REG - First Tin PLC - Final Results
12/04/2023 07:00
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RNS Number : 8790V First Tin PLC 12 April 2023
12 April 2023
First Tin Plc
("First Tin" or "the Company")
Final Audited Results for the year ended 31 December 2022
First Tin, a tin development company with advanced, low capex projects in
both Germany and Australia, today publishes its final audited results for the
year ended 31 December 2022.
Highlights
· Significant progress in the development of the Company's portfolio
of tin assets since listing the Company on the Standard List of the London
Stock Exchange in April 2022
· Successful £20m fundraise at IPO, enabling the Company to commence
Definitive Feasibility Studies at both assets in order to add substantial
value and drive the projects towards production
· Ended the period with a significant cash position of £13.8m (31
December 2021: £2.5m)
· Loss before tax of £3.2m (31 December 2021: £1.2m) reflecting a
ramp up in operational activities
· The fully funded DFS continues at pace at Taronga, Australia:
o Diamond drilling confirmed the previous Newmont exploration results with
good alignment between First Tin and Newmont's historical drillholes
o Reverse Circulation drilling has extended the known mineralisation by
approximately 400m to the south of the previously defined Newmont area with
mineralisation still open and drilling ongoing
o Post period end, First Tin signed an agreement with BID Energy Partners to
provide a feasibility study on renewable energy supply options which has the
potential to materially reduce the power costs of the project, supports
permitting and is aligned with First Tin's desire to have the highest ESG
credentials for the benefit of all our stakeholders
o The Environmental Impact Study is also progressing positively and results
from ongoing mineral processing studies so far confirm the previous hypotheses
that a majority of the tin will be liberated via a simple coarse crush,
followed by gravity separation
o New South Wales government has shown its support by providing a cash grant
of almost A$0.5M to the project from its Critical Minerals and High-Tech
Metals Activation Fund
· Highly encouraging results to date from DFS drilling at Tellerhauser
o Saxonian Mining Authority has confirmed eligibility to move straight to
the construction and operational permitting process, reducing the overall
permitting timeframe by up to 12-18 months
o Holes returned to date have confirmed the skarn horizon is present,
continuous and tin mineralised as previously identified by Wismut over 40
years ago
o Discovery of a considerable amount of additional historical drilling data
which should result in a more robust resource model and may lead to additional
resource tonnes being added cost effectively
o Signed a Memorandum of Understanding ("MOU") with Ecobat Resources
Freiberg GmbH ("ERF") with the intention to jointly establish a fully
integrated 'mine to metal' value chain in Germany
· Inaugural ESG rating received from Digbee, demonstrating First Tin's
commitment to transparent reporting of its performance and progress
Thomas Buenger, Chief Executive Officer, commented:
"2022 has been a year of a strong operational performance for First Tin at
both our assets in Australia and Germany. We expect 2023 to be another busy
and exciting year for us where we will continue to build on the momentum
achieved last year to add further value to our assets.
"This will be achieved through the completion of our DFS at Taronga and the
release of updated resources for each project in 2023. We have already
gathered a significant amount of data from both, and with no red flags having
emerged to date, we remain optimistic for the future.
"Our macro view of the tin market remains bullish with tin spot prices having
risen in recent years, with record highs in March 2022 of US$49,000 per tonne.
It is clear that the demand for tin will remain strong in the years ahead as
the metal continues to be an important component for soldering electronics
including semiconductors, solar panels, electronic systems in electric
vehicles (EVs) and batteries. These significant drivers, together with a rapid
increase in battery production and the rise of big data, are expected to
create a material tin deficit from 2025 and we are confident that First Tin
remains well positioned to take advantage of this opportunity and become a
material tin supplier from its conflict-free and low political risk
jurisdictions."
Analyst Presentation
There will be a Zoom webinar for equity analysts at 10:30am BST on the day of
results, hosted by Thomas Buenger, CEO. Any analysts wishing to register for
the event should email firsttin@secnewgate.co.uk.
Investor Presentation Reminder
Additionally, Thomas Buenger will provide a live presentation for investors
via the Investor Meet Company platform at 09:00am BST on the day of results.
The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via the Investor Meet Company dashboard up until
9:00am the day before the meeting or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and click "Add to
Meet" First Tin via:
https://www.investormeetcompany.com/first-tin-plc/register-investor
(https://www.investormeetcompany.com/first-tin-plc/register-investor)
Enquiries:
First Tin Via SEC Newgate below
Thomas Buenger - Chief Executive Officer
Arlington Group Asset Management Limited (Financial Advisor and Joint Broker)
Simon Catt 020 7389 5016
WH Ireland Limited (Joint Broker)
Harry Ansell 020 7220 1670
SEC Newgate (Financial PR)
Elisabeth Cowell / Molly Gretton / Matthew Elliott Firsttin@secnewgate.co.uk
CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
Despite the Company facing strong macro headwinds which included higher
inflation rates, supply chain issues, Covid-19 lockdowns in China and the
threat of a global recession, I am pleased to report on the strong operational
progress that the Company has made during the year ended 31 December 2022, our
first as a listed company. First Tin came to market in April 2022,
successfully raising £20m to progress its two low capex, high margin tin
assets, located in the Tier 1 jurisdictions of Australia (Taronga) and Germany
(Tellerhäuser).
With both of the Company's assets having demonstrated compelling economics at
today's tin price of US$25,000 in previous independent studies, the Company
has rapidly set to work on commencing Definitive Feasibility Studies ("DFS")
at each asset to capitalise on the advanced nature of our projects. While we
have experienced some minor delays at Tellerhäuser due to issues with our
drilling contractor, we have made strong operational progress at Taronga and
aim to complete the DFS there by the end of 2023 as previously indicated.
During the period under review, First Tin undertook substantial drill
programmes at both our assets after a period of over 40 years of inactivity at
each project. These have confirmed historical mineralisation at both Taronga
and Tellerhäuser, as well proving up extensions to the previously known
resources, highlighting the strong potential to increase the overall resource
and create exploration upside. Substantial progress has also been made in
proving up the mineral processing and final flow sheets at both assets and in
developing sustainable solutions for their respective water and power
requirements.
Whilst the ongoing macro-economic challenges during the period certainly had a
material short term negative impact on the spot tin price, post period end the
spot price has started to strengthen again, and with a significant tin deficit
anticipated by the International Tin Association (ITA) from 2025 onwards, we
are hopeful that higher prices will emerge in future periods. The Company
still aims to have both of its assets enter production during this deficit
period in order to help mitigate this future supply gap and to take advantage
of any increases in the tin price.
The surge in demand for tin in the next decade will be driven by the global
transition to clean energy and technological revolutions. Tin remains crucial
in the creation of any electronic device found in electric vehicles, computers
and control equipment, power transmission and other renewable technologies. In
particular, the rise in the solar, battery and big data industries is expected
to drive demand. Electric vehicles now amount to 15% of car sales after record
sales in 2021 and 2022 and are expected to rise to 60% of sales by 2030. Solar
power generation also experienced strong growth at 40% year-on-year, and data
storage requirements are expected to increase 10-fold by 2030. It is therefore
essential that this demand is met by companies that are dedicated to supplying
tin responsibly. Currently, 97% of global tin supply comes from emerging or
developing economies, with tin mining in these regions often linked to local
conflicts and poor ESG standards and practices. Indeed, most of the world's
tin comes from alluvial mining, a highly unsustainable and environmentally
damaging practice. Conversely, First Tin is focused on becoming a sustainable,
professional, responsible, and regulated tin supplier in conflict-free, low
political risk jurisdictions.
During the period under review, it was pleasing to report that Taronga Mines
Pty Ltd, an Australian registered, 100% owned subsidiary of First Tin, was
awarded a significant grant of A$494,038 by the Government of New South Wales
in Australia under its Critical Minerals and High-Tech Metals Activation Fund.
The grant reinforces the support and commitment we have from the Government
and will help fund the ongoing development on this important tin deposit.
