REG - Kazera Global PLC - Final Results, Annual Report & Notice of AGM
15/12/2023 07:00
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RNS Number : 9072W Kazera Global PLC 15 December 2023
15 December 2023
Kazera Global plc ('Kazera' or 'the Company')
Final Results and publication of Annual Report and Notice of AGM
Kazera Global plc, the AIM-quoted investment company, is pleased to announce
its Final Results for the year ended 30 June 2023 and the publication of its
Annual Report which will be made available on the Company's website.
Highlights
Whale Head Minerals - Heavy Mineral Sands (HMS)
· August 2022: Receipt of mining permit for heavy mineral sands
project at Walviskop
· December 2022: Commenced initial production of HMS
· June 2023: Pilot plant showed very promising HMS results with
samples and test results:
o forming the basis for informed strategic discussions with potential
offtake partners
o indicating presence of higher value minerals including rutile, zircon, and
monazite
o identified to have raised levels of radioactivity and the Company
submitted the necessary application to the National Nuclear Regulator for the
appropriate permit.
Deep Blue Minerals - Diamonds
· July 2022: Diamond mine pan plant installed and commissioned
· March 2023: New plant completed and new mining blocks granted to
give access to a further 28,000 carats of diamonds
· June 2023: New heavy equipment on site providing greater
flexibility on mining locations
African Tantalum - Tantalum and Lithium
· December 2022: Sale of African Tantalum (Aftan) to Hebei Xinjian
Construction ("Xinjian") agreed for cash consideration of US$13m
· June 2023: Aggregate proceeds received of US$4.2 million
Corporate
· March 2023: Strategic shareholder African Mineral Sands Pte Ltd
("AMS") agrees to acquire up to 29.9% of the Company's Ordinary Shares from an
existing shareholder at 1.5p per share
· Geoff Eyre, Gerard Kisbey-Green and Peter Wilson appointed to the
Board
· Cash at 30 June 2023 of £761k
Post Period:
· July 2023: Received further payment of c. US$650,000 from Xinjian
in respect of the sale of Aftan. Aggregate payments received total c.US$4.85
million.
· October 2023: HMS: Manufacture of Trommel screening plant
completed. Plant expected to start operating immediately on receival of
National Nuclear Regulator permit anticipated Q1 2024.
· November 2023: Diamonds: Pulsating diamond jig with 20 tons per
hour processing capacity ordered. Expected to start operating in early 2024
· December 2023: AMS completed purchase of 250,000,000 shares from
existing shareholder at 1.5 pence per Ordinary Share, becoming Kazera's
largest shareholder
Publication of Annual Report and Notice of AGM
The Company has today published a notice convening an annual general meeting
("AGM") of the Company to be held at 16:30 on 17 January 2024, at 33 St James'
Square, London, SW1Y 4JS.
The Company is also pleased to confirm that Kazera's annual report for the
year ended 30 June 2023 ("Annual Report") and the notice of AGM will be posted
to shareholders on 18 December 2023.
The Annual Report and notice of AGM will be made available on the Company's
website www.kazeraglobal.com.
CHAIRMAN'S STATEMENT
For the year ended 30 June 2023
Review of the Period
Such is the activity and progress at Kazera over the last year that it can be
easy to forget that I only joined the Group as Non-Executive Chairman in July
2022.
In my first annual report, I commented that it was an exciting prospect to
join the Company with its assets on the verge of becoming cash flow positive.
Whilst that objective is still a short distance away, I am proud of the
progress and changes that Kazera has made during the year, having laid a
strong foundation for future success.
It is sometimes overlooked that our two main investments, Whale Head Minerals
Pty Ltd ("WHM"), in which we hold 60% of the share capital, and Deep Blue
Minerals Pty Ltd ("Deep Blue" or "DBM"), in which we have a 64% beneficial
interest (see Note 14), are in their infancy. In fact, in 2020, Deep Blue had
a sub-contracting agreement to mine diamonds at Alexander Bay but absolutely
no equipment, and it was only in July 2022 that a mining permit was granted at
WHM's Walviskop site.
Progress at Deep Blue has been frustrating as we have tried to navigate the
challenges posed by the unique operating environment in which we operate. I
believe that we are close to having the correct structures and equipment to
finally realise the potential of this company.
WHM has seen significant progress during the year, however while work was
completed on the processing plant design and the major components of the Wet
Processing Plant were ordered, progress on actual production was delayed by
the need to apply for authorisation from the National Nuclear Regulator after
slightly elevated levels of radioactivity within the gravels were detected. It
is not uncommon for heavy mineral sands to contain radioactive elements; we
have submitted the necessary application and anticipate that authorisation
will be granted during the first quarter of the 2024 calendar year. In the
meantime, we have put this time to good use, further optimising the metallurgy
and process design to maximise recoveries once production begins.
Whilst there are still a few hurdles to overcome, the hard work, persistence,
and investment means the Group is in a much better place than it was a year
ago. My confidence in Kazera is multifaceted but fundamentally, the projects
have sizeable resources, and the mining, processing and sale of the
commodities is neither complex nor costly, and they can quickly become
profitable once we have in place the right equipment, infrastructure and
partners.
On the investment front, the transaction to sell our African Tantalum project
in Namibia has thus far allowed the Group to progress the WHM and Deep Blue
projects towards production and profitability without raising additional funds
or taking on any debt.
The Board chose to terminate the proposed acquisition of a 71% interest in
Great Lakes Graphite (Pty) Ltd in March 2023. Although it would have
diversified the Company's portfolio, the Board decided that it was more
prudent to focus its energy and the Company's resources on WHM and Deep Blue
where the route to production and profitability were well defined. The Board
and its advisors continue to seek and evaluate new investments whilst managing
capital and cash resources prudently. Both the termination of the Great Lakes
Graphite deal as well as the sale of Aftan demonstrates that the Board is
flexible in terms of the investment criteria and focused on adding value to
shareholders.
We have also been adding to the experience, knowledge and capacity of the
team. At board level, we were pleased to welcome Peter Wilson, with 42 years
of experience in the international mining and mining contract industry, and
Geoffrey Eyre, a finance professional with more than 17 years' experience in
senior positions in the mining industry, as Non-Executive Directors.
I am pleased to welcome African Mineral Sands Pte Ltd ("AMS"), which has
acquired 26.69% of the Company's Ordinary shares from an existing shareholder.
AMS has extensive experience in mining and infrastructure projects in Southern
Africa and its knowledge, experience and connections are already providing
opportunities for the Company.
In closing, I want to reiterate the progress Kazera has made in the past year.
We have made significant strides in bringing both WHM and Deep Blue closer to
profitability. Our focus on acquiring the right equipment, developing
efficient processes, and forging strategic partnerships has been relentless,
funded by the sale of Aftan. This strategic approach has allowed us to avoid
raising additional funds or taking on debt, a testament to our commitment to
responsible growth. Alongside this, the strengthening of our team and
shareholder base is enhancing our capabilities and opening new opportunities.
I am confident that Kazera is poised for a prosperous future, and I am excited
about the journey that lies ahead for our Company. I would like to thank the
Board, the executive team and all of our advisors for your trust and support
during the year, and I look forward to working with all of you as we continue
our progress in the current year.
Gerard Kisbey-Green
Chairman
14 December 2023
CHIEF EXECUTIVE OFFICER'S REVIEW
For the year ended 30 June 2023
Overview
I am pleased to provide an overview of activities during the year in which,
notwithstanding some developments are taking longer than anticipated, Kazera
Global Plc has made excellent progress towards generating cashflow in the near
future.
Operations
Whale Head Minerals - Heavy Mineral Sands
Kazera owns 60% of Whale Head Minerals ("WHM"), a heavy mineral sands ("HMS")
project in Walviskop, Alexander Bay, South Africa. In 2020, independent
consultancy company Creo Design (Pty) Limited ("CREO"), which undertook the
initial competent persons report and resource estimate, calculated WHM had a
net present value at £150 million based on expected production of circa 6,000
tons of HMS per month and applying a 20% discount rate. It is estimated that
the resource, once fully operational, which we expect to achieve during the
course of 2024, may generate gross profits of circa US$300,000 per month.
It is easy to forget that it was only in August 2022 that a Mining Permit was
granted to WHM enabling the construction of an HMS processing facility at the
site to commence. The permit gave WHM the right to mine a 5 hectare beach sand
deposit at Walviskop with a JORC Indicated Mineral Resource of 3.11 million
tons of Valuable Heavy Minerals at a grade of 61.2%. This was made up of
Garnet (30.29% Run of Mine ("ROM")) and Ilmenite (27.54% ROM), with Zircon and
Rutile also present but not included in any of the Company's modelling.
In December 2022, WHM commenced initial limited basic production of HMS to
help inform the design of a more comprehensive processing facility and, in
February 2023, the Company placed an order for the manufacture of equipment
including a specially designed centrifugal screen.
Whilst awaiting the build and delivery of the screen, the Company introduced a
double-deck 500-micron screen with a view to accelerating production of the
separated HMS product and commence building up stockpiles of HMS whilst
identifying a site to dry material away from the moisture at the coast. Work
also commenced on building a spiral array, reconditioning pumps, building
additional scalpers, screens, feed bins and conveyers.
Subsequently, in March 2023, the permit area was moved circa 100 metres to
the west due to conflicts identified with the original permit coordinates.
This resulted in the updated mine permit being in the surf zone of the bay and
not largely on the beach. CREO estimated the resource volume for the updated
permit location to be comparable in volume to the initial volume estimate
under the original permit but at a grade of 49.9% total heavy minerals
compared to the 61.2%. This difference was explained by the wind playing a
significant role in removing light sand grains from the beach within the
original permit area, and so enriching the heavy mineral deposited there.
