REG - Kazera Global PLC - Final Results, Annual Report & Notice of AGM
13/12/2024 07:15
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RNS Number : 9484P Kazera Global PLC 13 December 2024
13 December 2024
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 2024 and the publication of its
Annual Report, which will be made available on the Company's website and is
being posted to shareholders today.
HIGHLIGHTS
Progressed Whale Head Minerals ("WHM") towards commercial production
· Completed mechanical commissioning work at the Heavy Mineral Sands
(HMS) plant to improve economics.
· Received permit from the National Nuclear Regulator (NNR) post period
end.
· Post period end, applied for Mining Right for Perdevlei, an area circa
34 times larger than WHM's existing Walviskop project, which will allow
operations to scale.
· Post period end: entered into an offtake agreement with US$600,000
prepayment. Commercial production of HMS is imminent.
Delivered on new processing strategy at Deep Blue Minerals ("DBM")
· Installed new equipment including pulsating jig and flow sort diamond
recovery machine
· Post period end, flow sort machine adapted and approved for use by
Alexkor
Strengthened the business on a corporate level
· Received further payments from Hebei Xinjian for sale of African
Tantalum Pty Ltd ("Aftan") bringing aggregate payments to US$4.4million (£3.5
million) of an agreed US$13 million.
· Post period end strengthened board to support transition from a
developer to a producer.
· Post period end increased stakes in WHM and DBM to 70% and 74%
respectively.
· Post period end welcomed Catalyse Capital Ltd and its related parties
as largest shareholder.
· Post period end initiated legal proceedings and Arbitration to recover
outstanding payments of US$9.5 million (£7.5 million) from Hebei Xinjian in
respect of the Aftan Sale Agreement.
Publication of Annual Report and Notice of AGM
The Company is also pleased to confirm that Kazera's annual report for the
year ended 30 June 2024 ("Annual Report") and a Notice of Annual General
Meeting ("AGM") will be posted to shareholders on 13 December 2024 and made
available on the Company's website www.kazeraglobal.com
(https://kazeraglobal.com/)
The Company's AGM will take place at 12.00 noon on Tuesday, 14 January 2025 at
33 St James' Square, London, SW1Y 4JS.
Dr John Wardle, Non-Executive Chairman of Kazera Global plc commented: "During
the year and up to the date of this report, we achieved significant milestones
in developing substantial local infrastructure and establishing two operating
plants in readiness for commercial production at our diamond and heavy mineral
sands projects in South Africa. As announced separately today, we have also
entered into an offtake agreement for our heavy mineral sands with commercial
production of HMS imminent.
"This an extremely exciting time for the Group with every one of our
initiatives seeming to reach inflection points at or around the same time.
Together, we are building a resilient and forward-looking company which is
well-positioned for sustained success."
For further information, please visit the Company's website at
www.kazeraglobal.com (http://www.kazeraglobal.com) or contact:
Kazera Global plc kazera@stbridespartners.co.uk (mailto:kazera@stbridespartners.co.uk)
Dennis Edmonds, CEO
Strand Hanson Limited (Nominated & Financial Adviser and Broker) Tel: +44 (0)207 409 3494
Christopher Raggett / Ritchie Balmer
St Brides Partners Limited (Financial PR) kazera@stbridespartners.co.uk (mailto:kazera@stbridespartners.co.uk)
Paul Dulieu / Isabel de Salis
CHAIRMAN'S STATEMENT
For the year ended 30 June 2024
The year ended 30 June 2024 has been one of significant activity. During the
year and up to the date of this report, we achieved significant milestones in
developing substantial local infrastructure and establishing two operating
plants in readiness for commercial production at our diamond and heavy mineral
sands ("HMS") projects in South Africa.
This an extremely exciting time for the Group with every one of our
initiatives seeming to reach inflection points at or around the same time.
Whale Head Minerals
We have also had a number of challenges to overcome, especially in ensuring
the safe alteration of operations and procedures to ensure compliance with the
National Nuclear Regulator ("NNR") requirements for the safe processing of
HMS. It is not uncommon for radiation to naturally occur in HMS such as those
at the Alexander Bay site, and it is important that we ensure the safety of
all stakeholders, especially staff and contractors working on the project.
While waiting for NRR approval for the project, we were unable to commence HMS
production. We used the time to implement an optimisation programme aimed to
enhance economic efficiency, which included the installation of new,
custom-designed plant and machinery.
Following the year-end, in early August 2024, we took the opportunity to
increase our stake in each of the diamond and HMS projects by 10%, bringing
our percentage interest to 74% and 70%, respectively.
Our (now 70% beneficially-owned) subsidiary, Whale Head Minerals Pty Ltd
("WHM"), was subsequently awarded the necessary permit from the NNR in mid
August 2024 which was subject to a number of conditions being met. These
conditions have since been satisfied and, as at the date of this report, we
are finalising the commissioning and optimisation of the HMS processing plant.
We have now entered into an offtake agreement and the commencement of
commercial production of HMS is now imminent.
Contemporaneously, WHM has applied for a Mining Right over the nearby
Perdevlei HMS project, which has an area approximately 34 times larger than
WHM's existing Walviskop HMS project. In November 2024, WHM received
Environmental Approval for the project from the Department of Mineral
Resources and Energy in South Africa and, if the mining right is granted,
Perdevlei will provide an excellent opportunity to significantly scale the HMS
project.
Deep Blue Minerals
Moving onto our (now 74% beneficially-owned) subsidiary, Deep Blue Minerals
Pty Ltd ("DBM"), initial production at the start of the financial year had to
be halted early on due to political and economic factors, and operating
difficulties at Alexkor's Muisvlak processing plant. As announced previously,
we invested in a FlowSort plant to ensure a secure local processing facility
to generate high concentrate diamond gravels to the government-owned Alexkor
facility for final sorting. Our focus is now on scaling up production and
generating revenue.