We were also pleased to welcome Nick Mather to the Board as a Non-Executive
Director on 30 September 2022. Nick has 40 years' experience in all aspects of
resource exploration and brings technical expertise and a track record of
successful business development which will be valuable as we focus on
achieving the Company's objective of becoming a low-cost tin producer, through
exploration and development of our two flagship assets in Germany and
Australia.
First Tin's commitment to strong Environmental, Social and Governance (ESG)
principles has been at the forefront of our Company since inception, and we
remain committed to developing a conflict-free source of tin through
sustainable, professional, responsible, and regulated mining. In line with
this, in April 2023 (post period end), we signed a partnership agreement with
BID Energy Partners, an Australia based energy company specialising in
strategy, project development and delivery of renewable energy projects, to
provide a feasibility study on renewable energy supply options for Taronga.
This workstream is designed to benefit all our stakeholders.
Looking to the future of First Tin, we remain confident in our ability to
progress both our assets in Australia and Germany. The global clean energy and
technological revolutions and resultant significant future demand for tin,
remain an exciting opportunity to First Tin and our ability to deliver a
sustainable answer to the global supply shortage, remains our focused
objective.
I would like to take this opportunity to thank my fellow Directors, the First
Tin team and our shareholders for their ongoing commitment and support as we
strive for another busy and successful year ahead.
C Cannon Brookes
Chairman
CHIEF EXECUTIVE OFFICER'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
I am pleased to report that 2022 saw First Tin make strong progress in
developing both of our assets in Australia and Germany, with the ultimate goal
of delivering on a low-capex, value-accretive path to achieve annual tin
production of 6,000 tonnes or more.
We have achieved a range of milestones towards this objective since listing on
the London Stock Exchange in April 2022 and in just one year have rapidly put
the building blocks in place to progress Definitive Feasibility Studies
("DFS") at both of our assets. We also began our fully funded deep drilling
operations at Tellerhäuser, Germany and commenced drilling at our Taronga Tin
project in Australia, with the intention of expanding the existing resources
at each asset.
The period under review has not been without its challenges, with the ongoing
war in Ukraine, impact of China's strict Covid-19 lockdowns and fears of a
global recession all putting extreme pressure on the spot tin price. However,
our assets show robust economics at US$25,000 tin and we have confidence that
our production schedule is well aligned with a sustained tin deficit forecast
from 2025, which has the potential to create significant price rises.
This deficit is being driven by tin's role as a critical metal, vital for the
decarbonisation and electrification of the world. Yet Europe has very little
tin supply, particularly from conflict-free jurisdictions such as those in
which we operate. Increasing EV uptake and the surge in solar and data centres
is driving demand, yet Indonesia, which at 34% is the largest producer of
primary tin globally, has stated its intention to reduce non-beneficiated tin
metal exports in favour of manufactured tin products, while consumer stocks of
tin remain at historical low.
Together, First Tin's assets represent the 5th largest undeveloped tin
reserves globally, outside China, Russia, Kazakhstan and the Democratic
Republic of Congo. They are located in tier 1 jurisdictions and have been
de-risked significantly, with extensive historical work undertaken to date. We
intend to deliver a new, ESG compliant source of tin and the solid economics
that our assets have already demonstrated (by scoping and pre-feasibility
studies) provides the Company with significant leverage to higher tin prices.
Taronga - Australia
Our Taronga project, situated in New South Wales, is a low risk asset in a low
risk jurisdiction. Acquired in 2022 by First Tin, it is surrounded by
excellent existing infrastructure and benefits from over a century of
development and abundant underexplored tin showings, providing major
exploration upside potential. Significant exploration work was undertaken by
BHP in 1933, 1958, and 1964, and by the Newmont Joint Venture from 1979 to
1983.
Following the commencement of a DFS in August 2022, First Tin began drilling
operations just a month later. Diamond drilling was conducted with the aim of
confirming historical data by twinning historical holes drilled by Newmont,
while RC drilling focused on testing for extensions to the south of Newmont's
Southern Zone deposit in order to add tonnage to the Indicated Resources.
Diamond drilling was completed post period end with a total of 1,619m drilled
in 12 holes. Pleasingly, the results have confirmed the previous Newmont
results with the alignment between First Tin and Newmont's drillholes
generally being very good.
RC extension drilling is ongoing, but we were pleased to report in January
2023 that the programme to date has extended the known mineralisation by
approximately 400m to the south of the Newmont area and is still open to the
south. 2,435m have been completed to date (1,957m of infill and extension
drilling completed in 13 drillholes and 478m twin drilling completed in four
drillholes) with better results including (downhole widths):
• 41m @ 0.20% Sn from surface
• 22m @ 0.12% Sn from 62m
• 19m @ 0.20% Sn from surface
• 9m @ 0.20% Sn from 133m
• 32m @ 0.28% Sn from 118m
• 33m @ 0.18% Sn from 109m
• 56m @ 0.12% Sn from 5m
The drill rig is now infilling this area with the aim of adding tonnage to the
Company's existing Indicated Resource.
Drilling has also been undertaken in an area previously assumed to be barren,
in the centre of the Newmont resource area. To date, results have been
received for one drillhole which returned several zones of tin mineralisation.
This confirms that tin mineralisation continues in this previously assumed
barren zone and has enabled a revised geological interpretation of the
mineralisation as being semi-continuous across this zone.
As well as drilling for confirmatory and extension purposes, 670m of diamond
drilling has been completed for geotechnical purposes and 300m of RC drilling
has been completed for ground-water monitoring.
The fully funded DFS continues at pace, and is on track to be completed by the
end of 2023. The project is shaping up well, with alternative energy studies
highlighting the economic and social licence benefits of using low carbon
power generation, in line with our corporate values. In line with this, post
period end we were pleased to sign an agreement with BID Energy Partners to
provide a feasibility study on renewable energy supply options for the Taronga
Tin Project in Australia. Taronga is well placed to take advantage of
renewable energy as it is located within the New England Renewable Energy Zone
("REZ"), one of the priority REZs in New South Wales. It has high solar
capacity and good wind speed characteristics, and is located very close to a
power line.
Our Environmental Impact Study is also progressing positively. We are also
advancing mineral processing studies and no red flags have been identified to
date. We are pleased to confirm that results so far, underpin our previous
hypotheses that most tin will be liberated via a simple coarse crush.
Most data collection is planned to be completed and results received in H1 or
early H2, when some major decisions concerning the size and style of operation
will be finalised and the Feasibility Study can progress from that point
forward with a single option. We look forward to sharing more results as they
come to hand.
I am also delighted to note that the New South Wales (NSW) government has
shown its support for the project by providing a grant of almost A$0.5M to the
project from its Critical Minerals and High-Tech Metals Activation Fund.
Germany
Tellerhäuser
Our Tellerhäuser project is one of the world's most advanced tin deposits. It
is located in the tin district of Saxony, which enjoys an exceptionally long
history of mining, and has an active Mining Licence for the extraction of
mineral resources valid until 30 June 2070. It has major existing
infrastructure benefits which ensure that future development capital
expenditure will remain low.
A Scoping Study, undertaken in 2021, demonstrated that an operation with a
throughput rate of 500,000 tonnes per annum is financially robust with a low
projected start-up capital expenditure of US$49 million, which, at US$30,000
per tonne of tin, suggested a Net Present Value ("NPV") of US$264 million
(using an 8% discount rate) and an Internal Rate of Return ("IRR") of 58%.
We commenced a DFS in the summer of 2022 and began drilling as part of this.
