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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Andrada Mining Limited | LSE:ATM | London | Ordinary Share | GG00BD95V148 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.10 | 2.02% | 5.05 | 4.90 | 5.20 | 5.05 | 4.95 | 4.95 | 1,621,640 | 08:05:59 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Ferroalloy Ores, Ex Vanadium | 9.88M | -8.1M | -0.0051 | -9.90 | 79.82M |
From Apr 2019 to Apr 2024
TIDMATM
RNS Number : 1203E
AfriTin Mining Ltd
02 July 2019
2 July 2019
AfriTin Mining Limited
("AfriTin" or the "Company" and with its subsidiaries the "Group")
Audited Financial Results
for the year ended 28 February 2019
AfriTin Mining Limited (AIM: ATM), a mining company with a portfolio of tin assets in Namibia and South Africa, is pleased to announce its final audited results for the year ended 28 February 2019.
The preliminary financial information does not constitute full statutory accounts but is derived from accounts for the year ended 28 February 2019 which are audited. This preliminary announcement is prepared on the same basis as set out in the statutory accounts for the year ended 28 February 2019. While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), as adopted by the European Union (EU), this announcement does not in itself contain sufficient information to comply with IFRSs.
The auditor's report for the year ended 28 February 2019 was unqualified.
The full Annual Report along with a Notice of Annual General Meeting ("AGM") will be distributed to shareholders on 9 July 2019 and made available on the Company's website. The AGM will be held at 18-20 Le Pollet, St Peter Port, Guernsey GY1 1WH on 1 August 2019.
On 23 May 2018, the Company announced details of a proposed director share option scheme which was subsequently approved by shareholders at an EGM on 14 June 2018. The Company wishes to correct an error in the announcement to replace "Lapse Date" with "Vesting Date". Full disclosure of the share option scheme can be found in Note 19 to the Annual Financial Statements.
For further information, please visit www.afritinmining.com or contact:
AfriTin Mining Limited Anthony Viljoen, CEO +27 (11) 268 6555 Nominated Adviser and Joint Broker WH Ireland Limited Katy Mitchell Adrian Hadden James Sinclair-Ford +44 (0) 207 220 1666 Corporate Advisor and Joint Broker Hannam & Partners Andrew Chubb Jay Ashfield Nilesh Patel +44 (0) 20 7907 8500 Joint Broker NOVUM Securities Limited Jon Belliss +44 (0)20 7399 9400 Financial PR (United Kingdom) Tavistock +44 (0) 207 920 3150 Jos Simson Barney Hayward
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.
CHAIRMAN'S STATEMENT
I am pleased to present the Annual Report of AfriTin Mining Limited ("AfriTin") for the year ended 28 February 2019.
Reflecting on our first complete year as an AIM-quoted company on the London Stock Exchange, the AfriTin team have reached a number of important milestones, most notably a significant amount of new mining and processing infrastructure at our flagship Uis mine in Namibia. The focus has been on delivering catalysts for long-term value creation, namely the recommissioning of the Uis mine site and the new pilot plant for the commencement of Phase 1 production, whilst confirming and updating the historical resource. Construction of the Phase 1 Pilot Plant is well advanced and production is imminent. All efforts have been inspired by an unwavering vision of becoming a "first mover" to take advantage of the current global tin deficit and to become the first AIM-quoted, conflict-free tin mining company and the "tin champion" of Africa.
The global tin market remains in a deficit which has been exacerbated by production cuts in China. Tin continues to be one of the better-performing commodities on the London Metal Exchange and we have noticed a strong medium-term demand underpinned by growing applications for its use in new technologies, particularly in lithium-ion batteries. AfriTin strives to capitalise and position itself for growth on these current solid supply/demand fundamentals which remain in line with our expectations when we formed the business.
Namibia as a jurisdiction continues to encourage foreign investment in the mining sector. It is a stable democracy with an independent, strong legal system. This has been evident in the participation of locals wherever possible in the development at Uis. AfriTin has been able to utilise local expertise throughout the process of building the Phase 1 Pilot Plant. We have a commitment to ensure that the local communities benefit alongside the Company, and have therefore placed emphasis on community engagement and upliftment. We were fortunate and delighted to welcome the Minister of Mines and Energy, The Honourable Tom Alweendo, for our first blast of ore at the Uis tin mine site in December 2018.
Building on this solid base and turning to the year that lies ahead, we will focus on the goal of commissioning the Phase 1 Pilot Plant and becoming a producer of tin concentrate. With production imminent at Uis, further attention will now be placed on confirming the JORC-compliant resource, and starting a full feasibility study (Phase 2). The appeal and scale of AfriTin's tin mineralisation at Uis and surrounding permit areas, the discovery of lithium pegmatites at the ML 133 licence, and the acquisition of further prospective license areas near Brandberg West all considerably enhance AfriTin's potential to realise additional value in the future.
We look forward to the exciting upcoming months for AfriTin with the imminent production of tin at Uis and further developments as we advance to the larger Phase 2 development of the mine.
I would like to thank all our shareholders and stakeholders for their continued support, my fellow board members and Anthony and his dedicated team for what has been achieved to date.
GLEN PARSONS
Chairman
1 JULY 2019
CEO'S STATEMENT
Since listing on AIM in 2017, AfriTin has embarked on a journey that has positioned the Company for sustainable development and growth. The review below outlines the strategic objectives and direction for the Company and speaks to the key milestones reached and goals achieved thus far.
Following the commencement of civil construction works in June 2018, the Company has been preparing and rehabilitating the Uis mine site for the commissioning of the Phase 1 Pilot Plant at our flagship asset, Uis, in Namibia. In December 2018, the Company undertook the first large-scale blast of mining material, the primary crushing circuit was commissioned, and first material was crushed. In an effort to improve design efficiencies and increase the pilot plant throughput capacity, it was decided to modify the plant by procuring a third dense medium separation circuit. This will be advantageous to the Company in the long term as it will allow greater tonnages to be processed and provide for improved returns on the pilot plant. Furthermore, a magnetic separator was added to the plant which will enable the co-production of a tantalum concentrate, which has the ability to increase the revenue-generation capability of the plant. In addition to this, the Company has procured mining contractor services for drilling, blasting, loading and hauling. These developments at site have been facilitated by the contributions, skills and knowledge of our experienced team.
Within the Uis license area, the V1 / V2 pegmatite bodies were previously identified as priority targets to supply feed to the upgraded processing plant. Results from a mapping programme of the pits confirmed the extent of the mineralisation, along with further mineralisation across the 197km(2) license area. Dense medium separation test work was conducted on a bulk sample of the V1 / V2 bodies and highlighted the potential of concentrating mined material, to produce the output of tin concentrate from a significant tin and multi-commodity deposit outlined at IPO in 2017. The test work conducted confirmed the beneficiation potential of the Uis pegmatites to produce a saleable concentrate from a coarse run-of-mine feed and a scalable deposit.
In line with the mine plan, 2018 saw the commencement of the validation drilling programme at Uis. The primary goal of the exploration programme is to validate the existing report produced for Iscor by SRK in 1985 over the V1 and V2 pegmatites. The core is being assayed for the declaration of an initial JORC-compliant resource on the project and will be announced to the market in due course. This is a key element in the development of AfriTin's mine plan and the bankable feasibility study for Phase 2.
Other developments that were set out for Phase 1 have made significant progress. Viable groundwater sources have been confirmed to supply the mine with the required process water. It was also announced that the electrical power required at site will be provided from the existing high-voltage supply line that currently terminates approximately one kilometre from the plant processing site. There will also be back-up power provided in the form of diesel-generating sets.
The completion of an equity subscription of c.GBP3m on 22 May 2019 as well as the finalisation of a standby working capital facility of ZAR30m (c.GBP1.7m) with Bushveld Minerals is expected to allow us to complete the development of the Phase 1 Pilot Plant and to provide us with general working capital to achieve our goal of first production of tin concentrate.
While Uis remains our focus, we have also looked to expand our footprint in the local area through regional exploration. We were delighted by the discovery of geologically significant grades of lithium-bearing material at our ML133 license. The ML 133 license is outside of the current development area at the Uis mine but the results are encouraging and warrant further investigation. This provides the possibility for targeted upside in the future and the prospect of multiple revenue streams. It is these discoveries, coupled with acquisitions that grow the portfolio, such as the addition of the Tantalum Investment deposits, that could propel AfriTin towards its goal of becoming the "tin champion" of Africa.
The tin market remained favourable throughout 2018 with robust demand coupled with decreased supply, that was also exacerbated by production cuts from Chinese smelters. Tin was one of the best-performing metals on the London Metal Exchange in 2018 and the continued research for the use of tin in the lithium-ion battery space indicates a potential need for further increased supply in the future. AfriTin is focused on taking advantage of these market fundamentals by becoming a "first mover" in the new tin mine arena. The first step towards achieving this goal was the blasting, crushing and stockpiling of ore in anticipation of the completion of the Phase 1 Pilot Plant.
Namibia is a favourable mining and exploration jurisdiction and is the ideal location for our flagship asset. Mining continues to be the biggest contributor to Namibia's economy and its importance was emphasised by the attendance of the The Honourable Tom Alweendo, Minister of Mines and Energy, at the Company's first blast in December 2018. While at site, and to an audience of analysts and investors, he highlighted the importance of tin mining returning to the Uis region and the significant economic benefits that will be brought back to the region. We are indebted to the communities, our local partners and government officials who have shown significant support and have provided the framework to allow us to achieve so much in a short space of time and we look forward to working together further in the future.
With many key milestones achieved by the Company in 2018, AfriTin is now focused on delivering a pilot plant capable of producing a profitable concentrate at Uis while incorporating optionality via regional expansion. Alongside this, we are looking forward to producing a JORC-compliant resource at Uis to confirm the historical SRK report.
Uis is part of a historical tin province and AfriTin is leading the way in terms of development. The stable mining jurisdiction of Namibia coupled with strong medium-term demand for tin underpinned by growing applications in new technologies are strong positive factors for AfriTin's long-term prospects.
I would like to thank the government and people of Namibia, my fellow directors, all our employees, shareholders, advisors and wider stakeholders for their ongoing support and loyalty to AfriTin. Given the momentum over the past year, I look forward to the upcoming year and the developments that lie ahead.
This report was approved by the Board on 1 July 2019.
ANTHONY VILJOEN
Chief Executive Officer
1 JULY 2019
FINANCIAL REVIEW
Although AfriTin has not yet commenced commercial production and therefore has not earned any revenue from its primary activity, namely the sale of tin concentrate, GBP27k (6-month period ending 28 February 2018: GBP18k) of revenue was generated from the sale of sand at Zaaiplaats.
Tight control over administrative expenses was exercised during the year. As such, they were contained to GBP1 098k. Administrative costs for the 6-month period ending 28 February 2018 amounted to GBP1 552k. This comparative amount included listing costs of GBP330k and a one-off cost of GBP556k associated with the issuing of shares to the directors and employees at GBPnil value upon listing.
The Group's loss for the year totalled GBP1 058k (6-month period ending 28 February 2018: GBP1 534k).
Basic loss per share from operations of 0.23 pence was recorded (2018: 0.83 pence).
The Phase 1 Exploration Drilling Programme began in earnest during the financial year. This coupled with other exploration and evaluation work resulted in expenditure of GBP571k being capitalised to the exploration and evaluation intangible asset (2018: GBP178k). Furthermore, GBP850k was capitalised to intangible assets when Tantalum Investment Pty Limited, a company holding exclusive prospecting licenses at Brandberg West and Goantagab in Namibia, was acquired through the issue of 25 000 000 of the Company's shares.
Progress continued throughout the year on the Phase 1 Pilot Plant project and capital expenditure on this project amounted to GBP4.7m during the year under review (2018: GBP511k). Given the near-term production from Phase 1, GBP489k worth of capitalised exploration and evaluation costs in relation to Phase 1 were reclassified from intangible assets to property, plant and equipment.
As at 28 February 2019, the Group had cash in the bank of GBP1 781k (2018: GBP2 905k).
As part of the operational readiness programme, consumable inventory of GBP25k had been procured as at year-end (2018: GBPnil).
The majority of trade and other receivables of GBP475k (2018: GBP122k) relate to VAT refunds in both Namibia and South Africa. In South Africa, VAT refunds continue to be processed efficiently and timeously. However, in Namibia, whilst we do not believe that there is a recoverability issue with the VAT receivable of GBP312k and all efforts are being made to speed up the refund process, the amount receivable is 6 months overdue.