African Tantalum
The transaction to sell our African Tantalum project in Namibia to Hebei
Xinjian Construction ("Xinjian") initially advanced well, with Kazera
receiving total payments of approximately US$4.4 million (£3.5 million)
during the period December 2022 to August 2023. However, Xinjian subsequently
missed all remaining payments totalling US$9.5 million (£7.5 million),
prompting us to take steps in Q4 2024 to initiate legal proceedings and enter
arbitration to recover the outstanding balance.
Corporate
On the corporate side, we had movement in our major shareholders, welcoming
African Mineral Sands Pte Ltd, in a transaction that was ultimately unwound.
We are fortunate to enjoy the continuing support of Catalyse Capital Ltd and
its related parties, including R.S. and C.A. Jennings ("Catalyse Capital).
Both I (through Tracarta Limited) and Catalyse Capital have committed
additional funding to the Group to help ensure it has the necessary funding to
enable us to commence production at WHM. I am confident that commercial
production, which is fast approaching, will lead to strong positive cash
flows, which will be transformational for the projects and the wider group.
Over the past two years, alongside the significant progress made in our
projects, the Company has achieved notable advancements at a corporate level,
particularly in our reporting processes.
As we look ahead, the lessons learned during this process will serve as a
strong foundation for further improvements in our operations and corporate
governance. On behalf of the Board, I would like to extend our heartfelt
gratitude to the entire team for their hard work and commitment to driving
Kazera forward, and to the Board, executive team, project staff, advisors, and
shareholders for their continued support. Together, we are building a more
resilient and forward-looking company which is well-positioned for sustained
success. I look forward to working with all of you as we drive the Company's
progress and profitability forward.
Dr John Wardle
Non-Executive Chairman
12 December 2024
CHIEF EXECUTIVE OFFICER'S REVIEW
For the year ended 30 June 2024
The financial year ended 30 June 2024 was pivotal for Kazera Global plc as we
made significant strides in advancing our primary projects and moving towards
revenue generation, operational success and future growth.
I am pleased to reflect on our achievements and developments during the period
across our core assets: the Whale Head Minerals Pty Ltd Heavy Mineral Sands
Project and the Deep Blue Minerals Pty Ltd Diamond Project, and key corporate
developments, all of which are helping to position Kazera for a transformative
future.
Investment Highlights
Whale Head Minerals Pty Ltd ("WHM") - Heavy Mineral Sands ("HMS") Project
The development of our WHM Heavy Mineral Sands Project advanced considerably
during the year, including:
· October 2023: Completion of the Trommel screening plant.
· December 2023: Plant received on-site, roads constructed, and
permit submission made to the NNR.
· May 2024: Significant work on plant installation and progress on
mechanical and electrical commissioning, positioning WHM for production to
commence upon receiving NNR approval.
· Post-Year End: Received nuclear permit from the NNR in August 2024
following detailed inspection and implementation of all safety protocols. WHM
commenced mining and began producing HMS samples for potential off-takers,
paving the way for securing contracts.
· Post Year End: In October 2024, WHM applied for a Mining Right for
Perdevlei, an area circa 34 times larger than Walviskop, which would, if
granted, allow significant scaling up of the HMS business.
· Post Year End: In November 2024, WHM received Environmental Approval
for Perdevlei two months earlier than expected, advancing the timetable for
securing the mining right.
· Post Year End: In December 2024, WHM entered into an offtake agreement
for 100,000 tonnes of HMS and prepayment agreement for US$600k (approximately
£470k).
Deep Blue Minerals Pty Ltd ("DBM") - Diamond Project
Likewise, our diamond project has also advanced:
· November 2023: DBM ordered a pulsating diamond jig, capable of
processing 20 tons of diamond gravel per hour, to enhance operational
capacity.
· December 2023: The pulsating jig was delivered to site, and
additional key equipment was secured.
· May 2024: Flow Sort diamond recovery machine to X-Ray and sort
processed diamond gravels, installed on site in a secure Alexkor compound.
· Post-Year End: The flow sort machine was adapted and Alexkor
approved its use.
African Tantalum Pty Ltd ("Aftan") - Tantalum and Lithium Project
The sale of Aftan did not proceed as we had hoped but positive resolution is
expected soon:
· Q3 2023: Kazera received further payments totalling approximately
US$1.3 million (£1.1 million) from Hebei Xinjian, bringing aggregate payments
for the sale of Aftan to US$4.4 million (£3.5 million) of an agreed US$13
million (£10.3 million).
· December 2023: Kazera commenced discussions with potential alternative
buyers for the project, given the possibility of Hebei Xinjian defaulting on
the Aftan Sale Agreement.
· Post-Year End: In September 2024, Kazera initiated legal proceedings
to enforce the Aftan Sale Agreement, with outstanding payments due from Hebei
Xinjian of approximately US$9.5 million (£7.5 million) comprising the unpaid
capital, outstanding shareholders' loans, and accrued interest.
· Arbitration proceedings expected to commence in Namibia in November
2024, and Kazera remains confident of a favourable outcome, especially
following the recent granting of a lithium mining licence which enhances
Aftan's value.
Corporate Developments
At a corporate level we saw some changes to our board, strategic investment
and ongoing support from our largest shareholders:
· Board Changes: Post period-end, Gerard Kisbey-Green stepped down as
Non-Executive Chairman of Kazera with Dr John Wardle appointed his successor.
Dr Wardle brings a wealth of experience, and his leadership will be
instrumental in helping to steer Kazera towards operational success. In
addition, Peter Wilson stepped down as a Non-Executive Director of the Company
subsequent to the year-end. We are looking to further enhance the balance of
sills and experience on the Board in due course.
