TIDMATM
RNS Number : 5187U
AfriTin Mining Ltd
13 July 2018
13 July 2018
AfriTin Mining Limited
("AfriTin" or the "Company")
2017 Audited Financial Results
AfriTin Mining Limited (AIM: ATM), a mining company with a
portfolio of tin assets in Namibia and South Africa, is pleased to
announce its final audited results for the period ended 28 February
2018.
This represents the first set of consolidated accounts for
AfriTin which was incorporated on 1 September 2017. Accordingly, no
comparative financial information is provided. However, comparative
financial information for the underlying subsidiaries is set out in
the Company's Admission Document which is available on the
Company's website.
The preliminary financial information does not constitute full
statutory accounts but is derived from accounts for the period
ended 28 February 2018 which are audited. This preliminary
announcement is prepared on the same basis as set out in the
statutory accounts for the period ended 28 February 2018. While the
financial information included in this preliminary announcement has
been prepared in accordance with the recognition and measurement
criteria of International Financial Reporting Standards (IFRS), as
adopted by the European Union (EU), this announcement does not in
itself contain sufficient information to comply with IFRSs.
The auditor's report for the period ended 28 February 2018 was
unqualified.
The full Annual Report will be available on the Company's
website on 20 July 2018 and a printed copy will be posted to the
Company's shareholders on 20 July 2018. The Company will be posting
a Notice of Annual General Meeting ('AGM') to Shareholders, a copy
of which will be available on the Company's website
www.afritinmining.com on 20 July 2018. A copy of the Notice of the
Annual General Meeting to be held at 18-20 Le Pollet, St Peter
Port, Guernsey GY1 1WH at 11 a.m. on Wednesday 15th August 2018
will also be posted to all shareholders.
For further information, please visit www.afritinmining.com or
contact:
AfriTin Limited
Anthony Viljoen, CEO +27 (11) 268 6555
Nominated Adviser and Joint Broker
WH Ireland Limited
Katy Mitchell
Adrian Hadden
James Sinclair-Ford +44 (0) 207 220 1666
Joint Broker
NOVUM Securities Limited
Jon Belliss +44 (0)20 7399 9400
Financial PR (United Kingdom)
Tavistock
Jos Simson / Barney Hayward +44 (0) 207 920 3150
Financial PR (South Africa)
Lifa Communications
Cath Drummond / Gabriella von Ille +27(0)11 268 5781
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014.
About AfriTin Mining Limited
Notes to Editors
AfriTin Mining is the first pure tin company listed in London
and its vision is to create a portfolio of world-class,
conflict-free, tin producing assets. The Company's flagship asset
is the Uis brownfield tin mine in Namibia, formerly the world's
largest hard-rock tin mine.
AfriTin is managed by an experienced board of directors and
management team with a current two-fold strategy: fast track Uis
brownfield tin mine in Namibia to commercial production in 2018
ramping up to 5,000 tonnes of concentrate, and consolidation of
other quality African tin assets. The Company strives to capitalise
on the solid supply/demand fundamentals of tin by developing a
critical mass of tin resource inventory, achieving production in
the near term and further scaling production by consolidating tin
assets in Africa.
CHAIRMAN'S STATEMENT
I am delighted to present AfriTin Mining Limited's ("AfriTin")
first annual report as an independent, quoted tin development
company.
Since AfriTin's IPO and gross GBP4.5 million raising in November
2017, we have progressed our flagship Uis tin mine to the point
where we are keenly anticipating first production of tin
concentrate from our upgraded pilot plant. We will then become the
only pure play producing tin company quoted on AIM. Through our
successful IPO and the accessing of global capital markets we have
been able to achieve the successful implementation of our stated
objective of being in production within one year. This important
achievement allows the company to continue implementing the growth
strategy of becoming a primary producer of tin concentrate.
Looking back over the period, we formed AfriTin to take
advantage of the current tin deficit and to become the first AIM
quoted conflict-free tin mining company and the tin champion of
Africa.
There is a widespread view in our markets that we may see a
reduction in global tin supply and, as a group, we believe that we
will be able to take advantage of this global deficit.
The global tin market has run at a consistent deficit over the
preceding years, as a result of increasing demand. This demand is
driven particularly by the use of tin in consumer electronics as a
solder, where it is a key component in most semiconductor-based
industries due to its high durability and reliable connection of
components. In addition to its use in soldering, it is also used in
the chemicals industry, glass manufacturing, tin plating, and brass
and bronze manufacturing.
Our flagship asset, the Uis project, is located in Namibia which
is seen as one of the safest, conflict-free tin jurisdictions in
the world. The Uis mine itself represents one of the last open pit,
scalable tin deposits in a market with a significant deficit. Based
purely on the historical resource and reserve estimates ignoring
exploration upside, Uis could potentially fall into the top ten tin
mines in the world by amount of contained tin.
On behalf of the board I would like to thank all of our
shareholders for their continued support on our first period
results as an AIM quoted company. We as a company look forward to
providing further updates and progression through the course of
2018.
CEO'S STATEMENT
Introduction
Our first period results since listing on AIM come at an
exciting time for AfriTin. Since our IPO in November 2017, we have
achieved a number of key strategic and operational milestones. The
review below provides some colour to the operational achievements
since our listing alongside details of what may lie ahead.
Review of business
AfriTin has embarked on a two-phased development approach for
Uis. This period saw a magnified focus on Phase 1 and the
completion thereof. Work to date has involved the completion of the
geological mapping, 3D models and mine design plan for the V1/V2
pits. For Phase 1, the Company has acquired large parts of the
production plant and equipment which has been adapted to suit our
specifications for the construction of the mine. The work completed
in Phase 1 is intended to enhance operational efficiencies in the
production of tin concentrate. These results will allow AfriTin not
only to translate these Phase 1 results into a comprehensive
long-term mine plan for Phase 2, (which has the objective of
achieving around 5,000 tonnes of tin concentrate per annum) but
also generating on-going cash flows.
As part of bringing our flagship Uis mine back into production,
we purchased a cost effective front-end crushing component for the
processing circuit of the Phase 1 plant. This equipment included a
jaw crusher, three cone crushers, stacking and conveying equipment,
and the electrical switchgear. The procurement of this equipment
was our starting point and represented the entire comminution
circuit for Phase 1. Once Phase 1 achieves steady state production
in 2019, it is anticipated that production could reach up to 780
tonnes of tin concentrate per annum.
In our operational updates, we were pleased to announce the
appointment of Crushplant & Utility Spares CC, a Namibian based
engineering firm. They specialise in the construction and
installation of crushing equipment to match the equipment to the
required specifications and associated installation at the mine
site. We believe entirely in the fundamentals of Namibia as an
investment destination and we are committed to developing the
Namibian economy with this appointment being a key first step.
In March 2018, we provided the market with another operational
update at Uis which included a number of completed objectives. We
have undertaken and finalised a detailed geological mapping over
the V1 and V2 pegmatite bodies at Uis. These were previously
identified as priority targets for ore to supply the new,
intermediary plant, based upon a historical report produced for
Iscor, by SRK in 1985. This mapping programme confirmed the
presence of mineralisation throughout the unmined surface
extensions along strike and at depth. The key takeaway for AfriTin
is that these results support the detailed work that was contained
in the historical SRK report that produced a 70-year life of mine
plan and we believe it can provide a foundation for the programme
in bringing Uis back into production.
