TIDMATM
RNS Number : 9781U
Andrada Mining Limited
29 November 2023
29 November 2023
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 (MAR) as in force in
the United Kingdom pursuant to the European Union (Withdrawal) Act
2018. Upon the publication of this announcement via Regulatory
Information Service (RIS), this inside information will be in the
public domain.
Andrada Mining Limited
("Andrada" or "the Company")
Unaudited Interim Financial Results for the six months ended 31
August 2023
Andrada Mining Limited (AIM: ATM, OTCQB: ATMTF), the metals and
mining company with a portfolio of technology metals mining and
exploration assets in Namibia, announces its unaudited interim
financial results for the six-months ended 31 August 2023 ("H1
2024").
The company will be hosting an investor presentation at 9am UK
time (11am SAST) on Thursday 30 November 2023. Please register for
the event at:
https://www.investormeetcompany.com/afritin-mining-limited/register-investor
.
HIGHLIGHTS
FINANCIAL PERFORMANCE
-- 87% increase in revenue to GBP8.7 million (H1 2023: GBP4.7
million).
-- 19% decrease in cost of sales per tonne of contained tin to
GBP17 276 (H1 2023: GBP21 903).
-- > 100% increase in gross profit to GBP1.5 million (H1
2023: loss of GBP1 million).
-- 30% reduction in operating loss to GBP2.5 million (H1 2023:
loss of GBP3.5 million).
-- 25% reduction in loss before tax to GBP2.8 million (H1 2023:
loss of GBP3.7 million).
-- Average C1(1) operating cash cost per tonne of contained tin
produced was USD18 161 (GBP14 324), which is within management
guidance.
-- Average C2(2) operating cost per tonne of contained tin
produced was USD20 796 (GBP16 403), which is within management
guidance.
-- All-in sustaining cost ("AISC") (3) per tonne of contained
tin produced was USD24 662 (GBP19 452) which is below management
guidance.
-- GBP7.7 million (c. USD10 million) raised through issuance of
unsecured convertible loan notes.
-- Unaudited cash balance on 31 August 2023 was GBP6.7 million
(USD8.5 million).
OPERATIONAL PEFORMANCE
-- Successful plant expansion in 2023 resulted in significant
improvements in the H1 2024 performance.
-- 67% increase in tin concentrate to 758 tonnes (H1 2023: 455
tonnes).
-- 58% increase in contained tin metal to 454 tonnes (H1 2023:
287 tonnes).
-- 37% increase in the plant processing rate to 136 tonnes per
hour (tph) (H1 2023: 99 tph).
-- 10% increase in plant utilisation to 81% (H1 2023: 74%).
-- Improved safety performance to 0.8714 Lost Time Injury
Frequency Rate ("LTIFR") at the end of the period compared to 8.02
at the end of H1 2023.
-- Production of initial bulk saleable petalite concentrate at
85% purity and Li O grade of 4.16%.
-- Construction and commissioning of the lithium (bulk-sampling)
pilot plant ("Pilot Plant") completed.
- Production of lithium concentrate from the Pilot Plant has
commenced (see announcement dated 27 November 2023).
-- Construction and commissioning of the tantalum circuit ("the
Circuit") completed.
-- In-house test campaigns have commenced to determine how to
produce a consistent saleable grade of lithium concentrate.
-- Drilling on Spodumene Hill licence area (ML 129) completed
with all holes intersecting mineralised pegmatite
- Inaugural drill results intersected high grade spodumene
mineralisation with grades up to 2.32% lithium oxide (Li O).
STRATEGIC
-- Appointment of Barclays Bank PLC as a strategic advisor to
the Company's lithium development programme.
-- Completed the rebranding from Afritin Mining to Andrada
Mining to reflect the Company's expanding lithium, tin, and
tantalum resources.
-- Upgraded the OTC listing from pink sheets to the QB tier to
enhance access to the North American investor base.
-- Renewal of the Brandberg West exploration license (EPL 5445)
for an additional 2 years from 1 August 2023.
POST - PERIOD
Operational
-- Renewal of the Thailand Smelting and Refining Co. Limited
("Thaisarco") tin off-take agreement for three years commencing
December 2023.
-- Renewal of the AfriMet Resources AG ("AfriMet") tantalum
off-take agreement for 12 months commencing January 2024.
-- Completion and publication of the 2023 Sustainability Report
highlighting the Company's contribution of GBP33 million to the
Namibian national economy since inception.
Financial
-- On 5 September 2023, the Company finalised the NAD100 million
(c. GBP4.2 million OR USD5.3 million) Development Bank of Namibia
("DBN") financing that is ring-fenced for the implementation of the
Uis Mine Stage II Continuous Improvement Project ("CI2").
-- Finalisation and receipt of USD25 million Financing Package
from Orion Resource Partners ("Orion"). (See announcement dated 15
August 2023 and 16 November 2023).
-- Unaudited cash balance on 27 November 2023 at GBP23 million
(USD29 million)
Exploration
-- Reverse Circulation ("RC") drilling programme undertaken on
the Lithium Ridge licence area (ML133).
- All holes intersected mineralised pegmatites with significant
lithium mineralisation along a 6km strike length with spodumene and
petalite identified as the primary lithium minerals.
-- Commencement of an exploration programme on Brandberg West
licence area EPL 5445.
- Historically a producer of tin and tungsten with strong indications of copper.
Chief Executive Officer's Statement
The interim period under review has been nothing short of
eventful and exhilarating. We kicked off the year with a rebranding
initiative to accurately reflect the poly-metallic nature of our
extensive resource portfolio in Namibia's mineral-rich Erongo
region. We achieved numerous milestones across all the Company's
departments with a single-mindedness to expedite the
route-to-market for lithium and tantalum. These milestones include
the significant lithium discoveries on Lithium Ridge and Spodumene
Hill license areas which established Andrada as an emerging,
formidable poly-metallic producer. The commentary below further
elaborates the various initiatives we have implemented towards the
expanded strategic intent to being a renowned poly-metallic
producer.
OPERATIONAL AND FINANCIAL OVERVIEW
Description Unit H1 2024 H1 2023 YoY % <DELTA>
Feed grade % Sn 0.156 0.147 6%
----------------- -------- -------- --------------
Plant processing
rate tph 136 99 37%
----------------- -------- -------- --------------
Ore processed t 446 621 286 558 56%
----------------- -------- -------- --------------
Tin concentrate t 758 455 67%
----------------- -------- -------- --------------
Contained tin t 454 287 58%
----------------- -------- -------- --------------
Tin recovery % 65 68 -4%
----------------- -------- -------- --------------
Plant availability % 92 89 3%
----------------- -------- -------- --------------
Plant utilisation % 81 74 10%
----------------- -------- -------- --------------
Uis mine C1 operating USD/t contained
cost(1) tin 18 161 20 094 -10%
----------------- -------- -------- --------------
Uis mine C2 operating USD/t contained
cost(2) tin 20 796 22 668 -8%
----------------- -------- -------- --------------
USD/t contained
Uis mine AISC(3) tin 24 662 25 812 -5%
----------------- -------- -------- --------------
USD/t contained
Tin price achieved tin 25 912 25 525 2%
----------------- -------- -------- --------------
All the numbers are unaudited
(1) C1 operating cash costs refers to operating cash costs per
unit of production excluding selling expenses and sustaining
capital expenditure associated with Uis Mine.
(2) C2 operating cash costs are equivalent to the C1 costs
including selling expenses (logistics, smelting and royalties).
(3) All-in sustaining cost (AISC) incorporates all costs are
related to sustaining production, capital expenditure associated
with developing and maintaining the Uis operation as well as
pre-stripping waste mining costs.
Increased tonnage and revenue
Andrada experienced significant growth in H1 2024, driven by a
67% increase in tin concentrate production to 758 tonnes, resulting
in a 58% increase in contained tin to 454 tonnes compared to the
interim period in the 2023 financial year ("H1 2023").
Consequently, revenue increased to GBP8.7 million (H1 2023: GBP4.7
million), generating a higher gross profit of GBP1.5 million (H1
2023: loss of GBP1 million). This impressive performance is
attributed to a 37% increase in plant processing rate and a 10%
improvement in capacity utilisation, following the completion of
the modular expansion of the crushing and tin concentration
circuits in Q3 2023.
The enhanced plant performance revealed bottlenecks that needed
to be eliminated to ensure sustainability of the increased output
and higher production rates. To that effect, the CI2 is expected to
improve processing efficiencies to maximise the tin concentrate
recovery rate to approximately 70%, establish business
sustainability through the enhancement of operational support
infrastructure and to reduce operating costs.