This programme has been focused on adding high grade tin mineralisation from
the Dreiberg zone to the Indicated Resources already present at the project,
thus enabling it to be used for economic evaluation under JORC guidelines. We
successfully intersected high grade tin mineralisation at depth along strike
from the known resources at the Tellerhäuser project from each of the four
holes drilled, returning the following intercepts:
Drillhole Number From (m) To Interval (m) Sn Zn In (ppm) Ag Notes
(m) (%) (%) (g/t)
SAXDRE25 794.65 795.30 0.65 0.34 0.74 34.9 11.3 Upper Skarn
and 805.70 807.20 1.50 0.75 1.00 33.2 5.6 Lower Skarn
incl. 806.00 806.60 0.60 1.43 1.99 61.5 10.9 0.5% Sn cut-off
SAXDRE24 810.30 816.20 5.90 0.40 0.74 43.0 5.9 Skarn
incl. 811.60 813.00 1.40 1.26 2.16 130.3 20.0 0.5% Sn cut-off
SAXDRE34 886.60 890.45 3.85 0.63 1.29 58.4 4.5 Skarn/schist
incl. 887.75 889.10 1.35 1.49 0.78 122.1 7.1 0.5% Sn cut-off
SAXDRE31 877.2 880.1 2.90 0.71 0.48 56.4 6.5 Skarn/marble
incl. 877.65 878.60 0.95 2.02 1.39 163.0 18.7 0.5% Sn cut-off
These highly encouraging drilling results have confirmed the skarn horizon is
present, continuous and tin mineralised as was previously identified by Wismut
over 40 years ago. This suggests that the skarn horizon is continuous for at
least 1.5km southeast of the Indicated Resources at Dreiberg and is open to
the southeast.
The next Dreiberg hole, the fifth drilled by First Tin, is scheduled to
commence in Q2 2023. Should this also prove successful, the programme may be
expanded to define additional Indicated Resources in the Dreiberg area.
We are currently in the process of selecting a new drilling contractor due to
the poor performance of the previous one which has put the proposed drilling
programme behind schedule by around six-months. Unfortunately, this means that
the DFS at Tellerhäuser is now targeted to be completed in 2024 instead of
end of 2023, as previously expected. However, with the forthcoming tin deficit
expected to be of a long-term nature, our project is still well aligned to
provide critical supply to meet rising demand.
On a more pleasing note, drilling to date has obtained enough drill core to
undertake mineral processing test work from Dreiberg with half of the core
from the drillholes being sent to ALS in Burnie, Australia. This will be the
first mineral processing testwork conducted on Dreiberg mineralisation in over
40 years and will be useful as variability testwork for the project as a
whole.
Another recent pleasing development is the discovery of a considerable amount
of additional historical drilling data for the Tellerhäuser project area.
Following granting of the Mining Licence in 2021, Saxore was able to request
additional historic data, in particular drillholes targeting uranium
mineralisation, that were also assayed for tin and other metals.
This data is currently being added to the main database and should result in a
more robust resource model and may lead to additional resource tonnes being
added very cost effectively. The additional identified data represents an
equivalent of around 3,500m of core drilling from surface, 4,500m of core
drilling from underground and a number of other channel samples. Based on
the new data from the Tellerhäuser drilling programme, plus the additional
historical data recently received, we expect to publish an updated JORC
compliant Resource Statement for Tellerhäuser in June/July 2023.
While waiting for additional drilling results to be returned and while the new
historical drilling data is being analysed, the DFS will continue to progress
and will focus on the areas of mineral processing as well as investigating
optimal mining methods, mine access and environmental studies. All these
activities are well financed until end of 2023. A potential adjusted and
extended drilling programme for Tellerhäuser based on the results of the
updated Resource Statement may require further funding beyond the existing
budget.
Furthermore, post period end we received good news in respect to the
permitting process at Tellerhäuser, with the Saxonian Mining Authority
confirming the asset's eligibility to move straight to the construction and
operational permitting process. This reduces the overall permitting timeframe
by a period of up to 12-18 months. This decision was made due to the minimal
environmental footprint that the project is anticipated to have throughout
both the construction and production phases.
Gottesberg
During the period, we also commenced drilling at our Gottesberg project, which
we believe represents a possible satellite orebody development for processing
at Tellerhäuser, due to its close proximity. A historical project of historic
significance, it has an existing JORC resource of 42.1Mt grading 0.27% Sn
(114,000t tin).
16 holes have been drilled for a total length of 2080.5m across seven drill
sites in the project area, and we have been pleased with the results to date,
which have confirmed a higher-grade section within the existing resource. This
has validated the Board's belief that a higher-grade core exists within the
large but moderate grade deposit. Of particular note was a high-grade
intercept of 73.3m @ 0.49% tin from 91.7m which included 15.6m @ 0.74% tin
from 149.4m.
MOU with ERF
During the period, First Tin signed a non-binding Memorandum of Understanding
("MOU") with Ecobat Resources Freiberg GmbH ("ERF"), a market leader in the
collection, recycling, production, and distribution of resources for battery
systems. Our intention is to jointly establish a fully integrated 'mine to
metal' value chain in Germany, which is closely aligned with our strategy to
provide a fully traceable, ESG compliant supply of tin to Germany and the EU
from conflict-free locations.
ESG
First Tin is committed to provide an ethically sourced supply of tin through
sustainable, professional, responsible, and regulated mining. Our priorities
remain to minimize our CO2 footprint from an early stage by utilising
renewable energy and by using electrification options wherever possible for
future mine equipment. We focus on safety as one of the Company's core
values and aim for a fatality, injury and illness free workplace.
The Company will also try to minimise its environmental footprint through
identification and implementation of "leave-no-trace solutions" wherever
possible and will operate in an ethical and respectful way that is built on a
transparent relationship with local communities and their culture and laws.
Wherever possible First Tin will source goods and hire employees locally and
will plan to leave a positive legacy on its local environment.
During the period under review, First Tin received its inaugural
environmental, social and governance (ESG) rating from Digbee. Digbee is a
leading independent assessment platform for ESG disclosure in the mining
industry. Based on ESG achievements in the Company's first six months of
operations since listing on the London Stock Exchange in April 2022, First Tin
achieved an overall rating of BB.
The Digbee ESG assessment is a further demonstration of our commitment to
transparent reporting of our performance and progress as we work to achieve
the highest levels of ESG compliance and practice across our operations.
Finance Review
In respect of the financial results, First Tin posted a comprehensive loss for
the period of £3.1m and ended the period with a healthy cash position of
£13.8m and a net asset value of £41.8m. Expenditure during the period was
primarily focussed on drilling activities and other DFS related costs as well
as on strategic land and property acquisitions. The Company believes that it
has adequate cash resources to fund its operating activities throughout 2023
allowing it to deliver a DFS study at Taronga in late 2023 while at the same
time advancing the DFS work currently ongoing at Tellerhäuser.
Outlook
2022 has been a year of a strong operational performance for First Tin at both
our assets in Australia and Germany. We expect 2023 to be another busy and
exciting year for us where we will continue to build on the momentum achieved
last year to add further value to our assets.
This will be achieved through the completion of our DFS at Taronga and the
delivery of updated resources for each project in 2023. We have already
gathered a significant amount of data from both, and with no red flags having
emerged to date, we remain optimistic for the future.
Our macro view of the tin market remains bullish with tin spot prices having
risen in recent years, with record highs in March 2022 of US$49,000 per tonne.
It is clear that the demand for tin will remain strong in the years ahead as
the metal continues to be an important component for soldering electronics
including semiconductors, solar panels, electronic systems in electric
vehicles (EVs) and batteries. These significant drivers, together with a rapid
increase in battery production and the rise of big data, are expected to
create a material tin deficit from 2025 and we are confident that First Tin
remains well positioned to take advantage of this opportunity and become a
material tin supplier from its conflict-free and low political risk
jurisdictions.
We have the right strategy and business model to unlock the significant value
potential of our tin assets and pursue our purpose to develop a sustainable
tin mining company to generate a long-term value for all our stakeholders.
