TIDMATM
RNS Number : 7474G
AfriTin Mining Ltd
17 November 2022
17 November 2022
AfriTin Mining Limited
("AfriTin", the "Company" or the "Group")
Unaudited Interim Results
for the six months ended August 2022
AfriTin Mining Limited (AIM: ATM), an African technology metals
mining company with a portfolio of mining and exploration assets in
Namibia , is pleased to release its unaudited interim results for
the six months ended 31 August 2022 which should be read in
conjunction with the Company's previous operational results
communicated on 15 September 2022. (
https://polaris.brighterir.com/public/afritin_mining/news/rns/story/ry59p7w?confirm=1
)
Highlights:
-- Six month production up 23% to 454 tonnes of tin concentrate
(286 tonnes of contained tin) compared to H1 2021: 368 tonnes (227
contained);
-- Phase 1 processing plant continued to exceed targets and
nameplate capacity;
-- Revenue of GBP4.7 million (H1 2021: GBP5.1 million) impacted
by the decrease in the tin price as well as the impact of the
timing of settlement adjustments (initial prepayment versus final
settlement spot prices during reporting period);
-- Average tin price achieved before settlement adjustment for
the six month period of US$25 227/tonne (H1 2021: US$36
910/tonne);
-- Cost of sales of GBP5.7 million (H1 2021: GBP4 million)
reflecting inflationary pressures of high fuel prices and higher
maintenance costs;
-- Except for higher fuel prices, aforementioned cost factors
are expected to be resolved during H2 2022;
-- Unit costs expected to improve with the achievement of higher
production volumes from the Phase 1 Expansion Project;
-- Cash and Cash Equivalents of GBP12.2 million as at 15
November 2022, subsequent to the US$53.6 million proposed funding
package announced in September 2022; and,
-- Commissioning of the Uis Phase 1 Expansion Project is now
complete with production projected to ramp to more than 1 200 tpa
of tin concentrate in H2 2022.
Chief Executive Officer's Statement
I am proud of the AfriTin operational team for once again
producing an impressive half-yearly production performance. The
first half of FY2023 has seen internal tin production targets
exceeded at the Uis Mine and an unwavering focus on bringing
lithium and tantalum by-products into production and thereby
consolidating our tech-metal exposure. Our vision is to fast-track
lithium production to become the only producing lithium company on
AIM. Importantly the team aims to capitalise on what we believe is
our globally significant resource and bridge the supply gap that
currently exists.
Financially, the group recognised revenue of GBP4.7 million
(Sales: 268t contained (H1 2021: 230t contained)) net of final
price settlements. The revenue was negatively impacted by the
reduction in the tin prices, specifically related to a few delayed
shipments which net settled at prices much lower than the original
prepayment rate. This amounted to an adjustment to revenue of
approximately GBP1.4 million for which the prepayment was
recognised in H2 2021. We have since changed shipping lines to
speed up the shipping timelines and limit the time exposure for
revenue recognition. The cost of sales for the net of depreciation
amounted to GBP4.8 million, which equated to approximately US$ 22
219 (H1 2021: US$ 19 470) per tonne of contained tin sold. The
increase in the costs was part of the expansion commissioning
readiness phase as well as higher maintenance costs due to
unplanned stoppages. A portion of these costs are planned to be
supported by the increased production levels, whilst the
maintenance costs are expected to reduce.
After the end of the period under review, AfriTin negotiated a
potential Proposed Funding Package of US$53.6 million (see
announcement dated 15 September 2022). Coupled with our cash
resources, this package, if completed, could accelerate the organic
growth in tin operations, fund the development of the lithium and
tantalum by-product opportunities, continue the regional drilling
programme, and initiate the Feasibility Study for the Phase 2
production phase at Uis. Whilst there can be no guarantee that the
total funding package will be entered into, the Directors have
every expectation that it will be. Updates will be provided as this
progresses.
The Proposed Funding Package has been produced using a diverse
range of funding methods, including debt, convertible notes and an
equity raise with Hamman & Partners Advisory Limited and Stifel
Nicolaus Europe Ltd acting jointly to raise US$22.8 million (c.
GBP19.8 million), through a placing and subscriptions, a process
that successfully closed on 16 September 2022.
The Development Bank of Namibia (DBN) approved a conditional
US$5.8 million lending facility, previously announced on 5 July
2022, and as updated in the Company's audited financial results,
which provides another component of AfriTin's Proposed Funding
Package. Although this has been approved by the credit committee
and board of the Development Bank of Namibia, there are certain
conditions precedent that need to be adhered to, including
completion of final legal documentation. At this stage there can be
no guarantee the DBN facility will be entered into, or that any
funds will be drawn down, but AfriTin Management have every
confidence that it will be. The Directors confirm that this has now
been extended such that completion is anticipated during Q1 2023. A
further update will be provided when it is entered into.
Furthermore, global asset management firm Orion has been
proposed as a key strategic investor for AfriTin, providing a
conditional US$25 million (c. GBP21.5 million) investment, via
Royalty (US$12.5 million), Convertible Note (US$10 million) and
Equity Conscription (US$2.5 million), which the firm will manage.
Orion has a strong history of cultivating sustainable shareholder
value in the mining sector, as well as boasting a unique ability to
identify growth opportunities at an early stage. As such, their
interest in AfriTin provides a compelling endorsement of our
current work and future endeavours. This Orion funding package
remains subject to the satisfaction of certain conditions and
approvals, including due diligence and agreeing definitive
documentation, but the Directors anticipate it will be concluded in
Q1 2023.
From a macroeconomics perspective, we have also seen tin prices
drop drastically in recent months, although the inverse has
occurred with regard to lithium prices. This further cements the
Group's strategy to accelerate and unlock lithium and tantalum, as
we continue to organically grow the operations and move into a
lower unit cost position.
We remain conscious of the environment and its people, and this
continues to be woven into our corporate DNA as we strive to become
a significant African multi-commodity tech-metals producer. The
foundation has been laid for the second half of the financial year
to deliver on our stated strategy and I look forward to providing
further updates.