The renewal of the tin off-take with Thaisarco for up to 100%
production that was agreed after the period end, should also secure
the expanded output resulting from the Orion royalty for another
three years to 30 November 2026. (See announcement dated 5
September 2023) .
Lower unit cost per tonne
The Company is pleased to report a significant improvement in
its financial performance in the first half of 2024. Despite an
increase in the cost of sales to GBP7.3 million (H1 2023: GBP5.7
million), the cost per tonne of contained tin decreased by 19% to
GBP17 276 (H1 2023: GBP21 903). due to increased production tonnage
and economies of scale. At the same time, as set out above, the C1
operating cost and AISC decreased by 10% and 5% respectively due to
the higher production tonnage. The increased waste stripping of the
mining pit to access ore contributed to the higher costs during the
period under review. We are pleased that we have exposed additional
ore and the stripping ratios have continued to decrease.
The operating loss decreased by 30% to GBP2.5 million (H1 2023:
loss of GBP3.6 million) whilst the loss before tax decreased to
GBP2.8 million (H1 2023: loss of GBP3.7 million). The average C1
and C2 cash costs remained within management guidance at USD18 161
(GBP14 324) and USD20 796 (GBP16 403), respectively. We are
particularly pleased that the AISC at USD24 662 (GBP19 452) was
below management guidance of between USD25 000 (GBP19 719) and
USD30 000 (GBP 23 663) per tonne of contained tin. It is important
to note that due to the higher stripping ratio and Orion tin
royalty, the AISC is expected to increase but remain within our
guidance. The CI2 is expected to improve plant efficiency and to
reduce operational costs by 10%, with the initial impact expected
in Q1 2024.
Improved safety performance
At Andrada we are committed to upholding the highest safety
standards at Uis. The concerted effort of supervisors across all
functions to instil a culture of safety have resulted in a
significant improvement in safety performance. The LTIFR decreased
from 8.02 at the end of H1 2023 to 0.87 at the end of H1 2024 and
there were no fatalities recorded. Various initiatives, such as
quarterly safety audits and training, have been instrumental in
promoting the safety culture.
Strengthened the financial position
To support ongoing capital expansion programs related to lithium
and tantalum development, the Company issued unsecured convertible
loan notes totalling GBP7.7 million (c. USD10 million) in July
2023. These funds were primarily utilised for working capital
purposes, to progress the exploration program, and to commence a
lithium feasibility study. Additionally, the Company secured a
USD25 million funding package from Orion Mining, comprising a
USD12.5 million unsecured tin royalty, a USD2.5 million equity
subscription, and a USD10 million unsecured convertible loan note
(see announcement dated 16 November 2023, for more details of this
completed package). This funding should provide sufficient capital
to progress the expansion programmes at Uis and to expedite the
lithium implementation program. In August 2023, Andrada signed
binding documentation for the USD25 million Orion funding and
ultimately received the funds in November 2023, after the period
under review, following the fulfilment of all precedent conditions.
We believe that this funding from Orion strongly endorses Andrada's
corporate and broader multi-commodity development strategy. (see
announcements dated 18 July 2023 and 16 November 2023) .
In September 2023, the Company concluded the NAD100 million (c.
GBP4.2 million OR c. USD5.3 million) funding with DBN to expedite
the implementation of the CI2. The Directors consider this DBN
funding to be an essential component of the overall funding and
development strategy. The proceeds will be used to implement
improvements at Uis Mine to enhance the plant's productivity and
output. The targeted increase in the tin recovery rate will
complement the royalty portion of the Orion funding by enabling
Andrada to achieve the requisite concentrate tonnages. The
improvement in cost efficiencies and overall productivity at Uis
resulting from the CI2, should lay the foundation for the
management of the lithium processing plant and other future
operations. (see announcement dated 5 September 2023) .
These capital inflows of almost USD40 million, provide funding
for the Company to pursue the development of lithium and tantalum
revenue streams whilst expanding tin production. Importantly, the
DBN and Orion funding will enable us to implement various strategic
initiatives necessary for further production growth and the
stabilisation of the Company's assets.
The Directors believe that partnering with the DBN and gaining
the bank's confidence, should also enable the Company to secure
additional infrastructure development financing potentially
required for our future growth aspirations.
LITHIUM & TANTALUM DEVELOPMENT
The production of the initial off- site petalite bulk sample
concentrate of saleable grade in May 2023 from the Lithium Ridge
project represents a significant step towards establishing Andrada
as an emerging lithium producer.
Lithium Pilot Plant production
Testing of bulk samples at the Pilot Plant to determine the
optimal processing parameters for lithium extraction from all three
mining licences commenced in October 2023. In addition to the bulk
testing campaigns, the Pilot Plant is also targeting the production
of at least 2 400 tpa comprising a saleable concentrate suitable
for glass-ceramics market. To date, the Company, has delivered high
purity petalite concentrate samples to several potential customers
and progress will be provided as these discussions progress. We
believe that our lithium concentrate may potentially be suitable as
feedstock for refineries producing lithium carbonate or lithium
hydroxide for the battery manufacturing industry and will provide
further updates on this as our test work in this area advances.
(see announcement 15 and 27 November 2023 ).
Tantalum Circuit production
After the end of the period under review, the Company renewed
its tantalum o take agreement with AfriMet. This will commence on 1
January 2024 for a period of 12 months and should absorb all the
concentrate produced by the Circuit at the Uis Mine. The renewal of
the off-take agreement should enable us to realise additional value
from a the newly commissioned magnetic separation circuit.
Optimisation of the Circuit is on-going, and we foresee commercial
production commencing in or around December 2023. (see announcement
15 November 2023).
Spodumene Hill: Mining Licence 129
An initial drill programme over the B1 and C1 pegmatites
returned positive results with spodumene mineralisation identified
within all holes drilled. The results revealed notable
intersections of up to 2.32% Li O grade, highlighting the tantalum
potential of this area, which further enhances the relevance of the
recently constructed Tantalum Circuit. The proximity of Spodumene
Hill to the existing operations at Uis provides an immediate
opportunity for additional revenues from the licence area by
blending material to increase tantalum grades. (see announcement
dated 6 July 2023)
Lithium Ridge: Mining Licence 133
Lithium Ridge infill channel sampling programme confirmed the
presence of continuous mineralisation at surface over a 6 km strike
length along multiple mineralised pegmatites. An initial RC
drilling programme investigated the continuation of several
pegmatites at depth and found that the mineralisation continues
within the pegmatite lithologies. The primary lithium minerals
identified through drilling and channel sampling were spodumene and
petalite, notable lithium intersections including 9m with grades
exceeding 2% Li O. (See announcement dated 29 August 2023, 6
September 2023 & 18 September 2023).
Off-site Testing Update
Metallurgical test work to date has focused on the concentration
of petalite due to its prevalence within the mining areas. The
Lithium processing testwork has therefore focussed on petalite
recovery, whilst the feasibility of concentrating other lithium
bearing minerals present within the mineralised pegmatites is also
being investigated. A substantial metallurgical programme focussing
on spodumene production is planned to commence in Q4 2024. Three
processing technologies are currently being evaluated to determine
the optimal process for the extraction and concentration of
petalite. Some test work has indicated that it may be possible to
upgrade ore to a saleable concentrate solely through DMS
technology.
STRATEGIC OVERVIEW
Resource upgrade
Simultaneously, we upgraded the Uis Mineral Resource Estimate
for the V1 and V2 pegmatites, confirming 81 million tonnes (Mt) of
ore with an enhanced average tin grade of 0.15% and an updated
Lithium Carbonate Equivalent of 1.45Mt at a noteworthy average
grade of 0.73% Li O. (See announcement dated 6 February 2023 for
full details of the MRE).
Enhanced governance
As we embarked on the new financial year commencing in March
2023, we further strengthened the Board's expertise by welcoming
Hiten Ooka, our Chief Financial Officer, as an executive director
and Ms. Gida Sekandi as a non-executive director. Hiten's
appointment bolstered the Board's financial acumen, while Gida's
expertise deepened our sustainability knowledge. (See announcement
dated 11 May 2023).
Strategic Assessment Process
The Strategic Process is on-going with further updates to be
released in due course. (See announcement dated 11 May 2023 and 27
November 2023).
