TIDMKZG
RNS Number : 1231T
Kazera Global PLC
16 March 2023
16 March 2023
Kazera Global plc ("Kazera" or "the Company")
2022 Full Year Results , Corporate Update and Notice of AGM
Kazera Global plc, the AIM-quoted investment company, is pleased
to announce its results for the year ended 30 June 2022 (the
"Results") ("Financial Year 2022" or "FY2022"), which will be sent
to shareholders today and are available on the Company's website,
at www.kazeraglobal.com . The Company is also pleased to provide an
update on key corporate developments and Notice of its Annual
General Meeting .
Trading in the Company's ordinary shares (the "Ordinary Shares")
will resume on the AIM Market of the London Stock Exchange at 7 . 3
0 a.m. today.
The Company is currently preparing its unaudited interim results
for the six months ended 31 December 2022 , which it expects to
publish no later than 31 March 2023 .
CORPORATE UPDATE
Highlights
-- New Strategic shareholder, African Mineral Sands Pte Ltd
Singapore ("AMS"), with extensive experience in mining and
infrastructure projects in Southern Africa to acquire up to 29.9%
the Company's existing Ordinary Shares from an existing
shareholder, at a 53% premium to the price per Ordinary Share
immediately prior to the suspension of their trading on AIM
-- Total received to date of US $ 2,347,834 , with a Proof of
Payment for a further US$687,500, from Hebei Xinjian Construction
("Xinjian") re the sale of African Tantalum (Pty) Ltd in Namibia
("Aftan"), which is on track to complete December 2023
-- New equipment ordered at Walviskop Heavy Mineral Sands
Project to allow for ilmenite and garnet extraction/sale and
license area moved 100 metres to incorporate self-replenishing
surf-zone
-- New plant completed at Deep Blue Minerals' diamond mining
operation and new mining blocks granted to give access to a further
28,000 carats of diamonds
-- Buru Hills acquisition ceased at nil cash cost to focus on
Walviskop Heavy Mineral Sands Project
-- The Company has today launched its new website
Dennis Edmonds, Kazera Chief Executive Officer, commented: "The
last two months have been very productive operationally for Kazera.
Our team in South Africa has made a fantastic effort in building,
essentially from scratch and with initially limited financial
resources, a diamond gravel processing plant that equals the
capacity of our neighbour Alexkor. It is also fantastic to be able
to make the commitment of buying equipment that sees the generation
of real profits from the sale of Heavy Mineral Sands on the near
horizon.
"Perhaps the most exciting development is the addition of AMS as
a strategic shareholder in Kazera. AMS recognises the value of our
current projects and has a number of ideas which could lead to
major growth and investment opportunities within the next year. I
am delighted to welcome AMS as the Company's single largest
shareholder and look forward to working with its team as we drive
the business forward."
New Strategic Shareholder
The Company has been advised that African Mineral Sands Pte Ltd
Singapore ("AMS") has entered into a binding agreement to purchase
the entire shareholding of Catalyse Research Ltd (formerly Align
Research Investments Ltd) and its related parties , including R S
& C A Jennings and Align Research Ltd . Pursuant to this
transaction, AMS will purchase up to 280 million Ordinary Shares
(representing up to 29.9 per cent . of the Ordinary Shares
currently in issue), at a price of 1.5p per Ordinary Share; this is
a premium of 53% to the price per Ordinary Share immediately prior
to the suspension of their trading on AIM. The Company has been
advised that the purchase will take place in a series of tranches
during 2023, with all voting rights passing to the purchaser on
payment of the first tranche.
AMS and its associated partners have extensive experience in
mining and infrastructure projects in Southern Africa and the
Company believes the addition of AMS as a strategic investor is a
positive development , which will provide Kazera with new
opportunities for growth and development. In particular, AMS and
its partners have been investors and offtake partners in the Heavy
Mineral Sands ("HMS") business over the past five years.
Further Payment from Xinjian
Since its announcement of 28 February 2023, the Company has
received a series of payments totalling US $ 112,800 with a Proof
of Payment for US$687,500 from Hebei Xinjian Construction
("Xinjian") towards its purchase of Kazera's interest in African
Tantalum in Namibia; this brings the aggregate amount received to
date to US $ 2,347,834 , with an additional USD687,500 about to be
received .
Under the terms of the agreement announced on 20 December 2022,
Xinjian was due to have paid an aggregate of US $ 3,642,207 by the
end of January with the balance of US $ 9,357,793 payable in equal
monthly instalments commencing in April 2023 and completing in
December 2023.
The Company believes that Xinjian is doing all that it can to
make payments and is acting in good faith but has been experiencing
administrative issues from within China . The Company is therefore
n ot currently exercising its contractual rights regarding
Xinjian's non-compliance with the timeline set out in the agreement
and, in so doing, is providing Xinjian further time with which to
make the necessary payments . The outstanding balances are however
accruing interest at a rate of 8% per annum.
Under the terms of the sale agreement with Xinjian, Kazera
retains ownership of 100% of the shares in Aftan as security until
all amounts owing by Xinjian have been paid in full. Furthermore,
all ongoing operation costs in respect of the Aftan business since
the beginning of the year are borne by Xinjan.
Whale Head Minerals ("WHM") (60% interest)
The Company is pleased to confirm that it has placed an order
for the manufacture of equipment to undertake the separation of HMS
at WHM's Walviskop Heavy Mineral Sands Project within the vicinity
of Alexander Bay/Port Nolloth, South Africa. The equipment,
expected to be delivered in approximately four months, will allow
the Company to sell Ilmenite and Garnet as separate HMS components,
which will attract higher value than a bulk product. It is
anticipated that the introduction of this equipment will lead to
the production of product exceeding a purity of 80%, for which
there is a ready market. Consequently, the Company is in active
discussions with several prospective purchasers for these products.
In the interim, the Company is introducing a double-deck 500-micron
screen with a view to accelerating production of the separated HMS
product. The Company is currently building up stockpiles of HMS
whilst identifying a site to dry material away from the moisture
and dust of the coast.
The initial mine permit area applied for by WHM and accepted by
the Department of Mineral Resources and Energy has been moved circa
100 m etres to the west due to conflicts identified with the
original permit coordinates. This has resulted in the Mine Permit
now being in the surf zone of the bay and not largely on the beach.
The resource volume for the new offshore permit location estimated
by CREO Design (PTY) LTD, which undertook the initial competent
persons report and resource estimate, is determined to be
comparable in volume to the initial volume estimate for the onshore
area but at a grade of 49.9% total heavy minerals compared to the
62% total heavy minerals on the beach area. This can be explained
by the wind playing a significant role in removing light sand
grains from the beach and so enriching the heavy mineral deposited
there. However, a major benefit of the permits being moved is that
wave action is constantly renewing the resource and rehabilitating
the mine site. This means that current volumes in situ are largely
irrelevant as what is mined is naturally replenished. Furthermore,
initial testing has confirmed that the planned separation plant
will upgrade the material from 49.9% to in excess of 80%, which
will be directly saleable and is believed to be one of the highest
grades in the world.
The mining method used in the WHM permit area will remain a
dredging operation as originally planned. With the entire resource
being submerged, a further advantage of the movement of the permit
area is that dredge mining can take place unhindered and at a
higher rate, resulting in higher production levels at lower unit
cost per ton mined. This means the new moved mine permits have the
potential of outperforming the original heavy mineral production
volumes of mining on the beach.
Deep Blue Minerals (60% interest)
The Company has completed development of the new plant at Deep
Blue Minerals' diamond project in Alexander Bay and can
independently process similar volumes of gravel as were previously
being processed at the Muisvlak plant. The new plant is also
capable of processing gravel containing high quantities of HMS, and
stockpiles of mined gravel are now being processed.
Furthermore, through its close association with the Richtersveld
community, the Company has gained access to new mining blocks,
tripling the area available for mining and giving it access to a
further 28,000 carats of diamonds.
Buru Hills
In light of delays in obtaining licenses at Buru Hills and a
desire to focus on bringing WHM's Walviskop Heavy Mineral Sands
Project into full production, the Company has elected to not
proceed with the proposed acquisition of the 71% interest in Great
Lakes Graphite (PTY) Ltd. There was nil cash cost to the Company in
this regard.
NOTICE OF ANNUAL GENERAL MEETING
The Company has today published a notice convening an annual
general meeting ("AGM") of the Company to be held at 12:30 on 26
April 2023, at the offices of finnCap, 1 Bartholomew Close, London
EC1A 7BL. The notice of AGM is available on the Company's website,
at www.kazeraglobal.com .
RESULTS FOR THE YEARED 30 JUNE 2022
Chairman's Statement
Review of the Period
Joining the team at Kazera Global this year has been an exciting
prospect, with all the Company's assets on the verge of becoming
cash flow positive. The Company has made significant progress over
the past year in building the infrastructure on its various
projects to move them to production. We are on track to both
production and revenue, generating significant cash inflows during
the year ending 30 June 2023; this work is described further in the
Chief Executive Officers review on page 3.
Kazera has performed well in what has been a turbulent year
globally, and over the period Kazera has delivered growth both
organically and inorganically.
The potential acquisition of a 71% interest in Great Lakes
Graphite, Kenya Rare Earth projects, announced in June, was a
significant potential step forward into further diversifying the
Company's portfolio, maximising shareholder value whilst minimising
downside risk. Due to delays in obtaining the licence, and in light
of the board's wish to focus on Whale Head Minerals' Heavy Mineral
Sands project, the board has decided not to proceed with this
transaction.
Post period end, the Company signed a definitive agreement to
sell its 100% interest in African Tantalum (Pty) Limited to Hebei
Xinjian Construction for cash consideration of US$13,000,000 in
December 2022. Seizing opportunities such as this highlight the
rigour and expertise of the team driving growth for the business
and the profitable realisation of assets.
As well as realising capital value by the disposal of African
Tantalum, Kazera has continued to drive organic growth through
investment in its assets. The development of the diamond and HMS
projects has been a clear example of the team's dedication to
maximising growth through investment in a promising project,
executing plans to develop the processing plant, driving potential
production figures and cashflow for the mine and subsequently the
Company.
In addition to my joining the Kazera Board, post-reporting
period, the Company was also pleased to appoint Geoffrey Eyre as a
Non-Executive Director in July 2022. Geoff, as an experienced
finance professional with more than 17 years of experience in
senior positions in the mining industry, is already making an
impact as a great addition to the Board.
Outlook
We plan to continue to drive growth in the business both through
organic and inorganic means, leaning on the expertise of the team
to maximise the opportunities available to us. We will also be
exploring ways in which to return to shareholders a substantial
portion of the gains made.
As Kazera moves forward it is in a prime position to deliver a
promising year for the business. With cash in hand and the growth
in cashflow potential, the business will look to maximise
shareholder value by continuing to reinvest, whether it be through
further developing assets or through M&A transactions.
I would like to take this opportunity to thank the Kazera Board,
management team, and all our employees as well as our advisors for
their continued work and dedication.
Gerard Kisbey-Green
Chairman
Chief Executive Officer's Review
Overview
I am pleased to provide an update following a very strong period
for Kazera Global Plc.
