Botswana Diamonds PLC Annual Results for the Year Ended 30 June 2019 (4799T)

TIDMBOD

RNS Number : 4799T

Botswana Diamonds PLC

15 November 2019

15 November 2019

Botswana Diamonds PLC

("Botswana Diamonds" or the "Company")

Annual Results for the Year Ended 30 June 2019

Botswana Diamonds plc (AIM: BOD) today announces its audited annual results for the year ended 30 June 2019.

Chairman's Statement

Botswana Diamonds has become a diamond miner. Our project on the Marsfontein gravels has begun production and we expect it to ramp up in the coming weeks.

The general business environment is currently very uncertain. International trade faces restrictions, and the European Union is facing the first exit of a member state. Chinese growth rates which have under-pinned global economic growth are weak while in the United States the economic expansion which has lasted a record length of time is now looking fragile. Zero or negative interest rates are becoming more prevalent. This economic oddity is causing severe stress in banking and among economic/political policy makers.

Gem-quality diamonds are purely a "luxury item". In the last year prices have been weak due more to economic uncertainty than an increase in supply. Laboratory-grown diamonds (LGD) have received a great deal of publicity and though they make up a tiny percentage of gem sales the impact on sentiment has been very negative.

Rough diamond prices have generally fallen as have the share prices of diamond producers and explorers. Yet the long term fundamentals of the industry are solid. A "diamond is forever", but diamond mines are not. As an economy grows, a growing number of individuals generate significant disposable income and the demand for jewellery grows in turn. Producing diamond mines are running out or are producing at higher costs as they access deeper levels.

Asian economies are showing the fastest increase in diamond consumption. There is a long way to go until the latent demand in these markets is satisfied. There are not enough gemstone quality diamonds to provide a diamond ring for half of the population of China and India. Remarkably, the United States has continued to be an engine of growth for jewellery. Almost 50% of all diamond jewellery is purchased in the US. The technology behind LGD is improving and bigger stones can now be grown.

We believe that giving a gift of a diamond is more than a gift of a piece of carbon. LGD while perfect are not the "real thing". The Mona Lisa can be reproduced by the best painters in the world but it will not be the Mona Lisa. A 2,500 million year old diamond which came from 180 kilometres down in the earth's mantle is not the same as the stone grown in a sterile factory in Europe or China.

Turning to operations, the political situation in each of the three countries where we operate has improved. Fresh democratic elections in Botswana have led to continuity and stability. There is a slow improvement in the investment attractiveness of South Africa. In Zimbabwe there are glimmers of hope. Botswana Diamonds has made significant strides in the period under review. Delays in our projects in Botswana caused a redirection of focus onto the properties held in South Africa by our associate company Vutomi.

Initial focus was on the Thorny River, kimberlite dyke system which hosted former mines Klipspringer and Marsfontein. Both mines were discovered on the dyke system in the area. Dykes are often narrow, maybe a metre or less. A blow is where the dyke balloons out to a size capable of being mined as a conventional open pit. The Marsfontein blow was such a rich source of diamonds that the CAPEX was recovered in less than 4 days.

Vutomi explored the Thorny River dykes which are 4 kilometres away from the Klipspringer mine and processing plant. Exploration exposed a dyke system over seven kilometres long.

We negotiated both a contract mining agreement and a contract processing agreement. Vutomi would receive a 12% royalty. The Klipspringer processing plant struggled to process fresh kimberlite in a satisfactory manner and was losing diamonds to the waste dumps so we suspended operation. Meanwhile work was ongoing on a license over the nearby Marsfontein gravels. A mining permit was obtained in September 2019. Once again contract mining and processing is being employed, this time on a 15% royalty. Two plants are processing the gravels and initial results are positive. Throughput is being increased to 400 tons of gravel per day. At the same time there is ongoing exploration on the Thorny River dyke system looking for blows. State of the art structural geophysical and geochemical techniques are being employed to identify targets. Early results are promising.

The objective of the Thorny River / Marsfontein Project is to produce a cash flow to fund exploration in South Africa, Botswana and Zimbabwe but as we have developed the projects we believe that a real prospect now exists to identify one or more blows on Thorny River which could be very rich in high quality diamonds.

While the focus of activities is in South Africa we have continued to develop our interests in Botswana. We hold eight prospecting licenses in Botswana with applications lodged for a further six. We also hold a 15% net interest in the Maibwe joint venture in the Southern Kalahari. Our interest is held through a 51% owned South African company, Siseko Minerals.

