REG - Premier African Min. - Final Results
28/06/2024 13:00
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RNS Number : 3951U Premier African Minerals Limited 28 June 2024
28 June 2024
Premier African Minerals Limited
Final Results
Premier African Minerals Limited ("Premier" or the "Company"), the
AIM-traded, multi-commodity mining and natural resource development company
focused on Southern Arica, is pleased to announce publication of its audited
Annual Report and Accounts for the year ended 31 December 2023 (the "Annual
Report").
The Annual Report is available on the Company's
website, www.premierafricanminerals.com
(http://www.premierafricanminerals.com/) and is in the process of being
posted to Shareholders.
The Annual Report for the year ended 31 December 2023 is set out in full
below.
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of
the European Union (Withdrawal) Act 2018.
The person who arranged the release of this announcement on behalf of the
Company was George Roach.
Enquiries:
George Roach Premier African Minerals Limited Tel: +27 (0) 100 201 281
Michael Cornish / Roland Cornish Beaumont Cornish Limited Tel: +44 (0) 20 7628 3396
(Nominated Adviser)
Douglas Crippen CMC Markets UK Plc Tel: +44 (0) 20 3003 8632
Toby Gibbs/Rachel Goldstein Shore Capital Stockbrokers Limited Tel: +44 (0) 20 7408 4090
Nominated Adviser Statement
Beaumont Cornish Limited ("Beaumont Cornish"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority, is
acting as nominated adviser to the Company in connection with this
announcement and will not regard any other person as its client and will not
be responsible to anyone else for providing the protections afforded to the
clients of Beaumont Cornish or for providing advice in relation to such
proposals. Beaumont Cornish has not authorised the contents of, or any part
of, this document and no liability whatsoever is accepted by Beaumont Cornish
for the accuracy of any information, or opinions contained in this document or
for the omission of any information. Beaumont Cornish as nominated adviser to
the Company owes certain responsibilities to the London Stock Exchange which
are not owed to the Company, the Directors, Shareholders, or any other person.
CEO STATEMENT -Mr George Roach
2023 was a year of extremes. From the excitement of completing assembly of the
Zulu Lithium and Tantalum Project ("Zulu") plant to the disappointment when
the deficiencies in the ore sorting and comminution circuit became apparent.
From completion of mine site infrastructures, civils, roads and access,
tailings and water storage, in fact from a little bit of Zimbabwean bush to a
complete mine in record time to the disappointment that has been covered in
many announcements over the period and into events post December 2023.
Whilst many of the issues associated with the plant at Zulu are discussed in
the Strategic Report, it is important to note that the fundamental quality of
the deposit at Zulu and the original test work on which the plant supplier
based their process and design remains valid and with extensive both
independent and in house and ongoing test work, nothing fundamental has
changed and it is more apparent today that had the plant met the most basic of
the design requirements, Zulu would be in production. The facts are that the
ore sorters are not fit for purpose and the Company has successfully
implemented interim mitigation steps to deal with this, and the milling and
screening completely unable to meet the required specifications, an issue
admitted by the plant supplier and eventually resolved but only after Premier
agreed to advance the funds needed to effect this repair as the plant supplier
was unable to fund this. Reference is made to this in our accounts. The
combination of the pull back in SC6 pricing coupled to the delays with getting
Zulu into production, whilst presenting short-term difficulties, have not
changed the medium and long-term fundamentals of Zulu and the strong future
for Premier African Minerals Limited ("Premier" or "Company"). And in this
context in particular we are conscious of the opportunities that have emerged
that include a crushing and milling circuit able to support an increase in
float plant feed up to 100%, stockpiled crushed ore in the small size
fractions able to support a separate Dense Medium Separation plant and feed to
a new Tantalum recovery circuit under design at present.
With our focus on Zulu, little has been achieved in regard to Premier's other
projects. Once matters have been addressed at Zulu, Premier expects that our
other projects will see serious attention in the coming year with a view to
realising a return that is closer to our original investments than the value
we now have elected to include in our accounts. Current pricing of Tungsten is
compelling, and we do expect resolution of this with the Zimbabwean authority.
Similarly, our interests in Manganese represent an equally compelling
opportunity.
_____________________
George Roach
Chief Executive Officer
28 June 2024
STRATEGIC REPORT
The strategic report provides a detailed assessment of the activities of the
Company during the period under review. It also details the main objectives of
the Company related to our portfolio of assets. The principal risks and
uncertainties associated with our activities are outlined in a specific
principal risks and uncertainties section.
RHA
49% Interest owned by Premier
51% Locally indigenized owned by National Indigenisation and Economic
Empowerment Fund ("NIEEF") NIEEF is controlled by Ministry of Mines and Mining
Development
Despite indications to the contrary, nothing has changed. The price of
wolframite continues to suggest that RHA should be back into production but
with our reticence to commit more funds into RHA under the present share
ownership structure, we are unable to predict when and if there will be a
return to production notwithstanding that recent discussions with the Ministry
of Mines and Mining Development have been positive. What is certain is that
with advances in other exploration in Zimbabwe and with a need for additional
comminution capacity at Zulu, most of the plant at RHA will be relocated
during the latter part of 2024 if we are unable to resolve the present
ownership status.
Recoverability of RHA Assets
The RHA assets remain fully impaired at this time and are likely to so remain
until we are able to conclude the discussions underway at present.
Zulu
With hindsight the issues associated with the Zulu plant and the deficiencies
and oversights in the plant design were all avoidable. It was easy to accept
the proposal and purported competencies of the supplier, in particular with
the confidence our Company had in the resource and in the test work that had
been undertaken by Anzaplan in 2017 and had been updated subsequently. It is
worth noting that the resource estimates at Zulu have been undertaken by
Shango Solutions an independent consultancy with extensive resource estimation
experience, and validation of the amenability of the Zulu ores to successful
recovery of SC6 has been undertaken not only by Anzaplan, but also by Geolabs
and by our reagent suppliers quite apart from the many float tests undertaken
in our laboratory at Zulu.
In our view, the ruling SC6 price, our confidence in the resource and test
work, coupled to the assurances and proposal from the equipment supplier
adequately addressed the risks associated with proceeding to plant
construction. It remains our opinion that constructing the Zulu mine at that
time was correct and in the light of the present price structures for SC6, had
the Company not proceeded at that time, it is unlikely this mine would have
been financed and built today. In terms of the plant, the production of SC6
was to be through a floatation process. The plant was expected to perform the
following functions:
• After an initial crushing of Run of Mine ("ROM")
ore, ore sorting machines were expected to remove waste material that was not
pegmatite. The plant supplier was fully informed of the required waste to be
removed. The ore sorters supplied are not fit for purpose. The primary sorters
failed to remove all the identified waste. The secondary Ultraviolet sorters
failed to identify and upgrade spodumene rich ore. The Company has mitigated
this by carefully controlled mining and inspection of ore on the ROM pad. The
Plant supplier has been informed that the sorters are not fit for purpose. The
Company has reserved its rights in this regard.
• Sorted ore was to be milled to the correct size fraction in
the design tonnage for feed to the float plant. The milling and screening
system originally supplied was completely deficient in every respect and was
required to be replaced. The Company advanced funds to the plant supplier to
remedy this situation and this resulted in the installation of a new mill and
hydro-sizer system. The Equipment supplier was unable to properly commission
the new systems and was removed from site in a subsequent event in early 2024.
• During the year under review, it had been impossible to
properly evaluate the float plant. At no time had the correct feed rate and
particle size been achieved. Accordingly, it was only after the Company had
brought the new milling and sizing circuit into operation that it was possible
to properly assess the performance of the float plant and deal with
commissioning and optimisation.
• In subsequent events, issues associated with the pH and
reagent dosing control and recovery of spodumene have been identified and
addressed.
• Despite these challenges, in continuous running of the float
plant, spodumene concentrate was produced and despite the very low recoveries
of spodumene, concentrate at saleable grade and at up to 6.2% Li2O has been
produced.
• At this time, we expect an additional conditioning
cell to be installed during the week commencing 10 July 2024 and thereafter it
is expected that the plant will operate at design throughput and with adequate
recovery to meet the production targets originally agreed.
• The Company has expressed its overall dissatisfaction
with the performance of the original plant and equipment suppliers and intends
to seek substantial redress in due course.
It is important to acknowledge the support that has been provided by our
offtake and prepayment partner. Our communication remains open and frank and
the Company remains committed to meeting the long-term interests of our
offtake partner that is focussed on the supply of SC6 into the future. At the
same time, our offtake and prepayment partner is aware of the challenges that
the production delays have caused, in particular in relation to cash flows and
has expressed agreement to the Company seeking other finance opportunities
provided the long-term interests of our offtake partner are not impinged.
The Company was able to release updated resource estimates and at the same
time identify that the main pegmatite at Zulu is Spodumene Quartz Intergrowths
dominant and accordingly is primarily a spodumene rich ore body. This resource
estimate, coupled to the emerging extent of pegmatites contained within the
EPO, is likely to support both a much longer term life of mine for the present
mine plant, but also the expectation of a significantly larger overall
resource and the likelihood of an increase in plant production capacity in the
immediate future. Application has been made for renewal of the EPO but in the
event that this is not forthcoming, the company has registered extensive new
mining claims over prospective areas within the EPO.
In subsequent events associated with the plant, the Company engaged Senet
Engineering to conduct a preliminary review of the plant as delivered at the
time of removal of the previous plant supplier, as much to assist in remedial
action required as to set and understand the baseline and other issues
associated with the previous plant supplier. Subsequently, the Company intends
to further engage similar services to examine and validate the Company's
internal discounted cash flow and projected cash flows with a view to moving
the operation at Zulu to a fully compliant mineral reserve status. The
experience to date, based upon internal assessments, and the production cost
associated with spodumene concentrate produced supports the Company's internal
projection of a delivered China port all in cost of $828 per tonne for the
year ending June 2025.
Extended Lithium Portfolio
We have previously referred to our claims in the eastern part of Zimbabwe and
we are pleased to advise that these claims are presently under evaluation by a
major Chinese miner who have indicated their intention to formulate a formal
offer to acquire these properties.
Turwi Gold Project
Premier had acquired operational control and 50% of this gold exploration
project in Southeast Zimbabwe. However, at this time, the focus of Premier
will be that of Zulu. Premier will explore other alternative opportunities to
releasing the potential value and opportunity of the Turwi Gold Project.
MN Holdings Limited ("MNH")
Delays at Zulu have effectively delayed any further development of this
project. It should be noted that the positives associated with Manganese make
this investment attractive and Premier will look to increase our interest and
control.
In the unaudited management accounts for year ended 30 June 2023, MNH's wholly
owned operating subsidiary, Otjozondu reported revenue of approximately N$76
million (equivalent to $4.1 million) and an operating profit before tax (and
interest charges to group companies) of approximately N$24.1 million
(equivalent to $1.3 million). Total assets as at the same date amounted to
approximately N$289 million (equivalent to $15.6 million).
Vortex Limited (formerly Circum Minerals Limited "Circum")
Although the status in Ethiopia has improved, little has been achieved.
Frustrations related to cooperative agreements and differing opinions on
development of this outstanding worldclass deposit, allied to the Ethiopian
status continue to frustrate the realisation of this investment.
Funding
During the reporting period we raised net proceeds of $17.542 million (2022:
of $14.838 million).
Principal activities and strategic review of the business
The principal activity of Premier and its subsidiary companies (the Group)
during the year under review is the mining, exploration, evaluation
development and investment in natural resource properties on the African
continent.
Premier was incorporated on 21 August 2007 in the British Virgin Islands (BVI)
as a BVI business company with number 1426861. The registered office is
Craigmuir Chambers, PO Box 71, Road Town, Tortola, British Virgin Islands. The
Company was admitted to trading on the London Stock Exchange's AIM Market on
10 December 2012.
Objectives
During the current year, the primary focus will be:
• Optimise and stabilise profitable operations at Zulu
• Progress resource development within the Zulu EPO and
secure a Mining lease over prospective areas therein.
• Expand production at Zulu
• Seek to resolve the status of RHA, MNH and Vortex
• Identify and secure high value exploration targets in
other jurisdictions.
Principal risks and uncertainties
The Group is subject to a number of risks and uncertainties which could have a
material effect on its business, operations, or future performance, including
but not limited to:
Credit Risk
Credit risk is the risk of potential loss to the Company if counterparty to a
financial instrument fails to meet its contractual obligations. The Company's
credit risk is primarily attributable to its liquid financial assets,
including cash, receivables, and balances receivable from the government. The
Company limits the exposure to credit risk in its cash by only investing its
cash with high-credit quality financial institutions in business and savings
accounts, guaranteed investment certificates and in government treasury bills
which are available on demand by the Company for its programs. The Company
does not invest in money market funds. The Company has no risk exposure to
asset backed commercial paper or auction rate securities.
Refer to note 29 for the company's exposure to credit risk.
Liquidity Risk
Liquidity risk is the risk that the Company will not have the resources to
meet its obligations as they fall due. The Company manages this risk by
closely monitoring cash forecasts and managing resources to ensure that it
will have sufficient liquidity to meet its obligations. Also refer to the
going concern section below.
Refer to note 29 for the company's exposure to liquidity risk.
Operating Risks
The activities of the Group are subject to all of the hazards and risks
normally incidental to exploring and developing natural resource projects.
These risks and uncertainties include, but are not limited to environmental
hazards, machinery and plant breakdowns, industrial accidents, labour
disputes, geo-political risks, encountering unusual or unexpected geologic
formations or other geological or grade problems, unanticipated changes in
rock formation characteristics and mineral recovery, encountering
unanticipated ground or water conditions, land slips, flooding, periodic
interruptions due to inclement or hazardous weather conditions and other acts
of God or un-favourable operating conditions and losses.
Should any of these risks and hazards affect the Group's exploration,
development or mining activities, it may cause the cost of production to
increase to a point where it would no longer be economic to extract minerals
from the Group's properties, require the Group to write-down the carrying
value of one or more of its assets, cause delays or a stoppage of mining and
processing, result in the destruction of mineral properties or processing
facilities, cause death or personal injury and related legal liability, any
and all of which may have a material adverse effect on the Group.
Early-stage Business Risk
The Group's success will depend on its ability to raise capital and generate
cash flows from production in the future at Zulu. The board of directors
manages this risk by monitoring cash levels and reviewing cash flow forecasts
on a regular basis. In particular, the Group's success will depend on the
successful commissioning, modification and optimisation of the processing
plant at Zulu and there is no certainty that there may not be further
unforeseen delays, plant modifications or unanticipated costs.
Market Risk (exchange rates, commodity, and equity)
Market risk is the risk of loss that may arise from changes in market factors
such as interest rates, foreign exchange rates, and commodity and equity
prices. These fluctuations may be significant.
Interest Rate Risk: The Company is exposed to interest rate risk to the extent
that its cash balances bear variable rates of interest. The interest rate
risks on cash and short-term investments and on the Company's, obligations are
not considered significant.
Foreign Currency Risk - The Company is exposed to the financial risk related
to the fluctuation of foreign exchange rates against the Company's functional
currency, which is the United States dollar ("USD"). The Company expects to
continue to raise funds in the United Kingdom. The Company conducts its
business in Zimbabwe with a significant portion of expenditures in that
country historically denominated in USD and now also in RTGS Dollars
("RTGS$"). The introduction of the RTGS$ during the 2019 financial year has
resulted in the devaluation of the RTGS$ against the US Dollar. This
devaluation has also resulted in the Zimbabwean economy going into
hyperinflationary status. As a means to counteract the hyper-inflationary
effects and given that the majority of transactions are denominated in USD,
all Zimbabwean companies within the group now record and report their
financial information in USD with effect from 1 January 2023. Additionally, a
portion of the Company's business is conducted in South African Rands ("ZAR").
As such, it is subject to risk due to fluctuations in the exchange rates
between the USD and each of the ZAR and GBP. A significant change in the
currency exchange rates between the USD relative to foreign currencies could
have an effect on the Company's results of operations, financial position, or
cash flows. The Company has not hedged its exposure to currency
fluctuations.
Commodity Price Risk - Zulu value is largely related to the price of lithium
and the outlook on this mineral.
The Company minority interest in MNH results in limited control of how MNH
mitigate the risk associated with Manganese price fluctuations.
Refer to note 29 for the company's exposure to market risk.
Early-stage Project Risk
Zulu moved into early-stage production through the development of a pilot
plant without a Definitive Feasibility Study. In advancing Zulu to the stage
where it may be cash generative, many risks are faced including without
limitation, the inherent uncertainty of mining and continuity of the mineral
resource without a DFS support by a measured category resource statement, the
capital costs of exploration and production, commodity pricing, operating in
remote and often politically unstable environment.
Environmental Risks and Hazards
All phases of the Group's operations are subject to environmental regulation
in the areas in which it operates. Environmental legislation is evolving in a
manner that may require stricter standards and enforcement, increased fines
and penalties for non-compliance, more stringent environmental assessments of
proposed projects and a heightened degree of responsibility for companies and
their officers, directors, and employees. There is no assurance that existing
or future environmental regulation will not materially adversely affect the
Group's business, financial condition, and results of operations.
Environmental hazards may exist on the properties on which the Group holds
interests that are unknown to the Group at present. The Board manages this
risk by working with environmental consultants and by engaging with the
relevant governmental departments and other concerned stakeholders.
Licencing Risk
The Company's exploration and development activities are dependent upon the
grant of appropriate licences, concessions, leases, permits and regulatory
consents which may be withdrawn or made subject to limitations or performance
criteria. Such licences and permits are as a practical matter subject to the
discretion of the applicable Government or Government office. The Group must
comply with known standards, existing laws and regulations that may entail
greater or lesser costs and delays depending on the nature of the activity to
be permitted. The interpretations, amendments to existing laws and
regulations, or more stringent enforcement of existing laws and regulations
could have a material adverse impact on the Group's results of operations and
financial condition. Whilst the Company continually seeks to do everything
within its control to ensure that the terms of each licence are met and
adhered to, third parties may seek to exploit any technical breaches in
licence terms for their own benefit. There is a risk that negotiations with a
Government in relation to the grant, renewal or extension of a licence may not
result in the grant, renewal or extension taking effect prior to the expiry of
the previous licence period, and there can be no assurance of the terms of any
extension, renewal, or grant.
Political and Regulatory Risk
The Group's operating activities in Africa, notably in Zimbabwe, are subject
to laws and regulations governing expropriation of property, health and worker
safety, employment standards, waste disposal, protection of the environment,
mine development, land and water use, prospecting, mineral production,
exports, taxes, labour standards, occupational health standards, toxic wastes,
the protection of endangered and protected species and other matters. The
Group is dependent on the political and economic situation in these countries
and may be adversely impacted by political factors such as expropriation, war,
terrorism, insurrection, and changes to laws governing mineral exploration and
operations.
Internal Control and Financial Risk Management
The Board has overall responsibility for the Group's systems of internal
control and for reviewing their effectiveness. The Group maintains systems
which are designed to provide reasonable but not absolute assurance against
material loss and to manage rather than eliminate risk.
The key features of the Group's systems of internal control are as follows:
➢ Management structure with clearly identified responsibilities.
➢ Production of management information presented to the Board.
➢ Day to day hands on involvement of the Executive Directors and Senior
Management.
➢ Regular board meetings and discussions with the non-executive directors.
The Group's activities expose it to a number of financial risks including cash
flow risk, liquidity risk and foreign currency risk. The Group has identified
certain short coming in the financial control systems, which are currently in
the process of being addressed.
Disclosure of management's objectives, exposure, and policies in relation to
these risks can be found in note 29 to these financial statements.
Environmental Policy
The Group is aware of the potential impact that its subsidiary companies may
have on the environment. The Group ensures that it complies with all local
regulatory requirements and seeks to implement a best practice approach to
managing environmental aspects.
Zulu was granted approval of its Environmental Impact Assessment and was
permitted to undertake mining operations by the Environmental Management
Agency of Zimbabwe.
Health and Safety
The Group's aim is to achieve and maintain a high standard of workplace
safety. In order to achieve this objective, the Group provides ongoing
training and support to employees and sets demanding standards for workplace
safety.