As the Company continues to progress towards generating
significant cashflow I would like to thank all the team for their
hard work throughout the year and in dealing with the aftershock of
the COVID-19 pandemic.
Operations
Kazera has continued to build through organic growth, initially
securing of a three-year tantalum off-take agreement that would
support the Company's cashflow through until 31 December 2024. This
deal was signed in September 2021 with Jiujiang Jinxin Nonferrous
Metals Co Ltd at Tantalite Valley, Namibia. Post-period, in July
2022, the Company announced an agreement to secure a non-dilutive
US$7.5 million investment in return for a 49% stake in the
Company's marketing, sales and export subsidiary for all lithium
production from the Tantalite Valley mine in Namibia. This deal was
further improved when, in December 2022, the Company secured a deal
to dispose of its entire interest in African Tantalum (Proprietary)
Limited to Hebei Xinjian Construction for cash consideration of
US$13,000,000. This second deal was the result of continued
investment in the asset and its production capabilities including a
processing plant refurbishment plan outlining a path to unlock
significant cashflow potential from the asset once completed.
Exploration work at the Tantalite Valley Mine also sampled high
quality Lithium and Feldspar from the site which increased the
attractiveness of the asset for potential buyers. The transaction
is transformational for Kazera and represents a real milestone for
the Company as the first realization of returns from an investment
in line with our stated strategy as an investing company of
building value in our investments whilst maintaining flexibility
for opportunistic exit points. This strategic exit will also enable
management to focus on our existing projects and further potential
investments.
In September 2021, Kazera acquired 60% of Whale Head Minerals
("WHM"). This transaction offered Kazera exposure to the WHM
application for a Mining Permit over a Heavy Mineral Sands ("HMS")
project with a net present value ("NPV") of GBP150 million as
calculated by independent consultancy company Creo Design (Pty)
Limited based on expected production of circa 6,000 tons of HMS per
month generating an estimated gross profit of in excess of $300,000
per month. Post-period, in August 2022, the Mining Permit was
granted to WHM, enabling the Company to start building the HMS
mine. This will place a substantial positive impact on the
Company's profitability, and also holds potential to generate
broader opportunities for Kazera in the Richtersveld where we are
now focused on delivering production at Walviskop.
Following the WHM acquisition, the Group had a balance in
respect of Mines Under Construction, which related to the
acquisition of the subsidiaries, Aftan, Deep Blue and WHM, of
GBP2,961k.
Throughout the period, the Group has been mining diamond gravel.
Despite achieving over 1,000 carats in one cycle, the Group has,
like all other contractors in the region, been hampered by the fact
that the processing facility run by Alexkor at Muisvlak has not
been operational. Without being able to process gravels, the
Company was unable to sell diamonds. For a period, at Alexkor's
request, the Group took over the running of the facility with
operational success, but was forced to withdraw its assistance due
to political and economic factors. Post-period the Group acquired
the use of a pan plant and a jig which will enable it to bypass
Muisvlak in its entirety and submit highly concentrated gravel only
for final sorting. This is expected to have a major impact on cash
flows before the end of the year.
Our path to profitability remains the Company's ultimate
priority and in October 2021, Kazera established a new loan
facility to allow the Company to draw down GBP250k to maximise the
Company's growth potential. This facility provided the Company with
a cash buffer to overcome any short-term cash issues which might
otherwise have hindered its route to positive cash flow. In
addition, the Company increased its borrowings from Westleigh
Investment Holdings Limited ("WIHL"), a company controlled by Giles
Clarke and Nick Harrison (who were at the time directors of the
Company). At the end of the year, GBP199k remained outstanding to
WIHL; this amount was repaid in full, in January 2023.
On 5 May 2022, the Company announced that it had raised GBP1
million by way of a placing of 100,000,000 new ordinary shares.
Align Research Ltd converted GBP100,000 of its loan (as referred to
in the previous paragraph) together with the interest thereon into
11,131,500 ordinary shares and Dennis Edmonds agreed to convert
GBP50,000 of outstanding salary into 5,000,000 shares.
Outlook
As the business becomes cashflow positive, we intend to continue
to deliver growth and value for our shareholders through
reinvestment of the proceeds into resource definition and mining at
our Deep Blue and WHM projects in South Africa.
In addition to our significant organic growth potential, the
team at Kazera continues to seek to maximise value by evaluating
potential M&A opportunities available to the business. In the
event that a disposal of one of our assets took place we would look
to making a distribution to shareholders. The Board is also
actively investigating ways to distribute to shareholders a
substantial portion of the proceeds received from the sale of
assets.
Dennis Edmonds
Chief Executive Officer
Strategic Report
The Directors present their strategic report on the Group for
the year ended 30 June 2022.
Principal Activity and Business Review
The principal activity of the Group is to act as an investor in
the resources and energy sectors. The Group was focused on its
Tantalite and Lithium projects in Namibia and its diamond and heavy
Mineral Sands mine in South Africa; its projects in Namibia were
disposed of post-period end. As of 30 June 2022, the Group was also
in the process of undertaking due diligence into a Rare Earth
Element exploration project in Kenya. The Group may be either an
active investor and acquire control of a single company or it may
acquire non-controlling shareholdings.
The Directors recommend that there is no dividend payment for
the year ended 30 June 2022 (2021: nil).
The review of the period is contained within the Chairman's
Statement.
The Chairman's Statement provides a balanced and comprehensive
analysis of the future developments, performance and results of the
Group during the period and of the balance sheet position of the
Group at the end of that period in the context of the Group's
current activities (which are set out in the CEO's report), taking
into consideration the disposal of the Group's interest in Namibia
post period end.
Investing Policy
Kazera Global plc (the "Company") seeks to achieve shareholder
return primarily via capital appreciation through direct
investments in companies and projects primarily in, but not limited
to, Africa within the mining and resource sectors (the "Target
Sectors") including traditional direct investments in securities
and similar financial instruments including any combination of the
following:
(a) equity securities (predominantly unlisted);
(b) isted and unlisted debt securities that may be rated or not
rated (bonds, debt instruments, convertible bonds and bonds with
warrants, fund-linked notes with a capital guarantee, loan
facilities etc.); and
(c) hybrid instruments.
The Company may exploit a wide range of investment opportunities
within the Target Sectors as they arise and, to this end, the
Company has complete flexibility in selecting the specific
investment and trading strategies that it sees fit in order to
achieve its investment objective. In this regard, the Company may
seek to gain Board representation and/or managerial control in its
underlying investments if it deems to be the best way of generating
value for shareholders.
Opportunities will be chosen through a careful selection process
which will appraise both the fundamental factors specific to the
opportunity as well as wider economic considerations. Typical
factors that will be considered are the strength of management, the
quality of the asset base, the investment's scale and growth
potential, the commodity price outlook, any geopolitical concerns,
the underlying financial position, future working capital
requirements as well as potential exit routes. Investments may be
in the form of buy-outs, controlling positions (whether initially
or as a result of additional or follow-on investments) or strategic
minority investments.
There is no fixed limit on the number of projects or companies
into which the Company may invest, nor the proportion of the
Company's gross assets that any investment may represent at any
time.
No material change will be made to the Company's investing
policy without the approval of shareholders.
Key Performance Indicators
The Group considers investment value and return on investment as
its principal key performance indicators. This is monitored
quarterly and reviewed at Board meetings. The Directors believe the
return on investment to be a fair representation of business for
the year. The Company has provided further finance to its
subsidiaries.
Key Performance Indicator 30 June 2022 30 June 2021
GBP'000 GBP'000
--------------------------- ------------- -------------
Investment (1) 3,298 3,114
Return on investment (2) -61% -36%
(1) see investment in subsidiaries (Note 14)
(2) Loss attributable to owners of the Company in the year
divided by the Investment amount
Principal Risks and Uncertainties
The Group's business is to identify, make, manage and realise
investments in accordance with the Group's stated investing policy.
The Directors consider the following risks to be the most material
or significant for the management of the business. These issues do
not purport to be a complete list or explanation of all the risk
factors facing the Group. In particular, the Group's performance
may be affected by changes in the market and/or economic conditions
and changes in legal, regulatory or tax requirement legislation.
Additional risks and uncertainties not presently known by the Group
or that the Group currently deems immaterial may also impact the
business.
The Board of Directors monitors these risks and the Group's
performance on a regular basis, considering investment proposals,
the performance of investments made and opportunities for
divestment as appropriate as well as considering the actual
performance of the Group against budgets.
-- Political and Country Risk
Substantially all of the Group's business and operations are
conducted in Namibia and South Africa. The political, economic,
legal and social situation in Namibia and South Africa introduces a
certain degree of risk with respect to the Group's activities. The
governments of Namibia and South Africa exercise control over such
matters as exploration and mining license, permitting, exporting
and taxation, which may adversely impact the Group's ability to
carry out exploration, development and mining activities.
Government activity, which could include non-renewal of
licenses, may result in any income receivable by the Group being
adversely affected. In particular, changes in the application or
interpretation of mining and exploration laws and/or taxation
provisions in Namibia could adversely affect the value of the
Group's interests.
The Group's risks are mitigated by liaison with the local
governments and union representatives as well as continuous
monitoring of local situations. The Group's exposure to Namibia in
this regard has now been mitigated by the post-year-end disposal of
the operations in Namibia, for which the acquirer is now
responsible.
-- Exploration and Development Risk
The exploration for and the development of mineral deposits
involves significant risks, which even a combination of careful
evaluation, experience and knowledge may not eliminate. While the
discovery of an ore body may result in substantial rewards, few
properties which are explored ultimately develop into producing
mines. Major resources are required to establish ore reserves, to
develop metallurgical processes and to construct mining and
processing facilities. In respect of the Namibian site this risk
has been substantially mitigated by the disposal transaction per
period end that previously referred to above.
There is no certainty that the exploration and development
expenditures made by the Group as described in these financial
statements will result in a commercially feasible mining operation.
There is aggressive competition within the mining industry for the
discovery and acquisition of properties considered to have
commercial potential. The Group will compete with other companies,
many of which have greater financial resources, for the opportunity
to participate in promising projects. Significant capital
investment is required to achieve commercial production from
successful exploration efforts.
The commercial viability of a deposit is dependent on a number
of factors. These include deposit attributes such as size, grade
and proximity to infrastructure; current and future market prices
which can be cyclical; government regulations including those
relating to prices, taxes, royalties, land tenure, land use,
importing and exporting of minerals and environmental protection.
The effect of these factors, either alone or in combination, cannot
be entirely predicted, and their impact may result in the Group not
receiving an adequate return on invested capital.
There is no assurance the Group will be able to adhere to the
current development and production schedule or that the required
capital and operating expenditure will be accurate. The Group's
development plans may be adversely affected by delays and the
failure to obtain the necessary approvals, licenses or permits to
commence production or technical or construction difficulties which
are beyond the Group's control. Operational risks and hazards
include: unexpected maintenance, technical problems or delays in
obtaining machinery and equipment, interruptions from adverse
weather conditions, industrial accidents, power or fuel supply
interruptions and unexpected variations in geological
conditions.