However, the Company recognised that a major benefit of the revised permits
was that the volumes in situ are largely irrelevant, as was the 5-year Life of
Mine under the original permit area, given that wave action constantly
replenishes HMS in the updated permit area, whilst also rehabilitating the
mine site.
The proposed mining method used at the updated WHM permit area will remain a
dredging operation as originally planned. With the entire resource being
submerged, mining at the revised permit area is not dependent on, or hindered
by, the tidal state and with dredge pumps able to deliver high volumes of raw
material than an excavator, it will be possible to achieve higher production
levels, at lower unit cost per ton mined. Consequently, the revised permit
area has the potential to outperform the HMS production volumes of the
original permit area.
Extensive testing revealed very promising results and allowed the Company to
determine the make-up of its HMS and further guide refinements in the design
of its full processing plant.
Samples and test results also formed the basis for informed strategic
discussions with industry experts and off-take partners on the short and long
term potential of the Company's HMS. From these discussions, initial findings
suggest that the Company's HMS has a heavy mineral content of approximately
62%, with around 55% of the resources classified as "saleable heavy minerals".
Indicative pricing for the basic (unseparated) product was $160 per ton, but
the Company was able to confirm that by undertaking further separation, it
could be expected to achieve a price of approximately double, whilst transport
costs would remain the same.
Deep Blue Minerals - Diamonds
Kazera has a 64% beneficial interest (see Note 14) in Deep Blue, which is a
diamond project in Alexander Bay, South Africa. The operation is located
within the 80km long Alexkor diamond fields, which lies between two historic
De Beers operations. The area has been mined for diamonds since 1928 and more
than ten million carats of gem quality diamonds have been recovered over the
last ninety years or so. It is estimated that there are at least another two
million carats left in the tenement.
In 2020, a Feasibility Study was prepared on one of the mining blocks
allocated to Deep Blue, which resulted in an ascribed inferred resource of
208,000 carats at a bottom cut-off aperture size of 1.6 mm at a grade of 6.0
ct/100m2. DBM's current focus is on deposits closer to the beach where
diamonds tend to be of better quality and the amount of overburden is
considerably less.
Mining at Deep Blue is undertaken under contract from Alexkor RMC JV
("Alexkor"), a government owned entity, which has the rights to all the
diamonds in the area. In 2020, Deep Blue had a sub-contract to mine diamonds,
but none of its own equipment. Since then, the Company has acquired its own
mining contract as well as the equipment required to mine and process diamond
gravel. This includes a diamond mining plant and new heavy plant, including
a front-end Loader and a 75 ton Low-bed transporter, to allow the sharing
of equipment between Deep Blue's diamond project, and WHM's HMS project.
At Deep Blue, this is specifically used to target areas containing prospective
high quantities of diamond gravel, which the Group believes creates a very
cost-effective approach by prioritising potentially rich diamond deposits
first.
Part of the agreement with Alexkor requires that it processes the diamond
gravels and undertakes all diamond sales, but with Alexkor's Muisvlak
processing plant operating sporadically during the year, the ability to
process diamond gravel and, accordingly, produce diamonds for sale has been
greatly constrained.
In June 2022, Deep Blue agreed to take on the task of getting the Muisvlak
plant running as, without it, neither Deep Blue or the majority of the other
contractors in the area had any way of processing their diamonds. Deep Blue
was successful in doing this but was forced to withdraw its assistance due to
political and economic factors, and operating difficulties at Muisvlak endure.
The resulting blockage in the diamond mining process for Deep Blue and all
other diamond miners in the area because of a forced reliance on Alexkor to
process our diamonds and take them to market is hugely frustrating for all.
Accordingly, Deep Blue has now commissioned the building of a diamond specific
pulsating jig, together with a Flow Sorter, which will enable it to bypass the
Muisvlak plant completely and allow it to deliver very small volumes of very
high concentrate diamond gravels to Alexkor for final sorting. Deep Blue
anticipate that this equipment will be in operation early in 2024 and will
allow a quick ramp up in production and positive cash flow.
African Tantalum - Lithium
In July 2022, the Company announced an agreement to secure a non-dilutive
US$7.5 million investment in return for a 49% stake in the Company's
marketing, sales, and export subsidiary for all lithium production from the
Tantalite Valley mine in Namibia. Subsequently, this was improved upon when,
in December 2022, it was agreed that Hebei Xinjian Construction ("Xinjian")
would acquire the Company's entire interest in African Tantalum (Pty) Ltd
("Aftan") in Namibia to for cash consideration of US$13,000,000, meaning the
Company would not have to incur any of the costs related to mining, transport
or building a processing plant.
To date, we have received aggregate payments totalling c.US$4.4 million in
respect of the sale, which have enabled Kazera to invest in, and advance, its
other investment projects, without the need of accessing external funding.
Nonetheless, it has been frustrating for the Board and Shareholders alike that
the full cash consideration of the sale is yet to be paid, albeit the
transaction still represents a milestone for the Company as it is the first
realisation of a return from an investment, which is in line with our stated
strategy.
As things currently stand, Xinjian is not in compliance with the sale
agreement (as announced on 20 December 2022) and also owes accrued interest of
approximately US$260k at 30 June 2023. However, our decision not to exercise
our contractual rights to terminate the contract at this time is due to the
strong position it is in, given that:
· Kazera retains 100% ownership of Aftan as security until all
amounts owed by Xinjian have been paid in full;
· All ongoing operational costs in respect of the Aftan business
are being borne by Xinjian and have been since the beginning of 2023;
· Communication between Kazera and Xinjian remains positive and
constructive, and there is hope that further payments will be forthcoming; and
· Outstanding and overdue balances are accruing interest at a rate
of 8% per annum.
This is a situation we wish to resolve and are actively exploring alternative
avenues for the future of Aftan should Xinjian fail to swiftly fulfil its
contractual obligations. Options open to the Company include terminating the
contract with Xinjian and resuming full control of Aftan, finding an
alternative buyer for the project, or selling Xinjian's debt to a third party.
Whatever the outcome for the Aftan project, it is important to remember that
the Company still owns the underlying asset and will retain all payments
received from Xinjian to date. We will, naturally, update shareholders of any
development in due course.
Corporate Matters
During the year we made important additions to the Board of Directors in
Geoffrey Eyre and Peter Wilson, whilst Giles Clarke, Nick Harrison and Odilon
Kasongo Ilunga stepped down.
In December 2022, the Company settled all outstanding debts to former
Directors and loan providers, and is now debt-free.
In March 2023, we welcomed a new strategic shareholder to the register,
African Mineral Sands Pte Ltd ("AMS"), which has experience in mining and
infrastructure projects in Southern Africa. It has since acquired an aggregate
of 26.69% of the Company's existing Ordinary shares from an existing
shareholder and this relationship is already proving of great value. AMS has
introduced a number of potential new deals to the Company and the Board is
actively engaged in due diligence and negotiations regarding structuring.
Post year end
Whale Head Minerals - Heavy Mineral Sands
Further test results from the pilot plant in July 2023 indicate the presence
of minerals including rutile, zircon, and monazite in much higher quantities
than anticipated. These minerals usually have a much higher commercial value
than ilmenite, but are typically associated with raised levels of
radioactivity. This has required the Company to engage with the National
Nuclear Regulator ("NRR") to obtain the appropriate certification to allow it
to process and transport radioactive materials.
To guide this discussion, a comprehensive baseline study of radioactivity was
conducted across all areas of Walviskop, including areas where the Company's
HMS will be stored, processed, and transported. In addition, a third party
compiled a Workers Safety Report and Operating Procedures. Subsequently, the
Company commenced the application process with the NRR for relevant permits,
which it anticipates will be granted in Q1 2024.
In the meantime, further HMS sampling has been undertaken to enable the
Company to design the necessary processes to maximise the commercial
separation of the component materials. The Company has commissioned a Trommel
screening plant, which was completed on schedule at the end of September 2023
and has now been transported to site for installation. The construction of the
remainder of the wet concentration plant on site has also commenced, along
with the creation of administration, security, storage, and loading facilities
within a secure area supplied to the Company by Alexkor RMC JV. In addition,
Alexkor RMC JV, which recognises the value of the project in terms of
opportunities for the local community, has provided the Company with
administration buildings, entrance /exit facilities and a sheltered and secure
workshop facility for the repair, maintenance and storage of the Company's
plant and machinery.
The Company expects the full HMS plant at Walviskop to be in operation before
it receives the NRR permits in Q1 2024 and, once fully operational, this
strategically important project is expected to produce circa 6,000t of HMS per
month. Given anticipated strong demand for its products, the Company expects
to achieve a gross profit of circa US$300,000 per month based on current
prices.
Having invested in the appropriate plant and machinery and undertaken a great
deal of hard work on the ground, we believe full production at WHM is now just
a few months away.
Outlook
Taking the final few steps to positive cashflow and profitability are the
Company's immediate focus and, whilst we have experienced some delays, we have
used the time constructively utilising funding from the ongoing sale of the
Aftan Project to put in place the plant, people and equipment needed to make
this a reality in short order.
As we move into positive cashflow, we will continue to deliver growth and
value for our shareholders through reinvestment into our WHM and Deep Blue
projects to fulfil our organic growth potential, whilst carefully evaluating
the potential of M&A opportunities that frequently cross our desk. As
demonstrated when we walked away from Buru Hills rare earth project at nil
cost, our priority is to ensure that any M&A activity is right for the
Company at that point in time and does not risk jeopardising fulfilling the
potential of our existing projects, which have real potential to make Kazera a
very successful business. It is not our intention to sit on piles of cash, so
if a project has not already been identified the Board would always consider
returning excess cash to shareholders.