Expansion into the North American capital market
The admission to the OTCQB(R) Market was a key step in Andrada's
strategy to broaden the Company's investor base by increasing
accessibility to Andrada shares by North American institutional and
retail investors. This investor base is known for its understanding
of, and strong appetite, for mining companies with strong growth
potential, particularly in lithium equities. (See announcement
dated 5 June 2023).
Sustainability focus
Sustainability is one of our foundational pillars and is
intricately woven into our business model. Our approach goes beyond
the mine as we strive to make a positive impact on the Erongo
region in which we operate and on Namibia as a whole. Since
inception, we have contributed significantly to the national
economy through job creation and procurement. We estimate that we
have contributed GBP33 million (NAD690 million) to the Namibian
economy through procurement, royalties, and taxes since inception.
In the 2023, the Company's procurement outlay was GBP 9.1 million
(NAD203 million) through 225 Namibian suppliers of which 107 are
situated within the Erongo region where Uis is located. The Company
further contributed c. GBP2 million (NAD45 million) in royalties
and taxes during the year ending 28 February 2023. As focus shifts
globally towards climate-smart economies, there is an increased
focus on the natural environment. To that effect, we have
concentrated our efforts on the sustainable management of the
surrounding resources including biodiversity and water whilst
producing minerals that are integral to the green energy
transition. We are committed to creating long lasting value for all
our stakeholders. (See announcement dated 27 October 2023).
CONCLUSION
As we approach the final quarter of 2024, we look forward to
achieving the key milestones regarding the lithium development
strategy and tin production in line with the Orion tin royalty. The
CI2 will be implemented into 2025 and is instrumental in achieving
the tin production targeted volumes and cost efficiencies. We also
look forward to providing further updates on the many
initiatives.
Glossary of abbreviations
GBP Great British Pound
N AD Namibian Dollar
---------------------
USD United States Dollar
---------------------
ANDRADA MINING LIMITED
INTERIM REPORT AND CONDENSED CONSOLDATED FINANCIAL
STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
GBP ( GBP) Notes 6 months ended 6 months ended 12 months
31 August ended
2022
31 August (unaudited) 28 February
2023 (unaudited) 2023
(audited)
Continuing operations
----- ------------------ ----------------------- -----------------------
Revenue 5 8 846 997 4 726 609 9 827 474
----- ------------------ ----------------------- -----------------------
Cost of Sales 6 (7 325 039) (5 724 376) (10 509 418)
----- ------------------ ----------------------- -----------------------
Gross profit / (loss) 1 521 958 (997 767) (681 944)
----- ------------------ ----------------------- -----------------------
Administrative expenses 7 (4 031 304) (2 557 296) (7 451 352)
----- ------------------ ----------------------- -----------------------
Idle Pant Costs - - (258 177)
----- ------------------ ----------------------- -----------------------
Other income 20 583 - 52 196
----- ------------------ ----------------------- -----------------------
Operating loss (2 488 763) (3 555 063) (8 339 277)
----- ------------------ ----------------------- -----------------------
Finance income 22 354 21 368 39 054
----- ------------------ ----------------------- -----------------------
Finance cost 8 (309 832) (186 874) (669 824)
----- ------------------ ----------------------- -----------------------
Loss before tax (2 776 241) (3 720 569) (8 970 047)
----- ------------------ ----------------------- -----------------------
Tax credit/(charge) 9 - 888 933 866 203
----- ------------------ ----------------------- -----------------------
Loss for the period (2 776 241) (2 831 636) (8 103 844)
----- ------------------ ----------------------- -----------------------
Other comprehensive income/(loss)
----- ------------------ ----------------------- -----------------------
Items that will or may be reclassified
to profit or loss:
----- ------------------ ----------------------- -----------------------
Exchange differences on translation
of share-based payment reserve (325) 126 (441)
----- ------------------ ----------------------- -----------------------
Exchange differences on translation
of foreign operations (2 207 455) 394 000 (2 298 674)
----- ------------------ ----------------------- -----------------------
Exchange differences on non-controlling
interest 13 410 5 508 19 395
----- ------------------ ----------------------- -----------------------
Total comprehensive loss for
the period (4 970 611) (2 432 002) (10 383 564)
----- ------------------ ----------------------- -----------------------
Profit/((loss) for the period
attributable to:
----- ------------------ ----------------------- -----------------------
Owners of the parent (2 755 819) (2 680 820) (7 753 819)
----- ------------------ ----------------------- -----------------------
Non-controlling interests (20 422) (150 816) (350 025)
----- ------------------ ----------------------- -----------------------
(2 776 241) (2 831 636) (8 103 844)
----- ------------------ ----------------------- -----------------------
Total comprehensive income/(loss)
for the period attributable
to:
----- ------------------ ----------------------- -----------------------
Owners of the parent (4 963 600) (2 286 694) (10 052 933)
----- ------------------ ----------------------- -----------------------
Non-controlling interests (7 012) (145 308) (330 631)
----- ------------------ ----------------------- -----------------------
(4 970 611) (2 432 002) (10 383 564)
----- ------------------ ----------------------- -----------------------
Loss per ordinary share
----- ------------------ ----------------------- -----------------------
Basic and diluted loss per
share (in pence) 10 (0.18) (0.25) (0.60)
----- ------------------ ----------------------- -----------------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
GBP ( GBP) Notes 6 months ended 6 months ended 12 months ended
31 August 2023 31 August 2022 28 February2023
(unaudited) (unaudited) (audited)
Assets
------ ------------------- ---------------------- -----------------------
Non-current assets
------ ------------------- ---------------------- -----------------------
Intangible assets 11 8 401 278 6 812 947 7 279 593
------ ------------------- ---------------------- -----------------------
Property, plant, and equipment 12 29 571 064 26 142 978 26 723 218
------ ------------------- ---------------------- -----------------------
Total non-current assets 37 972 342 32 955 925 34 002 811
------ ------------------- ---------------------- -----------------------
Current assets
------ ------------------- ---------------------- -----------------------
Inventories 13 3 171 674 1 429 829 2 667 193
------ ------------------- ---------------------- -----------------------
Trade and other receivables 14 2 896 972 2 830 985 2 592 770
------ ------------------- ---------------------- -----------------------
Cash and cash equivalents 15 6 686 921 1 675 245 8 205 705
------ ------------------- ---------------------- -----------------------
Total current assets 12 755 567 5 936 059 13 465 668
------ ------------------- ---------------------- -----------------------
Total assets 50 727 909 38 891 984 47 468 479
------ ------------------- ---------------------- -----------------------
Equity and liabilities
------ ------------------- ---------------------- -----------------------
Equity
------ ------------------- ---------------------- -----------------------
Share capital 20 56 944 408 38 655 078 56 883 908
------ ------------------- ---------------------- -----------------------
Accumulated deficit (21 089 934) (13 420 141) (18 334 115)
------ ------------------- ---------------------- -----------------------
Warrant reserve 21 338 903 192 632 50 307
------ ------------------- ---------------------- -----------------------
Share-based payment reserve 22 994 087 1 074 125 1 049 663
------ ------------------- ---------------------- -----------------------
Convertible loan note reserve 4 595 614 - -
------ ------------------- ---------------------- -----------------------
Foreign currency translation
reserve (6 040 689) (1 140 560) (3 833 234)
------ ------------------- ---------------------- -----------------------
Equity attributable to the
owners of the parent 35 742 389 25 361 134 35 816 529
------ ------------------- ---------------------- -----------------------
Non-controlling interests (154 442) 37 892 (147 430)
------ ------------------- ---------------------- -----------------------
Total equity 35 587 947 25 399 026 35 669 099
------ ------------------- ---------------------- -----------------------
Non-current liabilities
------ ------------------- ---------------------- -----------------------
Environmental rehabilitation
liability 18 912 550 319 440 965 578
------ ------------------- ---------------------- -----------------------
Borrowings 16 4 328 373 4 198 763 3 287 121
------ ------------------- ---------------------- -----------------------
Lease liability 19 568 076 89 776 707 355
------ ------------------- ---------------------- -----------------------
Deferred tax liability - - -
------ ------------------- ---------------------- -----------------------
Total non-current liabilities 5 808 999 4 607 979 4 960 054
------ ------------------- ---------------------- -----------------------
Current liabilities
------ ------------------- ---------------------- -----------------------
Trade and other payables 17 5 289 812 3 881 051 3 655 126
------ ------------------- ---------------------- -----------------------
Borrowings 16 3 839 746 4 829 492 2 915 917
------ ------------------- ---------------------- -----------------------
Lease liability 19 201 405 174 436 268 283
------ ------------------- ---------------------- -----------------------
Total current liabilities 9 330 963 8 884 979 6 839 326
------ ------------------- ---------------------- -----------------------
Total equity and liabilities 50 727 909 38 891 984 47 468 479
------ ------------------- ---------------------- -----------------------
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 28 November 2023.