Exploration risk is mitigated by using independent third parties
to determine the resource availability (JORC reports) and the
operational risk is mitigated by using high-quality skilled
drilling contractors.
-- Unable to invest
The Directors may be unable to identify investments which are
consistent with the Group's investment policy and which are
available at a price which the Directors consider suitable, which
would limit the potential for the Group's value to grow.
The Board is comprised of experienced mining executives with
significant experience in sourcing investment opportunities, and
has engaged professional advisers, each of whom has access to a
broad network through which opportunities are frequently referred.
Shareholders in the Company may also bring to the Board's
attention, projects which they believe to be consistent with the
Group's investment policy.
-- Unavailability of finance
The Directors may identify suitable investments at what they
believe to be a suitable price but which may require more funds
than are available to the Group and the Group may then be unable to
raise further funds at all or on terms which the Directors consider
acceptable.
The Group is listed on the public markets providing enhanced
access to capital in the event that this was required. The
Company's disposal of its interests in Namibia in December 2022 and
move towards cash generative production during the year ending 30
June 2023 also reduces the Company's funding requirements.
-- Covid-19
The Group's operations are principally in Namibia and South
Africa where Covid-19 has had a significant impact on the local
economies. The following has been implemented by the Group:
Health and safety - The Group has published policies on
operating within the current government and international
guidelines to ensure our personnel remain safe. No significant
outbreaks of Covid-19 have been identified within our operational
vicinity, however should there be a significant outbreak,
operations will be adversely affected. The current guidelines
implemented by the Group have limited financial impact in the short
term, and as government restrictions are being eased in these
regions, the Group does predict a long-term effect on the
results.
Localised and national lockdowns - To date, there have been
limited lockdowns in the specific regions in which Kazera operate.
Going forward there is a risk that should tighter restrictions be
enforced leading to reduced activity, both future development as
well as mining operations may be impacted.
-- Investment risk
Once an investment has been made, the underlying business
invested in may not perform as the Directors had expected and this
may impair or eliminate the value of the Group's investment.
The management team closely monitors performance of each
activity and takes corrective action where necessary.
-- Realisation risk
Once an investment has been made, it may not prove possible to
realise the investment at the time the Directors intend or only to
realise it at a value which damages the Group's value.
The Management team are highly experienced at sourcing
opportunities and adding value to assets until such time as an
acceptable return on investment can be realised as demonstrated by
the Group's disposal of its interest in Namibia.
Financial Risk Management Objectives and Policies
Note 24 to the financial statements sets out the financial risks
to which the Group is exposed, together with its policies for
managing these risks.
Promotion of The Company for the Benefit of the Members as a
Whole
The Director's believe they have acted in the way most likely to
promote the success of the Company for the benefit of its members
as a whole, as required by s172 of the Companies Act 2006.
The section specifies that the Directors must act in good faith,
when promoting the success of the Company and in doing so have
regard (amongst other things) to:
-- Consider the likely consequences of any decision in the long term,
-- Act fairly between the members of the Company,
-- Maintain a reputation for high standards of business conduct,
-- Consider the interests of the Company's employees,
-- Foster the Company's relationships with suppliers, customers and others, and
-- Consider the impact of the Company's operations on the community and the environment.
The Company is quoted on AIM and its members will be fully
aware, through detailed announcements, shareholder meetings and
financial communications, an updated website, of the Board's broad
and specific intentions and the rationale for its decisions. The
Company has complied with all its obligations under AIM rule 26.
The Company went through a period of continued development and
evolution during the period 2021-2022. The Directors worked during
the year and after year end to increase its reach with regards to
mining rights in various countries which sets the stage for further
growth and development.
When selecting investments, issues such as the impact on the
community and the environment have actively been taken into
consideration. The Company strives to comply with all local
environmental legislation, and takes its responsibility to the
environment very seriously. Post year-end, the Company had focused
on water recycling projects at its processing plant in the
Tantalite Valley. This has also been timed with equity and
investments designed to advance the business for the benefit of all
stakeholders, including shareholders, employees and suppliers while
minimising the effects of dilution and capital costs on the
shareholders and the business.
The Company pays its employees and creditors promptly and keeps
its costs to a minimum to protect shareholders funds. The Company
recognises, communicates with workers' representation unions and
complies with all local employment legislation. There were no
outstanding employment disputes at 30 June 2022.
Decision Making and Implementation
The Board is collectively responsible for the decisions made
towards the long-term success of the Company and how the strategic,
operational and risk management decisions have been implemented
throughout the business, this is detailed in this Strategic Review
Report on pages 5 to 10.
Maintaining High Standards of Business Conduct
The Board places great importance on this aspect of corporate
life, where failure could put the Company at risk, and seeks to
ensure that this flows through all its business interactions and at
all levels of the Company. The Board upholds the importance of
sound ethical values and behaviour not only because it is important
to the Company to successfully achieve its corporate objectives and
to transmit this culture throughout the organisation but also to
set a benchmark and send a signal of what it will and will not do
in some of the jurisdictions in which the Company operates.
The Company is incorporated in the UK and governed by the
Companies Act 2006, the Group's business operations are carried out
within the UK and Internationally, which requires the Company to
conform with the various statutory and regulatory provisions in the
UK as well as in other locations in which it operates. The Company
has adopted the Quoted Companies Alliance Corporate Governance Code
2018 (the 'QCA Code') and the Board recognises the need to maintain
a high standard of corporate governance as well as to comply with
AIM Rules to safeguard the interest of the Company's stakeholders.
The corporate governance arrangements that the Board has adopted,
together with a punctilious observance of applicable regulatory
requirements also form part of the corporate culture, requiring a
standard of behaviour when interacting with contractors, business
partners, service providers, regulators and others. For example,
the Company has adopted an Anti-Corruption and Bribery Policy,
Whistleblowing Policy, HR and H&S Policies that dictate
acceptable behaviour as well as the Share Dealing Code for
Directors and employees, required for the AIM listed companies and
in accordance with the requirements of the Market Abuse Regulation,
which came into effect in 2016. Staff training on anti-corruption
and anti-bribery is monitored and refresher courses are provided as
when required to ensure that the issues of bribery and corruption
remain at the forefront of peoples' mind.
Employee Engagement
The Board recognises that its employees are one its key
resources, which enables delivering the Company's vision and goals.
Annual pay and benefit reviews are carried out to determine whether
all levels of employees are benefited equally and to retain and
encourage skills vital for the business. The Board encourages
management to improve employee engagement and to provide necessary
training in order to use their skills in the relevant areas in the
business. The Board periodically reviews the health and safety
measures, implemented in the business premises and improvements are
recommended for better practices.
Employees are informed of the results and important business
decisions to stimulate their engagement and are encouraged to
improve their skills and career potential.
Suppliers, Customers and Regulatory Authorities
The Board acknowledges that a strong business relationship with
suppliers and customers is a vital part of the growth. Whilst day
to day business operations are delegated to the executive
management, the Board sets directions with regard to new business
ventures. The Board upholds ethical behaviour across all sectors of
the business and encourages management to seek comparable business
practices from all suppliers and customers doing business with the
Company. We value the feedback we receive from our stakeholders and
we take every opportunity to ensure that, where possible, their
wishes are duly considered.
Shareholder Engagement
The Board places equal importance on all shareholders and
recognises the significance of transparent and effective
communications with shareholders. As an AIM listed company, there
is a need to provide fair and balanced information in a way that is
understandable to all stakeholders and particularly our
shareholders.
The Board recognises that it is accountable to shareholders for
the performance and activities of the Company and is committed to
providing effective communication with its shareholders.
Significant developments are disseminated through stock exchange
announcements. The changes to the Board and Board Committees,
changes to major shareholder information, QCA Code disclosure
updates are promptly published on the website to enable the
shareholders to be kept abreast of the Company's affairs. The
Company's Annual Report and Notice of Annual General Meetings (AGM)
are available to all shareholders and the Interim Report and other
investor presentations are also available for the last five years
and can be downloaded from the Company's website
www.kazeraglobal.com.
Shareholders can attend the Company's Annual General Meetings
and any other shareholder meetings held during the year, where they
can formally ask questions, raise issues and vote on the
resolutions as well as engage in a more informal one-to-one
dialogue with the executive Directors.
Community and Environment
The Board recognises that the long-term success of the Company
will be enhanced by good relations with different internal and
external groups and to understand their needs, interests and
expectations.
Kazera is committed to sustainable natural resource investment
and development worldwide and recognises a responsibility to
protect the environments in which it operates. The Company seeks to
manage and mitigate environmental risks as well as to minimise the
overall impact of our operations on the people and countries in
which we operate. The Board encourages that good relations are
cultivated with local governments and communities, aiming to better
understand various parties' aspirations and ensure that the
Company's business activities are compliant not only with local and
global laws, including environmental laws, but also where possible
take account of local expectations and priorities.
Going Concern
The financial statements have been prepared assuming the Group
and Company will continue as a going concern.
In assessing whether the going concern assumption is
appropriate, the directors have taken into account all available
information for the foreseeable future; in particular for the 12
months from the date of approval of these financial statements and
performed sensitivity analysis thereon. This assessment includes
consideration of the cash receipts arising from the disposal of the
Group's operations in Namibia, future plans, expenditure
commitments in place, cost reduction measures that can be
implemented and permitting requirements. The Directors estimates
are dependent upon the Group's mining operations coming into
operation as planned. In the event that this does not occur the
Directors are confident that further funds could be raised to meet
any shortfall.
In May 2022, the Company raised GBP1 million before expenses by
way of a share placing.
On 20 December 2022, the Company announced an agreement for the
sale of Kazera's interest in 100% of the shares in African Tantalum
to Xinjian for a headline sum of US$13 million (excluding interest
at 8% on loans of c. US$9.3 million made by Kazera to African
Tantalum). On signing of these agreements, Kazera received a
payment of US$642k, and has since received further payments of
approximately US$1,625k, far exceeding the contracted amount
required under the agreement at this stage. Monthly receipts under
the agreement are due to commence from April 2023.
This report was approved by the board of Directors on 15 March
2023 and signed on its behalf by
Dennis Edmonds
Chief Executive Officer
The financial statements below should be read in conjunction
with the notes contained within the full financial report which
will be available online at the Company's website at
www.kazeraglobal.com .
Group Statement of Comprehensive Income
For the year ended 30 June 2022
Continuing operations Notes Year ended Year ended
30 June 2022 30 June 2021
GBP'000 GBP'000
---------------------------------------------------------------- ----- ------------- -------------
Revenue 5 107 55
Cost of Sales (107) (55)
---------------------------------------------------------------- ----- ------------- -------------
Gross Profit / (loss) - -
Pre-production expenses (333) (111)
Administrative expenses (1,644) (1,053)
Operating loss 6 (1,977) (1,164)
Finance charges 7 (44) -
Loss before taxation (2,021) (1,164)
Taxation 10 - -
---------------------------------------------------------------- ----- ------------- -------------
Loss for the year (2,021) (1,164)
Loss attributable to owners of the Company (2,001) (1,146)
Loss attributable to non-controlling interests (20) (18)
(2,021) (1,164)
Other comprehensive income:
Items that may be subsequently reclassified to profit and loss:
Exchange differences on translation of foreign operations (17) 107
---------------------------------------------------------------- ----- ------------- -------------
Total comprehensive loss for the year attributable to:
The equity holders of the parent (2,018) (1,039)
The non-controlling interests (20) (18)
------------- -------------
(2,038) (1,057)
Earnings per share attributable to owners of the Company
From continuing operations:
Basic and diluted (pence) 11 (0.26) p (0.17) p
The Company has elected to take the exemption under section 408
of the Companies Act 2006 not to present the parent Company pro t
and loss account. The loss for the Parent Company for the year was
GBP328,095 (2021: GBP423,521 loss).