Net proceeds from an equity raise in May 2018 of GBP5 579k as well as the acquisition of Tantalum Investment Pty Limited (GBP850k) account for the majority of the movement in the share capital balance for the financial year.
Share-based payment charges amounting to GBP157k, as well as a charge of GBP65k relating to shares to be issued to certain directors and employees in lieu of fees/salaries, were recognised in the share-based payment reserve during the year.
Apart from trade and other payables of GBP379k (comprising GBP266k trade creditors and GBP111k other payables) (2018: GBP516k), the other significant liability on the balance sheet is the environmental rehabilitation provision. Given the significant progress on the Phase 1 Pilot Plant during the year, an environmental rehabilitation liability and corresponding decommissioning asset of GBP78k (2018: GBPnil) relating to the Uis project had been recognised in the year.
The completion of an equity subscription of c.GBP3m on 22 May 2019 as well as the finalisation of a standby working capital facility for ZAR30m (c.GBP1.7m) with Bushveld Minerals will allow us to complete the development of the Phase 1 Pilot Plant and will provide us with general working capital to achieve our goal of first production of tin concentrate.
I look forward to the imminent achievement of our first sale of tin concentrate and to reporting operational results in the near future.
RM SEWELL
Chief Financial Officer
1 July 2019
DIRECTORS' REPORT
The Directors of AfriTin hereby present their report together with the consolidated financial statements for the period from 1 March 2018 to 28 February 2019.
Principal Activities, Business Review and Future Developments
The principal activity of the Group (AfriTin and its subsidiaries) is the exploration and development of mining and exploration projects in both Namibia and South Africa. A review of the Group's progress and prospects is given in the CEO's statement in this Annual Report.
Principal Risks and Uncertainties
The Group is subject to a variety of risks, specifically those relating to the mining and exploration industry. As an entrepreneurial business operating in emerging markets, there is clearly an elevated risk which is balanced by potentially greater rewards. The Board is mindful of and monitors both its corporate risks and individual project risks. Outlined below are the principal risk factors that the Board feels may affect performance. The risks detailed below are not exhaustive, and further risks and uncertainties may exist which are currently unidentified or considered to be immaterial. The risks are not presented in any order of priority.
Hot Features
Premium
Risk and Impact Mitigation
Volatility Tin and tantalum prices are The Board and management
of metal prices subject to high levels of constantly monitor the
volatility and are impacted market in which the Group
by numerous factors that are operates. Long-term financial
outside of the control of planning is undertaken
the Group. A low tin or tantalum on a regular basis.
price could affect the financial
performance of the Company
which may affect the ability
of the Group to fund future
growth.
--------------------------------------- -------------------------------------
Foreign Exchange With AfriTin's operations The Company holds the majority
mainly in Namibia and South of its funds in major currencies.
Africa, but tin sales based It attempts to match cash
in US Dollars and funding held in a particular currency
based in Sterling, the volatility to the currency in which
and movement in the Rand could liabilities are incurred.
be a significant factor to
the Group.
--------------------------------------- -------------------------------------
Development Development projects have Feasibility studies and
projects no operating history upon construction are done by
which to base estimates of experienced geoscientists
future cash operating costs. and engineers. Independent
For development projects, third-party experts are
estimates of proven and probable used to verify all key
reserves and cash operating assumptions. The Phase
costs are, to a large extent, 1 Pilot Plant will assist
based on the interpretation in understanding the metallurgy
of geological data obtained and processing elements
from drill holes and other of the project which will
sampling techniques and feasibility provide essential up-front
studies which derive estimates information for the implementation
of cash operating costs based of Phase 2.
upon anticipated tonnage and
grades of ore to be mined
and processed, as well as
the con guration of the ore
body, expected recovery rates,
comparable facility and equipment
operating costs, anticipated
climatic conditions and other
factors.
As a result, it is possible
that actual cash operating
costs and economic returns
may differ materially from
those currently estimated.
--------------------------------------- -------------------------------------
Exploration The business of exploration Exploration projects are
and mining for minerals involves a high carefully managed with
risks degree of risk. Whilst the regular review by the Board
discovery of a mineral deposit of progress against targets
may result in substantial and expenditure. Funds
rewards, few properties at are only expended on areas
the exploration stage are deemed prospective.
ultimately developed into
producing mines. The Group adheres strictly
to a health and safety
The operations of the Group programme. When constructing
may be disrupted by a variety a mine site, external geotechnical,
of risks and hazards which environmental and geo-hydrological
are beyond the control of consultants are used to
the Company, including geological, ensure all potential risks
geotechnical and seismic factors, of this nature are understood
environmental hazards, industrial and mitigation plans are
accidents, occupational and put in place.
health hazards, technical
failures, labour disputes,
unexpected rock properties,
explosions, ooding, and extended
interruptions due to inclement
or hazardous weather conditions
and other acts of God.
--------------------------------------- -------------------------------------
Social license Past environmental incidents Our ability to maintain
to operate in the extractive industry regulatory compliance in
highlight risks such as water order to protect the environment,
management, tailings storage as well as the health and
facilities and other potential safety of our host communities
hazards to both the environment and our workers remains
and community health and safety. our top priority. We seek
to build partnerships with
host governments and local
communities based on trust
to drive shared long-term
value while working to
minimize the social and
environmental impacts of
our activities. The Board
oversees the Company's
environmental, safety and
health, corporate social
responsibility programs,
and policies and performance.
--------------------------------------- -------------------------------------
Capital budget Whilst best estimates are The management team and
overruns used in preparing capital the Board regularly review
project budgets, the strategy expenditure on projects.
of relying on historical mine This includes reviewing
information prior to construction actual costs against budgeted
of the Phase 1 Pilot Plant costs, updating working
coupled with the fact that capital models and assessing
these budgets are dependent potential impacts on future
on a number of external factors cash flow.
which are beyond the control
of the Group, results in a
risk of material overruns
versus budget.
--------------------------------------- -------------------------------------
Power and water Power sources and water supply The Company has concluded
supply are key to the functioning a formal electrical power
of viable mining operations. supply agreement with Namibia
A lack of power or water, Power Corporation for power
or uncertainties around their at the mining and processing
uninterrupted supply, would facility in Uis and this
adversely impact the feasibility will provide enough power
of the operation. for Phase 1 of the project.
Diesel generators will
serve as backup power.
A geohydrological study,
water drilling and test
pumping programme has been
completed. This work has
confirmed the viability
of using groundwater sources
to supply the Phase 1 Pilot
Plant with the required
process water.
Solutions for Phase 2 in
terms of both electrical
power and water supply
are in the process of being
reviewed.
--------------------------------------- -------------------------------------
Country and AfriTin's operations are predominantly The AfriTin team is highly
political based in Namibia and South experienced at operating
Africa. Emerging market economies in Africa. AfriTin routinely
are generally subject to greater monitors political and
risks including legal, regulatory, regulatory developments
tax, economic and political in its countries of operation
risks, which are potentially at both regional and local
subject to rapid change. level.
--------------------------------------- -------------------------------------
Key man risk The success and operational Remuneration arrangements
performance of the Group is are intended to be sufficiently
dependent on the skills, expertise competitive to attract,
and knowledge of management retain and motivate high-quality
and qualified personnel. Company executives capable of achieving
profitability could be impacted the Company's objectives,
in the event that one or more thereby enhancing shareholder
of these individuals leave value.
the business.
--------------------------------------- -------------------------------------
Financing The successful extraction The Group has sufficient
of tin will require signi funds for its near-term
cant capital investment. The goal of bringing the Uis
Group's ability to raise further pilot plant into production
funds will depend on the success and has a supportive shareholder
of existing and acquired operations. base to engage with for
Market conditions may not future funding rounds.
be conducive to a financing. Furthermore, the Group
The Group may not be successful monitors cash flows on
in procuring the requisite a monthly basis.
funds.
--------------------------------------- -------------------------------------
Results and Dividend
The Group's results show a loss for the year of GBP1 057 520. The Directors will not be recommending a dividend.
Share Capital and Funding
Full details of the authorised and issued share capital, together with details of the movements in the Company's issued share capital during the year, are shown in Note 17. The Company has one class of ordinary shares which carry no right to fixed income. Each share carries the right to one vote at general meetings of the Company.
Directors
The Directors who served the Company during the year are as follows:
Anthony Viljoen (appointed 23 October 2017) Chief Executive Officer
Glen Parsons (appointed 23 October 2017) Chairman/Independent Non-Executive Director
Laurence Robb (appointed 23 October 2017) Independent Non-Executive Director Roger Williams (appointed 23 October 2017) Independent Non-Executive Director Terence Goodlace (appointed 23 May 2018) Independent Non-Executive Director
Directors' Interests
The Directors' beneficial interests in the shares of the Company at 28 February 2019 were:
Ordinary shares
of no par
value Share options
Anthony Viljoen 4 775 793 7 000 000
Glen Parsons 1 396 011 3 000 000
Roger Williams 1 381 765 2 500 000
Laurence Robb 394 586 2 500 000
Terence Goodlace - 2 500 000
Directors' Indemnity Insurance
The Group has maintained insurance throughout the year for its Directors and officers against the consequences of actions brought against them in relation to their duties for the Group.
Employee Involvement Policies
The Group places considerable value on the awareness and involvement of its employees in the Group's exploration and development activities. Within bounds of commercial confidentiality, information is disseminated to all levels of staff about matters that affect the progress of the Group, and that are of interest and concern to them as employees.
Creditors' Payment Policy and Practice
The Group's policy is to ensure that, in the absence of dispute, all suppliers are dealt with in accordance with its standard payment policy to abide by the terms of payment agreed with suppliers when agreeing the terms of each transaction. Suppliers are made aware of the terms of payment. The number of days of average daily purchases included in trade payables at 28 February 2019 was 30 days.
Related-party Transactions
Details of related-party transactions are detailed in Note 23 of the consolidated financial statements.
Events after Balance Sheet Date
Events after balance sheet date are detailed in Note 22 of the consolidated financial statements.
Statement as to Disclosure of Information to Auditor
The Directors who were in office on the date of approval of these financial statements have confirmed that, as far as they are aware, there is no relevant audit information of which the auditor is unaware. Each of the Directors has confirmed that they have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that it has been communicated to the auditor.
Auditor
The Company's auditor, BDO LLP, was appointed on 10 September 2018 and has expressed their willingness to continue in office. The Directors will place a resolution before the Annual General Meeting to reappoint BDO LLP as the Company's auditor for the ensuing year.
Electronic Communications
The maintenance and integrity of the Group's website is the responsibility of the Directors; the work carried out by the auditor does not involve consideration of these matters and accordingly the auditor accepts no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.
The Group's website is maintained in compliance with AIM Rule 26.
By order of the Board
AR VILJOEN
Chief Executive Officer
1 July 2019
CORPORATE GOVERNANCE REPORT
Introduction
As a listed company traded on the AIM market of the London Stock Exchange we recognise the importance of sound corporate governance throughout our organisation giving our shareholders and other stakeholders including employees, customers, suppliers and the wider community confidence in our business. We endeavour to conduct our business in an ethical and sensitive manner irrespective of race, colour or creed.
AfriTin has chosen to adopt the Quoted Companies Alliance (QCA) Corporate Governance Code 2018 for Smaller Companies. The table below outlines how we apply each of the code's ten key principles to our business.
Principle Application
1. Establish a The Company is the first pure tin company listed
strategy and business in London and its vision is to create a portfolio
model which promote of world-class, conflict-free, tin-producing
long-term value assets. The Company's flagship asset is the
for shareholders. Uis brownfield tin mine in Namibia, formerly
the world's largest hard-rock tin mine.
The Company is managed by an experienced Board
of Directors and management team with a current
two-fold strategy: fast track Uis brownfield
tin mine in Namibia to commercial production
(the intention is to ramp up to 5 000 tonnes
of concentrate) and consolidate other quality
African tin assets. The Company strives to capitalise
on the solid supply/demand fundamentals of tin
by developing a critical mass of tin resource
inventory, achieving production in the near
term and further scaling production by consolidating
tin assets in Africa.
The Company is subject to a variety of risks,
specifically those relating to the mining and
exploration industry. The principal risk factors
facing the business as well as mitigation of
those risks are outlined in the Directors' Report
in this Annual Report.