Dennis Edmonds
Chief Executive Officer
14 December 2023
GROUP STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2023
Notes Year ended Year ended
30 June 2023 30 June 2022
£'000 £'000
Revenue 5 31 107
Cost of Sales (155) (107)
Gross loss (124) -
Pre-production expenses - (333)
Administrative expenses (1,518) (474)
Operating loss 6 (1,642) (807)
Finance charges 7 - (44)
Net finance income 7 246 -
Loss before taxation from continuing operations (1,396) (851)
Taxation expense 10 (142) -
Loss for the year from continuing operations (1,538) (851)
Profit/(loss) on discontinued operation, net of tax 15 8,128 (1,170)
Profit/(loss) attributable to owners of the Company 6,706 (2,001)
Loss attributable to non-controlling interests (116) (20)
Profit/(loss) for the year 6,590 (2,021)
Other comprehensive income:
Items that may be subsequently reclassified to profit and loss:
Exchange differences on translation of foreign operations 159 (17)
6,749 (2,038)
Total comprehensive profit/(loss) for the year attributable to:
The equity holders of the parent 6,865 (2,018)
The non-controlling interests (116) (20)
Total comprehensive profit/(loss) for the year 6,749 (2,038)
Basic and diluted Earnings per share in pence attributable to owners of the
Company from:
Total operations 11 0.70 p (0.26) p
Discontinued operations 11 0.87 p (0.15) p
The accounting policies and notes form an integral part of these financial
statements.
GROUP AND COMPANY STATEMENTS OF FINANCIAL POSITION
As at 30 June 2023
GROUP COMPANY
Notes 2023 2022 2023 2022
£'000 (as restated) £'000 £'000
£'000
Non-Current assets
Mines under construction 12 749 2,961 - -
Property, plant and equipment 13 531 796 - -
Investment in subsidiaries 14 - - 784 3,298
Long-term loan 16 - - 1,607 8,737
1,280 3,757 2,391 12,035
Current assets
Trade and other receivables 17 9,053 279 8,866 22
Cash and cash equivalents 18 761 637 758 609
9,814 916 9,624 631
Current liabilities
Trade and other payables 19 191 652 73 645
191 652 73 645
Non-Current liabilities
Other payables 19 - 69 - -
Provisions - 54 - -
- 123 - -
Net current assets / (liabilities) 9,623 264 9,551 (14)
Net assets 10,903 3,898 11,942 12,021
Equity
Share capital 21 3,516 3,516 3,516 3,516
Share premium account 21 17,556 17,556 17,556 17,556
Capital redemption reserve 2,077 2,077 2,077 2,077
Share option reserve 574 443 574 443
Currency translation reserve 422 263 - -
Retained earnings (13,077) (19,908) (11,781) (11,571)
Equity attributable to owners of the Company 11,068 3,947 11,942 12,021
Non-controlling interests (165) (49) - -
Total equity 10,903 3,898 11,942 12,021
The accounting policies and notes form an integral part of these financial
statements.
The Company has elected to take the exemption under section 408 of the
Companies Act 2006 not to present the parent Company profit and loss account.
The loss for the Parent Company for the year was £335,670 (2022: £328,095
loss).
These financial statements were approved by the Board of Directors on 14
December 2023.
Signed on behalf of the Board by
Dennis Edmonds
Director
Company number: 05697574
GROUP STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2023
Share capital Share Capital redemption reserve Share Currency translation reserve (restated) Retained earnings Equity shareholders' funds Non-controlling interests Total
£'000 premium account £'000 option £'000 £'000 £'000 £'000 £'000
£'000 reserve
£'000
Balance at 30 June 2021 3,279 15,863 2,077 337 (477) (17,917) 3,162 (29) 3,133
Loss for the year - - - - - (2,001) (2,001) (20) (2,021)
Other comprehensive income - - - - 740 - 740 - 740
Total comprehensive income - - - - 263 (2,001) (1,261) (20) (1,281)
Transactions with owners in their capacity as owners:
Issue of share capital 237 1,693 - - - - 1,930 - 1,930
Share options/warrants exercised - - - (10) - 10 - - -
Share based payment expense - - - 116 - - 116 - 116
Balance at 30 June 2022 3,516 17,556 2,077 443 (494) (19,908) 3,947 (49) 3,141
Prior year adjustment see note 27 - - - - 757 - - - 757
Balance at 30 June 2022 (as restated) 3,516 17,556 2,077 443 263 (19,908) 3,947 (49) 3,898
Profit for the year - - - - - 6,706 6,706 (116) 6,590
Other comprehensive income - - - - 159 - 159 - 159
Total comprehensive income - - - - 159 6,706 6,865 (116) 6,749
Transactions with owners in their capacity as owners:
Share options/warrants exercised - - - (125) - 125 - - -
Share based payment expense - - - 256 - - 256 - 256
Balance at 30 June 2023 3,516 17,556 2,077 574 422 (13,077) 11,068 (165) 10,903
The accounting policies and notes form an integral part of these financial
statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2023
Share Share Capital redemption reserve Share option reserve Retained Total
capital premium earnings
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 30 June 2021 3,279 15,863 2,077 337 (11,253) 10,303
Total comprehensive income for the year - - - - (328) (328)
Issue of share capital, net of share issue costs 237 1,693 - - - 1,930
Share options/warrants exercised - - - (10) 10 -
Share based payment expense - - - 116 - 116
Balance at 30 June 2022 3,516 17,556 2,077 443 (11,571) 12,021
Total comprehensive income for the year - - - - (335) (335)
Share options/warrants exercised - - - (125) 125 -
Share based payment expense - - - 256 - 256
Balance at 30 June 2023 3,516 17,556 2,077 574 (11,781) 11,942
The accounting policies and notes form an integral part of these financial
statements.
Group and Company Statements of Cash Flows
For the year ended 30 June 2023
GROUP COMPANY
Year ended Year ended Year ended Year ended
30 June 30 June 30 June 30 June
2023 2022 2023 2022
£'000 £'000 £'000 £'000
OPERATING ACTIVITIES
Loss before tax from continuing operations (1,396) (851) (335) (328)
Profit/loss before tax from discontinued operations 8,128 (1,170) - -
Loss before tax 6,732 (2,021) (335) (328)
Depreciation and amortisation 40 52 -
Share based payment expense 256 116 256 116
Net finance (income)/charges (246) 44 (246) 44
Foreign exchange 269 121 75 -
Gain on sale of subsidiary (8,037) - (476) -
Intercompany loan written off - - 1,308 -
Management fees - - (1,144) -
Intercompany loan interest charged - - (106) (336)
Operating cash flows before movement in working capital (986) (1,688) (668) (504)
(Increase)/decrease in receivables (531) (110) (343) 1
(Decrease)/increase in payables (59) 880 (66) 205
Net cash used in operating activities (1,576) (918) (1,077) (298)
INVESTING ACTIVITIES
Purchases of property, plant and equipment (69) (438) - -
Development costs (24) (6) - -
Trial diamond mining - 107 - -
Proceeds from disposal of subsidiary 2,316 - 2,316 -
Advances to subsidiary undertakings - - (569) (757)
Purchase/increase in subsidiary undertakings - - - (184)
Net cash used in investing activities 2,223 (337) 1,747 (941)
FINANCING ACTIVITIES
Net proceeds from share issues - 1,498 - 1,498
Loans (repaid)/received (474) 347 (474) 347
Interest paid (47) - (47) -
Net cash from financing activities (521) 1,845 (521) 1,845
Net increase in cash and cash equivalents 126 590 149 606
Cash and cash equivalents at beginning of year 637 47 609 3
Exchange losses on cash and cash equivalents (2) - - -
Cash and cash equivalents at end of year 761 637 758 609
During the year purchases of property, plant and equipment included £180k of
non-cash additions.
The accounting policies and notes are an integral part of these financial
statements.
NOTES TO THE GROUP FINANCIAL STATEMENTS
For the year ended 30 June 2023
1. General Information
Kazera Global Plc is a public limited company which is listed on the
Alternative Investment Market (AIM) and incorporated and domiciled in England
and Wales, United Kingdom. The nature of the Group's operations and its
principal activities are set out in the Strategic Report and the Directors'
Report.
2. Accounting Policies
BASIS OF PREPARATION
These consolidated financial statements have been prepared and approved by the
Directors in accordance with UK Adopted International Accounting Standards in
accordance with the requirements of the Companies Act 2006.
The consolidated financial statements have been prepared under the historical
cost convention, except as noted in the accompanying accounting policies.
The preparation of financial statements in conformity with UK Adopted
International Accounting Standards ('IAS') requires the use of certain
critical accounting estimates. It also requires management to exercise its
judgement in the process of applying the accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements, are
disclosed in Note 3.
The financial statements are presented in pounds sterling (£'000), which is
also the functional currency of the Company and Group.
The principal accounting policies applied in the preparation of these
financial statements are set out below. These policies have been consistently
applied to all the years presented, unless otherwise stated.
PRIOR YEAR ADJUSTMENT
Subsequent to the approval of the 2022 financial statements the Board carried
out a review of the prior year 'other payables' balance of £826k shown in
non-current liabilities. The Board concluded that £757k of this balance
related to amounts due from Deep Blue Minerals (Pty) Ltd to the Company. As
DBM is a subsidiary of the Company this amount should have been eliminated
against the corresponding receivable amount in the Company, in the
consolidated statement of financial position. However, the elimination had
instead been allocated to Currency translation reserve. The effect of the
adjustment to correct the error increases the Group's net assets by £757k to
£3.9m from the previously stated £3.1m. See note 27.