Mr. T Buenger
Chief Executive Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
Note 2022 2021
£ £
Administrative expenses (3,240,389) (1,321,977)
Operating loss 6 (3,240,389) (1,321,977)
Other gains and losses 8 - 167,795
Finance costs 9 (2,557) (58,495)
Loss before tax (3,242,946) (1,212,677)
Income tax expense 10 - -
Loss for the year (3,242,946) (1,212,677)
Other comprehensive income/(loss)
Exchange differences on translation of foreign
operations 118,937 (117,093)
Changes in the fair value of equity instruments at fair value 8 - (582,750)
Other comprehensive income/(loss) for the
year 118,937 (699,843)
(699,843)
Total comprehensive loss for the year (3,124,009) (1,912,520)
Total comprehensive loss attributable to
the equity holders of the company (3,124,009) (1,912,520)
Basic loss - pence per share 11 (1.40) (1.02)
Diluted loss - pence per share 11 (1.40) (1.02)
The Notes form an integral part of these Consolidated Financial Statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
Note 2022 2021
£ £
Non-current assets
Intangible assets 13 27,367,552 3,380,913
Investments 14 - 1,543,670
Property, plant and equipment 15 1,589,748 28,851
28,957,300 4,953,434
Current assets
Trade and other receivables 16 808,711 413,620
Cash and cash equivalents 13,823,173 2,503,714
14,631,884 2,917,334
Current liabilities
Trade and other payables 17 (1,805,298) (301,452)
Net current assets 12,826,586 2,615,882
Total assets less current liabilities 41,783,886 7,569,316
Net assets 41,783,866 7,569,316
Capital and reserves
Called up share capital 21 265,535 138,868
Share premium account 21 18,391,046 17,931,296
Merger relief reserve 22 17,940,000 -
Warrant reserve 22 269,138 95,372
Retained earnings 22 4,887,594 (10,507,856)
Translation reserve 22 30,573 (88,364)
Shareholders' funds 41,783,886 7,569,316
The Notes form an integral part of these Consolidated Financial Statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Merger
Share Share relief Warrant Retained Translation Total
capital premium reserve reserve earnings reserve equity
£ £ £ £ £ £ £
At 1 January 2022 138,868 17,931,296 - 95,372 (10,507,856) (88,364) 7,569,316
Loss for the year - - - - (3,242,946) - (3,242,946)
Other comprehensive loss for
the year - - - - - 118,937 118,937
Total comprehensive loss
for the year - - - - (3,242,946) 118,937 (3,124,009)
Transactions with owners:
Capital reduction - (17,931,296) - - 17,931,296 - -
Issuance of shares (net of
issuance costs) 66,667 18,564,812 - - - - 18,631,479
Shares issued to acquire
Taronga 60,000 - 17,940,000 - - - 18,000,000
Share-based payments - (173,766) - 173,766 707,100 - 707,100
Total transactions with
owners 126,667 459,750 17,940,000 173,766 18,638,396 - 37,338,579
At 31 December 2022 265,535 18,391,046 17,940,000 269,138 4,887,594 30,573 41,783,886
Share Share Shares to Warrant Retained Translation Total
capital premium be issued reserve earnings reserve equity
£ £ £ £ £ £ £
At 1 January 2021 70,177 10,264,409 50,411 - (8,861,429) 28,729 1,552,297
Loss for the year - - - - (1,212,677) - (1,212,677)
Other comprehensive loss for
the year - - - - (582,750) (117,093) (699,843)
Total comprehensive loss
for the year - - - - (1,795,427) (117,093) (1,912,520)
Transactions with owners:
Accrued interest on convertible
loan notes - - 54,247 - - - 54,247
Issuance of shares 68,691 7,747,650 (104,658) - - - 7,711,683
Share based payments - (80,763) - 95,372 149,000 - 163,609
Total transactions with
owners 68,691 7,666,887 (50,411) 95,372 149,000 - 7,929,539
At 31 December 2021 138,868 17,931,296 - 95,372 (10,507,856) (88,364) 7,569,316
The Notes form an integral part of these Consolidated Financial Statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
2022 2021
£ £
Cash flows from operating activities
Operating loss (3,240,389) (1,321,977)
Adjustments to reconcile loss before tax to net cash flows:
Depreciation of tangible assets 20,597 8,845
Share-based payment expense 707,100 163,609
Increase in trade and other receivables (357,635) (317,770)
Increase in trade and other payables 1,503,846 113,731
Cash used in operations (1,366,481) (1,353,562)
Interest paid (2,557) (4,248)
Net cash flows used in operating activities (1,369,038) (1,357,810)
Cash flows from investing activities
Purchase of intangible fixed assets (5,288,557) (588,255)
Purchase of property, plant and equipment (600,907) (28,165)
Initial consideration to acquire Taronga - (734,182)
Loan advanced to Taronga - (813,762)
Proceeds from sale of investment - 333,000
Cash acquired on acquisition of Taronga 102 -
Net cash flows used in investing activities (5,889,362) (1,831,364)
Cash flows from financing activities
Proceeds from issue of shares 19,000,000 5,601,000
Share issuance costs (368,521) -
Interest paid in respect of convertible loans - (200,000)
Net cash flows generated
from financing activities 18,631,479 5,401,000
Net increase in cash 11,373,079 2,211,826
Cash and cash equivalents at beginning of year 2,503,714 245,740
Exchange loss on cash and cash equivalents (53,620) 46,148
Cash at the end of period 13,823,173 2,503,714
As disclosed in Note 19 and Note 12, the material non-cash transactions relate
to the issue of new shares as part of the consideration to acquire Taronga
Mines Pty Ltd ("Taronga") and the settlement of broker commission.
The Notes form an integral part of these Consolidated Financial Statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
1. General Information
The Company is a public company limited by shares, incorporated in England and
Wales under the Companies Act 2006. The Company's registered address is First
Floor, 47/48 Piccadilly, London, England, W1J 0DT.
On 15 March 2022 the Company re-registered as a public company in the name of
First Tin Plc.
The financial statements comprise of financial information of the Company and
its subsidiary (the "Group"). The principal activities of the Company and the
Group and the nature of their operations are disclosed elsewhere in these
financial statements.
2. Presentation of financial statements
The financial statements are presented in pounds sterling, as this is the
currency of the primary economic environment that the Group operates in.
3. Significant accounting policies
3.1 Basis of preparation
These financial statements have been prepared on the going concern basis in
accordance with International Financial Reporting Standards as adopted by the
UK and the requirements of the Companies Act 2006. The financial statements
have been prepared on a historical cost basis.
3.2 Going concern
The Group currently has no income and meets its working capital requirements
through raising development finance. In common with many businesses engaged in
exploration and evaluation activities prior to production and sale of minerals
the Group will require additional funds and/or funding facilities in order to
fully develop its business plan. Ultimately the viability of the Group is
dependent on future liquidity in the exploration and study period and this, in
turn, depends on the availability of external funding.
During the year the Company's shares were admitted to trading on the London
Stock Exchange raising equity of £20 million. At 31 December 2022, the Group
had cash of £13.8 million (2021: £2.5 million).
The Directors have prepared financial projections and plans for a period of at
least 12 months from the date of approval of these financial statements. Based
on the current management plan, management believes that these funds are
sufficient for the expenditure to date as well as the planned forecast
expenditure for the forthcoming twelve months.
It is anticipated that additional capital will need to be raised by the end of
the second quarter of 2024 in order to continue to fund the Group's activities
at their planned levels beyond this date. This represents a material
uncertainty that may cast significant doubt the Group's and Company's ability
to continue as a going concern. However, the Directors have a reasonable
expectation that this uncertainty can be managed to a successful outcome, and
based on that assessment, the Group and Company will have adequate resources
to continue in operational existence for the foreseeable future. Accordingly,
these financial statements have been prepared on the going concern basis.
The financial statements do not reflect any adjustments that would be required
to be made if they were to be prepared on a basis other than the going concern
basis.
3.3 Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiaries). Control
is achieved where the Company has power over the investee, is exposed or has
rights to variable returns from its involvement with the investee and has the
ability to use its power to affect its returns.
Changes in the Group's interests in subsidiaries that do not result in a loss
of control are accounted for as equity transactions.
The results of subsidiaries acquired or disposed of are included in the
consolidated Statement of Comprehensive Income from the effective date of
acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial information of
subsidiaries to bring the accounting policies used into line with those used
by the Group.