Anthony Viljoen
CEO
AfriTin Mining Limited +27 (11) 268 6555
Anthony Viljoen, CEO
Nominated Adviser +44 (0) 207 220 1666
WH Ireland Limited
Katy Mitchell
Corporate Advisor and Joint
Broker
H&P Advisory Limited
Andrew Chubb
Jay Ashfield +44 (0) 20 7907 8500
Stifel Nicolaus Europe Limited
Ashton Clanfield
Callum Stewart +44 (0) 20 7710 7600
Tavistock Financial PR (United
Kingdom) +44 (0) 207 920 3150
Emily Moss
Catherine Drummond
Adam Baynes
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the 6 months ended 31 August 2022
6 months 6 months 12 months
ended
31 August ended ended
2022 (unaudited)
GBP 31 August 28 February
2021 2022
(unaudited) (audited)
Notes GBP GBP
Continuing operations
Revenue 5 4 726 609 5 073 337 13 615 045
(3 959
Cost of Sales 6 (5 724 376) 149) (9 302 518)
------------------ ---------------------- ---------------------
Gross Profit (997 767) 1 114 188 4 312 527
(1 390
Administrative expenses 7 (2 557 296) 177) (3 674 662)
Other income - - 61 753
------------------ ---------------------- ---------------------
(3 555
Operating loss 063) (275 989) 699 619
Finance income 21 368 - 6 545
Finance cost 8 (186 874) (228 285) (316 365)
------------------ ---------------------- ---------------------
(3 720
Profit/(loss) before tax 569) (504 274) 389 798
Tax credit/(charge) 9 888 933 - (864 199)
------------------ ---------------------- ---------------------
(2 831
Loss for the period 636) (504 274) (474 401)
================== ====================== =====================
Other comprehensive income/(loss)
Items that will or may be
reclassified
to profit or loss:
Exchange differences on translation
of share-based payment reserve 126 1 180 767
Exchange differences on translation
of foreign operations 394 000 658 735 526 779
Exchange differences on
non-controlling
interest 5 508 (7 788) (6 700)
Total comprehensive income/(loss) (2 432
for the period 002) 147 853 46 445
================== ====================== =====================
Profit/((loss) for the period
attributable
to:
Owners of the parent (2 680 820) (692 252) (815 645)
Non-controlling interests (150 816) 187 978 341 244
------------------
(2 831
636) (504 274) (474 401)
================== ====================== =====================
Total comprehensive income/(loss)
for the period attributable to:
Owners of the parent (2 286 694) (32 337) (288 098)
Non-controlling interests (145 308) 180 190 334 543
------------------
(2 432
002) 147 853 46 445
================== ====================== =====================
Loss per ordinary share
Basic and diluted loss per share
(in pence) 10 (0.25) (0.07) (0.08)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 August 2022
Company number: 63974
31 August 31 August 28 February
2022 2021 2022
(unaudited) (unaudited) (audited)
Notes GBP GBP GBP
Assets
Non-current assets
Intangible assets 11 6 812 947 6 195 625 5 147 782
26 142 15 095
Property, plant and equipment 12 978 878 19 150 092
------------ --------- ---------------------
32 955 21 291 24 297
Total non-current assets 925 503 875
============ ========= =====================
Current assets
Inventories 13 1 429 829 1 429 694 1 451 933
Trade and other receivables 14 2 830 985 1 136 053 3 953 382
Cash and cash equivalents 15 1 675 245 6 290 694 7 365 379
12 770
Total current assets 5 936 059 8 856 441 694
============ ========= =====================
38 891 30 147 37 068
Total assets 984 944 569
============ ========= =====================
Equity and liabilities
Equity
38 655 38 297
Share capital 20 078 431 38 655 078
(13 420 (10 733 (10 739
Accumulated deficit 141) 570) 321)
Warrant reserve 21 192 632 192 632 192 632
Share-based payment reserve 1 074 125 769 658 704 828
Foreign currency translation (1 402
reserve (1 140 560) 604) (1 534 560)
------------
Equity attributable to the 25 361 27 123 27 278
owners of the parent 134 547 657
------------ --------- ---------------------
Non-controlling interests 37 892 28 846 183 200
------------ --------- ---------------------
25 399 27 152 27 461
Total equity 026 393 857
============ ========= =====================
Non-current liabilities
Environmental rehabilitation
liability 18 319 440 202 242 295 151
Borrowings 16 4 198 763 - 4 095 405
Lease liability 19 89 776 232 858 167 216
Deferred tax liability - - 861 784
------------
Total non-current liabilities 4 607 979 435 100 5 419 556
============ ========= =====================
Current liabilities
Trade and other payables 17 3 881 051 1 890 700 2 969 833
Borrowings 16 4 829 492 505 267 1 024 736
Lease liability 19 174 436 164 484 192 586
Total current liabilities 8 884 979 2 560 451 4 187 155
============ ========= =====================
38 891 30 147 37 068
Total equity and liabilities 984 944 569
============ ========= =====================
The notes that follow in this report form part of this interim
financial information.
This interim financial information was authorised and approved
for issue by the Board of Directors and authorised for issue on 16
November 2022
ANTHONY VILJOEN
Chief Executive Officer
16 November 2022
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 31 August 2022
Foreign
Convertible Share-based currency
Share loan note Accumulated Warrant payment translation Non-controlling Total
capital reserve deficit reserve reserve reserve Total interests equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Total equity
at 28
February 25 608 (10 030 (2 061 16 641 16 490
2021 001 2 170 645 679) 211 348 743 615 339) 591 (151 344) 247
Loss for the
period (692 252) (692 252) 187 978 (504 274)
Other
comprehensive
income/(loss) - - - 1 180 658 735 659 915 (7 788) 652 127
Transactions
with owners:
Issue of 13 019 13 009 13 009
shares 672 - - - (10 000) - 672 - 672
Share issue
costs (823 447) - - - - - (823 447) - (823 447)
Share-based
payments - - - - 34 863 - 34 863 - 34 863
Warrants
exercised 63 150 18 716 (18 716) - - 63 150 63 150
Issue costs
reclassified
to
accumulated
deficit - 29 355 (29 355) - - - - - -
Settlement of
convertible
loan note in
shares 430 055 (430 055) - - - - - - -
Settlement of
convertible
loan note in (1 769 (1 769 (1 769
cash - 945) - - - - 945) - 945)
--------- ----------- ----------- -------- ----------- ----------- ---------- --------------- ----------
Total equity
at 31 August 38 297 (10 733 (1 402 27 123 27 152
2021 431 - 570) 192 632 769 658 604) 547 28 846 393
Loss for the
period - - (123 393) - (123 393) 153 266 29 873
Other
comprehensive
income/(loss) - - - - (413) (131 956) (132 369) 1 088 (131 281)
Transactions
with owners:
Issue of
shares 49 101 - - - - 49 101 - 49 101
Share options
exercised 308 546 - 117 642 - (117 642) - 308 546 - 308 546
Share-based
payments - - - - 53 225 - 53 225 - 53 225
Total equity
at 28
February 38 655 (10 739 (1 534 27 278 27 461
2022 078 - 321) 192 632 704 828 560) 657 183 200 857
Loss for the (2 680 (2 831
period - - (2 680 820) - - - 820) (150 816) 637)
Other
comprehensive
income/(loss) - - - - 126 394 000 394 126 5 508 399 634
Transactions
with owners:
Share-based
payments - - - - 369 171 - 369 171 - 369 171
Total equity
at 31 August 38 655 (13 420 (1 140 25 361 25 399
2022 078 - 141) 192 632 1 074 125 560) 134 37 892 026
========= =========== =========== ======== =========== =========== ========== =============== ==========
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 31 August 2022
Period ended Period ended Year ended
31 August 31 August
2022 (unaudited) 2021 (unaudited)
GBP GBP 28 February
2022
(audited)
Notes GBP
Cash flows from operating activities
Loss before taxation (3 720 569) (504 274) 389 798
Adjustments for:
Fair value adjustment to customer
contract 5 30 726 (15 238) (137 019)
Depreciation of property, plant
and equipment 12 949 884 736 792 1 861 023
Depreciation of intangible assets 11 5 285 6 086 28 198
Share-based payments 267 401 22 527 55 793
Equity-settled transactions - 9 672 66 101
Finance income (21 368) - (6 545)
Finance costs 8 186 874 228 285 316 365
Changes in working capital:
Decrease/(increase) in receivables 1 189 937 124 981 (2 866 192)
Decrease/(increase) in inventory 57 917 (382 786) (418 556)
Increase in payables 851 750 334 662 1 006 060
Net cash (used)/generated in operating
activities (202 163) 560 707 569 064
------------------- -------------------- -------------------
Cash flows from investing activities
Purchase of intangible assets (1 606 380) (822 753) (1 442 774)
Purchase of property, plant and (1 511
equipment (7 466 335) 632) (4 543 884)
------------------- -------------------- -------------------
(2 334
Net cash used in investing activities (9 072 715) 385) (5 986 658)
------------------- -------------------- -------------------
Cash flows from financing activities
Finance income 21 368 - 6 545
Finance costs 8 (153 901) (157 458) (224 061)
Lease payments 19 (120 977) (91 258) (213 661)
Net proceeds from issue of shares 20 - 12 239 703 12 548 248
(1 769
Settlement of convertible loan notes - 945) (1 769 945)
Proceeds from borrowings 16 3 997 799 5 298 880 5 024 727
(8 700
Repayment of borrowings 16 (166 932) 696) (3 907 086)
------------------- -------------------- -------------------
Net cash generated from financing
activities 3 577 357 6 819 226 11 464 767
------------------- -------------------- -------------------
Net decrease/(increase) in cash
and cash equivalents (5 697 521) 5 045 548 6 047 173
Cash and cash equivalents at the
beginning of the period 7 365 379 1 351 200 1 351 200
Exchange differences 7 387 (106 054) (32 994)
------------------- -------------------- -------------------
Cash and cash equivalents at the
end of the period 1 675 245 6 290 694 7 365 379
=================== ==================== ===================
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL INFORMATION
For the period ended 31 August 2022
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 PO Box 282, Oak House, Hirzel Street, St Peter Port,
Guernsey GY1 3RH and operates from Illovo Edge Office Park, 2nd
Floor, Building 3, Corner Harries and Fricker Road, Illovo,
Johannesburg, 2116, South Africa.