Strategic approach and outlook
Looking forward to 2018 and beyond, our focus remains on
commencing production of first tin concentrate to the market in H2
2018. As already outlined, we have made a number of key steps in
the achievement of this objective. However there are many other
initiatives that we will be looking to complete in the short to
mid-term.
We will continue the upgrading of the current pilot plant
operation into a producer of 65 tonnes per month of tin
concentrate. The directors believe that the cash flows and test
work conducted over the course of this development will allow the
Company to construct a significant knowledge base to advance
towards a bankable feasibility study. From there, we will look to
expand the plant production of up to 5,000 tons per annum of tin
concentrate. In addition to this, once initial production at the
Uis pilot plant commences, the board's intention is to gain a more
detailed understanding of the Uis ore body through a detailed
exploration programme and thereafter map out a long-term mine
plan.
Events after the reporting period
The board believes Uis has the resources to be a long-life
operation. However this initial 5-year staged approach should
provide a platform for sustainable early cash flows and de-risk the
implementation of a larger scale mining and processing facility in
the future.
We were delighted to have signed a Non-Binding Memorandum of
Understanding with MRI Trading AG, a world leader in trading,
metals and minerals. The relationship allows us to explore a number
of objectives for the Company and significantly supports our belief
that there is going to be an increasing demand for tin in the
future, coupled with a global decrease in supply.
Experience is imperative to deal with the complexities of the
environment in which we operate. With that in mind, we were pleased
to welcome Terence Goodlace to our Board. His experience across the
African continent, initially with Gold Fields, followed by CEO
roles at both Metorex and Impala, will no doubt prove invaluable as
we build our first mine.
In May 2018, we concluded a successful, oversubscribed placing
for GBP6 million, allowing us to accelerate our existing
workstreams leading up to the bankable feasibility study on the
larger, commercial plant. The support from existing shareholders
has demonstrated confidence in the team achieving their
deliverables and furthermore the introduction of a new strategic
investor bodes well for the ongoing development of the project.
A key advancement in ensuring production commences in H2 2018
was the appointment of a Namibian civil works contractor. After a
comprehensive tender process, we selected a local contractor who
will be responsible for completion of the plant civil works. Our
decision to appoint a Namibian contractor attests to our commitment
to utilising locals skills wherever possible and in turn, uplifting
and developing the Uis community.
Conclusion
In conclusion, I would like to thank my fellow directors, all
our employees, shareholders, advisers and wider stakeholders for
their ongoing support and dedication to AfriTin, and I look forward
to providing further updates in what I believe will be an exciting
year ahead.
This report was approved by the Board on 12 July 2018.
Anthony Viljoen, CEO
CONSOLIDATED STATEMENT OF COMPREHENSIVE Income
For the period ended 28 February 2018
Period ended
28 February
2018
Note GBP
Continuing operations
Administrative expenses 5 (1 551 662)
-----------------
Operating loss (1 551 662)
Other income 17 826
Finance income 7 2
-----------------
Loss before tax (1 533 834)
Income tax expense 8 -
-----------------
Loss for the period (1 533 834)
Other comprehensive income -
-----------------
Total comprehensive income for
the period (1 533 834)
=================
Attributable to:
Owners of the parent (1 533 464)
Non-controlling interests (370)
(1 533 834)
=================
Loss per ordinary share
Basic and diluted loss per share
(in pence) 9 (0.83)
Consolidated Statement of Financial Position
As at 28 February 2018
Company number: 63974
28 February
2018
GBP
Note
Assets
Non-current assets
Intangible assets: exploration
and evaluation 11 6 300 864
Property, plant and equipment 12 538 369
Total non-current assets 6 839 233
============
Current assets
Trade and other receivables 13 121 687
Cash and cash equivalents 14 2 904 767
Total current assets 3 026 454
============
Total assets 9 865 687
============
Equity and liabilities
Current liabilities
Trade and other payables 15 (516 107)
------------
Total current liabilities (516 107)
============
Net assets 9 349 580
============
Equity
Share capital 16/23 10 853 631
Accumulated deficit 23 (1 533 464)
Warrant reserve 17/23 29 783
Equity attributable to the owners
of the parent 9 349 950
------------
Non-controlling interests (370)
------------
Total equity 9 349 580
============
The financial statements were authorised and approved for issue
by the Board of directors and authorised for issue on 12 July
2018.
RA WILLIAMS
Director
12 JULY 2018
Consolidated Statement of Changes in Equity
For the period ended 28 February 2018
Attributable to the owners of the
parent company
Accumulated Warrant Non-controlling Total
Share Capital Deficit Reserve Total interests equity
GBP GBP GBP GBP GBP GBP
Total equity at
1 September
2017 - - - - - -
Loss for the (1 533
period - (1 533 464) - 464) (370) (1 533 834)
Transactions
with owners:
Warrants
granted in
period (29 783) - 29 783 - - -
11 172
Issue of shares 11 172 559 - - 559 - 11 172 559
Share issue
costs (289 145) - - (289 145) - (289 145)
Total equity at
28
February 2018 10 853 631 (1 533 464) 29 783 9 349 950 (370) 9 349 580
============== ============ =============== ========== ================ ===============
Consolidated Statement of Cash Flows
For the period ended 28 February 2018
28 February 2018
Note GBP
Cash flows from operating activities
Loss before taxation (1 533 834)
Adjustments for:
Depreciation property, plant and
equipment 12 378
Share-based payments 552 520
Equity-settled transactions 48 611
Finance income 7 (2)
Changes in working capital:
(Increase) in receivables (98 815)
Increase in payables 364 078
------------------------
Net cash used in operating activities (667 064)
------------------------
Cash flows from investing activities
Finance income 2
Purchase of exploration and evaluation
assets 11 (177 747)
Cash costs relating to Dawnmin acquisition (6 235)
Cash element of Greenhills and Dawnmin
acquisitions 60 799
Purchase of property, plant and
equipment 12 (515 843)
------------------------
Net cash used in investing activities (639 024)
------------------------
Cash flows from financing activities
Net proceeds from issue of shares 4 210 855
------------------------
Net cash generated from financing
activities 4 210 855
------------------------
Net increase in cash and cash equivalents 2 904 767
Cash and cash equivalents at the
beginning of the period -
Cash and cash equivalents at the
end of the period 14 2 904 767
========================
1. Corporate information and principal activities
AfriTin Mining Limited ("AfriTin") was incorporated and
domiciled in Guernsey on 1 September 2017 and admitted to the AIM
market in London on 9 November 2017. The Company's registered
office is 18 -20 Le Pollet, St. Peter Port, Guernsey, GY1 1WH and
operates from Illovo Edge Office Park, 2(nd) Floor, Building 3,
Illovo Edge Office Park, Corner Harries and Fricker Road, Illovo,
Johannesburg, 2116, South Africa.
The AfriTin Group comprises AfriTin Mining Limited and its
subsidiaries as noted below.