Going Concern
These consolidated financial statements are prepared on the going concern
basis. The going concern basis assumes that the Group will continue in
operation for the foreseeable future and will be able to realise its assets
and discharge its liabilities and commitments in the normal course of
business.
There remains an active and very liquid market for the Group's shares.
The Directors have prepared a cash flow forecasts for the 18-month period
ended 31 December 2025, taking into account the number of shares available to
Premier to raise further equity, forecast operating cash flow and capital
expenditure requirements for the Zulu Mine, available working capital and
forecast expenditure for the rest of the Group including overheads and other
development costs. These key assumptions of this forecast are, inter alia:
The Group
During 2023 the Group issued 4,216,446,124 shares at an average price of
0.4455p per share raising a total of $18.786 million. This cash was used to
continue with the commission and development work at Zulu mine.
• Premier has obtained support from its offtake
and prepayment partner allowing Premier to pursue alternative funding avenues.
• The calling of a Special General Meeting to increase the
number of shares free from pre-emptive rights by no more than 2 billion.
RHA
• The Company has not funded any of the activities at RHA
since 1 July 2019, apart from essential care and maintenance costs.
Zulu
• Zulu will have its new scrubber unit installed and
operational in the week of the 10th of July. This will enable Zulu to produce
and derive revenue from the sale of SC6.
· Premier has engaged Zimbabwean banks to facilitate
the funding of Zulu's short-term needs as they may arise.
The Board also believes that it has a valuable asset in Zulu, with an
estimated fair value in accordance with the prepayment and offtake agreement
is US$200 million. And, in the event that it elected to stop all group funding
of Zulu, the group has sufficient share authorities to sustain its reduced
holding costs for the period to 31 December 2025.
After careful consideration of those matters set out above, the Directors are
of the opinion that the Group will be able to obtain adequate resources to
enable it to undertake its planned activities for the period to 31 December
2025 either from production or from additional fund raising and have prepared
these consolidated financial statements on the going concern basis. In the
event that Premier is not able to meet the above consideration, then a
material uncertainty exists which may cast significant doubt on the ability of
the Group to continue as a going concern and therefore be unable to realise
its assets and settle its liabilities in the normal course of business.
Refer to note 5 for further information.
George Roach
Chief Executive Officer
28 June 2024
Management Team
CEO - MR GEORGE ROACH
George has extensive experience in the natural resources sector in Africa. He
has successfully obtained licenses and concluded mineral exploration and
exploitation agreements in the entire SADAC region, Ethiopia, and most of
CEMAC and ECOWAS regions. Under the auspices of Exploration Services, he has
provided consultancy to prospective exploration companies and has acted in
significant capacities for several start-ups that have subsequently listed on
AIM and TSX-V. Prior to founding Premier, George was the Managing Director
Africa, for Uramin Inc
COO - Mr Errico Vascotto
Errico is an accomplished and qualified Mining Engineer with more than 40
years in the mining industry. Errico also has an MBA from the University of
Southern Queensland, Australia with Project Management as a speciality. He
has worked on both greenfield and brownfield projects globally. In addition
to direct mining experience, Errico has gained experience in mining
construction, providing strategic project leadership in line with industry
best practice.
CFO - Mr Tomas Apetauer
Since qualifying as a C.A. (S.A.), Tomas has gained extensive experience in a
diverse range of industries including finance, engineering consulting,
corporate finance and as an international trainer. As Premier's chief
financial officer, he brings the skills gained through corporate turnaround
strategies, multi-million-dollar capital raises and buy-outs primarily focused
on the African market.
Country Manager - Mr Jabulani Chirasha
A qualified Metallurgical Engineer with over 30 years' experience in mining
and process engineering. Prior to joining Premier, Jabulani was a senior
manager at Anglo American in Zimbabwe. Jabulani has authored a number of
international papers on mining and process technology and facilitated at
international mining conferences as a speaker.
Corporate Secretary - Mr Brendan Roach
Brendan holds a B.Com LLB and MA(Law). He manages the full function of
corporate affairs for Premier and acts as our international Legal Counsel.
Exploration Manager - Mr Bruce Cumming
With more than 40 years' experience Bruce is an accomplished, SACNASP
registered Geologist. Bruce qualified with a BSc Hons degree from the
University of Cape Town and is a member of the GSSA. Bruce has extensive
exploration project management experience and has worked in various capacities
in diverse African countries. He has a long history with Premier African
Minerals.
Directors
CEO - MR GEORGE ROACH
George has extensive experience in natural resource business development in
Africa. He has held positions in and/or initiated a number of start-up
businesses listed on AIM and/or TSX-V.
Mr Wolfgang Hempel - Non-executive Director
Wolfgang has more than 27 years' experience in the African, American,
European, and Asian exploration and mining industry. He holds a Diploma in
Economic Geology from the Technical University of Munich and is a registered
European Geologist (EurGeol) n*1261, with the European Federation of
Geologists.
Mr Godfrey Manhambara - Chairman
A Zimbabwean national with extensive experience in business.
Godfrey was the former Chief Executive of Affretair. In 1999, Godfrey was
appointed as CEO of the Civil Aviation Authority in Zimbabwe, a position he
held until 2001. Currently Godfrey is the Chief Executive of Beta Holding, the
largest infrastructure supply manufacturer in Zimbabwe.
Dr Luo Wei - Non-Executive Director
Dr Wei has a PhD in Mineral Prospecting and Exploration from Central South
University. With over a decade of experience in the mining and exploration
industry Dr Wei has extensive experience in project management and
optimisation with a focus on resource development.
DIRECTORS REPORT
Results
The audited financial statements for the year ended 31 December 2023 are set
out on pages 32 to 87. The Group reported a loss before and after tax of
$20.813 million for the year ended 31 December 2023 (2022: loss $5.803
million).
The loss before and after tax includes:
• A gross trading loss before depreciation and amortisation
is $3.805 million (2022: $nil).
• Administration expenses amounting to $10.645 million (2022:
$4.622 million).
• Finance costs amounting to $5.818 million (2022: $nil).
The total comprehensive loss for the year amounted to $21.312 million (2022:
Loss $13.646 million).
Dividends
The Directors do not recommend the payment of a dividend in respect of the
year under review.
Fund-raising and capital
During the 2023 financial year net funds of $17.542 million were raised
through direct subscriptions from the issue of new ordinary shares (2022:
$14.838 million).
There remains an active and very liquid market for the Group's shares.
Borrowings
During the financial year, no additional borrowings were raised.
Other key elements of financial position
The Company's holdings in Vortex Ltd amount to $0.501 million
The Company's holdings in MNH amount to $nil (2022: $nil).
The Company's investment in property, plant and equipment during the year was
$53.234 million (2022: $35.997 million).
Events after the reporting date
At the date these financial statements were approved, the Directors were not
aware of any significant events after the reporting date other than those set
out in note 32 to the financial statements.
Directors
The Directors of Premier who served during the period or subsequently were:
• George Roach (appointed on incorporation April
2007)
• Godfrey Manhambara (appointed 27 September 2017)
• Wolfgang Hampel (appointed 10 April 2018)
• Dr Luo Wei (appointed 30 April 2022)
Directors' Fiduciary Statement
The Directors acknowledge their fiduciary duties and consider that they have,
both individually and together, acted in the way that, in good faith, would be
most likely to promote the success of the Company for the benefit of its
members as a whole. In doing so, they have had regard (amongst other matters)
to:
• The likely consequences of any decision in the long term. The
Group's long-term strategic objectives, including progress made during the
year and principal risks to these objectives, are shown in the strategic
report and the key performance indicators.
• The interests of the Company's employees. Our employees are
fundamental to us achieving our long-term strategic objectives.
• The impact of the Company's operations on the community and
the environment. The Group operates honestly and transparently. We consider
the impact on the environment on our day-to-day operations and how we can
minimise this.
• The desirability of the Company maintaining a reputation for
high standards of business conduct. Our intention is to behave in a
responsible manner, operating within the high standard of business conduct and
good corporate governance.
• The need to act fairly as between members of the Company. Our
intention is to behave responsibly towards our shareholders and treat them
fairly and equally so that they may benefit from the successful delivery of
our strategic objectives.
Share capital
Premier's shares are publicly traded on AIM with the stock ticker of PREM. As
at 31 December 2023, the Company's issued share capital consists of
26,634,455,000 (note 18) Ordinary Shares of no-par value.
The company does not hold any Ordinary Shares in treasury.
Major Shareholders
As at 28 June 2024 the Company was aware of the following persons who hold,
directly or indirectly, voting rights representing 3% or more of the issued
share capital of the Company to which voting rights are attached:
Name Number of Ordinary Shares % Issued Share Capital
Canmax (formerly Suzhou TA&A Ultra Clean Technology Co. Ltd) 4,428,571,428 14.11%
George Roach*
1,246,514,207 3.9%
* George Roach and/or structures associated with G Roach.
There are no restrictions on the transfer of the Company's AIM securities.
_____________________
George Roach
Chief Executive Officer
28 June 2024
CORPORATE GOVERNANCE STATEMENT
Premier is committed to maintaining the highest standards in corporate
governance throughout its operations and to ensure all its practices are
conducted transparently, morally, and efficiently. Therefore, and in
accordance with the AIM Rules for Companies (March 2018), Premier seeks to
comply with the provisions of The UK Corporate Governance Code 2018 as
published by the Financial Reporting Council Limited, to the extent the Board
consider appropriate, given the Company's size, stage of development and
resources (the "Code"). The Code was updated in January 2024 and will apply to
financial years beginning on or after 1 January 2025. The 2018 code remains in
effect at this time.
Throughout the Reporting Period, the Company has continued to adhere to this
Code and the following statement sets out how the Company complies or
otherwise departs from the principles of the Code.
Premier constantly seeks to maintain the highest levels of corporate
governance whereby the Company ensures that a periodic review of the Company's
corporate governance is done. Following this recent review, there have been no
corporate governance issues identified by Premier.
Accordingly, the Company has established specific committees and implemented
certain policies, to ensure that:
• It is led by an experienced Board which is collectively
responsible for the long-term success of the Company.
• The Board and the committees have the appropriate balance of
skills, experience, independence, and knowledge of the Company to enable them
to discharge their respective duties and responsibilities effectively.
• The Board establish a formal and transparent arrangement for
considering how it applies the corporate reporting, risk management and
internal control principles and for maintaining an appropriate relationship
with the Company's auditors.
• There is a dialogue with shareholders based on the
mutual understanding of objectives.
During the year, the board of directors held one formal board meeting that was
attended by all members in office. Due to the ongoing medical issues
pertaining to one of the members of the board of directors, the board of
directors have elected to hold a number of informal virtual board calls with
the attendance of most of the directors in office to discuss the operations of
the Company. Since the year end, the board continued to implement the policy
of holding informal board calls as so required and is also in the process of
actively looking to strengthen the board of directors. The various committees
of the Company have continued to meet from time to time in accordance with the
requirements of the Company's ongoing operations.
In addition, the Company has adopted a comprehensive suite of policies
including:
• Anti-corruption and bribery.
• Health and safety.
• Environment and community.
• IT, communications, and systems.
• social media.
The Code follows 5 Main Principles, which are herein assessed in accordance
with Premier commitment to maintain the highest levels of corporate
governance.
1. Leadership
The Role of the Board of Directors
The Board is responsible for the management of the business of the Company,
setting its strategic direction and establishing appropriate policies. It is
the Directors' responsibility to oversee the financial position of the Company
and monitor its business and affairs on behalf of the Shareholders, to whom
they are accountable. The primary duty of the Board is always to act in the
best interests of the Company. The Board also addresses issues relating to
internal control and risk management. The Non-executive Directors bring a wide
range of skills and experience to the Company, as well as independent judgment
on strategy, risk, and performance. The Non-executive Directors are considered
by the Board to be independent at the date of this report. To achieve its
objectives, the Board strictly adheres to the Code.
The Board meets at least three times a year with supplementary meetings held
as required. The agenda for the Board meetings is prepared jointly by the
Chairman and CEO. The Board maintains annual rolling plan ("Agenda") of items
for discussion to ensure that all matters reserved for the Board, with other
items as appropriate, are addressed. The agenda, with all accompanying
documents, generally includes the following:
• Review of previous minutes.
• Discussion on various project activities and market
conditions.
• Management Accounts and Financial position.
• Corporate Matters.
• Other business matters that Board members can freely
raise beyond the defined Agenda.
The Annual Accounts of Premier best reflects the Board key types of decisions
that the Board are required to take in their pursuant of maintaining the
highest levels of corporate governance. The following matters are reserved for
the Board.
• Strategy, Policy, and Management.
• Group Structure and capital requirements.
• Financial reporting and controls.
• Internal and External controls.
• Transactions and Commercial Contracts including
delegation authority.
• Board structure.
• Corporate governance matters.
Premier has established varies committees to assist the Board in maintain the
highest levels of corporate governance. Of these committees, the following two
strongly assist the decision making of the Board.
Audit Committee
The Audit Committee ("AC"), which comprises of George Roach and is chaired by
Godfrey Manhambara, is responsible for the appointment of auditors and the
audit fee, and for ensuring that the financial performance of the Company is
properly monitored and reported. The Audit Committee, inter alia, meets with
the Company's external auditor and its senior financial management to review
the annual and interim financial statements of the Company, oversees the
Company's accounting and financial reporting processes, the Company's internal
accounting controls and the resolution of issues identified by the Company's
auditors.
Other key aspects of the AC include:
• Reviewing the Company's accounting policies and reports produced
by internal and external audit functions.
• Considering whether the Company has followed appropriate accounting
standards and made appropriate estimates and judgements, considering the views
of the external auditor.
• Reporting its views to the board of directors if it is not
satisfied with any aspect of the proposed financial reporting by the Company.
• Reviewing the adequacy and effectiveness of the Company's
internal financial controls and internal control and risk management systems.
• Reviewing the adequacy and effectiveness of the Company's
anti-money laundering systems and controls for the prevention of bribery and
receive reports on non-compliance.
• Overseeing the appointment of and the relationship with
the external auditor.
Remuneration Committee
The Remuneration Committee comprises of George Roach and is chaired by Godfrey
Manhambara. The Remuneration Committee assumes general responsibility for
assisting the Board in respect of remuneration policies for Premier. The
Committee reviews and recommends remuneration strategies for the Company and
proposals relating to compensation for the Company's officers, directors and
consultants and assesses the performance of the officers of the Company in
fulfilling their responsibilities and meeting corporate objectives. It has the
responsibility for, inter alia, administering share and cash incentive plans
and programmes for Directors and employees and for approving (or making
recommendations to the Board on) share and cash awards for Directors and
employees.
The Committee is satisfied that the advice received has been objective and
independent as at the date of this report.
The Division of Responsibility of the Board of Directors
It is important that the Board itself contains the right mix of skills and
experience to deliver the strategy of the Company. The roles of the Chairman
and Chief Executive Officer ("CEO") are split and Godfrey Manhambara acts as
chairman. There is no one individual or group of individuals on the Board that
have unfettered powers of discretion nor is there any undue influence in the
collective decision-making ability of the Board.
The responsibilities of the Chairman, CEO and Non-executive director are set
out in writing and are reviewed by the Board annually to ensure that it
remains relevant and accurate. In brief summary, they are responsible as
follows:
• The Chairman's role is to lead and manage the Board and play a
role in facilitating the discussion of the Company's strategy, as set by the
Board. And to effectively promote the success of the Company.
• The CEO's role, including the role of the Technical Director, is
the responsibility of the day-to-day management of the Company's operational
activities, and for the proper execution of the stage as set by the Board.
• The Non-executive directors, act as a member of the unitary
Board, however, they are required to constructively challenge performance of
management and help develop proposals on strategy, agreeing of goals and the
Company key objectives.
2. Effectiveness
The Composition of the Board
The Board and its committees should have the appropriate balance of skills,
experience, independence, and knowledge of the Company to enable them to
discharge their respective duties and responsibilities effectively.
As such, the Board has been structured to ensure that correct mix of skills
and experience are in place to allow it to operate effectively:
• An independent Chairman (Godfrey Manhambara), whose
primary responsibility to lead and manage the Board. This remains vital in the
delivery of the Company's corporate governance model. The Chairman has a clear
separation from the day-to-day business of the Company which allows him to
make independent decisions.
• A CEO (George Roach), whose primary focus is communicating, on
behalf of the Company, with shareholders, government entities, and the public.
Leading the development of the Company's short- and long-term strategy.
• A Technical Director (Wolfgang Hampel), whose is responsible for
leading, co-ordinating, and optimising the performance of both mining and
exploration services. With a further responsibility for geological and mine
planning activities, his role is critical in ensuring the quality and
efficiency of Premier geology, and
• A further Non-Executive Director (Dr Luo Wei).
The Code requires that a smaller company (and which the Company is under the
Code) should have at least two independent non-executive directors. Godfrey
Manhambara is independent under the Code. The Board also regards Wolfgang
Hampel as independent, notwithstanding that he participates in the Company's
share option plan and provides some technical advice to the board. The Board
is satisfied that Wolfgang Hampel acts independently irrespective of these
interests. The Board also notes that no single individual will dominate
decision making and further notes that there has been sufficient challenge of
executive management at meetings of the Board thereby confirming that the
Board is capable of operating effectively.
The Board has not appointed a senior Finance Director but is actively seeking
for the appropriate candidate with financial expertise to provide board
oversight on all report prepared by the group financial manager, Mr Tomas
Apetauer who is a chartered accountant with extensive audit and financial
management experience. Additionally, the Company has a Company Secretary in
the United Kingdom who assists the Chairman and CEO in preparing for and
running effective board meetings, including the timely dissemination of
appropriate information. The Company Secretary provides advice and guidance to
the extent required by the Board on the legal and regulatory environment.
The Nomination Committee ("NC") has been established to regularly review and
ensure that the Board has the appropriate balance of skills, experience, and
knowledge of the Company. NC meets as required to consider the composition of
and succession planning for the Board, and to lead the process of appointments
to the Board. The Committee is made up of George Roach and Wolfgang Hampel and
is chaired by George Roach.
Other key aspects of the NC include:
• regularly reviewing the structure, size, and composition
(including the skills, knowledge, experience, and diversity) of the board and
make recommendations to the board about any changes, succession planning and
vacancies; and
• identifying suitable candidates from a wide range of
backgrounds to be considered for positions on the board.
Appointments to the Board
The appointment of new Directors to the Board is led by the NC who has the
responsibility for nominating candidates for appointment. Both the NC and
Board considers the need for diversity, including equality, and that the new
directors must exhibit the required skills, experience, knowledge, and
independence.
The Board acknowledges that the Company is not in compliance with the Code
whereby the NC should comprise a majority of independent directors. The Board
considers that the NC has a strong enough independent component with Godfrey
Manhambara.
Commitment
The Board requires that all directors should be able to allocate sufficient
time to the Company to discharge their responsibilities in accordance their
letter of appointment. The Company maintains records of each letter of
appointment, which can be inspected at an agreed time, at the Company's
registered office.
The NC is responsible for considering on an annual basis, whether each
director is able to devote sufficient time to their duties.
Development
All directors are required to familiarise themselves with the Board and should
regularly update and refresh their skills and knowledge. The Company provides
each joining director with an induction on the Company. Each induction is
tailored to the specific background and requirements of the new director. In
general, the induction contains information on:
• Structures and operations.
• Board procedures.
• Corporate Governance.
• Details regarding their duties and responsibilities.
Information and Support
As Premier constantly seeks to maintain the highest levels of corporate
governance, it is imperative that information is supplied to the Board in a
form and of a quality appropriate to enable the Board to discharge its duties
in a timely manner. The supply of the information is done by the Chairman with
the assistance of the Company Secretary.
Premier encourage all Board members to seek independent professional advice
(at the reasonable expense of the Company) in the furtherance of their duties.
The Board is given sufficient opportunity to meet with any manager,
consultant, or contractor to gain further insight into Premier.
Evaluation
The Board recognises that it should undertake a formal and rigorous annual
evaluation of its own performance, that of its committees and individual
directors.
The evaluation of the Board's performance is an assessment of the following
key factors:
• The Board structure.
• The Board's performance.
• The Board business strategy.
• Financial reporting and controls.
• Performance monitoring.
• Supporting and advisory roles.