This financial information is for the period ended 31 August
2022 and the comparative figures for the 6 month period ended 31
August 2021 and for the year ended 28 February 2022 are shown.
The AfriTin Group comprises AfriTin Mining Limited and its
subsidiaries as noted below.
AfriTin Mining Limited ("AML") is an investment holding company
and holds 100% of Guernsey subsidiary, Greenhills Resources Limited
("GRL").
GRL is an investment holding company that holds investments in
resource-based tin and tantalum exploration companies in Namibia
and South Africa. The Namibian subsidiary is AfriTin Mining
(Namibia) Pty Limited ("AfriTin Namibia"), in which GRL holds 100%
equity interest. 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.
AfriTin Namibia owns an 85% equity interest in Uis Tin Mining
Company Pty Limited ("UTMC"). The minority shareholder in UTMC is
The Small Miners of Uis who own 15%.
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%.
AML holds 100% of Tantalum Investment Pty Limited, a company
containing Namibian exploration licenses EPL5445 and EPL5670 for
the exploration of tin, tantalum and associated minerals.
As at 31 August 2022, the AfriTin Group comprised:
Equity holding
and voting Country
Company rights of incorporation Nature of activities
AfriTin Mining Limited N/A Guernsey Ultimate holding
company
-------------- ----------------- --------------------------
Greenhills Resources Limited(1) 100% Guernsey Holding company
-------------- ----------------- --------------------------
AfriTin Mining Pty Limited(1) 100% South Africa Group support services
-------------- ----------------- --------------------------
Tantalum Investment Pty 100% Namibia
Limited(1) Tin & tantalum exploration
-------------- ----------------- --------------------------
AfriTin Mining (Namibia) 100% Namibia
Pty Limited(2) Tin & tantalum operations
-------------- ----------------- --------------------------
Uis Tin Mining Company 85% Namibia
Pty Limited(3) Tin & tantalum operations
-------------- ----------------- --------------------------
Mokopane Tin Company Pty 100% South Africa
Limited(2) Holding company
-------------- ----------------- --------------------------
Renetype Pty Limited(4) 74% South Africa Tin & tantalum exploration
-------------- ----------------- --------------------------
Jaxson 641 Pty Limited(4) 50% South Africa Tin & tantalum exploration
-------------- ----------------- --------------------------
Pamish Investments 71 Pty 100% South Africa
Limited(2) 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 AfriTin Mining (Namibia) Pty Limited
(4) Held by Mokopane Tin Company Pty Limited
(5) Held by Pamish Investments 71 Pty Limited
This financial information presented in Pound Sterling (GBP)
because that is the currency in which 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.
The Group's key subsidiaries, AfriTin Namibia and UTMC, use the
Namibian Dollar (N$) as their functional currency. The period-end
spot rate used to translate all Namibian Dollar balances was GBP1 =
N$19.84 and the average rate for the period was GBP1 = N$19.70.
2. Significant accounting policies
Basis of accounting
The Consolidated interim financial information has been prepared
in accordance with UK Adopted International Accounting Standards.
The Consolidated interim financial information also complies with
the AIM Rules for Companies, NSX Listing Requirements and the
Companies (Guernsey) Law, 2008 and show a true and fair view.
The significant accounting policies applied in preparing this
information are set out below. These policies have been
consistently applied throughout the period. This information has
been prepared under the historical cost convention except as where
stated.
The interim financial information for the six months to 31
August 2022 is unaudited and does not constitute statutory
financial information. The statutory accounts for the year ended 28
February 2022 are available on the Company's website.
Going concern
This interim financial information has been prepared on the
basis of accounting principles applicable to a going concern which
assumes the company will be able to continue in operation for the
upcoming 12 months and will be able to realize its assets and
discharge its liabilities in the normal course of operations.
At 31 August 2022, the company had cash in the bank of GBP1.7m.
Subsequent to the period end, the group successfully concluded a
successful completion of the Placing and Subscription of
396,021,660 new Ordinary Shares raising gross proceeds of GBP19.8
million (approximately US$22.8million).
Management have prepared a detailed cash flow forecast for the
period to 31 October 2022 and stress tests of those forecasts. The
base case forecast demonstrates that the Group will have sufficient
funds to meet its liabilities as they fall due and includes the
following key assumptions:
-- Prices have been set at $19,000 per tonne of tin.
-- The base case forecast assumes continuing steady state
production for the current mining and processing facility post the
successful expansion, which was commissioned in November 2022.
-- The base case forecast includes capital expenditure required
for the pilot lithium and tantalum production facilities. This
expenditure will be funded by the secured equity.
-- The base case forecast includes exploration drilling
programme expenditure for lithium and tantalum. This expenditure
will be funded by the secured equity.
In addition, the Board have considered downside scenarios in
relation to commodity pricing and production across the period. The
scenarios demonstrated that the Group will be able to maintain
liquidity.
The group has also entered into a conditional US$30.8 million
funding arrangement made up as follows:
-- US$25 million (c. GBP21.5m) investment with a fund managed by
Orion Resource Partners ("Orion").
-- US$5.8 million (cGBP5m) lending facility with the Development
Bank of Namibia. This was announced on 5 July 2022 (and updated by
the disclosures in the Company's Annual Report) ("DBN Debt
Financing")
Accordingly, the Directors have concluded that the going concern
basis in the preparation of this financial information is
appropriate and that there are no material uncertainties that would
cast doubt on that basis of preparation.