Additionally, a reconciliation of the issued share capital of the Company was
carried out and a historical error was identified which had resulted in the
2022 financial statements having overstated the number of Ordinary shares of
0.1p in issue by 565,388. See note 21.
GOING CONCERN
The financial statements have been prepared assuming the Group and Company
will continue as a going concern.
The Company prepares and routinely maintains a cash flow forecast; the
directors have, with reference to the cash flow forecast considered a number
of potential scenarios under which the Company's ability to continue as a
going concern is assessed.
In assessing whether the going concern assumption is appropriate, the
directors have taken into account all available information for the forseeable
future; in particular for the 12 months from the date of approval of these
financial statements and performed sensitivity analysis thereon. This
assessment includes consideration of the cash receipts arising from the
disposal of the Group's operations in Namibia, and in South Africa, the
Group's future plans, expenditure commitments, and cost reduction measures
that can be implemented and permitting requirements.
The Directors' estimates are dependent principally upon the Group's mining
operations coming into operation as planned and funds from the sale of African
Tantalum Pty Ltd continuing to be received in the short-term. The Directors
are confident that further funds could be raised to meet any shortfall in the
event that insufficient funds are received timeously, or operations are
delayed or underperform.
in view of the facts that the Group's mining operations are not yet in full
operation and the proceeds arising from the sale of the Company's former
subsidiary, African Tantalum Pty Ltd have not yet been reveived in full, the
Directors consider than a material uncertainty exists as to the Company's
ability to continue as a going concern; the auditors have made reference to
this material uncertainty in their audit report on page 28 of the Annual
Report and Financial Statements.
Following the Company's announcement of 20 December 2022, that Kazera had
entered into an agreement for the sale of 100% of its shares in African
Tantalum Pty Ltd to Hebei Xinjian Construction for a headline sum of US$13
million (excluding interest at 8% on loans of c.US$9.3 million made by Kazera
to Aftan), the Company has received payments amounting to US$4.42m.
NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS ADOPTED BY THE GROUP
The following IFRS or IFRIC interpretations were effective for the first time
for the financial year beginning 1 July 2022. Their adoption has not had any
material impact on the disclosures or on the amounts reported in these
financial statements.
Standards/interpretations Application Effective from
IAS 1 amendments Presentation of Financial Statements: Classification of Liabilities as Current 1 January 2024
or Non-current
IAS 1 amendments Classification of Liabilities as Current or Non-current 1 January 2024
IAS 1 amendments Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure 1 January 2023
of Accounting Policies
IAS 8 amendments Accounting policies, Changes in Accounting Estimates and Errors - Definition 1 January 2023
of Accounting Estimates
IAS 12 amendments Income Taxes - Deferred Tax related to Assets and Liabilities arising from a 1 January 2023
Single Transaction
BASIS OF CONSOLIDATION
Subsidiaries are all entities (including structured 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
has the ability to affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are deconsolidated from the date that control
ceases.
Inter-company transactions, balances and unrealised gains on transactions
between group companies are eliminated. Unrealised losses are also eliminated.
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 subsidiary 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 recognises any non-controlling interest in the subsidiary on
an acquisition-by-acquisition basis, either at fair value or at the
non-controlling interest's proportionate share of the recognised amounts of
subsidiary's identifiable net assets.
Acquisition-related costs are expensed as incurred.
Any contingent consideration to be transferred by the Group is recognised at
fair value at the acquisition date. Subsequent changes to the fair value of
the contingent consideration that is deemed to be an asset or liability is
recognised either in profit or loss or as a change to other comprehensive
income. Contingent consideration that is classified as equity is not
re-measured, and its subsequent settlement is accounted for within equity.
Disposal of subsidiary undertakings
A disposal of a subsidiary occurs when control is lost, which can happen
through the sale, liquidation, or other forms of relinquishment of control.
Upon disposal, the subsidiary will be deconsolidated from the date control is
lost. All assets, liabilities, and non-controlling interests related to the
subsidiary will be removed from the consolidated balance sheet. The
consideration received from the disposal of a subsidiary will be measured at
fair value on the disposal date; the gain or loss on disposal will be
calculated as the difference between:
· The fair value of the consideration received; and
· The carrying amount of the subsidiary's assets and liabilities,
and any cumulative translation differences recorded in equity.
The results of the subsidiary up to the date of disposal will be included in
the consolidated income statement and shown separately as discontinued
operations.
foreign currencies
The individual financial statements of each subsidiary company are presented
in South African Rands (and Namibian Dollars for the subsidiary disposed of
during the year), which is the currency of the primary economic environment in
which it operates (its functional currency). For the purpose of the Group and
parent company financial statements, the results and financial position of
each group company are expressed in Pounds Sterling, which is the functional
currency of the Company, and the presentation currency for the Group financial
statements.
In preparing the financial statement of the individual companies, transactions
in currencies other than the entity's functional currency (foreign currencies)
are recorded at the rates of exchange prevailing on the dates of the
transactions. At each year end date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates prevailing on
the year end date. Non-monetary items carried at fair value that are
denominated in foreign currencies are translated at the rates prevailing at
the date when the fair value was determined. Non-monetary items that are
measured in terms of historical cost in a foreign currency are not
retranslated.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in the income statement.
Exchange differences arising on the retranslation of non-monetary items
carried at fair value are included in profit or loss for the period, except
for differences arising on the retranslation of non-monetary items in respect
of which gains and losses are recognised directly in equity. For such
non-monetary items, any exchange component of that gain or loss is also
recognised directly in equity.
For the purpose of presenting Group financial statements, the assets and
liabilities of the Group's foreign operations are translated at exchange rates
prevailing on the year end date. Income and expense items are translated at
the average exchange rates for the period. Exchange differences arising are
classified as equity and transferred to the Group's translation reserve. Such
translation differences are recognised as income or as expenses in the period
in which the operation is disposed of.
TAXATION
The tax currently payable is based on taxable profit or loss for the period.
Taxable profit or loss differs from net profit or loss as reported in the
income statement 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 Company's liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by
the balance sheet date.
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
(other than in a business combination) of other assets and liabilities in a
transaction that affects neither the tax profit nor the accounting profit.
The carrying value of deferred tax assets is reviewed at each balance sheet
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 deferred tax
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 based on tax
laws and rates that have been enacted at the balance sheet date. Deferred tax
is charged or credited in the income statement, 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 there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Company intends to settle its current tax assets and
liabilities on a net basis.
INTANGIBLE ASSETS - EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation activity involve the search for mineral resources,
the determination of technical feasibility and the assessment of commercial
viability of an identified resource. Research expenditure is written off in
the year in which it is incurred. The Group recognises expenditure as
exploration and evaluation assets when it determines that the legal rights to
said assets have been obtained. Costs incurred which relate wholly to
exploration work only, are expensed through the statement of comprehensive
income. When a decision is taken that a mining property becomes viable for
commercial production, all further pre-production expenditure is capitalised.
Expenditure included in the initial measurement of exploration and evaluation
assets and which is classified as intangible assets, relates to the
acquisition of rights to undertake topographical, geological, geochemical and
geophysical studies, exploratory drilling, trenching, sampling and other
activities to evaluate the technical feasibility and commercial viability of
extracting a mineral source.
MINES UNDER CONSTRUCTION
Expenditure is transferred from "Exploration and evaluation" assets to "Mines
under construction" once the work completed to date supports the future
development of the property and such development receives the requisite
approvals. All subsequent expenditure on technically and commercially feasible
sites is capitalised within mining rights.
All expenditure on the construction, installation or completion of
infrastructure facilities is capitalised as construction in progress within
"Mines under construction". Once production starts, all assets included in
"Mines under construction" are transferred into "Property, Plant and
Equipment" or "Producing Mines. It is at this point that
depreciation/amortisation commences over its useful economic life. The asset
will be depreciated using the Units of Production method (UOP).
Mines under construction are stated at cost. The initial cost comprises
transferred exploration and evaluation assets, construction costs,
infrastructure facilities, any costs directly attributable to bringing the
asset into operation, the initial estimate of the rehabilitation obligation,
and, for qualifying assets, borrowing costs. Costs are capitalised and
categorised between mining rights and construction in progress respectively
according to whether they are intangible or tangible in nature.
PROPERTY, PLANT AND EQUIPMENT
Property, Plant and equipment are recorded at cost, less depreciation, less
any amount of adjustments for impairment, if any.
Significant improvements are capitalised, provided they qualify for
recognition as assets. The costs of maintenance, repairs and minor
improvements are expensed when incurred.
Tangible assets, retired or withdrawn from service, are removed from the
balance sheet together with the related accumulated depreciation. Any profit
or loss resulting from such an operation is included in the income statement.
Tangible and intangible assets are depreciated on the straight-line method
based on their estimated useful lives from the time they are put into
operation, so that their net cost is diminished over the lifetime of
consideration to estimated residual value as follows:
Buildings Over 20 years
Plant and machinery Between 5 and 10 years
Furniture and equipment Between 5 and 10 years
IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENT AND INTANGIBLE ASSETS EXCLUDING
GOODWILL
Assets that have an indefinite useful life are not subject to amortisation but
are reviewed for impairment annually and where there are indications that the
carrying value may not be recoverable. An impairment loss is recognised for
the amount by which the carrying value exceeds the recoverable amount.
ASSET ACQUISITIONS - land
Acquisitions of mineral exploration licences through the acquisition of
non-operational corporate structures that do not represent a business, and
therefore do not meet the definition of a business combination, are accounted
for as the acquisition of an asset. The consideration for the asset is
allocated to the assets based on their relative fair values at the date of
acquisition. Inter-company transactions, balances and unrealised gains on
transactions between group companies are eliminated. Unrealised losses are
also eliminated.