· Post Year End Strategic Investments: In August 2024, Kazera secured
additional stakes in DBM and WHM from Tectonic Gold PLC, increasing its
beneficial interest to 74% and 70%, respectively. This strategic acquisition
strengthens the Company's position as it gears up for production.
· Shareholder and Financial Developments: During the year, the Company
navigated challenges with key shareholder changes and in August 2024 secured
debt funding from its two largest shareholders to bridge the gap to revenue
generation without equity dilution, which would be unfavourable under current
market conditions.
Financial Overview
The Company's cash position as of 30 June 2024 was £61k, reflecting
substantial capital investments in infrastructure and equipment and
unavoidable delays, and the Board continues to prudently manage costs and
resources. With production and cashflows on the near horizon, the Company felt
it was imperative to tightly manage cashflow and avoid the need to raise funds
through the issue of equity with its associated shareholder dilution. A
£500,000 loan facility secured in August 2024 from the Company's two largest
shareholders therefore provided critical support to help position the business
to achieve its short-term production milestones. The Group has subsequently
entered into an offtake agreement with an agreed prepayment of US$600k
(c.£470k).
Outlook for 2025 and Beyond
The Board believes that the year ahead is set to be transformational. The
receipt of the NNR permit for WHM marks the culmination of significant effort
and positions Kazera for near-term revenue generation. With commercial diamond
and HMS production expected to commence imminently, we anticipate cash flows
from both businesses that will significantly strengthen the Company's
financial position. The acquisition of additional interests in both DBM and
WHM, plus the ongoing arbitration process for the circa US$9.5 million (£7.5
million) owed to the Company by Hebei Xinjian, are also expected to yield
material benefits and drive shareholder value.
Despite facing delays, regulatory hurdles and no shortage of frustrations, the
Company's perseverance is beginning to pay off. Kazera is on the brink of
realising its potential with its operations aligned for success. My deepest
appreciation goes to our team, partners, and shareholders for their unwavering
support during the last year. I look forward to updating the market on
Kazera's progress during 2025 as we move towards becoming a company generating
cash flows and profits.
Dennis Edmonds
Chief Executive Officer
12 December 2024
GROUP STATEMENT OF COMPREHENSIVE INCOME Notes Year ended Year ended
For the year ended 30 June 2024 30 June 2024 30 June 2023
£'000 £'000
Revenue 5 6 31
Cost of Sales (157) (155)
Gross loss (151) (124)
Administrative expenses (1,828) (1,518)
Provision for expected credit losses (1,345) -
Operating loss 6 (3,324) (1,642)
Net finance income 7 407 246
Loss before taxation from continuing operations (2,917) (1,396)
Taxation expense 10 - (142)
Loss for the year from continuing operations (2,917) (1,538)
Profit on discontinued operation, net of tax 15 - 8,128
(Loss)/profit attributable to owners of the Company (2,823) 6,706
Loss attributable to non-controlling interests (94) (116)
(Loss)/profit for the year (2,917) 6,590
Other comprehensive income:
Items that may be subsequently reclassified to profit and loss:
Exchange differences on translation of foreign operations (67) 159
(2,984) 6,749
Total comprehensive (loss)/profit for the year attributable to:
The equity holders of the parent (2,890) 6,865
The non-controlling interests (94) (116)
Total comprehensive (loss)/profit for the year (2,984) 6,749
Basic and diluted Earnings per share in pence attributable to owners of the
Company from:
Continuing operations 11 (0.30) p 0.70 p
Discontinued operations 11 - 0.87 p
The accounting policies and notes below are an integral part of these
financial statements
GROUP AND COMPANY STATEMENTS OF FINANCIAL POSITION
As at 30 June 2024
GROUP COMPANY
Notes 2024 2023 2024 2023
£'000 £'000 £'000 £'000
Non-Current assets
Mines under construction 12 814 749 - -
Property, plant and equipment 13 1,006 531 - -
Investment in subsidiaries 14 - - 784 784
Long-term loan 16 - - 2,446 1,607
1,820 1,280 3,230 2,391
Current assets
Trade and other receivables 17 6,269 9,053 6,194 8,866
Cash and cash equivalents 18 61 761 51 758
6,331 9,814 6,245 9,624
Current liabilities
Trade and other payables 19 182 191 143 73
Borrowings 20 50 - 50 -
232 191 193 73
Net current assets 6,099 9,623 6,052 9,551
Net assets 7,919 10,903 9,282 11,942
Equity
Share capital 22 3,516 3,516 3,516 3,516
Share premium account 22 17,556 17,556 17,556 17,556
Capital redemption reserve 2,077 2,077 2,077 2,077
Share option reserve 479 574 479 574
Currency translation reserve 355 422 - -
Retained earnings (15,805) (13,077) (14,346) (11,781)
Equity attributable to owners of the Company 8,178 11,068 9,282 11,942
Non-controlling interests (259) (165) - -
Total equity 7,919 10,903 9,282 11,942
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 £2,660k (2023: £335k loss).
These financial statements were approved by the Board of Directors on 12
December 2024.
Signed on behalf of the Board by
Dennis Edmonds
Director
Company number: 05697574
The accounting policies and notes below form an integral part of these
financial statements.