The accounting policies and notes are an integral part of these
financial statements.
Group and Company Statements of Financial Position
As at 30 June 2022
GROUP COMPANY
------------------
2022 2021 2022 2021
Notes GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------------- ----- -------- -------- -------- --------
Non-Current assets
Mines under construction 12 2,961 2,897 - -
Property, plant and equipment 13 796 716 - -
Investment in subsidiaries 14 - - 3,298 3,114
Long-term loan 16 - - 8,737 7,644
3,757 3,613 12,035 10,758
----------------------------------------------- ----- -------- -------- -------- --------
Current assets
Trade and other receivables 17 279 168 22 23
Cash and cash equivalents 18 637 47 609 3
916 215 631 26
--------
Current liabilities
Trade and other payables 19 652 209 645 180
652 209 645 180
----------------------------------------------- ----- -------- -------- -------- --------
Non-Current liabilities
Other payables 19 826 431 - 301
Provisions 20 54 55 - -
----------------------------------------------- ----- -------- -------- -------- --------
880 486 - 301
----------------------------------------------- ----- -------- -------- -------- --------
Net current assets / (liabilities) 264 6 (14) (150)
Net assets 3,141 3,133 12,021 10,303
----------------------------------------------- ----- -------- -------- -------- --------
Equity
Share capital 21 3,516 3,279 3,516 3,279
Share premium account 21 17,556 15,863 17,556 15,863
Capital redemption reserve 2,077 2,077 2,077 2,077
Share option reserve 443 337 443 337
Currency translation reserve (494) (477) - -
Retained earnings (19,908) (17,917) (11,571) (11,253)
----------------------------------------------- ----- -------- -------- -------- --------
Equity attributable to owners of the Company 3,190 3,162 12,021 10,303
Non-controlling interests (49) (29) - -
----------------------------------------------- ----- -------- -------- -------- --------
Total equity 3,141 3,133 12,021 10,303
----------------------------------------------- ----- -------- -------- -------- --------
Group Statement of Changes in Equity
For the year ended 30 June 2022
Shar e Capital
pr r Share Currency Equity
Shar e emium edemption option translation Retained shareholders' Non-controlling
capital account r eserve reserve reserve earnings funds interests Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================= ======= ======= ========= ======= =========== ======== ============= ================ =======
Balance at 30
June
2020 3,255 15,711 2,077 165 (584) (16,771) 3,853 (11) 3,842
----------------- ------- ------- --------- ------- ----------- -------- ------------- ---------------- -------
Loss for the year - - - - - (1,146) (1,146) (18) (1,164)
Other
comprehensive
income - - - - 107 - 107 - 107
----------------- ------- ------- --------- ------- ----------- -------- ------------- ---------------- -------
Total
comprehensive
income - - - - 107 (1,146) (1,039) (18) (1,057)
----------------- ------- ------- --------- ------- ----------- -------- ------------- ---------------- -------
Non-controlling - - - - - - - - -
interest
on acquisition of
a subsidiary
Transactions with - - - - - - - - -
Non-controlling
interest
Issue of share
capital 24 152 - - - - 176 - 176
Share based
payment
expense - - - 172 - - 172 - 172
Balance at 30
June
2021 3,279 15,863 2,077 337 (477) (17,917) 3,162 (29) 3,133
================= ======= ======= ========= ======= =========== ======== ============= ================ =======
Loss for the year - - - - - (2,001) (2,001) (20) (2,021)
Other
comprehensive
income - - - - (17) - (17) - (17)
----------------- ------- ------- --------- ------- ----------- -------- ------------- ---------------- -------
Total
comprehensive
income - - - - (17) (2,001) (2,018) (20) (2,038)
----------------- ------- ------- --------- ------- ----------- -------- ------------- ---------------- -------
Issue of share
capital 237 1,693 - - - - 1,930 - 1,930
Share
options/warrants
exercised - - - (10) - 10 - - -
Share based
payment
expense - - - 116 - - 116 - 116
Balance at 30
June
2022 3,516 17,556 2,077 443 (494) (19,908) 3,190 (49) 3,141
----------------- ------- ------- --------- ------- ----------- -------- ------------- ---------------- -------
Company Statement of Changes in Equity
For the year ended 30 June 2022
Capital Share
Share Share redemption option Retained
capital premium reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- ---------------------- ---------- ------------ ---------- ----------- ---------------------
Balance at 30 June
2020 3,255 15,711 2,077 165 (10,829) 10,379
-------------------- ---------------------- ---------- ------------ ---------- ----------- ---------------------
Total
comprehensive
income for the
year - - - - (424) (424)
Issue of share
capital,
net of share
issue
costs 24 152 - - - 176
Share based payment
expense - - - 172 - 172
Balance at 30 June
2021 3,279 15,863 2,077 337 (11,253) 10,303
-------------------- ---------------------- ---------- ------------ ---------- ----------- ---------------------
Total
comprehensive
income for the
year - - - - (328) (328)
Issue of share
capital,
net of share
issue
costs 237 1,693 - - - 1,930
Share
options/warrants
exercised - - - (10) 10 -
Share based payment
expense - - - 116 - 116
Balance at 30 June
2022 3,516 17,556 2,077 443 (11,571) 12,021
-------------------- ---------------------- ---------- ------------ ---------- ----------- ---------------------
Group and Company Statements of Cash Flows
For the year ended 30 June 2022
GROUP COMPANY
------------------------ ------------------------
Year ended Year ended Year ended Year ended
30 June 30 June 30 June 30 June
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------------------------- ----------- ----------- ----------- -----------
OPERATING ACTIVITIES
Operating loss (2,021) (1,164) (328) (424)
Depreciation and amortisation 52 126 - -
Share based payment expense 116 172 116 172
Finance charges 44 - 44 -
Foreign exchange 121 (39) - -
Provisions for mine rehabilitation and decommissioning - 55 - -
Intercompany loan interest charged - - (336) (312)
--------------------------------------------------------- ----------- ----------- ----------- -----------
Operating cash flows before movement in working capital (1,688) (850) (504) (564)
(Increase)/decrease in receivables (110) 21 1 89
Increase in payables 880 382 205 312
--------------------------------------------------------- ----------- ----------- ----------- -----------
Net cash used in operating activities (918) (447) (298) (163)
--------------------------------------------------------- ----------- ----------- ----------- -----------
INVESTING ACTIVITIES
Purchases of property, plant and equipment (438) (197) - -
Development costs (6) - - -
Trial diamond mining 107 - - -
Advances to subsidiary undertakings - - (757) (501)
Purchase/increase in subsidiary undertakings - - (184) -
Net cash used in investing activities (337) (197) (941) (501)
--------------------------------------------------------- ----------- ----------- ----------- -----------
FINANCING ACTIVITIES
Net proceeds from share issues 1,498 176 1,498 176
Loans received 347 90 347 90
--------------------------------------------------------- ----------- ----------- ----------- -----------
Net cash from financing activities 1,845 266 1,845 (266)
--------------------------------------------------------- ----------- ----------- ----------- -----------
Net increase/(decrease) in cash and cash equivalents 590 (378) 606 (398)
Cash and cash equivalents at beginning of year 47 425 3 401
Cash and cash equivalents at end of year 637 47 609 3
--------------------------------------------------------- ----------- ----------- ----------- -----------
Notes to the Group Financial Statements
For the year ended 30 June 2022
1. GENERAL INFORMATION
Kazera Global Plc is a public limited company which is listed on
the Alternative Investment Market (AIM) and incorporated and
domiciled in England and Wales, United Kingdom. The nature of the
Group's operations and its principal activities are set out in the
Strategic Report and the Directors' Report.
2. ACCOUNTING POLICIES
BASIS OF PREPARATION
These consolidated financial statements have been prepared and
approved by the Directors in accordance with UK Adopted
International Accounting Standards in accordance with the
requirements of the Companies Act 2006.
The consolidated financial statements have been prepared under
the historical cost convention, except as noted in the accompanying
accounting policies.
The preparation of financial statements in conformity with UK
Adopted International Accounting Standards ('IAS') requires the use
of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the
accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates
are significant to the financial statements, are disclosed in Note
3.
The financial statements are presented in pounds sterling
(GBP'000), which is also the functional currency of the Company and
Group.
The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies have
been consistently applied to all the years presented, unless
otherwise stated.
GOING CONCERN
The Company prepares and routinely maintains a cash flow
forecast; the directors have, with reference to the cash flow
forecast considered a number of potential scenarios under which the
Company's ability to continue as a going concern.
During October 2021, the Company secured a loan facility of
GBP450,000 with Westleigh Investments Holdings Limited, and
throughout the year, received equity finance from the exercise of
share options, warrants, and the conversion of contractor
liabilities, salaries and loans, totalling GBP887,065.
The loan from Westleigh Investments Holdings Limited was
subsequently repaid in full during January 2023 following the sale
of the Company's Namibian business for US$13 million, which was as
announced in December 2022.
The Group's South African diamond business investment is now
also generating revenue.
The Directors are of the opinion that existing available cash
resources together with deferred cash consideration from the
disposal of the Namibian business and cash inflows from operations
will be sufficient to meet operating cash outflows requirements for
a period of 12 months from the date of approval of these financial
statements. Future revenues will be dependent upon the Company's
ability to extract and sell diamonds in line with budgets. In the
event that the mining activities do not perform in line with
budgets, the Directors are confident that the deferred
consideration from the disposal of the Namibian business with be
sufficient to meet any shortfall.
Taking the above factors into consideration, the financial
statements have been prepared on the going concern basis.
NEW STANDARDS, AMMENTS AND INTERPRETATIONS ADOPTED BY THE
GROUP
The following IFRS or IFRIC interpretations were effective for
the first time for the financial year beginning 1 July 2020. Their
adoption has not had any material impact on the disclosures or on
the amounts reported in these financial statements.
Standard /interpretations Application
--------------------------------- --------------------------------------
Annual Improvements to IFRS Effective 01 January 2022
Standards: 2018 - 2020 Cycle
Amendments to IAS1 Presentation of Financial Statements
and IFRS
Practice Statement 2: Disclosure Disclosure of Accounting Policies
of Accounting Policies (effective 1 January 2023);
Amendments to IAS 8 Accounting policies, Changes
in Accounting Estimates and
Errors - Definition of Accounting
Estimates (effective 1 January
2023)
Amendments to IAS 12 Income Taxes - Deferred Tax
arising from a Single Transaction
(effective 1 January 2023).