The wholly-owned Guernsey subsidiary, Greenhills Resources
Limited (GRL) was acquired by AfriTin by way of a Demerger
Agreement with Bushveld Minerals Limited effective 8 November
2017.
GRL is an investment holding company that holds investments in
resource-based tin exploration companies in South Africa and
Namibia. The South African subsidiaries are Mokopane Tin Company
Pty Limited "Mokopane" and Pamish Investments 71 Pty Limited
"Pamish 71", in which GRL holds 100% equity interest.
Mokopane owns a 74% equity interest in Renetype Pty Limited
"Renetype" and a 50% equity interest in Jaxson 641 Pty Limited
"Jaxson". The minority shareholders in Renetype are African Women
Enterprises Investments Pty Limited and Cannosia Trading 62 CC who
own 10% and 16% respectively.
The minority shareholder in Jaxson is Lerama Resources Pty
Limited who owns a 50% interest in Jaxson. Pamish 71 owns a 74%
interest in Zaaiplaats Mining Pty Limited "Zaaiplaats". The
minority shareholder in Zaaiplaats is Tamiforce Pty Limited who
owns 26%.
On 9 November 2017, GRL acquired the remaining 50.5% equity in
Namibian subsidiary, Dawnmin Africa Investments Pty Limited
"Dawnmin". Dawnmin owns an 85% equity interest in Guinea Fowl
Investments Twenty Seven Pty Limited "Guinea Fowl". The minority
shareholder in Guinea Fowl is The Small Miners of Uis who own
15%.
As at 28 February 2018, the AfriTin Group comprised:
Equity holding
and voting Country of
Company rights incorporation Nature of Activities
Ultimate Holding
AfriTin Mining Limited N/A Guernsey Company
Greenhills Resources Limited
(1) 100% Guernsey Holding Company
AfriTin Mining Pty Limited Group support
(1) 100% South Africa services
Dawnmin Africa Investments
Pty Limited (2) 100% Namibia Tin Exploration
Guinea Fowl Investments Twenty
Seven Pty Limited (3) 85% Namibia Tin Exploration
Mokopane Tin Company Pty
Limited (2) 100% South Africa Holding Company
Renetype Pty Limited (4) 74% South Africa Tin Exploration
Jaxson 641 Pty Limited (4) 50% South Africa Tin Exploration
Pamish Investments 71 Pty
Limited (2) 100% South Africa Holding Company
Zaaiplaats Mining Pty Limited
(5) 74% South Africa Property Owning
1. Held directly by AfriTin Mining Limited
2. Held by Greenhills Resources Limited
3. Held by Dawnmin Africa Investments Pty Limited
4. Held by Mokopane Tin Company Pty Limited
5. Held by Pamish Investments 71 Pty Limited
These financial statements are presented in Pound Sterling (GBP)
because that is the currency the Group has raised funding on the
AIM market in the United Kingdom. Furthermore, Pound Sterling (GBP)
is the functional currency of the ultimate holding company, AfriTin
Mining Limited.
2 Significant accounting policies
Basis of accounting
These financial statements have been prepared in accordance with
International Financial Reporting Standards, International
Accounting Standards and Interpretations (collectively "IFRS")
issued by the International Accounting Standards Board ("IASB") as
adopted by the European Union ("adopted IFRS"). This is the first
period of IFRS reporting.
The consolidated financial statements have been prepared under
the historical cost convention. The preparation of financial
statements in conformity with IFRS requires the use of certain
critical accounting estimates. It also requires management to
exercise judgement in the process of applying the Group's
accounting policies. The areas involving a higher degree of
judgement or complexity and areas where assumptions and estimates
are significant to the consolidated financial statements are
discussed in further in this note. The principal accounting
policies are set out below.
Going Concern
These financial statements have been prepared on a going concern
basis. In arriving at this position the Directors have had regard
to the fact that the AfriTin Group has sufficient cash and other
assets to fund administrative and other committed expenditure for a
period of not less than 12 months from the date of this report.
Furthermore, the Group's financial risk management objectives and
policies are detailed in Note 18 and particulars of a gross placing
of GBP6m that was done subsequent to the end of the period are
detailed in Note 20.
Basis of consolidation
Subsidiaries
Subsidiaries are all entities (including structured entities)
over which the Group has control. The Group controls an entity when
the Group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those
returns through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date that control
ceases.
The Group applies the acquisition method to account for business
combinations. The consideration transferred for the acquisition of
a subsidiary is the fair values of the assets transferred, the
liabilities incurred to the former owners of the acquiree and the
equity interests issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired
and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the
acquisition date. The Group recognises any non-controlling interest
in the acquiree on an acquisition-by-acquisition basis, either at
fair value or at the non-controlling interest's proportionate share
of the recognised amounts of acquiree's identifiable net
assets.
If the business combination is achieved in stages, the
acquisition date carrying value of the acquirer's previously held
equity interest in the acquiree is re-measured to fair value at the
acquisition date; any gains or losses arising from such
re-measurement are recognised in profit or loss.
Any contingent consideration to be transferred by the Group is
recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that is
deemed to be an asset or liability are recognised in accordance
with IAS 39 either in profit or loss or as a change to other
comprehensive income. Contingent consideration that is classified
as equity is not re-measured, and its subsequent settlement is
accounted for within equity.
Inter-company transactions, balances and unrealised gains/losses
on transactions between Group companies are eliminated. When
necessary, amounts reported by subsidiaries have been adjusted to
conform to the Group's accounting policies.
Disposal of subsidiaries
When the Group ceases to have control any retained interest in
the entity is measured to its fair value at the date when control
is lost, with the change in carrying amount recognised in profit or
loss. The fair value is the initial carrying amount for the
purposes of subsequently accounting for the retained interest as an
associate, joint venture or financial asset. In addition, any
amounts previously recognised in other comprehensive income in
respect of that entity are accounted for as if the Group had
directly disposed of the related assets or liabilities. This may
mean that amounts previously recognised in other comprehensive
income are reclassified to profit or loss.
Non-controlling interests
Non-controlling interests in subsidiaries are identified
separately from the Group's equity therein. Those interests of
non-controlling shareholders that present ownership interests
entitling their holders to a proportionate share of the net assets
upon liquidation are initially measured at fair value. Subsequent
to acquisition, the carrying amount of non-controlling interests is
the amount of those interests at initial recognition plus the
non-controlling interests' share of subsequent changes in equity.
Total comprehensive income is attributed to non-controlling
interests even if this results in the non-controlling interests
having a deficit balance.
Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the management steering committee
that makes strategic decisions.
Foreign Currencies
Functional and presentational currency
The individual financial statements of each Group company are
prepared in the currency of the primary economic environment in
which they operate (its functional currency). For the purpose of
the consolidated financial statements, the results and financial
position of each Group company are expressed in Pound Sterling,
which is the functional currency of the Company, and the
presentation currency for the consolidated financial
statements.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions or valuation where items are re-measured. Foreign
exchange gains and losses resulting from the settlement of such
transactions and from the translation at period-end exchange rates
of monetary assets and liabilities denominated in foreign
currencies are recognised in the income statement, except when
deferred in other comprehensive income as qualifying cash flow
hedges and qualifying net investment hedges. Foreign exchange gains
and losses that relate to borrowings and cash and cash equivalents
are presented in the income statement within "finance income or
costs". All other foreign exchange gains and losses are presented
in the income statement.