ANTHONY VILJOEN
Chief Executive Officer
28 November 2023
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
GBP ( GBP) Share Convertible Accumulated Warrant Share-based Foreign Total Non-controlling Total
capital loan note deficit reserve payment currency interests equity
reserve reserve translation
reserve
Total equity
at 28
February 27 278 27 461
2022 38 655 078 - (10 739 321) 192 632 704 828 (1 534 560) 657 183 200 857
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
Loss for the
period - - (2 680 820) - - - (2 680 820) (150 816) (2 831 636)
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
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 25 361 25 399
2022 38 655 078 - (13 420 141) 192 632 1 074 125 (1 140 560) 134 37 892 026
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
Loss for the
period - - (5 072 999) - - - (5 072 999) (199 209) (5 272 208)
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
Other
comprehensive
income/(loss) - - - - (567) (2 692 674) (2 693 241) 13 887 (2 679 354)
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
Transactions
with owners:
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
19 801 19 801
Issue of shares 19 801 083 - - - - - 083 - 083
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
Share issue
costs (1 962 253) - - - - - (1 962 253) - (1 962 253)
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
Share-based
payments - - - - (23 895) - (23 895) - (23 895)
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
Warrants
exercised in
the year 390 000 - 159 025 (159 025) - - 390 000 - 390 000
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
Warrants
modified in
the year - - - 16 700 - - 16 700 - 16 700
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
Total equity
at 28
February 35 816 35 669
2023 56 883 908 - (18 334 115) 50 307 1 049 663 (3 833 234) 529 (147 430) 099
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
Loss for the
period - - (2 755 819) - - - (2 755 819) (20 422) (2 776 241)
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
Other
comprehensive
income/(loss) - - - - (325) (2 207 455) (2 207 780) 13 410 (2 194 370)
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
Transactions
with owners:
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
Issue of shares 60 500 - - - (60 500) - - - -
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
Share-based
payments - - - - 5 249 - 5 249 - 5 249
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
Issue of
convertible
loan notes - 5 124 235 - - - - 5 124 235 - 5 124 235
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
Convertible
loan notes
issue costs - (528 621) - - - - (528 621) - (528 621)
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
Issue of
warrants - - - 288 596 - - 288 596 - 288 596
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
Total equity
at 31 August 35 742 35 587
2023 56 944 408 4 595 614 (21 089 934) 338 903 994 087 (6 040 689) 388 (154 442) 946
----------- ----------- ------------ --------- ----------- ----------- ----------- --------------- -----------
CONSOLIDATED STATEMENT OF CASH FLOWS
GBP ( GBP) Notes 6 months ended 6 months ended 12 months
31 August 31 August ended 28 February
2023 (unaudited) 2022 (unaudited) 2023 (audited)
Cash flows from operating activities
------ ------------------ ------------------- -------------------
Loss before taxation (2 776 241) (3 720 569) (8 970 047)
------ ------------------ ------------------- -------------------
Adjustments for:
------ ------------------ ------------------- -------------------
Fair value adjustment to customer
contract 5 40 866 30 726 261 689
------ ------------------ ------------------- -------------------
Depreciation of property, plant,
and equipment 12 1 692 332 949 884 2 377 349
------ ------------------ ------------------- -------------------
Depreciation of intangible assets 11 3 499 5 285 10 290
------ ------------------ ------------------- -------------------
Share-based payments 5 250 267 401 345 276
------ ------------------ ------------------- -------------------
Equity-settled transactions - - 16 700
------ ------------------ ------------------- -------------------
Finance income (22 354) (21 368) (39 054)
------ ------------------ ------------------- -------------------
Finance costs 8 309 832 186 874 669 824
------ ------------------ ------------------- -------------------
Changes in working capital:
------ ------------------ ------------------- -------------------
Decrease/(increase) in receivables (530 322) 1 189 937 869 458
------ ------------------ ------------------- -------------------
Decrease/(increase) in inventory (706 531) 57 917 (1 471 706)
------ ------------------ ------------------- -------------------
Increase in payables 1 910 817 851 750 997 469
------ ------------------ ------------------- -------------------
Net cash (used)/generated in
operating activities (72 853) (202 163) (4 932 752)
------ ------------------ ------------------- -------------------
Cash flows from investing activities
------ ------------------ ------------------- -------------------
Purchase of intangible assets (1 477 104) (1 606 380) (2 580 267)
------ ------------------ ------------------- -------------------
Purchase of property, plant,
and equipment (6 415 069) (7 466 335) (10 677 505)
------ ------------------ ------------------- -------------------
Net cash used in investing activities (7 892 173) (9 072 715) (13 257 772)
------ ------------------ ------------------- -------------------
Cash flows from financing activities
------ ------------------ ------------------- -------------------
Finance income 22 354 21 368 39 054
------ ------------------ ------------------- -------------------
Finance costs 8 (209 479) (153 901) (499 621)
------ ------------------ ------------------- -------------------
Lease payments 19 (193 149) (120 977) (363 959)
------ ------------------ ------------------- -------------------
Net proceeds from issue of shares 20 - - 18 228 830
------ ------------------ ------------------- -------------------
Proceeds from equity component
of convertible loan notes 4 848 214 - -
------ ------------------ ------------------- -------------------
Proceeds from borrowings (incl.
debt component of convertible
loan notes) 2 816 215 3 997 799 1 729 454
------ ------------------ ------------------- -------------------
Repayment of borrowings (425 792) (166 932) (89 014)
------ ------------------ ------------------- -------------------
Net cash generated from financing
activities 6 858 363 3 577 357 19 044 744
------ ------------------ ------------------- -------------------
Net decrease/(increase) in cash
and cash equivalents (1 106 663) (5 697 521) 854 220
------ ------------------ ------------------- -------------------
Cash and cash equivalents at
the beginning of the period 8 205 705 7 365 379 7 365 379
------ ------------------ ------------------- -------------------
Exchange differences (412 121) 7 387 (13 894)
------ ------------------ ------------------- -------------------
Cash and cash equivalents at
the end of the period 6 686 921 1 675 245 8 205 705
------ ------------------ ------------------- -------------------
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL INFORMATION
For the period ended 31 August 2023
1. Corporate information and principal activities
Andrada Mining Limited ("Andrada") 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 2023 and the comparative figures for the
6-month period ended 31 August 2022 and for the year ended 28
February 2023 are shown.
As at 31 August 2023, the Andrada Group comprised:
Company Equity holding Country of Nature of activities
and voting incorporation
rights
Andrada Mining Limited N/A Guernsey Ultimate holding company
--------------- --------------- --------------------------
Greenhills Resources Limited(1) 100% Guernsey Holding company
--------------- --------------- --------------------------
Andrada Mining Pty Limited(1) 100% South Africa Group support services
--------------- --------------- --------------------------
Tantalum Investment Pty Limited(1) 100% Namibia Tin & tantalum exploration
--------------- --------------- --------------------------
Andrada Mining (Namibia) Pty 100% Namibia Tin, tantalum & lithium
Limited(2) operations
--------------- --------------- --------------------------
Uis Tin Mining Company Pty 85% Namibia Tin, tantalum & lithium
Limited(3) operations
--------------- --------------- --------------------------
Mokopane Tin Company Pty Limited(2) 100% South Africa 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 Holding company
Limited(2)
--------------- --------------- --------------------------
Zaaiplaats Mining Pty Limited(5) 74% South Africa Property owning
--------------- --------------- --------------------------
Uis Tin Mining Company Rwanda 100% Rwanda Tin & tantalum exploration
Limited(2)
--------------- --------------- --------------------------
(1) Held directly by Andrada Mining Limited
(2) Held by Greenhills Resources Limited
(3) Held by Andrada 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, Andrada Mining Limited. The Group's key subsidiaries,
Andrada 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$23.87 and the average rate
for the period was GBP1 = N$23.25.
2. SIGNIFICANT ACCOUNTING POLICIES
a. 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, OTCQB
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 2023 is unaudited and does not constitute statutory
financial information. The statutory accounts for the year ended 28
February 2023 are available on the Company's website.
b. Going concern
These financial statements have been prepared on the basis of
accounting principles applicable to a going concern which assumes
the Group will be able to continue in operation for the foreseeable
future and will be able to realize its assets and discharge its
liabilities in the normal course of operations. At period end, the
Group had cash in the bank of GBP6.7m and had drawn down GBP1.5m of
the Standard Bank working capital facility.