GROUP STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2024
Share capital Share Capital redemption reserve Share Currency translation reserve Retained earnings Equity shareholders' funds Non-controlling interests Total
£'000 premium account £'000 option £'000 £'000 £'000 £'000 £'000
£'000 reserve
£'000
Balance at 1 July 2022 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
Transactions with owners in their capacity as owners - - - 131 - 125 256 - 256
Balance at 30 June 2023 3,516 17,556 2,077 574 422 (13,077) 11,068 (165) 10,903
Loss for the year - - - - (2,823) (2,823) (94) (2,917)
(
Other comprehensive income - - - - (67) - (67) - (67)
Total comprehensive income - - - - (67) (2,823) (2,890) (94) (2,984)
Transactions with owners in their capacity as owners:
Share options/warrants lapsed - - - (95) - 95 - - -
Transactions with owners in their capacity as owners - - - (95) - 95 - - -
Balance at 30 June 2024 3,516 17,556 2,077 479 355 (15,805) 8,178 (259) 7,919
The accounting policies and notes below form an integral part of these
financial statements. A description of each reserve is provided in note 22.
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2024
Share Share Capital redemption reserve Share option reserve Retained Total
capital premium earnings
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 July 2022 3,516 17,556 2,077 443 (11,571) 12,021
Loss for the year - - - - (335) (335)
Total comprehensive income for the year - - - - (335) (335)
Share options/warrants exercised - - - (125) 125 -
Share based payment expense - - - 256 - 256
Transactions with owners in their capacity as owners - - - 131 125 256
Balance at 30 June 2023 3,516 17,556 2,077 574 (11,781) 11,942
Loss for the year - - - - (2,660) (2,660)
Total comprehensive income for the year - - - - (2,660) (2,660)
Share options/warrants lapsed - - - (95) 95 -
Transactions with owners in their capacity as owners - - - (95) 95 -
Balance at 30 June 2024 3,516 17,556 2,077 479 (14,346) 9,282
The accounting policies and notes below form an integral part of these
financial statements. A description of each reserve is provided in note 22.
GROUP AND COMPANY STATEMENTS OF CASH FLOWS
For the year ended 30 June 2024
GROUP COMPANY
Year ended Year ended Year ended Year ended
30 June 30 June 30 June 30 June
2024 2023 2024 2023
Note £'000 £'000 £'000 £'000
OPERATING ACTIVITIES
Loss before tax from continuing operations (2,917) (1,396) (2,660) (335)
Profit/loss before tax from discontinued operations - 8,128 - -
Loss before tax (2,917) 6,732 (2,660) (335)
Depreciation and amortisation 82 40 - -
Share based payment expense - 256 - 256
Net finance (income) 7 (407) (246) (405) (246)
Foreign exchange 292 269 396 75
Expected credit loss on financial assets 17 1,345 - 1,543 -
Gain on sale of subsidiary - (8,037) - (476)
Intercompany loan written off - - - 1,308
Acquisition option written off 474 - 474 -
Management fees - - - (1,144)
Intercompany loan interest charged 16 - - (156) (106)
Operating cash flows before movement in working capital (1,131) (986) (808) (668)
(Increase)/Decrease in receivables (82) (531) (195) (343)
(Decrease)/increase in payables (14) (59) 69 (66)
Net cash used in operating activities (1,227) (1,576) (934) (1,077)
INVESTING ACTIVITIES
Purchases of property, plant and equipment (525) (69) - -
13
Mines under construction (60) (24) - -
Proceeds from disposal of subsidiary 17 1,059 2,316 1,059 2,316
Advances to subsidiary undertakings 16 - - (882) (569)
Interest received 3 - -
Net cash generated from investing activities 477 2,223 177 1,747
FINANCING ACTIVITIES
Loans received /(repaid) 20 50 (474) 50 (474)
Interest paid - (47) - (47)
Net cash generated from/(used in) financing activities 50 (521) 50 (521)
Net (decrease)/increase in cash and cash equivalents (700) 126 (707) 149
Cash and cash equivalents at beginning of year 761 637 758 609
Exchange losses on cash and cash equivalents - (2) - -
Cash and cash equivalents at end of year 61 761 51 758
Major non-cash transactions
During the year purchases of property, plant and equipment included £nil
(2023: £180k) of non-cash additions.
The accounting policies and notes below are an integral part of these
financial statements.
NOTES TO THE GROUP FINANCIAL STATEMENTS
For the year ended 30 June 2024
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.
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 12 months
from the date of approval of these financial statements and performed
sensitivity analysis thereon. This assessment includes consideration of the
possible outcomes from the arbitration process with respect to the disposal of
the Group's operations in Namibia (and the default by the purchaser in failing
to adhere to the repayment provisions within the sale and purchase agreement),
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 upon a number of factors including: the
receipt of funds under the offtake prepayment agreement (see note 26), and the
Group's mining operations performing in line with expectations, both in terms
of timing and quantum of revenue generation; and associated costs being in
line with expectations, recognising that the Group does not yet have a long
operating history. In the event of an adverse result arising from these
factors, the Directors are confident that further funds could be raised to
meet any shortfall through the support of its key investors and shareholders.
In view of the uncertainty over the receivable in respect of the agreed
disposal of African Tantalum Pty Ltd, and the facts that the Group has not yet
fully commenced commercial production and does not have a long track record of
operations, the Directors consider that 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 in the Annual
Report.
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 2023. Their adoption has not had any
material impact on the disclosures or on the amounts reported in these
financial statements.
Standards/interpretations Effective Date
Amendments to IAS 1: Presentation of financial Statements: Classification of 1 January 2024
liabilities as Current or Non-current liabilities
Amendments to IAS 1; Classification of liabilities as Current or Non-current - 1 January 2024
Deferral of Effective Date
Amendments to IFRS 16 Leases: Lease liability in a Sale and Leaseback 1 January 2024
Amendments to IAS 1 Presentation of Financial Statements: Non-current 1 January 2024
liabilities with Covenants
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: 1 January 2024
Disclosures: Supplier Finance Arrangements
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rate: Lack of 1 January 2025
Exchangeability
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 Statement of comprehensive income 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 Statement of
comprehensive income. 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
Statement of comprehensive income because it excludes items of income or
expense that are taxable or deductible in other years and it further excludes
items that are never taxable or deductible. The 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 Statement of comprehensive income, 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 accumulated
depreciation and impairment losses.