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. In particular, information about
significant areas of estimation uncertainty considered by
management in preparing the interim financial information is
provided below.
Estimates and judgements are continually evaluated. Revisions to
accounting estimates are recognised in the year in which the
estimates are revised if the revision affects only that year, or in
the year of revision and in future years if the revision affects
both current and future years.
i) Going concern and liquidity
Significant estimates were required in forecasting cash flows
used in the assessment of going concern including tin and tantalum
prices, the levels of production, operating costs, and capital
expenditure requirements. For further details, refer to going
concern considerations laid out earlier in Note 2.
ii) Decommissioning and rehabilitation obligations
Estimating the future costs of environmental and rehabilitation
obligations is complex and requires management to make estimates
and judgements, as most of the obligations will be fulfilled in the
future and contracts and laws are often not clear regarding what is
required. The resulting provisions (see Note 18) are further
influenced by changing technologies, and by political,
environmental, safety, business, and statutory considerations.
The Group's rehabilitation provision is based on the net present
value of management's best estimates of future rehabilitation
costs. Judgement is required in establishing the disturbance and
associated rehabilitation costs at period end, timing of costs,
discount rates, and inflation. In forming estimates of the cost of
rehabilitation which are risk adjusted, the Group assessed the
Environmental Management Plan and reports provided by internal and
external experts. Actual costs incurred in future periods could
differ materially from the estimates, and changes to environmental
laws and regulations, life of mine estimates, inflation rates, and
discount rates could affect the carrying amount of the
provision.
In determining the amount attributable to the rehabilitation
liability, management used a discount rate of 13% (August 2021:
12.8% and February 2022: 10%), an inflation rate of 7% (August
2021: 6% and February 2022: 5%) and an estimated mining period of
16.5 years, being the Phase 1 expansion life of mine.
iii) Impairment indicator assessment for 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 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, environmental and
regulatory restrictions, and the successful renewal of licences.
The Group considers the South African exploration and evaluation
assets to be non-core as it continues to primarily focus on
developing its Namibian assets. Accordingly, the capitalised
exploration and evaluation expenditure relating to the South
African assets was impaired to nil in the prior year on the basis
that the Group did not intend on incurring any further expenditure
on its South African licences. The directors have concluded that
there are no indications of impairment in respect of the carrying
value of Namibian intangible assets at 28 February 2022 based on
planned future development of the Namibian projects, and current
and forecast tin prices. Exploration and evaluation assets are
disclosed fully in Note 11.
iv) Impairment assessment for property, plant and equipment
Management have reviewed the Uis mine for indicators of
impairment and have considered, among other factors, the operations
to date at the Uis Tin Mine, the Phase 1 Stage II expansion of the
Uis operations, forecast commodity prices, and market
capitalisation of the Group. In undertaking the indicator review,
management have also reviewed the underlying LoM valuation model
for Uis and have concluded that no indicators of impairment have
been noted at period end. The LoM valuation model is on a fair
value less cost to develop basis and includes assessments of
different scenarios associated with capital development and
expansion opportunities.
The forecasts required estimates regarding forecast tin prices,
ore resources and production, and operating and capital costs. The
discounted cash flows use a discount rate of 8.3% post tax nominal.
Under the base case forecast using a nominal consensus tin price of
$25 000 per tonne, rising to $31 000 per tonne by 2028, the
forecast indicates headroom as at 31 August 2022.
As an additional test, management performed certain sensitivity
calculations. These included raising the discount rate to 11% post
tax nominal, lowering the forecast tin prices by 5%, lowering plant
recovery by 5% and increasing operating costs by 10%. In each of
these circumstances, the forecast indicated headroom as at 31
August 2022.
v) Depreciation
Judgement is applied in making assumptions about the
depreciation charge for mining assets when using the
unit-of-production method in estimating the ore tonnes held in
reserves. The relevant reserves are those included in the current
approved LoM plan which relates to the Phase 1 expansion. Judgement
is also applied when assessing the estimated useful life of
individual assets and residual values. The assumptions are reviewed
at least annually by management and the judgement is based on
consideration of the LoM plan, as well as the nature of the assets.
The reserve assumptions included in the LoM plan are evaluated by
management.
vi) Capitalisation and depreciation of waste stripping
The Group has elected to capitalise the costs of waste stripping
activities as these are necessary to allow improved access to the
ore and, therefore, will result in future economic benefits. The
costs of drilling, blasting and load & haul of waste material
is capitalised until such time that the underlying ore is used in
production. These costs are then expensed on a proportional basis.
The capitalised costs are included in the mining asset in property,
plant & equipment and are expensed back into the statement of
comprehensive income as depreciation. Capitalisation of waste
stripping requires the Group to make judgements and estimates in
determining the amounts to be capitalised. These judgements and
estimates include, amongst others, the expected life of mine
stripping ratio for each separate open pit, the determination of
what defines separate pits, and the expected volumes to be
extracted from each component of a pit for which the stripping
asset is depreciated.
vii) Determination of ore reserves
The estimation of ore reserves primarily impacts the
depreciation charge of evaluated mining assets, which are
depreciated based on the quantity of ore reserves. Reserve volumes
are also used in calculating whether an impairment charge should be
recorded where an impairment indicator exists.
The Group estimates its ore reserves and mineral resources based
on information, compiled by appropriately qualified persons,
relating to geological and technical data on the size, depth,
shape, and grade of the ore body and related to suitable production
techniques and recovery rates. The estimate of recoverable reserves
is based on factors such as tin prices, future capital requirements
and production costs, along with geological assumptions and
judgements made in estimating the size and grade of the ore
body.
There are numerous uncertainties inherent in estimating ore
reserves and mineral resources. Consequently, assumptions that are
valid at the time of estimation may change significantly if or when
new information becomes available.
viii) Valuation of inventories
Judgement is applied in making assumptions about the value of
inventories and inventory stockpiles, including tin prices, plant
recoveries and processing costs, to determine the extent to which
the Group values inventory and inventory stockpiles. The Group uses
forecast tin prices to determine the net realisable value of the
ROM stockpile and the tin concentrate inventory on hand at period
end. Inventory stockpiles are measured using actual mining and
processing costs.
ix) Determining the lease term
In determining the lease term, management considers all facts
and circumstances that create an economic incentive to exercise, or
not to exercise, an extension option. Extension options are only
included in the lease term where the company is reasonably certain
that it will extend or will not terminate the lease when the lease
expires. For all leases, the most relevant factors include:
-- Historical lease durations;
-- Costs incurred in replacing the leased asset;
-- Possible business disruption due to replacing the leased asset;
-- Likelihood of extension of the lease - if there are
significant penalties to terminate, then it's reasonably certain
that the Group will extend.
The lease term is reassessed on an ongoing basis, especially
when the option to extend becomes exercisable, or on occurrence of
a significant event or a significant change in circumstances which
affects this assessment, and that is within the control of the
Group.
x) Determining the incremental borrowing rate to measure lease liabilities
The interest rate implicit in leases is not available, therefore
the Group uses the relevant incremental borrowing rate (IBR) to
measure its lease liabilities. The IBR is estimated to be the
interest rate that the Group would pay to borrow:
-- over a similar term;
-- with similar security;
-- the amount necessary to obtain an asset of a similar value to the right of use asset; and
-- in a similar economic environment.