In September 2023, N$50m (c. GBP2.1m) of the N$100m (c. GBP4.2m)
funding from the Development Bank of Namibia was received. These
funds will be used to expedite the implementation of the Uis Mine
Stage II Continuous Improvement Project.
In November 2023, US$25m (c. GBP19.8m) was received from Orion
Resource Partners. This includes US$2.5m (c. GBP2.0m) equity, a
US$10m (c. GBP7.9m) Convertible Loan Note and a US$12.5m (c.
GBP9.9m) unsecured tin royalty. The equity and loan note will be
used to accelerate Andrada's overall strategy of achieving
commercial production of its lithium, tin and tantalum revenue
streams. The royalty funds will be used for the sole purpose of
increasing Andrada's tin production as it ramps up its capital
programmes over the next 2 years.
Management has prepared a detailed cash flow forecast for the
period to 30 November 2024 and have performed stress tests of these
forecasts. The base case forecast demonstrates that the Group will
have sufficient funds to meet its liabilities as they fall due. The
main estimates considered as part of management's going concern
assessment are production profiles, tin, lithium and tantalum
prices, exchange rates and committed capital. The production
profile is based on the Group's current achieved production post
the completion of the expansion project, as well as the additional
production on the successful completion of the continuous
improvement capital project. The Group also retains the ability to
flex its ongoing exploration and metallurgical capital expenditures
in line with cash availability as well as macro-economic
circumstances.
The forecast revenue and funding raised to date supports the
liquidity requirements of the Group and its ability to meet its
obligations in the ordinary course of business until February 2025.
Accordingly, the Directors have concluded that the going concern
basis in the preparation of the financial statements is appropriate
and that there are no material uncertainties that would cast doubt
on that basis of preparation.
c. 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 relevant. Actual results may differ from these
estimates. 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.
d. Going concern and liquidity
Significant estimates were required in forecasting cash flows
used in the assessment of going concern including tin, tantalum and
lithium 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(b).
e. 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 risk-free discount rate of 13% (August
2022: 13% and February 2023: 13%), an inflation rate of 5.3%
(August 2022: 7% and February 2023: 5.3%) and an estimated mining
period of 12.9 years (August 2022: 16.5 years and February 2023:
13.4 years), being the Phase 1 expansion life of mine. The rates
used are in line with the Namibian market rates.
f. 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 directors have concluded that there are no indications of
impairment in respect of the carrying value of Namibian intangible
assets at 28 February 2023 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.
g. 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, forecast commodity prices, production
profile, inflation rate, post-tax real discount rate and market
capitalisation of the Group. Management identified the reduction in
the tin price as an indicator of impairment. In undertaking the
impairment review, management have also reviewed the underlying LoM
valuation model for Uis. The LoM valuation model is on a fair value
less cost to develop basis and includes assessments of different
scenarios associated with capital improvements and expansion
opportunities. The impairment testing performed by management did
not result in an impairment.
The forecasts require estimates regarding forecast tin, tantalum
and lithium prices, ore resources, production, operating and
capital costs. Under the base case forecast scenario, management
used a forecast tin price of $26 000, tantalum price of $150 000,
lithium price of $2 960 dropping to $1 051 in FY2027, a post-tax
real discount rate of 8.7%, an inflation rate of 5.5% and a life of
mine of 30 years. The forecast indicates sufficient headroom as at
31 August 2023.
The complex judgement in determining the recoverable amount of
mining assets is an estimation of the future tin price. The
estimation of future tin price is subject to uncertainty
considering the volatility of market. Management has therefore
compared the forecast tin price with the economic consensus
estimates. Furthermore, a sensitivity analysis was performed by
lowering the forecast tin prices by 5% which also indicated
sufficient headroom as at 31 August 2023.
As an additional test, management performed certain sensitivity
calculations. These included raising the discount rate to 9.7% post
tax real rate, lowering plant recovery by 5% and increasing
operating costs by 5%. In each of these circumstances, the forecast
indicated sufficient headroom as at 31 August 2023.
h. 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.
i. 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.
j. 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.
k. 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.
l. 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.
m. 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 the best estimate of the incremental rate
and requires management's judgement as there are no observable
rates available.
n. 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 2023, the Group recognised a receivable
at fair value through profit or loss of GBP432 220 (August 2022:
receivable of GBP519 321 and February 2023: receivable of GBP126
125).
3. Adoption of new and revised standards
Several 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 2023 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.
a. Accounting standards and interpretations not applied
There are several 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 the chief operating decision-makers) by the way
that the Group's operations are organised. The Group has previously
reported a Namibian and a South African operating segment. In the
2021 financial year, the Group made the decision to impair the full
value of the South African mining licences as it chose to focus on
developing its Namibian assets and it did not intend to incur any
further expenditure on its South African licences. The Group now
has a single operating segment, consisting of the Namibian
operations.
5. Revenue
GBP ( GBP) 6 months ended 6 months ended 12 months ended
31 August 2023 31 August 2022 28 February
(unaudited) (unaudited) 2023 (audited)
Revenue from the sale of tin 8 863 854 4 723 857 10 024 487
---------------- ---------------- ----------------
Revenue from the sale of sand 24 009 33 478 64 676
---------------- ---------------- ----------------
Total revenue from customers 8 887 863 4 757 335 10 089 163
---------------- ---------------- ----------------
Other revenue - change in fair
value of
customer contract (40 866) (30 726) (261 689)
---------------- ---------------- ----------------
8 846 997 4 726 609 9 827 474
---------------- ---------------- ----------------
6. Cost of sales
GBP ( GBP) 6 months ended 6 months ended 12 months ended
31 August 2023 31 August 2022 28 February
(unaudited) (unaudited) 2023 (audited)
Costs of production 6 340 380 5 049 956 9 334 142
--------------- --------------- ---------------
Smelter charges 643 468 339 978 757 459
--------------- --------------- ---------------
Logistics costs 79 401 59 328 106 626
--------------- --------------- ---------------
Government royalties 261 790 275 114 311 191
--------------- --------------- ---------------
7 325 039 5 724 376 10 509 418
--------------- --------------- ---------------
7. Administrative expenses
The loss for the period has been arrived at after charging:
GBP ( GBP) 6 months ended 6 months ended 12 months ended
31 August 2023 31 August 2022 28 February
(unaudited) (unaudited) 2023 (audited)
Staff costs 1 216 022 1 083 726 3 025 406
---------------- ---------------- ----------------
Depreciation of property, plant
& equipment 209 960 113 185 366 190
---------------- ---------------- ----------------
Professional fees 1 089 805 443 781 1 201 984
---------------- ---------------- ----------------
Travelling expenses 153 875 150 450 350 884
---------------- ---------------- ----------------
Uis administration expenses 484 264 266 779 916 238
---------------- ---------------- ----------------
Auditor's remuneration 5 350 5 000 190 000
---------------- ---------------- ----------------
Foreign exchange losses 305 870 315 510 696 621
---------------- ---------------- ----------------
IT costs 199 685 105 846 285 408
---------------- ---------------- ----------------
Other costs 366 473 73 018 418 621
---------------- ---------------- ----------------
4 031 304 2 557 296 7 451 352
---------------- ---------------- ----------------
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
GBP ( GBP) 6 months ended 6 months ended 12 months ended
31 August 2023 31 August 2022 28 February
(unaudited) (unaudited) 2023 (audited)
Interest on lease liability 50 506 15 882 156 118
---------------- ---------------- ----------------
Interest on environmental rehabilitation
liability 13 851 17 209 14 085
---------------- ---------------- ----------------
Bank interest 150 915 95 900 338 812
---------------- ---------------- ----------------
Interest on convertible loan
notes 19 809 - -
---------------- ---------------- ----------------
Interest on warrants 16 187 - -
---------------- ---------------- ----------------
Other interest 58 564 57 882 160 809
---------------- ---------------- ----------------
309 832 186 874 669 824
---------------- ---------------- ----------------
9. Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
GBP ( GBP) 6 months ended 6 months ended 12 months ended
31 August 2023 31 August 2022 28 February
(unaudited) (unaudited) 2023 (audited)
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 (2 776 241) (3 720 569) (8 970 048)
---------------- ---------------- ----------------
Profit/ (Loss) before taxation - - -
multiplied by the Guernsey:
Corporation tax charge rate
of 0%
---------------- ---------------- ----------------
Effects of:
---------------- ---------------- ----------------
Differences in tax rates (overseas
jurisdictions) (548 888) (615 188) (1 791 238)
---------------- ---------------- ----------------
Tax losses carried forward 548 888 615 188 1 791 238
---------------- ---------------- ----------------
Movement in deferred tax - 888 933 866 203
---------------- ---------------- ----------------
Tax for the period - 888 933 866 203
---------------- ---------------- ----------------
Accumulated losses in the subsidiary undertakings for which
there is an unrecognised deferred tax asset are GBP9 379 913
(August 2022: GBP5 131 401 and February 2023: GBP8 100 173).
