BOD Botswana Diamonds Plc

Notes:

1.            INFORMATION

The financial information for the six months ended 31 December 2023 and the comparative amounts for the six months ended 31 December 2022 are unaudited. The financial information above does not constitute full statutory accounts within the meaning of section 434 of the Companies Act 2006.

The Interim Financial Report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union.

The accounting policies and methods of computation used in the preparation of the Interim Financial Report are consistent with those used in the Group 2023 Annual Report, which is available at www.botswanadiamonds.co.uk

The interim financial statements have not been audited or reviewed by the auditors of the Group pursuant to the Auditing Practices board guidance on Review of Interim Financial Information.

2.            DIVIDEND

No dividend is proposed in respect of the period.

3.            LOSS PER SHARE

Basic loss per share is computed by dividing the loss after taxation for the period available to ordinary shareholders by the weighted average number of ordinary shares in issue and ranking for dividend during the period.

Diluted loss per share is computed by dividing the loss after taxation for the period by the weighted average number of ordinary shares in issue, adjusted for the effect of all dilutive potential ordinary shares that were outstanding during the period.

The following table sets forth the computation for basic and diluted earnings per share (EPS):

4.            INTANGIBLE ASSETS

Exploration and evaluation assets relate to expenditure incurred in exploration for diamonds in Botswana and South Africa. The directors are aware that by its nature there is an inherent uncertainty in exploration and evaluation assets and therefore inherent uncertainty in relation to the carrying value of capitalized exploration and evaluation assets.

In the prior year the Group incurred expenditure to date of £3,124,284 on certain licences held in Botswana, these licences lapsed and were not renewed. The directors decided to fully impair the expenditure and accordingly, an impairment charge of £3,124,284 was recorded in the prior year.

On 6 February 2017 the Group entered into an Option and Earn-In Agreement with Vutomi Mining Pty Ltd and Razorbill Properties 12 Pty Ltd (collectively known as 'Vutomi'), a private diamond exploration and development firm in South Africa. Pursuant to the terms of the Agreement, Botswana Diamonds earned a 40% equity interest in the project. A separate agreement for funding of exploration resulted in the Company's interest in Vutomi increasing from 40% to 45.94%.

On 28 September 2022 the Board announced that it had exercised its pre-emptive right to acquire the outstanding third-party interests in Vutomi and had increased its' interest from 45.94% to 74%.

The consideration for Vutomi comprised 56,989,330 new ordinary shares of £0.0025 each in the Company ("Consideration Shares"). The Consideration Shares were issued in two tranches. 28,464,665 Consideration Shares (First Tranche) were issued to the vendors on 28 September 2022 and the balance of 28,524,665 (Second Tranche) was issued on 27 January 2023.

The Company also agreed that immediately on completion of the Acquisition, the Company would sell 26% of Vutomi for a deferred consideration of US$316,333 to the Company's local South African Empowerment partner, Baroville Trade and Investments 02 Proprietary Limited ("Baroville"), in order to comply with South African requirements on empowerment ownership, which will be funded by a loan from Botswana Diamonds (Note 6). On completion, the Company therefore owns 74% of Vutomi.

The realisation of these intangible assets is dependent on the successful discovery and development of economic diamond resources and the ability of the Group to raise sufficient finance to develop the projects. It is subject to a number of significant potential risks, as set out below:

•          licence obligations;

•          exchange rate risks;

•          uncertainties over development and operational costs;

•          political and legal risks, including arrangements with governments for licenses, profit sharing and taxation;

•          foreign investment risks including increases in taxes, royalties and renegotiation of contracts;

•          title to assets;

•          financial risk management;

•          going concern; and

•          operational and environmental risks.

Included in additions for the period are £28,000 (June 2023: £71,521) of directors' remuneration which has been capitalized. This is for time spent directly on the operations rather than on corporate activities.

5.            SHARE CAPITAL

Movements in share capital

               On 27 November 2023 the Company raised £380,000 through the issue of 76,000,000 new ordinary shares at a placing price of 0.5p via a placing and subscription with existing and new investors. Each Placing Share has one warrant attached with the right to subscribe for one new Ordinary Share at 0.5p per new Ordinary Share for a period of two years from 27 November 2023.

6.            OTHER RECEIVABLES

                The carrying value of other receivables approximates to their fair value.

7.            TRADE AND OTHER PAYABLES

It is the Company's normal practice to agree terms of transactions, including payment terms, with suppliers and provided suppliers perform in accordance with the agreed terms, payment is made accordingly. In the absence of agreed terms it is the Company's policy that the majority of payments are made between 30 - 40 days. The carrying value of trade and other payables approximates to their fair value.

8.            SHARE BASED PAYMENTS

WARRANTS

Further information on the warrants are detailed in Note 5 above.

9.            POST BALANCE SHEET EVENTS

There are no material post balance sheet events affecting the Group.

10.         APPROVAL

               The Interim Report for the period to 31^st December 2023 was approved by the Directors 22 March 2024.

11.         AVAILABILITY OF REPORT

               The Interim Statement will be available on the website at www.botswanadiamonds.co.uk