The Board is not in compliance with the Code as the evaluation process is
usually conducted internally due to the size and complexity of the operations
of the Company. Furthermore, the Board believes that internal assessment best
help identify the key strength and weaknesses to allow for effective
evaluation. The Board will continue to assess the internal review process
against the growth of the Company as should the Company grow in size it may
consider getting an independent assessment.
Re-election
The Board believe that all directors should be submitted for re-election at
regular intervals, subject to the continued satisfactory performance of the
Company.
The Director longest in office since their last appointment is required to
retire by rotation or stand for reappointment at the Annual General Meeting
("AGM").
3. Accountability
Financial and Business reporting
A key duty of the Board is to oversee the financial affairs of the Company.
The Financial Statements is the Board's primary means of presenting a fair,
balanced and understandable assessment of the Company's positions that also
best provides the information necessary to allow shareholders to assess the
Company's performance, business model and strategy for that period.
You can view Premier Annual Report and Financial Statements on the Company's
webpage at the following address, www.premierafricanminerals.com. Under the
Strategic Review section of the Company's Annual Report and Financial
Statements for the year ended December 2023, the Board set outs the strategic
objectives of the Company, how these will be delivered, Premier business model
and how the Company will generate and preserve value over the longer term for
shareholders.
The Board have a reasonable expectation that the Group has adequate resources
to continue in operations or existence for the foreseeable future thus
continues to adopt the going concern basis in preparing its Annual Report and
Financial Statements. Refer to note 5 to the financial statements.
Risk Management and Internal Control
The Board is responsible for determining the nature and extent of the
significant risks it is willing to take in achieving its strategic objectives.
The Board manages the risk through the implementation of internal control
systems.
The Board has identified the following as some of the risks and their
mitigation:
• Credit Risk: Credit risk is the risk of potential loss to the
Company if counterparty to a financial instrument fails to meet its
contractual obligations. The Company's credit risk is primarily attributable
to its liquid financial assets, including cash, receivables, and balances
receivable from the government. The Company limits the exposure to credit risk
in its cash by only investing its cash with high-credit quality financial
institutions in business and savings accounts, guaranteed investment
certificates and in government treasury bills which are available on demand by
the Company for its programs.
• Liquidity Risk: Liquidity risk is the risk that the Company will
not have the resources to meet its obligations as they fall due. The Company
manages this risk by closely monitoring cash forecasts and managing resources
to ensure that it will have enough liquidity to meet its obligations.
• Operating Risks: The activities of the Company are
subject to all of the hazards and risks normally incidental to exploring and
developing natural resource projects. These risks and uncertainties include,
but are not limited to environmental hazards, industrial accidents, Covid-19,
labour disputes, geo-political risks, encountering unusual or unexpected
geologic formations or other geological or grade problems, unanticipated
changes in rock formation characteristics and mineral recovery, encountering
unanticipated ground or water conditions, land slips, flooding, periodic
interruptions due to inclement or hazardous weather conditions and other acts
of God or un-favourable operating conditions and losses. The Company manages
the risk by closing monitoring operations and maintaining adequate insurance
cover.
• Early-stage Business Risk: The Board manages this risk
by monitoring cash levels and reviewing cash flow forecasts on a regular
basis.
• Market Risk (exchange rates, commodity, and equity):
Market risk is the risk of loss that may arise from changes in market factors
such as interest rates, foreign exchange rates, and commodity and equity
prices. The Company manages the risk by closing monitoring exchange rates,
commodity, and equity markets. The Company further engages consultants to
undertake commodity forecasts.
• Interest Rate Risk: The Company is exposed to interest
rate risk to the extent that its cash balances bear variable rates of
interest. The interest rate risks on cash and short-term investments and on
the Company's, obligations are not considered significant and is not mitigated
at this time.
• Foreign Currency Risk: The Company is exposed to the
financial risk related to the fluctuation of foreign exchange rates against
the Company's functional currency, which is the United States dollar ("USD").
The Company has not hedged its exposure to currency fluctuations.
• Environmental Risks and Hazards: All phases of the Company's
operations are subject to environmental regulation in the areas in which it
operates. The Board manages this risk by working with environmental
consultants and by engaging with the relevant governmental departments and
other concerned stakeholders.
• Licencing Risk: The Company's exploration and
development activities are dependent upon the grant of appropriate licences,
concessions, leases, permits and regulatory consents which may be withdrawn or
made subject to limitations or performance criteria. Such licences and permits
are as a practical matter subject to the discretion of the applicable
Government or Government office. The Group must comply with known standards,
existing laws and regulations that may entail greater or lesser costs and
delays depending on the nature of the activity to be permitted. The
interpretations, amendments to existing laws and regulations, or more
stringent enforcement of existing laws and regulations could have a material
adverse impact on the Group's results of operations and financial condition.
Whilst the Company continually seeks to do everything within its control to
ensure that the terms of each licence are met and adhered to, third parties
may seek to exploit any technical breaches in licence terms for their own
benefit. There is a risk that negotiations with a Government in relation to
the grant, renewal or extension of a licence may not result in the grant,
renewal or extension taking effect prior to the expiry of the previous licence
period, and there can be no assurance of the terms of any extension, renewal,
or grant.
• Political and Regulatory Risk: The Company operating activities
in Africa, notably in Zimbabwe, and Namibia, are subject to laws and
regulations governing expropriation of property, health and worker safety,
employment standards, waste disposal, protection of the environment, mine
development, land and water use, prospecting, mineral production, exports,
taxes, labour standards, occupational health standards, toxic wastes, the
protection of endangered and protected species and other matters. The Group is
dependent on the political and economic situation in these countries and may
be adversely impacted by political factors such as expropriation, war,
terrorism, insurrection, and changes to laws governing mineral exploration and
operations.
• Internal Control and Financial Risk Management: The
Board has overall responsibility for the Group's systems of internal control
and for reviewing their effectiveness. The Group maintains systems which are
designed to provide reasonable but not absolute assurance against material
loss and to manage rather than eliminate risk.
The Board has overall responsibility for maintaining and reviewing the Group's
system of internal control and ensuring that the controls are robust and
effective in enabling risks to be appropriately assessed and managed.
Refer to the principal risks and uncertainties as set out in the Strategic
Report for additional information on these risks.
On behalf of the Board, the AC conducts an annual review of the effectiveness
of the systems of internal control including financial, operational and
compliance controls and risk management systems.
Audit Committee and Auditors
The functions of the AC are clearly described as part of the Leadership
function in this note.
Whilst the Board sets the Company risk appetite, it reviews the operations and
effectiveness of the Company's risk management activities through the AC,
which undertake the day-to-day oversight of the risk management framework on
behalf of the Board. The Chairman of the AC regularly provides an update on
the work carried out by the AC to the board.
It is noted that the AC follow the recommendations of the Code whereby they
monitor and review the effectiveness of the internal audit activities.
However, at this time, the Board have determined that the appointment of
internal auditor is not required due to the size of the Company.
4. Remuneration
The Level and Components of Remuneration
Executive directors' remuneration should be designed to promote the long-term
success of the Company. Performance-related elements should be transparent,
stretching and rigorously applied. The Board delegates the responsibility for
setting the appropriate levels of remuneration for its directors to the
Remuneration Committee.
The levels of Remuneration to directors are disclosed to shareholders in
Premier Annual Report and Financial Statements. Both the Board and
Remuneration Committee seek to provide appropriate reward for the skill and
time commitment required so at to retain the right calibre of director at a
cost to the Company and which reflects the current market rates.
Procedure
The Board have a formal and transparent procedure for developing policy on the
executive remuneration and for fixing the remuneration packages of individual
directors. As strict policy, no director is involved in deciding their own
remuneration.
The Remuneration Committee consider and approves the remuneration and where
applicable, incentives and benefits, and makes recommendations to the Board.
The Committee will also govern employee share schemes. The Chairman of the
Committee will be consulted by the CEO in respect of the Company and
director's performance approvals, compensation and in respect of any
appointment/departures from roles.
The remuneration of non-executive directors shall be a matter for the
executive members of the Board.
The Company has adopted a share dealing code to ensure directors and certain
employees do not abuse, and do not place themselves under suspicion of abusing
inside information of which they are in possession and to comply with its
obligations under MAR which applies to the Company by virtue of its shares
being traded on AIM. Furthermore, the Company's share dealing code is
compliant with the AIM Rules for Companies published by the London Stock
Exchange (as amended from time to time).
Under the share dealing code, the Company must:
• Disclose all inside information to the public as soon as possible
by way of market announcement unless certain circumstances exist in which the
disclosure of the inside information may be delayed.
• Keep a list of each person who is in possession of inside
information relating to the Company.
• Procure that all persons discharging managerial responsibilities and
certain employees are given clearance by the Company before they are allowed
to trade in Company securities; and
• Procure that all persons discharging managerial
responsibilities and persons closely associated to them notify both the
Company and the Financial Conduct Authority of all trades in Company
securities that they make.
Additionally, under the share dealing code, no person discharging managerial
responsibilities is permitted to deal in Company securities (whether directly
or through an investment manager) during a closed period; being the period
either: from the end of the relevant financial year up to the release of the
preliminary announcement of the Company's annual results; from the end of the
relevant financial period up to the release of the Company's half-yearly
financial report or; 30 calendar days before the release of each of the
Company's first quarter report and third quarter report.
For details of the directors' remuneration refer to note 27.
5. Relations with Shareholders
Dialogue with shareholders
The Company recognises that maintaining strong communications with its
shareholders promotes transparency and will drive value in the medium to
long-term. Accordingly, the Company has an established programme to
communicate with shareholders. This done by providing regular updates on the
progress of the Company, detailing recent business and strategy developments,
in news releases which will be posted on the Company's website and through
certain social media channels.
The Board has responsibility for approval and monitoring compliance with the
Company's disclosure controls and procedures. It has the responsibility, inter
alia, determining whether information is inside information, deciding whether
the inside information is to be announced as soon as possible and reviewing
the scope, content, and accuracy of disclosure. The Company has adopted a
share dealing code governing the share dealings of the Directors and
applicable employees during close periods and is in accordance with Rule 21 of
the AIM Rules.
The CEO is contactable via email. Their email address can be obtained at
either the Company's registered office or by requesting them at the below
address. To continually improve transparency, the Board would be delighted to
receive feedback from shareholders. Communications should be directed to
info@premierafricanminerals.com. The CEO has been appointed to manage the
relationship between the Company and its shareholders and will review and
report to the Board on any communications received.
Constructive Use of General Meetings
The Company holds AGM each year, whereby all of the directors aim to attend
the AGM and value the opportunity of welcoming individual shareholders and
other investors to communicate directly and address their questions.
In addition to the mandatory information required and procedures to calling a
general meeting, which can be found under the Company's constitutional
documents on the webpage, the Board ensure that a full, fair, and balanced
explanation of business of all general meetings is sent in advance to
shareholders.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and financial
statements and have prepared the Group financial statements in accordance with
UK adopted International Accounting Standards in order to give a true and fair
view of the state of affairs of the Group and of its profit or loss for that
period, in accordance with the rules of the London Stock Exchange for
companies trading securities on AIM.
In preparing these financial statements the directors are required to:
• select suitable accounting policies and then apply them
consistently.
• make judgements and accounting estimates that are
reasonable and prudent.
• state whether they have been prepared in accordance with
UK adopted International Accounting Standards, subject to any material
departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company and the Group will
continue in business.
The directors are responsible for keeping records that are sufficient to show
and explain the Group and Company's transactions and will, at any time, enable
the financial position of the Group and Company to be determined with
reasonable accuracy. They are also responsible for safeguarding the assets of
the Company and the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
All reports and accounts, taken as a whole, is fair, balanced, understandable,
and provides the information necessary for shareholders to assess the
Company's position, performance, business model and strategy.
Statement of disclosure to auditor
The directors who were in office at the date of approval of these financial
statements have confirmed that, as far as they are aware, there is no relevant
audit information of which the auditor is unaware. Each of the directors has
confirmed that they have taken all the steps that they ought to have taken as
directors in order to make themselves aware of any relevant audit information
and to establish that it has been communicated to the auditor.
Viability statement and going concern
The Board has assessed the prospects of the Group over a period of 12 months
from the date of approval of these financial statements, involving a review of
the Group's forecast prepared for the 12 months ending 30 June 2025. and
taking account of the Board's intentions for future activities after that
date. As explained further in note 5, taking account of the Group's current
position and principal risks, over a 12-month period, the Board has a
reasonable expectation that the Group will be able to continue in operation
and meet its liabilities as they fall due over that period.
The Board considers these periods of assessment to be appropriate because they
contextualise the Company's financial position, business model and strategy.
George Roach
Chief Executive Officer
28 June 2024
NON-STATUTORY INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PREMIER AFRICAN
MINERALS LIMITED
Opinion on non-statutory financial statements
We have audited the consolidated non-statutory financial statements of Premier
African Minerals Ltd (the 'Group') for the year ended 31 December 2023 which
comprise the consolidated statement of profit or loss and other comprehensive
income, the consolidated statement of financial position, the consolidated
statement of cash flows, the consolidated statement of changes in equity and
the related notes, including a summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation of
the financial statements UK adopted international accounting standards.
In our opinion, the non-statutory financial statements:
• give a true and fair view of the state of the Group's
affairs as at 31 December 2023 and of the Group's loss for the year then
ended;
• have been properly prepared in accordance with UK adopted
international accounting standards.
Basis for opinion
We conducted our audit in accordance with UK adopted international accounting
standards. Our responsibilities under those standards are further described in
the Auditor's responsibilities for the audit of the financial statements
section of our report. We are independent of the Group in accordance with the
ethical requirements that are relevant to our audit of the financial
statements, including the FRC's Ethical Standard as applied to listed
entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty relating to going concern
We draw attention to the Strategic Report and note 5 in the financial
statements, which indicates that the Group is loss making and has net current
liabilities. As stated in note 5, these events or conditions, along with the
other matters as set forth in note 5 and the Strategic Report, indicate that a
material uncertainty exists that may cast significant doubt on the Group's
ability to continue as a going concern. Our opinion is not modified in respect
of this matter.
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the entity's ability to continue to adopt the going concern
basis of accounting included:
• Reviewing the cash flow forecasts prepared by management
for the period up to December 2025, providing challenge to key assumptions,
reviewing for reasonableness and stress testing the forecasts.
• Reviewing post-year period end RNS announcements and holding
detailed discussions with management about the current status of the Zulu
plant and mine and what actions are available to the Group to resolve the
issues with production, as well as any alternative plans if they cannot be
resolved; and
• Assessing the adequacy of going concern
disclosures within the financial statements.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed the
risks of material misstatement in the financial statements. In particular, we
looked at where the directors made subjective judgments, for example in
respect of significant accounting estimates that involved making assumptions
and considering future events that are inherently uncertain. As in all of our
audits we also addressed the risk of management override of internal controls,
including evaluating whether there was evidence of bias by the directors that
represented a risk of material misstatement due to fraud.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to
be able to give an opinion on the financial statements as a whole, taking into
account the structure of the Group, the accounting processes and controls, and
the industry in which they operate.
The Group financial statements are a consolidation of reporting units,
comprising the Group's operating businesses and holding companies.
We performed full scope audits of the financial information of the components
within the Group which were individually financially significant and material.
We also performed specified audit procedures over certain account balances and
transaction classes that we regarded as material to the Group, as well as
analytical procedures, for components which were not significant and not
material. The audit work and specified audit procedures accounted for 100% of
the Group's consolidated expenditures and 100% of the Group's absolute loss
before tax (i.e. the sum of the numerical values without regard to whether
they were profits or losses for the relevant reporting units).
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. This is not a complete list of
all risks identified by our audit.
Key audit matter How our audit addressed the key audit matter
Valuation of the rehabilitation provision Valuation of the rehabilitation provision
The Group has recognised a rehabilitation provision, under IAS 37 - contingent We have understood and assessed the inputs in calculation of the liability.
liabilities and contingent assets, of $360,000 (2022: $360,000), in relation These were based on the original environmental impact assessment as carried
to the future costs to rehabilitate the current mines as per regulation. out in 2015. We have also verified that there were no applicable changes to
the regulations which would increase the liability and have reviewed
calculations for the unwinding of the provision.
The directors are required to assess the provision at the end of each
reporting period and adjust to reflect their best estimates of the liability.
Fair value of investments Fair value of investments
The Group has recognised Investments of $501,000 (2022: $501,000) as at the We have clarified that the Vortex shares were valued on the basis of the
reporting date. latest share transactions and have been recognised accordingly.
Directors are required to assess the fair value of investments at each We reviewed the information available for Vortex and agree with management's
reporting date under IFRS 9. view that the investment is not impaired.
As Vortex is not traded on an active market a level 3 valuation technique was
used. The shareholding was based on the most recent placing of the shares in
the respective companies, as well as management's best estimates of the fair
values.
Going concern Going Concern
The Group has used going concern basis of preparation in its accounting
policies. However, there is significant judgement required as to whether the
company can continue to operate as a going concern. We evaluated management's assessment about going concern and challenged the
judgement made by management, as described in note 5. As part of our
procedures we reviewed the company's environment, controls and management's
assessment of the company's ability to continue as a going concern. We also
reviewed the cashflow forecasts and assumptions made and the data sources.
Based on our procedures we concluded that the going concern basis of
preparation is appropriate, subject to an emphasis of matter. (See also
Conclusions relating to going concern above)
Carrying value of exploration and evaluation assets and mining properties Carrying value of exploration and evaluation assets and mining properties
The Group holds intangible assets of $4,686,000 (2022: $4,739,000) and Our audit work in this area included:
tangible assets of $53,234,000 (2022: $35,997,000) relating to capitalised
costs, primarily in respect of the Zulu Lithium project in Zimbabwe. · We have understood and assessed the methodology used in the
capitalisation of these assets.
· Reviewing a sample of costs capitalised during the year to ensure
There are risks that expenses have been incorrectly capitalized or that they meet the recognition or classification criteria under IFRS 6, IAS 38 or
impairment indicators exist which would result in an impairment of the year IAS 16;
end balances.
· Confirming that the Group has good title to any applicable licences
for the mining properties.
· Evaluating the status of the projects during the year, and subsequent
to the year-end, to identify and evidence any impairment indicators;
· Assessing management's impairment reviews, including challenging key
assumptions and consideration of sensitivity to reasonably possible changes.
Our application of materiality
The scope of our audit was influenced by our application of materiality. We
set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and
the nature, timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements
as a whole.
Based on our professional judgment, we determined materiality for the
financial statements as a whole as follows:
Group financial statements
Overall materiality $325,000
How we determined it 0.5% of Gross assets
Rationale for benchmark applied We believe that the gross assets is a primary measure used by shareholders in
assessing the performance of the Group, as the Group is at a pre-revenue stage
and is asset heavy.
Other information
The other information comprises the information included in the annual report
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement as set
out in the Corporate Governance Statement, the directors are responsible for
the preparation of the financial statements and for being satisfied that they
give a true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the Group's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or the
parent company or to cease operations, or have no realistic alternative but to
do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
The extent to which the audit was considered capable of detecting
irregularities including fraud.
Our approach to identifying and assessing the risks of material misstatement
in respect of irregularities, including fraud and non-compliance with laws and
regulations, was as follows:
• the senior auditor ensured the engagement team collectively had
the appropriate competence, capabilities and skills to identify or recognise
non-compliance with applicable laws and regulations;
• we focused on specific laws and regulations which we
considered may have a direct material effect on the financial statements or
the operations of the Group.
• we assessed the extent of compliance with the laws and
regulations identified above through making enquiries of management and
inspecting legal correspondence; and
• identified laws and regulations were communicated within
the audit team regularly and the team remained alert to instances of
non-compliance throughout the audit.
We assessed the susceptibility of the Group's financial statements to material
misstatement, including obtaining an understanding of how fraud might occur,
by:
• making enquiries of management as to where they considered
there was susceptibility to fraud, their knowledge of actual, suspected and
alleged fraud;
• considering the internal controls in place to mitigate
risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls,
we:
• performed analytical procedures to identify any
unusual or unexpected relationships;
• tested journal entries to identify unusual
transactions;
• assessed whether judgements and assumptions made in
determining the accounting estimates set out in Note 4 were indicative of
potential bias;
• investigated the rationale behind significant or
unusual transactions.