10. Loss per share from continuing operations
The calculation of a basic loss per share of 0.18 pence
(February 2022: loss per share of 0.25 pence and February 2023:
loss per share of 0.60 pence), is calculated using the total loss
for the period attributable to the owners of the Company of GBP2
755 819 (February 2022: GBP2 680 820 and February 2023: GBP7 753
819 and the weighted average number of shares in issue during the
period of 1 538 528 155 (August 2022: 1 064 247 295 and February
2023: 1 291 331 804). 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 2023 is
76 309 563 (August 2022: 97 310 649 and February 2023: 77 636 918).
These potentially dilutive ordinary shares may have a dilutive
effect on future earnings per share.
11. Intangible assets
GBP ( GBP) Exploration and Computer software Total
evaluation assets
Cost
------------------- ------------------ ---------
As at 31 August 2022 6 723 897 122 418 6 846 315
------------------- ------------------ ---------
Additions for the period 957 860 - 957 860
------------------- ------------------ ---------
Exchange differences (476 995) (10 104) (487 099)
------------------- ------------------ ---------
As at 28 February 2023 7 204 762 112 313 7 317 076
------------------- ------------------ ---------
Additions for the period 1 477 104 - 1 477 104
------------------- ------------------ ---------
Exchange differences (346 855) (5 155) (352 010)
------------------- ------------------ ---------
As at 31 August 2023 8 335 011 107 159 8 442 170
------------------- ------------------ ---------
Accumulated Depreciation
------------------- ------------------ ---------
As at 31 August 2022 - 33 368 33 368
------------------- ------------------ ---------
Charge for the period - 5 005 5 005
------------------- ------------------ ---------
Exchange differences - (890) (890)
------------------- ------------------ ---------
As at 28 February 2023 - 37 483 37 483
------------------- ------------------ ---------
Charge for the period - 3 499 3 499
------------------- ------------------ ---------
Exchange differences - (91) (91)
------------------- ------------------ ---------
As at 31 August 2023 - 40 892 40 892
------------------- ------------------ ---------
Net Book Value
------------------- ------------------ ---------
As at 31 August 2023 8 335 011 66 268 8 401 278
------------------- ------------------ ---------
As at 28 February 2023 7 204 762 74 831 7 279 593
------------------- ------------------ ---------
As at 31 August 2022 6 723 897 89 050 6 812 947
------------------- ------------------ ---------
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 test work
programme, environmental studies, and region exploration
projects.
12. Property, plant, and equipment
GBP ( GBP) Land Mining Mining Mining Decommissioning Right-of-use Computer Furniture Vehicles Mobile Buildings Total
asset Asset Asset asset Asset Equipment equipment
under - (crane)
construction Stripping
Cost
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
As at 31
August 8 741 17 063 2 083
2022 12 613 126 094 162 275 258 671 519 242 417 197 962 256 268 489 237 52 271 30 084 927
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
Additions for 2 151 1 121
the period - 424 (122 546) 808 190 750 363 536 72 089 85 000 104 577 (7 960) 232 099 5 194 772
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
Disposals for
the period - - (309 259) - - (61 435) - - - - - (370 694)
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
Transfer from
exploration
and
evaluation (9 532 9 532
asset - 184) 184 - - - - - - - - -
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
Exchange (2 500
differences (1 351) (119 492) 783) (279 125) (97 049) (172 923) (31 466) (28 470) (32 449) (44 458) (25 272) (3 332 838)
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
As at 28
February 1 240 23 662 2 612 1 558
2023 11 262 874 690 227 928 572 697 283 040 254 492 328 396 436 819 259 098 31 576 167
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
Additions for 3 953 1 838
the period - 001 380 379 423 - 22 458 68 646 66 240 85 926 - - 6 415 073
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
Disposals for - - - - - - - - - - - -
the period
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
Exchange
differences (776) (763 865) (963 365) (227 596) (63 968) (112 191) (21 231) (19 211) (24 850) (30 092) (17 849) (2 244 994)
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
As at 31
August 4 430 23 079 4 223 1 468
2023 10 486 010 70 054 864 604 964 330 455 301 521 389 472 406 727 241 249 35 746 246
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
Accumulated
Depreciation
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
As at 31
August 2 330
2022 - - 648 840 539 17 585 425 950 145 881 88 373 72 793 19 527 653 3 941 949
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
Charge for the
period - - 532 865 624 439 7 567 168 863 25 354 21 703 18 605 19 591 8 479 1 427 466
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
Exchange
differences - - (264 204) (138 298) (2 380) (69 973) (17 358) (10 876) (9 085) (3 475) (817) (516 466)
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
As at 28
February 2 599 1 326
2023 - - 309 680 22 772 524 840 153 877 99 200 82 313 35 643 8 315 4 852 949
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
Charge for the
period - - 802 796 587 519 32 511 156 332 36 216 27 251 30 183 17 422 2 104 1 692 334
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
Exchange
differences - - (182 819) (106 619) (2 411) (49 187) (11 564) (7 515) (6 452) (2 907) (627) (370 101)
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
As at 31
August 3 219 1 807
2023 - - 286 580 52 872 631 985 178 529 118 936 106 044 50 158 9 792 6 175 182
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
Net Book
Value
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
As at 31
August 4 430 19 860 2 415
2023 10 486 010 418 474 811 732 836 979 151 926 182 585 283 428 356 569 231 457 29 571 064
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
As at 28
February 1 240 21 063 1 285 1 033
2023 11 262 874 381 547 905 800 857 129 163 155 292 246 083 401 176 250 783 26 723 218
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
As at 31
August 8 741 14 732 1 242
2022 12 613 126 446 624 257 673 245 569 96 536 109 589 183 475 469 710 51 618 26 142 978
------- ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- ---------- ---------- -----------
Additions to the mining asset under construction include
capitalised costs and equipment purchased as part of the
construction of the Bulk Sample Processing Facility. This includes
a Lithium pilot plant, a Tantalum pilot plant and an ore sorting
plant. Additions to the mining asset include capitalised costs and
equipment purchased as part of the Uis Phase 1 Continuous
Improvement project
13. Inventories
GBP ( GBP) 6 months ended 6 months ended 12 months ended
31 August 2023 31 August 2022 28 February
(unaudited) (unaudited) 2023 (audited)
Run-of-mine stockpile 1 669 176 605 258 589 725
------------------- ------------------- -----------------
Tin concentrate on hand 723 747 204 236 1 364 286
------------------- ------------------- -----------------
Consumables 778 752 620 335 713 182
------------------- ------------------- -----------------
3 171 674 1 429 829 2 667 193
------------------- ------------------- -----------------
14. Trade and other receivables
6 months ended 6 months ended 12 months ended
31 August 2023 31 August 2022 28 February
(unaudited) (unaudited) 2023 (audited)
Trade receivables 305 410 160 188 27 678
---------------- ---------------- ----------------
Trade receivables at fair value
through profit
or loss 432 220 (519 321) 126 125
---------------- ---------------- ----------------
Other receivables 951 525 538 218 1 369 867
---------------- ---------------- ----------------
VAT receivables 1 207 817 2 651 899 1 069 100
---------------- ---------------- ----------------
2 896 972 2 830 984 2 592 770
---------------- ---------------- ----------------
15. Cash and cash equivalents
GBP ( GBP) 6 months ended 6 months ended 12 months ended
31 August 2023 31 August 2022 28 February
(unaudited) (unaudited) 2023 (audited)
Cash on hand and in bank 6 686 921 1 675 245 8 205 705
---------------- ---------------- ----------------
16. Borrowings
6 months ended 6 months ended 12 months ended
31 August 2023 31 August 2022 28 February
(unaudited) (unaudited) 2023 (audited)
Standard Bank term loan facility 3 387 437 4 467 960 4 083 503
---------------- ---------------- ----------------
Standard Bank VAT facility 313 186 376 709 336 357
---------------- ---------------- ----------------
Standard Bank Vehicle Asset
Financing 528 064 503 444 484 373
---------------- ---------------- ----------------
Standard Bank Short-term Loan
Facility - 2 005 565 -
---------------- ---------------- ----------------
Standard Bank working capital
facility 1 472 644 1 674 577 1 298 805
---------------- ---------------- ----------------
Convertible Loan Note (debt
component) 2 466 788
---------------- ---------------- ----------------
6 168 120 9 028 255 6 203 038
---------------- ---------------- ----------------
On 18 November 2022, a term loan facility of N$90 000 000
(c.GBP3 771 000), a VAT facility of N$8 000 000 (c.GBP335 000) and
a working capital facility of N$35 000 000 (c. GBP1 476 000) was
entered into between the Company's subsidiary, Uis Tin Mining
Company (Pty) Ltd and Standard Bank Namibia. During the prior year,
a vehicle asset financing facility to the value of N$15 000 000 (c.