Where the asset was acquired during the period however licensing becomes
available post year end this is accounted for as an acquisition of Land.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash at bank and in hand, deposits at call
with banks, other short-term highly liquid investments with original maturity
at acquisition of three months or less that are readily convertible to cash,
net of bank overdrafts. For the purpose of the cash flow statement, cash and
cash equivalents consist of the definition outlined above.
EQUITY INSTRUMENTS INCLUDING SHARE CAPITAL
Equity instruments consist of the Company's ordinary share capital and are
recorded at the proceeds received, net of direct issue costs.
FINANCIAL INSTRUMENTS - INITIAL RECOGNITION AND SUBSEQUENT MEASUREMENT
Classification
The Group classifies its financial assets into only one category, being those
to be measured at amortised cost.
The classification depends on the Group's business model for managing the
financial assets and the contractual terms of the cash flows.
Recognition
Purchases and sales of financial assets are recognised on trade date (that is,
the date on which the Group commits to purchase or sell the asset). Financial
assets are derecognised when the rights to receive cash flows from the
financial assets have expired or have been transferred and the Group has
transferred substantially all the risks and rewards of ownership.
Measurement
At initial recognition, the Group measures a financial asset at its fair value
plus transaction costs that are directly attributable to the acquisition of
the financial asset.
Debt instruments
Amortised cost: Assets that are held for collection of contractual cash flows,
where those cash flows represent solely payments of principal and interest,
are measured at amortised cost. Interest income from these financial assets is
included in finance income using the effective interest rate method. Any gain
or loss arising on derecognition is recognised directly in profit or loss and
presented in other gains/(losses) together with foreign exchange gains and
losses. Impairment losses are presented as a separate line item in the
statement of profit or loss.
Impairment
The Group assesses, on a forward-looking basis, the expected credit losses
associated with its debt instruments 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, which requires expected lifetime losses to be recognised from initial
recognition of the receivables.
FINANCIAL LIABILITIES
All non-derivative financial liabilities are classified as other financial
liabilities and are initially measured at fair value, net of transaction
costs. Other financial liabilities are subsequently measured at amortised cost
using the effective interest rate method. Other financial liabilities consist
of borrowings and trade and other payables.
Financial liabilities are classified as current liabilities unless the Company
has an unconditional right to defer settlement of the liability for at least
12 months after the balance sheet date.
OTHER FINANCIAL LIABILITIES, BANK AND SHORT-TERM BORROWINGS
Other financial liabilities, as categorised above, are initially measured at
fair value, net of transaction costs. Other financial liabilities are
subsequently measured at amortised cost using the effective interest method,
with interest expense recognised on an effective yield basis. Other financial
liabilities are classified as current liabilities unless the Company has an
unconditional right to defer settlement of the liability for at least 12
months after the balance sheet date.
TRIAL PRODUCTION REVENUE AND COSTS
Revenue
IFRS 15 establishes a comprehensive framework for determining whether, how
much and when revenue is recognised. These steps are as follows:
identification of the customer contract; identification of the contract
performance obligations; determination of the transaction price; allocation of
the transaction price to the performance obligations; and revenue recognition
as performance obligations are satisfied.
Under IFRS 15, revenue is recognised when performance obligations are met.
This is the point of delivery of goods to the customer. Revenue is measured at
the fair value of consideration received or receivable from sales of diamonds
and tantalite to an end user, net of buyer's discount, treatment charges,
freight costs and value added tax. The application of the standard including
the five-step approach has not resulted in any changes to the timing of
recognition of revenue in the current or any prior period.
Cost of revenue
These are the costs directly associated with the extraction and processing of
diamonds from mining operations.
Costs to be included in cost of sales are as follows:
· Extraction costs: These include labour and overhead costs
directly related to the extraction of diamonds from the mine.
· Processing Costs: Costs incurred in the crushing, sorting, and
other processing required to prepare the diamonds for sale.
· Inventory Costs: Costs related to the storage and security of
diamonds until they are sold. This includes warehousing and insurance costs.
· Depreciation and Amortization: The systematic allocation of the
depreciable amount of assets (e.g., machinery, equipment) used in the
extraction and processing of diamonds.
Exclusion of costs: General administrative expenses, marketing, and
distribution costs are not included in the cost of sales but are recognized as
separate expense categories in the income statement.
Cost of sales is recognized in the income statement when the related revenue
is recognized.
EARNINGS PER SHARE
Basic earnings per share (EPS) is calculated by dividing: the profit
attributable to owners of the Company, excluding any costs of servicing equity
other than ordinary shares; by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary
shares issued during the year and excluding treasury shares (note 11).
Diluted EPS adjusts the figures used in the determination of basic EPS to take
into account the after-income tax effect of interest and other financing costs
associated with dilutive potential ordinary shares, and the weighted average
number of additional ordinary shares that would have been outstanding,
assuming the conversion of all dilutive potential ordinary shares.
Discontinued operations
Basic EPS for discontinued operations is calculated by dividing the net profit
or loss attributable to ordinary shareholders from discontinued operations by
the weighted average number of ordinary shares outstanding during the period.
Diluted EPS considers the potential dilution that would occur if convertible
instruments or contracts to issue shares were converted into ordinary shares.
SEGMENTAL ANALYSIS
Under IFRS 8 operating segments are considered to be components of an entity
about which separate financial information is available that is evaluated
regularly by the chief operating decision maker in deciding how to allocate
resources and assessing performance. The Company's chief operating decision
maker is the Board of Directors. At present, and for the period under review,
the Company's reporting segments are the holding company, tantalite and
lithium mining operation in Namibia and the diamond mining operations in South
Africa.
3. Critical Accounting Judgements
In the application of the Group's accounting policies, which are described in
Note 2, the Directors are required to make judgements, estimates and
assumptions that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and associated
assumptions are based on historical experience and various other factors that
are believed to be reasonable under the circumstances, the results of which
form the basis of making the judgements about carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates.
Valuation of options
The valuation of the options involves making a number of critical estimates
relating to price volatility, future dividend yields, expected life of the
options and forfeiture rates. These assumptions and valuation methodology
adopted have been described in more detail in Note 22. The estimates and
assumptions could materially affect the Income Statement.
Carrying value of mines under construction (Note 12)
The Group tests annually whether its mines under construction have suffered
any impairment and management make judgements in this respect. The judgements
are based on the recoverable amounts of cash generating units ("CGUs") which
are determined based on value in use calculations which require the use
estimates and assumptions such as long-term commodity prices and recovery
rates, discount rates, operating costs and therefore expected margins and
future capital requirements. These estimates and assumptions are subject to
risk and uncertainty and therefore there is a possibility that changes in
circumstances will impact the recoverable amount.
During the year, progress on production at the Walviskop site held by Whale
Head Minerals, the parent company's 60% owned subsidiary, was delayed by the
need to apply for authorisation from the National Nuclear Regulator after
slightly elevated levels of radioactivity within the gravels were detected.
The necessary application has been submitted and it is expected that
authorisation will be granted during Q1 2024. Should this authorisation be
denied or the process be further delayed, this would impact the Company's cash
flow projections and potentially also the carrying values of the 'investment
in subsidiary' and 'mines under construction'.
The Group continually monitors and updates its cash flow forecast on both
Group and legal entity bases, applying the latest available information as
regards operations and key inputs such as commodity prices or sales forecasts,
production rates, transport costs. In reviewing the carrying value of mines
under construction, the Board has considered the present value of expected
future cash flows, discounted at a rate of 10%, and has ensured these exceed
the present carrying value.
Investment in subsidiaries
The investments in subsidiaries are recognised at cost less accumulated
impairments. Details of the investments are listed in Note 14.
Upon acquisition, the excess of the sum of the consideration transferred over
the net of the acquisition-date amounts of the identifiable assets acquired
and the liabilities assumed, is recognised under mines under construction.
Any potential impairments to the investments in subsidiaries are measured in
line with the impairment of mines under construction in the paragraph above.
The Directors are confident that the future operational cashflows forecast to
be generated from the sale of diamonds and HMS will be sufficient to repay the
intragroup loans.
Loss of Control of African Tantalum Pty Ltd
In December 2022, the Company agreed to dispose of its interest in 100% of the
issued share capital of subsidiary African Tantalum Pty Ltd ("Aftan") to Hebei
Xinjian Construction CC ("Xinjian"). On 4 January 2023, Dennis Edmonds
resigned as a director of Aftan and each of its subsidiaries, following which
Kazera has no control of the board, operations or finances of Aftan and there
is no shareholder or relationship agreement in place through which Kazera can
exert control. Kazera is unable to compel the provision of such detailed
financial information from Aftan to enable it to consolidate Aftan's financial
information as it has no operational control and no right to receive
operational accounting information. Furthermore, (without prejudice, and
notwithstanding its ongoing contractual breach) Xinjian has the power to
compel the final transfer of the issued share capital by making the final
payment and the remaining completion elements under the terms of the sale and
purchase agreement ("SPA") between the parties.
Whilst the ongoing fixed-rate royalty leads to a variable absolute return, the
Directors consider this to be consistent with other forms of debt financing,
and the SPA includes a negative covenant restricting the payment of dividends
by Aftan to Kazera.
As a result of the loss of control of Aftan, that Company's financial
statements have been deconsolidated from the Group, as further detailed in
Note 15.
Recoverability of proceeds from disposal of Aftan
The directors acknowledge that:
· There are uncertainties surrounding final amounts to be received
from Xinjian
· There are uncertainties surrounding timing of receipts
· If the transaction is terminated due to non-payment of the
disposal proceeds the loan to Aftan may need to be reinstated; the amounts
received to date would be treated as repayment of this loan and the deferred
consideration would need to be written off
As at the date of this financial statements the directors consider that the
amounts due from Xinjian are recoverable, however, if Xinjian remains in
breach of contract and the parties cease to progress the transaction in good
faith, Kazera could attempt to exercise its powers as a shareholder to eject
Xinjian's representatives from the board and retake operational control of
Aftan.