Group Companies
The results and financial position of all the Group entities
(none of which has the currency of a hyper-inflationary economy)
that have a financial currency different from the presentation
currency are translated into the presentation currency as
follows:
a) Assets and liabilities for each balance sheet presented are
translated at the closing rate at the date of that balance
sheet;
b) income and expenses for each income statement are translated
at average exchange rates (unless the average is not a reasonable
approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are
translated at the rate on the dates of the transactions); and
c) all resulting exchange differences are recognised in other comprehensive income.
Other income
Other income for the Group is measured at fair value of the
consideration received or receivable. Although it is not a primary
activity of the Group income on the sale of sand is recognised when
the risk and rewards of ownership have been transformed from the
seller to the buyer, the amount of income can be reliably measures
and it is probable that economic benefits will flow to the
entity.
Finance income
Interest revenue is recognised when it is probable that economic
benefits will flow to the Group and the amount of revenue can be
measured reliably. Interest revenue is accrued on a time basis, by
reference to the principal outstanding and the effective interest
rate applicable, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial
asset to that asset's net carrying amount on initial
recognition.
Share-based payments
Share-based payments of the Group are shares granted to
employees for GBPnil consideration for which the share price was
used to determine the fair value at grant date. That fair value is
charged as an expense in the consolidated statement of profit or
loss, with a corresponding increase in equity.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
The tax charge is based on taxable profit for the period. The
Group's liability for current tax is calculated by using tax rates
that have been enacted or substantively enacted by the reporting
date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amount of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit and is accounted for using the
"balance sheet liability" method.
Deferred tax liabilities are recognised for all taxable
temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised.
Deferred tax is calculated at the tax rates that are expected to
apply to the period when the asset is realised or the liability is
settled based upon rates enacted and substantively enacted at the
reporting date. Deferred tax is charged or credited to profit or
loss, except when it relates to items credited or charged to other
comprehensive income, in which case the deferred tax is also dealt
with in other comprehensive income.
Intangible exploration and evaluation assets
All costs associated with mineral exploration and evaluation
including the costs of acquiring prospecting licenses; mineral
production licenses and annual license fees; rights to explore;
topographical, geological, geochemical and geophysical studies;
exploratory drilling; trenching, sampling and activities to
evaluate the technical feasibility and commercial viability of
extracting a mineral resource; are capitalised as intangible
exploration and evaluation assets and subsequently measured at
cost.
If an exploration project is successful, the related
expenditures will be transferred at cost to property, plant and
equipment and amortised over the estimated life of the commercial
ore reserves on a unit of production basis (with this charge being
taken through profit or loss). Where a project does not lead to the
discovery of commercially viable quantities of mineral resources
and is relinquished, abandoned, or is considered to be of no
further commercial value to the Group, the related costs are
recognised in profit or loss.
The recoverability of deferred exploration costs is dependent
upon the discovery of economically viable ore reserves, the ability
of the Group to obtain necessary financing to complete the
development of ore reserves and future profitable production or
proceeds from the extraction or disposal thereof.
Impairment of exploration and evaluation assets
Whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable, the asset is
reviewed for impairment. Assets are also reviewed for impairment at
each balance sheet date in accordance with IFRS 6. An asset's
carrying value is written down to its estimated recoverable amount
(being the higher of the fair value less costs to sell and value in
use) if that is less than the asset's carrying value. Impairment
losses are recognised in profit or loss.
An impairment review is undertaken when indicators of impairment
arise but typically when one of the following circumstances
applies:
-- unexpected geological occurrences that render the resource uneconomic; or
-- title to the asset is compromised; or
-- variations in mineral prices that render the project uneconomic; or
-- variations in foreign currency rates; or
-- the Group determines that it no longer wishes to continue to
evaluate or develop the field.
Warrants
The warrants issued by the Company are recorded at fair value on
initial recognition net of transaction costs. The fair value of
warrants granted is recognised as an expense or as share issue
costs, with a corresponding increase in equity. The fair value of
the warrants granted is measured using the Black Scholes valuation
model, taking into account the terms and conditions under which the
options were granted. The amount recognised as an expense is
adjusted to reflect the actual number of warrants that vest.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less
accumulated depreciation.
Land is not depreciated. Depreciation is provided on all plant
and equipment at rates calculated to write each asset down to its
estimated residual value, using the straight-line method over their
estimated useful life of the asset as follows:
-- The mining assets amortised over the life of the mine or 20
years whichever is the lesser. Depreciation begins when the asset
is available for use and continues until the asset is derecognised,
even if it is idle; and
-- Computer equipment over three years.
The estimated useful lives, residual values and depreciation
methods are reviewed at each period end and adjusted if
necessary.
Gains or losses on disposal are included in profit or loss.
An asset's carrying amount is written down immediately to its
recoverable amount if the asset's carrying amount is greater than
its estimated recoverable amount.
Impairment of property, plant and equipment
At each statement of financial position date, the Group reviews
the carrying amounts of its tangible assets to determine whether
there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where the asset does not generate
cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
Where there has been a change in economic conditions that
indicate a possible impairment in a cash-generating unit, the
recoverability of the net book value relating to that mine is
assessed by comparison with the estimated discounted future cash
flows based on management's expectations of future commodity prices
and future costs.
The recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised as an expense
immediately, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a
revaluation decrease.
Where conditions giving rise to impairment subsequently reverse,
the effect of the impairment charge is also reversed as a credit to
the income statement, net of any depreciation that would have been
charged since the impairment.
Provisions
General
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. Where the
group expects some or all of a provision to be reimbursed, for
example under an insurance contract, the reimbursement is
recognised as a separate asset but only when the reimbursement is
virtually certain. The expense relating to any provision is
presented in the statement or comprehensive income, provisions are
discounted using a current pre-tax rate that reflects, where
appropriate, the risks specific to the liability. Where discounting
is used the increase in the provision due to the passage of time is
recognised as a finance cost.
Environmental rehabilitation liability
Although not the case at balance sheet date, the group may be
exposed to environmental liabilities relating to its operations.
Full provision for the cost of environmental and other remedial
work such as reclamation costs, close down and restoration costs
and pollution control is made based on the estimated cost. Annual
increases in the provisions relating to change in the net present
value of the provision and inflationary increases are shown
separately in the statement of comprehensive income as a finance
cost. Changes in estimates of the provision are accounted for in
the period the change in estimate occurs, and is charged to either
the statement of comprehensive income or the decommissioning asset
in property, plant and equipment, depending on the nature of the
liability.
Financial assets and liabilities
Financial assets and financial liabilities are recognised in the
Group's balance sheet when the Group becomes a party to the
contractual provisions of the instrument. Financial instruments are
classified into specified categories dependent upon the nature and
purpose of the instruments and are determined at the time of
initial recognition. All financial assets are recognised as loans
and receivables or available for sale investments and all financial
liabilities are recognised as other financial liabilities.