All intra-group transactions, balances and unrealised gains on transactions
between group companies are eliminated on consolidation.
3.4 Intangible assets other than goodwill
Exploration and evaluation assets
The Group capitalises costs which directly relate to exploration and
evaluation activities in areas for which it has obtained appropriate legal
rights and there is a high degree of confidence in the feasibility of the
project.
Capitalised exploration and evaluation costs include acquisition of rights to
explore, topographical, geological, geochemical and geophysical studies,
exploration drilling, sampling and activities in relation to the evaluation of
the technical feasibility and commercial viability of extracting a mineral
resource. General and administrative costs directly associated with such
activities are also capitalised.
Exploration and evaluation costs are carried at cost less any impairment and
are not amortised prior to the conclusion of the appraisal activities. If the
appraisal activities establish the existence of commercial reserves and the
decision is made to develop the site, then the carrying value of the
associated exploration and evaluation assets is tested for impairment and
subsequently reclassified as development and production assets. If commercial
reserves have not been found, or exploration and evaluation activities have
been abandoned, then the associated exploration and evaluation assets are
fully impaired.
Impairment charges and exploration costs incurred prior to obtaining legal
rights are expensed in the profit and loss as incurred.
3.5 Property, plant and equipment
Items of property, plant and equipment that do not form part of the
exploration and evaluation assets are carried as cost less accumulated
depreciation and are depreciated on a straight-line basis over the following
expected useful economic lives:
Land and buildings Land is not depreciated
Motor vehicles 3 years
Fixtures and fittings 3 - 15 years
3.6 Impairment of non-financial assets
At each reporting date, the Directors assess whether there is any indication
that a Group's asset, other than deferred tax assets, may be impaired. Where
an indicator of impairment exists, the Directors make an estimate of the
recoverable amount. An impairment loss is recognised in profit and loss
whenever the carrying amount of the asset or cash generating unit exceeds its
recoverable amount.
Recoverable amount is the higher of fair value less costs to sell 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 which the estimates of future cash flows have not
been adjusted.
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 (or
cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised immediately in the profit and 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 (or 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 (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognised immediately in the profit and
loss, unless the relevant asset is carried at a revalued amount greater than
cost, in which case the reversal of the impairment loss is treated as a
revaluation increase.
3.7 Segment 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 Board of
Directors.
3.8 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with
banks, other short-term liquid investments with original maturities of three
months or less and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities.
3.9 Financial assets
Financial assets are recognised in the Statement of Financial Position when
the Group becomes party to the contractual provisions of the instrument.
Financial assets are classified into specified categories. The classification
depends on the Group's business model for managing the financial assets and
the contractual terms of the cash flows. Financial assets are initially
measured at fair value plus transaction costs.
Loans and receivables
Trade receivables are recognised initially at the amount of consideration that
is unconditional, unless they contain significant financing components, in
which case they are recognised at fair value. They are subsequently measured
at amortised cost using the effective interest method less loss allowance.
Loans and other receivables that have fixed or determinable payments and are
held for collection of contractual cash flows, where those cash flows
represent solely payments of principal and interest, are measured at amortised
cost using the effective interest method less any impairment.
Interest is recognised by applying the effective interest rate, except for
short-term receivables when the recognition of interest would be immaterial.
The effective interest method is a method of calculating the amortised cost of
a debt instrument and of allocating the interest income over the relevant
period. The effective interest rate is the rate that exactly discounts
estimated future cash receipts through the expected life of the debt
instrument to the net carrying amount on initial recognition.
Impairment of financial assets
The Group assesses on a forward-looking basis the expected credit loss
associated with its receivables carried at amortised cost. The impairment
methodology applied depends on whether there has been a significant increase
in credit risk. For trade receivables, the Group applies the simplified
approach permitted by IFRS 9, resulting in trade receivables recognised and
carried at original invoice amount less an allowance for any uncollectible
amounts based on expected credit losses.
The Group recognises a loss allowance for expected credit losses on
investments in debt instruments that are measured at amortised cost. The
amount of expected credit losses is updated at each reporting date to reflect
changes in credit risk since initial recognition of the respective financial
instrument.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash
flows from the asset expire, or when it transfers the financial asset and
substantially all the risks and rewards of ownership to another entity.
3.10 Financial liabilities
Financial liabilities are classified as either financial liabilities at fair
value through profit or loss or other financial liabilities.
Other financial liabilities
Other financial liabilities, including trade and other payables, are initially
measured at fair value, and are subsequently measured at amortised cost, using
the effective interest rate method.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the Group's
obligations are discharged, cancelled, or they expire.
3.11 Equity instruments
Equity instruments issued by the Company are recorded at the proceeds
received, net of direct issue costs. Dividends payable on equity instruments
are recognised as liabilities once they are no longer at the discretion of the
Company.
3.12 Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the profit and loss 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 reporting date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit and is accounted for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if
the temporary difference arises from goodwill or from the initial recognition
of other assets and liabilities in a transaction that affects neither the tax
profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered. Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled, or the asset is realised.
Deferred tax is charged or credited in the profit and loss, except when it
relates to items charged or credited directly to equity, in which case the
deferred tax is also dealt with in equity. Deferred tax assets and liabilities
are offset when the Group has a legally enforceable right to offset current
tax assets and liabilities and the deferred tax assets and liabilities relate
to taxes levied by the same tax authority.
3.13 Foreign exchange
Functional and presentation currency
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the "functional currency"). The consolidated financial
statements are presented in pound sterling, which is the Group's functional
and presentation currency.
Transactions and balances
Transactions in currencies other than the functional currency are recorded at
the rates of exchange prevailing at the dates of the transactions. At each
reporting date, monetary assets and liabilities that are denominated in
foreign currencies are retranslated at the rates prevailing on the reporting
date. Gains and losses arising on translation are included in profit or loss
for the period.
Group companies
For the purpose of presenting the consolidated financial statements, the
assets and liabilities of the Group's foreign operations are translated at
exchange rates prevailing on the reporting date. Income and expense items are
translated at the average exchange rates for each period, unless exchange
rates fluctuate significantly during that period, in which case the exchange
rates at the date of transaction are used. All resulting exchange differences
are recognised in "other comprehensive income" and accumulated in equity.
3.14 Leases
The Directors assess whether a Group's contract is, or contains, a lease at
inception of the contract. Payments associated with short-term leases or
leases of low value assets are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a lease-term of
12 months or less without a purchase option.
3.15 Share-based payments
Equity-settled share-based payments to employees and others providing similar
services are measured at the fair value of the equity instruments at the grant
date. The fair value excludes the effect of non-market-based vesting
conditions. Details regarding the determination of the fair value of
equity-settled share-based transactions are set out in Note 12 to these
financial statements.
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 Directors' estimate of the number of equity instruments that will
eventually vest. At each reporting date, the Directors revises their estimate
of the number of equity instruments expected to vest as a result of the effect
of non-market-based vesting conditions. The impact of the revision of the
original estimates, if any, is recognised in profit or loss such that the
cumulative expense reflects the revised estimate, with a corresponding
adjustment to reserves.
Equity-settled share-based payment transactions with parties other than
employees are measured at the fair value of the goods or services received,
except where that 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.
3.16 New and amended standards adopted by the Group
The Group has applied the following amendments for the first time for the
annual reporting period commencing 1 January 2022:
· Property, Plant and Equipment: Proceeds before Intended Use -
Amendments to IAS 16
· Onerous Contracts - Cost of Fulfilling a Contract - Amendments to
IAS 37
· Annual Improvements to IFRS Standards 2018-2020; and
· Reference to the Conceptual Framework - Amendments to IFRS 3.
The amendments listed above did not have any impact on the amounts recognised
in prior periods and are not expected to significantly affect the current or
future periods.
3.17 New standards and interpretations not yet adopted
Certain new accounting standards, amendments to accounting standards and
interpretations have been published that are not mandatory for 31 December
2022 reporting periods and have not been early adopted by the Group. These
standards, amendments or interpretations are not expected to have a material
impact on the entity in the current or future reporting periods and on
foreseeable future transactions.