In response to the risk of irregularities and non-compliance with laws and
regulations, we designed procedures which included, but were not limited to:
• agreeing financial statement disclosures to
underlying supporting documentation;
• reading the minutes of meetings of those charged
with governance;
• enquiring of management as to actual and
potential litigation and claims;
• reviewing correspondence with the Group's legal
advisors.
There are inherent limitations in our audit procedures described above. The
more removed that laws and regulations are from financial transactions, the
less likely it is that we would become aware of non-compliance. Auditing
standards also limit the audit procedures required to identify non-compliance
with laws and regulations to enquiry of the directors and other management and
the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than
those that arise from error as they may involve deliberate concealment or
collusion.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor's report.
Use of this report
This report is made solely to the Company's members, as a body, in accordance
with our engagement letter. Our audit work has been undertaken so that we
might state to the Company's members those matters we are required to state to
them in an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the company and the Company's members as a body, for our audit work, for
this report, or for the opinions we have formed.
MAH, Chartered Accountants
2nd Floor, 154 Bishopsgate,
London, EC2M 4LN
28 June 2024
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
EXPRESSED IN US DOLLARS 2023 2022
Notes $ 000 $ 000
ASSETS
Non-current assets
Intangible assets 8 4,686 4,739
Investments 9 501 501
Property, plant and equipment 10 53,234 35,997
Loans Receivable 11 232 -
58,653 41,237
Current assets
Inventories 12 936 11
Trade and other receivables 13 5,001 180
Cash and cash equivalents 14 542 9,627
6,479 9,818
TOTAL ASSETS 65,132 51,055
LIABILITIES
Non-current liabilities
Deferred tax 25 - -
Provisions - rehabilitation 15 360 360
360 360
Current liabilities
Trade and other payables 16 50,063 33,725
Borrowings 17 180 180
50,243 33,905
TOTAL LIABILITIES 50,603 34,265
NET ASSETS 14,529 16,790
EQUITY
Share capital 18 88,493 70,951
Share based payment and warrant reserve 19 3,532 3,708
Revaluation reserve 711 711
Foreign currency translation reserve 7 (13,150) (13,150)
Accumulated loss (51,902) (32,713)
Total equity attributed to the owners of the parent company 27,684 29,507
Non-controlling interest 20 (13,155) (12,717)
TOTAL EQUITY 14,529 16,790
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
AS AT 31 DECEMBER 2023
Continuing operations 2023 2022
EXPRESSED IN US DOLLARS Notes $ 000 $ 000
Revenue 21 - -
Cost of sales excluding depreciation and amortisation 22 (3,805) -
Gross profit / (loss) (3,805) -
Administrative expenses 23 (10,645) (4,622)
Operating profit / (loss) (14,450) (4,622)
Depreciation and amortisation 8, 10 (371) (54)
Other Income 21 137 34
Impairment of investments 11 (311) (1,161)
Finance charges 24 (5,818) -
(6,363) (1,181)
Profit / (Loss) before income tax (20,813) (5,803)
Income tax expense 25 - -
Profit / (Loss) from continuing operations (20,813) (5,803)
Loss for the year (20,813) (5,803)
Other comprehensive income:
Items that are or may be reclassified subsequently to profit or loss:
Foreign exchange loss on translation 7 - (2)
Fair value movement on available-for-sale investment (499) (7,841)
(499) (7,843)
Total comprehensive income for the year (21,312) (13,646)
Loss attributable to:
Owners of the Company (20,375) (5,359)
Non-controlling interests (438) (444)
(20,813) (5,803)
Total comprehensive income attributable to:
Owners of the Company (20,874) (13,134)
Non-controlling interests (438) (512)
Total comprehensive income for the year (21,312) (13,646)
Loss per share attributable to owners of the parent (expressed in US cents)
Basic loss per share 26 (0.09) (0.03)
Diluted loss per share 26 (0.09) (0.03)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 December 2023
Share capital Share option and warrant reserve Revaluation reserve Foreign currency translation reserve Accumulated loss Total attributable to owners of parent Non-controlling interest ("NCI") Total equity
EXPRESSED IN US DOLLARS $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000
At 1 January 2022 56,113 2,366 711 (13,216) (19,513) 26,461 (12,205) 14,256
Loss for the period - - - - (5,359) (5,359) (444) (5,803)
Other comprehensive income for the period - - - 66 (7,841) (7,775) (68) (7,843)
Total comprehensive income for the period - - - 66 (13,200) (13,134) (512) (13,646)
Transactions with Owners
Issue of equity shares 15,782 - - - - 15,782 - 15,782
Share issue costs (944) - - - - (944) - (944)
Warrant options cancelled - - - - - - - -
Share based payments - 1,342 - - - 1,342 - 1,342
At 31 December 2022 70,951 3,708 711 (13,150) (32,713) 29,507 (12,717) 16,790
Loss for the period - - - - (20,375) (20,375) (438) (20,813)
Other comprehensive income for the period - - - - (499) (499) - (499)
Total comprehensive income for the period - - - - (20,874) (20,874) (438) (21,312)
Transactions with Owners
Issue of equity shares 18,786 - - - - 18,786 - 18,786
Share issue costs (1,244) - - - - (1,244) - (1,244)
Share options expired - (1,685) - - 1,685 - - -
Share based payments - 1,509 - - - 1,509 - 1,509
At 31 December 2023 88,493 3,532 711 (13,150) (51,902) 27,684 (13,155) 14,529
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 December 2023
2023 2022
EXPRESSED IN US DOLLARS Notes $ 000 $ 000
Net cash outflow from operating activities 28 (8,030) 30,116
Investing activities
Acquisition of property plant and equipment 10 (17,608) (35,912)
Expenditure on intangible assets 8 (446) (53)
Loans advanced to investment 11 (543) (302)
Net cash used in investing activities (18,597) (36,267)
Financing activities
Proceeds from borrowings granted 17 - -
Net proceeds from issue of share capital 18 17,542 14,838
Finance charges 24 - -
Net cash from financing activities 17,542 14,838
Net decrease in cash and cash equivalents (9,085) 8,687
Cash and cash equivalents at beginning of year 9,627 940
Net cash and cash equivalents at end of year 542 9,627
The notes on pages 36 to 87 are an integral part of these consolidated
financial statements
1. Reporting entity
Premier African Minerals Limited ('Premier' or 'the Company'), together with
its subsidiaries (the 'Group'), was incorporated in the Territory of the
British Virgin Islands under the BVI Business Companies Act, 2004. The address
of the registered office is Craigmuir Chambers, PO Box 71, Road Town, Tortola,
British Virgin Islands.
The Group's operations and principal activities are the mining and development
of mineral reserves on the African continent.
Premier's shares were admitted to trading on the London Stock Exchange's AIM
market on 10 December 2012.
2. Basis of accounting
These consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (UK adopted International
Accounting Standards). They were authorised for issue by the Company's board
of directors on 28 June 2024.
Details of the Group's accounting policies are detailed below.
The preparation of financial statements in conformity with UK adopted IFRS
requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's
accounting policies.
The accounting policies set out below are applied consistent across the Group
and to all periods presented in these consolidated financial statements.
Functional and presentation currency
The Group's presentation currency and the functional currency of the majority
of the Group's entities is
US dollars. All amounts have been rounded to the nearest thousand, unless
otherwise indicated. The Zimbabwean subsidiaries' functional currency was
changed by the Zimbabwean government from USD to RTGS dollar during the 2019
financial year. With effect from 1 January 2023, the group has converted the
functional currency of all Zimbabwean entities to USD, as the majority of
transactions with other Zimbabwean is conducted in USD and therefore it is
more representative of the flow of economic benefits. Refer to note 7 for
detailed information.
Use of judgements and estimates
In preparing these consolidated financial statements, management has made
judgements, estimates and assumptions that affect the application of the
Group's accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to estimates are recognised prospectively.
For details of the use of judgments and estimates refer to note 4 and detailed
notes on the Intangible assets and goodwill (note 8), Investments (note 9),
Property, plant and equipment (note 10), Inventories (note 12), Trade and
other receivables (note 13), Provision for rehabilitation (note 15) and Share
based payment and warrant reserve (note 19).
3. Significant accounting policies
3.1 Change in significant accounting policies
The following standards, amendments and interpretations are new and effective
for the year ended 31 December 2023 and have been adopted. None of the IFRS
standards below had a material impact on the financial statements.
Reference Title Summary Application date of standard (Periods commencing on or after)
IAS 1 Presentation of Financial Statements Clarifies that liabilities are classified as either current or noncurrent, 1 January 2023
depending on the rights that exist at the end of the reporting period.
Classification is unaffected by the expectations of the entity or events after
the reporting date (for example, the receipt of a waiver or a breach of
covenant). The amendment also clarifies what IAS 1 means when it refers to the
'settlement' of a liability.
IAS 1 and IAS 8 'Presentation of Financial Statements' and 'Accounting policies, changes in Amendments to improve accounting policy disclosures and to help users of the 1 January 2023
accounting estimates and errors' financial statements to distinguish between changes in accounting estimates
and changes in accounting policies.
IAS 12 Deferred Taxation These amendments require companies to recognise deferred tax on transactions 1 January 2023
that, on initial recognition give rise to equal amounts of taxable and
deductible temporary differences.
IFRS17 Insurance contracts This standard replaces IFRS 4, which currently permits a wide variety of 1 January 2023
practices in accounting for insurance contracts. IFRS 17 will fundamentally
change the accounting by all entities that issue insurance contracts and
investment contracts with discretionary participation features.
The following new standards, amendments to standards and interpretations have
been issued, but are not effective for the year ended 31 December 2023 and
have not been early adopted:
Reference Title Summary Application date of standard (Periods commencing on or after)
IFRS 16 Lease Liability in a Sale and Leaseback Specifies requirements relating to measuring the lease liability in a sale and 1 January 2024
leaseback transaction after the date of the transaction.
IFRS 1 Presentation of Financial Statements and IFRS Practice Statement 2 - Changes requirements from disclosing 'significant' to 'material' accounting 1 January 2024
Disclosure of Accounting Policies policies and provides explanations and guidance on how to identify material
accounting policies.
IFRS 1 Presentation of Financial Statements: Classification of Liabilities as Current Clarifies that only those covenants with which an entity must comply on or 1 January 2024
or Non-Current and Non-Current Liabilities with Covenants Date before the end of the reporting period affect the classification of a
liability as current or non-current
IAS 7 FRS 7 Supplier Finance Arrangements The Amendments complement the existing disclosure requirements in IFRS 1 January 2024
Accounting Standards and are aimed at providing users of financial statements
with information to assess the effect of supplier finance arrangements on an
entity's liabilities, cash flows and exposure to liquidity risk
The Directors anticipate that the adoption of these standards and the
interpretations in future periods will not have a material impact on the
financial statements of the Group.
3.2 Basis of consolidation
Subsidiaries are all entities over which the Group has control. The Group
controls an entity when it is exposed to, or has the rights to, variable
returns from its involvement with the entity and has the ability to affect
those returns through its power over the entity. The existence and effect of
potential voting rights that are currently exercisable or convertible are
considered when assessing whether the Group controls another entity. The Group
also assesses existence of control where it does not have more than 50% of the
voting power but is able to govern the financial and operating policies by
virtue of de-facto control. This is evidenced with RHA Tungsten (Private)
Limited which the Group owns 49% of but is consolidated into the Group (note
4.7).
Subsidiaries are consolidated, using the acquisition method, from the date
that control is gained and non-controlling interests are apportioned on a
proportional basis.
When necessary, amounts reported by subsidiaries have been adjusted to conform
to the Group's accounting policies.
3.3 Business combinations and goodwill
The Group applies the acquisition method to account for business combinations.
The consideration transferred for the acquisition of a subsidiary is the fair
values of the assets transferred, the liabilities incurred to the former
owners of the acquiree, and the equity interests issued by the Group. The
consideration transferred includes the fair value of any asset or liability
resulting from a contingent consideration arrangement. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the acquisition
date.
3.4 Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an
entity when it 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. The financial statements of subsidiaries
are included in the consolidated financial statements from the date on which
control commences until the date on which control ceases.
3.5 Non-controlling interests ("NCI")
Non-controlling interests are measured initially at their proportionate share
of the acquiree's identifiable net assets at the date of acquisition.
Changes in the Group's interest in a subsidiary that do not result in a loss
of control are accounted for as equity transactions.
3.6 Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses
arising from intra-Group transactions, are eliminated. Unrealised gains
arising from transactions with equity accounted investees are eliminated
against the investment to the extent of the Group's interest in the investee.
Unrealised losses are eliminated in the same way as unrealised gains, but only
to the extent that there is no evidence of impairment.
3.7 Foreign currency
Transactions in foreign currencies are translated into the respective
functional currencies of Group companies at the exchange rates at the dates of
the transactions.
Monetary assets and liabilities denominated in foreign currencies are
translated into the functional currency at the exchange rate at the reporting
date. Non-monetary assets and liabilities that are measured at fair value in a
foreign currency are translated into the functional currency at the exchange
rate when the fair value was determined. Non-monetary items that are measured
based on historical cost in a foreign currency are translated at the exchange
rate at the date of the transaction. Foreign currency differences are
generally recognised in profit or loss.
The assets and liabilities of foreign operations, including goodwill and fair
value adjustments arising on acquisition, are translated into dollars at the
exchange rates at the reporting date. The income and expenses of foreign
operations are translated into dollars at the exchange rates at the dates of
the transactions.
Foreign currency differences are recognised in Other Comprehensive Income
("OCI") and accumulated in the translation reserve, except to the extent that
the translation difference is allocated to NCI.
Where the functional currency of a company is in a hyperinflationary economy
IAS 29 Financial Reporting in Hyperinflationary Economies is applied. Under
this standard the results are restated to reflect the current cost of the
various elements of the financial statements. For the Statement of
comprehensive income the cost of sales and depreciation are recorded at
current costs at the time of consumption; sales and other expenses are
recorded at their money amounts when they occurred. Therefore all amounts need
to be restated into the measuring unit current at the end of the reporting
period by applying a general price index.
Monetary items stated in the Statement of financial position that are stated
at current cost are not restated because they are already expressed in terms
of the measuring unit current at the end of the reporting period. All
non-monetary items in the statement of financial position are restated by
applying an index at the time of their acquisition to the reporting date. Any
resulting gain or loss on the net monetary position is included in profit or
loss reserve.
In accordance with IAS29, corresponding figures for the previous reporting
period, whether they were based on a historical cost approach or a current
cost approach, are restated by applying a general price index so that the
comparative financial statements are presented in terms of the measuring unit
current at the end of the reporting period. Information that is disclosed in
respect of earlier periods is also expressed in terms of the measuring unit
current at the end of the reporting period.
When a foreign operation is disposed of in its entirety or partially such that
control, significant influence or joint control is lost, the cumulative amount
in the translation reserve related to that foreign operation is reclassified
to profit or loss as part of the gain or loss on disposal. If the Group
disposes of part of its interest in a subsidiary but retains control, then the
relevant proportion of the cumulative amount is reattributed to NCI. When the
Group disposes of only part of an associate or joint venture while retaining
significant influence or joint control, the relevant proportion of the
cumulative amount is reclassified to profit or loss.
3.8 Discontinued operation
A discontinued operation is a component of the Group's business, the
operations and cash flows of which can be clearly distinguished from the rest
of the Group and which:
• represents a separate major line of business or
geographic area of operations;
• is part of a single co-ordinated plan to dispose of a
separate major line of business or geographic area of operations; or
• is a subsidiary acquired exclusively with a view to
re-sale.
Classification as a discontinued operation occurs at the earlier of disposal
or when the operation meets the criteria to be classified as held-for-sale.
When an operation is classified as a discontinued operation, the comparative
statement of profit or loss and OCI is re-presented as if the operation had
been discontinued from the start of the comparative year.
3.9 Revenue
Performance obligations and service recognition policies
Revenue is measured based on the consideration specified in a contract with a
customer in line with IFRS 15. The Group recognises revenue when it transfers
control over of goods or services to a customer.
The following table provides information about the nature and timing of the
satisfaction of performance obligations in contracts with customers, including
significant payment terms, and the related revenue recognition policies.
Type of product/ service Nature and timing of satisfaction of performance obligations, including Revenue recognition under IFRS 15
significant payment terms
Revenue
Wolframite sales Customers obtain control of the wolframite ore when the ore has been delivered Revenue is recognised when the goods are delivered and have been accepted by
to and have been accepted at their premises or the agreed point of delivery. the customers at their premises or the agreed point of delivery.
Invoices are generated at that point in time based on the agreed upon weight
of the ore. Invoices are generally payable within 30 days. No discounts are
provided for.
The sale of the ore is not subject to a return policy.
Scrap sales Customers obtain control of the scrap when the scrap has been delivered to and Revenue is recognised when the goods are delivered and have been accepted by
have been accepted at their premises or the agreed point of delivery. Invoices the customers at their premises or the agreed point of delivery.
are generated at that point in time based upon the agreed upon weight of the
scrap. Invoices are generally payable within 30 days. No discounts are
provided for.
The sale of the scrap is not subject to a return policy.
Reserve Bank of Zimbabwe Export Incentive The Export Incentive is provided on an individual basis and has to be applied The Group gains control over the export incentive when it is received in the
for. It is based on the export sales of the company. As such the revenue from Group's bank accounts.
the RBZ is not guaranteed.
Other Income
Government Grants The Group has no control over the timing of the grants nor any payment terms. The Group gains control over the Government grant when it is received in the
Group's bank accounts.
Prescription of debts Management periodically reviews all outstanding payables and identifies any Debts are considered prescribed if the creditor has not claimed payment for a
potential debts that may have prescribed. period in excess of the relevant prescription period.
3.10 Employee benefits
Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid if the Group has
a present legal or constructive obligation to pay this amount as a result of
past service provided by the employee and the obligation can be estimated
reliably.
Share-based payment arrangements
The Group operates an equity-settled share option plan and issues warrants
from time to time either with direct subscriptions in equity or as finance
related packages. The fair value of the service received in exchange for the
grant of options or issue of warrants is recognised as an expense or
recognised as a deduction from equity or an addition to intangible assets
depending on the nature of the services received.
Share-based payments are measured at fair value at the date of grant. The
fair value determined at the grant date of equity-settled share-based payments
is expensed on a straight-line basis over the vesting period, based on the
Group's estimate of shares that will eventually vest.
Fair value is measured by use of the Black Scholes model. The expected life
used in the model has been adjusted, based on management's best estimate, for
the effects of non-transferability, exercise restrictions, and behavioural
considerations.
Any adjustments are recognised through the profit and loss. The fair value is
reassessed annually.
3.11 Finance income and finance costs
The Group's finance income and finance costs include:
• interest income;
• Interest expense;
• dividend income;
Interest income and expense is recognised using the effective interest method.
Dividend income is recognised in profit or loss on the date on which the
Group's right to receive payment is established.
The "effective interest rate" is the rate that exactly discounts estimated
future cash payments or receipts through the expected life of the financial
instrument to:
• the gross carrying amount of the financial asset;
or
• the amortised cost of the financial liability.
In calculating interest income and expense, the effective interest rate is
applied to the gross carrying amount of the asset (when the asset is not
credit-impaired) or to the amortised cost of the liability. However, for
financial assets that have become credit-impaired subsequent to initial
recognition, interest income is calculated by applying the effective interest
rate to the amortised cost of the financial asset, if the asset is no-longer
credit-impaired, then the calculation of interest income reverts to the gross
basis.
3.12 Income tax
Income tax expense comprises current and deferred tax. It is recognised in
profit or loss except to the extent that it relates to a business combination,
or items recognised directly in equity or in OCI.
3.12.1 Current tax
Current tax comprises the expected tax payable or receivable on the taxable
income or loss for the year and any adjustment to the tax payable or
receivable in respect of previous years. The amount of current tax payable or
receivable is the best estimate of the tax amount expected to be paid or
received that reflects uncertainty related to income taxes, if any. It is
measured using tax rates enacted or substantively enacted at the reporting
date. Current tax also includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are
met.
