royalty ("GRR") of up to 1.0% on nickel and
cobalt sales from the Project.
The GRR will be calculated as a percentage of the gross proceeds received from
sales from the Project less transportation costs. The GRR will be subject to a
separate agreement, which will be entered into between the Company and Altus,
within six months of the grant of the Application.
Firering will pay to Altus a GRR from the Project, linked to the United States
dollar nickel price (as quoted per ton by the London Metal Exchange) at the
time of the metal sales as follows:
- When the nickel price is less than or equal to US$12,000/t: no royalties
will be payable;
- when the nickel price is between US$12,000/t and US$18,000/t Firering will
pay to Altus a 0.5% GRR; and
- when the nickel price is higher than US$18,000/t Firering will pay to Altus
a 1.0% GRR.
- - - - -- - - - - - - - - - - - - - - - -
*** ENDS ***
For further information and updates on Firering's exploration programme, visit
www.fireringplc.com or contact the following:
Firering Strategic Minerals Tel: +44 20 7236 1177
Yuval Cohen
Tim Daniel
SPARK Advisory Partners Limited Tel: +44 20 3368 3550
Nominated Adviser
Neil Baldwin / James Keeshan / Adam Dawes
Optiva Securities Limited Tel: +44 20 3137 1903
Broker
Christian Dennis / Daniel Ingram
St Brides Partners Limited T: +44 20 7236 1177
Financial PR E: firering (mailto:firering@stbridespartners.co.uk) @stbridespartners.co.uk
(mailto:firering@stbridespartners.co.uk)
Susie Geliher / Oonagh Reidy / Ana Ribeiro
Notes to Editors:
Firering Strategic Minerals
Firering Strategic Minerals plc is an AIM-quoted mining company focused on
exploring and developing a portfolio of mines producing critical minerals in
the Côte d'Ivoire including lithium and Tantalum to support the global
transition to net zero emissions. It operates the Atex Lithium-Tantalum
Project in northern Côte d'Ivoire, which is prospective for both lithium and
tantalum. Firering intends to advance development at Atex with a view to
establishing a maiden Lithium resource and a pilot scale production of ethical
tantalum and niobium production within 18 months to generate early revenues
and support further exploration work. A large-scale Tantalum production
facility will be developed following pilot results, which will be supported by
a debt facility of FCFA 5,057,000,000 (approximately €7,500,000) currently
under negotiation to fund the entire scale-up plan to develop a portfolio of
ethically sourced mineral projects in the Côte d'Ivoire, supplying EV
batteries, high tech electronics and other fast-growing end markets.
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