Trade and other receivables
Trade and other receivables are initially recognised at the fair
value of the consideration receivable less any impairment.
Impairment provisions are recognised when there is objective
evidence that the Group will be unable to collect all of the
amounts due under the terms of the receivable, the amount of such a
provision being the difference between the carrying amount and the
present value of the future expected cash flows associated with the
impaired receivable.
Trade and other receivables are subsequently measured at
amortised cost, less any impairment.
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and deposits on
a term of not greater than three months.
Trade and other payables
Trade and other payables are initially recognised at fair value.
They are subsequently measured at amortised cost using the
effective interest rate method.
Financial liabilities and equity
Financial liabilities (including loans and advances due to
related parties) and equity instruments are classified according to
the substance of the contractual arrangements entered into. An
equity instrument is any contract that evidences a residual
interest in the assets of the Group after deducting all of its
liabilities. When the terms of a financial liability are negotiated
with the creditor and settlement occurs through the issue of the
Company's equity instruments, the equity instruments are measured
at fair value and treated as consideration for the extinguishment
of the liability. Any difference between the carrying amount of the
liability and the fair value of the equity instruments issued is
recognised in profit or loss.
Critical accounting estimates and judgements
In the application of the Group's accounting policies, the
Directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may
differ from these estimates.
Estimates and judgements are continually evaluated. Revisions to
accounting estimates are recognised in the period in which the
estimates are revised if the revision affects only that period, or
in the period of revision and in future periods if the revision
affects both current and future periods.
Key judgements made during the period were:
Acquisition of Greenhills Resources Limited ("Greenhills")
On 8 November 2017, the Group completed the acquisition of
Greenhills which through its subsidiaries has interests in tin
exploration projects in South Africa. The total cost of the
acquisition was GBP3 328 813. Due to the lack of processes and
outputs relating to Greenhills at the time of purchase, the Board
does not consider the entities acquired to meet the definition of a
business. As such, the Group has accounted for the acquisition of
Greenhills as an asset purchase. Further details are disclosed in
Note 10.
Acquisition of Dawnmin Africa Investments Pty Limited
("Dawnmin")
On 9 November 2017, the Group completed the acquisition of
Dawnmin which through its subsidiary has interests in tin
exploration projects in Namibia. The total cost of the acquisition
was GBP2 749 349. Due to the lack of processes and outputs relating
to Dawnmin at the time of purchase, the Board does not consider the
entities acquired to meet the definition of a business. As such,
the Group has accounted for the acquisition of Dawnmin as an asset
purchase. Further details are disclosed in Note 10.
The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of the assets
and liabilities within the next financial year are addressed
below.
Impairment of exploration & 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. The valuation of intangible exploration assets is
dependent upon the discovery of economically recoverable deposits
which, in turn, is dependent on future tin prices, future capital
expenditures and environmental, regulatory restrictions and the
successful renewal of licenses. The directors have concluded that
there are no indications of impairment in respect of the carrying
value of exploration and evaluation assets at 28 February 2018
based on planned future development of the projects and current and
forecast tin prices. In making this assessment a tin price of USD20
000/tonne was used. Exploration and evaluation assets are disclosed
fully in Note 10.
3. Adoption of new and revised standards
Accounting standards and interpretations not applied
Standards, amendments and interpretations to existing standards that
are not yet effective and have not been early adopted by the Group:
Amendments to provide requirements
on the accounting for the effects
of vesting and non-vesting conditions
on the measurement of cash-settled
share-based payments, share-based
payment transactions with a
net settlement feature for withholding
tax obligations, and a modification
to the terms and conditions
Amendments to IFRS 2: of a share-based payment that
Classification and Measurement changes the classification of
of Share-based Payment 1 January the transaction from cash-settled
Transactions* 2018 to equity-settled.
--------------------------------- ---------- -------------------------------------------
Provides requirements about
which exchange rate to use in
reporting foreign currency transactions
IFRIC 22 Foreign Currency (such as revenue transactions)
Transactions and Advance 1 January when payment is made or received
Consideration* 2018 in advance.
--------------------------------- ---------- -------------------------------------------
Replacement to IAS 39 and is
built on a logical, single classification
and measurement approach for
financial assets which reflects
both the business model in which
they are operated and their
cash flow characteristics. Also
addresses the so--called 'own
credit' issue and includes an
improved hedge accounting model
to better link the economics
of risk management with its
accounting treatment. It is
1 January a change from incurred to expected
IFRS 9 Financial Instruments 2018 loss model.
--------------------------------- ---------- -------------------------------------------
Introduces requirements for
companies to recognise revenue
to depict the transfer of goods
or services to customers in
amounts that reflect the consideration
to which the company expects
to be entitled in exchange for
those goods or services. Also
results in enhanced disclosure
about revenue and provides or
improves guidance for transactions
IFRS 15 Revenue from Contracts that were not previously addressed
with Customers (IFRS 15 1 January comprehensively and for multiple--element
clarifications not EU-endorsed) 2018 arrangements.
--------------------------------- ---------- -------------------------------------------
The new standard recognises
a leased asset and a lease liability
for almost all leases and requires
them to be accounted for in
a consistent manner. This introduces
a single lessee accounting model
and eliminates the previous
1 January distinction between an operating
IFRS 16 Leases 2019 lease and a finance lease.
--------------------------------- ---------- -------------------------------------------
The interpretation addresses
the determination of taxable
profit (tax loss), tax bases,
unused tax losses, unused tax
credits and tax rates, when
IFRIC 23 Uncertainty over 1 January there is uncertainty over income
Income Tax Treatments* 2019 tax treatments under IAS 12.
--------------------------------- ---------- -------------------------------------------
* not yet endorsed by
the EU
The Directors anticipate that the adoption of these Standards and
Interpretations in future periods will have no material impact on
the financial statements of the Group, subject to any future business
combinations.
4. Segmental reporting
The reporting segments are identified by the management steering
committee (who are considered to be the chief operating
decision-makers) by the way that the Group's operations are
organised. As at 28 February 2018, the Group operated within two
operating segments, tin exploration activities in Namibia and South
Africa.
Segment results
The following is an analysis of the Group's results by
reportable segment.
South Africa Namibia Total
GBP GBP GBP
As at 28 February 2018
Operating segments loss (33 828) (36 574) (70 402)
Segmental loss (33 828) (36 574) (70 402)
============= ========== =========
The reconciliation of segmental gross loss to the Group's loss
before tax is as follows:
Period ended
28 February 2018
GBP
Segmental loss (70 402)
Unallocated costs (1 463 434)
Finance income 2
-----------------
Loss before tax (1 533 834)
=================
Unallocated costs mainly comprise one-off professional fees in
relation to the incorporation and listing of the Company as well as
a one-off cost of issuing shares to staff at GBPnil
consideration.
Other segmental information
South Africa Namibia Total
GBP GBP GBP
As at 28 February 2018
Intangible assets - exploration
and evaluation 3 359 388 2 941 476 6 300 864
Other reportable segmental assets 109 903 538 209 648 112
Other reportable segmental liabilities (116 087) (171 039) (287 126)
Unallocated net assets - - 2 687 730
Total consolidated net assets 3 353 204 3 308 646 9 349 580
============= ========== ==========
Unallocated net assets are mainly comprised of cash and cash
equivalents which are managed at a corporate level.