3.12.2 Deferred tax
Deferred tax is recognised in respect of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes.
Deferred tax is not recognised for:
• temporary differences on the initial recognition of assets
or liabilities in a transaction that is not a business combination and that
affects neither accounting nor taxable profit or loss;
• temporary differences related to investments in
subsidiaries, associates and joint arrangements to the extent that the Group
is able to control the timing of the reversal of the temporary differences and
it is probable that they will not reverse in the foreseeable future; and
taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognised for unused tax losses, unused tax credits
and deductible temporary differences to the extent that it is probable that
future taxable profits will be available against which they can be used.
Future taxable profits are determined based on the reversal of relevant
taxable temporary differences. If the amount of taxable temporary differences
is insufficient to recognise a deferred tax asset in full, then future taxable
profits, adjusted for reversals of existing temporary differences, are
considered, based on the business plans for individual subsidiaries in the
Group. Deferred tax assets are reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the related tax benefit will
be realised; such reductions are reversed when the probability of future
taxable profits improves.
Unrecognised deferred tax assets are reassessed at each reporting date and
recognised to the extent that it has become probable that future taxable
profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to
temporary differences when they reverse, using tax rates enacted or
substantively enacted at the reporting date.
The measurement of deferred tax reflects the tax consequences that would
follow from the manner in which the Group expects, at the reporting date, to
recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if certain criteria are
met.
3.13 Intangible assets and goodwill
All costs of Exploration and Evaluation ("E&E") are initially capitalised
as intangible assets, such as payments to acquire the legal right to explore,
costs of technical services and studies, seismic acquisition, exploratory
drilling and testing. The costs include directly attributable overheads
together with the cost of other materials consumed during the exploration and
evaluation phases.
Costs incurred prior to having obtained the legal rights to explore an area
are expensed directly to profit or loss as they are incurred.
E&E assets are not amortised.
Intangible assets related to each exploration licence or pool of licences are
carried forward, until the existence (or otherwise) of commercial reserves has
been determined. Once the technical feasibility and commercial viability of
extracting a mineral resource is demonstrable, the related E&E assets are
assessed for impairment on an individual licence or cost pool basis, as
appropriate, as set out below and any impairment loss is recognised in profit
or loss.
The Group considers each licence, or where appropriate, a pool of licences,
separately, for the purposes of determining whether impairment of E&E
assets has occurred.
Intangible assets are assessed for impairment when facts and circumstances
suggest that the carrying amount may exceed its recoverable amount. Such
indicators include, but are not limited to, those situations outlined in
paragraph 20 of IFRS 6 Exploration for and Evaluation of Mineral Resources and
include the point at which a determination is made as to whether or not
commercial reserves exist.
When impairment indicators exist, the aggregate carrying value is compared
against the expected recoverable amount, generally by reference to the present
value of the future net cash flows expected to be derived from production of
commercial reserves.
When a licence or pool of licences is abandoned or there is no planned future
work, the costs associated with the respective licences are written off in
full and recognised in profit or loss.
Any impairment loss is recognised in profit or loss and separately disclosed.
3.14 Impairment
3.14.1 Non-derivative financial assets
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at
amortised cost and debt securities at FVOCI are credit-impaired. A financial
asset is "credit-impaired" when one or more events that have a detrimental
impact on the estimated future cash flows of the financial assets have
occurred.
Evidence that a financial asset is credit-impaired includes the following
observable data:
• significant financial difficulty of the borrower or
issuer;
• a breach of contract such as a default or being more
than 90 days past due;
• the restructuring of a loan or advance by the Group on
terms that the Group would not consider otherwise;
• it is probable that the borrower will enter bankruptcy
or other financial reorganisation; or
• the disappearance of an active market for a security
because of financial difficulties.
A 12 months approach is followed in determining the Expected Credit Loss
("ECL").
Presentation of allowance for ECL in the statement of financial position
Loss allowances for financial assets measured at amortised cost are deducted
from the gross carrying amount of the assets.
For debt securities at FVOCI, the loss allowance is charged to profit or loss
and is recognised in OCI.
Write-off
The gross carrying amount of a financial asset is written off when the Group
has no reasonable expectations of recovering a financial asset in its entirety
or a portion thereof. For corporate customers, the Group individually makes an
assessment with respect to the timing and amount of write-off based on whether
there is a reasonable expectation of recovery from the amount written off.
However, financial assets that are written off could still be subject to
enforcement activities in order to comply with the Group's procedures of
recovery of the amounts due.
3.14.2 Financial assets measured at amortised cost
The Group considers evidence of impairment for these assets at both an
individual asset and a collective level. All individually significant assets
are individually assessed for impairment. Those found not to be impaired are
then collectively assessed for any impairment that has been incurred but not
yet individually identified. Assets that are not individually significant are
collectively assessed for impairment. Collective assessment is carried out by
grouping together assets with similar risk characteristics.
In assessing collective impairment, the Group uses historical information on
the timing of recoveries and the amount of loss incurred, and makes an
adjustment if current economic and credit conditions are such that the actual
losses are likely to be greater or lesser than suggested by historical trends.
An impairment loss is calculated as the difference between an asset's carrying
amount and the present value of the estimated future cash flows discounted at
the asset's original effective interest rate. Losses are recognised in profit
or loss and reflected in an allowance account. When the Group considers that
there are no realistic prospects of recovery of the asset, the relevant
amounts are written off. If the amount of impairment loss subsequently
decreases and the decrease can be related objectively to an event occurring
after the impairment was recognised, then the previously recognised impairment
loss is reversed through profit or loss.
3.14.3 Available for sale financial asset
Impairment losses on available-for-sale financial assets are recognised, only
when fair value is less than carrying value and this is significant over a
prolonged period, by reclassifying the losses accumulated in the fair value
reserve to profit or loss. The amount reclassified is the difference between
the acquisition cost (net of any principal repayment and amortisation) and the
current fair value, less any impairment loss previously recognised in profit
or loss.
3.14.4 Non-financial assets
At each reporting date, the Group reviews the carrying amounts of its
non-financial assets (other than inventories) to determine whether there is
any indication of impairment. If any such indication exists, then the asset's
recoverable amount is estimated. Goodwill is tested annually for impairment.
For impairment testing, assets are grouped together into the smallest group of
assets that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or CGUs. Goodwill arising from
a business combination is allocated to CGUs or groups of CGUs that are
expected to benefit from the synergies of the combination.
The recoverable amount of an asset or CGU is the greater of its value in use
and its fair value less cost of disposal. Value in use is based on the
estimated future cash flows, discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU
exceeds its recoverable amount.
Impairment losses are recognised in profit or loss. They are allocated first
to reduce the carrying amount of any goodwill allocated to the CGU, and then
to reduce the carrying amounts of the other assets in the CGU on a pro rata
basis.
An impairment loss in respect of goodwill is not reversed. For other assets,
an impairment loss is reversed only to the extent that the asset's carrying
amount does not exceed the carrying amount that would have been determined,
net of depreciation or amortisation, if no impairment loss had been
recognised.
3.15 Cash and cash equivalents
The Cash and cash equivalents comprises of cash at bank, cash on hand and
other highly liquid investments with short term maturities. Cash and cash
equivalents are measured at amortised cost. For the purposes of the Statement
of Cash Flows, cash and cash equivalents consist of cash and cash equivalents
as defined above, net of outstanding bank overdrafts.
3.16 Inventory
Inventory is measured at the lower of cost and net realisable value. The cost
of inventories is based on the first-in, first-out principle. The cost of
inventories includes the cost of consumables and cost of production. Net
realisable value is the estimated selling price in the ordinary course of
business, less the estimated costs of completion and selling expenses.
Inventory consists of mining consumables.
3.17 Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost, which includes
capitalised borrowing costs, less accumulated depreciation and any accumulated
impairment losses.
If significant parts of an item of property, plant and equipment have
different useful lives, then they are accounted for as separate items (major
components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is
recognised in profit or loss.
Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future
economic benefits associated with the expenditure will flow to the Group.
Depreciation
Depreciation is calculated to write off the cost of items of property, plant
and equipment less their estimated residual values using the straight-line
method over their estimated useful lives, and is generally recognised in
profit or loss. Leased assets are depreciated over the shorter of the lease
term and their useful lives unless it is reasonably certain that the Group
will obtain ownership by the end of the lease term. Land is not depreciated.
The estimated useful lives of property, plant and equipment for current and
comparative periods are as follows:
• Land - indefinite useful life
• Buildings - 10 years
• Plant & equipment - 4/6 years
• Mine development - depreciated over the life of
the mine, currently assessed at 10 years
Depreciation methods, useful lives and residual values are reviewed at each
reporting date and adjusted if appropriate.
3.18 Financial instruments
The Group classifies non-derivative financial assets into the following
categories: loans and receivables and FVTPL and FVTOCI financial assets.
The Group classifies non-derivative financial liabilities into the following
category: other financial liabilities.
3.18.1 Non-derivative financial assets and financial liabilities -
Recognition and derecognition
The Group initially recognises loans and receivables on the date when they are
originated. All other financial assets and financial liabilities are initially
recognised on the trade date when the entity becomes a party to the
contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the
cash flows from the asset expire, or it transfers the rights to receive the
contractual cash flows in a transaction in which substantially all of the
risks and rewards of ownership of the financial asset are transferred, or it
neither transfers nor retains substantially all of the risks and rewards of
ownership and does not retain control over the transferred asset. Any interest
in such derecognised financial assets that is created or retained by the Group
is recognised as a separate asset or liability.
The Group derecognises a financial liability when its contractual obligations
are discharged or cancelled or expire. Gains or losses on derecognition of
financial liabilities are recognised in profit or loss as a finance charge.
Financial assets and financial liabilities are offset, and the net amount
presented in the statement of financial position when, and only when, the
Group currently has a legally enforceable right to offset the amounts and
intends either to settle them on a net basis or to realise the asset and
settle the liability simultaneously.
3.18.2 Loans and receivables- Measurement
These assets are initially measured at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, they are
measured at amortised cost using the effective interest method.
3.18.3 Assets at FVOCI - Measurement
These assets are initially measured at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, they are
measured at fair value and changes therein, other than impairment losses, are
recognised in OCI and accumulated in the revaluation reserve.
When these assets are derecognised, the gain or loss accumulated in equity is
reclassified to profit or loss.
3.18.4 Non-derivative financial liabilities - Measurement
Other non-derivative financial liabilities are initially measured at fair
value less any directly attributable transaction costs. Subsequent to initial
recognition, these liabilities are measured at amortised cost using the
effective interest method.
3.18.5 Convertible loan notes and derivative financial instruments
The presentation and measurement of loan notes for accounting purposes is
governed by IAS 32 and IAS 39. These standards require the loan notes to be
separated into two components:
• A derivative liability, and
• A debt host liability.
This is because the loan notes are convertible into an unknown number of
shares, therefore failing the 'fixed-for-fixed' criterion under IAS 32. This
requires the 'underlying option component' of the loan note to be valued first
(as an embedded derivative), with the residual of the face value being
allocated to the debt host liability (refer financial liabilities policy
above).
Compound financial instruments issued by the Group comprise convertible notes
denominated in dollars that can be converted to ordinary shares at the option
of the holder, when the number of shares to be issued is fixed and does not
vary with changes in fair value.
The liability component of compound financial instruments is initially
recognised at the fair value of a similar liability that does not have an
equity conversion option. The equity component is initially recognised at the
difference between the fair value of the compound financial instrument as a
whole and the fair value of the liability component. Any directly attributable
transaction costs are allocated to the liability and equity components in
proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound
financial instrument is measured at amortised cost using the effective
interest method. The equity component of a compound financial instrument is
not remeasured.
Interest related to the financial liability is recognised in profit or loss.
On conversion at maturity, the financial liability is reclassified to equity
and no gain or loss is recognised.
3.19 Provisions - Rehabilitation
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation.
An obligation to incur environmental restoration, rehabilitation and
decommissioning costs arises when disturbance is caused by the development or
on-going production of a mining property. Such costs arising from the
decommissioning of plant and other site preparation work, discounted to their
net present value, are provided for and capitalised at the start of each
project, as soon as the obligation to incur such costs arises. These costs are
recognised in profit or loss over the life of the operation, through the
depreciation of the asset and the unwinding of the discount on the provision.
Costs for restoration of subsequent site damage which is created on an ongoing
basis during production are provided for at their net present values and
recognised in profit or loss as extraction progresses.
Changes in the measurement of a liability relating to the decommissioning of
plant or other site preparation work (that result from changes in the
estimated timing or amount of the cash flow, or a change in the discount rate)
are added to or deducted from the cost of the related asset in the current
period. If a decrease in the liability exceeds the carrying amount of the
asset, the excess is recognised immediately in profit or loss. If the asset
value is increased and there is an indication that the revised carrying value
is not recoverable, an impairment test is performed in accordance with the
accounting policy above.
Provisions are determined by discounting the expected future cash flows at a
pre-tax rate that reflects current market assessments of the time value of
money and the risks specific to the liability. The unwinding of the discount
is recognised as finance cost in profit or loss.
3.20 Equity
Equity comprises the following:
• Share capital - ordinary shares are classified as
equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
• Share-options and warrant reserve - represents
equity-settled share-based payments.
• Accumulated loss represents retained profits less
retained losses.
• Revaluation reserve represents the difference
between the nominal value of shares issued by the Company to the shareholders
of ZimDiv Holdings Limited ("Zimdiv") and the nominal value of the ZimDiv
shares taken in exchange.
• Non-controlling interests represents the share of
retained profits less retained losses of the non-controlling interests.
• Foreign currency translation reserve represents
the other comprehensive income gains or losses arising on the conversion of
the functional currencies of the subsidiaries to the holding company's
functional currency of USD.
3.21 Leases
Determining whether an arrangement contains a lease.
At inception of an arrangement, the Group determines whether the arrangement
is or contains a lease.
At inception or on reassessment of an arrangement that contains a lease, the
Group separates payments and other consideration required by the arrangement
into those for the lease and those for other elements on the basis of their
relative fair values. If the Group concludes for a finance lease that it is
impracticable to separate the payments reliably, then an asset and a liability
are recognised at an amount equal to the fair value of the underlying asset;
subsequently, the liability is reduced as payments are made and an imputed
finance cost on the liability is recognised using the Group's incremental
borrowing rate.
Assets held under leases are recognised as assets of the Group at the fair
value at the inception of the lease or, if lower, at the present value of the
minimum lease payments. Lease payments are apportioned between interest
expense and capital redemption of the liability. Interest is recognised
immediately in the statement of comprehensive income unless attributable to
qualifying assets, in which case they are capitalised to the cost of those
assets.
Exemptions are applied for short life leases and low value assets made under
operating leases charged to the statement of comprehensive income on a
straight line basis over the period of the lease.
Payments made under non-capitalised leases are recognised in profit or loss on
a straight-line basis over the term of the lease. Lease incentives received
are recognised as an integral part of the total lease expense, over the term
of the lease.
Minimum lease payments made are apportioned between the finance expense and
the reduction of the outstanding liability. The finance expense is allocated
to each period during the lease term so as to produce a constant periodic rate
of interest on the remaining balance of the liability.
3.22 Operating segments
Segmental information is provided for the Group on the basis of information
reported internally to the chief operating decision-maker for decision-making
purposes. The Group considers that the role of chief operating decision-maker
is performed by the Group's board of directors.
4. Significant accounting judgements, estimates and
assumptions
In preparing these consolidated financial statements, management has made
judgements, estimates and assumptions that affect the application of the
Group's accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to estimates are recognised prospectively.
4.1. Judgements
Information about judgements made in applying accounting policies that have
the most significant effects on the amounts recognised in the consolidated
financial statements is included in the following notes:
- Note 4.7 - consolidation: whether the Group has de
facto control over an investee; and
- Note 15 and 16 - leases: whether an arrangement
contains a lease.
4.2. Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a
significant risk of resulting in a material adjustment to the carrying amounts
of assets and liabilities within the year ended 31 December 2023 is included
in the following notes:
• Note 25 - recognition of deferred tax assets: availability of
future taxable profit against which tax losses carried forward can be used;
• Note 4.4 - Recoverability of exploration and evaluation assets:
key assumptions underlying recoverable amounts;
• Note 4.5 - Recoverability of RHA Cash-Generating Unit "CGU":
key assumptions underlying recoverable amounts;
• Note 15 and 16 - recognition and measurement of provisions and
contingencies: key assumptions about the likelihood and magnitude of an
outflow of resources; and
• Note 19 - share based payments assumptions regarding the
various inputs into the Black Scholes model used to determine the option
value.
4.3. Measurement of fair values
A number of the Group's accounting policies and disclosures require the
measurement of fair values, for both financial and non-financial assets and
liabilities.
When measuring the fair value of an asset or a liability, the Group uses
observable market data as far as possible. Fair values are categorised into
different levels in a fair value hierarchy based on the inputs used in the
valuation techniques as follows.
• Level 1: quoted prices (unadjusted) in active
markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included in Level 1
that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
• Level 3: inputs for the asset or liability that
are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability fall
into different levels of the fair value hierarchy, then the fair value
measurement is categorised in its entirety in the same level of the fair value
hierarchy as the lowest level input that is significant to the entire
measurement.
The Group recognises transfers between levels of the fair value hierarchy at
the end of the reporting period during which the change occurred.
Further information about the assumptions made in measuring fair values is
included in the following notes:
• Note 19 - share-based payment arrangements;
• Note 29 - financial instruments.
4.4 Recoverability of exploration and evaluation assets
Determining whether an exploration and evaluation asset is impaired requires
an assessment of whether there are any indicators of impairment, including by
reference to specific impairment indicators prescribed in IFRS 6 Exploration
for and Evaluation of Mineral Resources. If there is any indication of
potential impairment, an impairment test is required based on value in use of
the asset or fair value less cost to sell.
The carrying amount of exploration and evaluation assets at 31 December 2023
amounted to $4.686 million (2022: $4.739 million). Refer to note 8 for the
assumptions used.
4.5 Recoverability of RHA Cash-Generating Unit "CGU"
Determining whether a CGU is impaired requires an assessment of whether there
are any indicators of impairment, including by reference to specific
impairment indicators prescribed in IAS36 Impairment of Assets. If there is
any indication of potential impairment, an impairment test is required based
on the greater of fair value less cost of disposal, and, value in use of the
asset. The value in use calculation requires the entity to estimate the future
cash flows expected to arise from the cash-generating unit and a suitable
discount rate in order to calculate the present value.
During 2017 the operating losses at RHA were higher than predicted due to
operations in the open pit and underground failing to deliver both the ore
volumes and the anticipated grade. The operating losses are an indicator of
potential impairment. In December 2017, due to the lower ore delivery,
anticipated grade and operating losses, the Board of Directors decided to
place the RHA Tungsten mine under care and maintenance.
As a result, management completed an impairment review.
The impairment review concluded that four months further capex will be
required in order to open the existing underground mining of 6 000 tons per
month run of mine ore. Concurrently additional plant upgrades and a connection
to the national grid would result in a 40 000 ton per month run of mine ore
operation. A further option to construct a new decline vehicle access was not
considered during this review.
Key assumptions used in calculating the initial impairment included:
• 7 265 mtu concentrate production per month; 10
year mine plan; APT price of $275 per metric ton unit ('mtu');
• 20% discount rate; and a zero growth rate in
operating cash flow after the plant is fully operational, forecast to be for
the full year 2019. Other key factors include attainment of forecast grade as
set out in our resource statement and plant operating parameters being
achieved.
• The XRT sorter installation is a significant
element in increasing confidence in RHA in that 70% of the anticipated run of
mine feed target of 40 000 ton per month is passed through the sorter, which
is able to recover approximately 90% of the mineralisation in a mass pull of
some 5%.
• The model assumes annual revenues of $13.1m from
2020. Revenue generation is dependent on a number of inter-linked
assumptions and a combination of negative changes in those assumptions would
result in further impairment charges.
As the mine is not operating, these assumptions were not revisited and the
mine remains fully impaired.
Sensitivity analysis was conducted on the volume, grade, concentrate
production per month and APT price assumptions in the model.
The management of RHA continue to engage with NIEEF about the future of RHA.