Significant improvements are capitalised, provided they qualify for
recognition as assets. The costs of maintenance, repairs and minor
improvements are expensed when incurred to administrative expenses in the
statement of comprehensive income.
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 Statement of
comprehensive income.
Tangible and intangible assets are depreciated on the straight-line method
based on their estimated useful lives from the time they are available for use
as intended by management, so that their net cost is diminished over the
lifetime of consideration to estimated residual value as follows:
Buildings 20 years
Plant and machinery Between 5 and 10 years
Furniture and equipment Between 5 and 10 years
The depreciation cost is included within administrative expenses in the
statement of comprehensive income.
IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENT ('PPE') 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 in
administrative expenses in the statement of comprehensive income for the
amount by which the carrying value exceeds the recoverable amount. Management
determines the recoverable amount of PPE as the higher of fair value less
costs of disposal and value in use. Fair value less costs of disposal is based
on recent market transactions, where available, or an appropriate valuation
model.
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
(ECL) 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.
For receivables from Group undertakings, including loans to subsidiaries such
as DBM and WHM, the Group applies the general approach under IFRS 9. Under
this approach, ECLs are calculated based on a model that considers changes in
credit risk since initial recognition.
Management assesses credit risk by evaluating both the financial health of
each group undertaking and the probability of default. A receivable is
considered in default when there is evidence of financial difficulty, such as
liquidity challenges or a breach of loan covenants, or if contractual payments
are significantly overdue, unless there is strong evidence to support that
delayed payment does not indicate a credit issue.
Expected Credit Loss Model: The ECL is determined as the present value of all
expected cash shortfalls over the remaining life of the receivable. This is
based on weighted probabilities for a number of scenarios, which may include
base, adverse, and optimistic cases. The probabilities are adjusted based on
historical data, forward-looking information, and management's assessment of
current economic conditions.
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 recognised as
separate expense categories in the Statement of comprehensive income.
Cost of sales is recognised in the Statement of comprehensive income 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, Heavy Mineral Sands
activities and the diamond mining operations in South Africa.
3. Critical Accounting ESTIMATES AND 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.
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") being
DBM and WHM which are determined based on value in use (VIU) calculations
which require the use estimates and assumptions such as the offtake terms and
conditions available, which will be influenced by commodity prices, product
grades, 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.
The VIU calculations are based on cash flow projections covering a period of
10 years, which management considers appropriate given the expected life of
the mines and the time required to realise the economic benefits from ongoing
capital investment. Management believes this period accurately reflects the
economic lifecycle of the CGUs and aligns with industry norms for similar
mining assets. These estimates and assumptions are subject to risk and
uncertainty, and therefore there is a possibility that changes in
circumstances could impact the recoverable amount.
During the year, progress on production at the Walviskop site held by Whale
Head Minerals, the parent company's then 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. As
at 30 June 2024, this application had been submitted. Following the year-end,
the necessary consent had been granted.
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 offtake terms and conditions,
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 15%, being approximately a 5% premium to the 10-year South Africa Bond
yield rate, and is intended to ensure 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.
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 were deconsolidated from the Group in the prior year, as further
detailed in Note 15.
Recoverability of proceeds from disposal of Aftan
The Directors acknowledge that, as at 30 June 2024:
· There are uncertainties surrounding final amounts to be received
from Xinjian
· There are uncertainties surrounding timing of receipts from Xinjian
· 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
Although Xinjian was in breach of the SPA, as at the date of this financial
statements the directors consider that the amounts due from Xinjian remain
recoverable. In FY2024 the Group received US$4.4 million (£3.5 million) from
Xinjian in respect of its obligations under the SPA. The Company is now moving
to initiate arbitration as provided for under the terms under the SPA. As a
matter of prudence in accordance with accounting principles, and without
prejudice to its likely success in arbitration or any claim that may arise
thereafter, the Company has impaired the amount receivable by £1,345k. This
amount has been determined by considering a number of possible scenarios and
determining a number of adverse possibilities, without recognising any
potential upside of any prospective award.
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. The directors
have considered the expected credit losses in accordance with IFRS 9,
considering the likelihood of a number of scenarios to weight the expected
credit loss in each of them. 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.
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 23. The estimates and
assumptions could materially affect the Statement of comprehensive income.
Mine rehabilitation
Management has considered whether provision is required for mine
rehabilitation.
With respect of beach mining operations, once the sands have been screened and
valuable elements have been separated, the screened material is returned to
the beach and is distributed naturally by the repetitive action of waves and
the tide.
With respect to land mining operations, the mining operation follows ancient
surf zones or river courses and is carried out by way of trenching where the
overburden is removed and reserved to one side until the diamond bearing layer
of gravel below is reached. The diamond bearing gravel is removed and screened
for diamonds. Screened gravel is then returned to the trench and re-covered
with topsoil throughout the routine course of mining, effectively encompassing
rehabilitation within the cost of mining.
It has therefore been determined that at the present time, in view of the
current stage and nature of mining operations, no provision for mine
rehabilitation should be required.
4. Segmental Reporting
In accordance with IFRS 8 'Operational Segments,' the Group determines and
presents operating segments based on the information that is provided
internally to the Executive Directors, who are the Group's chief operating
decision makers ("CODM"). The operating segments are aggregated if they meet
certain criteria.
Identification of Segments:
An operating segment is a component of the Group that engages in business
activities from which it may earn revenues and incur expenses, including
revenues and expenses that relate to transactions with any of the Group's
other components, and is:
· Expected to generate revenues and incur expenses.