--------------------------------------------------------------
2. Seek to understand The Board is committed to maintaining good communications
and meet shareholder and having a constructive dialogue with all
needs and expectations. its shareholders.
Management, led by the CEO, undertake regular
presentations and roadshows to investors as
appropriate. This enables them to develop a
balanced understanding of the issues and concerns
of shareholders. The views of shareholders are
communicated to the rest of the Board.
Furthermore, the Company keeps shareholders
informed on the Company's progress through its
public announcements and its website. All reports
and press releases are published in the Investor
Relations section of the Company's website.
--------------------------------------------------------------
3. Take into account The Board recognises that its prime responsibility
wider stakeholder is to promote the success of the Company for
and social responsibilities the benefit of its members as a whole. This
and their implications success is largely reliant on its relations
for long-term with its stakeholders, both internal (employees
success. and shareholders) and external (customers, suppliers,
business partners and advisors).
Employees, community members and other stakeholders
work in collaboration with one another and with
transparency and accountability. Open dialogue
and engagement with community members at our
sites is central to maintaining a successful
relationship and essential to ensuring long-term
sustainability for all parties involved.
The Company endeavours to systematically examine
the environmental impact of any of our operations
and will adopt measures to mitigate this. The
goal is to minimise the negative impacts of
the different processes related to the extraction
of tin on the environment. The Company operates
in the most environmentally and socially responsible
way possible.
The Company maintains a regular dialogue with
key suppliers.
The Company places considerable value on the
awareness and involvement of its employees in
its activities. Within bounds of commercial
confidentiality, information is disseminated
to all levels of staff about matters that affect
the progress of the Company and that are of
interest and concern to them as employees.
The Company has set up a share option scheme
for key employees which will give them a stake
in the Company's long-term success.
--------------------------------------------------------------
4. Embed effective As an entrepreneurial business operating in
risk management, emerging markets there is clearly an elevated
considering both risk which is balanced by potentially greater
opportunities rewards. The Board is mindful of and monitors
and threats, throughout both its corporate risks and individual project
the organisation. risks.
The Board ensures that there is a risk-management
framework in place which identifies and addresses
all relevant risks in order to execute and deliver
strategy. Key risks are reviewed by the Board
regularly and disclosed in the Directors' Report.
The Audit Committee receives feedback from the
external auditors on the state of its internal
controls and reports their findings to the Board.
--------------------------------------------------------------
5. Maintain the The Board is comprised of a Chairman, three
Board as a well-functioning, Non-Executive Directors and the CEO.
balanced team
led by the chair. The roles of the Chairman and CEO are clearly
separated.
The CEO is responsible for the day-to-day operational
management of the business and is supported
by a Chief Financial Officer, a Chief Operating
Officer, geologists and mining engineers.
The Chairman is responsible for the leadership
and effective working of the Board, for the
implementation of sound corporate governance,
for setting the Board agenda, and ensuring that
Directors receive accurate, timely and clear
information.
The Chairman and Non-Executive Directors (Glen
Parsons, Terence Goodlace, Laurence Robb and
Roger Williams) are considered by the Board
to be independent of management and free to
exercise independent judgement.
The Board meets at least every three months
or at any other time deemed necessary for the
good management of the business. All Directors
have attended all Board meetings whilst being
a Director of the Company.
--------------------------------------------------------------
6. Ensure that Directors who have been appointed to the Company
between them the have been chosen because of the skills and experience
Directors have they offer.
the necessary
up-to-date experience, The composition of the Board as well as biographical
skills and capabilities. details are included within the Board of Directors
page on the Company website.
Furthermore, the Company has put in place an
Audit Committee and a Remuneration Committee.
The Directors have access to training (online
training or external training courses) to ensure
that their skills are kept up to date.
The Board and its committees will also seek
external expertise and advice where required.
Directors are briefed on regulations that are
relevant to their role as directors of an AIM-quoted
company from the Company's Nominated Advisor.
Robert Sewell (Chief Financial Officer) and
Frans van Daalen (Chief Operating Officer) attend
Board meetings by invitation to provide input
from a financial and operational perspective.
--------------------------------------------------------------
7. Evaluate Board The Board considers evaluation of its performance
performance based and that of its committees and individual directors
on clear and relevant to be an integral part of corporate governance
objectives, seeking to ensure it has the necessary skills, experience
continuous improvement. and abilities to fulfil its responsibilities.
The goal of the Board evaluation process is
to identify and address opportunities for improving
the performance of the Board and to solicit
honest, genuine and constructive feedback.
The Chairman is responsible for ensuring the
evaluation process is "fit for purpose", as
well as dealing with matters raised during the
process.
Succession planning is a vital task for boards
and the management of succession planning represents
a key measure of the effectiveness of the Board.
--------------------------------------------------------------
8. Promote a corporate The Company has a strong ethical culture, which
culture that is is promoted by the Board and the management
based on ethical team.
values and behaviours.
The Company endeavours to conduct its business
in an ethical, professional and responsible
manner, treating all employees, customers, suppliers
and partners with equal courtesy and respect
at all times.
--------------------------------------------------------------
9. Maintain governance The Board approves the Company's strategy and
structures and ensures that necessary resources are in place
processes that in order for the Company to meet its objectives.
are fit for purpose
and support good Whilst the Board has delegated the operational
decision-making management of the Company to the Chief Executive
by the Board. Officer and other senior management, there are
detailed specific matters subject to the approval
of the Board. These include:
* annual budget;
* interim and final financial statements;
* management structure and appointments;
* mergers, acquisitions and disposals;
* capital raising;
* joint ventures and investments;
* projects of a capital nature; and
* significant contracts.
The Non-Executive Directors have a particular
responsibility to constructively challenge the
strategy proposed by the executive management
team, to scrutinise and challenge performance,
to ensure appropriate remuneration, and to ensure
that succession planning arrangements are in
place in relation to senior members of the management
team. The senior management team enjoy open
access to the Non-Executive Directors.
The Chairman is responsible for leadership of
the Board and ensuring its effectiveness. The
Chairman with the assistance of the Chief Executive
Officer sets the Board's agenda and ensures
that adequate time is available for discussion
of all agenda items, in particular strategic
issues.
The role of the Audit Committee and the Remuneration
Committee is set out further on in this report.
The governance structures will evolve over time
in parallel with the Company's objectives, strategy,
and business model to reflect the development
of the Company.
--------------------------------------------------------------
10. Communicate The Board is committed to maintaining good communication
how the company and having constructive dialogue with all of
is governed and its stakeholders, including shareholders, providing
is performing them with access to information to enable them
by maintaining to come to informed decisions about the Company.
a dialogue with The Investor Relations section on the Company's
shareholders and website provides all required regulatory information
other relevant as well as additional information shareholders
stakeholders. may find helpful including:
* information on Board members, advisors and
significant shareholdings;
* a historical list of the Company's announcements;
* corporate governance information;
* historical Annual Reports and notices of Annual
General Meetings; and
* share price information and interactive charting
facilities to assist shareholders in analysing
performance.
Results of shareholder meetings and details
of votes cast will be publicly announced through
the regulatory system and displayed on the Company's
website with suitable explanations of any actions
undertaken as a result of any significant votes
against resolutions.
--------------------------------------------------------------
The Board of Directors
The Board currently comprises:
Independent Non-Executive Chairman
-- Glen Parsons (appointed 23 October 2017)
Independent Non-Executive Directors
-- Roger Williams (appointed 23 October 2017) -- Laurence Robb (appointed 23 October 2017) -- Terence Goodlace (appointed 23 May 2018)
Executive Director
-- Anthony Viljoen (appointed 23 October 2017) Chief Executive Officer
Operational management in South Africa and Namibia is led by Anthony Viljoen supported by a Chief Financial Officer (Robert Sewell), a Chief Operating Officer (Frans van Daalen), geologists and mining engineers. Operational management is also supported technically through various consultancy agreements that were in place during the year under review.
The Board met formally four times during the year and also met frequently on an ad-hoc basis. This included Board site visits to Uis.
All press releases, including quarterly operational updates, are approved by the entire Board.
The Audit Committee
The Audit Committee meets at least twice a year and is composed exclusively of Non-Executive Directors: Roger Williams (Chairman) and Glen Parsons. The Chief Financial Officer, Robert Sewell, attends Audit Committee meetings by invitation. The committee is responsible for:
-- reviewing the annual financial statements and interim reports prior to approval, focusing on changes in accounting policies and practices, major judgemental areas, significant audit adjustments, going concern and compliance with accounting standards, stock exchange and legal requirements;
-- receiving and considering reports on internal financial controls, including reports from the auditors, and reporting their findings to the Board;
-- considering the appointment of the auditors and their remuneration including reviewing and monitoring their independence and objectivity;
-- meeting with the auditors to discuss the scope of the audit, issues arising from their work and any matters the auditors wish to raise; and
-- developing and implementing policy on the engagement of the external auditor to supply non-audit services.
The Audit Committee is provided with details of any proposed related-party transactions in order to consider and approve the terms and conditions of such transactions.
The Audit Committee met four times during the year to consider the following agenda items:
March 2018:
-- External audit plan for the period ended February 2018
July 2018:
-- External audit report -- Critical accounting estimates -- Going concern -- Impairment -- Approval of the Annual Report for the period ended February 2018
October 2018:
-- Half-year results and report to 31 August 2018 -- Going concern assessment -- Capitalisation of costs -- Related-party transaction
February 2019:
-- Auditor independence -- External audit plan for the year ended February 2019
The Remuneration Committee
Prior to the appointment of Terence Goodlace to the Board, remuneration matters had been dealt with by the full Board. With a larger Board in place, a subcommittee was constituted comprising Non-Executive Directors Glen Parsons (Chairman) and Roger Williams.
The Committee is responsible for reviewing the performance of senior management and for setting the scale and structure of their remuneration, determining the payment of bonuses, considering the grant of options under any share option scheme and, in particular, the price per share and the application of performance standards which may apply to any such grant, paying due regard to the interests of shareholders as a whole and the performance of the Group.
The Committee met for the first time in October 2018 and considered:
-- an independent Paterson banding and job evaluation report for all employees -- full time contracts of employment for key contractors -- salary increases for staff and senior management -- criteria for payment of future bonuses -- the award of share options for senior management.
The Committee will meet at least once a year.
Internal Controls
The Board acknowledges its responsibility for the Group's systems of internal controls and for reviewing their effectiveness. These internal controls are designed to safeguard the assets of the Group and to ensure the reliability of financial information for both internal use and external publication. Whilst the Board are aware that no system can provide absolute assurance against material misstatement or loss, in light of the increased activity and further development of the Group, continuing reviews of internal controls will be undertaken to ensure that they are adequate and effective.
Risk Management
The Board considers risk assessment to be important in achieving its strategic objectives. Project milestones and timelines are regularly reviewed.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations.
The Companies (Guernsey) Law, 2008 requires the Directors to prepare Group financial statements for each financial year in accordance with generally accepted accounting principles. The Directors are required by the AIM Rules of the London Stock Exchange to prepare Group financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU").
The financial statements of the Group are required by law to give a true and fair view of the state of the Group's affairs at the end of the financial year and of the profit or loss of the Group for that year and are required by IFRS as adopted in the EU to reflect fairly the financial position and performance of the Group.