4.6 Estimation of useful life for mine assets
Mine assets are depreciated /amortised on a straight-line basis over the life
of the mine concerned. Judgement is applied in assessing the mine's useful
life and in the case of RHA, the Group's only operating concern, is based on
the initial Preliminary Economic Assessment ('PEA') first published in August
2013 that initially modelled an 8 year life of mine. The life of mine
reassessed annually based on levels of production.
4.7 Basis of consolidation
RHA
During 2013, Premier concluded a shareholders' agreement with NIEEF whereby
NIEEF acquired 51% of the shares of RHA. The principal terms of the agreement
are as follows:
• ZimDiv Holdings Limited ('ZimDiv'), a wholly owned
subsidiary, is appointed as the Manager of the project for an initial 5 year
term.
• On 7 May 2019 ZimDiv were reappointed as the
manager for another 5 year term.
• ZimDiv has marketing rights to the product.
• Each shareholder can appoint up to two directors
each, with a 5th director who is rotated between each shareholder. The 5th
director will not have a vote.
• Although the local Zimbabwean company is responsible for
financing and repayment of such. Premier has secured the funding to advance
RHA to production.
• There has been no operational change since the
agreements were signed and Premier continues to fund RHA until it becomes cash
generative.
At the financial year-end, two directors of RHA were from the Premier Group
and three directors from NIEEF. There is no majority vote at board level and
Premier still retains operational and management control through its
shareholders' agreement. Following the assessment, the Directors concluded
that Premier, through its wholly owned subsidiary ZimDiv, retained control and
should continue to consolidate 100% of RHA and recognise non-controlling
interests of 51% in the consolidated financial statements.
4.8 Valuations
• Investments - Premier's investment in Vortex Ltd
(formerly Circum Minerals Ltd) is classified as an FVOCI as such is required
to be measured at fair value at the reporting date. As Vortex is unlisted
there are no quoted market prices. In previous years the fair value of the
Vortex shares was derived using the most recent placing price. The Fair value
of the Vortex shares as at 31 December 2023 was derived using the most recent
placing price in 30 December 2022.
• Valuation of warrants, share options and ordinary shares
issued as consideration - judgement is applied in determining appropriate
assumptions to be used in calculating the fair value of the warrants, shares
and share options issued. Refer accounting policy note and note 19.
• Provision for Rehabilitation - A provision is
recognised for site rehabilitation and decommissioning of current mining
activities based on current environmental and regulatory requirements. The net
present value of the provision is calculated at a discount rate of 10% over an
8 year life of mine. No mining took place during the year, therefore the
remaining life of the mine was not adjusted and resulted in no movement in the
rehabilitation provision.
• The life of mine has subsequently been reassessed to a total of
10 years. The corresponding rehabilitation assets were capitalised to
property, plant and equipment and is depreciated over the life of the mine.
5. Going Concern
These consolidated financial statements are prepared on the going concern
basis. The going concern basis assumes that the Group will continue in
operation for the foreseeable future and will be able to realise its assets
and discharge its liabilities and commitments in the normal course of
business.
The Group has an operating loss from continuing operations amounting to
$14.450 million (2022: $4.622 million) and negative cash flows from operation
amounting to $8.030 million for the year ended 31 December 2023 (2022:
positive cash flows from operations amounting to $30.116 million).
As at 31 December 2023, current liabilities exceeded current assets by $43.764
million (2022: $24.087 million). The Group raised $17.542 million (2022:
$14.838 million) in net funding through share subscriptions to fund the
commissioning of the Zulu plant and development work at the Zulu mine, general
group maintenance and preservation of assets and to investigate and assess
potential diversification, through potential investments in cash generating
assets, as discussed above.
There remains an active and very liquid market for the Group's shares.
The Directors have prepared a cash flow forecasts for the 18-month period
ended 31 December 2025. These key assumptions of this forecast are as follows:
RHA
• The Company has not funded any of the activities at RHA
since 1 July 2019, apart from essential care and maintenance costs.
Zulu
• Zulu will have its new scrubber unit installed
and operational in the week of 10 July. This will enable Zulu to produce and
derive revenue from the sale of SC6.
• Premier has engaged Zimbabwean banks to
facilitate the funding of Zulu's short-term needs as they may arise.
The Group
• During 2023 the Group issued 4,216,446,124 shares at an
average price of 0.4455p per share raising a total of $18.786 million. This
cash was used to continue with the commission and development work at Zulu
mine.
• In May 2023 the options issued in 2017 were
exercised raising £550,382 for the Group.
• Premier has obtained support from its offtake
and prepayment partner allowing Premier to pursue alternative funding avenues.
• The calling of a Special General Meeting to increase the
number of shares free from pre-emptive rights by no more than 2 billion
In the event that the Group is unable meet its obligations or have Zulu
commence operations, then a material uncertainty exists which may cast
significant doubt on the ability of the Company to continue as a going concern
and therefore be unable to realise its assets and settle its liabilities in
the normal course of business.
6. Operating segments
The Group has the following three reportable segments that are managed
separately due to the different jurisdictions.
Segmental results, assets and liabilities include items directly attributable
to a segment as well as those that can be allocated on a reasonable basis.
Reportable segments Operations
RHA and RHA Mauritius Development and mining of Wolframite
Zulu and Zulu Mauritius Development of Lithium and Tantalite
Head office General administration and control
By operating segment Unallocated Corporate RHA Tungsten Mine Zimbabwe and RHA Mauritius* Exploration Zulu Lithium Zimbabwe and Zulu Mauritius Total continuing operations
2023 $ 000 $ 000 $ 000 $ 000
Result
Revenue - - - -
Operating loss / (income) 7,118 64 7,639 14,821
Other income - - (137) (137)
Fair value movement on investment - - - -
Finance charges 5,818 - - 5,818
Impairment of investments and 311 - - 311
loans receivable
Loss before taxation 13,248 64 7,501 20,813
Assets
Exploration and evaluation assets 123 - 4,563 4,686
Investments 501 - - 501
Property, plant and equipment 77 - 53,157 53,234
Loans receivable 232 - - 232
Inventories - - 936 936
Trade and other receivables 3,647 8 1,346 5,001
Cash 507 23 12 542
Total assets 5,087 31 60,014 65,132
Liabilities
Other financial liabilities - - - -
Borrowings (180) - - (180)
Bank overdraft - - - -
Trade and other payables (47,892) - (2,171) (50,063)
Provisions - (360) - (360)
Total liabilities (48,072) (360) (2,171) (50,603)
Net assets (42,985) (329) 57,843 14,529
Other information
Depreciation and amortisation 19 - 352 371
Property plant and equipment additions 35 - 17,573 17,608
Costs capitalised to intangible assets 446 - - 446
By operating segment Unallocated Corporate RHA Tungsten Mine Zimbabwe and RHA Mauritius* Exploration Zulu Lithium Zimbabwe and Zulu Mauritius Total continued operations
2022 $ 000 $ 000 $ 000 $ 000
Result
Revenue - - - -
Operating loss / (income) 3,774 213 689 4,676
Other income - - (34) (34)
Finance charges - - - -
Impairment of investments and 1,161 - - 1,161
loans receivable
Loss before taxation 4,935 213 655 5,803
Assets
Exploration and evaluation assets 176 - 4,563 4,739
Investments 501 - - 501
Property, plant and equipment 63 - 35,934 35,997
Loans receivable - - - -
Inventories - - 11 11
Trade and other receivables 65 3 112 180
Cash 9,238 12 377 9,627
Total assets 10,043 15 40,997 51,055
Liabilities
Borrowings (180) - - (180)
Trade and other payables (33,792) - 67 (33,725)
Provisions - (360) - (360)
Total liabilities (33,972) (360) 67 (34,265)
Net assets (23,929) (345) 41,064 16,790
Other information
Depreciation and amortisation 7 - 47 54
Property plant and equipment additions 70 - 35,981 36,051
Costs capitalised to intangible assets 53 - - 53
*Represents 100% of the results and financial position of RHA Tungsten
(Private) Limited ("RHA") whereas the Group owns 49%. Non-controlling
interests are disclosed in note 20.
7. Hyper-inflationary accounting
In terms of IAS29, Hyperinflation is indicated by characteristics of the
economic environment of a country which include, but are not limited to, the
following:
a. the general population prefers to keep its wealth in
non‑monetary assets or in a relatively stable foreign currency. Amounts of
local currency held are immediately invested to maintain purchasing power;
b. the general population regards monetary amounts not in
terms of the local currency but in terms of a relatively stable foreign
currency. Prices may be quoted in that currency;
c. sales and purchases on credit take place at prices that compensate
for the expected loss of purchasing power during the credit period, even if
the period is short;
d. interest rates, wages and prices are linked to a price
index; and
e. the cumulative inflation rate over three years is
approaching, or exceeds, 100%.
As stated in the 2018 annual financial statements, with effect of the 21st of
February 2019 Zimbabwe implemented the Real Time Gross Settlement of US
Dollars ("RTGS") at an official exchange rate of 1:1. At that time the
official inflation rate was 0%. At the year end the official exchange rate has
moved to RTGS 6,104.72: $1 (2022: RTGS 684.3339: $1) whilst the official
inflation rate has moved to 26.5% (2022: 105.50%) on a year on year basis. The
table below details the exchange rates and inflation rates, as published by
https://tradingeconomics.com/zimbabwe/inflation-cpi, on a monthly basis for
the year ended 31 December 2023.
Inflation Rate Exchange Rate RTGS : US$ 1.00 Inflation Rate Exchange Rate RTGS : US$ 1.00
2023 2023 2022 2022
January 34.80% 796.5215 60.60% 115.4223
February 44.10% 889.1325 66.10% 124.0189
March 40.80% 929.3618 72.70% 142.4237
April 33.50% 1,047.4449 96.40% 159.3482
May 30.70% 2,577.0564 131.70% 301.4994
June 30.90% 5,739.7961 70.00% 370.9646
July 22.70% 4,516.8025 96.10% 443.8823
August 17.70% 4,606.6233 106.30% 546.8254
September 18.40% 5,466.7466 107.50% 621.8922
October 17.80% 6,007.9622 108.70% 632.7703
November 21.60% 6,102.7435 107.10% 654.9284
December 26.50% 6,104.7226 105.50% 684.3339
Two of the Group's subsidiaries, namely RHA and Zulu, operate in Zimbabwe.
The comparative financial statements have been restated to comply with IAS29.
The financial statements reflect the reduction in the purchasing power of RTGS
which have been remeasured, in terms of IAS 29, as at 31 December 2022.
With effect from 1 January 2023, all companies in the group prepare and
present their financial information in US Dollars. Any local reporting
requirements will be managed by converting the USD values to the respective
local currency.
8. Intangible assets
2023 2022
$ 000 $ 000
Exploration and evaluations assets 4,686 4,739
Total intangible assets 4,686 4,739
Opening carrying value 4,739 4,686
Expenditure on Exploration and evaluation 446 53
Impairment of Exploration and evaluation assets (499) -
Closing carrying value 4,686 4,739
During 2021, the market conditions for lithium improved substantially. This
improvement enabled management to revisit the assumptions surrounding the
impairment of the Zulu Lithium Exploration and Evaluation assets. Based upon
the current market conditions and associated assumptions, management reversed
the impairment of the Zulu Lithium's Exploration and Evaluation assets.
During 2020, the company acquired a portfolio of hard-rock lithium assets
located in Zimbabwe and Mozambique from Lithium Consolidated Ltd ("Li3").
During 2023, $0.446 million (2022: $0.053 million) was expended to purchase an
option to conduct exploration on Turwi Gold.
Zulu Lithium and Tantalite Project
During the year $nil (2022: $nil) exploration costs were incurred and
capitalised to Zulu. The Group views this project as strategic and exploration
work will be continued in the future, cash flow permitting.
Key assumptions applied in calculating the discounted cash flow analysis
included:
• Targeted annual production of spodumene
concentrate
84 000 tonnes
• Targeted annual production of petalite
concentrate
32 500 tonnes
• Price of spodumene
concentrate
$975/t
• Price of petalite
concentrate
$400/t
• Discount rate
25%
• Operating costs per combined tonnage of
concentrate
$486/t
• Estimated 15 year life of mine
• Average strip ratio of
5.5:1
During March 2021, the EPO was granted and a DFS commenced. Subsequently, the
identified resource and the economics of the project indicated that the
project was viable and The Group commenced developing the Zulu mine.
For additional information on events after the reporting date, refer to note
32.
9. Investments
Vortex Manganese Total
(formerly Namibian
Circum Holdings
Minerals)
$ 000 $ 000 $ 000
Opening carrying value 2022 6,263 2,079 8,342
Shares acquired - - -
Fair value adjustment (5,762) (2,079) (7,841)
Closing carrying value 2022 501 - 501
Shares acquired - - -
Fair value adjustment - - -
Closing carrying value 2023 501 - 501
Reconciliation of movements in investments
Opening carrying value 2022 (1) (2) (3) 6,263 2,079 8,342
Acquisition at fair value 2022 - - -
Fair value adjustment (5,762) (2,079) (7,841)
Opening carrying value 2023 501 - 501
Acquisition of shares - - -
Fair value adjustment - - -
Closing carrying value 2023 501 - 501
(1) Represents 5 million shares in unlisted entity Circum.
(2) As Circum is unlisted there are no quoted markets. The fair value of the
Circum shares was derived using the previous issue price and validating it
against the most recent placing price on 30 December 2022 of $0.10 per share.
In March 2022, the shares were sold at book value to Vortex Limited in
exchange for shares in Vortex Limited.
(3) Represents a purchase of 19.9% interest in MNH.
The shares are considered to be level 3 financial assets under the IFRS 13
categorisation of fair value measurements.
Premier continues to have an indirect interest in 5,010,333 shares in Circum
held by Vortex and is currently valued in total at $0.501 million (2022:
$0.501 million).
The fair value of these investments on 31 December 2023 amounted to $0.501
million (2022: $0.501 million).
Premier's investment in Vortex is classified as FVOCI and as such is required
to be measured at fair value at each reporting date. As Vortex is unlisted
there are no quoted market prices. The fair value of the Circum shares held by
Vortex was derived using the previous issue price and validating it against
the most recent placing price on 30 December 2022.
Premier's investment in MNH is classified as FVOCI and as such is required to
be measured at fair value at each
reporting date. As MNH is unlisted there are no quoted market prices. The fair
value of the MNH shares was fully impaired based on their most recently
available financial information.
Sensitivity analysis
The investments are subject to changes in market prices. A 10% reduction in
market prices would result in a $0.050 million (2022: $0.050 million) charge
to Other Comprehensive Income.
10. Property, plant and equipment
Mine Development Plant and Equipment Land and Buildings Capital Work-in-Progress Total
$ 000 $ 000 $ 000 $ 000
Cost
At 1 January 2022 895 2,812 41 - 3,748
Exchange differences (1) (122) (54) (22) - (198)
Transfer from Capital Work in Progress - - - -
Additions - 700 255 34,956 35,911
Disposals - - - - -
At 31 December 2022 773 3,458 274 34,956 39,461
Exchange differences (1) 7,649 7,918 1,404 - 16,971
Additions 490 643 168 16,307 17,608
Disposals - - - - -
At 31 December 2023 8,912 12,019 1,846 51,263 74,040
Accumulated Depreciation and Impairment Losses
At 1 January 2022 895 2,687 27 - 3,609
Charge for the period (122) (54) (23) - (199)
Exchange differences (1) - 44 10 - 54
Impairment of RHA - - - - -
At 31 December 2022 773 2,677 14 - 3,464
Exchange differences (1) 7,649 7,918 1,404 - 16,971
Charge for the year - 303 68 - 371
Impairment - - - - -
At 31 December 2023 8,422 10,898 1,486 - 20,806
Net Book Value
At 31 December 2022 - 781 260 34,956 35,997
At 31 December 2023 490 1,121 360 51,263 53,234
11. Loans receivable
2023 2022
$ 000 $ 000
Vortex Ltd - -
Li3 Lithium Corp 232 -
232 -
During the year the Group advanced $0.311 million (2022: $0.243 million) to
Vortex Ltd to enable Vortex Ltd to participate in rights issues conducted by
Circum Minerals Ltd. The most recent rights issue on 30 December 2022 for
$0.10 per Circum share. Due to the price of the rights issue, the Group fully
impaired the loan advanced.
During the year, the Group entered into a 50:50 joint venture exploration
agreement with Li3 Lithium Corp to develop the Licomex claims. The loan value
represents the amount due by Li3 Lithium Corp's in excess of their share of
the expenses incurred on this project.
12. Inventories
2023 2021
$ 000 $ 000
Diesel 21 -
Spares and plant consumables 652 -
Plant Chemicals 263 11
936 11
13. Trade and other receivables
2023 2022
$ 000 $ 000
Indirect tax receivable 1,094 3
Other receivables 8 52
Prepayments 3,899 125
5,001 180
Current 5,001 180
Non-current - -
5,001 180
2023 2022
$ 000 $ 000
The exposure to credit risk for trade receivables
by geographic region was as follows:
Zimbabwe 1,354 3
Other 3,647 52
5,001 55
The exposure to credit risk for trade receivables
by counterparty was as follows:
Zimbabwe Revenue Authority 1,094 3
Other 3,907 52
5,001 55
The exposure to credit risk for trade receivables
by credit rating was as follows:
External credit ratings - -
Other 5,001 55
5,001 55
The receivables are considered to be held within a held-to-collect business
model consistent with the Group's continuing recognition of the receivables.
As at 31 December 2023 the Group does not have any contract assets arising out
of contracts with customers relating to the Group's right to receive
consideration for work completed but not billed.
Credit and market risks, and impairment losses
The Group did not impair any of its trade receivables as at 31 December 2023,
as all trade receivables generated during the financial year were settled in
full prior to the year-end.
Information about the Group's exposure to credit and market risks and
impairment losses for trade receivables is included in Note 29.
The Directors consider that the carrying amount of trade and other receivables
approximates their fair value.
14. Cash and cash equivalents
2023 2022
$ 000 $ 000
Bank balances 542 9,627
Cash and cash equivalents per the statement of cash flows 542 9,627
15. Provisions - rehabilitation
2023 2022
$ 000 $ 000
As at 1 January 360 360
Foreign Exchange variation on translation - -
Unwinding of discount - -
As at 31 December 360 360
A provision is recognised for site rehabilitation and decommissioning of
current mining activities based on current environmental and regulatory
requirements. The gross provision was based upon an environmental impact
assessment ("EIA") conducted and calculated in 2014 and discounted to a net
present value using a discount rate of 10% over a life of mine of 8 years. The
corresponding rehabilitation assets was capitalised to property, plant and
equipment and is depreciated over the life of the mine. The initial provision
for rehabilitation was performed in the then functional currency of USD. With
the implementation of RTGS this provision was restated in terms of note 7 on
Hyperinflationary accounting. With RHA currently under care and maintenance
the directors reassessed the final provision based upon actual volumes
extracted versus projected volumes. This reassessment will be done annually
taking into consideration the remaining volume of ore to be extracted, the
current level of mining that has already been conducted and the estimated
costs involved in rehabilitating the land.
16. Trade and other payables
2023 2022
$ 000 $ 000
Trade payables 4,611 984
Accrued expenses 2,682 273
Advance receipt by Suzhou TA&A Ultra Clean 40,376 32,464
Short term loan from a director - G. Roach 2,269 -
Payroll liabilities 125 4
50,063 33,725
During the 2022 financial year the Group entered into an Offtake and Marketing
agreement with Canmax, whereby Canmax would prepurchase 143,000 tonnes of
spodumene concentrate that will be produced by the Group's Zulu mine. During
2023, this advance receipt accrued interest of $5.732 million.
Premier engaged China Zenith Capital Ltd to facilitate the placement of
3,000,000,000 shares with Canmax. Subsequently the Group entered into an
Offtake and Marketing agreement with Canmax, whereby Canmax would prepurchase
143,000 tonnes of spodumene concentrate that will be produced by the Group's
Zulu mine. In 2024 China Zenith Capital Ltd was awarded their success fee of
$1,350,000 plus interest and costs. Accordingly an amount of $2.078 million
has been accrued.