· Regularly reviewed by the CODM to make decisions about resources to
be allocated to the segment and assess its performance.
· For which discrete financial information is available.
Based on the above criteria, the Group has identified its reportable segments
as being business activity and geographic. Business activity is divided into:
· holding company expenses
· Heavy mineral sands mining activities and
· diamond mining activities
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 2024 30 June 2023
£'000 £'000
Holding company (3,021) (1,060)
Diamond mining activity (110) (453)
Mineral sands mining activity (193) (129)
Operating loss (3,324) (1,642)
Net finance income/(charge) 407 246
Taxation expense - (142)
Loss from continuing activities (2,917) (1,538)
Profit/(loss) on discontinued operation, net of tax - 8,128
Group profit/(loss) for the year (2,917) 6,590
Net assets /(liabilities) Year ended Year ended
30 June 2024 30 June 2023
£'000 £'000
Holding company 9,567 12,027
Diamond mining activity (1,331) (1,009)
Heavy Mineral Sands mining activity (317) (115)
Group net assets 7,919 10,903
Segmentation by geographical area
Operating loss Year ended Year ended
30 June 2024 30 June 2023
£'000 £'000
United Kingdom (3,021) (1,060)
South Africa (303) (582)
(3,324) (1,642)
Net assets /(liabilities) Year ended Year ended
30 June 2024 30 June 2023
£'000 £'000
United Kingdom 9,567 12,027
South Africa (1,648) (1,124)
7,919 10,903
5. Revenue
Year ended Year ended
30 June 2024 30 June 2023
£'000 £'000
Revenue from external customers 6 31
Revenues of £6k were derived from sales of diamonds during the first half of
the 2024 financial year.
In 2023, revenues of £31k were derived from the sale of the by-products of
testing and evaluation activities.
6. Operating Loss
Year ended Year ended
30 June 2024 30 June 2023
£'000 £'000
Loss for the period has been arrived at after charging:
Staff costs as per Note 9 below 590 790
Impairment loss on financial asset 1,345 -
Auditor' remuneration 83 61
Depreciation of property, plant and equipment 58 40
Share-based payment expense - 256
7. Finance Charges/INCOME
Year ended Year ended
30 June 2024 30 June 2023
£'000 £'000
Loan interest payable - (15)
Interest income 407 261
407 246
£404k of the interest income relates to the deferred consideration and loan
receivable from the sale of Aftan.
8. Auditor Remuneration
Year ended Year ended
30 June 2024 30 June 2023
£'000 £'000
Fees payable to the Group's auditors for the audit of the Group's annual 83 61
accounts
Total audit fees 83 61
9. Staff Costs
The average monthly number of employees (including executive directors) for
the continuing operations was:
Year ended Year ended
30 June 2024 30 June 2023
Number Number
Group total staff 35 29
£'000 £'000
Wages and salaries 506 224
Share based payment in respect of exercise of options - 256
Other benefits 19 -
Social security costs 65 27
590 507
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 within the Annual Report. 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 2024 30 June 2023
£'000 £'000
Analysis of income tax expense:
Current tax on profits for the year - -
Deferred tax - 142
Total income tax expense - 142
Loss before tax from continuing operations (2,917) (1,396)
(Loss)/profit before tax from discontinued operations - 8,128
(Loss)/profit before tax for the year (2,917) 6,732
Tax using the Company's domestic tax rate of 25% (2023:20.50%) (729) 1,380
Effects of:
Expenses not deductible for tax purposes 454 52
Unutilised tax losses carried forward 285 664
Substantial shareholder relief - (1,832)
Local deferred tax derecognised - 142
Effect of difference between local and UK tax rate (10) (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 £6,942k (2023:
£5,288K).
In December 2021, the OECD/G20 Inclusive Framework on BEPS released model
rules for the implementation of a global minimum tax (Pillar Two) at a rate of
15%, effective for fiscal years beginning on or after 1 January 2025. The
Group has considered the potential impact of these rules on its tax
obligations. Given that the corporate income tax rate in South Africa, where
the Group primarily operates, is above the 15% minimum threshold, management
does not expect the introduction of Pillar Two to have a material impact on
the Group's effective tax rate or deferred tax balances. The Group will
continue to monitor developments related to this reform to assess any
potential future implications.
11. Earnings Per Share
The calculation of basic earnings per share is based on the following data:
Year ended Year ended
30 June 2024 30 June 2023
£'000 £'000
Profit/(loss) for the year attributable to owners of the Company
Continuing operations (2,823) (1,538)
Discontinued operations - 8,128
Weighted average number of ordinary shares in issue for basic and fully 936,599,523 936,599,523
diluted earnings
EARNINGS PER SHARE (PENCE PER SHARE)
BASIC AND FULLY DILUTED:
- from continuing operations (0.30) (0.17)
- from discontinued operations - 0.87
(0.30) 0.70
The Company has outstanding warrants and options as disclosed under Note 23
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 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
Additions 60 - 60
Exchange translation difference 5 - 5
At 30 June 2024 768 46 814
13. Property, Plant and Equipment
Land & buildings Plant & machinery Total
GROUP £'000 £'000 £'000
Cost
At 1 July 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
Exchange translation difference - 28 28
Additions - 525 525
Cost at 30 June 2024 184 1,013 1,197
Depreciation
At 1 July 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
Exchange translation difference - (3) (3)
Charge for the year - 81 81
Depreciation at 30 June 2024 - 191 191
Net book value at 30 June 2024 184 822 1,006
Net book value at 30 June 2023 184 347 531
The additions during the year related mainly to the purchase of the following
plant and machinery: Trommel Screen to separate heavy mineral sands and a
Janni 1000 Pulsator and a Flow sort X-ray equipment to separate diamond ore
from other material.