4. Critical accounting estimates and judgements
The preparation of the Group's financial statements under IFRS requires the
Directors to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and
liabilities. 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.
Actual results may differ from these estimates.
Details of the Group's significant accounting judgements used in the
preparation of these financial statements include:
Recoverability of intangible exploration and evaluation assets
Where a project is sufficiently advanced, the recoverability of intangible
exploration and evaluation assets is assessed by comparing the carrying value
to internal and operator estimates of the net present value of projects.
Intangible exploration assets are inherently judgemental to value. The amounts
for intangible exploration and evaluation assets represent active exploration
projects. These amounts will be written-off to the profit and loss as
exploration costs unless commercial reserves are established, or the
determination process is completed and there are no indications of impairment.
Acquisition of Taronga
On 8 April 2022, the Company acquired the entire issued share capital of
Taronga Mines Pty Limited. The Company acquired a collection of assets
comprising some property and exploration equipment and the Taronga exploration
and evaluation assets. The Company evaluated the acquisition to determine
whether it met the definition of a business in accordance with IFRS 3 and
concluded that since there were no processes or outputs present at the time of
acquisition, it did not gain control of an integrated set of assets and
therefore the acquisition was that of a group of assets and not of a business.
5. Segmental analysis
In the opinion of the Board of Directors the Group has one operating segment,
being the exploitation of mineral rights.
The Group also analyses and measures its performance into geographic regions,
specifically Germany and Australia.
Non-current assets by region are summarised below:
2022 2021
£ £
Germany 6,824,224 3,409,764
Australia 22,133,076 1,543,670
28,957,300 4,953,434
6. Operating loss
The operating loss for the year is stated after charging the following:
2022 2021
£ £
At 1 January 2021
Additions
Currency translation
At 31 December 2021
Depreciation 20,597 8,845
Expenses relating to short-term leases 90,914 44,586
Share-based payment expense (Note 12) 707,100 14,609
IPO and acquisition related costs 737,040 -
Auditor's renumeration:
Fees payable to the Company's auditor for the audit of the Company and 62,000 35,000
consolidated financial statements
Fees payable to the Company's auditor for
Other services: Other transaction work 218,000 130,800
Review of interim accounts 5,500 -
Amounts reclassified as prepayments - (130,800)
Total auditor's renumeration 285,500 35,000
7. Staff costs and Director's renumeration
2022 2021
£ £
At 1 January 2021
Additions
Currency translation
At 31 December 2021
Wages and salaries 1,124,086 309,857
Social security costs 104,671 52,298
Pension costs 36,683 -
1,265,440 362,155
Amount capitalised as intangible asset (791,342) (117,548)
Total staff cost recognised in the profit and loss 474,098 244,607
The average number of staff employed by the Group, including Directors, is
detailed below:
2022 2021
No. No.
At 1 January 2021
Additions
Currency translation
At 31 December 2021
Management and administration 11 3
Geology and environment 12 3
Average number of staff employed by the Group 23 6
Directors' remuneration and fees are disclosed in the Directors' Remuneration
Report. The Directors are regarded as the key management personnel.
8. Other gains and losses
2022 2021
£ £
At 1 January 2021
Additions
Currency translation
At 31 December 2021
Gain on fair value of conversion option - 167,795
In 2021 the Group disposed of an equity investment in Panthera Resources Plc,
a company listed on the AIM market of the London Stock Exchange. The loss on
disposal of £582,750 was recognised in other comprehensive income.
9. Finance costs
2022 2021
£ £
At 1 January 2021
Additions
Currency translation
At 31 December 2021
Interest on convertible loan notes - 54,247
Bank charges and other finance costs 2,557 4,248
2,557 58,495
10. Income tax expense
2022 2021
£ £
At 1 January 2021
Additions
Currency translation
At 31 December 2021
Current tax - -
Deferred tax - -
- -
2022 2021
£ £
At 1 January 2021
Additions
Currency translation
At 31 December 2021
Loss before taxation on continued operations (3,242,946) (1,212,677)
Loss on before taxation multiplied by
standard rate of UK corporation tax of
19% (2021 - 19%) (616,159) (230,409)
Difference in overseas tax rate (174,737) (61,154)
Expenses not deductible for tax 257,155 31,519
Effect of tax losses not recognised as
deferred tax assets 533,741 260,044
Total tax charge for the year - -
The Group has tax losses carried forward of approximately £12.3 million
(2021: £7.4 million). The unutilised tax losses have not been recognised as a
deferred tax asset due to uncertainty over the timing of future profits and
gains.
An increase in the UK corporation tax rate from 19% to 25% for the financial
year beginning 1 April 2023 was substantively enacted on 24 May 2021.
11. Loss per Ordinary share
2022 2021
Loss for the period attributable to the ordinary
equity holders of the Company (£) (3,242,946) (1,212,677)
Basic loss per Ordinary share
Weighted average number of Ordinary shares
in issue 231,872,871 118,813,650
Basic loss per Ordinary share (pence) (1.40) (1.02)
Diluted loss per Ordinary share
Weighted average number of Ordinary shares
in issue 232,112,833 122,593,003
Diluted loss per Ordinary share (pence) (1.40) (1.02)
For diluted loss per share, the weighted average number of ordinary shares in
issue is adjusted to assume conversion of all potential dilutive warrants,
options and convertible loans over ordinary shares. Potential ordinary shares
resulting from the exercise of warrants, options and the conversion of
convertible loans have an anti-dilutive effect due to the Group being in a
loss position. As a result, diluted loss per share is disclosed as the same
value as basic loss per share
12. Share-based payments
Share options and warrants
The Group adopted the First Tin Option Plan ("FT Option Plan"), effective from
8 April 2022. In addition to the FT Option Plan the Group as certain
outstanding warrants and options issued under previous schemes.
The options issued under previous schemes vest 7 business days after the grant
date, have an exercise price of 13p and, if they remain unexercised after 4
years, they expire. If the employees leave the Company, the options expire 90
days after their leaving date.
The options issued under the FT Option Plan vested on admission to the London
Stock Exchange and are exercisable for periods between 2 and 3 years from
issue.
No. of No. of No. of No. of
options options warrants warrants
2022 2021 2022 2021
Outstanding at beginning of period 1,560,000 2,210,000 3,168,000 2,407,048
Granted during the period 8,500,000 - 2,500,000 3,168,000
Expired during the period - (650,000) - (2,407,048)
Outstanding at the end of the period 10,060,000 1,560,000 5,668,000 3,168,000
Exercisable at the end of the period 10,060,000 1,560,000 5,668,000 3,168,000
Weighted average exercise price (pence) 30 13 26 20
Share options outstanding at the end of the year have the following expiry
dates and exercise prices:
Exercise No. of No. of
price Options Options
Grant date Expiry date pence 2022 2021
4 March 2019 4 March 2023 13 1,560,000 1,560,000
6 April 2022 5 April 2025 33 8,500,000 -
10,060,000 1,560,000
Weighted average remaining contractual life of options
outstanding at the end of the year 1.94 1.17
Warrants outstanding at the end of the year have the following expiry dates
and exercise prices:
Exercise No. of No. of
price Options Options
Grant date Expiry date pence 2022 2021
27 April 2021 9 April 2024 20 2,668,000 2,668,000
29 June 2021 9 April 2024 20 500,000 500,000
29 March 2022 6 April 2024 33 2,500,000 -
5,668,000 3,168,000
Weighted average remaining contractual life of options
outstanding at the end of the year 1.27 2.27
12. Share-based payments (continued)
Share options and warrants (continued)
Fair value of options granted
The assessed fair value at the grant date of options granted during the year
ended 31 December 2022 was £0.08 per option. The fair value at grant date is
determined using the Black-Scholes model, which takes into account the
following inputs:
2022 2021
Grant date 8 April 2022 -
Exercise price 33 pence -
Market value at grant date 30 pence -
Expected term 3 years -
Volatility 44% -
Risk free rate 1.5% -
The volatility is calculated based upon the volatilities of peer group
companies since there is insufficient historic data available for the Group.