In preparing the Group financial statements, the Directors are required to:
i) Select suitable accounting policies and then apply them consistently; ii) Make judgements and accounting estimates that are reasonable and prudent; iii) State whether they have been prepared in accordance with IFRS as adopted by the EU; and
iv) Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's transactions, disclose with reasonable accuracy at any time the financial position of the Group, and enable them to ensure that the financial statements comply with the Companies (Guernsey) Law, 2008. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website. Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Directors confirm they have discharged their responsibilities as noted above.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 28 February 2019
Year ended As restated
28 February (Note 3)
2019 Period ended
GBP 28 February
2018
Notes GBP
Continuing operations
Revenue 4 26 782 17 826
Administrative expenses 5 (1 097 718) (1 551 662)
-------------- --------------
Operating loss (1 070 936) (1 533 836)
Finance income 7 13 416 2
--------------
Loss before tax (1 057 520) (1 533 834)
Income tax expense 8 - -
-------------- --------------
Loss for the year/ period (1 057 520) (1 533 834)
Other comprehensive income
Items that will or may be reclassified
to profit or loss:
Exchange differences on translation (1 577) -
of share-based payment reserve
Exchange differences on translation (421 827) -
of foreign operations
Exchange differences on non-controlling 332 -
interest
-------------- --------------
Total comprehensive income for the
year/period (1 480 592) (1 533 834)
============== ==============
Loss for the year/ period attributable
to:
Owners of the parent (1 050 074) (1 533 464)
Non-controlling interests (7 446) (370)
--------------
(1 057 520) (1 533 834)
============== ==============
Total comprehensive income attributable
to:
Owners of the parent (1 473 478) (1 533 464)
Non-controlling interests (7 114) (370)
--------------
(1 480 592) (1 533 834)
============== ==============
Loss per ordinary share
Basic and diluted loss per share
(in pence) 9 (0.23) (0.83)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 28 February 2019
28 February 28 February
2019 2018
Notes GBP GBP
Assets
Non-current assets
Intangible assets: exploration and
evaluation 11 7 012 317 6 300 864
Property, plant and equipment 12 5 785 043 538 369
----------- --------------------
Total non-current assets 12 797 360 6 839 233
=========== ====================
Current assets
Inventories 25 221 -
Trade and other receivables 13 474 963 121 687
Cash and cash equivalents 14 1 781 335 2 904 767
----------- --------------------
Total current assets 2 281 519 3 026 454
=========== ====================
Total assets 15 078 879 9 865 687
=========== ====================
Equity and liabilities
Equity
Share capital 17 17 337 718 10 853 631
Accumulated deficit (2 583 538) (1 533 464)
Warrant reserve 18 78 651 29 783
Share-based payment reserve 19 220 729 -
Foreign currency translation reserve (421 827) -
Equity attributable to the owners
of the parent 14 631 733 9 349 950
----------- --------------------
Non-controlling interests (7 484) (370)
----------- --------------------
Total equity 14 624 249 9 349 580
=========== ====================
Non-current liabilities
Environmental rehabilitation liability 16 75 180 -
----------- --------------------
Total non-current liabilities 75 180 -
=========== ====================
Current liabilities
Trade and other payables 15 379 450 516 107
----------- --------------------
Total current liabilities 379 450 516 107
=========== ====================
Total equity and liabilities 15 078 879 9 865 687
=========== ====================
The notes further on in this report form part of these financial statements.
The financial statements were authorised and approved for issue by the Board of directors and authorised for issue on 1 July 2019.
AR VILJOEN
Director
1 July 2019
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 28 February 2019
Foreign
Share-based currency
Share Accumulated Warrant payment translation Non-controlling Total
capital deficit reserve reserve reserve(1) Total interests equity
GBP GBP GBP GBP GBP GBP GBP GBP
Total equity
at 1 September
2017 - - - - - - - -
Loss for the
period - (1 533 464) - - - (1 533 464) (370) (1 533 834)
Transactions
with owners:
Warrants
granted in
period (29 783) - 29 783 - - - - -
Issue of 11 172 11 172
shares 559 - - - - 11 172 559 - 559
Share issue
costs (289 145) - - - - (289 145) - (289 145)
---------- ----------- -------- ----------- ----------- ----------- --------------- -----------
Total equity
at 28
February 10 853
2018 631 (1 533 464) 29 783 - - 9 349 950 (370) 9 349 580
========== =========== ======== =========== =========== =========== =============== ===========
Loss for the
year - (1 050 074) - - - (1 050 074) (7 446) (1 057 520)
Other
comprehensive
income - - - (1 577) (421 827) (423 404) 332 (423 072)
Transactions
with owners:
Warrants
granted in
year (48 868) - 48 868 - - - - -
Share-based
payments in
the year - - - 222 306 - 222 306 - 222 306
Issue of
shares 6 858 813 - - - - 6 858 813 - 6 858 813
Share issue
costs (325 858) - - - - (325 858) - (325 858)
Total equity
at 28
February 17 337 14 624
2019 718 (2 583 538) 78 651 220 729 (421 827) 14 631 733 (7 484) 249
========== =========== ======== =========== =========== =========== =============== ===========
1 Foreign exchange differences in the period ending 28 February 2018 were not material.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 28 February 2019
Year ended Period ended
28 February 28 February
2019 2018
Notes GBP GBP
Cash flows from operating activities
Loss before taxation (1 057 520) (1 533 834)
Adjustments for:
Depreciation property, plant and
equipment 12 22 824 378
Share-based payments 205 962 552 520
Equity-settled transactions - 48 611
Finance income 7 (13 416) (2)
Changes in working capital:
Increase in receivables (379 245) (98 815)
Increase in inventory (26 222) -
(Decrease)/ increase in payables (119 708) 364 078
-------------------- ---------------
Net cash used in operating activities (1 367 325) (667 064)
-------------------- ---------------
Cash flows from investing activities
Finance income 13 416 2
Purchase of exploration and evaluation
assets 11 (570 767) (177 747)
Cash costs relating to Dawnmin acquisition - (6 235)
Cash element of Greenhills and Dawnmin
acquisitions - 60 799
Purchase of property, plant and
equipment 12 (4 901 993) (515 843)
-------------------- ---------------
Net cash used in investing activities (5 459 344) (639 024)
-------------------- ---------------
Cash flows from financing activities
Net proceeds from issue of shares 5 682 954 4 210 855
-------------------- ---------------
Net cash generated from financing
activities 5 682 954 4 210 855
-------------------- ---------------
Net (decrease)/ increase in cash
and cash equivalents (1 143 715) 2 904 767
Cash and cash equivalents at the
beginning of the period 2 904 767 -
Foreign exchange differences 20 283 -
-------------------- ---------------
Cash and cash equivalents at the
end of the period 14 1 781 335 2 904 767
==================== ===============
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 28 February 2019
1. Corporate information and principal activities
AfriTin Mining Limited ("AfriTin") was incorporated and domiciled in Guernsey on 1 September 2017, and admitted to the AIM market in London on 9 November 2017. The company's registered office is 18-20 Le Pollet, St Peter Port, Guernsey, GY1 1WH and operates from 2nd Floor, Building 3, Illovo Edge Office Park, Corner Harries and Fricker Road, Illovo, Johannesburg, 2116, South Africa.
These financial statements are for the year ended 28 February 2019 and the comparative figures are for the period from 1 September 2017 to 28 February 2018.
The AfriTin Group comprises AfriTin Mining Limited and its subsidiaries as noted below.
During the year the Company acquired 100% in Tantalum Investment Pty Limited, a company containing Namibian exploration licenses EPL5445 and EPL5670 for the exploration of tin, tantalum and other associated minerals.
AfriTin Mining Limited ("AML") is an investment holding company and holds 100% of Guernsey subsidiary, Greenhills Resources Limited ("GRL").
GRL is an investment holding company that holds investments in resource-based tin and tantalum exploration companies in Namibia and South Africa. The Namibian subsidiary is AfriTin Mining (Namibia) Pty Limited ("AfriTin Namibia") (previously named Dawnmin Africa Investments Pty Limited), in which GRL holds 100% equity interest. The South African subsidiaries are Mokopane Tin Company Pty Limited "Mokopane" and Pamish Investments 71 Pty Limited "Pamish 71", in which GRL holds 100% equity interest.
AfriTin Namibia owns an 85% equity interest in Uis Tin Mine Company Pty Limited "Uis Tin Mine" (previously named Guinea Fowl Investments no 27 Pty Limited). The minority shareholder in Uis Tin Mine is The Small Miners of Uis who own 15%.
Mokopane owns a 74% equity interest in Renetype Pty Limited "Renetype" and a 50% equity interest in Jaxson 641 Pty Limited "Jaxson".
The minority shareholders in Renetype are African Women Enterprises Investments Pty Limited and Cannosia Trading 62 CC who own 10% and 16% respectively.
The minority shareholder in Jaxson is Lerama Resources Pty Limited who owns a 50% interest in Jaxson.
Pamish 71 owns a 74% interest in Zaaiplaats Mining Pty Limited "Zaaiplaats". The minority shareholder in Zaaiplaats is Tamiforce Pty Limited who owns 26%.
As at 28 February 2019, the AfriTin Group comprised:
Equity holding
and voting Country of Functional
Company rights incorporation currency Nature of activities
AfriTin Mining Limited N/A Guernsey GBP Ultimate Holding
Company
-------------- -------------- ---------- --------------------------
Greenhills Resources 100% Guernsey GBP Holding Company
Limited(1)
-------------- -------------- ---------- --------------------------
AfriTin Mining Pty Limited(1) 100% South Africa ZAR Group support services
-------------- -------------- ---------- --------------------------
Tantalum Investment 100% Namibia NAD Tin & Tantalum
Pty Limited(1) Exploration
-------------- -------------- ---------- --------------------------
AfriTin Mining (Namibia) 100% Namibia NAD Tin & Tantalum
Pty Limited(2) Exploration
-------------- -------------- ---------- --------------------------
Uis Tin Mine Company 85% Namibia NAD Tin & Tantalum
Pty Limited(3) Exploration & Development
-------------- -------------- ---------- --------------------------
Mokopane Tin Company 100% South Africa ZAR Holding Company
Pty Limited(2)
-------------- -------------- ---------- --------------------------
Renetype Pty Limited(4) 74% South Africa ZAR Tin & Tantalum
Exploration
-------------- -------------- ---------- --------------------------
Jaxson 641 Pty Limited(4) 50% South Africa ZAR Tin & Tantalum
Exploration
-------------- -------------- ---------- --------------------------
Pamish Investments 71 100% South Africa ZAR Holding Company
Pty Limited(2)
-------------- -------------- ---------- --------------------------
Zaaiplaats Mining Pty 74% South Africa ZAR Property Owning
Limited(5)
-------------- -------------- ---------- --------------------------
(1) Held directly by AfriTin Mining Limited
(2) Held by Greenhills Resources Limited
(3) Held by AfriTin Mining (Namibia) Pty Limited
(4) Held by Mokopane Tin Company Pty Limited
(5) Held by Pamish Investments 71 Pty Limited
These financial statements are presented in Pound Sterling (GBP) because that is the currency in which the Group has raised funding on the AIM market in the United Kingdom. Furthermore, Pound Sterling (GBP) is the functional currency of the ultimate holding company, AfriTin Mining Limited.
2. Significant accounting policies
Basis of accounting
These financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively "IFRS") issued by the International Accounting Standards Board ("IASB") as adopted by the European Union ("EU adopted IFRS").
The Group has adopted the standards, amendments and interpretations effective for annual periods beginning on or after 1 March 2018. The adoption of these standards and amendments did not have a material effect on the financial statements of the Group. See Note 3.
The consolidated financial statements have been prepared under the historical cost convention. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity and areas where assumptions and estimates are significant to the consolidated financial statements are discussed further in this note. The principal accounting policies are set out below.
Going concern
These financial statements have been prepared on a going concern basis. In arriving at this position, the Directors have had regard to the fact that the AfriTin Group has sufficient cash and other assets to fund administrative and other committed expenditure for a period of not less than 12 months from the date of this report.
On 22 May 2019, the Company completed an equity fundraising by way of a direct subscription of 99 613 074 ordinary shares of no par value in the Company at a price of 3 pence per share, to raise approximately GBP3 million before expenses.
Additionally, on 22 May 2019, a standby working capital facility of ZAR30million (c. GBP1.7million) was entered into between the Company and Bushveld Minerals Limited ("Bushveld"). Bushveld has agreed to a 12-month facility towards funding the general corporate and working capital requirements of the Group, including operational expenses prior to production.
The Directors have reviewed the Group's cashflow forecasts and sensitivities for a period of at least 12 months from the date of this report. In doing so, careful consideration was given to potential risks to the forecasts, including pricing and production ramp up. The forecasts indicate that the Group retains sufficient liquidity from existing cash resources, operating cashflows and the available standby working capital facility to meet its liabilities as they fall due under the base case cashflow forecast and reasonably possible sensitivities.
Accordingly, the Directors have concluded that the going concern basis in the preparation of the financial statements remains appropriate and that there are no material uncertainties that would cast doubt on that basis of preparation.
Basis of consolidation
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets.
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer's previously held equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognised in profit or loss.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability are recognised 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.
The acquisition of subsidiaries that do not meet the definition of a business and hold early stage exploration licenses are accounted for as asset purchases with the fair value of consideration being allocated to the assets.