Other partners in Maibwe are BCL 51% and Future Minerals 20%. BCL is a large state-owned copper nickel company which is in liquidation. Future Minerals is a locally owned Botswana company. Diamonds were discovered on the Maibwe licences. The operator, BCL, was placed into liquidation prior to them completing the agreed exploration programme. Botswana Diamonds has made an offer to the liquidator to buy the BCL holding. We are told that the Botswana government wants more work done on the licenses before making a decision.

Work done by Botswana Diamonds on their 100% owned licences contract continues to be focused on the Central Kalahari Game Reserve (CKGR).

Extensive geophysical and geochemical analysis was conducted in 2017 and 2018 which led to the identification of high priority targets. Interest was shown by third parties to participate in the exploration of these targets. Agreement was reached with one large diamond producer but that has not come to fruition. In the view of the board it is unlikely to be finalised. Alternatives are being considered.

We also have interests in Zimbabwe. The Marange area of Zimbabwe has in recent years produced large quantities of diamonds. The geology is complex and the rocks very hard. Botswana Diamonds directors have extensive experience in mining in Zimbabwe and were pleased to agree a joint venture with Vast Resources, an AIM-traded company, over a concession in the Marange area. We will have 13.3% of the joint venture and will provide technical and geological input to Vast. Vast agreed to provide the first US$1 million to the project in the form of loan. We understand that Vast are hopeful that a final agreement with the Zimbabwe authorities is imminent.

Outlook

There are four strands to our strategy for the future:

1. Ramp up the Marsfontein gravel production to generate immediate cash flow.

2. Restore production at Thorny River whilst exploring for blows on the ground.

3. Undertake reconnaissance work on the licenses in the Central Kalahari to identify specific drill targets and then drill them whilst continuing to work with the BCL liquidator to unlock the Maibwe project.

4. Assuming Vast Resources obtain the concession in the Marange area of Zimbabwe, to start work most probably with a pilot production plant.

Very significant strides have been taken by Botswana Diamonds in recent times. I am confident that the results from the efforts will flow to the shareholders.

John Teeling

Chairman

14 November 2019

Annual Report and Notice of Annual General Meeting

The Company's Annual Report and Accounts for the year ended 30 June 2019 (the "Annual Report") will be posted to shareholders on or around 19 November 2019.

A Notice of the Company's Annual General Meeting ("AGM") will be included in the Annual Report, which will also be available to download from the Company's website: http://www.botswanadiamonds.co.uk/investors

The AGM is due to be held on Thursday 12(th) December 2019 in the London Marriott Marble Arch Hotel, 134 George Street, Marylebone, London W1H 5DN at 11am.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014. The person who arranged for the release of this announcement on behalf of the Company was John Teeling, Director

S 

Enquiries:

 
Botswana Diamonds PLC 
 John Teeling, Chairman                  [phone] 
 James Campbell, Managing Director       [phone] 
 Jim Finn, Director                      [phone] 
Beaumont Cornish - Nominated Adviser 
 Michael Cornish 
 Roland Cornish                         [phone] 
Beaumont Cornish Limited - Broker 
 Roland Cornish 
 Felicity Geidt                        [phone] 
Blytheweigh - PR                       [phone] 
 Megan Ray                              [phone] 
 Fergus Cowan                           [phone] 
Teneo 
 Luke Hogg                               [phone] 
 Alan Tyrrell                            [phone] 
 

www.botswanadiamonds.co.uk

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARED 30 JUNE 2019

 
                                                                       2019        2018 
                                                                        GBP         GBP 
 
 
 Administrative expenses                                          (336,965)   (376,883) 
 
 Impairment of exploration and evaluation assets                  (435,139)   (179,524) 
 
 
 OPERATING LOSS                                                   (772,104)   (556,407) 
 
 (Loss)/gain due to fair value volatility                                 -     (1,250) 
 
 LOSS FOR THE YEAR BEFORE TAXATION                                (772,104)   (557,657) 
 
 Income tax expense                                                       -           - 
 
 LOSS AFTER TAXATION                                              (772,104)   (557,657) 
 
 Items that may be reclassified subsequently to profit or loss 
 
 Exchange difference on translation of foreign operations         (132,947)    (72,352) 
 
 
 TOTAL COMPREHENSIVE INCOME FOR THE YEAR                          (905,051)   (630,009) 
 
 
 
 
 Loss per share - basic                                             (0.14p)     (0.12p) 
 
 Loss per share - diluted                                           (0.14p)     (0.12p) 
 
 

CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2019

 
                                                  30/06/2019    30/06/2018 
                                                         GBP           GBP 
 ASSETS: 
 NON CURRENT ASSETS 
 Intangible assets                                 8,035,152     8,234,076 
 Financial assets                                          -             - 
 
                                                   8,035,152     8,234,076 
 
 
 CURRENT ASSETS 
 Other receivables                                    40,229        24,886 
 Cash and cash equivalents                            13,812       260,642 
 
                                                      54,041       285,528 
 
 TOTAL ASSETS                                      8,089,193     8,519,604 
 
 
 LIABILITIES: 
 CURRENT LIABILITIES 
 Trade and other payables                          (397,787)     (300,098) 
 
 TOTAL LIABILITIES                                 (397,787)     (300,098) 
 
 NET ASSETS                                        7,691,406     8,219,506 
 
 
 EQUITY 
 Called-up share capital - deferred shares         1,796,157     1,796,157 
 Called-up share capital - ordinary shares         1,441,388     1,273,206 
 Share premium                                    10,300,379    10,098,561 
 Share based payment reserves                        111,189       104,238 
 Retained deficit                                (4,841,473)   (4,069,369) 
 Translation reserve                               (132,947)             - 
 Other reserve                                     (983,287)     (983,287) 
 
 TOTAL EQUITY                                      7,691,406     8,219,506 
 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 30 JUNE 2019

Share

                                                         Called-up                                         Based 

Share Share Payment Retained Translation Other

Capital Premium Reserve Deficit Reserve Reserves Total

GBP GBP GBP GBP GBP GBP GBP

At 30 June 2017 2,745,064 9,085,128 97,287 (3,511,712)

     72,352           (983,287)        7,504,832 

Share based payment - - 6,951 - - - 6,951

Issue of shares 324,299 1,046,278 - - - - 1,370,577

Share issue expenses - (32,845) - - - - (32,845)

Loss for the year and

   total comprehensive income                    -                        -                          - 
(557,657)           (72,352)                   -             (630,009) 

At 30 June 2018 3,069,363 10,098,561 104,238 (4,069,369)

               -           (983,287)        8,219,506 

Share based payment - - 6,951 - - - 6,951

Issue of shares 168,182 201,818 - - - - 370,000

Loss for the year and

total comprehensive income - - - (772,104) (132,947) - (905,051)

At 30 June 2019 3,237,545 10,300,379 111,189 (4,841,473)

(132,947)          (983,287)     7,691,406 

Share Premium

The share premium reserve comprises of a premium arising on the issue of shares. Share issue expenses are deducted against the share premium reserve when incurred.

Share Based Payment Reserve

The share based payment reserve arises on the grant of share options under the share option plan.

Retained Deficit

Retained deficit comprises of losses incurred in the current and prior years.

Translation Reserve

The translation reserve arises from the translation of foreign operations.

Other Reserves

During 2010 the Company acquired certain assets and liabilities from African Diamonds plc, a Company under common control. The assets and liabilities acquired were recognised at their book value and no goodwill was recognised on acquisition. The difference between the book value of the assets acquired and the purchase consideration was recognised directly in reserves.

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEARED 30 JUNE 2019

 
                                                                 30/06/2019   30/06/2018 
                                                                        GBP          GBP 
 CASH FLOW FROM OPERATING ACTIVITIES 
 Loss for the year                                                (772,104)    (557,657) 
 Loss/(Profit) on investment held at fair value                           -        1,250 
 Foreign exchange losses                                          (131,699)     (68,359) 
 Impairment of exploration and evaluation assets                    435,139      179,524 
 
                                                                  (468,664)    (445,242) 
 
 MOVEMENTS IN WORKING CAPITAL 
 Increase/(Decrease) in trade and other payables                     82,689    (144,386) 
 (Increase)/Decrease in trade and other receivables                (15,343)       35,736 
 
 NET CASH FROM OPERATING ACTIVITIES                               (401,318)    (553,892) 
 
 
 CASH FLOW FROM INVESTING ACTIVITIES 
 Additions to exploration and evaluation assets                   (214,264)    (625,393) 
 
 NET CASH USED IN INVESTING ACTIVITIES                            (615,582)    (625,393) 
 
 
 CASH FLOW FROM FINANCING ACTIVITIES 
 Proceeds from share issue                                          370,000    1,370,577 
 Share issue costs                                                        -     (32,845) 
 
 NET CASH GENERATED FROM FINANCING ACTIVITIES                       370,000    1,337,732 
 
 
 NET (DECREASE)/INCREASE IN CASH AND CASH 
 EQUIVALENTS                                                      (245,582)      158,447 
 
 Cash and cash equivalents at beginning of the financial year       260,642      106,188 
 
 Effect of foreign exchange rate changes                            (1,248)      (3,993) 
 
 Cash and cash equivalents at end of the 
 financial YEAR                                                      13,812      260,642 
 
 
   1.            ACCOUNTING POLICIES 

The accounting policies and methods of computation followed in these financial statements are consistent with those published in the Group's Annual Report for the year ended 30 June 2018.