Fair value of warrants granted
The Group issued 2,500,000 warrants (2021 - 3,168,000) at an exercise price of
33 pence, exercisable over a period of two years from the date of grant. The
fair value was calculated at £173,766 (2021 - £80,763). The fair value was
determined using the Black-Scholes model, with the following inputs: market
value at grant date of 30 pence, expected term of 2 years, volatility of 46%
and risk free rate of 1.4%.
Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during
the period were as follows:
2022 2021
£ £
Recognised in profit or loss:
Options issued to Directors under the FT Option Plan 582,317 -
Options issued to staff and consultants under the FT Option Plan 124,783 -
Warrants issued to consultants - 14,609
707,100 14,609
Recognised against share premium:
Warrants issued in respect of broker services 173,766 80,763
Shares issued in settlement of broker commission 1,000,000 -
1,173,766 80,763
1,880,766 95,372
13. Intangible assets
Exploration
and
evaluation
assets
£
Cost
At 1 January 2021
Additions
Currency translation
At 31 December 2021
At 1 January 2021 2,950,227
Additions 588,255
Currency translation (157,569)
At 31 December 2021 3,380,913
Additions 5,288,557
Acquisition of Taronga (Note 19) 18,558,503
Currency translation 139,579
At 31 December 2022 27,367,552
The intangible assets relate to the Tellerhäuser and Taronga tin projects
located in southern Saxony in the east of Germany and Australia, respectively.
The Directors assess for impairment when facts and circumstances suggest that
the carrying amount of an Exploration and evaluation ("E&E") asset may
exceed its recoverable amount. In making this assessment, the Directors have
regard to the facts and circumstances noted in IFRS 6 paragraph 20. In
performing their assessment of each of these factors, at 31 December 2022, the
Directors have:
a) reviewed the time period that the Group has the right to explore the
area and noted no instances of expiration, or licences that are expected to
expire in the near future and not be renewed;
b) determined that further E&E expenditure is either budgeted or
planned for all licences;
c) not decided to discontinue exploration activity due to there being a
lack of quantifiable mineral resource; and
d) not identified any instances where sufficient data exists to indicate
that there are licences where the E&E spend is unlikely to be recovered
from successful development or sale.
On the basis of the above assessment, the Directors are not aware of any facts
or circumstances that would suggest the carrying amount of the E&E asset
may exceed its recoverable amount.
14. Investments
2022 2021
£ £
Investment deposit - 734,182
Long-term receivables - 809,488
- 1,543,670
In November 2021, the Company entered into a Sale and Purchase Agreement with
Aus Tin, the parent entity of Taronga, to acquire the entire share capital of
Taronga for an initial cash consideration of £734,182 (AUD$1,350,000)
followed by the issue of 60,000,000 ordinary shares of the Company on
completion. The acquisition was subject to a number of conditions including
the Company's share capital being admitted to trading on the main market of
the London Stock Exchange and completing a capital raising of £20 million by
no later than 30 June 2022. The Company also provided an unsecured, interest
free loan to Taronga to the value of £813,762 (AUD$1,505,000) as working
capital. The acquisition was completed on 8 April 2022 as disclosed further in
Note 19.
No provision for impairment was recognised as at 31 December 2022 or 2021.
The table below sets out the Company's subsidiaries. The subsidiaries have
share capital consisting solely of ordinary shares and the proportion of
ownership interests held equals the voting rights. The registered office
address is also their principal place of business:
Name of company Place of operation Principal activity Shareholding
Saxore Bergbau GmbH ("Saxore") Platz der Oktoberopfer 1A Mineral exploration 100%
(incorporated in Germany) 09599 Freiberg
Germany
Taronga Mines Pty Ltd (incorporated in Australia) 2 Glen Innes Road, Emmaville, NSW 2371 Mineral exploration 100%
Australia
First Tin Australia Pty Ltd 2 Glen Innes Road, Emmaville, NSW 2371 Dormant 100%
(incorporated in Australia) Australia
15. Property, plant and equipment
Land & Motor Fixtures &
Buildings Vehicles Fittings Total
£ £ £ £
Cost
At 1 January 2021 - 15,550 41,957 57,507
Additions - 24,842 3,323 28,165
Currency translation - (1,589) (7,483) (9,072)
At 31 December 2021 - 38,803 37,797 76,600
Additions 415,220 110,583 75,104 600,907
Acquisition of Taronga (Note 19) 965,939 - 34,202 1,000,141
Currency translation (21,179) 1,658 3,119 (16,402)
At 31 December 2022 1,359,980 151,044 150,222 1,661,246
Depreciation
At 1 January 2021 - 13,518 33,059 46,577
Charge for year - 4,811 4,034 8,845
Currency translation - (762) (6,911) (7,673)
At 31 December 2021 - 17,567 30,182 47,749
Charge for year - 9,334 11,263 20,597
Currency translation - 1,160 1,992 3,152
At 31 December 2022 - 28,061 43,437 71,498
Net book value
At 31 December 2022 1,359,980 122,983 106,785 1,589,748
At 31 December 2021 - 21,236 7,615 28,851
16. Trade and other receivables
2022 2021
£ £
Prepayments and other receivables 386,287 311,549
Recoverable value added taxes 422,424 102,071
808,711 413,620
17. Trade and other payables
2022 2021
£ £
Trade payables 761,512 210,521
Accruals 949,004 79,449
Other payables 94,782 11,482
1,805,298 301,452
18. Financial instruments
The principal financial instruments used by the Group from which financial
instrument risk arises are as follows:
Financial assets
2022 2021
£ £
Measured at amortised cost
Cash and cash equivalents 13,823,173 2,503,714
Trade and other receivables 52,428 67,736
13,875,601 2,571,450
Financial liabilities
2022 2021
£ £
Liabilities measured at amortised
cost
Trade and other payables 1,805,298 301,452
All financial assets and liabilities are due within one year.
The main risks arising from the Group's activities are market risk, credit
risk and liquidity risk.
Market risk
Market risk is the risk that the fair value of future cash flows will
fluctuate because of changes in market price. This risk is primarily comprised
of interest risk and foreign currency risk.
Foreign currency risk management
As highlighted earlier in these financial statements, the presentation
currency of the Group is pound sterling. The Group has foreign currency
denominated assets and liabilities. Exposures to exchange rate fluctuations
therefore arise. The Group pays for invoices denominated in a foreign currency
in the same currency as the invoice therefore suffers from a level of foreign
currency risk. The Group does not enter into any derivative financial
instruments to manage its exposure to foreign currency risk.
The carrying amount of the Group's foreign currency denominated monetary
assets and monetary liabilities as at 31 December 2022 is as follows:
2022 2021
£ £
Australian dollars
Long-term receivables - 809,488
Cash balances 5,616,478 -
5,616,478 809,488
2022 2021
£ £
Euro
Cash balances 4,973,867 -
As at 31 December 2022, if all foreign currencies in which the Group
transacts, had strengthened or weakened by 10% against pound sterling with all
other variables held constant, post-tax loss for the year would have
increased/(decreased) by:
2022 2021
£ £
Strengthened by 10% increase
in post-tax loss 962,765 75,583
Weakened by 10% decrease in post-tax
loss (1,176,716) (89,932)
The rate of 10% is the sensitivity rate used when reporting foreign currency
risk internally to key management personnel and represents management's
assessment of the reasonable possible change in foreign exchange rates. The
sensitivity analysis includes only outstanding foreign currency denominated
monetary items and adjusts their translation at the year-end for a 10% change
in foreign currency rates. A positive number above indicates an increase in
loss (increase in profit) or other equity where the pound sterling strengthens
by 10% against the relevant currency. For a 10% weakening of the pound
sterling against the relevant currency, there would be an equal and opposite
impact on the profit or loss and other equity.
Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. Credit risk
arises principally from the Group's cash balances and other receivables.
The Group gives careful consideration to which organisations it uses for its
banking services in order to minimise credit risk. The Group considers the
banks and financial institutions have low credit risks. Therefore, the Group
is of the view that the loss allowance is immaterial and hence no provision is
required.
The concentration of the Group's credit risk is considered by counterparty,
geography and currency. The Group does not have any significant concentrations
of credit risk at the reporting date related to external third parties.
As at 31 December 2022, the Group held no collateral as security against any
financial asset. No financial assets were past their due date and there were
no problems with the credit quality of any financial assets in the year. As a
result, there has been no impairment of financial assets during the year.
The carrying amount of financial assets recorded in the financial statements,
net of any allowances for losses, represents the Group's maximum exposure to
credit risk without taking account of the value of any collateral obtained. An
allowance for impairment is made where there is an identified loss event
which, based on previous experience, is evidence of a reduction in the
recoverability of the cash flows. Management considers the above measures to
be sufficient to control the credit risk exposure.
The Group recognises a loss allowance for expected credit losses in debt
instruments at each reporting date. As at 31 December 2022 and 2021, no
impairment was recognised.
Liquidity risk
Liquidity risk is the risk that an entity may not be able to generate
sufficient cash resources to settle its obligations as they fall due. The
Directors monitor cash flow requirements regularly and adopt a prudent
liquidity risk management approach to ensure sufficient cash is available for
operational expenses.
The following tables detail the Group's remaining contractual maturity for its
financial liabilities with agreed repayment periods. The tables 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.
2022 2021
£ £
Due within 1 month
Trade and other payables 1,805,298 301,452
Fair values
The Directors consider that the carrying amount of loans and receivables and
other financial liabilities approximates to their fair value because of the
short-term nature of such assets the effect of discounting is negligible.
Capital management
For the purposes of capital management, capital includes issued capital and
all other equity reserves attributable to the equity holders of the Company.
The primary objective of the Directors' capital management is to ensure that
the Group will be able to continue as a going concern while sustaining the
future development of the business.
19. Acquisition of subsidiary
On 8 April 2022, First Tin Plc acquired 100% of the share capital of Taronga
Mines Pty Ltd ("Taronga") in exchange for a combination of cash, shares in
First Tin Plc and assumption of the liability due to First Tin Plc. The assets
were acquired in line with the Company's aim of being able to deliver a
sustainable answer to the material supply issues faced by industrial tin
consumers. The acquisition has been accounted for as an asset acquisition,
with the cost of the group of assets and liabilities allocated to the
individual identifiable assets and liabilities on the basis of their relative
fair values at the date of purchase.
Total consideration transferred as part of the acquisition was:
Fair value
£
Consideration
Total cash transferred 734,182
Shares transferred (60,000,000 shares at 30p) 18,000,000
Assumption of liability due to First Tin Plc 862,020
19,596,202
The fair value of the 60,000,000 shares issued as part of the consideration
paid for Taronga of £18 million was based on the Company's share price of 30
pence per share as at 8 April 2022.
The total consideration has been allocated to the individual identifiable
assets and liabilities on the basis of their relative fair values at the date
of purchase as follows:
Fair value
Recognised amounts of assets acquired and £
liabilities assumed
Property, plant and equipment - plant and
machinery 34,202
Property, plant and equipment - land and
buildings 965,939
Intangibles - exploration and evaluation assets 18,558,503
Cash balances 102
Other current assets 37,456
Total identifiable net assets 19,596,202
The loss reported by Taronga Mines Pty Ltd included in the consolidated
statement of comprehensive income for the period is £376,101. There would
have been no material difference to the consolidated loss for the year if the
acquisition had occurred on 1 January 2022.
20. Related party transactions
Directors' remuneration and fees
Directors' remuneration and fees are disclosed in the Directors' Remuneration
Report.
Other fees and transactions
Mr C Cannon Brookes was a director of Arlington Group Asset Management Limited
("Arlington") for the reporting period. During the year, Arlington invoiced
and was paid £876,004 (2021: £420,499 in respect of fund-raising commissions
and expenses, financial advisory fees and director's fees.
Mr M E Thompson and Mr S L Fabian were directors of Tungsten West Plc
("Tungsten") for the reporting period. During the year, Tungsten invoiced
and was paid £nil (2021: £8,000) in respect of shared office rental charges.
Mr M E Thompson was a director of Treliver Minerals Trustees Limited
("Treliver") for the reporting period. During 2021, Treliver repaid an
unsecured interest free loan of £69,818. At 31 December 2022 £nil (2021:
£nil) was owed to the Group.
21. Share capital and share premium
2022 2021
£ £
Allotted, called up and fully paid share capital
265,534,972 (2021: 138,868,305) Ordinary shares of £0.001 each 265,535 138,868
Movements in ordinary shares
No. of Share Share
shares Capital premium Total
£ £ £
Opening balance at 1 January 2021 70,176,522 70,177 10,264,409 10,334,586
Shares issued on conversion of loan
notes 27,691,781 27,691 2,187,651 2,215,342
Shares issued as part of fundraising 40,000,002 40,000 5,960,000 6,000,000
Shares issued to T Buenger under the
terms of his CEO contract 1,000,000 1,000 - 1,000
138,868,305 138,868 18,412,060 18,550,928
Less: issuance costs (400,001) (400,001)
Less: warrant expense - - (80,763) (80,763)
Opening balance at 1 January 2022 138,868,305 138,868 17,931,296 18,070,164
Shares issued on IPO 66,666,667 66,667 19,933,333 20,000,000
Shares issued to acquire Taronga 60,000,000 60,000 - 60,000
265,534,972 265,535 37,864,629 38,130,164
Less: issuance costs settled in shares - - (1,000,000) (1,000,000)
Less: issuance costs settled in cash - - (368,521) (368,521)
Less: warrant expense - - (173,766) (173,766)
Less: capital reduction - - (17,931,296) (17,931,296)
Closing balance at 31 December 2022 265,534,972 265,535 18,391,046 18,656,581
The shares have attached to them full voting, dividend and capital
distribution (including on winding up) rights; they do not confer any rights
of redemption.
In March 2022, as part of the re-registration to a public limited company, the
Company completed a capital reduction which reduced the share premium by
£17,931,296. This was offset against its retained deficit.
On 8 April 2022 the Company issued 66,666,667 Ordinary shares of £0.001 each
at 30 pence per share under the terms of its Initial Public Offering.
On 8 April 2023 the Company issued 60,000,000 Ordinary shares of £0.001 each
at 30 pence per share as part of the consideration for the acquisition of
Taronga (see Note 19).
22. Reserves
The warrant reserve is used to hold the fair value of warrants issued but not
yet exercised.
The merger reserve is used to hold the premium on share issued to acquire
subsidiaries where merger relief applies under Section 612, Companies Act
2006.
The retained earnings reserve contains the accumulated losses of the Group.
The translation reserve is used to hold the accumulated gains and losses on
translation of overseas subsidiaries.
23. Net debt reconciliation
The table below sets out an analysis of net funds and the movements in net
funds for each of the years presented:
2022 2021
£ £
Cash and cash equivalents 13,823,173 2,503,714
Net funds 13,823,173 2,503,714
Cash and
cash Convertible
equivalents Loan note Total
£ £ £
Net funds
At 1 January 2021 245,740 (2,478,479) (2,232,739)
Cash flows 2,211,826 - 2,211,826
Currency translation 46,148 - 46,148
Movement in fair value - 781,955 781,955
Shares issued on redemption of loan - 1,696,524 1,696,524
At 31 December 2021 2,503,714 - 2,503,714
Cash flows 11,371,009 - 11,371,009
Currency translation (51,550) - (51,550)
At 31 December 2022 13,823,173 - 13,823,173
24. Ultimate controlling party
In the opinion of the Directors, there is no controlling party.
25. Events after the reporting period
There have been no material events to report since the year end.
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