The Directors consider that the Company's potential economic benefit from
Aftan post-signing of the SPA is capped at the amount of the outstanding
intercompany loan and the remaining consideration payable in respect of the
equity sold.
Recoverability of intragroup loans
Significant judgment has been exercised by the directors in assessing the
recoverability of intragroup loans. The Company has provided financial
assistance to its subsidiaries in the form of loans. These loans are assessed
for recoverability annually.
The determination of recoverability involves estimating the future cash flows
expected to be received from the subsidiaries, considering their financial
position, profit projections, and external market conditions. Based on these
assessments, management has concluded that the loans are recoverable and has
recognised them at their carrying amount in the financial statements.
Given the inherent uncertainties in predicting future events and behaviours,
this judgment is subject to estimation uncertainty. Any changes in the
financial condition of the subsidiaries, or in the economic conditions under
which they operate, could impact the estimated recoverability of these loans,
which may require adjustments to their carrying values in future periods.
4. Segmental Reporting
The Directors are of the opinion that under IFRS 8 - Operating Segments the
Group operates in three primary business segments; being holding company
expenses, tantalite mining and diamond mining activities. The secondary
segment is geographic. The Group's profit/(losses) and net assets by primary
business segments are shown below.
Segmentation by continuing business
Profit/ (loss) before income tax Year ended Year ended
30 June 2023 30 June 2022
£'000 £'000
Holding company (1,060) (620)
Diamond mining activity (453) (187)
Mineral sands mining activity (129) -
Operating loss (1,642) (807)
Net finance income/(charge) 246 (44)
Taxation expense (142) -
Loss from continuing activities (1,538) (851)
Profit/(loss) on discontinued operation, net of tax 8,128 (1,170)
Group profit/(loss) for the year 6,590 (2,021)
Net assets /(liabilities) Year ended Year ended
30 June 2023 30 June 2022
£'000 £'000
Holding company 12,027 11,124
Diamond mining activity (1,009) (504)
Mineral sands mining activity (115) -
Tantalite mining activity - (6,722)
Group net assets 10,903 3,898
Segmentation by geographical area
Operating loss Year ended Year ended
30 June 2023 30 June 2022
£'000 £'000
United Kingdom (1,060) (620)
South Africa (582) (187)
(1,642) (807)
Net assets /(liabilities) Year ended Year ended
30 June 2023 30 June 2022
£'000 £'000
United Kingdom 12,027 11,124
Namibia - (6,722)
South Africa (1,124) (504)
10,903 3,898
5. Revenue
Year ended Year ended
30 June 2023 30 June 2022
£'000 £'000
Revenue from external customers 31 107
Revenues of £31k (2022: £107k) were derived for the sale of the by-products
of testing and evaluation activities. Additionally, there were £24k of
revenues also from testing and evaluation activities incurred in the disposal
group (see note 15). For the prior year the revenues derived from
pre-production activities were considered against the Mines Under Construction
intangible asset recognised in the Group. This amount was not deemed to be
material to the financial statements. (see note 12).
6. Operating Loss
Year ended Year ended
30 June 2023 30 June 2022
£'000 £'000
Loss for the period has been arrived at after charging:
Staff costs as per Note 9 below 790 520
Auditors' remuneration 61 50
Depreciation of property, plant and equipment 40 52
Share-based payment expense 256 116
7. Finance Charges/INCOME
Year ended Year ended
30 June 2023 30 June 2022
£'000 £'000
Loan interest payable (15) (44)
Interest income on deferred consideration 261 -
246 (44)
8. Auditors' Remuneration
Year ended Year ended
30 June 2023 30 June 2022
£'000 £'000
Fees payable to the Group's auditors for the audit of the Group's annual 61 50
accounts
Total audit fees 61 50
9. Staff Costs
The average monthly number of employees (including executive directors) for
the continuing operations was:
Year ended Year ended
30 June 2023 30 June 2022
Number Number
Group total staff 29 16
£'000 £'000
Wages and salaries 507 400
Share based payment in respect of exercise of options 256 118
Other benefits - 1
Social security costs 27 1
790 520
Directors' emoluments
An analysis of the directors' emoluments and pension entitlements and their
interest in the share capital of the Company is contained in the Directors'
Remuneration report on page 24 in the Annual Report and Financial Statements.
All emoluments are short term in nature and the Directors are considered to be
key management personnel.
10. Taxation
The reasons for the difference between the actual tax charge for the year and
the standard rate of corporation tax applied to profits for the year are as
follows:
Year ended Year ended
30 June 2023 30 June 2022
£'000 £'000
Analysis of income tax expense:
Current tax - -
Deferred tax 142 -
Total income tax expense 142 -
Loss before tax from continuing operations (1,396) (851)
Profit/(loss) before tax from discontinued operations 8,128 (1,170)
Profit/(loss) before tax for the year 6,732 (2,021)
Tax using the Company's domestic tax rate of 20.50% (2022:19%) 1,380 (571)
Effects of:
Expenses not deductible for tax purposes 52 33
Unutilised tax losses carried forward 664 538
Substantial shareholder relief (1,832) -
Local deferred tax derecognised 142 -
Effect of difference between local and UK tax rate (264) -
Tax charge for period 142 -
The taxation charge in future periods will be affected by any changes to the
corporation tax rates in force in the countries in which the Group operates.
Losses from the previous period have been carried forward. A deferred tax
asset has not been recognised in the financial statements due to the
uncertainty of the recoverability of the amount.
At the balance sheet date the Group had unused tax losses of £5,288k (2022:
£7,401k).
11. Earnings Per Share
The calculation of basic earnings per share is based on the following data:
Year ended Year ended
30 June 2023 30 June 2022
£'000 £'000
Profit/(loss) for the year attributable to owners of the Company
Continuing operations (1,538) (851)
Discontinued operations 8,128 (1,170)
Weighted average number of ordinary shares in issue for basic and fully 936,599,523 770,895,360
diluted earnings
EARNINGS PER SHARE (PENCE PER SHARE)
BASIC AND FULLY DILUTED:
- from continuing operations (0.17) (0.11)
- from discontinued operations 0.87 (0.15)
0.70 (0.26)
The Company has outstanding warrants and options as disclosed under Note 22
which may be dilutive in future periods. As all options and warrants had fully
vested they had no-dilutive effect on the basic earnings per share.
12. Mines under Construction
Construction in progress Mining Total
licences
GROUP £'000 £'000 £'000
At 1 July 2021 2,861 36 2,897
Additions - 6 6
Sale of by-products (107) - (107)
Exchange translation difference 161 4 165
At 30 June 2022 2,915 46 2,961
Additions 27 - 27
Exchange translation difference (92) - (92)
Disposal of subsidiary (2,147) - (2,147)
At 30 June 2023 703 46 749
13. Property, Plant and Equipment
Land & buildings Plant & machinery Total
GROUP £'000 £'000 £'000
Cost
At 1 July 2021 125 1,224 1,349
Exchange translation difference - (350) (350)
Additions 184 254 438
Cost at 30 June 2022 309 1,128 1,437
Exchange translation difference - (169) (169)
Additions - 279 279
Disposal of subsidiary (125) (778) (903)
Cost at 30 June 2023 184 460 644
Depreciation
At 1 July 2021 35 598 633
Exchange translation difference - (44) (44)
Charge for the year 5 47 52
Depreciation at 30 June 2022 40 601 641
Exchange translation difference - (103) (103)
Charge for the year - 40 40
Disposal of subsidiary (40) (425) (465)
Depreciation at 30 June 2023 - 113 113
Net book value at 30 June 2023 184 347 531
Net book value at 30 June 2022 269 528 796
14. Investment in Subsidiary Undertakings
The Company's investments in its subsidiary and associated undertakings
COMPANY Total
£'000
Cost and net book value
As at 1 July 2021 3,114
Acquisition: 60% of Whale Head Minerals (Pty) Ltd (Note 15) 184
As at 30 June 2022 3,298
Disposal of African Tantalum (2,514)
As at 30 June 2023 784
All principal subsidiaries of the Group are consolidated into the financial
statements.
At 30 June 2023 the subsidiaries were as follows:
Subsidiary undertakings Country of registration Principal activity Holding %
Whale Head Minerals (Pty) Ltd ((1)) South Africa Mining License holder Ordinary shares 60%
6 Reier Avenue
Alexander Bay
Northern Cape
8290
South Africa
Deep Blue Minerals (Pty) Ltd ((1)(2)) South Africa Mining License holder Ordinary shares 90%
6 Reier Avenue
Alexander Bay
Northern Cape
8290
South Africa
Kazera Trading Limited UK Dormant Ordinary shares 100%
Unit D, De Clare House,
Sir Alfred Owen Way,
Pontygwindy Industrial Estate
Caerphilly
Wales, CF83 3HU
((1)) Companies incorporated in South Africa are required to comply with
Broad-Based Black Economic Empowerment (B-BBEE) regulations.
((2)) 26% of the shares in Deep Blue Minerals (Pty) Ltd are reserved for Black
Economic Empowerment partners, and therefore Kazera's ultimate beneficial
interest in Deep Blue Minerals (Pty) Ltd is 64%.
African Tantalum (Pty) Ltd and subsidiaries ("Aftan")
On 20 December 2022 the Company announced the 100% sale of Aftan to Hebei
Xinjian Construction for cash consideration of US$13m (details provided in
note 15).