5. Expenses by nature
The loss for the period has been arrived at after charging:
Period ended
28 February
2018
GBP
Staff costs (see
Note 6) 855 621
Depreciation of
property, plant &
equipment 378
Professional fees 479 753
Travelling expenses 74 252
Other costs 121 262
Auditor's
remuneration 50 000
Currency translation
differences (29 604)
1 551 662
=================================================
6. Staff costs
Key management personnel have been identified as the Board of
Directors and Frans van Daalen, Chief Operating Officer of the
Group. Details of key management remuneration are shown in Note
21.
The average number of staff during the period was 12 with an
average total cost for the period of GBP16 309. This calculation
excludes the one-off cost of GBP552 520 of issuing ordinary shares
at GBPnil consideration to staff on admission.
Emoluments of GBP124 050 were paid in respect of the highest
paid Director during the period.
No pension fund contributions were made on behalf of the
Directors and other staff members.
7. Finance income
Period Ended
28 February
2018
GBP
Bank Interest 2
8. Income tax expense
Period Ended
28 February 2018
GBP
Factors affecting tax for the period:
The tax assessed for the period at the
Guernsey corporation tax charge rate of
0%, as explained below:
Loss before taxation (1 533 834)
------------------------------------------ ------------------
Loss before taxation multiplied by the
Guernsey corporation tax charge rate of
0% -
Effects of:
Non-deductible expenses -
Tax for the period -
Accumulated losses in the subsidiary undertakings for which
there is an unrecognised deferred tax asset are GBP322 353.
9. Loss per share
From continuing operations
The calculation of a basic loss per share of 0.83 pence, is
calculated using the total loss for the period attributable to the
owners of the Company of GBP1 533 464 and the weighted average
number of shares in issue during the period of 184 033 537. There
are no potentially dilutive shares in issue.
223 555 101 ordinary shares with no par value were issued on 14
June 2018. At the same time, the General Meeting approved the
granting of 17 500 000 director share options and the share
authorities were increased by a further 22 500 000 shares to give
the Directors the authority to set up an employee option
scheme.
10. Asset acquisitions
Acquisition of Greenhills Resources Limited ("Greenhills")
On 8 November 2017, the Group completed the acquisition of
Greenhills which through its subsidiaries has interests in tin
exploration projects in South Africa. The consideration of GBP3 328
313 was satisfied by the issue of 85 341 358 ordinary shares of the
company which were issued partially to Bushveld Minerals Limited, a
company listed on the AIM market in London, the previous owner of
Greenhills and partially to Bushveld Minerals shareholders. Due to
the lack of processes and outputs relating to Greenhills at the
time of purchase, the Board does not consider the entities acquired
to meet the definition of a business. As such, the Group has
accounted for the acquisition of Greenhills as an asset
purchase.
The relative fair values of the identifiable assets and
liabilities acquired and included in the consolidation are:
GBP
Intangible assets - exploration and evaluation 3 349 614
Property, plant and equipment 15 366
Receivables 21 537
Cash 17 512
Other liabilities (75 716)
3 328 313
==========
Acquisition of Dawnmin Africa Investments Pty Limited
("Dawnmin")
On 9 November 2017, the Group completed the acquisition of
Dawnmin which through its subsidiary has interests in tin
exploration projects in Namibia. The consideration of GBP2 749 349
was satisfied by the issue of 70 336 290 ordinary shares of the
Company which were issued to Naminco Limited, the previous owner of
Dawnmin as well as stamp duty costs. Due to the lack of processes
and outputs relating to Dawnmin at the time of purchase, the Board
does not consider the entities acquired to meet the definition of a
business. As such, the Group has accounted for the acquisition of
Dawnmin as an asset purchase.
The relative fair values of the identifiable assets and
liabilities acquired and included in the consolidation are:
GBP
Intangible assets - exploration and evaluation 2 773 503
Property, plant & equipment 7 538
Other tax and social security costs 1 335
Cash 43 287
Other liabilities (76 314)
2 749 349
==========
11. Intangible exploration and evaluation assets
Cost and carrying value GBP
As at 1 September 2017 -
Additions for the period - acquisition of Greenhills
Resources Limited 3 349 614
Additions for the period - acquisition of Dawnmin Africa
Investments Pty Limited 2 773 503
Additions for the period - other expenditure 177 747
----------
As at 28 February 2018 6 300 864
==========
The directors have concluded that there are no indications of
impairment in respect of the carrying value of exploration and
evaluation assets at 28 February 2018 based on planned future
development of the projects and current and forecast tin prices. In
making this assessment a tin price of USD20 000/tonne was used.
The Company's subsidiary, Greenhills Resources Limited has the
following:
i) a 74% interest in Renetype Pty Limited ("Renetype") which
holds an interest in Prospecting Right 2205.
ii) an 85% interest in Guinea Fowl Investments 27 Pty Limited
("Guinea Fowl") which holds an interest in mining rights, ML129,
ML133 and ML134.
iii) a 50% interest in Jaxson 641 Pty Limited ("Jaxson") which
holds an interest in Prospecting Right 428.
iv) a 74% interest in Zaaiplaats Mining Pty Limited
("Zaaiplaats") which holds an interest in Prospecting Right
183.
12. Property, plant and equipment
Computer
Land Mining Assets equipment Total
GBP GBP GBP GBP
Cost
As at 1 September 2017 - - - -
Additions for the period
- acquisition of Greenhills 15 366 - - 15 366
Additions for the period
- acquisition of Dawnmin - 7 538 - 7 538
Additions for the period
- other expenditure - 511 303 4 540 515 843
As at 28 February 2018 15 366 518 841 4 540 538 747
------- -------------- ----------- --------
Accumulated depreciation
As at 1 September 2017 - - - -
Charge for the period - - 378 378
As at 28 February 2018 - - 378 378
------- -------------- ----------- --------
Net Book Value
At 28 February 2018 15 366 518 841 4 162 538 369
======= ============== =========== ========
As at 1 September 2017 - - - -
------- -------------- ----------- --------
13. Trade and other receivables
Period Ended
28 February 2018
GBP
Trade receivables 35 065
Other receivables 13 828
Other tax and social security costs 72 794
121 687
==================
The Directors consider that the carrying amount of trade and
other receivables approximates to their fair value due to their
short-term nature. No allowance for doubtful receivables is
provided.
The total trade and other receivables denominated in South
African Rand amount to GBP55 102 and denominated in Namibian
Dollars amount to GBP57 335.
14. Cash and cash equivalents
Period Ended
28 February
2018
GBP
Cash on hand and in bank 2 904 767
==============
Cash and cash equivalents (which are presented as a single class
of assets on the face of the Statement of Financial Position)
comprise cash at bank and other short-term highly liquid
investments with an original maturity of three months or less. The
Directors consider that the carrying amount of cash and cash
equivalents approximates their fair value. The total cash and cash
equivalents denominated in South African Rand amount to GBP151 514,
the total cash and cash equivalents denominated in Namibia Dollars
amount to GBP56 275 and the total cash and cash equivalents
denominated in US Dollars amount to GBP132.