Amendments to IFRS 10 and Sale or Contribution of Assets
IAS 28 between an Investor and its
Associate or Joint Venture
(effective date postponed)
Business Combinations - Reference
to the Conceptual Framework
(effective date 1 January 2022)
Amendments to IFRS 3 Amendments to IAS 1: Presentation
of Financial Statements and
IFRS Practice Statement 2:
Disclosure of Accounting Policies
Amendments to IAS 16 Property, Plant and Equipment
(effective date 1 January 2022)
Amendments to IAS 1 Presentation of Financial Statements:
Classification of Liabilities
as Current or Non-current (effective
date TBC)
Amendments to IAS 1 Classification of Liabilities
as Current or Non current (effective
date TBC)
NEW STANDARDS, AMMENTS AND INTERPRETATIONS NOT YET ADOPTED BY
THE GROUP
There are no IFRS's or IFRIC interpretations that are not yet
effective that would be expected to have a material impact on the
Company or Group.
BASIS OF CONSOLIDATION
Subsidiaries are all entities (including structured entities)
over which the Group has control. The Group controls an entity when
the Group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those
returns through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date that control
ceases.
Inter-company transactions, balances and unrealised gains on
transactions between group companies are eliminated. Unrealised
losses are also eliminated.
The Group applies the acquisition method to account for business
combinations. The consideration transferred for the acquisition of
a subsidiary is the fair values of the assets transferred, the
liabilities incurred to the former owners of the subsidiary and the
equity interests issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired
and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the
acquisition date. The Group recognises any non-controlling interest
in the subsidiary on an acquisition-by-acquisition basis, either at
fair value or at the non-controlling interest's proportionate share
of the recognised amounts of subsidiary's identifiable net
assets.
Acquisition-related costs are expensed as incurred.
Any contingent consideration to be transferred by the Group is
recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that is
deemed to be an asset or liability is recognised either in profit
or loss or as a change to other comprehensive income. Contingent
consideration that is classified as equity is not re-measured, and
its subsequent settlement is accounted for within equity.
foreign currencies
The individual financial statements of each group company are
presented in South African Rands and Namibian Dollars, which is the
currency of the primary economic environment in which it operates
(its functional currency). For the purpose of the Group financial
statements, the results and financial position of each group
company are expressed in Pounds Sterling, which is the functional
currency of the Company, and the presentation currency for the
Group financial statements.
In preparing the financial statement of the individual
companies, transactions in currencies other than the entity's
functional currency (foreign currencies) are recorded at the rates
of exchange prevailing on the dates of the transactions. At each
year end date, monetary assets and liabilities that are denominated
in foreign currencies are retranslated at the rates prevailing on
the year end date. Non-monetary items carried at fair value that
are denominated in foreign currencies are translated at the rates
prevailing at the date when the fair value was determined.
Non-monetary items that are measured in terms of historical cost in
a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary
items, and on the retranslation of monetary items, are included in
the income statement. Exchange differences arising on the
retranslation of non-monetary items carried at fair value are
included in profit or loss for the period, except for differences
arising on the retranslation of non-monetary items in respect of
which gains and losses are recognised directly in equity. For such
non-monetary items, any exchange component of that gain or loss is
also recognised directly in equity.
For the purpose of presenting Group financial statements, the
assets and liabilities of the Group's foreign operations are
translated at exchange rates prevailing on the year end date.
Income and expense items are translated at the average exchange
rates for the period. Exchange differences arising are classified
as equity and transferred to the Group's translation reserve. Such
translation differences are recognised as income or as expenses in
the period in which the operation is disposed of.
TAXATION
The tax currently payable is based on taxable profit or loss for
the period. Taxable profit or loss differs from net profit or loss
as reported in the income statement because it excludes items of
income or expense that are taxable or deductible in other years and
it further excludes items that are never taxable or deductible. The
Company's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the balance
sheet date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises
from goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a
transaction that affects neither the tax profit nor the accounting
profit.
The carrying value of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the deferred tax asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled, or the asset is
realised based on tax laws and rates that have been enacted at the
balance sheet date. Deferred tax is charged or credited in the
income statement, except when it relates to items charged or
credited directly to equity, in which case the deferred tax is also
dealt with in equity.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Company intends to settle
its current tax assets and liabilities on a net basis.
INTANGIBLE ASSETS - EXPLORATION AND EVALUATION EXPITURE
Exploration and evaluation activity involve the search for
mineral resources, the determination of technical feasibility and
the assessment of commercial viability of an identified resource.
Research expenditure is written off in the year in which it is
incurred. The Group recognises expenditure as exploration and
evaluation assets when it determines that the legal rights to said
assets have been obtained. Costs incurred which relate wholly to
exploration work only, are expensed through the statement of
comprehensive income. When a decision is taken that a mining
property becomes viable for commercial production, all further
pre-production expenditure is capitalised.
Expenditure included in the initial measurement of exploration
and evaluation assets and which is classified as intangible assets,
relates to the acquisition of rights to undertake topographical,
geological, geochemical and geophysical studies, exploratory
drilling, trenching, sampling and other activities to evaluate the
technical feasibility and commercial viability of extracting a
mineral source.
MINES UNDER CONSTRUCTION
Expenditure is transferred from "Exploration and evaluation"
assets to "Mines under construction" once the work completed to
date supports the future development of the property and such
development receives the requisite approvals. All subsequent
expenditure on technically and commercially feasible sites is
capitalised within mining rights.
All expenditure on the construction, installation or completion
of infrastructure facilities is capitalised as construction in
progress within "Mines under construction". Once production starts,
all assets included in "Mines under construction" are transferred
into "Property, Plant and Equipment" or "Producing Mines. It is at
this point that depreciation/amortisation commences over its useful
economic life. The asset will be depreciated using the Units of
Production method (UOP).
Mines under construction are stated at cost. The initial cost
comprises transferred exploration and evaluation assets,
construction costs, infrastructure facilities, any costs directly
attributable to bringing the asset into operation, the initial
estimate of the rehabilitation obligation, and, for qualifying
assets, borrowing costs. Costs are capitalised and categorised
between mining rights and construction in progress respectively
according to whether they are intangible or tangible in nature.
PROPERTY, PLANT AND EQUIPMENT
Property, Plant and equipment are recorded at cost, less
depreciation, less any amount of adjustments for impairment, if
any.
Significant improvements are capitalised, provided they qualify
for recognition as assets. The costs of maintenance, repairs and
minor improvements are expensed when incurred.
Tangible assets, retired or withdrawn from service, are removed
from the balance sheet together with the related accumulated
depreciation. Any profit or loss resulting from such an operation
is included in the income statement.
Tangible and intangible assets are depreciated on the
straight-line method based on their estimated useful lives from the
time they are put into operation, so that their net cost is
diminished over the lifetime of consideration to estimated residual
value as follows:
Buildings - Over 20 years
Plant and machinery - Between 5 and 10 years
Furniture and equipment - Between 5 and 10 years
IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENT AND INTANGIBLE
ASSETS EXCLUDING GOODWILL
Assets that have an indefinite useful life are not subject to
amortisation but are reviewed for impairment annually and where
there are indications that the carrying value may not be
recoverable. An impairment loss is recognised for the amount by
which the carrying value exceeds the recoverable amount.
ASSET ACQUISITIONS - land
Acquisitions of mineral exploration licences through the
acquisition of non-operational corporate structures that do not
represent a business, and therefore do not meet the definition of a
business combination, are accounted for as the acquisition of an
asset. The consideration for the asset is allocated to the assets
based on their relative fair values at the date of acquisition.
Inter-company transactions, balances and unrealised gains on
transactions between group companies are eliminated. Unrealised
losses are also eliminated.
Where the asset was acquired during the period however licensing
becomes available post year end this is accounted for as an
acquisition of Land.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash at bank and in hand,
deposits at call with banks, other short-term highly liquid
investments with original maturity at acquisition of three months
or less that are readily convertible to cash, net of bank
overdrafts. For the purpose of the cash flow statement, cash and
cash equivalents consist of the definition outlined above.
EQUITY INSTRUMENTS INCLUDING SHARE CAPITAL
Equity instruments consist of the Company's ordinary share
capital and are recorded at the proceeds received, net of direct
issue costs.
FINANCIAL INSTRUMENTS - INITIAL RECOGNITION AND SUBSEQUENT
MEASUREMENT
Classification
The Group classifies its financial assets into only one
category, being those to be measured at amortised cost.
The classification depends on the Group's business model for
managing the financial assets and the contractual terms of the cash
flows.
Recognition
Purchases and sales of financial assets are recognised on trade
date (that is, the date on which the Group commits to purchase or
sell the asset). Financial assets are derecognised when the rights
to receive cash flows from the financial assets have expired or
have been transferred and the Group has transferred substantially
all the risks and rewards of ownership.
Measurement
At initial recognition, the Group measures a financial asset at
its fair value plus transaction costs that are directly
attributable to the acquisition of the financial asset.
Debt instruments
Amortised cost: Assets that are held for collection of
contractual cash flows, where those cash flows represent solely
payments of principal and interest, are measured at amortised cost.
Interest income from these financial assets is included in finance
income using the effective interest rate method. Any gain or loss
arising on derecognition is recognised directly in profit or loss
and presented in other gains/(losses) together with foreign
exchange gains and losses. Impairment losses are presented as a
separate line item in the statement of profit or loss.
Impairment
The Group assesses, on a forward-looking basis, the expected
credit losses associated with its debt instruments carried at
amortised cost. The impairment methodology applied depends on
whether there has been a significant increase in credit risk.
For trade receivables, the Group applies the simplified approach
permitted by IFRS 9, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.
FINANCIAL LIABILITIES
All non-derivative financial liabilities are classified as other
financial liabilities and are initially measured at fair value, net
of transaction costs. Other financial liabilities are subsequently
measured at amortised cost using the effective interest rate
method. Other financial liabilities consist of borrowings and trade
and other payables.
Financial liabilities are classified as current liabilities
unless the Company has an unconditional right to defer settlement
of the liability for at least 12 months after the balance sheet
date.
OTHER FINANCIAL LIABILITIES, BANK AND SHORT-TERM BORROWINGS
Other financial liabilities, as categorised above, are initially
measured at fair value, net of transaction costs. Other financial
liabilities are subsequently measured at amortised cost using the
effective interest method, with interest expense recognised on an
effective yield basis. Other financial liabilities are classified
as current liabilities unless the Company has an unconditional
right to defer settlement of the liability for at least 12 months
after the balance sheet date.
TRIAL PRODUCTION REVENUE AND COSTS
Revenue
IFRS 15 establishes a comprehensive framework for determining
whether, how much and when revenue is recognised. These steps are
as follows: identification of the customer contract; identification
of the contract performance obligations; determination of the
transaction price; allocation of the transaction price to the
performance obligations; and revenue recognition as performance
obligations are satisfied.
Under IFRS 15, revenue is recognised when performance
obligations are met. This is the point of delivery of goods to the
customer. Revenue is measured at the fair value of consideration
received or receivable from sales of diamonds and tantalite to an
end user, net of buyer's discount, treatment charges, freight costs
and value added tax. The application of the standard including the
five-step approach has not resulted in any changes to the timing of
recognition of revenue in the current or any prior period.