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 2022 3,298
Disposal of African Tantalum (2,514)
As at 30 June 2023 784
As at 30 June 2024 784
All principal subsidiaries of the Group are consolidated into the financial
statements.
At 30 June 2024, 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
((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 which was completed on 4
January 2023 (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 in FY 2023 was determined as follows:
Group £'000
Cash consideration 2,990
Repayment of existing loan 7,683
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
£'000
Revenue 24
Administration and other costs 67
Gain from selling discontinued operations after tax 8,037
Profit/(loss) on discontinued operations after tax 8,128
In FY2023 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 African Tantalum Loan to Deep Loan to Whale Head Minerals Total
£'000 Blue Minerals £'000 £'000
£'000
As at 1 July 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
Increase in loan - 505 532 1,037
ECL provision - (118) (80) (198)
As at 30 June 2024 - 1,458 988 2,446
The total ECL provision is £1,543k for FY2024, of which £198k relates to DBM
and WHM. The remaining amount of £1,345k relates to the Aftan receivable as
described in note 17 below.
17. Trade and Other Receivables
GROUP COMPANY
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Other receivables 6,259 8,520 6,184 8,500
Prepayments and accrued income 10 533 10 366
6,269 9,053 6,194 8,866
SALE OF AFTAN
Included in other receivables is £6,107k (2023: £8,501k) with respect to
amounts due on the sale of Aftan. See note 3 and CEO's Review.
Group Total
£'000
At 1 July 2023 8,501
Cash received (1,059)
Interest 404
FX (394)
Gross receivable 7,452
ECL provision (1,345)
At 30 June 2024 6,107
Expected Credit Loss (ECL) calculation
The Group has calculated an expected credit loss (ECL) provision for the
receivable from the sale of Aftan. The gross carrying amount of this
receivable is £7,452k, and an ECL provision of £1,345k has been recognised
to reflect management's estimate of potential credit losses under IFRS 9.
The ECL provision was calculated using a probability-weighted approach that
considers various recovery scenarios, each assigned a probability based on
management's best estimates. The scenarios, with respective probabilities and
expected recoveries, are as follows:
Abandonment - 0% probability
Management does not intend to abandon attempts to recover the amounts owed by
Hebei. No credit loss provision has been made under this scenario as it is
deemed unlikely.
Alternative Sale - 10% probability
There is a possibility of recovering proceeds through the sale of Aftan's
interest to a third party. Due to uncertainties regarding asset condition and
current discussions, management has applied a 50% discount to the expected
recovery.
Arbitration - 38% probability
The Group is pursuing arbitration as per the terms of the sale agreement, with
legal advisors expressing high confidence in a favourable outcome.
Settlement - 37% probability
Management considers settlement increasingly likely once arbitration
proceedings commence, although no discussions have yet taken place.
Enforcement - 15% probability
If arbitration and settlement are unsuccessful, the Group may seek enforcement
through court proceedings. Management estimates full recovery of the
receivable under this scenario, resulting in no additional contribution to the
ECL.
The total probability-weighted ECL for this receivable is therefore £1,345k.
This calculation is based solely on the gross carrying amount of the
receivable, with any excess claim value excluded from the ECL assessment.
18. Cash and Cash Equivalents
GROUP COMPANY
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Cash and cash equivalents 61 761 51 758
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
2024 2024 2023
2023
£'000 £'000 £'000 £'000
Current Liabilities
Trade payables 57 17 31 11
Other payables 14 124 1 12
Accruals 111 50 111 50
182 191 143 73
The Directors consider the carrying amount of trade payables approximates to
their fair value.
20. BORROWINGS
On 27 June 2024, the Company entered into an unsecured loan agreement with
Richard Jennings for a facility of £50,000, repayable in a single payment on
30 October 2024. The loan bears a simple fixed interest of 5%, payable at the
time of repayment. Catalyse Capital Ltd and its related parties (including
Richard Jennings) is a substantial shareholder of the Company. Subsequent to
the year-end, this loan was added to and formed part of the funds deemed to
have been drawn under a Facility Agreement with Mr Jennings. See note 26.
21. Provisions
GROUP COMPANY
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Mine rehabilitation provision - - - -
Mine decommissioning provision - - - -
- - - -
22. 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 2023 936,599,523 286,561,208 3,516 17,556
Share issues - - - -
Total as at 30 June 2024 936,599,523 286,561,208 3,516 17,556
There were no new shares issued during the year to 30 June 2024
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 23).
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.
23. 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 total share-based payment expense recognised in the Statement of
comprehensive income for the year ended 30 June 2024 in respect of the share
options granted was £nil (2023: £256k).
The total number of share options and share warrants in issue as at 30 June
2024 are as follows:
Share Warrants
Exercise Price Expiry Date At 1 July 2023 Issued Exercised Lapsed At 30 June 2024
£0.01 30/10/2023 39,397,643 - - (39,397,643) -
39,397,643 - - (39,397,643) -
As at 30 June 2024, all warrants had lapsed. The weighted average contractual
life of the warrants in 2023 was 4 months.
Share options
Exercise Price (p) Expiry Date At 1 July 2023 Issued Exercised Lapsed At 30 June 2024
£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
£0.0100 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
59,200,000 - - (3,300,000) 55,900,000
As at 30 June 2024, the weighted average contractual life of the share options
in issue was 2 years (2023: 2.8 years).
24. 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
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Financial assets at amortised cost:
Cash and cash equivalents 61 761 51 758
Loans and receivables 6,270 9,053 6,194 8,866
6,331 9,814 6,245 9,624
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
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Financial liabilities at amortised cost:
Trade and other payables 182 191 143 73
182 191 143 73
The following tables 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.