Inter-company transactions, balances and unrealised gains/losses on transactions between Group companies are eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with the Group's accounting policies.
Disposal of subsidiaries
When the Group ceases to have control, any retained interest in the entity is measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.
Non-controlling interests
Non-controlling interests in subsidiaries are identified separately from the Group's equity therein. Those interests of non-controlling shareholders that present ownership interests entitling their holders to a proportionate share of the net assets upon liquidation are initially measured at fair value. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests' share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the management steering committee that makes strategic decisions.
Foreign currencies
Functional and presentational currency
The individual financial statements of each Group company are prepared in the currency of the primary economic environment in which they operate (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group company are expressed in Pound Sterling, which is the functional currency of the Company, and the presentation currency for the consolidated financial statements.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transaction or valuation date where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in other comprehensive income as qualifying cash flow hedges and qualifying net investment hedges. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the income statement within "finance income or costs". All other foreign exchange gains and losses are presented in the income statement.
Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy) that have a financial currency different from the presentation currency are translated into the presentation currency as follows:
i) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
ii) income and expenses for each income statement are translated at average exchange rates (unless the average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and
iii) all resulting exchange differences are recognised in other comprehensive income.
Revenue recognition
The Group is yet to commence commercial production and thus there has been no revenue from the sale of tin during the year (the Group's primary activity).
The Group has however generated an immaterial amount of revenue from the sale of sand. Revenue is recognised in line with the transfer of goods and services to customers. The amount recognised reflects the amount to which the Group expects to be entitled in exchange for those goods and services. Sales contracts are evaluated to determine the performance obligations, the transaction price and the point at which there is transfer of control.
The transaction price is the amount of consideration due in exchange for transferring the promised goods or services to the customer and is allocated against the performance obligations and recognised in accordance with whether control is recognised over a defined period or at a specific point in time.
Finance income
Interest income is recognised when it is probable that economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax charge is based on taxable profit for the period. The Group's liability for current tax is calculated by using tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the "balance sheet liability" method.
Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax is calculated at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled based upon rates enacted and substantively enacted at the reporting date. Deferred tax is charged or credited to profit or loss, except when it relates to items credited or charged to other comprehensive income, in which case the deferred tax is also dealt with in other comprehensive income.
Intangible exploration and evaluation assets
All costs associated with mineral exploration and evaluation, including the costs of acquiring prospecting licenses; mineral production licenses and annual license fees; rights to explore; topographical, geological, geochemical and geophysical studies; exploratory drilling; trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource; are capitalised as intangible exploration and evaluation assets and subsequently measured at cost.
If an exploration project is successful, the related expenditures will be transferred at cost to property, plant and equipment and amortised over the estimated life of the commercial ore reserves on a unit of production basis (with this charge being taken through profit or loss). Where capitalised costs relate to both development projects and exploration projects, the Group reclassifies a portion of the costs which are considered attributable to near term production based on a percentage of the ore resource expected to be mined in the relevant phase. Where a project does not lead to the discovery of commercially viable quantities of mineral resources and is relinquished, abandoned, or is considered to be of no further commercial value to the Group, the related costs are recognised in the income statement.
The recoverability of deferred exploration costs is dependent upon the discovery of economically viable ore reserves, the ability of the Group to obtain necessary financing to complete the development of ore reserves and future profitable production or proceeds from the extraction or disposal thereof.
Impairment of exploration and evaluation assets
Intangible exploration and evaluation assets are reviewed regularly for indicators of impairment following the guidance in IFRS 6 "Exploration for and Evaluation of Mineral Resources" and tested for impairment where such indicators exist.
In accordance with IFRS 6, the Group considers the following facts and circumstances in their assessment of whether the Group's exploration assets may be impaired:
-- whether the period for which the Group has the right to explore in a specific area has expired during the period or will expire in the near future, and is not expected to be renewed; or
-- whether substantive expenditure on further exploration for and evaluation of mineral resources in a specific area is neither budgeted nor planned; or
-- whether exploration for and evaluation of mineral resources in a specific area have not led to the discovery of commercially viable deposits and the Group has decided to discontinue such activities in the specific area; or
-- whether sufficient data exists to indicate that although a development in a specific area is likely to proceed, the carrying amount of the exploration and evaluation assets is unlikely to be recovered in full from successful development or by sale.
If any such facts or circumstances are noted, the Group, as a next step, perform an impairment test in accordance with the provisions of IAS 36. In such circumstances, the aggregate carrying value of the mining exploration and assets is compared against the expected recoverable amount of the cash-generating unit. The recoverable amount is the higher of value in use and the fair value less costs to sell.
Warrants
The warrants issued by the Company are recorded at fair value on initial recognition net of transaction costs. The fair value of warrants granted is recognised as an expense or as share issue costs, with a corresponding increase in equity. The fair value of the warrants granted is measured using the Black Scholes valuation model, taking into account the terms and conditions under which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of warrants that vest.
Share-based payments
Where equity settled share options are awarded to Directors or employees, the fair value of the options at the date of grant is charged to the consolidated statement of comprehensive income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the consolidated statement of comprehensive income over the remaining vesting period.
Where equity instruments are granted to persons other than employees, the consolidated statement of comprehensive income is charged with the fair value of goods and services received.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation.
Land is not depreciated. Depreciation is provided on all plant and equipment at rates calculated to write each asset down to its estimated residual value, using the straight-line method over their estimated useful life of the asset as follows:
-- The mining asset and the decommissioning asset are amortised over the life of the mine or 20 years whichever is the lesser. Depreciation begins when the asset is available for use and continues until the asset is derecognised, even if it is idle;
-- Computer equipment over three years; -- Furniture over five years; -- Vehicles over four years.
Mining assets under construction are not depreciated.
The estimated useful lives, residual values and depreciation methods are reviewed at each year end and adjusted if necessary.
Gains or losses on disposal are included in profit or loss.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.
Impairment of property, plant and equipment
At each statement of financial position date, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Where there has been a change in economic conditions that indicate a possible impairment in a cash-generating unit, the recoverability of the net book value relating to that mine is assessed by comparison with the estimated discounted future cash flows based on management's expectations of future commodity prices and future costs.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease to the extent that it reverses gains previously recognised in other comprehensive income.
Where conditions giving rise to impairment subsequently reverse, the effect of the impairment charge is also reversed as a credit to the income statement, net of any depreciation that would have been charged since the impairment.
Inventories
Inventories are initially recognised at cost, and subsequently at the lower of cost and net realisable value. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.
Weighted average cost is used to determine the cost of ordinarily interchangeable items.
Financial instruments
Financial instruments are recognised in the Group's statement of financial position when the Group becomes a party to the contractual provisions of the instrument.
Financial assets
Financial assets are classified as at amortised cost only if the asset is held to collect the contractual cash flows and the contractual terms of the asset give rise to cash flows that are solely payments of principal and interest. At subsequent reporting dates, financial assets at amortised cost are measured at amortised cost less any impairment losses.
Impairment of financial assets
The Group assesses on a forward-looking basis the expected credit losses, defined as the difference between the contractual cash flows and the cash flows that are expected to be received, associated with its assets carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables only, the simplified approach permitted by IFRS 9 is applied, which requires expected lifetime losses to be recognised from initial recognition of the receivables. Losses are recognised in the income statement. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through the income statement. In the prior year, under IAS 39, impairment provisions were recognised when there was objective evidence that the Group will be unable to collect all of the amounts due under the terms of the receivable, the amount of such a provision being the difference between the carrying amount and the present value of the future expected cash flows associated with the impaired receivable.
Trade and other receivables
Trade and other receivables are initially recognised at the fair value of the consideration receivable less any impairment.
Trade and other receivables are subsequently measured at amortised cost, less any impairment.
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and deposits on a term of not greater than three months.
Financial liabilities
Financial liabilities include trade and other payables, derivatives and other longer-term financing, classified into one of the following categories:
Fair value through profit and loss
The liabilities are carried in the statement of financial position at fair value with changes in fair value recognised in the consolidated income statement.
Financial liabilities carried at amortised cost
Trade and other payables
Trade and other payables are initially recognised at fair value. They are subsequently measured at amortised cost using the effective interest rate method.
Rehabilitation costs
The net present value of estimated future rehabilitation costs is provided for in the financial statements and capitalised within property, plant and equipment on initial recognition. Rehabilitation will generally occur on closure or after closure of a mine. Initial recognition is at the time of the construction or disturbance occurring and thereafter as and when additional construction or disturbances take place. The estimates are reviewed annually to take into account the effects of inflation and changes in the estimated cost of the rehabilitation works and are discounted using rates that reflect the time value of money. Annual increases in the provision due to the unwinding of the discount are recognised in the statement of comprehensive income as a finance cost. The present value of additional disturbances and changes in the estimate of the rehabilitation liability are recorded to mining assets against an increase/decrease in the rehabilitation provision. The rehabilitation asset will be amortised over the life of the mine once production commences. Rehabilitation projects undertaken, included in the estimates, are charged to the provision as incurred. Environmental liabilities, other than rehabilitation costs, which relate to liabilities arising from specific events, are expensed when they are known, probable and may be reasonably estimated.
Critical accounting estimates and judgements
In the application of the Group's accounting policies, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. In particular, information about significant areas of estimation uncertainty considered by management in preparing the financial statements is described below:
Estimates and judgements are continually evaluated. Revisions to accounting estimates are recognised in the year in which the estimates are revised if the revision affects only that year, or in the year of revision and in future years if the revision affects both current and future years.
i) Decommissioning and rehabilitation obligations
Estimating the future costs of environmental and rehabilitation obligations is complex and requires management to make estimates and judgements as most of the obligations will be fulfilled in the future and contracts and laws are often not clear regarding what is required. The resulting provisions (see Note 16) are further influenced by changing technologies, political, environmental, safety, business and statutory considerations.
The Group's rehabilitation provision is based on the net present value of management's best estimates of future rehabilitation costs. Judgement is required in establishing the disturbance and associated rehabilitation costs at year end, timing of costs, discount rates and inflation. In forming estimates of the cost of rehabilitation which are risk adjusted, the Group assessed the Environmental Management Plan and reports provided by internal experts. Actual costs incurred in future periods could differ materially from the estimates and changes to environmental laws and regulations, life of mine estimates, inflation rates and discount rates could affect the carrying amount of the provision. The carrying amount of the rehabilitation obligations for the Group at 28 February 2019 was GBP75 180 (February 2018: GBPnil).
ii) Acquisition of Greenhills Resources Limited ("Greenhills") in the prior period
On 8 November 2017, the Group completed the acquisition of Greenhills which through its subsidiaries has interests in tin exploration projects in South Africa. The total cost of the acquisition was GBP3 328 813. Due to the lack of processes and outputs relating to Greenhills at the time of purchase, the Board did not consider the entities acquired to meet the definition of a business. As such, the Group has accounted for the acquisition of Greenhills as an asset purchase. Further details are disclosed in Note 10.
iii) Acquisition of Dawnmin Africa Investments Pty Limited ("Dawnmin") in the prior period (now known as AfriTin Mining (Namibia) Pty Limited)
On 9 November 2017, the Group completed the acquisition of Dawnmin which through its subsidiary has interests in tin exploration projects in Namibia. The total cost of the acquisition was GBP2 749 349. Due to the lack of processes and outputs relating to Dawnmin at the time of purchase, the Board did not consider the entities acquired to meet the definition of a business. As such, the Group has accounted for the acquisition of Dawnmin as an asset purchase. Further details are disclosed in Note 10.
iv) Acquisition of Tantalum Investment Pty Limited ("Tantalum") in the current year
On 2 October 2018, the Group completed the acquisition of Tantalum which has interests in tin exploration projects in Namibia. The total cost of the acquisition was GBP850 000. Due to the lack of processes and outputs relating to Tantalum at the time of purchase, the Board did not consider the entity acquired to meet the definition of a business. As such, the Group has accounted for the acquisition of Tantalum as an asset purchase. Further details are disclosed in Note 10.
v) Impairment of exploration & evaluation assets
Determining whether an exploration and evaluation asset is impaired requires an assessment of whether there are any indicators of impairment, including by reference to specific impairment indicators prescribed in IFRS 6 Exploration for and Evaluation of Mineral Resources. If there is any indication of potential impairment, an impairment test is required based on value in use of the asset. The valuation of intangible exploration assets is dependent upon the discovery of economically recoverable deposits which, in turn, is dependent on future tin prices, future capital expenditures and environmental, regulatory restrictions and the successful renewal of licenses. The directors have concluded that there are no indications of impairment in respect of the carrying value of intangible assets at 28 February 2019 nor 28 February 2018 based on planned future development of the projects and current and forecast tin prices. Exploration and evaluation assets are disclosed fully in Note 11.
vi) Transfer of capitalised exploration costs to property, plant and equipment
On 28 February 2019, the Group transferred the Uis Phase One exploration and evaluation asset to mine development costs. The determination that the project had reached a stage of being commercially viable and technically feasible for extraction represented a key judgement. In forming this judgement, the Board considered factors including: a) the mine permit had been awarded; b) the Project had secured funding
for development and construction of the plant; c) the production phase due to commence shortly is anticipated to be profitable and cash generative; d) the mine development plan had been established; and e) the results of exploration data including internal and external assessments.