GBP629 000) was provided.
The maturity date of the term loan facility is November 2026 and
the capital balance of the loan together with accrued interest will
be repaid in quarterly instalments over the next 5 years. Interest
is charged on the outstanding capital balance of the loan at a rate
of 3-month JIBAR plus a margin of 4.5%.
The Group is required to meet the following covenants each year
on 28 February as part of the term loan facility agreement:
-- EBITDA ÷ total interest must not be lower than 4.5 times
-- Total debt ÷ EBITDA must not exceed 4 times in year 1, 3.5
times in year 2 and 3 times thereafter
-- Free cash flow before Debt Service Cover ÷ Principal and
Interest Senior Debt Service Payments must not be lower than 1.3
times
-- Free cash flow before Debt Service Cover + Total Cash
Collateral ÷ Principal and Interest Senior Debt Service Payments
must not be lower than 2 times
The Group received a covenant waiver from Standard Bank for the
year ended 28 February 2023. The next measurement date will be 28
February 2024.
The VAT facility is secured by assessed/audited VAT returns
(refunds) which have not been paid by Namibia Inland Revenue.
Standard Bank Namibia provides a facility amounting to the unpaid
refunds. Any drawdowns against this facility are repaid to the bank
upon receipt of cash from Namibia Inland Revenue.
The VAT facility and the working capital facility have no fixed
maturity date but are both renewed on an annual basis. Interest
accrues on these facilities at the Namibian prime rate less 1%.
Standard Bank Namibia have provided a N$ 5 956 100 (c. GBP250
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.
On 21 July 2023 the Group issued 77 unsecured convertible loan
notes of GBP100 000 each to new and existing investors. The notes
have a term of 3 years, bear interest at a rate of 12% per annum
and can be redeemed in cash only at the option of the Group or
converted into ordinary shares at a fixed price of 9.45p by mutual
agreement between the Group and the note holders. As per IAS 32 and
IFRS 9, the convertible loan notes have been classified as a
compound financial instrument. The principal amount is classified
as equity because, at the election of the Group, they can avoid
paying cash by delivering a fixed number of shares. The interest
payments are classified as a liability because there is a
contractual obligation to either pay cash or to deliver a variable
number of the Group's shares. Refer to the Statement of Changes in
Equity for the equity portion of this instrument and Note 24 for
further details of the transaction.
17. Trade and other payables
GBP ( GBP) 6 months ended 6 months ended 12 months ended
31 August 31 August 2022 28 February
2023 (unaudited) (unaudited) 2023 (audited)
Trade payables 2 652 507 3 344 593 1 624 816
------------------ ---------------- ----------------
Other payables 518 574 168 378 202 127
------------------ ---------------- ----------------
Accruals 2 118 731 368 080 1 828 183
------------------ ---------------- ----------------
5 289 812 3 881 051 3 655 126
------------------ ---------------- ----------------
18. Environmental rehabilitation liability
GBP ( GBP)
Balance at 31 August 2022 319 441
----------
Increase in provision 750 363
----------
Interest expense (3 006)
----------
Foreign exchange differences (101 219)
----------
Balance at 28 February 2023 965 578
----------
Increase in provision -
----------
Interest expense 13 851
----------
Foreign exchange differences (66 877)
----------
Balance at 31 August 2023 912 552
----------
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 2023.
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 2022: 13%
and February 2023: 13%), an inflation rate of 5.3% (August 2022: 7%
and February 2023: 5.3%) and an estimated mining period of 12.9
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 term Option Incremental borrowing
to rate
extend/terminate
Option
to
extend
not
specified
in
contract.
Term
of
lease
determined
to
be
Office 5
building 5 years years. 13.75%
------------ ------------------- ----------------------
Option
to
extend
not
specified
in
contract.
Term
of
lease
determined
to
be
Workshop 2
facility 2 years years. 9.75%
------------ ------------------- ----------------------
The
lease
will
continue
automatically
after
the
initial
period
for
an
open-ended
period.
Either
party
must
provide
written
notice
if
they
wish
to
terminate.
Lease
term
determined
to
be
Residential 5
housing 5 years years. 11.75%
------------ ------------------- ----------------------
The
lessee
is
granted
the
option
to
purchase
the
units
after
the
lease
period
of
Mobile 2
Units 2 years years. 7.5%
------------ ------------------- ----------------------
The
lessee
will
own
the
vehicles
after
the
after
the
lease
period
of
5
Vehicles 5 years years. 11.25%
------------ ------------------- ----------------------
GBP ( GBP) Office Workshop Housing Mobile Units Vehicles Total
Building
Balance at 31 August
2022 130 669 9 276 95 717 28 550 - 264 212
---------- --------- -------- ------------- --------- ---------
Additions 534 606 43 507 153 388 - 208 892 940 393
---------- --------- -------- ------------- --------- ---------
Disposals (22 035) (22 035)
---------- --------- -------- ------------- --------- ---------
Interest expense 45 733 14 862 58 016 601 21 025 140 237
---------- --------- -------- ------------- --------- ---------
Lease payments (104 824) (31 229) (32 144) (18 086) (56 699) (242 982)
---------- --------- -------- ------------- --------- ---------
Foreign exchange differences (55 866) (4 075) (26 752) (1 900) (15 594) (104 187)
---------- --------- -------- ------------- --------- ---------
Balance at 28 February
2023 528 283 32 341 248 225 9 165 157 624 975 638
---------- --------- -------- ------------- --------- ---------
Additions - - - - - -
---------- --------- -------- ------------- --------- ---------
Interest expense 29 952 815 12 137 103 7 500 50 507
---------- --------- -------- ------------- --------- ---------
Lease payments (94 822) (23 819) (42 970) (7 901) (23 637) (193 149)
---------- --------- -------- ------------- --------- ---------
Foreign exchange differences (34 712) (1 631) (16 302) (430) (10 440) (63 515)
---------- --------- -------- ------------- --------- ---------
Balance at 31 August
2023 428 702 7 706 201 090 937 131 047 769 481
---------- --------- -------- ------------- --------- ---------
The following is the split between the current and the
non-current portion of the liability:
GBP ( GBP) 6 months ended 6 months ended 12 months ended
31 August 2023 31 August 2022 28 February
(unaudited) (unaudited) 2023 (audited)
Non-current liability 568 076 89 776 707 355
---------------- ---------------- ----------------
Current liability 201 405 174 436 268 283
---------------- ---------------- ----------------
769 481 264 212 975 638
---------------- ---------------- ----------------
20. Share capital
Number of ordinary Share Capital
shares of no-par value
issued and fully paid
Balance at 31 August 2022 1 121 841 684 38 655 078
----------------------- -------------
Capital raise - 16 September
2022 222 701 660 11 135 083
----------------------- -------------
Capital raise - 10 October
2022 173 320 000 8 666 000
----------------------- -------------
Share issue costs - (1 962 253)
----------------------- -------------
Warrants exercised - 25
January 2023 20 000 000 390 000
----------------------- -------------
Balance at 28 February
2023 1 537 863 344 56 883 908
----------------------- -------------
Shares issued in lieu of
Directors fees - 11 May 1 092 189 60 500
----------------------- -------------
Balance at 31 August 2023 1 538 955 533 56 944 408
----------------------- -------------
Authorised: 1 617 600 762 ordinary shares of no-par value
Allotted, issued, and fully paid: 1 538 955 533 ordinary shares
of no-par value
On 16 September 2022, the Group completed an equity fundraising
by way of a placing and direct subscription of 222 701 660 ordinary
shares of no-par value in the Group at a price of 5 pence per
share. A further 173 320 000 660 ordinary shares of no-par value in
the Group at a price of 5 pence per share were issued on 10 October
2022 as part of the same capital raise.