The IBR, therefore, is considered to be the best estimate of the
incremental rate and requires management's judgement as there are
no observable rates available.
xi) Determining the fair value of trade receivables classified
at fair value through profit or loss
The consideration receivable in respect of certain sales for
which performance obligations have been satisfied at period end and
for which the Group has received prepayment under the terms of the
offtake agreement, remain subject to pricing adjustments with
reference to market prices at the date of finalisation. Under the
Group's accounting policies, the fair value of the consideration is
determined, and the remaining receivable is adjusted to reflect
fair value. Management estimated the forward price based on the LME
3-month tin price that is expected when the open shipments will be
finalised. As at 31 August 2022, the tin price had declined
significantly since the provisional payments received and therefore
the Group recognised a negative receivable at fair value through
profit or loss of GBP519 321 (August 2021: receivable of GBP465 529
and February 2022: receivable of GBP812 594).
3. Adoption of new and revised standards
A number of new and amended standards and interpretations issued
by IASB have become effective for the first time for financial
periods beginning on (or after) 1 March 2021 and have been applied
by the Group in this interim financial information. None of these
new and amended standards and interpretations had a significant
effect on the Group because they are either not relevant to the
Group's activities or require accounting which is consistent with
the Group's current accounting policies.
Accounting standards and interpretations not applied
There are a number of standards, amendments to standards, and
interpretations which have been issued by the IASB that are
effective in future accounting periods and which have not been
adopted early.
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 31 August 2022, the Group operated within two
operating segments, tin exploration and operational activities in
Namibia and tin exploration activities in South Africa.
Segment results
The following is an analysis of the Group's results by
reportable segment.
South Africa Namibia Total
GBP GBP GBP
Period ended 31 August
2022
Results
4 693 4 726
Revenue 33 478 131 609
(6 485 (6 491
Associated costs (5 229) 826) 056)
------------ --------- ---------
(1 792 (1 764
Segmental profit/(loss) 28 249 695) 446)
============ ========= =========
Period ended 31 August
2021
Results
Revenue 17 778 5 055 559 5 073 337
(4 498 (4 500
Associated costs (2 006) 287) 293)
------------ --------- ---------
Segmental profit 15 772 557 271 573 044
============ ========= =========
Year ended 28 February
2022
Results
13 580 13 615
Revenue 34 444 600 045
(10 693 (10 724
Associated costs (30 843) 637) 480)
2 886 2 890
Segmental profit 3 601 963 564
============ ========= =========
The reconciliation of segmental gross loss to the Group's loss
before tax is as follows:
Period ended Period ended Year ended
31 August 31 August 2021 28 February
2022 GBP 2022
GBP GBP
Segmental loss (1 764 446) 573 044 2 890 564
Unallocated costs (1 790 616) (849 033) (2 252 700)
Other income - - 61 755
Finance income 21 368 - 6 545
Finance costs (186 874) (228 285) (316 365)
------------ --------------- ------------
Profit/(loss)
before tax (3 720 569) (504 274) 389 798
============ =============== ============
Unallocated costs are mainly comprised of corporate overheads
and costs associated with being listed in London.
Other segmental information
South Africa Namibia Total
GBP GBP GBP
As at 31 August 2022
6 711 6 723
Intangible assets 12 871 027 898
Other reportable segmental 30 766 30 861
assets 95 428 260 688
Other reportable segmental (13 437 (13 504
liabilities (66 939) 197 136)
Unallocated net liabilities - - 1 317 576
------------ --------- ---------
24 040 25 399
Total consolidated net assets 41 360 089 025
============ ========= =========
As at 31 August 2021
6 182
Intangible assets 12 718 907 6 195 625
Other reportable segmental 17 326 17 424
assets 98 119 294 413
Other reportable segmental (2 080 (2 144
liabilities (63 974) 988) 962)
Unallocated net assets - - 5 677 317
------------ --------- ---------
21 428 27 152
Total consolidated net assets 46 863 214 393
============ ========= =========
As at 28 February 2022
Intangible assets 12 565 5 043 165 5 055 730
Other reportable segmental 24 119 24 190
assets 70 564 470 033
Other reportable segmental (4 038 (4 101
liabilities (63 006) 840) 846)
Unallocated net assets - - 2 317 939
------------ --------- ---------
25 123 27 461
Total consolidated net assets 20 122 795 857
============ ========= =========
Unallocated net assets/liabilities are mainly comprised of cash
and cash equivalents and the borrowings which are managed at a
corporate level.
5. Revenue
Period ended Period ended Year ended
31 August 31 August 28 February
2022 2021 2022
GBP GBP GBP
Revenue from the sale of tin 4 723 857 5 040 321 13 717 620
Revenue from the sale of sand 33 478 17 778 34 444
------------------ ------------- ------------
Total revenue from customers 4 757 335 5 058 099 13 752 064
Other revenue - change in fair
value of
customer contract (30 726) 15 238 (137 019)
------------------ -------------
4 726 609 5 073 337 13 615 045
================== ============= ============
6. Cost of sales
Period ended Period ended Year ended
31 August 31 August 28 February
2022 2021 2022
GBP GBP GBP
Costs of production 5 049 956 3 510 718 8 057 083
Smelter charges 339 978 268 818 748 892
Logistics costs 59 328 41 523 126 086
Government royalties 275 114 138 090 370 457
------------ ------------
5 724 376 3 959 149 9 302 518
============ ============ ============
7. Administrative expenses
The loss for the period has been arrived at after charging:
Period ended Period ended Year ended
31 August 31 August 28 February
2022 2021 2022
GBP GBP GBP
Staff costs 1 083 726 506 904 1 269 882
Depreciation of property, plant
& equipment 113 185 97 166 221 948
Professional fees 443 781 132 991 621 379
Travelling expenses 150 450 56 969 96 956
Uis administration expenses 266 779 230 007 660 476
Auditor's remuneration 5 000 1 500 95 000
Other costs 494 374 364 641 709 022
2 557 296 1 390 177 3 674 662
============ ============ ============
Other costs are mainly comprised of corporate overheads
necessary to run the South African head office and the costs
associated with being listed in London.
8. Finance cost
Period ended Period ended Year ended
31 August 31 August 28 February
2022 2021 2022
GBP GBP GBP
Interest on lease liability 15 882 21 060 42 630
Interest on environmental rehabilitation
liability 17 209 12 173 12 080
Bank interest 95 900 60 891 102 655
Interest on loan notes - 68 836 68 836
Amortisation of warrant charge - 37 594 37 594
Other interest 57 882 27 731 52 570
------------ ------------ ------------
186 874 228 285 316 365
============ ============ ============
9. Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
Period ended Period ended Year ended
31 August 31 August 28 February
2022 2021 2022
GBP GBP 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 (3 720 569) (504 274) 389 798
------------ ------------ ------------
Loss before taxation multiplied
by the Guernsey
Corporation tax charge rate of
0% - - -
Effects of:
Differences in tax rates (overseas
jurisdictions) (615 188) (452 848) (525 598)
Tax losses carried forward 615 188 452 848 525 598
Movement in deferred tax 888 933 - (864 199)
------------ ------------ ------------
Tax for the period 888 933 - (864 199)
============ ============ ============
Accumulated losses in the subsidiary undertakings for which
there is an unrecognised deferred tax asset are GBP5 131 401
(August 2021: GBP3 919 522 and February 2022: GBP4 290 665).