15. Trade and other payables
Period Ended
28 February
2018
GBP
Trade payables 308 699
Other payables 145 962
Accruals 61 446
516 107
=============
Trade and other payables principally comprise amounts
outstanding for trade purchases and on-going costs. The average
credit period taken for trade purchases is 30 days.
The Group has financial risk management policies in place to
ensure that all payables are paid within the pre-arranged credit
terms. No interest has been charged by any suppliers as a result of
late payment of invoices during the period.
The Directors consider that the carrying amount of trade and
other payables approximates to their fair value.
The total trade and other payables denominated in South African
Rand amount to GBP214 352 and GBP171 039 is denominated in Namibian
Dollars.
16. Share capital
Number of
shares issued
and fully
paid Share capital
GBP
Balance at 1 September 2017 - -
"Greenhills" acquisition (Note 10) 85 341 358 2 743 115
"Dawnmin" acquisition (Note 10) 70 336 290 2 829 066
Initial public offering 89 743 584 499 247
Convertible loan notes converted into
shares 36 629 947 1 000 000
Shares issued to staff and service provider
for nil consideration 15 413 613 601 131
Warrants exercised 16 January 2018 1 348 -
Warrants exercised 2 February 2018 15 789 -
Share issue costs - excluding warrants - (289 145)
Share issue costs - fair value of warrants
(Note 17) - (29 783)
Balance at 28 February 2018 297 481 929 10 853 631
=============== ===============================
Authorised:
386 721 484 ordinary shares of no par
value
Allotted, issued and fully paid:
297 481 929 ordinary shares of no par
value
A placing and subscription for existing and new institutional
and sophisticated private investors raised gross proceeds of
GBP3.5m with a further GBP1m raised from convertible loan notes
that converted on admission. Furthermore, 15 413 613 ordinary
shares were issued to directors, employees and a service provider
for GBPnil consideration on admission. These transactions were
recorded at 3.9p per share, being the placing price of the
shares.
In accordance with the terms of a Demerger Agreement between
Bushveld Minerals Limited and AfriTin Mining Limited (see Note 10),
Bushveld warrant holders are entitled to exercise the same amount
of warrants in AfriTin for GBPnil consideration subject to the
demerger ratio of 0.08999. This agreement effectively gave rise to
43 120 AfriTin warrants on admission. 1 348 and 15 789 of these
warrants were exercised on 16 January 2018 and 2 February 2018
respectively.
17. Warrants
The following warrants were granted during the period ended 28
February 2018:
Date of grant 9 November 2017
Number granted 1 871 939
Contractual life 3 years
Estimated fair value per
warrant (GBP) 0.01591
The estimated fair values were calculated by applying the Black
Scholes pricing
model. The model inputs were:
Date of grant 9 November 2017
Share price at grant
date 3.9p
Exercise price 3.9p
Expected life 3 years
Expected volatility 60%
Expected dividends Nil
Risk-free interest rate 1.24%
In accordance with the terms of a Demerger Agreement
between Bushveld Minerals
Limited and AfriTin Mining Limited (see Note 10),
Bushveld warrant holders
are entitled to exercise the same amount of warrants
in AfriTin for GBPnil
consideration.
The warrants in issue during the period are as
follows:
Outstanding at 1 September 2017 -
Granted during the period 1 871 939
Exercised during the period (17 137)
-------------------------
Outstanding at 28 February 2018 1 854 802
=========================
Exercisable at 28 February
2018 1 854 802
=========================
The warrants outstanding at the period-end have an
exercise
price of GBP0.039, with a weighted average remaining
contractual
life of 2.67 years.
The Group has recognised a charge amounting to GBP29 783
during
the period which has been deducted from share capital as
the
warrants were issued as consideration for professional
fees
in relation to the issue of shares.
18. Financial instruments
The Group is exposed to the risks that arise from its use of
financial instruments. This note describes the objectives, policies
and processes of the Group for managing those risks and the methods
used to measure them. Further quantitative information in respect
of these risks is presented throughout these financial
statements.
Capital Risk Management
The Group manages its capital to ensure that entities in the
Group will be able to continue as going concerns while maximizing
returns to shareholders. In order to maintain or adjust the capital
structure, the Group may issue new shares or arrange debt
financing.
The capital structure of the Group consists of cash and cash
equivalents and equity, comprising issued capital and retained
losses.
The Group is not subject to any externally imposed capital
requirements.
Significant accounting policies
Details of the significant accounting policies and methods
adopted including the criteria for recognition, the basis of
measurement and the bases for recognition of income and expenses
for each class of financial asset, financial liability and equity
instrument are disclosed in note 2.
Principal financial instruments
The principal financial instruments used by the Group, from
which financial instrument risk arises, are as follows:
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Categories of financial instruments
The Group holds the following financial assets:
Period Ended
28 February
2018
GBP
Measured as loans and receivables:
Trade and other receivables 121 687
Cash and cash equivalents 2 904 767
Total financial assets 3 026 454
=============
The Group holds the following financial liabilities:
Period Ended
28 February
2018
GBP
Measured at amortised cost:
Trade and other payables 516 108
Total financial liabilities 516 108
=============
General objectives, policies and processes
The Board has overall responsibility for the determination of
the Group's risk management objectives and policies. The Board
receives reports through which it reviews the effectiveness of the
processes put in place and the appropriateness of the objectives
and policies it set.
The overall objective of the Board is to set policies that seek
to reduce risk as far as possible without unduly affecting the
Group's competitiveness and flexibility. Further details regarding
these policies are set out below:
Credit risk
The Group's principal financial assets are bank balances and
trade and other receivables.
Credit risk arises principally from the Group's cash balances
with further risk arising due to its trade receivables. Credit risk
is the risk that the counterparty fails to repay its obligation to
the Group in respect of amounts owed. The Group gives careful
consideration to which organisations it uses for its banking
services in order to minimize credit risk. Other than a limited
amount of sales of sand, the Group has no sales hence credit risk
relating to other receivables is minimal. There are no formal
procedures in place for monitoring and collecting amounts owed to
the Group. A risk management framework will be developed over time,
as appropriate to the size and complexity of the business.
The concentration of the Group's credit risk is considered by
counterparty, geography and by currency. The Group has a
significant concentration of cash held on deposit with large banks
in South Africa, Namibia and Mauritius with A ratings and above
(Standard & Poor's).
The concentration of credit risk was as follows:
28 February
2018
Currency GBP
Sterling 2 696 846
USD 132
South African Rand 151 514
Namibian Dollars 56 275
TOTAL 2 904 767
==========
There are no other significant concentrations of credit risk as
at the balance sheet date.
At 28 February 2018, the Group held no collateral as security
against any financial asset. The carrying amount of financial
assets recorded in the financial statements, net of any allowances
for losses, represents the Group's maximum exposure to credit risk
without taking account of the value of any collateral obtained. At
28 February 2018, no financial assets were past their due date. As
a result, there has been no impairment of financial assets during
the period. An allowance for impairment is made where there is an
identified loss event which, based on previous experience, is
evidence of a reduction in the recoverability of the cash flows.