15. Disposal of Subsidiary
On 20 December 2022, the Company announced the 100% sale of Aftan to Hebei
Xinjian Construction for cash consideration of US$13m. Comprised of purchase
consideration for the sale of the shares in Aftan of USD3,642,207 and the
repayment of the intercompany loan to Kazera of USD9,357,793. Total
consideration in GBP is £10,673k.
On 4 January 2023, Dennis Edmonds resigned as a director of Aftan and each of
its subsidiaries, and from that date, the accounts of Aftan ceased to be
consolidated as a group company. See note 3 for further information.
The post-tax gain on disposal of Aftan was determined as follows:
Group £'000
Cash consideration 2,990
Repayment of existing loan 7,863
Total consideration 10,673
Cash disposed of 615
Net inflow on disposal of discontinued operations 10,059
Net assets disposed (other than cash)
Mines under construction (2,147)
Property, plant and equipment (438)
Trade and other receivables (92)
Trade and other payables 655
Pre-tax gain on disposal of subsidiary undertaking 8,037
The post tax gain on disposal of discontinued operations was determined as
follows:
2023 2022
£'000 £'000
Revenue 24 -
Administration and other costs 67 (1,170)
Gain from selling discontinued operations after tax 8,037 -
Profit/(loss) on discontinued operations after tax 8,128 (1,170)
The statement of cash flows included £73k in relation to outflow from
operating activities relating to discontinued operations.
16. Long Term Loan (Company)
Company Loan to Aftan Tantalum Loan to Deep Loan to Whale Head Minerals Total
£'000 Blue Minerals £'000 £'000
£'000
As at 1 July 2021 7,145 499 - 7,644
As at 30 June 2022 7,985 733 19 8,737
Increase in loan 361 338 517 1,216
Disposal of subsidiary (8,346) - - (8,346)
As at 30 June 2023 - 1,071 536 1,607
17. Trade and Other Receivables
GROUP COMPANY
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Other receivables 8,520 262 8,500 5
Prepayments and accrued income 533 17 366 17
9,053 279 8,866 22
Included in other receivables is £8,501k (2022: nil) with respect to amounts
due on the sale of Aftan.
18. Cash and Cash Equivalents
GROUP COMPANY
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Cash and cash equivalents 761 637 758 609
Cash and cash equivalents (which are presented as a single class of asset on
the face of the balance sheet) comprise cash at bank and other short term,
highly liquid investments with a maturity of three months or less.
The Directors consider the carrying amount of cash and cash equivalents
approximates to their fair value.
19. Trade and Other Payables
GROUP COMPANY
2023 2022 2023 2022
(as restated)
£'000 £'000 £'000 £'000
Current Liabilities
Trade payables 17 12 11 12
Other payables 124 482 12 480
Accruals 50 158 50 153
191 652 73 645
Non-Current Liabilities
Other payables - 123 - -
- 123 - -
The Directors consider the carrying amount of trade payables approximates to
their fair value.
The 'other payables' non-current liability for the year ended 30 June 2022 has
been re-stated as it had incorrectly included amounts due from subsidiary,
Deep Blue Minerals (Pty) Limited to the Company. For further details see note
27 - prior year adjustment.
20. Provisions
GROUP COMPANY
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Mine rehabilitation provision - 44 - -
Mine decommissioning provision - 10 - -
- 54 - -
The provisions for mine rehabilitation and decommissioning in 2022 related to
Aftan. Following the disposal of Aftan during the year these provisions are no
longer required. For further info on the disposal of Aftan see note 15.
Each of Deep Blue and WHM carry out continuous rehabilitation as an embedded
part of the mining process. Consequently, any rehabilitation costs are
incurred on an ongoing basis and no provision is required.
21. Share Capital and Share Premium
No. Ordinary shares Deferred shares Share Capital Share Premium
of 0.1p each of 0.9p each £'000 £'000
Total as at 30 June 2022 (restated) 936,599,523 286,561,208 3,516 17,556
Share issues - - - -
Total as at 30 June 2023 936,599,523 286,561,208 3,516 17,556
The number of Ordinary shares of 0.1p each in the capital of the Company as at
30 June 2022 has been restated as the number of such Ordinary shares had
previously been overstated by 565,388 Ordinary shares of 0.1p each.
Reserves
The Group's reserves are made up as follows:
Share capital:
Represents the nominal value of the issued share capital.
Share premium account: Represents amounts received in
excess of the nominal value on the issue of share capital less any costs
associated with the issue of shares.
Capital redemption reserve: Reserve created on the redemption of the
Company's shares
Share option reserve: Reserve created for the
equity settled share option scheme (see note 22).
Currency translation reserve: Reserve arising from the translation of
foreign subsidiaries at consolidation. The total movement in the foreign
currency translation reserve was presented in both the Statement of Changes in
Equity and in Other Comprehensive Income in the current year. During the prior
year, this movement was presented in the Statement of Changes in Equity.
Retained earnings: Represents
accumulated comprehensive income for the year and prior periods.
22. Share-Based Payments
Equity-settled share option scheme and share warrants
The Company operates share-based payment arrangements to incentivise directors
by the grant of share options.
Equity-settled share-based payments within the scope of IFRS 2 are measured at
fair value (excluding the effect of non-market based vesting conditions) at
the date of grant. 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 Company's estimate of shares that will
eventually vest and adjusted for the effect of non-market based vesting
conditions.
The fair value of the share-based payments issued during the year has been
calculated using the Black-Scholes valuation model. The assumptions used in
the fair value calculation were as follows:
Date of grant 8 July 2022 18 July 2022 3 November 2022 16 May 2023
Number of options/warrants 3,000,000 4,000,000 16,500,000 4,000,000
Weighted average share price £0.00725 £0.008 £0.00925 £0.00875
Exercise price (pence) £0.01 £0.01 £0.01 £0.01
Risk free interest (%) 1.91% 1.87% 3.345% 3,628%
Expected volatility (%) 80% 80% 78% 76%
Expected life (years) 5 5 5 5
Fair value per option/warrant (pence) 0.42p 0.48p 0.59p 0.54p
The expected volatility is calculated by obtaining daily closing prices over
period of measure, computing the daily returns, determining their standard
deviation, and then annualizing this figure by multiplying by the square root
of the number of trading days which is usually 252 days.
The total share-based payment expense recognised in the income statement for
the year ended 30 June 2023 in respect of the share options granted was £256k
(2022: £116k).
The total number of share options and share warrants in issue as at 30 June
2023 are as follows:
Share Warrants
Exercise Price Expiry Date At 1 July 2022 Issued Exercised Lapsed At 30 June 2023
£0.02 27/12/2022 10,000,000 - - (10,000,000) -
£0.02 04/01/2023 2,500,000 - - (2,500,000) -
£0.02 04/01/2023 5,000,000 - - (5,000,000) -
£0.01 30/10/2023 39,937,643 - - - 39,937,643
£0.02 01/02/2023 2,500,000 - - (2,500,000) -
£0.02 31/01/2023 10,000,000 - - (10,000,000) -
£0.01 31/05/2023 116,131,500 - - (116,131,500) -
£0.02 01/02/2023 3,500,000 - - (3,500,000) -
189,354,143 - - (149,631,500) 39,397,643
As at 30 June 2023 the weighted average contractual life of the warrants in
issue was 4 months (2022: 11.3 months).
Share options
Exercise Price (p) Expiry Date At 1 July 2022 Issued Exercised Lapsed At 30 June 2023
£0.0175 20/12/2022 3,300,000 - - (3,300,000) -
£0.0175 20/12/2023 3,300,000 - - - 3,300,000
£0.0175 20/12/2024 3,400,000 - - - 3,400,000
£0.0100 03/06/2025 5,000,000 - - - 5,000,000
£0.0100 03/06/2025 5,000,000 - - - 5,000,000
£0.0100 03/06/2025 5,000,000 - - - 5,000,000
£0.0100 03/06/2025 10,000,000 - - - 10,000,000
£0.0100 08/07/2027 - 3,000,000 - - 3,000,000
£0.0100 18/07/2027 - 4,000,000 - - 4,000,000
£0.0100 06/05/2027 - 15,000,000 - - 15,000,000
£0.0200 12/01/2023 1,500,000 - - (1,500,000) -
£0.0100 06/05/2027 - 1,500,000 - - 1,500,000
£0.0100 11/05/2028 - 3,000,000 - - 3,000,000
£0.0100 11/05/2028 - 1,000,000 - - 1,000,000
36,500,000 27,500,000 - (4,800,000) 59,200,000
As at 30 June 2023 the weighted average contractual life of the share options
in issue was 2.8 years (2022: 2.4 years).
23. Financial Instruments
The Group's financial instruments comprise borrowings, cash and various items,
such as trade receivables and trade payables that arise directly from its
operations. The main purpose of these financial instruments is to raise
finance for the Group's operations.
FINANCIAL ASSETS BY CATEGORY
Financial assets included in the Statement of financial position and the
headings in which they are included are as follows:
GROUP COMPANY
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Financial assets at amortised cost:
Cash and cash equivalents 761 637 758 609
Loans and receivables 9,053 279 8,866 22
9,814 916 9,624 631
FINANCIAL LIABILITIES BY CATEGORY
Financial liabilities included in the Statement of financial position and the
headings in which they are included are as follows:
GROUP COMPANY
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Financial liabilities at amortised cost:
Trade and other payables 191 652 73 645
191 652 73 645
The following table details the Group's remaining contractual maturity for its
non-derivative financial liabilities with agreed repayment periods. The table
has been drawn up based on the undiscounted cash flows of financial
liabilities based on the earliest repayment date on which the Group can be
required to pay. The table includes both interest and principal cash flows. To
the extent that interest flows are floating rate, the undiscounted amount is
derived from the interest rate curves at the balance sheet date. The
contractual maturity is based on the earliest date on which the Group may be
required to pay.