10. Loss per share from continuing operations
The calculation of a basic loss per share of 0.25 pence (August
2021: loss per share of 0.07 pence and February 2022: loss per
share of 0.08 pence), is calculated using the total loss for the
period attributable to the owners of the Company of GBP2 680 820
(August 2021: GBP692 251 and February 2022: GBP815 645) and the
weighted average number of shares in issue during the period of 1
064 247 295 (August 2021: 1 016 465 204 and February 2022: 1 064
247 295).
Due to the loss for the period, the diluted loss per share is
the same as the basic loss per share. The number of potentially
dilutive ordinary shares, in respect of share options, warrants and
shares to be issued as at 31 August 2022 is 131 220 649 (August
2021: 84 895 572 and February 2022: 76 261 762). These potentially
dilutive ordinary shares may have a dilutive effect on future
earnings per share.
11. Intangible assets
Exploration
and evaluation Computer
assets software Total
Cost GBP GBP GBP
6 201
As at 31 August 2021 6 080 069 121 637 706
Additions for the period 741 977 741 977
(1 058
Transfer to mining asset (1 058 602) 602)
Transfer to mining asset under
construction (678 467) (678 467)
Exchange differences (29 248) (1 465) (30 713)
5 175
As at 28 February 2022 5 055 729 120 172 901
1 622
Additions for the period 1 622 407 - 407
Exchange differences 45 761 2 246 48 007
6 846
As at 31 August 2022 6 723 897 122 418 315
=============== ========= =========
Accumulated Depreciation
As at 31 August 2021 - 6 081 6 081
Charge for the period - 22 112 22 112
Exchange differences - (75) (75)
--------------- --------- ---------
As at 28 February 2022 - 28 119 28 119
Charge for the period - 5 285 5 285
Exchange differences - (36) (36)
--------------- --------- ---------
As at 31 August 2022 - 33 368 33 368
--------------- --------- ---------
Net Book Value
6 812
As at 31 August 2022 6 723 897 89 050 947
5 147
As at 28 February 2022 5 055 729 92 053 782
6 195
As at 31 August 2021 6 080 069 115 556 625
The additions to the evaluation and exploration asset during the
period mainly comprise of expenses capitalised as part of the Phase
2 exploration drilling project, the metallurgical testwork
programme, environmental studies and region exploration
projects.
12. Property, plant and equipment
Mining Mining
asset Asset Mobile
under Mining - Decommissioning Right-of-use Computer equipment
Land construction Asset Stripping asset Asset Equipment Furniture Vehicles (crane) Buildings Total
Cost GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP
As at 31
August 14 629 16 918
2021 12 463 390 218 402 745 755 175 501 594 193 169 898 121 973 79 294 - - 697
Additions for
the 2 210 3 636
period - 779 395 160 589 604 95 585 68 073 42 256 58 844 - 176 273 - 574
Disposals for
the
period - - - - - - (12 831) - (12 523) - - (25 354)
Transfer from
exploration
and
evaluation 1 058 1 737
asset - 678 467 602 - - - - - - - - 069
Exchange (186
differences (150) 304 389 (473 395) (3 233) (2 382) (6 735) (1 851) (1 487) (920) (493) - 258)
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- --------
As at 28
February 3 583 15 609 1 332 22 080
2022 12 312 853 768 128 268 704 655 530 197 472 179 330 65 851 175 780 - 728
Additions for
the 5 112 1 106 7 552
period - 760 936 723 532 - - 40 407 14 370 190 122 311 316 52 634 078
Disposals for - - - - - - - - - - - -
the
period
Exchange
differences 300 44 513 346 390 27 502 6 554 15 989 4 537 4 262 295 2 141 (363) 452 120
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- --------
As at 31
August 8 741 17 063 2 083 30 084
2022 12 613 126 094 162 275 258 671 519 242 417 197 962 256 268 489 237 52 271 926
======= ============= ========= ========== ================ ============= ========== ========== ========= ========== ========== ========
Accumulated
Depreciation
As at 31
August 1 377 1 822
2021 - - 680 - 4 775 237 798 97 721 48 676 56 169 - 819
Charge for
the 1 124
period - - 492 511 489 372 4 683 97 285 20 931 16 932 (715) 3 231 - 231
Exchange
differences - - (10 416) (1 368) (23) (2 459) (1 047) (516) (576) (9) - (16 414)
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- --------
As at 28
February 1 859 2 930
2022 - - 775 488 005 9 435 332 624 117 605 65 091 54 878 3 222 635
Charge for
the
period - - 431 992 342 996 7 975 85 804 25 574 21 853 16 692 16 339 658 949 884
Exchange
differences - - 38 881 9 538 175 7 521 2 701 1 428 1 223 (34) (5) 61 429
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- --------
As at 31
August 2 330 3 941
2022 - - 648 840 539 17 585 425 950 145 881 88 373 72 793 19 527 653 948
======= ============= ========= ========== ================ ============= ========== ========== ========= ========== ========== ========
Net Book
Value
As at 31
August 8 741 14 732 1 242 26 142
2022 12 613 126 446 624 257 673 245 569 96 536 109 589 183 475 469 710 51 618 978
As at 28
February 3 583 13 749 19 150
2022 12 312 853 993 844 123 259 269 322 906 79 867 114 239 10 973 172 558 - 092
As at 31
August 13 251 15 095
2021 12 463 390 218 722 745 755 170 726 356 395 72 177 73 297 23 125 - - 878
The additions to the mining asset under construction during the
period mainly comprise of the construction of the Uis Phase 1 Stage
II expansion. The construction costs of the expansion will remain
in mining asset under construction until the project has been
completed and a commission certificate has been issued.
Additions to the mining asset include capitalised costs and
equipment purchased as part of the Uis Phase 1 Continuous
Improvement project
13. Inventories
31 August 31 August 28 February
2022 2021 2022
GBP GBP GBP
Run-of-mine stockpile 605 258 962 781 909 180
Tin concentrate on hand 204 236 167 367 155 389
Consumables 620 335 299 546 387 364
---------- ---------- -----------
1 429 829 1 429 694 1 451 933
========== ========== ===========
14. Trade and other receivables
31 August 31 August 28 February
2022 2021 2022
GBP GBP GBP
Trade receivables 160 188 120 042 96 173
Trade receivables at fair
value through profit
or loss (519 321) 465 529 812 594
Other receivables 538 218 165 475 1 875 561
VAT receivables 2 651 899 385 007 1 169 053
---------- -----------
2 830 984 1 136 053 3 953 382
========== =========== ===========
Due to the decline in the tin price between receipt of
provisional payment and finalisation of tin sales, the trade
receivables carried at fair value through profit and loss resulted
in a negative balance.