Where capitalised costs relate to both development projects and exploration projects, the Group reclassifies a portion of the costs which are considered attributable to near-term production based on a percentage of the ore resource expected to be mined in the relevant phase. Judgement was involved in determining the percentage split of capitalised costs between exploration expenditure and costs that relate to the development stage asset and should be transferred to PPE. In calculating the percentage split, the key inputs were total ore resource, ore resource for Phase One, nameplate capacity of the plant and estimated timing for Phase Two.
3. Adoption of new and revised standards
The Company adopted IFRS 9 "Financial Instruments" and IFRS 15 "Revenue from Customers" in the year, following the standards becoming effective for periods commencing on or after 1 January 2018.
IFRS 9 "Financial instruments" addresses the classification and measurement of financial assets and financial liabilities and replaces the guidance in IAS 39 that relates to the classification and measurement of financial instruments. IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortised cost, fair value through other comprehensive income (OCI) and fair value through profit or loss. The basis of classification depends on the entity's business model and the contractual cash flow characteristics of the financial asset. There is now a new expected credit loss model that replaces the incurred loss impairment model used in IAS 39. The Group has applied the modified retrospective approach to transition. The adoption of IFRS 9 did not result in any material change to the consolidated results of the Group. Following assessment of the consolidated financial assets and liabilities no changes to classification of those financial assets or liabilities was required, apart from the change in classification of financial assets from loans and receivables to amortised cost. The Group has applied the expected credit loss impairment model to its financial assets.
IFRS 15 introduced a single framework for revenue recognition and clarified principles of revenue recognition. This standard modifies the determination of when to recognise revenue and how much revenue to recognise. The core principle is that an entity recognises revenue to depict the transfer of promised goods and services to the customer of an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Whilst the Group is not yet revenue generating from its primary activity (the sale of tin), the Group does generate immaterial revenue from the sale of sand. The adoption of IFRS 15 has had the result of income from the sale of sand being reclassified from other income to revenue.
Accounting standards and interpretations not applied
Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the Group:
Amendments to existing standards
IFRIC 23 1 January IFRIC 23 Uncertainty over Income Tax Treatments
2019
IFRS 9 1 January Amendments to IFRS 9: Prepayment Features with
2019 Negative Compensation
---------- ---------------------------------------------------------
IAS 28 1 January Amendments to IAS 28: Long-term interests in Associates
2019 and Joint Ventures
---------- ---------------------------------------------------------
1 January Annual Improvements to IFRSs (2015-2017 Cycle)
2019
---------- ---------------------------------------------------------
IAS 19 1 January Amendments to IAS 19: Plan Amendment, Curtailment
2019 or Settlement
---------- ---------------------------------------------------------
1 January Amendments to References to the Conceptual Framework
2020 in IFRS Standards
---------- ---------------------------------------------------------
IFRS 3 1 January Amendments to IFRS 3 Business Combinations - Definition
2020 of a Business
---------- ---------------------------------------------------------
1 January Definition of Material - Amendments to IAS 1 and
2020 IAS 8
---------- ---------------------------------------------------------
The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the financial statements of the Group based on current operations.
New standards
IFRS 1 January IFRS 16 introduces a single lease accounting model.
16 Leases 2019 This standard requires lessees to account for
all leases under a single on-balance sheet model.
Under the new standard, a lessee is required to
recognise all lease assets and liabilities on
the balance sheet; recognise amortisation of leased
assets and interest on lease liabilities over
the lease term; and separately present the principal
amount of cash paid and interest in the cash flow
statement.
The requirements of IFRS 16 extend to certain service contracts, such as mining contractors in which the contractor provides services and the use of assets, which may impact the Group going forward as it moves into production and enters into new contracts. The Group is currently assessing the impact of IFRS 16.
4. Segmental reporting
The reporting segments are identified by the management steering committee (who are considered to be the chief operating decision-makers) by the way that the Group's operations are organised. As at 28 February 2019, the Group operated within two operating segments, tin exploration activities in Namibia and South Africa.
Segment results
The following is an analysis of the Group's results by reportable segment.
South Africa Namibia Total
GBP GBP GBP
Year ended 28 February
2019
Results
Revenue 26 782 - 26 782
Associated costs (13 623) (93 711) (107 334)
------------ -------- ---------
Segmental profit/(loss) 13 159 (93 711) (80 552)
============ ======== =========
Period ended 28 February
2018
Results
Revenue 17 826 - 17 826
Associated costs (51 654) (36 574) (88 228)
------------ -------- ---------
Segmental profit/(loss) (33 828) (36 574) (70 402)
============ ======== =========
The reconciliation of segmental gross loss to the Group's loss before tax is as follows:
Year ended Period ended
28 February 28 February
2019 2018
GBP GBP
Segmental loss (80 552) (70 402)
Unallocated
costs (990 384) (1 463 434)
Finance Income 13 416 2
------------ ------------
Loss before
tax (1 057 520) (1 533 834)
============ ============
Unallocated costs mainly comprise of corporate overheads and costs associated with being listed in London.
In the prior period, unallocated costs mainly comprised one-off professional fees in relation to the incorporation and listing of the Company as well as a one-off cost of issuing shares to staff at GBPnil consideration.
Other segmental information
South Africa Namibia Total
GBP GBP GBP
As at 28 February 2019
Intangible assets - exploration 3 798 7 012
and evaluation 3 214 042 275 317
Other reportable segmental 6 061 6 150
assets 89 103 366 469
Other reportable segmental
liabilities (70 203) (286 546) (356 749)
1 818
Unallocated net assets - - 211
------------ --------- ---------
9 573 14 624
Total consolidated net assets 3 232 942 095 248
============ ========= =========
As at 28 February 2018
Intangible assets - exploration 2 941 6 300
and evaluation 3 359 388 476 864
Other reportable segmental
assets 109 903 538 209 648 112
Other reportable segmental
liabilities (116 087) (171 039) (287 126)
2 687
Unallocated net assets - - 730
------------ --------- ---------
3 308 9 349
Total consolidated net assets 3 353 204 646 580
============ ========= =========
Unallocated net assets are mainly comprised of cash and cash equivalents which are managed at a corporate level.
5. Expenses by nature
The loss for the period has been arrived at after charging:
Year ended Period ended
28 February 28 February
2019 2018
GBP GBP
Staff costs (See Note 6) 519 823 855 621
Depreciation of property,
plant & equipment 22 824 378
Operating lease expense 20 332 -
Professional fees 75 076 479 753
Travelling expenses 105 939 74 252
Other costs 313 724 121 262
Auditor's remuneration 40 000 50 000
Currency translation differences - (29 604)
1 097 718 1 551 662
============ ============
6. Staff costs
Year ended Period ended
28 February 28 February
2019 2018
GBP GBP
Staff costs capitalised under 570 042 -
property, plant and equipment
Staff costs capitalised under 75 005 -
intangible assets
Staff costs recognised as
administrative expenses 313 860 303 101
Shares issued (including amounts
capitalised) 65 297 552 520
Share-based payment charge 157 008 -
(including amounts capitalised)
Pension fund contributions - -
1 181 212 855 621
============ ============
Key management personnel have been identified as the Board of Directors, Frans van Daalen (Chief Operating Officer of the Group) and Robert Sewell (Chief Financial Officer of the Group). Details of key management remuneration are shown in Note 23.
The average number of staff during the year was 22 (February 2018: 12) with an average total cost for the year of GBP52 693 (February 2018: GBP16 309).
Emoluments of GBP172 210 including GBP45 562 of share options and shares to be issued (February 2018: GBP124 050 including GBP78 000 worth of shares issued at listing) were paid in respect of the highest paid Director during the year.
7. Finance income
Year ended Period ended
28 February 28 February
2019 2018
GBP GBP
Bank interest 13 416 2
============ ============
8. Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Year ended Period ended
28 February 28 February
2019 2018
Factors affecting tax for the year/period: GBP GBP
The tax assessed for the year/period
at the Guernsey corporation tax charge
rate of 0%, as explained below:
Loss before taxation (1 057 520) (1 533 834)
------------ ------------
Loss before taxation multiplied by - -
the Guernsey corporation tax charge
rate of 0%
Effects of:
Differences in tax rates (overseas
jurisdictions) (160 094) (91 730)
Tax losses carried forward 160 094 91 730
------------ ------------
Tax for the period - -
============ ============
Accumulated losses in the subsidiary undertakings for which there is an unrecognised deferred tax asset are GBP842 560 (February 2018: GBP322 353).
9. Loss per share
From continuing operations
The calculation of a basic loss per share of 0.23 pence (February 2018: loss per share of 0.83 pence), is calculated using the total loss for the period attributable to the owners of the Company of GBP1 050 074 (February 2018: GBP1 533 464) and the weighted average number of shares in issue during the year/period of 465 473 041 (February 2018: 184 033 537).
Due to the loss for the year, the diluted loss per share is the same as the basic loss per share. The number of potentially dilutive ordinary shares, in respect of share options, warrants and shares to be issued is 48 566 727 (February 2018: 1 897 922). These potentially dilutive ordinary shares may have a dilutive effect on future earnings per share.
99 613 074 ordinary shares with no par value were issued on 22 May 2019. Refer to Note 22 for further details.
10. Asset acquisitions
Acquisition of Greenhills Resources Limited ("Greenhills") in the prior period
On 8 November 2017, the Group completed the acquisition of Greenhills which through its subsidiaries has interests in tin exploration projects in South Africa. The consideration of GBP3 328 313 was satisfied by the issue of 85 341 358 ordinary shares of the company which were issued partially to Bushveld Minerals Limited, a company listed on the AIM market in London, the previous owner of Greenhills and partially to Bushveld Minerals shareholders. Due to the lack of processes and outputs relating to Greenhills at the time of purchase, the Board does not consider the entities acquired to meet the definition of a business. As such, the Group has accounted for the acquisition of Greenhills as an asset purchase.
The relative fair values of the identifiable assets and liabilities acquired and included in the consolidation are:
GBP
Intangible assets - exploration
and evaluation 3 349 614
Property, plant and equipment 15 366
Receivables 21 537
Cash 17 512
Other liabilities (75 716)
---------------------
3 328 313
=====================
Acquisition of Dawnmin Africa Investments Pty Limited ("Dawnmin") in the prior period (now known as AfriTin Mining (Namibia) Pty Limited)
On 9 November 2017, the Group completed the acquisition of Dawnmin which through its subsidiary has interests in tin exploration projects in Namibia. The consideration of GBP2 749 349 was satisfied by the issue of 70 336 290 ordinary shares of the company which were issued to Naminco Limited, the previous owner of Dawnmin as well as stamp duty costs. Due to the lack of processes and outputs relating to Dawnmin at the time of purchase, the Board does not consider the entities acquired to meet the definition of a business. As such, the Group has accounted for the acquisition of Dawnmin as an asset purchase.
The relative fair values of the identifiable assets and liabilities acquired and included in the consolidation are:
GBP
Intangible assets - exploration
and evaluation 2 773 503
Property, plant and equipment 7 538
Other tax and social security
costs 1 335
Cash 43 287
Other liabilities (76 314)
---------------------
2 749 349
=====================
Acquisition of Tantalum Investment Pty Limited ("Tantalum Investment") in the current year
On 2 October 2018, the Group completed the acquisition of Tantalum Investment which has interests in tin exploration projects in Namibia. The consideration of GBP850 000 was settled by way of issue of 25 000 000 ordinary shares of the Company which were issued to a group of sellers. Due to the lack of processes and outputs relating to Tantalum Investment at the time of purchase, the Board does not consider the entity acquired to meet the definition of a business. As such, the Group has accounted for the acquisition of Tantalum Investment as an asset purchase.