Accordingly, the information for 2021 has not been restated.
Revenues from the sale of diamonds as a by-product of the
evaluation or "testing" phase are offset against the cost of the
Mines Under Construction (see Note 12).
EARNINGS PER SHARE
Basic earnings per share is calculated by dividing:
-- the profit attributable to owners of the Company, excluding
any costs of servicing equity other than ordinary shares;
-- by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary
shares issued during the year and excluding treasury shares (note
11).
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account:
-- the after-income tax effect of interest and other financing
costs associated with dilutive potential ordinary shares; and
-- the weighted average number of additional ordinary shares
that would have been outstanding, assuming the conversion of all
dilutive potential ordinary shares.
SEGMENTAL ANALYSIS
Under IFRS 8 operating segments are considered to be components
of an entity about which separate financial information is
available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and assessing
performance. The Company's chief operating decision maker is the
Board of Directors. At present, and for the period under review,
the Company's reporting segments are the holding company, tantalite
and lithium mining operation in Namibia and the diamond mining
operations in South Africa.
3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATIONS
In the application of the Group's accounting policies, which are
described in Note 2, the Directors are required to make judgements,
estimates and assumptions that affect the application of policies
and reported amounts of assets and liabilities, income and
expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed
to be reasonable under the circumstances, the results of which form
the basis of making the judgements about carrying values of assets
and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
Valuation of options
The valuation of the options involves making a number of
critical estimates relating to price volatility, future dividend
yields, expected life of the options and forfeiture rates. These
assumptions and valuation methodology adopted have been described
in more detail in Note 22. The estimates and assumptions could
materially affect the Income Statement.
Carrying value of mines under construction (Note 12)
The Group tests annually whether its mines under construction
have suffered any impairment and management make judgements in this
respect. The judgements are based on the recoverable amounts of
cash generating units ("CGUs") which are determined based on value
in use calculations which require the use estimates and assumptions
such as long-term commodity prices and recovery rates, discount
rates, operating costs and therefore expected margins and future
capital requirements. These estimates and assumptions are subject
to risk and uncertainty and therefore there is a possibility that
changes in circumstances will impact the recoverable amount.
In assessing the carrying amounts of its tantalite mine under
construction, the Directors have conducted a feasibility study in
conjunction with an independently prepared mineral resource
estimate. The period used in management's assessment is the
anticipated life of the mine to the expiration of the licence. A
discount rate of 10% has been applied. The mineral resource report
concluded on an inferred 297,600 tonnes of tantalum pentoxide
within the White City Tantalum Mineral Resource Area. These
estimates are consistent with external sources of information. The
three principal variables in the Company's forecasts are as
follows: resources, pricing and operational efficiency. In
reviewing sensitivities, the following should be considered: a
further 622,200 tonnes of lithium and tantalite resources have been
identified at Purple Haze and Homestead in addition to the
resources at White City, the Company's financial forecasts assume a
65% operational efficiency and resources are forecast to be sold on
long term contracts to end users reducing commodity risk.
In assessing the carrying amounts of its diamond operations, the
Company has commissioned an independent feasibility study which has
concluded that the market value of its operations is significantly
greater than carrying value.
Investment in subsidiaries
The investments in subsidiaries are recognised at cost less
accumulated impairments. Details of the investments are listed in
Note 14.
Upon acquisition, the excess of the sum of the consideration
transferred over the net of the acquisition-date amounts of the
identifiable assets acquired and the liabilities assumed, is
recognised under mines under construction.
Any potential impairments to the investments in subsidiaries are
measured in line with the impairment of mines under construction in
the paragraph above.
The Directors are confident that the future operational
cashflows forecast to be generated from the sale of diamonds,
tantalum and HMS will be sufficient to repay the intergroup
loans.
4. SEGMENTAL REPORTING
The Directors are of the opinion that under IFRS 8 - Operating
Segments the Group operates in three primary business segments;
being holding company expenses, tantalite mining and diamond mining
activities. The secondary segment is geographic. Pre-production/
trial revenue earned during each of the years ended 30 June 2022
and 30 June 2021 were from immaterial sales to Alexkor and JAE
Mining.
The Group's losses and net assets by primary business segments
are shown below.
Segmentation by continuing business
Year ended Year ended
30 June 30 June
2022 2021
Profit/ (loss) before income tax GBP'000 GBP'000
--------------------------------- ------------ ------------
Holding company (664) (424)
Tantalite mining activity (1,170) (506)
Diamond mining activity (187) (234)
--------------------------------- ------------ ------------
(2,021) (1,164)
--------------------------------- ------------ ------------
Year ended Year ended
30 June 30 June
2022 2021
Net assets /(liabilities) GBP'000 GBP'000
-------------------------- ------------ ------------
Holding company 12,021 10,303
Tantalite mining activity (6,722) (5,280)
Diamond mining activity (504) (300)
-------------------------- ------------ ------------
Segmentation by geographical area
Year ended Year ended
30 June 30 June
2022 2021
Loss before income tax GBP'000 GBP'000
------------------------- ------------- ------------
United Kingdom (664) (424)
Namibia (1,170) (506)
South Africa (187) (234)
------------------------- ------------- ------------
(2,021) (1,164)
------------------------- ------------- ------------
Year ended Year ended
30 June 30 June
2022 2021
Net assets /(liabilities) GBP'000 GBP'000
-------------------------- ------------ ------------
United Kingdom 12,021 10,303
Namibia (6,722) (5,280)
South Africa (504) (300)
-------------------------- ------------ ------------
5. REVENUE
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
-------------------------------- ------------ ------------
Revenue from external customers 107 55
-------------------------------- ------------ ------------
Revenues of GBP107k were derived from customers in South Africa,
for the sale of the by-products of testing and evaluation
activities in Deep Blue Minerals Limited. The revenues were derived
from pre-production activities and have been considered against the
Mines Under Construction intangible asset recognised in the Group
(see note 12).
6. OPERATING LOSS
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
------------------------------------------------- ------------ ------------
Loss for the period has been arrived at after
charging:
Staff costs as per Note 9 below 520 577
Auditors' remuneration 50 40
Depreciation of property, plant and equipment 52 126
Share-based payment expense 116 172
7. FINANCE CHARGES
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
---------------------- ------------ ------------
Loan interest payable 44 -
---------------------- ------------ ------------
44 -
---------------------- ------------ ------------
8. AUDITORS' REMUNERATION
The analysis of auditors' remuneration is as follows:
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
----------------------------------------------- ------------ ------------
Fees payable to the Group's auditors for
the audit of the Group's annual accounts 50 40
Total audit fees 50 40
Fees payable to the Group auditor and their
associates for other services to the Group: - -
50 40
----------------------------------------------- ------------ ------------
9. STAFF COSTS
The average monthly number of employees (including executive
directors) for the continuing operations was:
Year ended Year ended
30 June 30 June
2022 2021
Number Number
--------------------------------------------- ------------ ------------
Group total staff 16 16
GBP'000 GBP'000
--------------------------------------------- ------------ ------------
Wages and salaries 400 367
Share based payment in respect of exercise
of options 118 172
Other benefits 1 2
Social security costs 1 36
--------------------------------------------- ------------ ------------
520 577
--------------------------------------------- ------------ ------------
Directors' emoluments
An analysis of the directors' emoluments and pension
entitlements and their interest in the share capital of the Company
is contained in the Directors' Remuneration report on page 20
accompanying these financial statements. All emoluments are short
term in nature and the Directors are considered to be key
management personnel.
10. TAXATION
The weighted average applicable tax rate of 28.25% (2021:
28.25%) is a combination of the rates used in the UK, Namibia and
South Africa.
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
------------------------------------------- ------------ ------------
Analysis of income tax expense:
Current tax - -
Deferred tax - -
------------------------------------------- ------------ ------------
Total income tax expense - -
------------------------------------------- ------------ ------------
Loss on continuing operations before tax (2,021) (1,164)
------------------------------------------- ------------ ------------
Tax at the weighted average tax rate of
28.25% (2021 28.25%) (571) (329)
Effects of:
Expenses not deductible for tax purposes 33 1
Unutilised tax losses carried forward 538 328
Tax charge for period - -
------------------------------------------- ------------ ------------
The taxation charge in future periods will be affected by any
changes to the corporation tax rates in force in the countries in
which the Group operates. Losses from the previous period have been
carried forward. A deferred tax asset has not been recognised in
the financial statements due to the uncertainty of the
recoverability of the amount.
At the balance sheet date the Group had unused tax losses of
GBP7,401,000 (2021: GBP5,497,000)
11. EARNINGS PER SHARE
The calculation of basic earnings per share is based on the
following data:
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
----------------------------------------------- ----------------- -----------
Loss for the year attributable to owners
of the Company (2,021) (1,164)
Weighted average number of ordinary shares
in issue for basic and fully diluted earnings 770,895,360 686,324,120
----------------------------------------------- ----------------- -----------
EARNINGS PER SHARE (PENCE PER SHARE)
BASIC AND FULLY DILUTED:
- from continuing and total operations (0.26) (0.17)
----------------------------------------------- ----------------- -----------
The Company has outstanding warrants and options as disclosed
under Note 22 which may be dilutive in future periods. The effect
in respect of the current year would have been anti-dilutive
(reducing the loss per share) and accordingly is not presented.
In addition, the effect of the issue of ordinary shares shortly
after year end, would also have been anti-dilutive, and accordingly
is not considered. The issue however, may be dilutive in future
periods.
12. MINES UNDER CONSTRUCTION
Construction Mining
in progress licences Total
GROUP GBP'000 GBP'000 GBP'000
-------------------------------- ------------ --------- -------
At 1 July 2020 2,784 33 2,817
-------------------------------- ------------ --------- -------
Additions - - -
Sale of by-products (55) - (55)
Exchange translation difference 132 3 135
================================ ============ ========= =======
At 30 June 2021 2,861 36 2,897
================================ ============ ========= =======
Additions - 6 6
Trial production revenue (107) - (107)
Exchange translation difference 161 4 165
================================ ============ ========= =======
At 30 June 2022 2,915 46 2,961
================================ ============ ========= =======
Revenues from the sale of the by-product of testing and
evaluation activities have been offset against the costs of the
intangible asset. These totalled GBP107,281 in the year (2021:
GBP54,952).