Management considers the above measures to be sufficient to control
the credit risk exposure.
Liquidity risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting its financial obligations as they fall due.
Ultimate responsibility for liquidity risk management rests with
the Board of Directors. The Board manages liquidity risk by
regularly reviewing the Group's gearing levels, cash-flow
projections and associated headroom and ensuring that excess
banking facilities are available for future use.
The Group maintains good relationships with its banks, which
have high credit ratings and its cash requirements are anticipated
via the budgetary process. At 28 February 2018, the Group had GBP2
904 767 of cash reserves.
Market risk
The Group's activities expose it primarily to the financial risk
of changes in foreign currency exchange rates and interest
rates.
Interest rate risk
The Group was exposed to minimal interest rate risk during the
period. For this reason, no sensitivity analysis has been performed
regarding interest rate risk.
Foreign exchange risk
The Group has foreign currency denominated assets and
liabilities. Exposure to exchange rate fluctuations therefore
arise. The carrying amount of the Group's foreign currency
denominated monetary assets and liabilities, all in Pound Sterling,
are shown below:
28 February
2018
GBP
Cash and cash equivalents 207 921
Other receivables 112 437
Trade and other payables (385 391)
(65 033)
==========
The Group is exposed to a level of foreign currency risk. Due to
the minimal level of foreign exchange transactions, the Directors
currently believe the foreign currency risk is at an acceptable
level.
The Group does not enter into any derivative financial
instruments to manage its exposure to foreign currency risk.
The following table details the Group's sensitivity to a 10%
increase and decrease in the Pound Sterling against the Rand and
the Namibian Dollar. 10% is the sensitivity rate used when
reporting foreign currency risk internally to key management
personnel and represents management's assessment of the reasonable
possible change in foreign currency rates. The sensitivity analysis
includes only outstanding foreign currency denominated monetary
items and adjusts their translation at the period-end for a 10%
change in foreign currency rates.
Rand Rand Rand
denominated currency impact currency impact
monetary
items strengthening Weakening
GBP GBP GBP
Assets 206 616 227 277 185 954
Liabilities (214 352) (235 788) (192 917)
(7 736) (8 511) (6 963)
============ ================ ================
Namibian
Dollar Namibian Dollar Namibian Dollar
denominated currency impact currency impact
monetary
items strengthening Weakening
GBP GBP GBP
Assets 113 610 124 971 102 249
Liabilities (171 039) (188 143) (153 935)
(57 429) (63 172) (51 686)
============ ================ ================
19. Operating Lease Commitments
The Group had no operating lease commitments at the reporting
date.
20. Events after Balance Sheet Date
On 23 May 2018, an accelerated book-build and subscription
process was undertaken and gross proceeds of GBP6m (net proceeds
estimated at GBP5.7m) was raised. The Placing of 223 555 101 shares
was done at a price of 2.7p per share. A resolution to issue the
new ordinary shares was passed at a General Meeting on 14 June
2018. Subsequent to the issue of these new ordinary shares, the
issued share capital of the company will be 521 037 126 shares of
no par value.
The net proceeds of the Placing will be used as follows:
-- to commence with an exploration drilling programme and
geo-scientific work with the goal of declaring a JORC-compliant
resource in due course. It is anticipated that the programme will
confirm the historical mineral resources as published by SRK
Consulting in 1987, although there can be no guarantee that this
will occur. This programme will require the procurement of
geological equipment, drilling into the V1/V2 pegmatite and other
pegmatites (with a view to expand the resource base), sample
analysis, geological modelling and reporting;
-- to initiate and progress with a bankable feasibility study
(BFS) for the final mine configuration (Phase 2). Approximately 50
per cent. of this amount is planned for a geo-metallurgical
characterization, metallurgical test work and process flow design,
with the balance reserved for mine planning, infrastructure design
and financial modelling;
-- to incorporate upgrades to the process design of the Phase 1
plant to improve the planned beneficiation performance. The
intention is that these upgrades will involve the addition of a
fourth crushing stage, a second stage in the dense medium
separation circuit, as well as the dewatering equipment to improve
the planned process water recovery; and
-- for general corporate and working capital costs.
The General Meeting also approved the granting of 17 500 000
Director Share Options and the share authorities were increased by
a further 22 500 000 shares to give the Directors the authority to
set up an employee option scheme.
21. Related party transactions
Balances and transactions between the Company and its
subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in this note.
VM Investments Pty Ltd ("VM Investments") is a related party due
to Anthony Viljoen, CEO of AfriTin Mining Limited being a 50%
shareholder of VM Investments. During the period, VM Investments
charged the Group GBP57 361 for management services. At the end of
the period, the Group did not owe VM Investments any funds. At
period-end, VM Investments held 733 621 ordinary shares in AfriTin
Mining Limited.
Goldiblox Pty Ltd ("Goldiblox") is a related party due to Frans
van Daalen, key management personnel of AfriTin Mining Limited
being a 50% shareholder of Goldiblox. During the period, Goldiblox
charged the Group GBP119 973 for management services and
re-imbursables. At the end of the period, the Group did not owe
Goldiblox any funds.
The remuneration of the Directors, who including Frans van
Daalen are the key management personnel of the Group, is set out
below.
Directors and key management personnel were given shares for
GBPnil consideration when the Company was admitted to the AIM
market in London. The value of these shares is also included in the
totals below.
28 February 28 February 28 February 28 February
2018 2018 2018 2018
GBP GBP GBP GBP
Director
Shares Fees/Salary Other Fees Total
Non-executive directors
Glen Parsons (Chairman) 40 000 - - 40 000
Laurence Robb 12 500 4 000 - 16 500
Roger Williams 25 000 - 2 809 27 809
Executive director
Anthony Viljoen (Chief Executive
Officer)* 78 000 46 050 - 124 050
Other Key Management Personnel
Frans van Daalen (Chief
Operating Officer)** 78 000 41 445 - 119 445
233 500 91 495 2 809 327 804
============ ============= ============ ============
*The salary cost of GBP46 050 was paid to Anthony Viljoen via VM
Investments.
** The salary cost of GBP41 445 was paid to Frans van Daalen via
Goldiblox.
Naminco Limited ("Naminco") is a related party due to Naminco
owning 24% of AfriTin Mining Limited during the period under
review. During the period, AfriTin entered into an agreement with
Naminco to purchase property, plant and equipment to the value of
GBP94 242. At the period end, the Group owed Naminco GBP39 855.
22. Comparative Figures
The financial statements as presented are for the period from
incorporation, 1 September 2017, to 28 February 2018. As these are
the first financial statements of the Group, no comparative figures
are reflected.
23. Reserves within equity
Share capital
Ordinary shares are classified as equity. Incremental cost
directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
Warrant reserve
The warrant reserve represents the cumulative charge to date in
respect of unexercised share warrants at the balance sheet
date.
Retained earnings/Accumulated deficit
The retained earnings/accumulated deficit represent the
cumulative profit and loss net of distribution to owners.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR GGUWUMUPRGMP
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July 13, 2018 02:00 ET (06:00 GMT)
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