During the year, a director, Mr. G. Roach advanced the Group $2.269 million
including interest. This loan is to be settled in shares by 31 December 2024.
All trade and other payables at 31 December 2023 are due within one year,
non-interest bearing, and comprise amounts outstanding for mine purchases and
on-going costs, except as described further below. The Directors consider that
the carrying amount of trade and other payables approximates their fair value.
17. Borrowings
2023 2022
$ 000 $ 000
Loan Neil Herbert 180 180
180 180
2023 2022
$ 000 $ 000
Reconciliation of movement in borrowings
As at 1 January 180 180
Loans received (1) - -
Accrued interest - -
As at 31 December 180 180
Current 180 180
Non-current - -
180 180
Borrowings comprise loans from a related party and a non-related party. Loans
from a related party are further disclosed in Note 31, Related Party
Transactions.
(1) Neil Herbert made available a loan of US$180,000 to
the Company. Under the terms of the Director Loan, the loan is both unsecured
and will not attract any interest and is repayable in full by the Company on
the signing of a new off-take agreement at Otjozondu. The purpose of the
Director Loan is to provide funding to Premier to allow an amendment to the
Otjozondu Loan while Premier, acting collectively with Otjozondu, looks to
secure the best possible off-take funding package.
At 31 December 2023 the off-take funding had not been secured and Mr Herbert
agreed to the deferment of the repayment of the loan until such off-take
agreement has been secured.
18. Share capital
Authorised share capital
26.63 billion (2022: 22.42 billion) ordinary shares of no par value.
Issued share capital
Number of Shares Value
'000 $ 000
As at 1 January 2022 19,418,009 59,432
Shares issued for direct Investment (1) 3,000,000 15,782
As at 31 December 2022 22,418,009 75,214
Shares issued for direct Investment (2) 190,216 2,194
Shares issued on conversion of fees (3) 161,877 688
Shares issued on conversion of fees (4) 11,892 136
Shares issued on conversion of fees (5) 54,054 753
Shares issued for direct Investment (6) 1,106,286 4,847
Shares issued on conversion of loan (7) 36,571 153
Shares issued under subscription agreement (8) 1,428,571 6,251
Shares issued on conversion for fees (9) 90,000 397
Shares issued on conversion for fees (10) 15,000 57
Shares issued on conversion for fees (11) 11,000 40
Shares issued on conversion for fees (12) 45,000 165
Shares issued on conversion for fees (13) 22,500 82
Shares issued under subscription agreement (14) 518,696 1,498
Shares issued under subscription agreement (15) 518,696 1,507
Shares issued under subscription agreement (16) 6,087 18
As at 31 December 2023 26,634,455 94,000
Less cumulative share costs (5,507)
Net share capital as at 31 December 2023 88,493
(1) On 30 March 2022 the Company issued 3 000 000 000 shares
under a subscription agreement at a price of 0.4p for a total value of $15.782
million.
(2) On 22 May 2023 the Company issued 190 216 216 shares under a
subscription agreement at a price of 0.092p for a total value of $ 2.194
million.
(3) On 26 May 2023 the Company issued 161 877 130 shares for a
total value of $ 0.688 million for conversion of fees to a
contractor.
(4) On 26 May 2023 the Company issued 11 891 892 shares for a total
value of $ 0.136 million for conversion of
fees.
(5) On 26 May 2023 the Company issued 54 054 054 shares for a total
value of $ 0.753 million for conversion of
fees.
(6) On 1 September 2023 the Company issued 1 106 285 713 shares
under a subscription agreement at a price of 0.035p for a total value of $
4.847 million.
(7) On 4 September 2023 the Company issued 36 571 430 shares for
a total value of $ 0.153 million for conversion of
loan.
(8) On 14 September 2023 the Company issued 1 428 571 428 shares
under a subscription agreement at a price of 0.035p for a total value of $
6.251 million.
(9) On 15 November 2023 the Company issued 90 000 000 shares for
a total value of $ 0.397 million for conversion of
fees.
(10) On 4 December 2023 the Company issued 15 000 000 shares for a
total value of $ 0.040 million for conversion of
fees.
(11) On 4 December 2023 the Company issued 11 000 000 shares for a
total value of $ 0.057 million for conversion of
fees.
(12) On 12 December 2023 the Company issued 45 000 000 shares for a
total value of $ 0.165 million for conversion of
fees.
(13) On 13 December 2023 the Company issued 22 500 000 shares for a
total value of $ 0.081 million for conversion of
fees.
(14) On 13 December 2023 the Company issued 518 695 652 shares under
a subscription agreement at a price of 0.023p for a total value of $ 1.498
million.
(15) On 14 December 2023 the Company issued 518 695 652 shares under
a subscription agreement at a price of 0.023p for a total value of $1.507
million.
(16) On 31 December 2023 the Company issued 6 086 957 shares under a
subscription agreement at a price of 0.023p for a total value of $0.018
million.
Reconciliation to balance as stated in the consolidated statement of financial
position
2023 2022
$ 000 $ 000
As at 1 January 70,951 56,113
Shares issued under subscription agreements - cash flow 9,274 -
Shares issued to settle trade payables 2,318 -
Shares issued on conversion of loans and loan notes (note 12 above) 153 -
- non-cash
Shares issued on exercise of warrants - cash flow -
Shares issued to purchase Investment in MNH - -
Share issue costs - cash flow (1,244) (944)
Shares issued for direct Investment 7,041 15,782
As at 31 December 88,493 70,951
19. Share based payment and warrant reserve
2023 2022
$ 000 $ 000
Share options and warrants reserve beginning of year 3,708 2,366
Warrants granted - -
Share options granted 1,509 1,342
Share options exercised (1,685) -
Warrants cancelled - -
Share options and warrants reserve end of year 3,532 3,708
Share options and warrant arrangements are set out below.
Equity-settled Share base payment arrangement
The Company adopted an incentive share option plan (the 'Plan') during 2012.
The essential elements of the Plan provide that the aggregate number of common
shares of the Company's capital stock issuable pursuant to options granted
under the Plan may not exceed 15% of the issued and outstanding Ordinary
Shares at the time of any grant of options. Options granted under the Plan
will have a maximum term of 10 years. All options granted to Directors and
management are subject to vesting provisions of one to two years.
All options are to be settled by the physical delivery of shares.
The fair value of all the share options has been measured using the
Black-Scholes Model.
Issued to Date Granted Vesting Term Number of Options Granted Exercise Price Expiry Date Estimated Fair Value
'000
Employees and consultants 10/02/2011 1 year 2,250 1.135p 09/02/2014 0.87p
Directors 04/12/2012 See 1 below 20,386 Nil 03/12/2022 1.11p
Directors 04/12/2012 See 2 below 20,386 2p 03/12/2022 1.85p
Employees and associates
04/12/2012 See 3 below 5,536 Nil 03/12/2022 1.85p
Directors 29/07/2014 See 4 below 6,000 1.15p 28/07/2024 1.15p
Directors 29/07/2014 See 5 below 6,000 1.50p 28/07/2024 1.15p
Management 29/07/2014 See 4 below 6,500 1.15p 28/07/2024 1.15p
Management 29/07/2014 See 5 below 6,500 1.50p 28/07/2024 1.15p
Directors 13/03/2015 See 4 below 2,000 0.9p 12/03/2025 0.67p
Directors 13/03/2015 See 5 below 2,000 1.17p 12/03/2025 0.64p
Management 13/03/2015 See 4 below 3,250 0.9p 12/03/2025 0.67p
Management 13/03/2015 See 5 below 3,250 1.17p 12/03/2025 0.64p
Directors 19/01/2017 See 5 below 30,500 0.28p 18/01/2027 0.278p
Consultants 19/01/2017 See 5 below 50,439 0.28p 18/01/2027 0.278p
Directors 19/01/2017 See 5 below 30,500 0.40p 18/01/2027 0.28p
Consultants 19/01/2017 See 5 below 50,439 0.40p 18/01/2027 0. 28p
Directors 30/05/2022 See 6 below 122,500 Nil 31/05/2032 0.32p
Consultants 30/05/2022 See 6 below 202,500 Nil 31/05/2032 0.32p
Directors 30/05/2022 See 6 below 65,000 0.4p 31/05/2032 0.18p
Consultants 30/05/2022 See 6 below 202,500 0.4p 31/05/2032 0.18p
Directors 30/05/2022 See 6 below 65,000 0.5p 31/05/2032 0.19p
Consultants 30/05/2022 See 6 below 202,500 0.5p 31/05/2032 0.19p
Directors 30/05/2022 See 6 below 65,000 0.5p 31/05/2032 0.19p
Consultants 30/05/2022 See 6 below 202,500 0.5p 31/05/2032 0.19p
Total number of options 1,373,436
Issued to:
- Directors 429,272
- Employees and consultants 924,664
- Management 19,500
1,373,436
Less:
- Options exercised in prior years 27,257
- Options exercised in the current year 161,877
- Options cancelled in prior years 32,802
- Options cancelled in the current year -
Total options in issue at 31 December 2023 1,151,500
Expected volatility has been based on an evaluation of the historical
volatility of the Company's share price, particularly over the historical
period commensurate with the expected term. The expected term of the
instruments has been based on historical experience and general option holder
behaviour.
The Company has granted the following share options during the years up to 31
December 2023:
1. These share options vest on the two-year anniversary of the
grant date. The options are exercisable at any time after vesting during the
grantee's period as an eligible option holder, and must be exercised no later
than 10 years after the date of grant, after which the options will lapse.
2. These share options vest in equal instalments annually on
the anniversary of the grant date over a two year period. The options are
exercisable at any time after vesting during the grantee's period as an
eligible option holder, and must be exercised no later than 10 years after the
date of grant, after which the options will lapse.
3. These share options vested on the grant date. The options
are exercisable at any time after vesting during the grantee's period as an
eligible option holder, and must be exercised no later than 10 years after the
date of grant, after which the options will lapse.
4. These share options vest on the one-year anniversary of the
grant date. The options are exercisable at any time after vesting during the
grantee's period as an eligible option holder, and must be exercised no later
than 10 years after the date of grant, after which the options will lapse.
5. These share options vest on the two-year anniversary of the
grant date. The options are exercisable at any time after vesting during the
grantee's period as an eligible option holder, and must be exercised no later
than 10 years after the date of grant, after which the options will lapse.
6. These share options vest on the 18 month anniversary of the
grant date. The options are exercisable at any time after vesting during the
grantee's period as an eligible option holder, and must be exercised no later
than 10 years after the date of grant, after which the options will lapse.
7. These share options vest on the 30 month anniversary of the
grant date. The options are exercisable at any time after vesting during the
grantee's period as an eligible option holder, and must be exercised no later
than 10 years after the date of grant, after which the options will lapse.
No share options were granted during the year ended 31 December 2023.
The expense for the year for the fair value of the options previously granted
was $1.509 million (2022: $1.342 million). The assessed fair value of options
granted to directors and management was determined using the Black-Scholes
Model that takes into account the exercise price, the term of the option, the
share price at grant date, the expected price volatility of the underlying
share, the expected dividend yield and the risk-free rate interest rate for
the term of the option.
In issue prior to 1 January 2022 Exercised during the year Cancelled / Lapsed during the year Granted during the year In issue as at 31 December 2023
Directors:
- G. Roach 279,000 (19,000) - - 260,000
- W. Hampel 25,500 (5,500) - - 20,000
- G. Manhambara 40,000 - - - 40,000
- Resigned directors 53,000 (42,000) - - 11,000
Other option holders 915,877 (95,377) - - 820,500
1,313,377 (161,877) - - 1,151,500
The Group has the following share options outstanding:
Number of Number of
Grant Date Expiry Date Exercise Price options options vested
outstanding and exercisable
'000 '000
29/07/2014 28/07/2024 1.15p 3,000 6,500
29/07/2014 28/07/2024 1.50p 10,500 6,500
13/03/2015 12/03/2025 0.9p 5,250 5,250
13/03/2015 12/03/2025 1.17p 5,250 5,250
30/05/2022 31/05/2032 Nil 325,000 325,000
30/05/2022 31/05/2032 0.4p 267,500 267,500
30/05/2022 31/05/2032 0.5p 267,500 211,801
30/05/2022 31/05/2032 0.5p 267,500 169,295
1,151,500 997,096
The following table lists the inputs into the valuation model.
Risk- free Share price
Dividend Expected interest rate at grant Exercise
Yield (%) Volatility (%) (%) date price
Issue - 29 July 2014 - 148 1.71 1.15p 1.15p
Issue - 29 July 2014 - 148 1.71 1.15p 1.50p
Issue - 13 March 2015 - 100 1.71 0.9p 0.9p
Issue - 13 March 2015 - 100 1.71 0.9p 1.17p
Issue - 30 May 2022 - 70 3.02 0.32p Nil
Issue - 30 May 2022 - 70 3.02 0.32p 0.4p
Issue - 30 May 2022 - 70 3.02 0.32p 0.5p
Issue - 30 May 2022 - 70 3.02 0.32p 0.5p
The shares that the options are based on are quoted in GBP and so the option
agreement is stated in GBP. As such they are presented in GBP despite the
presentational currency of the Group being USD.
The number and weighted-average exercise prices of share options under the
share option programmes and replacement awards were as follows:
2023 2022
Weighted Average Exercise Price Weighted Average Exercise Price
Shares Shares
'000 '000
Options outstanding, beginning of year 1,313,377 0.35p 200,349 0.55p
Exercised (161,877) 0.46p - 0p
Expired - 0p (14,472) 0p
Granted - 0p 1,127,500 0.33p
Options outstanding, end of year 1,151,500 0.33p 1,313,377 0.35p
The weighted-average life of the options in issue as at 31 December 2023 is 8
years and 96 days (2022 - 8 years and 2 days.)
Warrants
The Company did not grant warrant options during the year (2022: nil)
A summary of the status of the Company's share warrants as of 31 December 2023
and changes during the year are as follows:
2023 2022
'000 '000
Warrants outstanding, beginning of year - -
Granted - -
Expired - -
Exercised - -
Cancelled * - -
Warrants outstanding, end of year - -
There are no warrants outstanding in favour of the Directors.
Premier's share price opened at 0.510p in January 2022, traded at an average
of 0.566p, with a high of 1.040p and low of 0.200p during the year and closed
at 0.220p on 31 December 2023.
20. Non-controlling interest
2023 2022
RHA Tungsten Limited (51% Non-controlling interest) $ 000 $ 000
At 1 January (12,717) (12,205)
Foreign exchange and hyper-inflationary adjustments - -
Non-controlling interest in share of profit / (losses) for the year - RHA - (68)
Non-controlling interest in share of other comprehensive income for the period (438) (444)
At 31 December (13,155) (12,717)
The following table summarises the information relating to each of the Group's
subsidiaries that has material Non-controlling interest, before any
intra-group eliminations.
2023 2022
RHA RHA
Non-controlling Interest percentage 51% 51%
Non-current assets - -
Current assets 32 15
Non-current liabilities (18,582) (18,516)
Current liabilities (7,244) (6,434)
Net assets (25,794) (24,935)
Net assets attributed to Non-controlling Interest (13,155) (12,717)
Revenue - -
Profit / (Loss) (859) (870)
Other Comprehensive Income /(Loss) - (134)
Total comprehensive income (859) (1,004)
Loss allocated to NCI (438) (512)
The share of losses in the year represents the losses attributable to
non-controlling interests in RHA for the year.
21. Revenue
2023 2022
$ 000 $ 000
Major product/service lines
Sale of Wolframite - -
Sale of scrap - -
Reserve Bank of Zimbabwe Export Incentive - -
Total revenue - -
Prescription of debts 137 34
Total other income 137 34
Gross revenue 137 34
Primary Geographical Markets
Africa 137 34
137 34
Timing of revenue recognition
Products transferred at a point in time - -
- -
22. Cost of sales excluding depreciation and amortisation
2023 2022
$ 000 $ 000
Mining contractor 2,312 -
Staff costs 506 -
Consumables 266 -
Equipment hire and maintenance - -
Mining services - -
Plant services 58 -
Selling costs 663 -
Inventory write-down / (write-up) - -
3,805 -
23. Administrative expenses
2023 2022
$ 000 $ 000
Audit fees - Holding company 44 42
- Under provision prior year - 7
- Over provision prior year (16) -
Staff costs 1,946 53
Consulting and advisory fees 3,931 1,369
Directors' fees 126 116
Accounting and legal fees 792 230
Marketing and public relations 131 22
Travel 715 380
Security costs 117 33
Vehicle operating costs 112 47
Insurance 59 53
Office and administration 862 306
Short term non-capitalised lease payments 124 126
Foreign exchange losses 193 480
Share based payment (note 19) 1,509 1,342
Exploration costs - 16
10,645 4,622
Number of staff 2023 2022
Directors of the Holding Company 4 4
Administrative staff 0 0
Total Holding Company staff 4 4
Directors of subsidiaries 3 3
Subsidiary administrative and operating staff 220 12
Total staff 227 19
24. Finance charges
2023 2022
$ 000 $ 000
Interest charged by suppliers - -
Interest on borrowings 5,818 -
Derivative financial liability transaction costs - -
Unwinding of discount on provisions - -
Loss on extinguishment of debt - -
Interest on finance lease - -
5,818 -
25. Taxation
Deferred tax 2023 2022
$ 000 $ 000
As at 1 January - -
As at 31 December - -
Income Tax
Taxation charge for the year - -
There is no taxation charge for the year ended 31 December 2023 (2022: Nil)
because the Group is registered in the British Virgin Islands where no
corporate taxes or capital gains tax are charged. However, the Group may be
liable for taxes in the jurisdictions of the underlying operations.
The Group has incurred tax losses in West Africa and Zimbabwe; however, a
deferred tax asset has not been recognised in the accounts due to the
unpredictability of future profit streams. The accumulated tax losses not
recognised at RHA amount to RTGS 15,862.422 million (2022: 15,862.422
million).
Reconciliation of effective tax rate 2023 2023 2022 2022
$ 000 $ 000
Loss before tax from continuing operations (20,813) - (5,803)
Tax using the Zimbabwean company tax rate 25% 5,203 25% 1,451
Tax effect of:
Effects of tax rates in foreign jurisdictions (25%) (5,203) (25%) (1,451)
Contingent liability
The Group operates across different geographical regions and is required to
comply with tax legislation in various jurisdictions. The determination of the
Group's tax is based on interpretations applied in terms of the respective tax
legislations and may be subject to periodic challenges by tax authorities
which may give rise to tax exposures.
26. Loss per share
The calculation of loss per share is based on the loss after taxation
attributable to shareholders, divided by the weighted average number of shares
in issue during the year:
2023 2022
$ 000 $ 000
Net loss attributable to owners of the Company ($ 000) (20,375) (5,359)
Weighted average number of Ordinary Shares in calculating basic earnings per 23,538,638 21,686,502
share ('000)
Basic loss per share (US cents) (0.09) (0.03)
Diluted loss per share (US cents) (0.09) (0.03)
Weighted average number of ordinary shares
Issued ordinary shares at 1 January ('000) 22,418,009 19,418,009
Weighted average of shares issued during the year ('000) 1,120,629 2,268,493
Weighted average number of ordinary shares at 31 December ('000) 23,538,638 21,686,502
The 2022 Net loss attributable to owners of the Company has been restated
slightly to agree to the statement of profit or loss and other comprehensive
income, but doesn't change the loss per share figures, due to rounding.
As the Group incurred a loss for the year, there is no dilutive effect from
share options and warrants in issue or the shares issued after the reporting
date.
2023 2022
Potential dilutive effect on earnings per share
Options issued 1,151,500 1,327,849
Warrants issued - -
Convertible loan notes - -
Total potentially dilutive shares 1,151,500 1,327,849
Refer to note 32 Post balance sheet events for additional potentially dilutive
transactions.
27. Directors' remuneration
Directors' fees Consultancy Fees Share Options Total
2023 $ 000 $ 000 $ 000 $ 000
Executive Directors
George Roach - 275 - 275
Non-Executive Directors
Godfrey Manhambara 42 - - 42
Wolfgang Hampel 42 42
Dr Wei Lou 42 - - 42
126 275 - 401
Directors' fees Consultancy Fees Share Options Total
2022 $ 000 $ 000 $ 000 $ 000
Executive Directors
George Roach - 275 - 275
Non-Executive Directors
Godfrey Manhambara 42 - - 42
Wolfgang Hampel 42 42
Neil Herbert - 11 - 11
Dr Wei Lou 31 - - 31
115 286 - 401
The Directors' fees disclosed in note 23 include nil (2022: nil) being the
fees paid to Directors of RHA, who are not directors of the parent company.