The relative fair values of the identifiable assets and liabilities acquired and included in the consolidation are:
GBP
Intangible assets - exploration
and evaluation 850 000
===================
11. Intangible exploration and evaluation assets
GBP
As at 1 September 2017 -
Additions for the period - acquisition of Greenhills
Resources Limited 3 349 614
Additions for the period - acquisition of AfriTin
Mining Namibia Pty Limited 2 773 503
Additions for the period - other expenditure 177 747
---------
As at 28 February 2018 6 300 864
Additions for the period - other expenditure 570 767
Additions for the year - acquisition of Tantalum 850 000
Reclassification to property, plant and equipment (488 891)
Foreign exchange difference (220 423)
---------
As at 28 February 2019 7 012 317
=========
For the purposes of impairment testing, the intangible exploration and evaluation assets are allocated to the Group's cash-generating unit, which represents the lowest level within the Group at which the intangible exploration and evaluation assets are measured for internal management purposes, which is not higher than the Group's operating segments as reported in Note 4.
The amounts for intangible exploration and evaluation assets represent costs incurred on active exploration projects. Amounts capitalised are assessed for impairment indicators under IFRS 6 at each period end as detailed in the Group's accounting policy. In addition, the Group routinely reviews the economic model and reasonably possible sensitivities and considers whether there are indicators of impairment.
The directors have concluded that there are no indications of impairment in respect of the carrying value of exploration and evaluation assets at 28 February 2019 and 28 February 2018 based on planned future development of the projects and current and forecast tin prices. In making this assessment a tin price of USD 20 600/tonne (February 2018: USD 20 000/tonne) was used.
The Company's subsidiary, Greenhills Resources Limited has the following:
i) a 74% interest in Renetype Pty Limited ("Renetype") which holds an interest in Prospecting Right 2205.
ii) an 85% interest in Uis Tin Mine Company Pty Limited ("Uis Tin Mine") which holds an interest in mining rights, ML129, ML133 and ML134.
iii) a 50% interest in Jaxson 641 Pty Limited ("Jaxson") which holds an interest in Prospecting Right 428.
iv) a 74% interest in Zaaiplaats Mining Pty Limited ("Zaaiplaats") which holds an interest in Prospecting Right 183.
The Company has a 100% interest in Tantalum Investment Pty Limited ("Tantalum") which holds an interest in Exclusive Prospecting Licence 5445 and Exclusive Prospecting Licence 5670.
12. Property, plant and equipment
Mining
asset
under Decommissioning Computer
Land construction asset Equipment Furniture Vehicles Total
Cost
As at 1 September 2017 - - - - - - -
Additions for the period 15
- acquisition of Greenhills 366 - - - - - 15 366
Additions for the period
- acquisition of AfriTin
Namibia - 7 538 - - - - 7 538
Additions for the period
- other expenditure - 511 303 - 4 540 - - 515 843
15
As at 28 February 2018 366 518 841 - 4 540 - - 538 747
Additions for the period 4 721 64 5 027
- other expenditure - 734 78 168 701 74 065 88 902 570
Transfer from exploration
and evaluation asset - 488 891 - - - - 488 891
Foreign exchange differences (1 927) (233 695) (2 988) (3 043) (2 831) (3 398) (247 882)
13 5 495 66 5 807
As at 28 February 2019 439 771 75 180 198 71 234 85 504 326
Accumulated Depreciation
As at 1 September 2017 - - - - - - -
Charge for the period - - - 378 - - 378
As at 28 February 2018 - - - 378 - - 378
11
Charge for the period - - - 135 4 280 7 409 22 824
Foreign exchange differences - - - (473) (164) (282) (919)
11
As at 28 February 2019 - - - 040 4116 7 127 22 283
Net Book Value
13 5 495 55 5 785
As at 28 February 2019 439 771 75 180 158 67 118 78 377 043
15
At 28 February 2018 366 518 841 - 4 162 - - 538 369
As at 1 September 2017 - - - - - -
13. Trade and other receivables
28 February 28 February
2019 2018
GBP GBP
Trade receivables 42 463 35 065
Other receivables 83 615 13 828
VAT receivables 348 885 72 794
474 963 121 687
=========== ===========
The Directors consider that the carrying amount of trade and other receivables approximates to their fair value due to their short-term nature. No allowance for any expected credit losses against any of the receivables is provided.
The total trade and other receivables denominated in South African Rand amount to GBP80 662 (February 2018: GBP55 102) and denominated in Namibian Dollars amount to GBP316 307 (February 2018: GBP57 335).
14. Cash and cash equivalents
28 February 28 February
2019 2018
GBP GBP
Cash on hand and in bank 1 781 335 2 904 767
=========== ===========
Cash and cash equivalents (which are presented as a single class of assets on the face of the Statement of Financial Position) comprise cash at bank and other short-term highly liquid investments with an original maturity of three months or less. The Directors consider that the carrying amount of cash and cash equivalents approximates their fair value. The total cash and cash equivalents denominated in South African Rand amount to GBP82 287 (February 2018: GBP151 514), the total cash and cash equivalents denominated in Namibia Dollars amount to GBP660 190 (February 2018: GBP56 275) and the total cash and cash equivalents denominated in US Dollars amount to GBP132 (February 2018: GBP132).
15. Trade and other payables
28 February 28 February
2019 2018
GBP GBP
Trade payables 266 184 308 699
Other payables 110 716 145 962
Accruals 2 550 61 446
379 450 516 107
=========== ===========
Trade and other payables principally comprise amounts outstanding for trade purchases and on-going costs. The average credit period taken for trade purchases is 30 days.
The Group has financial risk management policies in place to ensure that all payables are paid within the pre-arranged credit terms. No interest has been charged by any suppliers as a result of late payment of invoices during the period.
The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
The total trade and other payables denominated in South African Rand amount to GBP149 684 (February 2018: GBP214 352) and GBP179 394 (February 2018: GBP171 039) is denominated in Namibian Dollars.
16. Environmental rehabilitation liability
28 February 28 February
2019 2018
GBP GBP
As at 1 March 2018 - -
Increase in provision 78 168 -
Foreign exchange
differences (2 988) -
As at 28 February
2019 75 180 -
=========== ===========
Provision for future environmental rehabilitation and decommissioning costs are made on a progressive basis. Estimates are based on costs that are regularly reviewed and adjusted appropriately for new circumstances. The environmental rehabilitation liability is based on disturbances and the required rehabilitation as at 28 February 2019.
The rehabilitation provision represents the present value of decommissioning costs relating to the dismantling and sale of mechanical equipment and steel structures related to the Phase 1 Pilot Plant, the demolishing of civil platforms and reshaping of earthworks. The provision is based on management's estimates and assumptions based on the current economic environment. Actual rehabilitation and decommissioning costs will ultimately depend upon future market prices for the necessary rehabilitation works and timing of when the mine ceases operation.
17. Share capital
Number of ordinary
shares of no
par value issued Share Capital
and fully paid GBP
Balance at 1 September 2017 - -
"Greenhills" acquisition 85 341 358 3 328 313
"AfriTin Namibia" acquisition 70 336 290 2 743 115
Initial Public Offering 89 743 584 3 500 000
Convertible loan notes converted into
shares 36 629 947 1 000 000
Shares issued to staff and service
provider for nil consideration 15 413 613 601 131
Warrants exercised 16 January 2018 1 348 -
Warrants exercised 2 February 2018 15 789 -
Share issue costs - excluding warrants - (289 145)
Share issue costs - fair value of
warrants - (29 783)
Balance at 28 February 2018 297 481 929 10 853 631
Capital raise - 14 June 2018 220 515 292 5 953 913
Share issue costs - excluding warrants - (325 858)
Share issue costs - fair value of
warrants - (48 868)
Shares issued to Hannam & Partners
- 17 August 2018 1 591 304 54 900
"Tantalum" acquisition - 2 October
2018 25 000 000 850 000
Balance at 28 February 2019 544 588 525 17 337 718
Authorised: 673 396 387 ordinary shares of no par value
Allotted, issued and fully paid: 544 588 525 shares of no par value
On 23 May 2018, an accelerated bookbuild and subscription process was undertaken and gross proceeds of GBP6m was raised. The Placing of 220 515 292 shares was done at a price of 2.7p per share. A resolution to issue the new ordinary shares was passed at a General Meeting on 14 June 2018.
On 17 August 2018, 1 591 304 ordinary shares of no par value were issued to Hannam & Partners Advisory Limited at 3.45p in lieu of a payment of GBP54 900, being part of their fees in relation to the capital raise that took place in June 2018.
On 2 October 2018, AfriTin Mining Limited acquired the entire issued share capital of Tantalum Investment Pty Limited, containing Namibian exploration licenses EPL5445 and EPL5670 for the exploration of tin, tantalum and other associated minerals from Jan Jonathan Serfontein. The purchase price of GBP850 000 was settled by way of issue of 25 000 000 ordinary shares in the Company, at a price of 3.40p.
18. Warrants
The following warrants were granted during the year ended 28 February 2019:
Date of grant 23 January
2019
Number granted 3 800 000
Contractual life 2 years
Estimated fair value
per warrant (GBP) 0.01286
The following warrants were granted during the period ended 28 February 2018:
Date of grant 9 November
2017
Number granted 1 871 939
Contractual life 3 years
Estimated fair value
per warrant (GBP) 0.01591
The estimated fair values were calculated by applying the Black Scholes pricing model. The model inputs were:
Date of grant 23 January 9 November
2019 2017
Share price at grant
date (pence) 4.15 3.90
Exercise price (pence) 4.50 3.90
Expected life 2 years 3 years
Expected volatility 60% 60%
Expected dividends Nil Nil
Risk-free interest rate 1.24% 1.24%
In accordance with the terms of a Demerger Agreement between Bushveld Minerals Limited and AfriTin Mining Limited (see Note 10), Bushveld warrant holders are entitled to exercise the same amount of warrants in AfriTin for GBPnil consideration subject to the demerger ratio of 0.0899. This agreement effectively gave rise to 43 120 AfriTin warrants on admission. In the period to 28 February 2018, 17 137 of these warrants were exercised. The remaining 25 983 of these warrants expired during the year ended 28 February 2019.
The warrants in issue during the year are as follows:
Outstanding at 1 September - 2017 Arising as a result of Demerger Agreement 43 120 Granted during the period 1 871 939 Exercised during the period (17 137) Outstanding at 28 February 2018 1 897 922 Exercisable at 28 February 2018 1 897 922 Granted during the year 3 800 000 Expired during the year (25 983) Exercised during the year - Outstanding at 28 February 2019 5 671 939 Exercisable at 28 February 2019 5 671 939
The warrants outstanding at the period-end have an average exercise price of GBP0.043, with a weighted average remaining contractual life of 1.83 years.
In the period ended 28 February 2019, the Group recognised a charge amounting to GBP48 868 (February 2018: GBP29 783) which was deducted from share capital as the warrants were issued as consideration for professional fees in relation to the issue of shares.
19. Share-based payments reserve
Director share options
The following director share options were granted during the year ended 28 February 2019:
14 June
Date of grant 2018 14 June 2018 14 June 2018
Number granted 8 750 000 4 375 000 4 375 000
Vesting period 1 year 18 months 2 years
Contractual life 5 years 5 years 5 years
Estimated fair value
per option (pence) 1.1040 0.9090 0.7280
The estimated fair values were calculated by applying the Black Scholes pricing model. The model inputs were:
Date of grant 14 June 2018 14 June 2018 14 June 2018 Share price at grant date (pence) 2.8 2.8 2.8 Exercise price (pence) 4.5 6.0 8.0 Expiry date 14 June 2023 14 June 2023 14 June 2023 Expected volatility 60% 60% 60% Expected dividends Nil Nil Nil Risk-free interest rate 1.24% 1.24% 1.24%
The director share options in issue during the period are as follows:
Outstanding at 1 March - 2018 Granted during the year 17 500 000 Forfeited during the year - Exercised during the year - Expired during the year - Outstanding at 28 February 2019 17 500 000 Exercisable at 28 February 2019 17 500 000
The director share options outstanding at the year-end have an average exercise price of GBP0.058, with a weighted average remaining contractual life of 4.29 years.