On 25 January 2023, warrant holders exercised 20 000 000
warrants at an exercise price of 1.95.
On 11 May 2023, the Group issued 1 092 189 Ordinary Shares ("New
Shares") to Directors in lieu of their fees for the financial years
ended February 2022 and 2023. This is in accordance with the terms
of their contracts.
21. Warrant reserve
The following warrants were granted during the period ended 31
August 2023:
Date of grant 21 July 2023
Number granted 15 400 000
-------------
Vesting period 2 years
-------------
Contractual life 2 years
-------------
Estimated fair value per option (pence) 1.874
-------------
The estimated fair values were calculated by applying the Black
Scholes pricing model. The model inputs were:
Date of grant 21 July 2023
Share price at grant date (pence) 7.70
-------------
Exercise price (pence) 9.45
-------------
Expiry date 21 July 2025
-------------
Expected volatility 52%
-------------
Expected dividends Nil
-------------
Risk-free interest rate 3.70%
-------------
The warrants in issue during the period are as follows:
Outstanding at 31 August 2022 22 613 334
Exercisable at 31 August 2022 22 613 334
------------
Granted during the period -
------------
Expired during the period -
------------
Exercised during the period (20 000 000)
------------
Outstanding at 28 February 2023 2 613 334
------------
Exercisable at 28 February 2023 2 613 334
------------
Granted during the period 15 400 000
------------
Expired during the period -
------------
Exercised during the period -
------------
Outstanding at 31 August 2023 18 013 334
------------
Exercisable at 31 August 2023 2 613 334
------------
On 21 July 2023, 15 400 000 warrants were issued as part of the
convertible loan note transaction. Each note holder received 2
warrants for every GBP1 subscribed for. Each warrant enables the
holder to subscribe for one ordinary share at a subscription price
of 9.45p. The Warrants are exercisable at any time from the date of
issue for a period of two years. Please refer to note 24 for
further details.
22. Share-based payment reserve
Director share options
The following director share options were granted during the
period ended 28 February 2023:
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 2022 25 850 000
Exercisable at 31 August 2022 23 850 000
-----------
Granted during the period 15 600 000
-----------
Forfeited during the period -
-----------
Exercised during the period -
-----------
Expired during the period -
-----------
Outstanding at 28 February 2023 41 450 000
-----------
Exercisable at 28 February 2023 23 850 000
-----------
Granted during the period -
-----------
Forfeited during the period -
-----------
Exercised during the period -
-----------
Expired during the period -
-----------
Outstanding at 31 August 2023 41 450 000
-----------
Exercisable at 31 August 2023 23 850 000
-----------
a. Employee share options
The following employee share options were granted during the
period ended 28 February 2023:
Date of grant 8 April 2022 8 April 2022 8 April 2022
Number granted 2 400 000 1 200 000 1 200 000
------------ ------------ ------------
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 employee share options in issue during the period are as
follows:
Outstanding at 31 August 2022 27 371 229
Exercisable at 31 August 2022 27 371 229
-----------
Granted during the period 4 800 000
-----------
Forfeited during the period -
-----------
Exercised during the period -
-----------
Expired during the period -
-----------
Outstanding at 28 February 2023 32 171 229
-----------
Exercisable at 28 February 2023 27 371 229
-----------
Granted during the period -
-----------
Forfeited during the period -
-----------
Exercised during the period -
-----------
Expired during the period -
-----------
Outstanding at 31 August 2023 32 171 229
-----------
Exercisable at 31 August 2023 27 371 229
-----------
23. Events after balance sheet date
a. Funding:
On 5 September 2023, the Development Bank of Namibia ("DBN")
served notice confirming that all conditions had been fulfilled or
waived and that financial close had occurred. Accordingly, the
Group received the 1(st) drawdown of NAD50 million (c. GBP2.1m) of
a total NAD100 million (c. GBP4.2m). These Funds are being used to
expedite the implementation of the Uis Mine Stage II Continuous
Improvement Project
On 14 November 2023, a US$25m (c. GBP19.8m) funding packing was
concluded with Orion Resource Partners. This includes US$2.5m (c.
GBP2.0m) equity, a US$10m (c. GBP7.9m) Convertible Loan Note and a
US$12.5m (c. GBP9.9m) unsecured tin royalty. The equity and loan
note will be used to accelerate Andrada's overall strategy of
achieving commercial production of its lithium, tin and tantalum
revenue streams. The royalty funds will be used for the sole
purpose of increasing Andrada's tin production as it ramps up its
capital programmes over the next 2 years.
b. Exercise of share options:
On 29 September 2023, the Group issued 3 473 684 Ordinary Shares
to satisfy the following employee share option exercises:
-- 1 736 842 share options at an exercise price of 3p
-- 868 421 share options at an exercise price of 3.5p
-- 868 421 share options at an exercise price of 4p
On 3 October 2023, the Group issued 7 315 786 Ordinary Shares to
satisfy the following employee share option exercises:
-- 3 407 894 share options at an exercise price of 3p
-- 1 953 946 share options at an exercise price of 3.5p
-- 1 953 946 share options at an exercise price of 4p
24. reserves within equity
a. Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
b. Convertible loan note reserve
The convertible loan note reserve represents the equity
component of the outstanding convertible loan notes.
On 21 July 2023 the Group raised GBP7.7m through the issue of 77
unsecured convertible loan notes of GBP100 000 each to new and
existing investors. The notes have a term of 3 years, bear interest
at a rate of 12% per annum and can be redeemed in cash only at the
option of the Group or converted into ordinary shares at a fixed
price of 9.45p by mutual agreement between the Group and the note
holders. As per IAS 32 and IFRS 9, the convertible loan notes have
been classified as a compound financial instrument. The principal
amount is classified as equity because, at the election of the
Group, they can avoid paying cash by delivering a fixed number of
shares. The interest payments are classified as a liability because
there is a contractual obligation to either pay cash or to deliver
a variable number of the Group's shares (based on the 30-day VWAP
share price). Issues costs have been proportionally deducted for
the liability and the equity component .
c. Warrant reserve
The warrant reserve represents the cumulative charge to date in
respect of unexercised share warrants at the balance sheet
date.
d. Share-based payment reserve
The share-based payment reserve represents the cumulative charge
to date in respect of unexercised share options at the balance
sheet date as well as fees/salaries owed to directors/employees to
be settled through the issuing of shares.
e. Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign
exchange differences arising from the translation of entities with
a functional currency other than Pound Sterling.
f. Retained earnings/accumulated deficit
The retained earnings/accumulated deficit represents the
cumulative profit and loss net of distribution to owners.
CONTACT
Andrada Mining Limited +27 (11) 268 6555
Anthony Viljoen, CEO investorrelations@andradamining.com
Sakhile Ndlovu, Investor Relations
Nominated Adviser
WH Ireland Limited
Katy Mitchell +44 (0) 207 220 1666
Corporate Adviser and Joint Broker
H&P Advisory Limited
Andrew Chubb
Jay Ashfield
Matt Hasson +44 (0) 20 7907 8500
Stifel Nicolaus Europe Limited
Ashton Clanfield
Calum Stewart
Varun Talwar +44 (0) 20 7710 7600
Tavistock Financial PR (United Kingdom) +44 (0) 207 920 3150
Jos Simson andrada@tavistock.co.uk
Catherine Drummond
Adam Baynes
About Andrada Mining Limited
Andrada Mining Limited, is a London-listed technology metals
mining company with a vision to create a portfolio of globally
significant, conflict-free, production and exploration assets. The
Company's flagship asset is the Uis Mine in Namibia, formerly the
world's largest hard-rock open cast tin mine. An exploration
drilling programme is currently underway at Uis with the aim of
expanding the tin resource over the fourteen additional,
historically mined pegmatites, all of which occur within a 5 km
radius of the current processing plant. The Company has set a
mineral resource target of 200 Mt to be delineated within the next
5 years. The existing mine, together with its substantial mineral
resource potential, allows the Company to consider economies of
scale.
Andrada is managed by a board of directors with considerable
industry knowledge and a management team with extensive commercial
and technical skills. Furthermore, the Company is committed to the
sustainable development of its operations as demonstrated by the
way the leadership team places emphasis on creating value for the
wider community, investors, and other key stakeholders. Andrada has
established an environmental, social and governance system that has
been implemented at all levels of the Company and aligns with
international standards.
[END]
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END
IR DZMZMMRZGFZZ
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