28. Notes to the statement of cash flows
Cash and cash equivalents comprise cash at bank, bank overdrafts and
short-term bank deposits with an original maturity of three months or less.
The carrying value of these assets is approximately equal to their fair value.
2023 2022
$ 000 $ 000
Profit / (Loss) before tax (20,813) (5,803)
Adjustments for:
Finance charges unpaid 5,818 -
Foreign exchange variations - 1,342
Settlement agreement on Finance lease - -
Impairment of Investments and loans receivable 311 1,161
Share based payments charge 1,509 -
Depreciation and amortisation 371 54
Operating cash flows before movements in working capital (12,804) (3,246)
(Increase)/decrease in inventories (925) (11)
(Increase)/decrease in receivables (4,821) 206
Increase/(decrease) in payables 10,520 33,167
Net cash (outflow) from operating activities (8,030) 30,116
2023 2022
Reconciliation of Non-Cash Transactions $ 000 $ 000
Share Capital
Shares issued 18,786 15,782
Less: Share issue costs (1,244) (944)
Less: Settlement of payables - -
17,542 14,838
Finance Charges
Finance charge expense (5,818) -
Less: Unwinding of discount on the Provision for rehabilitation - -
Less: Interest accrued on loans and other payables - -
(5,818) -
Cash and
cash Total
equivalents Borrowings debt Net debt
£ £ £ £
Net debt as at 31 December 2021 940 (180) (180) 760
Cash flows 7,345 - - 7,345
Foreign exchange adjustments 1,342 - - 1,342
Net debt as at 31 December 2022 9,627 (180) (180) 9,447
Cash flows (9,085) - - (9,085)
Foreign exchange adjustments - - - -
Net debt as at 31 December 2023 542 (180) (180) 362
29. Financial Instruments - Fair values and risk management
The following table shows the carrying amounts and fair values of financial
assets and financial liabilities, including their levels in the fair value
hierarchy. It does not include fair value information for financial assets and
financial liabilities not measured at fair value if the carrying amount is a
reasonable approximation of fair value.
Trade and other receivables and trade and other payables classified as
held-for-sale are not included in the table below. As at 31 December 2023 the
Group did not have any trade and other receivables nor any trade and other
payables that were classified as held-for-sale.
The Group has not disclosed the fair values of financial instruments such as
short-term trade receivables and payables, because their carrying amounts are
a reasonable approximation of their fair value.
Carrying value Fair value
31 December 2023 FVOCI - equity instruments Financial assets at amortised cost Other financial liabilities Total Level 1 Level 2 Level 3 Total
Note $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000
Financial assets measured at fair value
FVOCI 501 - - 501 - - 501 501
501 - - 501
Financial assets not measured at fair value
Trade and other receivables - 232 - 232
Cash and cash equivalents - - - -
- 232 - 232
Financial liabilities measured at fair value
- - - -
- - - -
Financial liabilities not measured at fair value
Bank overdrafts - - - -
Unsecured loans from shareholders - - - -
Secured loan - - - -
Trade and other payables - - (50,063) (50,063)
- - (50,063) (50,063)
Carrying value Fair value
31 December 2022 FVOCI - equity instruments Financial assets at amortised cost Other financial liabilities Total Level 1 Level 2 Level 3 Total
Note $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000
Financial assets measured at fair value
FVOCI 501 - - 501 - - 501 501
501 - - 501
Financial assets not measured at fair value
Trade and other receivables - - - -
Cash and cash equivalents - - - -
- - - -
Financial liabilities measured at fair value
- - - -
- - - -
Financial liabilities not measured at fair value
Bank overdrafts - - - -
Unsecured loans from shareholders - - - -
Secured loan - - - -
Trade and other payables - - (33,725) (33,725)
- - (33,725) (33,725)
Financial instruments - Fair values and risk management
B. Measurement of fair values
i. Valuation techniques and significant unobservable
inputs
The following tables show the valuation techniques used in measuring Level 3
fair values for financial instruments measured at fair value in the statement
of financial position, as well as the significant unobservable inputs used.
Related valuation processes are described in Note 4.8.
Financial instruments measured at fair value
Type Valuation technique Significant unobservable inputs Inter-relationship between significant unobservable inputs and fair value
measurement
Unlisted Equity investments Current market value technique: None None
The valuation model is based upon the latest price at which the unlisted
entity raised capital.
ii. Transfers between Levels 1 and 2
There were no transfers between Levels 1 and 2 in either the current financial
year or in the prior financial year.
C. Financial Risk Management
The Group has exposure to the following risks arising from financial
instruments:
- credit risk;
- liquidity risk; and
- market risk.
Risk management framework
The Company's board of directors has overall responsibility for the
establishment and oversight of the Group's risk management framework.
The Group's risk management policies are established to identify and analyse
the risks faced by the Group, to set appropriate risk limits and controls and
to monitor risks and adherence to limits. Risk management policies and
systems are reviewed regularly to reflect changes in market conditions and the
Group's activities.
The Group's audit committee oversees how management monitors compliance with
the Group's risk management policies and procedures, and reviews the adequacy
of the risk management framework in relation to the risks faced by the Group.
The Group's audit committee undertake ad hoc reviews of risk management
controls and procedures, the results of which are reported to the audit
committee.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group's receivables from customers
and investments in debt securities.
The carrying amounts of financial assets represent the maximum credit
exposure.
In the current year there was no impairment loss, nor 2022, for unrecoverable
sundry debtors.
Trade receivables
The Group's exposure to credit risk is influenced mainly by the individual
characteristics of each customer. However, management also considers the
factors that may influence the credit risk of its customer base, including the
default risk associated with the industry and country in which its customers
operate. Details of concentration of revenue are included in Note 21.
The Group has established a credit policy under which each new customer is
analysed individually for creditworthiness before the Group's standard payment
terms and conditions are offered. The Group's review includes external
ratings, if they are available, financial statements, credit agency
information, industry information and in some cases bank references. Sales
limits are established for each customer and are reviewed regularly.
The Group limits its exposure to credit risk from trade receivables by
establishing a maximum payment period of one month.
The Group is monitoring the economic environment in Zimbabwe, where its
exploration and mining operations are based.
The Group does not require collateral in respect of trade and other
receivables. The Group does not have trade receivables for which a no
allowance is recognised because of collateral.
2023 2022
$ 000 $ 000
The exposure to credit risk for trade receivables
by geographic region was as follows:
Zimbabwe 1,354 3
Other 3,647 52
5,001 55
The exposure to credit risk for trade receivables
by counterparty was as follows:
Zimbabwe Revenue Authority 1,094 3
Other 3,907 52
5,001 55
The exposure to credit risk for trade receivables
by credit rating was as follows:
External credit ratings - -
Other 5,001 55
5,001 55
Expected credit loss assessment for corporate customers as at 31 December 2023
and 31 December 2022
The Group allocates each exposure to a credit risk grade based on data that is
determined to be predictive of the risk of loss (including but not limited to
external ratings, audited financial statements, management accounts and cash
flow projections and available press information about customers) and applying
experienced credit judgement. Credit risk grades are defined using qualitative
and quantitative factors that are indicative of the risk of default.
The Company had no exposure to credit risk for the year ended 31 December 2023
(2022 - nil)
Movements in the allowance for impairment in respect of trade receivables
The movement in the allowance for impairment in respect of trade receivables
during the year amounted to nil (2022 - nil).
Cash and cash equivalents
As at 31 December 2023, the Group held $0.542 million cash and cash
equivalents (2022: $9.627 million). The cash and cash equivalents are held
with bank and financial institution counterparties which are rated BB to BAA
(according to Standard and Poor's).
Impairment on cash and cash equivalents has been measured on a 12-month
expected loss basis and reflects the short maturities of the exposures. The
Group considers that its cash and cash equivalents have low credit risk based
on the external credit ratings of the counterparties. On the implementation of
IFRS 9 the Group did not impair any of its cash and cash equivalents.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting
the obligations associated with its financial liabilities that are settled by
delivering cash or another financial asset. The Group's approach to managing
liquidity is to ensure, as far as possible, that it will have sufficient
liquidity to meet its liabilities when they are due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage
to the Group's reputation.
Exposure to liquidity risk
The following table presents the remaining contractual maturities of financial
liabilities at the reporting date. The amounts are gross and undiscounted and
include contractual interest payments and exclude the impact of netting
agreements.
Contractual cash flows
31 December 2023 Carrying value Total 2 Months or less 2 to 12 Months 1 to 2 Years 2 to 5 Years More than 5 years
$ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000
Non- derivative financial
liabilities
Bank overdrafts - - - - - - -
Unsecured shareholder's
loan - - - - - - -
Unsecured loans - - - - - - -
Secured loans - - - - - - -
Trade payables (50,063) (50,063) (50,063) - - - -
(50,063) (50,063) (50,063) - - - -
Derivative financial - - - - - - -
liabilities - - - - - - -
- - - - - - -
Contractual cash flows
31 December 2022 Carrying value Total 2 Months or less 2 to 12 Months 1 to 2 Years 2 to 5 Years More than 5 years
$ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000
Non- derivative financial
liabilities
Bank overdrafts - - - - - - -
Unsecured shareholder's
loan - - - - - - -
Unsecured loans - - - - - - -
Secured loans - - - - - - -
Trade payables (33,725) (33,725) (33,725) - - - -
(33,725) (33,725) (33,725) - - - -
Derivative financial - - - - - - -
liabilities - - - - - - -
- - - - - - -
The interest payments on the financial liabilities represent the fixed
interest rates as per the respective contracts.
The Group aims to maintain the level of its cash and cash equivalents and
other highly marketable debt investments at an amount in excess of expected
cash outflows on financial liabilities other than trade payables. The Group
also monitors the level of expected cash inflows on trade and other
receivables together with expected cash outflows on trade and other payables.
Market risk
Market risk is the risk that changes in market prices - such as foreign
exchange rates, interest rates and equity prices - will affect the Group's
income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return.
Currency risk
The Group is exposed to transactional foreign currency risk to the extent that
there is a mismatch between the currencies in which sales, purchases,
receivables and borrowings are denominated and the respective functional
currencies of Group companies. The functional currencies of Group companies
are primarily Pound Sterling and the US Dollar. The Zimbabwean trading
companies functional currency is USD (2022: RTGS). The functional currency of
the Zimbabwean entities was changed to USD as the majority of transactions are
done in USD. The currencies in which these transactions are primarily
denominated are Euro, US Dollar, South African Rand, RTGS and Pound Sterling.
The Company conducts its business in Zimbabwe with a significant portion of
expenditures in that country currently and historically denominated in USD and
now also in RTGS. The introduction of the RTGS$ during the 2019 financial year
has resulted in the devaluation of the RTGS$ against the US Dollar. This
devaluation has also resulted in the Zimbabwean economy going into
hyperinflationary status. As a means of neutralising the effects of reporting
in RTGS, with effect of 1 January 2023 all Zimbabwean companies in the group
present and report in USD. The decision for this change was primarily due to
the majority transactions in Zimbabwe are still denominated in USD.
All transactions are subject to spot rates and with no hedging transactions
taking place.
31 December 2023 31 December 2022
EUR GBP USD ZAR RTGS EUR GBP USD ZAR RTGS
'000 '000 '000 '000 '000 000 '000 '000 '000 '000 '000 000
Trade receivables 186 - - - - - - - - -
Unsecured loans - - - - - - - - - -
Trade payables - (461) (5,627) (9,448) - (13) (28) (15) (523) (231)
Net statement of financial position exposure 186 (461) (5,627) (9,448) - (13) (28) (15) (523) (231)
Next 6 months forecast - - - - - - - - - -
sales
Next 6 months forecast purchases (26) (437) (12,485) (15,627) - (129) (596) (7,029) (23,997) (4,883)
Net forecast transaction exposure (26) (437) (12,485) (15,627) - (129) (596) (7,029) (23,997) (4,883)
Net exposure 160 (898) (18,112) (25,075) - (142) (624) (7,044) (24,520) (5,114)
The summary quantitative data about the Group's exposure to currency risk as
reported to the management of the Group is as follows:
The following significant exchange rates in relation to the reporting currency
are applicable:
Average rate for the year Year end spot rate
2023 2022 2023 2022
Euro 1.0816 1.0540 1.1055 1.0702
GBP 1.2466 1.2355 1.2622 1.2097
ZAR 0.05412 0.0589 0.05461 0.0591
RTGS 3692.126 399.859 6112.78 684.334
The carrying amounts of the Group's foreign currency denominated monetary
assets and monetary liabilities at the reporting date are as follows:
Liabilities Assets
2023 2022 2023 2022
'000 '000 '000 '000
Sterling (£) 461 28 - -
Euro (€) - 13 186 -
South African Rand (ZAR) 9,448 523 - -
Real Time Gross Settlement of USD (RTGS) - 231 - -
The presentation currency of the Group is US dollars.
The Group is exposed primarily to movements in USD for trade, RTGS for the
Zimbabwean companies and GBP for all fund raising activities.
Sensitivity analysis
Financial instruments affected by foreign currency risk include financial
investments (see note 9) cash and cash equivalents, other receivables, trade
and other payables and convertible loan notes. The following analysis is
intended to illustrate the sensitivity of the Group's financial instruments
(at year end) to changes in market variables, being exchange rates.
The following assumptions were made in calculating the sensitivity analysis:
All income statement sensitivities also impact equity.
Translation of foreign subsidiaries and operations into the Group's
presentation currency have been excluded from this sensitivity as they have no
monetary effect on the results.
Income Statement / Equity
2023 2022
$ 000 $ 000
Exchange rates:
+10% $ Sterling (GBP) (42) (3)
-10% $ Sterling (GBP) 42 3
+10% $ RTGS (0) (23)
-10% $ RTGS 0 23
The above sensitivities are calculated with reference to a single moment in
time and will change due to a number of factors including:
• Fluctuating other receivable and trade payable
balances
• Fluctuating cash balances
• Changes in currency mix
Interest rate risk
The Group has entered into fixed rate agreements for its finance leases and
shareholders loans. The Group does not hedge its interest rate exposure by
entering into variable interest rate swaps.
Exposure to interest rate risk
The interest rate profile of the Group's interest-bearing financial
instruments as reported to the management of the Group is as per the table
below.
2023 2022
$ 000 $ 000
Fixed rate instruments
Financial assets - -
Financial liabilities - -
- -
Fair value sensitivity analysis for fixed-rate instruments
The Group does not account for any fixed-rate financial assets of financial
liabilities at FVTPL. Therefore, a change in interest rates at the reporting
date would not affect profit or loss.
Other market price risk
The Group is exposed to equity price risk, which arises from equity securities
at FVOCI are held as a long-term investment.
The Group's investments in equity securities comprise small shareholdings in
unlisted companies. The shares are not readily tradable and any monetisation
of the shares is dependent on finding a willing buyer.
Valuation techniques and assumptions applied for the purposes of measuring
fair value
Due to the short term nature, the fair value of cash and receivables and
liabilities approximates the carrying values disclosed in the financial
statements.
Due to the short term nature, the fair value of cash and receivables and
liabilities approximates the carrying values disclosed in the financial
statements.
The fair value of financial assets is estimated by using other readily
available information. As the Vortex (formerly Circum) and MNH shares are in
privately held exploration companies, the fair values were estimated using
observable placing prices where available.
Vortex and MNH are unlisted and there are no quoted market prices. The fair
value of the Vortex shares was derived using the previous issue price and
validating it against the most recent placing price on 30 December 2022. The
fair value of MNH shares was derived from the latest financial information and
was fully impaired.
Capital management
The Group manages its capital resources to ensure that entities in the Group
will be able to continue as a going concern, while maximising shareholder
return.
The capital structure of the Group consists of equity attributable to
shareholders, comprising issued share capital and reserves. The availability
of new capital will depend on many factors including a positive mineral
exploration environment, positive stock market conditions, the Group's track
record, and the experience of management. There are no externally imposed
capital requirements. The Directors are confident that adequate cash
resources exist or will be made available to finance operations but controls
over expenditure are carefully managed.
30. Subsidiaries
Premier had investments in the following subsidiary undertakings as at 31
December 2023, which principally affected the losses and net assets of the
Group:
30.1 Subsidiaries held during the year
Country of incorporation and operation Proportion of voting interest %
Name
Activity
2023 2022
Zulu Lithium Mauritius Holdings Limited Mauritius 100 100 Holding Company
RHA Tungsten Mauritius Limited Mauritius 100 100 Holding Company
Kavira Minerals Holdings Limited Mauritius 100 100 Holding Company
Tinde Fluorspar Holdings Limited Mauritius 100 100 Holding Company
Lubimbi Minerals Holdings Limited Mauritius 100 100 Holding Company
Gwaaii River Minerals Limited Mauritius 100 100 Holding Company
Zulu Lithium (Private) Limited Zimbabwe 100 100 Exploration
RHA Tungsten (Private) Limited Zimbabwe 49* 49* Care and maintenance
Katete Mining (Private) Limited Zimbabwe 100 100 Exploration
Tinde Fluorspar (Private) Limited Zimbabwe 100 100 Exploration
LM Minerals (Private) Limited Zimbabwe 100 100 Exploration
BM Mining & Exploration (Private) Limited Zimbabwe 100 100 Exploration
Licomex (Pty) Ltd Zimbabwe 100 100 Exploration
Li3 Mozambique (Pty) Ltd Australia 100 100 Holding Companies
Li3B Mozambique (Pty) Ltd Australia 100 100 Holding Companies
Li3C Mozambique (Pty) Ltd Australia 100 100 Holding Companies
Lithium B S.A. Mozambique 100 100 Exploration
Premier African Minerals (South Africa) (Pty) Ltd South Africa 100 100% Procurement assistance
* Accounted as a controlled subsidiary, refer note 4 - Significant accounting
policies, estimates and assumptions and note 4.7 - Basis of consolidation.
30.2 Acquisition of subsidiaries
During the year ended 31 December 2023 the Group did not acquire any
companies.
31. Related party transactions
Ultimate controlling party
There is no single ultimate controlling party.
Transactions with key management personnel
Borrowings
During the 2021 financial year, Neil Herbert advanced $0.180 million to
Premier African Minerals to facilitate an additional loan to MN Holdings. At
31 December 2023 the loan was still owing.
Remuneration of key management personnel
The remuneration of the Directors and other key management personnel of the
Group are set out below for each of the categories specified in IAS 24 Related
Party Disclosures.
2023 2022
$ 000 $ 000
Staff costs - 53
Consulting and advisory fees 1,210 286
Directors' fees 126 116
1,336 455
32. Events after the reporting date
32.1 Corporate matters
In accordance with the terms of Restated and Amended Offtake and Prepayment
Agreement ("Agreement") entered between Premier and Canmax the interest rate
for the outstanding balance of the prepayment amount was increased to 12% per
annum with effect from the 1 December 2023.
In February 2024, Premier concluded a direct equity raise of £2.475 million
before expenses at an issue price of 0.275 pence per new ordinary share for
the Zulu Lithium and Tantalum Project.
On 11 April 2024, Premier concluded a direct equity raise of £2.060 million
before expenses at an issue price of 0.17 pence per new ordinary share for the
Zulu Lithium and Tantalum Project. Following strong institutional interest
following this raise, Premier concluded an addition raise two days later by
way of a direct equity raise of £1 million before expenses at an issue price
of 0.17 pence per new ordinary share for the Zulu Lithium and Tantalum Project
In May 2024, Premier concluded a direct equity raise of £1.250 million before
expenses at an issue price of 0.16 pence per new ordinary share for the Zulu
Lithium and Tantalum Project.
In May 2024, Premier concluded a settlement of contractor invoices amounting
to £1.57 million through the issue of 983,500,000 shares at an issue price of
0.16 pence per new ordinary share.
33 Ultimate Controlling Company
There is no single ultimate controlling company for Premier.
Ends
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