The director must remain as a director of the Company for the share options to vest. There are no market-based vesting conditions on the share options.
Employee share options
The following employee share options were granted during the year ended 28 February 2019:
Date of grant 1 October 2018 1 October 2018 1 October 2018 Number granted 11 250 000 5 625 000 5 625 000 Vesting period 1 year 18 months 2 years Contractual life 5 years 5 years 5 years Estimated fair value per option (pence) 1.5750 1.3240 1.0830
The estimated fair values were calculated by applying the Black Scholes pricing model. The model inputs were:
Date of grant 1 October 2018 1 October 2018 1 October 2018
Share price at grant
date (pence) 3.5 3.5 3.5
Exercise price (pence) 4.5 6.0 8.0
30 September 30 September 30 September
Expected life 2023 2023 2023
Expected volatility 60% 60% 60%
Expected dividends Nil Nil Nil
Risk-free interest
rate 1.24% 1.24% 1.24%
The employee share options in issue during the period are as follows:
Outstanding at 1 March - 2018 Granted during the year 22 500 000 Forfeited during the year - Exercised during the year - Expired during the year - Outstanding at 28 February 2019 22 500 000 Exercisable at 28 February 2019 22 500 000
The employee share options outstanding at the year-end have an average exercise price of GBP0.058, with a weighted average remaining contractual life of 4.59 years.
The employee must remain in employment with the Company for the share options to vest. There are no market-based vesting conditions on the share options.
Director shares to be issued
Directors fees of GBP24 050 are owing to the directors at the end of the year (February 2018: GBPnil). These fees will be settled through issuing a fixed number of shares. The corresponding credit has been recorded in the share-based payment reserve.
Employee shares to be issued
Employee salaries of GBP41 248 are owing to employees at the end of the year (February 2018: GBPnil). These fees will be settled through issuing a fixed number of shares. The corresponding credit has been recorded in the share-based payment reserve.
20. Financial instruments
The Group is exposed to the risks that arise from its use of financial instruments. This note describes the objectives, policies and processes of the Group for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.
Capital Risk Management
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing returns to shareholders. In order to maintain or adjust the capital structure, the Group may issue new shares or arrange debt financing.
The capital structure of the Group consists of cash and cash equivalents and equity, comprising issued capital and retained losses.
The Group is not subject to any externally imposed capital requirements.
Significant accounting policies
Details of the significant accounting policies and methods adopted including the criteria for recognition, the basis of measurement and the bases for recognition of income and expenses for each class of financial asset, financial liability and equity instrument are disclosed in note 2.
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:
-- Trade and other receivables -- Cash and cash equivalents -- Trade and other payables
Categories of financial instruments
The Group holds the following financial assets:
Year ended Period ended
28 February 28 February
2019 2018
GBP GBP
Measured at amortised
cost:
Trade and other receivables 126 805 48 893
Cash and cash equivalents 1 781 335 2 904 767
Total financial assets 1 908 140 2 953 660
============ ============
The Group holds the following financial liabilities:
Year ended Period ended
28 February 28 February
2019 2018
GBP GBP
Measured at amortised
cost:
Trade and other payables 379 450 516 108
Total financial liabilities 379 450 516 108
============ ============
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group's risk management objectives and policies. The Board receives reports through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies are set out below:
Credit risk
The Group's principal financial assets are bank balances and trade and other receivables.
Credit risk arises principally from the Group's cash balances with further risk arising due to its trade receivables. Credit risk is the risk that the counterparty fails to repay its obligation to the Group in respect of amounts owed. The Group gives careful consideration to which organisations it uses for its banking services in order to minimize credit risk. Other than a limited amount of sales of sand, the Group has no sales hence credit risk relating to other receivables is minimal. There are no formal procedures in place for monitoring and collecting amounts owed to the Group. A risk management framework will be developed over time, as appropriate to the size and complexity of the business.
The concentration of the Group's credit risk is considered by counterparty, geography and by currency. The Group has a significant concentration of cash held on deposit with large banks in South Africa, Namibia and Mauritius with A ratings and above (Standard & Poor's).
The concentration of credit risk was as follows:
Year ended Period ended
28 February 28 February
2019 2018
GBP GBP
Currency
Sterling 1 038 726 2 696 846
USD 132 132
South African
Rand 82 287 151 514
Namibian Dollars 660 190 56 275
TOTAL 1 781 335 2 904 767
============ ============
There are no other significant concentrations of credit risk as at the balance sheet date.
At 28 February 2019, the Group held no collateral as security against any financial asset. The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the Group's maximum exposure to credit risk without taking account of the value of any collateral obtained. At 28 February 2019, no financial assets were past their due date. The Group applies IFRS 9 to measure expected credit losses for receivables and these are regularly monitored and assessed. There has been no impairment of financial assets during the year. Management considers the above measures to be sufficient to control the credit risk exposure.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. Ultimate responsibility for liquidity risk management rests with the Board of Directors. The Board manages liquidity risk by regularly reviewing the Group's gearing levels, cash-flow projections and associated headroom and ensuring that excess banking facilities are available for future use.
The Group maintains good relationships with its banks, which have high credit ratings and its cash requirements are anticipated via the budgetary process. At 28 February 2019, the Group had GBP1 781 335 (February 2018: GBP2 904 767) of cash reserves.
Market risk
The Group's activities expose it primarily to the financial risk of changes in foreign currency exchange rates and interest rates.
Interest rate risk
The Group was exposed to minimal interest rate risk during the period. For this reason, no sensitivity analysis has been performed regarding interest rate risk.
Foreign exchange risk
The Group has foreign currency denominated assets and liabilities. Exposure to exchange rate fluctuations therefore arise. The carrying amount of the Group's foreign currency denominated monetary assets and liabilities, all in Pound Sterling, are shown below.
Year ended Period ended
28 February 28 February
2019 2018
GBP GBP
Cash and cash equivalents 742 609 207 921
Other receivables 48 811 39 643
Trade and other
payables (329 078) (385 391)
462 342 (137 827)
============ ============
The Group is exposed to a level of foreign currency risk. Due to the minimal level of foreign exchange transactions, the Directors currently believe the foreign currency risk is at an acceptable level.
The Group does not enter into any derivative financial instruments to manage its exposure to foreign currency risk.
The following table details the Group's sensitivity to a 10% increase and decrease in the Pound Sterling against the Rand and the Namibian Dollar. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the reasonable possible change in foreign currency rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end for a 10% change in foreign currency rates.
Rand denominated Rand currency Rand currency
monetary items impact impact
GBP Strengthening Weakening
GBP GBP
Assets 128 300 141 130 115 470
Liabilities (149 684) (164 653) (134 716)
---------------- ---------------- ----------------
(21 384) (23 523) (19 246)
================ ================ ================
Namibian Dollar Namibian Dollar Namibian Dollar
denominated currency impact currency impact
monetary items Strengthening Weakening
GBP GBP GBP
Assets 662 987 729 286 596 689
Liabilities (179 394) (197 333) (161 454)
---------------- ---------------- ----------------
483 593 531 953 435 235
================ ================ ================
21. Operating Lease Commitments
The Group had total commitments at the reporting date under non-cancellable operating leases falling due as follows:
28 February 28 February
2019 2018
Land and buildings Land and buildings
GBP GBP
Within one year 70 702 -
Between one and five
years 318 615 -
389 317 -
=================== ===================
The operating lease commitments relate to office rent in Illovo, Johannesburg. The lease was agreed on 1 December 2018 for a period of five years. Please refer to Note 23 for more details.
22. Events after Balance Sheet Date
Equity Fundraising
On 22 May 2019, the Company completed an equity fundraising by way of a direct subscription of 99,613,074 ordinary shares of no par value in the Company at a price of 3 pence per share, to raise approximately GBP3 million before expenses.
Working Capital Facility
On 22 May 2019, a standby working capital facility of ZAR30,000,000 (c. GBP1.7million) was entered into between the Company and Bushveld Minerals Limited ("Bushveld"). Bushveld is a shareholder of AfriTin, which holds 9.5% of the issued share capital in the Company.
Bushveld has agreed to a 12-month facility of ZAR30,000,000 (c. GBP1.7 million) (the "Facility") towards funding the general corporate and working capital requirements of the Group. The security for this Facility is a general notarial bond to be registered in favour of Bushveld over the Plant. The Facility is repayable after 12 months and bears a ZAR300,000 facility fee. Interest on the Facility accrues at a rate of 12.5% per annum (payable quarterly) on drawn amounts. Furthermore, the Facility may be repaid at any time at no cost prior to the final repayment date.
Subject to AfriTin's shareholders resolving to increase the Company's authorised share capital at the AfriTin annual general meeting to be held in June 2019, Bushveld has the right, in the event of AfriTin defaulting in repaying the facility, to elect to convert any outstanding loan amount at the maturity of the Facility into AfriTin ordinary shares of no par value at a 20-day VWAP for such shares discounted by 10%.
23. Related-party transactions
Balances and transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
Goldiblox Pty Limited ("Goldiblox") is a related party due to Frans van Daalen, key management personnel of Afritin Mining Limited being a 50% shareholder of Goldiblox. During the year, Goldiblox charged the Group GBP66 554 (February 2018: GBP119 973) for management services. At year end, the Group did not owe Goldiblox any funds.
Bushveld Minerals Limited ("Bushveld") is a related party due to Anthony Viljoen, Chief Executive Officer being a Non-Executive Director on the Bushveld Board. During the year, Bushveld charged the Group GBP22 477 (February 2018: GBPnil) for rent, GBP18 592 (February 2018: GBPnil) for employee costs and GBPnil (February 2018: GBP77 537) for admin related costs. At year end, the Group owed Bushveld GBP77 537. Post year-end, Bushveld provided the Group a standby working capital facility (see Note 22).
The remuneration of the key management personnel of the Group, which includes the Directors, Frans van Daalen and Robert Sewell, is set out below.
28 February 2019 Shares/Share
Options Director Fees/Salary Other Fees Total
GBP GBP GBP GBP
Non-Executive Directors
Glen Parsons (Chairman) 27 433 - - 27 433
Terence Goodlace 12 583 21 996 - 34 579
Laurence Robb 16 591 12 000 - 28 591
Roger Williams 20 291 - - 20 291
Executive Director
Anthony Viljoen
(Chief Executive
Officer) 45 562 126 648 - 172 210
Other key management
personnel
Robert Sewell
(Chief Financial
Officer) 17 620 83 851 - 101 471
Frans van Daalen
(Chief Operating
Officer)* 26 546 112 302 - 138 848
------------ -------------------- ---------- -------
166 626 356 797 - 523 423
============ ==================== ========== =======
* Salary cost of GBP28 266 was paid to Frans van Daalen via Goldiblox.
28 February 2018 Shares/Share
Options Director Fees/Salary Other Fees Total
GBP GBP GBP GBP
Non-Executive Directors
Glen Parsons (Chairman) 40 000 - - 40 000
Terence Goodlace - - - -
Laurence Robb 12 500 4 000 - 16 500
Roger Williams 25 000 - 2 809 27 809
Executive Director
Anthony Viljoen
(Chief Executive
Officer)* 78 000 46 050 - 124 050
Other key management
personnel
Robert Sewell - - - -
(Chief Financial
Officer)
Frans van Daalen
(Chief Operating
Officer)** 78 000 41 445 - 119 445
------------ -------------------- ---------- -------
233 500 91 495 2 809 327 804
============ ==================== ========== =======
* The salary cost of GBP46 050 was paid to Anthony Viljoen via VM Investments.
** The salary cost of GBP41 445 was paid to Frans van Daalen via Goldiblox.
24. Reserves within equity
Share capital
Ordinary shares are classified as equity. Incremental cost directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Warrant reserve
The warrant reserve represents the cumulative charge to date in respect of unexercised share warrants at the balance sheet date.
Share-based payment reserve
The share-based payment reserve represents the cumulative charge to date in respect on unexercised share options at the balance sheet date as well as fees/salaries owed to directors/employees to be settled through the issuing of shares.
Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of entities with a functional currency other than Pound Sterling.
Retained earnings/accumulated deficit
The retained earnings/accumulated deficit represent the cumulative profit and loss net of distribution to owners.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
FR LFFVLDAILIIA
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