15. Cash and cash equivalents
31 August 31 August 28 February
2022 2021 2022
GBP GBP GBP
--------- ---------
Cash on hand and in bank 1 675 245 6 290 694 7 365 379
========= ========= ===========
16. Borrowings
31 August 31 August 28 February
2022 2021 2022
GBP GBP GBP
Standard Bank term loan
facility 4 467 960 - 4 523 414
Standard Bank VAT facility 376 709 - 367 739
Standard Bank Vehicle Asset
Financing 503 444 - -
Standard Bank Short-term
Loan Facility 2 005 565 - -
Standard Bank working capital
facility 1 674 577 - 228 988
Nedbank working capital
facility - 505 267 -
9 028 255 505 267 5 120 141
========== ========= ===========
On 18 November 2021, a term loan facility of N$90 000 000 (c.
GBP4 536 000), a VAT facility of N$8 000 000 (c. GBP403 000) and a
working capital facility of N$35 000 000 (c. GBP1 764 000) was
entered into between the Company's subsidiary, Uis Tin Mining
Company (Pty) Ltd and Standard Bank Namibia.
The maturity date of the term loan facility is November 2026 and
the capital balance of the loan together with accrued interest will
be repaid in quarterly instalments over the next 5 years. Interest
is charged on the outstanding capital balance of the loan at a rate
of 3-month JIBAR plus a margin of 4.5%.
The Group is required to meet the following covenants each year
on 28 February as part of the term loan facility agreement:
-- EBITDA ÷ total interest must not be lower than 4.5 times
-- Total debt ÷ EBITDA must not exceed 4 times in year 1, 3.5
times in year 2 and 3 times thereafter
-- Free cash flow before Debt Service Cover ÷ Principal and
Interest Senior Debt Service Payments must not be lower than 1.3
times
-- Free cash flow before Debt Service Cover + Total Cash
Collateral ÷ Principal and Interest Senior Debt Service Payments
must not be lower than 2 times
The Group met all the above covenant requirements at 28 February
2022.
The VAT facility is secured by assessed/audited VAT returns
(refunds) which have not been paid by Namibia Inland Revenue.
Standard Bank Namibia provides a facility amounting to the unpaid
refunds. Any drawdowns against this facility are repaid to the bank
upon receipt of cash from Namibia Inland Revenue.
The VAT facility and the working capital facility have no fixed
maturity date, but are both renewed on an annual basis. Interest
accrues on these facilities at the Namibian prime rate less 1%.
Standard Bank have recently provided vehicle asset financing of
N$10 000 000 (c. GBP504 000) and a short-term loan facility of N$40
000 000 (c. GBP2 016 000).
Standard Bank Namibia have provided a N$ 4 117 500 (c. GBP195
000) guarantee to the Namibia Power Corporation Pty Limited in
relation to a deposit for the supply of electrical power. As a
result of the guarantee provided by Standard Bank, no cash was paid
over for the deposit.
The full working capital facility that was previously held with
Nedbank Namibia was repaid during the previous year as the Group's
facilities were moved over to Standard Bank.
Reconciliation of net cash flow to movement in combined Long and
Short term Borrowings
Balance as at 31 August 2021 505 267
Incoming cash flows 5 024 727
----------------------------------------- --------------------
Proceeds from term loan facility 4 428 000
Proceeds from VAT facility 367 739
Proceeds from working capital
facility 228 988
Outgoing cash flows (505 267)
----------------------------------------- --------------------
Repayment of working capital
facility (505 267)
Non-cash flows 95 414
----------------------------------------- --------------------
Interest accrued on term loan
facility 95 414
Balance as at 28 February
2022 5 120 141
Incoming cash flows 3 997 799
----------------------------------------- --------------------
Proceeds from vehicle asset
financing facility 506 939
Proceeds from short-term loan
facility 2 019 492
Proceeds from working capital
facility 1 450 001
Interest received on bank balances 21 368
----------------------------------------- --------------------
Outgoing cash flows (116 932)
----------------------------------------- --------------------
Repayment of capital balance
of term loan (68 512)
Interest paid on facilities (98 420)
----------------------------------------- --------------------
Non-cash flows 77 247
----------------------------------------- --------------------
Interest accrued on facilities
(a portion has been capitalised
to mining asset under construction) 175 864
Foreign exchange differences (98 617)
----------------------------------------- --------------------
Balance as at 31 August 2022 9 028 255
====================
17. Trade and other payables
31 August 31 August 28 February 2022
2022 2021 GBP
GBP GBP
Trade payables 3 344 593 1 436 435 2 293 471
Other payables 168 378 78 520 341 276
Accruals 368 080 375 745 335 087
---------- ----------
3 881 051 1 890 700 2 969 833
========== ========== ================
18. Environmental rehabilitation liability
GBP
Balance at 31 August
2021 202 240
Increase in provision 95 585
Interest expense (93)
Foreign exchange differences (2 581)
--------
Balance at 28 February
2022 295 151
Increase in provision -
Interest expense 17 091
Foreign exchange differences 7 199
--------
Balance at 31 August
2022 319 441
========
Provision for future environmental rehabilitation and
decommissioning costs are made on a progressive basis. Estimates
are based on costs that are regularly reviewed and adjusted
appropriately for new circumstances. The environmental
rehabilitation liability is based on disturbances and the required
rehabilitation as at 31 August 2021.
The rehabilitation provision represents the present value of
decommissioning costs relating to the dismantling of mechanical
equipment and steel structures related to the Phase 1 Pilot Plant,
the demolishing of civil platforms and reshaping of earthworks. A
provision for this requires estimates and assumptions to be made
around the relevant regulatory framework, the magnitude of the
possible disturbance and the timing, extent and costs of the
required closure and rehabilitation activities. In calculating the
appropriate provision, cost estimates of the future potential cash
outflows based on current studies of the expected rehabilitation
activities and timing thereof are prepared. These forecasts are
then discounted to their present value using a risk-free rate
specific to the liability. In determining the amount attributable
to the rehabilitation liability, management used a discount rate of
13% (August 2021: 12.8% and February 2022: 10%), an inflation rate
of 7% (August 2021: 6% and February 2022: 5%) and an estimated
mining period of 16.5 years, being the Phase 1 expansion life of
mine. Actual rehabilitation and decommissioning costs will
ultimately depend upon future market prices for the necessary
rehabilitation works and timing of when the mine ceases
operation.