Less than 1-3 months 3 months 1-5 years Over 5 years
1 month to 1 year
£'000 £'000 £'000 £'000 £'000
30 June 2022
Non-interest bearing:
Trade and other payables - 652 - - -
Short term borrowings - - - - -
30 June 2023
Non-interest bearing:
Trade and other payables - 191 - - -
Short term borrowings - - - - -
24. Risk Management Objectives and Policies
The Group is exposed to a variety of financial risks which result from both
its operating and investing activities. The Group's risk management is
coordinated by the Board of Directors and focuses on actively securing the
Group's short to medium term cash flows by minimising the exposure to
financial markets.
The main risks the Group are exposed to through its financial instruments and
the operations of the Group are credit risk, foreign currency risk, liquidity
risk and market price risk. These risks are managed by the Group's finance
function together with the Board of Directors.
Capital risk management
The Group's objectives when managing capital are:
· to safeguard the Group's ability to continue as a going concern,
so that it continues to provide returns and benefits for shareholders;
· to support the Group's growth; and
· to provide capital for the purpose of strengthening the Group's
risk management capability.
The Group actively and regularly reviews and manages its capital structure to
ensure an optimal capital structure and equity holder returns, taking into
consideration the future capital requirements of the Group and capital
efficiency, prevailing and projected profitability, projected operating cash
flows, projected capital expenditures and projected strategic investment
opportunities. Management regards total equity as capital and reserves, for
capital management purposes.
Credit risk
The Company's principal financial assets are bank balances and cash and other
receivables, which represent the Company's maximum exposure to credit risk in
relation to financial assets. The credit risk on liquid funds is limited
because the counterparties are banks with high credit ratings assigned by
international credit rating agencies.
As at 30 June 2023, the Group's maximum exposure to credit risk was £760,576
(2022: £636,854) comprising cash and cash equivalents.
Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter
difficulty in settling its debts or otherwise meeting its obligations related
to financial liabilities. The Group manages this risk through maintaining a
positive cash balance and controlling expenses and commitments. The Directors
are confident that adequate resources exist to finance current operations.
Foreign Currency risk
The Group undertakes transactions denominated in foreign currencies. Hence,
exposures to exchange rate fluctuations arise. Following the acquisition of
African Tantalum (Pty) Ltd, the Group's major activity has been in Namibia,
bringing exposure to the exchange rate fluctuations of GBP/£ Sterling with
the Namibian Dollar and South African Rand, the currencies in which most of
the operating costs are denominated. It is expected that the Group's future
exposure will principally be to GBP South African Rand foreign exchange
fluctuations following the Company's disposal of African Tantalum (Pty) Ltd.
At the year end the value of assets denominated in these currencies was such
that the resulting exposure to exchange rate fluctuations was not material to
the Group's operations.
Exchange rate exposures are managed within approved policy parameters. The
Group has not entered into forward exchange contracts to mitigate the exposure
to foreign currency risk.
The Directors consider the assets most susceptible to foreign currency
movements to be the Investment in Subsidiaries. Although these investments are
denominated in South African Rands their value is dependent on the global
market value of the available Tantalite resources.
The table below details the split of the cash held as at 30 June 2023 between
the various currencies. The impact due to movements in the exchange rates is
considered to be immaterial.
Currency 2023 2022
Namibian Dollar - NAD 173,234
South African Rand ZAR 233,109 ZAR 220,360
Great British Pounds GBP 366,884 GBP 608,504
US Dollars USD 480,289 -
Euros EUR 6,031 -
Total in GBP GBP 761,000 GBP 637,000
Market Price risk
Going forwards the Group's exposure to market price risk mainly arises from
potential movements in the market price of Tantalite. The Group is managing
this price risk by completing a fixed price off-take agreement in respect of
the major part of its planned production.
25. Events After the Reporting Period
In respect of the disposal of Aftan, the Company received £795k in August
2023 and £264k in November 2023.
On 30 October, warrants over 39,397,643 Ordinary shares exercisable at a price
of £0.01 per share, lapsed unexercised.
26. Related Party Transactions
The remuneration of the Directors, who are the key management personnel of the
Company, is set out in the report of the Board on remuneration accompanying
these financial statements.
During the year, Westleigh Investment Holdings Ltd ("WIHL") received £55,000
(2022: £49,000) in respect of accounting, administration and office
accommodation services provided to the Company. WIHL is a substantial
shareholder in the Company and is controlled by Giles Clarke and Nick Harrison
(each of whom resigned as directors on 8 July 2022).
As at 30 June 2022, the Company had an outstanding loan of £199,000 with
WIHL. This loan was repaid in January 2023.
As at 30 June 2022, £71,000 and £57,000 was owed to Giles Clarke and Nick
Harrison (each of whom was a director until 8 July 2022) respectively in
unpaid salaries. These amounts were settled in full in December 2022.
There have been no other material transactions with related parties.
27. PRIOR YEAR ADJUSTMENT
The prior year comparatives for the Group have been restated from those
previously reported by the Company as shown below:
As previously Adjustment As restated
stated £'000 2022
2022 £'000
£'000
Non-Current assets
Mines under construction 2,961 - 2,961
Property, plant and equipment 796 - 796
3,757 - 3,757
Current assets
Trade and other receivables 279 - 279
Cash and cash equivalents 637 - 637
916 - 916
Current liabilities
Trade and other payables 652 - 652
652 - 652
Non-Current liabilities
Other payables 826 (757) 69
Provisions 54 54
880 (757) 123
Net current assets / (liabilities) 264 - 264
Net assets 3,141 (757) 3,898
Equity
Share capital 3,516 - 3,516
Share premium account 17,556 - 17,556
Capital redemption reserve 2,077 - 2,077
Share option reserve 443 - 443
Currency translation reserve (494) 757 263
Retained earnings (19,908) - (19,908)
Equity attributable to owners of the Company
3,190 757 3,947
Non-controlling interests (49) - (49)
Total equity 3,141 757 3,898
Subsequent to the approval of the 2022 financial statements the Board carried
out a review of the prior year Other payables balance of £826k shown in
non-current liabilities. The Board concluded that £757k of this balance
related to amounts due from Deep Blue Minerals (Pty) Ltd (DBM) to the Company.
As DBM is a subsidiary of the Company this amount should have been eliminated
against the corresponding receivable amount in the Company, in the
consolidated statement of financial position. However, the elimination had
instead been allocated to Currency translation reserve. The effect of the
adjustment to correct the error increases the Group's net assets by £757k to
£3.9m from the previously stated £3.1m. There was no resulting impact on
profit or loss.
28. Notes supporting statement of cashflows
Significant non-cash transactions from investing activities are as follows:
2023 2022
£'000 £'000
Consideration for the disposal of subsidiary 10,673 -
See note 15
Reconciliation of net cash flow to movement in net debt
Group 2023 2022
£000 £000
Cash and cash equivalents 761 637
Borrowings - (474)
Net debt 761 163
126 590
Net increase in cash and cash equivalents in the period
Cash flows from decrease/(increase) in borrowings 474 (347)
Other non-cash changes (2) 16
Change in net debt resulting from cashflows 598 259
Net debt at the start of the year 163 (96)
Net debt at the end of the year 761 163
29. Ultimate Controlling Party
The Directors do not consider there to be one single ultimate controlling
party.
**ENDS**
For further information on the Company, visit: www.
(http://www.kazeraglobal.com/) kazeraglobal (http://www.kazeraglobal.com/)
.com (http://www.kazeraglobal.com/) .
Kazera Global plc kazera@stbridespartners.co.uk
Dennis Edmonds, CEO
Cavendish Capital Markets Ltd (Nominated Adviser and Broker) Tel: +44 (0)207 220 0500
Derrick Lee / Neil McDonald / Fergus Sullivan (Corporate Finance)
St Brides Partners (Financial PR) kazera@stbridespartners.co.uk (mailto:kazera@stbridespartners.co.uk)
Paul Dulieu / Isabel de Salis
About Kazera Global plc
Kazera is a global investment company focused on leveraging the skills and
expertise of its Board of Directors to develop early-stage mineral exploration
& development assets towards meaningful cashflow and production.
Its three principal investments are as follows:
(1) Alluvial diamond mining through Deep Blue Minerals (Pty) Ltd, Alexander
Bay, South Africa. Kazera currently has a 90% direct interest in Deep Blue
Minerals, of which 64% is held beneficially by Kazera and 26% is held on
behalf of Black Economic Empowerment partners.
(2) Heavy Mineral Sands mining (including ilmenite, monazite, rutile, and
zircon) through Whale Head Minerals (Pty) Ltd, Alexander Bay, South
Africa. Kazera currently has a 60% direct beneficial interest in Whale Head
Minerals.
(3) Tantalite mining in South-East Namibia (divestment in progress)
As announced on 20 December 2022, Kazera has agreed to dispose of African
Tantalum (Pty) Ltd ("Aftan") for a cash consideration of US$13 million plus a
debenture payment of 2.5% of the gross sales of produced lithium and tantalum
for life-of-mine. Completion of the sale is subject to receipt of full
consideration proceeds. Aftan has been deconsolidated from the Company's
financial statements with effect from 4 January 2023 because in accordance
with the terms of the sale agreement, it has relinquished control of the Aftan
in favour of the purchaser, Hebei Xinjian Construction Close Corp with effect
from that date. Kazera retains the right to cancel the transaction and retain
all amounts paid to date in the event of default by Hebei Xinjian.
The Company will consider additional investment opportunities as appropriate,
having regard to the Group's future cash flow requirements.TER WILSON HAHA)
LSON HAHA
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