13. PROPERTY, PLANT AND EQUIPMENT
Plant & Furniture
Land & buildings machinery & equipment Total
GROUP GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ---------------- ---------- ------------ -------
Cost
At 1 July 2020 125 964 36 1,125
Exchange translation difference - 24 3 27
Additions - 197 - 197
Cost at 30 June 2021 125 1,185 39 1,349
-------------------------------- ---------------- ---------- ------------ -------
Exchange translation difference - (342) (8) (350)
Additions 184 196 58 438
================================ ================ ========== ============ =======
Cost at 30 June 2022 309 1,039 89 1,437
================================ ================ ========== ============ =======
Depreciation
At 1 July 2020 30 432 28 490
Exchange translation difference - 16 1 17
Charge for the year 5 116 5 126
-------------------------------- ---------------- ---------- ------------ -------
Depreciation at 30 June 2021 35 564 34 633
-------------------------------- ---------------- ---------- ------------ -------
Exchange translation difference - (24) (20) (44)
Charge for the year 5 44 3 52
-------------------------------- ---------------- ---------- ------------ -------
Depreciation at 30 June 2022 40 584 17 641
-------------------------------- ---------------- ---------- ------------ -------
Net book value at 30 June
2022 269 455 73 796
-------------------------------- ---------------- ---------- ------------ -------
Net book value at 30 June
2021 90 621 5 716
-------------------------------- ---------------- ---------- ------------ -------
14. INVESTMENT IN SUBSIDIARY UNDERTAKINGS
The Company's investments in its subsidiary and associated
undertakings
Total
COMPANY GBP'000
---------------------------------------- --------
Cost and net book value
As at 1 July 2020 3,114
As at 30 June 2021 3,114
======================================== ========
Acquisition: 60% of Whale Head Minerals
(Pty) Ltd (Note 15) 184
---------------------------------------- --------
As at 30 June 2022 3,298
---------------------------------------- --------
All principal subsidiaries of the Group are consolidated into
the financial statements.
At 30 June 2022 the subsidiaries were as follows:
Country Principal
Subsidiary undertakings of registration activity Holding %
African Tantalum (Pty) Intermediate Ordinary
Ltd Namibia holding company shares 100%
Namibia Tantalite Investments Ordinary
(Pty) Ltd Namibia Tantalite mining shares 100%
Tameka Shelf Company Mining licence Ordinary
Four (Pty) Ltd Namibia holder shares 100%
Whale Head Minerals Mining License Ordinary
(Pty) Ltd South Africa holder shares 60%
Deep Blue Minerals (Pty) Mining License Ordinary
Ltd South Africa holder shares 90%
Ordinary
Kazera Trading Limited UK Dormant shares 100%
------------------------------- ------------------ ------------------ ---------- -----
Whale Head Minerals (Pty) Ltd
On 30 September 2021, the Company announced an investment
acquiring a 60% stake in Whale Head Minerals (Pty) Limited, a South
Africa-based company as the mining license holder. The cost of the
transaction was an initial investment and directly attributable
acquisitions costs, totalling GBP183,079. Goodwill in the amount of
GBP183,655 was recognised in relation to this acquisition and
subsequently impaired to GBPnil as at 30 June 2022.
15. BUSINESS ACQUISITION - WHALE HEAD MINERALS (PTY) LTD
On 28 September 2021, the Company acquired 60% of the issued
share capital of Whale Head Minerals (Pty) Ltd ("WHM") for
consideration of GBP184,000. The consolidated income statement for
the year ended 30 June 2022 includes the results of WHM from 28
September 2021, the date of the acquisition. The Company has
determined the fair value of the assets and liabilities of WHM to
be recognised in these consolidated financial statements as
follows:
Fair Value
recognised
on acquisition
GBP'000
Assets
Exploration and evaluation
assets 10
---------------
Total Assets 10
Liabilities
Non-current liabilities (10)
---------------
Total Liabilities (10)
Total identified assets
at fair value -
---------------
Purchase consideration 184
---------------
Under IFRS 3, a business must have three elements: inputs,
processes and outputs. Whale Head Minerals (Pty) Ltd is an early
stage exploration company and as at 30 June 2022, had no near term
plans to develop a mine. WHM possess titles to mineral properties
but at 30 June 2022, these could not be considered inputs because
of their early stage of development. WHM did not have a skilled
workforce, nor did it hold any infrastructure or assets that could
produce outputs. Therefore, the Directors' conclusion is that the
transaction is an asset acquisition and not a business combination.
As the mining licence only became available after 30 June 2022, the
acquisition of WHM was initially accounted for as an acquisition of
land.
16. LONG TERM LOAN (COMPANY)
Loan to
Loan to Aftan Loan to Deep Whale Head
Tantalum Blue Minerals Minerals Total
COMPANY GBP'000 GBP'000 GBP'000 GBP'000
============================ ============= ============== =========== ========
As at 1 July 2020 6,729 102 0 6,831
As at 30 June
2021 7,145 499 0 7,644
---------------------------- ------------- -------------- ----------- --------
Increase in loan 840 234 19 1,394
---------------------------- ------------- -------------- ----------- --------
As at 30 June
2022 7,985 733 19 8,737
---------------------------- ------------- -------------- ----------- --------
The Directors are confident that the future operational
cashflows forecast to be generated from the sale of diamonds,
tantalum and HMS will be sufficient to repay the intragroup
loans.
17. TRADE AND OTHER RECEIVABLES
GROUP COMPANY
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ------- ------- ------- -------
Other receivables 262 162 5 17
Prepayments and accrued income 17 6 17 6
279 168 22 23
------------------------------- ------- ------- ------- -------
The Directors consider the carrying amount of intercompany loans
and other receivables approximates to their fair value.
18. CASH AND CASH EQUIVALENTS
GROUP COMPANY
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ------- ------- ------- -------
Cash and cash equivalents 637 47 609 3
-------------------------- ------- ------- ------- -------
Cash and cash equivalents (which are presented as a single class
of asset on the face of the balance sheet) comprise cash at bank
and other short term, highly liquid investments with a maturity of
three months or less.
The Directors consider the carrying amount of cash and cash
equivalents approximates to their fair value.
19. TRADE AND OTHER PAYABLES
GROUP COMPANY
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ------- ------- ------- -------
Current Liabilities
Trade payables 12 128 12 108
Other payables 482 7 480 3
Accruals 158 74 153 69
------------------------ ------- ------- ------- -------
652 209 645 180
------------------------ ------- ------- ------- -------
Non-Current Liabilities
Other payables 826 220 - 90
Accruals - 211 - 211
------------------------ ------- ------- ------- -------
826 431 - 301
------------------------ ------- ------- ------- -------
The Directors consider the carrying amount of trade payables
approximates to their fair value.
The 'other payables' current liability amount includes several
loans: GBP148k from third parties; GBP199k from WIHL, a related
party (see note 26); loans relating to directors' deferred salaries
of GBP71k relating to Giles Clarke, and GBP57k relating to Nick
Harrison. The directors' loans were repaid during December
2022.
The 'other payables' non-current liability amount includes loans
of GBP766k from third parties.
20. PROVISIONS
GROUP COMPANY
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ------- ------- ------- -------
Mine rehabilitation provision 44 45 - -
Mine decommissioning provision 10 10 - -
------------------------------- ------- ------- ------- -------
54 55 - -
------------------------------- ------- ------- ------- -------
The provisions for mine rehabilitation and decommissioning
represents the management's best estimate of the costs which will
be incurred in the future to meet the Group's obligations under
existing Namibian law and the terms of the Group's mining and other
licences and contractual arrangements. Estimates are based upon
costs that are regularly reviewed and adjusted as new information
becomes available. The current estimate was discounted at a rate of
7.50% and the liabilities become payable in the next five years
being licence validity period.
21. SHARE CAPITAL AND SHARE PREMIUM
No. Ordinary shares Deferred shares Share Capital Share Premium
of 0.1p each of 0.9p each GBP'000 GBP'000
Total as at 1 July 2020 675,927,855 286,561,208 3,255 14,307
Share issues 23,839,780 - 24 1,404
Total as at 30 June 2021 699,767,653 286,561,208 3,279 15,863
Share issues 237,397,258 - 237 1,693
Total as at 30 June 2022 937,164,911 286,561,208 3,516 17,556
Share issues
On 30 September 2021, 2,500,000 new ordinary shares were issued
at 1 pence per share.
On 30 September 2021, 13,527,957 new ordinary shares were issued
at 1.358 pence per share
On 1 October 2021, 5,000,000 new ordinary shares were issued at
1 pence per share
On 8 October 2021, 1,825,000 new ordinary shares were issued at
1 pence per share
On 15 October 2021, 1,666,667 now ordinary shares were issued at
0.6 pence per share
On 19 October 2021, 10,000,000 new ordinary shares were issued
at 0.1 pence per share
On 27 October 2021, 3,500,000 new ordinary shares were issued at
0.5 pence per share
On 28 October 2021, 16,666,666 new ordinary shares were issued
at 0.3 pence per share
On 29 October 2021, 3,500,000 new ordinary shares were issued at
1.0 pence per share
On 31 December 2021, 2,500,000 new ordinary shares were issued
at a price of 1.0 pence per share
On 2 February 2022, 5,579,468 new ordinary shares at a price of
1.2546p per Ordinary Share
On 24 February 2022, 10,000,000 new ordinary shares were issued
at a price of 1.0 pence per share
On 5 May 2022, 116,131,500 new ordinary shares were issued at a
price of 1.0 pence per share
On 23 May 2022, 45,000,000 new ordinary shares were issued at a
price of 0.3 pence per share
Reserves
The Group's reserves are made up as follows:
Share capital : Represents the nominal value of the issued share
capital.
Share premium account : Represents amounts received in excess of
the nominal value on the issue of share capital less any costs
associated with the issue of shares.
Capital redemption reserve : Reserve created on the redemption
of the Company's shares
Share option reserve: Reserve created for the equity settled
share option scheme (see note 22)
Currency translation reserve: Reserve arising from the
translation of foreign subsidiaries at consolidation. The total
movement in the foreign currency translation reserve was presented
in both the Statement of Changes in Equity and in Other
Comprehensive Income in the current year. During the prior year,
this movement was presented in the Statement of Changes in
Equity.
Retained earnings : Represents accumulated comprehensive income
for the year and prior periods.
22. SHARE-BASED PAYMENTS
Equity-settled share option scheme and share warrants
The Company operates share-based payment arrangements to
incentivise directors by the grant of share options.
Equity-settled share-based payments within the scope of IFRS 2
are measured at fair value (excluding the effect of non-market
based vesting conditions) at the date of grant. The fair value
determined at the grant date of the equity-settled share-based
payments is expensed on a straight-line basis over the vesting
period, based on the Company's estimate of shares that will
eventually vest and adjusted for the effect of non-market based
vesting conditions.
The fair value of the share-based payments has been calculated
using the Black-Scholes valuation model. The assumptions used in
the fair value calculation were as follows:
Date of grant 21 Dec 2 Oct 2019 23 Mar 4 Jun 2020
2018 2020
Number of options/warrants 10,000,000 3,333,333 66,666,667 26,500,000
Exercise price
(pence) 1.75p 0.6p 0.3p 1p
Risk free interest
(%) 0.5% 0.5% 0.5% 0.5%
Expected volatility
(%) 50% 50% 50% 50%
Expected life
(years) 3.66 2.9 2 5
The total share-based payment expense recognised in the income
statement for the year ended 30 June 2022 in respect of the share
options granted was GBP116,000 (2021: GBP172,000).