19. Lease liability
The Company assessed all rental agreements and concluded that
the following rentals fall within the scope of IFRS 16: Leases and
therefore a lease liability has been recognised:
Lease Option to extend/terminate Incremental
term borrowing
rate
Option to extend not specified
in contract. Term of lease determined
Office building 5 years to be 5 years. 13.75%
--------- ---------------------------------------- ------------
Option to extend not specified
in contract. Term of lease determined
Workshop facility 2 years to be 2 years. 7.5%
--------- ---------------------------------------- ------------
The lease will continue automatically
after the initial period for
an open-ended period. Either
party must provide written notice
Residential if they wish to terminate. Lease
housing 5 years term determined to be 5 years. 8.5%
--------- ---------------------------------------- ------------
The lessee is granted the option
to purchase the units after the
Mobile Units 2 years lease period of 2 years. 7.5%
--------- ---------------------------------------- ------------
Office Building Mobile
Workshop Housing Units Total
GBP GBP GBP GBP GBP
Balance at 31 August
2021 211 841 61 892 123 609 - 397 342
Additions (616) - - 68 689 68 073
Interest expense 11 910 1 648 4 601 3 411 21 570
Lease payments (50 167) (27 046) (18 298) (26 892) (122 403)
Foreign exchange differences (2 147) (922) (1 584) (126) (4 779)
--------------- --------
Balance at 28 February
2022 170 821 35 572 108 328 45 082 359 803
Additions - - - - -
Interest expense 9 645 750 4 182 1 305 15 882
Lease payments (54 272) (28 103) (19 541) (19 061) (120 977)
Foreign exchange differences 4 475 1 057 2 748 1 224 9 504
--------------- --------
Balance at 31 August
2022 130 669 9 276 95 717 28 550 264 212
=============== ======== ======== ======== =========
The following is the split between the current and the
non-current portion of the liability:
31 August 31 August 28 February
2022 2021 2022
GBP GBP GBP
Non-current liability 89 776 232 858 167 215
Current liability 174 436 164 484 192 588
--------- ---------
264 212 397 342 359 803
========= ========= ===========
20. Share capital
Number of ordinary
shares of no
par value issued Share Capital
and fully paid GBP
Balance at 31 August 2021 1 112 334 912 38 297 431
Shares issued to suppliers
- 15 Dec 798 001 49 101
Exercising of employee share
options - 14 Jan 2 185 087 72 059
Exercising of employee share
options - 27 Jan 1 250 000 56 250
Exercising of employee share
options - 22 Feb 5 273 684 180 237
------------------ -------------
Balance at 28 February 2022 1 121 841 684 38 655 078
Balance at 31 August 2022 1 121 841 684 38 655 078
================== =============
Authorised: 1 220 486 913 ordinary shares of no par value
Allotted, issued and fully paid: 1 121 841 684 ordinary shares
of no par value
On 15 December 2021, 798 001 ordinary shares of no par value
were issued to settle a contractual liability at 4.90 pence in lieu
of fees in relation to a consulting agreement.
On 14 January 2022, the Company received notice from share
option holders to exercise 1 300 877 share options at an exercise
price of 3 pence, 467 105 share options at an exercise price of 3.5
pence and 417 105 share options at an exercise price of 4
pence.
On 27 January 2022, the Company received notice from share
option holders to exercise 1 250 000 share options at an exercise
price of 4.5 pence.
On 22 February 2022, the Company received notice from share
option holders to exercise 2 336 842 share options at an exercise
price of 3 pence, 1 468 421 share options at an exercise price of
3.5 pence, and 1 468 421 share options at an exercise price of 4
pence.
21. Warrant reserve
The warrants in issue during the period are as follows:
Outstanding at 31 August 22 613
2021 334
Exercisable at 31 August 22 613
2021 334
Granted during the period -
Expired during the period -
Exercised during the period -
------
Outstanding at 28 February 22 613
2022 334
Exercisable at 28 February 22 613
2022 334
Granted during the period -
Expired during the period -
Exercised during the period -
------
Outstanding at 31 August 22 613
2022 334
Exercisable at 31 August 22 613
2022 334
The warrants outstanding at the end of the period have an
average exercise price of 2.2 pence, with a weighted average
remaining contractual life of 0.65 years.
22. Share-based payment reserve
Director share options
The following director share options were granted during the
period ended 31 August 2022:
Date of grant 8 April 2022 8 April 2022 8 April 2022
Number granted 7 800 000 3 900 000 3 900 000
Vesting period 1 year 2 years 3 years
Contractual life 3 years 3 years 3 years
Estimated fair value
per option (pence) 2.0830 2.8490 3.4090
The estimated fair values were calculated by applying the Black
Scholes pricing model. The model inputs were:
Date of grant 8 April 2022 8 April 2022 8 April 2022
Share price at grant
date (pence) 9.35 9.35 9.35
Exercise price (pence) 9.80 10.30 10.80
Expiry date 8 April 2025 8 April 2025 8 April 2025
Expected volatility 60% 60% 60%
Expected dividends Nil Nil Nil
Risk-free interest rate 1.24% 1.24% 1.24%
The director share options in issue during the period are as
follows:
Outstanding at 31 August 27 100
2021 000
Exercisable at 31 August
2021 8 389 999
Granted during the period -
Forfeited during the period -
Exercised during the period (1 250 000)
Expired during the period -
-----------
Outstanding at 28 February 25 850
2022 000
Exercisable at 28 February 23 850
2022 000
15 600
Granted during the period 000
Forfeited during the period -
Exercised during the period -
Expired during the period -
-----------
Outstanding at 31 August 41 450
2022 000
Exercisable at 31 August 23 850
2022 000
The director share options outstanding at period end have an
average exercise price of GBP0.067, with a weighted average
remaining contractual life of 1.78 years.
Employee share options
The following employee share options were granted during the
period ended 31 August 2022:
Date of grant 8 April 2022 8 April 2022 8 April 2022
Number granted 19 355 000 9 677 500 9 677 500
Vesting period 1 year 2 years 3 years
Contractual life 3 years 3 years 3 years
Estimated fair value
per option (pence) 2.0830 2.8490 3.4090
The estimated fair values were calculated by applying the Black
Scholes pricing model. The model inputs were:
Date of grant 8 April 2022 8 April 2022 8 April 2022
Share price at grant
date (pence) 9.35 9.35 9.35
Exercise price (pence) 9.80 10.30 10.80
Expiry date 8 April 2025 8 April 2025 8 April 2025
Expected volatility 60% 60% 60%
Expected dividends Nil Nil Nil
Risk-free interest rate 1.24% 1.24% 1.24%
The employee share options in issue during the period are as
follows:
Outstanding at 31 August 34 830
2021 000
Exercisable at 31 August 26 610
2021 001
Granted during the period -
Forfeited during the period -
Exercised during the period (7 458 771)
Expired during the period -
-----------
Outstanding at 28 February 27 371
2022 229
Exercisable at 28 February 27 371
2022 229
Granted during the period 38 710 000
Forfeited during the period -
Exercised during the period -
Expired during the period -
-----------
Outstanding at 31 August 66 081
2022 229
Exercisable at 31 August 27 371
2022 229
The employee share options outstanding at the period end have an
average exercise price of GBP0.074, with a weighted average
remaining contractual life of 2.13 years.
23. Events after balance sheet date
Funding:
Subsequent to the period end, the group successfully concluded a
successful completion of the Placing and Subscription of
396,021,660 new Ordinary Shares raising gross proceeds of GBP19.8
million (approximately US$22.8million).
The group has also entered into a conditional US$30.8 million
funding arrangement made up as follows:
-- US$25 million (c. GBP21.5m) investment with a fund managed by
Orion Resource Partners ("Orion").
-- US$5.8 million (cGBP5m) lending facility with the Development
Bank of Namibia. This was announced on 5 July 2022 (and updated by
the disclosures in the Company's Annual Report) ("DBN Debt
Financing")
Decline in tin price:
The recent volatility in the tin prices has placed additional
pressures on the Company with regards to funding of capital
expansion project via internal sources. Management had anticipated
the declines and have secured the necessary funding in order to
continue its growth ambitions. Furthermore, the consensus view of
the forward-looking range of prices used by management in the
forecast modelling still results in a positive recoverability of
assets.
Recovery of VAT receivable:
Full balance of the outstanding VAT receivables were recovered
from the Namibian Revenue Agency in September and October
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END
IR DZMMMVNNGZZG
(END) Dow Jones Newswires
November 17, 2022 02:00 ET (07:00 GMT)
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