Group 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 2023
Non-interest bearing:
Trade and other payables - 191 - - -
Short term borrowings - - - - -
30 June 2024
Non-interest bearing:
Trade and other payables - 182 - - -
Short term borrowings - - - - -
Company 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 2023
Non-interest bearing:
Trade and other payables - 73 - - -
Short term borrowings - - - - -
30 June 2024
Non-interest bearing:
Trade and other payables - 143 - - -
Short term borrowings - - - - -
25. 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 2024, the Group's maximum exposure to credit risk was £60,539
(2023: £760,576) 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. The receivable due from the sale of Aftan is
denominated in US dollars and therefore presents a foreign currency exchange
risk for the Group.
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 2024 between
the various currencies. The impact due to movements in the exchange rates is
considered to be immaterial.
Currency 2024 2023
South African Rand ZAR 213,991 ZAR 233,109
Great British Pounds GBP 50,637 GBP 366,884
US Dollars USD 522 USD 480,289
Euros EUR 0 EUR 6,031
Total in GBP GBP 60,539 GBP 761,000
Other financial assets
The Aftan receivable is USD-denominated. The carrying amount as at the
reporting date was £6,107k (USD7,725k) and was translated into GBP at the
closing exchange rate of 1 GBP = USD 1.265. This receivable exposes the Group
to fluctuations in foreign exchange rates. Management has chosen not to hedge.
A hypothetical 10% strengthening of the USD against GBP as at the reporting
date would result in an increase in the carrying value of the receivable by
approximately £679k. Conversely, a 10% weakening of the USD against GBP would
result in a decrease in the carrying value of the receivable by approximately
£554k.
This sensitivity analysis illustrates the potential impact of exchange rate
fluctuations on the receivable's value, assuming all other variables remain
constant.
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.
26. Events After the Reporting Period
In August 2024, the Company entered an agreement to acquire an additional 10%
of the issued shares of each of its existing subsidiaries, Deep Blue Minerals
(Pty) Ltd and Whale Head Minerals (Pty) Ltd, bringing the Company's total
beneficial interest in them to 70% and 74%, respectively.
Also in August 2024, the Company entered into loan facilities with its two
largest shareholders, Richard Jennings and Tracarta Limited ("Lenders") under
which amounts of up to £150,000 and £350,000 respectively could be drawn.
Fixed interest of 12% is payable under these loan facilities; any interest due
thereunder is convertible at each Lender's discretion. The loans are each
repayable on 30 October 2025.
In June 2024, the Company had entered into a loan agreement for £50,000 with
Richard Jennings and Catalyse Capital Limited. In entering the facility
agreement for up to £150,000 as aforementioned, the initial £50,000 received
in June 2024 was included within, and formed a part of the £150,000 facility.
Consequently, the repayment date was extended from 30 October 2024, to 30
October 2025.
Under the terms of the loan agreements, warrants were due to each of the
Lenders as further disclosed below.
On 7 August 2024, warrants over 25,575,000 Ordinary shares were issued to
Richard Jennings exercisable at a price of £0.01 per share expiring on 7
August 2026.
On 7 August 2024, warrants over 59,400,000 Ordinary shares were issued to
Tracarta Limited exercisable at a price of £0.01 per share expiring on 7
August 2026.
On 23 August 2024, the NNR completed its inspection of the WHM operation and
consented to the commencement of operations.
On 24 September 2024, the Company announced it was referring the outstanding
matter in respect of the receipt of full payment in respect of the sale of
African Tantalum (Pty) Ltd to Hebei Xinjian Construction, to arbitrators in
Namibia.
On 25 September 2024, Gerard Kisbey-Green resigned as a director.
On 15 October 2024, the Company announced that its subsidiary WHM had been
requested by the Department of Mineral Resources and Energy ("DMRE") to
furnish a guarantee in respect of its obligations to rehabilitate the mining
area covered by its application for a mining right over the Perdevlei project.
WHM accordingly obtained a suitable insurance policy, and that it had entered
into an unsecured loan agreement with Tracarta Limited (a related party of
John Wardle) for £45k to provide the necessary funding.
On 30 October 2024, Peter Wilson resigned as a director.
On 20 November 2024, the Company announced that WHM had been granted
Environmental Approval for the project from the Department of Mineral
Resources and Energy in South Africa.
On 12 December 2024, the Company's subsidiary, WHM entered into an offtake
agreement for the sale of 100,000 tonnes of HMS product, at a rate of
approximately 6,000 tonnes per month. In parallel with the offtake agreement,
WHM entered into a prepayment agreement, under which the ZAR equivalent of
US$300k (approximately £235k) will be paid to WHM in December 2024, and a
further US$300k equivalent will be paid to WHM in January 2025.
27. 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.
There have been no other material transactions with related parties.
28. Notes supporting statement of cashflows
Significant non-cash transactions from investing activities are as follows:
2024 2023
£'000 £'000
Consideration for the disposal of subsidiary - 8,357
The £8,357k is the difference between the gross consideration of £10,673k
and the cash received of £2,316k in FY2023. See note 15.
Reconciliation of net cash flow to movement in net debt
Group 2024 2023
£000 £000
Cash and cash equivalents 61 761
Borrowings (50) -
Net debt 11 761
(700) 126
Net increase in cash and cash equivalents in the period
Cash flows from decrease / (increase) in borrowings (50) 474
Other non-cash changes - (2)
Change in net debt resulting from cashflows (750) 598
Net debt at the start of the year 761 163
Net debt at the end of the year 11 761
29. Ultimate Controlling Party
The Directors do not consider there to be one single ultimate controlling
party.
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