The total number of share options and share warrants in issue as
at 30 June 2022 are as follows:
Share warrants
Exercise Expiry At 1 July At 30 June
Price (p) Date 2021 Issued Exercised Lapsed 2022
0.60 23/09/2022 1,666,667 - 1,666,667 - 0
0.30 23/03/2022 61,666,666 - 61,666,666 - 0
1.00 17/06/2022 64,700,000 - 33,500,000 - 0
2.00 17/12/2022 325,000 - 325,000 - 0
2.00 27/12/2022 - 10,000,000 - - 10,000,000
2.00 04/01/2023 - 2,500,000 - - 2,500,000
2.00 12/01/2023 - 5,000,000 - - 5,000,000
1.00 30/10/2023 - 39,722,643 - - 171,854,143
2.00 01/02/2023 - 2,500,000 - - 2,500,000
2.00 31/01/2023 - 10,000,000 - - 10,000,000
1.00 31/05/2023 - 116,131,500 - - 116,131,500
2.00 01/02/2023 - 3,500,000 - - 3,500,000
----------- ----------- -------------- -------------- ------------- ------------ ------------
128,033,333 189,354,143 97,158,333 - 189,354,143
Share options
Exercise Expiry At 1 At 30 June
Price (p) Date July 2021 Issued Exercised Lapsed 2022
1.75 17/08/2021 3,300,000 - - 3,300,000 0
1.75 17/08/2022 3,300,000 - - - 3,300,000
1.75 17/08/2023 3,400,000 - - - 3,400,000
1.00 03/06/2025 5,000,000 - - - 5,000,000
1.00 03/06/2025 5,000,000 - - - 5,000,000
1.00 03/06/2025 5,000,000 - - - 5,000,000
1.00 03/06/2025 10,000,000 - - - 10,000,000
1.00 03/06/2025 1,500,000 - 1,500,000 - -
2.00 12/01/2023 - 1,500,000 - - 1,500,000
1.00 06/05/2027 - 1,500,000 - - 1,500,000
36,500,000 3,000,000 1,500,000 3,300,000 34,700,000
23. FINANCIAL INSTRUMENTS
The Group's financial instruments comprise borrowings, cash and
various items, such as trade receivables and trade payables that
arise directly from its operations. The main purpose of these
financial instruments is to raise finance for the Group's
operations.
FINANCIAL ASSETS BY CATEGORY
Financial assets included in the Statement of financial position
and the headings in which they are included are as follows:
2022 2021
GBP'000 GBP'000
------------------------------------- -------- --------
Financial assets at amortised cost:
Cash and cash equivalents 637 47
Loans and receivables 279 167
-------------------------------------- -------- --------
916 214
------------------------------------- -------- --------
FINANCIAL LIABILITIES BY CATEGORY
Financial liabilities included in the Statement of financial
position and the headings in which they are included are
as follows:
2022 2021
GBP'000 GBP'000
-------------------------------------------- ---------- ---------
Financial liabilities at amortised
cost:
Trade and other payables 652 209
652 209
-------------------------------------------- ---------- ---------
The following table details the Group's remaining contractual
maturity for its non-derivative financial liabilities with agreed
repayment periods. The table has been drawn up based on the
undiscounted cash flows of financial liabilities based on the
earliest repayment date on which the Group can be required to pay.
The table includes both interest and principal cash flows. To the
extent that interest flows are floating rate, the undiscounted
amount is derived from the interest rate curves at the balance
sheet date. The contractual maturity is based on the earliest date
on which the Group may be required to pay.
Less than 3 months Over 5
1 month 1-3 months to 1 year 1-5 years years
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- --------- ---------- ---------- --------- -------
30 June 2021
Non-interest bearing:
Trade and other payables 209
Short term borrowings
---------------------------- --------- ---------- ---------- --------- -------
30 June 2022
Non-interest bearing:
Trade and other payables - 826 - - -
Short term borrowings - - - - -
---------------------------- --------- ---------- ---------- --------- -------
24. RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group is exposed to a variety of financial risks which
result from both its operating and investing activities. The
Group's risk management is coordinated by the Board of Directors,
and focuses on actively securing the Group's short to medium term
cash flows by minimising the exposure to financial markets.
The main risks the Group are exposed to through its financial
instruments and the operations of the Group are credit risk,
foreign currency risk, liquidity risk and market price risk. These
risks are managed by the Group's finance function together with the
Board of Directors.
Capital risk management
The Group's objectives when managing capital are:
-- to safeguard the Group's ability to continue as a going
concern, so that it continues to provide returns and benefits for
shareholders;
-- to support the Group's growth; and
-- to provide capital for the purpose of strengthening the Group's risk management capability.
The Group actively and regularly reviews and manages its capital
structure to ensure an optimal capital structure and equity holder
returns, taking into consideration the future capital requirements
of the Group and capital efficiency, prevailing and projected
profitability, projected operating cash flows, projected capital
expenditures and projected strategic investment opportunities.
Management regards total equity as capital and reserves, for
capital management purposes.
Credit risk
The Company's principal financial assets are bank balances and
cash and other receivables, which represent the Company's maximum
exposure to credit risk in relation to financial assets. The credit
risk on liquid funds is limited because the counterparties are
banks with high credit ratings assigned by international credit
rating agencies.
As at 30 June 2022, the Group's maximum exposure to credit risk
was GBP636,854 (2021: GBP46,780) comprising cash and cash
equivalents.
Liquidity risk
Liquidity risk arises from the possibility that the Group might
encounter difficulty in settling its debts or otherwise meeting its
obligations related to financial liabilities. The Group manages
this risk through maintaining a positive cash balance and
controlling expenses and commitments. The Directors are confident
that adequate resources exist to finance current operations.
Foreign Currency risk
The Group undertakes transactions denominated in foreign
currencies. Hence, exposures to exchange rate fluctuations arise.
Following the acquisition of African Tantalum (Pty) Ltd. Ltd, the
Group's major activity has been in Namibia, bringing exposure to
the exchange rate fluctuations of GBP/GBP Sterling with the
Namibian Dollar and South African Rand, the currencies in which
most of the operating costs are denominated. It is expected that
the Group's future exposure will principally be to GBP South
African Rand foreign exchange fluctuations following the Company's
disposal of African Tantalum (Pty) Ltd. At the year end the value
of assets denominated in these currencies was such that the
resulting exposure to exchange rate fluctuations was not material
to the Group's operations.
Exchange rate exposures are managed within approved policy
parameters. The Group has not entered into forward exchange
contracts to mitigate the exposure to foreign currency risk.
The Directors consider the assets most susceptible to foreign
currency movements to be the Investment in Subsidiaries. Although
these investments are denominated in South African Rands their
value is dependent on the global market value of the available
Tantalite resources.
The table below details the split of the cash held as at 30 June
2022 between the various currencies. The impact due to movements in
the exchange rates is considered to be immaterial.
Namibian Dollar (NAD) South African Rand (ZAR) GBP Sterling (GBP) Total GBP Sterling (GBP)
173,234 220,360 608,504 636,854
Market Price risk
Going forwards the Group's exposure to market price risk mainly
arises from potential movements in the market price of Tantalite.
The Group is managing this price risk by completing a fixed price
off-take agreement in respect of the major part of its planned
production.
25. EVENTS AFTER THE REPORTING PERIOD
On 20 July 2022, the Company announced that Kazera Global plc
signed an agreement to secure an investment of US$7.5 million in
return for a 49% stake in the Company's marketing, sales and export
subsidiary ("SPV") for all lithium production from the Company's
wholly owned mine at Tantalite Valley, Namibia.
On 26 July 2022, the Company announced the transformational
investment deal in lithium produced from the Company's wholly owned
mine at Tantalite Valley, Namibia, the Company has now received the
first payment of US$100,000 in accordance with the terms of the
deal.
On 28 July 2022, the Company announced that Department of Mining
and Mineral Resources has dismissed a third party's appeal against
the grant of a mining permit to the Company's 60% owned subsidiary
Whale Head Minerals (Pty) Ltd ("WHM"). WHM now expects to shortly
receive final documentation allowing it to commence production
operations of heavy mineral sands ("HMS") at the Walviskop mine in
South Africa.
On 31 August 2022, the Company announced that that the mining
permit has now been granted to the Company's 60% owned subsidiary
Whale Head Minerals (Pty) Ltd ("WHM"), which will facilitate the
start of heavy mineral sands ("HMS") production at the Walviskop
mine in South Africa.
On 20 September 2022, the Company granted options to subscribe
for up to 16,500,000 new ordinary shares (representing
approximately 1.8% of the Company's issued ordinary share capital)
to Dennis Edmonds, Chief Executive Officer of the Company, and
certain members of staff. Such options will be exercisable at any
time up until 6 May 2027 at a price of 1p per share.
On 20 December 2022, the Company announced the signing of a
definitive agreement to sell its 100% interest in African Tantalum
(Proprietary) Limited ("Aftan") to Hebei Xinjian Construction
("Xinjian") for cash consideration of US$13,000,000 .
26. RELATED PARTY TRANSACTIONS
The remuneration of the Directors, who are the key management
personnel of the Company, is set out in the report of the Board on
remuneration accompanying these financial statements.
During the year, Westleigh Investment Holdings Ltd ("WIHL")
received GBP49,000 (2021: GBP48,000) in respect of accounting,
administration and office accommodation services provided to the
Company. WIHL is a substantial shareholder in the Company and is
controlled by Giles Clarke and Nick Harrison.
On 7 July 2020, the Company issued 800,000 ordinary shares at a
price of 0.5p per share to Westleigh Investment Holdings ("WIHL"),
a company which is controlled by Giles Clarke and Nick
Harrison.
In October 2021, Giles Clarke and Nick Harrison each exercised
warrants over 8,333,333 at a price of 0.3 pence per share. The loan
outstanding to WIHL was reduced by an aggregate of GBP50,000, in
settlement of the exercise proceeds.
In May 2022, Align Research Ltd converted GBP100,000 of its
outstanding loan (as referred to on the Chief Executive's Review on
page 3) together with the interest thereon into 11,131,500 ordinary
shares.
In May 2022, Dennis Edmonds converted GBP50,000 of outstanding
salary into 5,000,000 shares.
As at 30 June 2022, the Company had an outstanding loan of
GBP199,000 with WIHL. This loan was repaid in January 2023.
As at 30 June 2022, GBP71,000 and GBP57,000 was owed to Giles
Clarke and Nick Harrison respectively in unpaid salaries. These
amounts were settled in full in December 2022.
There have been no other material transactions with related
parties.
27. ULTIMATE CONTROLLING PARTY
The Directors do not consider there to be one single ultimate
controlling party.
ENDS
For further information on the Company, visit: www. kazeraglobal
.com
Kazera Global plc (c/o St Brides) kazera@stbridespartners.co.uk
Dennis Edmonds (CEO)
finnCap (Nominated Adviser and Broker)
Christopher Raggett / Fergus Sullivan Tel: +44 (0)207 220 0500
(Corporate Finance)
St Brides (PR)
Paul Dulieu / Isabel de Salis / kazera@stbridespartners.co.uk
Susie Geliher
Notes
Kazera is a global investment company focused on developing
early-stage assets towards meaningful cashflow and production in
the resource sector. Its current assets include a diamond mine and
heavy mineral sands production in South Africa. The Company intends
to leverage its unique board expertise, investment capability and
operational proficiency, to facilitate exceptional cash generation
and shareholder growth.
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END
FR SFIFWIEDSESD
(END) Dow Jones Newswires
March 16, 2023 03:00 ET (07:00 GMT)
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