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs). The financial statements have also been prepared in accordance with International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB) and International Financial Reporting Interpretations Committee (IFRIC) as adopted by the European Union.

The financial information set out below does not constitute the Group's financial statements for the year ended 30 June 2019 or 30 June 2018, but is derived from those accounts. The financial statements for the year ended 30 June 2018 have been delivered to the Registrar of Companies and those for the year ended 30 June 2019 will be delivered following the Group's Annual General Meeting.

The auditors have reported on the 2019 statements; their report was unqualified with an emphasis of matter in respect of considering the adequacy of the disclosures made in the financial statements concerning the valuation of intangible assets, and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006.

   2.            GOING CONCERN 

The Group incurred a loss for the year of GBP905,051 after exchange differences on retranslation of foreign operations (2018: GBP630,009) and had a retained deficit of GBP4,841,473 (2018: GBP4,069,369) at the balance sheet date. These conditions represent a material uncertainty that may cast doubt on the Group's ability to continue as a going concern.

The directors have prepared cashflow projections and forecasts for a period of not less than 12 months from the date of this report which indicate that the group will require additional finance to fund working capital requirements and develop existing projects. On 18 July 2019 the Group raised GBP250,000 by placing 50,000,000 new ordinary shares. Further details are outlined in Note 7.

As in previous years the Directors have given careful consideration to the appropriateness of the going concern basis in the preparation of the financial statements and believe the going concern basis is appropriate for these financial statements. The financial statements do not include any adjustments that would result if the Group was unable to continue as a going concern.

   3.            LOSS PER SHARE 

Basic loss per share is computed by dividing the loss after taxation for the year available to ordinary shareholders by the weighted average number of ordinary shares in issue and ranking for dividend during the year. Diluted earnings per share is computed by dividing the profit or loss after taxation for the year by the weighted average number of ordinary shares in issue, adjusted for the effect of all dilutive potential ordinary shares that were outstanding during the year.

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

 
                                                   2019          2018 
                                                    GBP           GBP 
 Numerator 
 
 For basic and diluted EPS retained loss      (772,104)     (557,657) 
                                           ============  ============ 
 
 
 Denominator                                        No.           No. 
 
 For basic and diluted EPS                  537,481,761   470,397,102 
                                           ============  ============ 
 
 Basic EPS                                      (0.14p)       (0.12p) 
 Diluted EPS                                    (0.14p)       (0.12p) 
                                           ============  ------------ 
 

The following potential ordinary shares are anti-dilutive and are therefore excluded from the weighted average number of shares for the purposes of the diluted earnings per share:

 
                         No.          No. 
 
 Share options    11,410,000   10,410,000 
                 ===========  =========== 
 
   4.            INTANGIBLE ASSETS 
 
 Exploration and evaluation assets: 
                                              2019          2018 
                                               GBP           GBP 
 Cost: 
 At 1 July                               9,063,021     8,415,677 
 Additions                                 369,161       647,344 
 Exchange variance                       (132,946)             - 
                                      ------------  ------------ 
 At 30 June                              9,299,236     9,063,021 
                                      ============  ============ 
 
 Impairment: 
 At 1 July                                 828,945       649,421 
 Allowance for impairment                  435,139       179,524 
                                      ------------  ------------ 
 At 30 June                              1,264,084       828,945 
                                      ============  ============ 
 
 Carrying Value: 
 At 1 July                               8,234,076     7,766,256 
                                      ============  ============ 
 
   At 30 June                            8,035,152     8,234,076 
                                      ============  ============ 
 
 
 Segmental analysis                           2019          2018 
                                               GBP           GBP 
 Botswana                                7,056,591     7,463,973 
 South Africa                              978,561       770,103 
                                      ------------  ------------ 
                                         8,035,152     8,234,076 
                                      ============  ============ 
 

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

During the current year, some licences held by the Group in its subsidiary company Sunland Minerals (Pty) Ltd were relinquished. Therefore, the directors have decided to impair the costs of exploration on these licences. Accordingly, an impairment allowance of GBP435,139 (2018: GBP179,524) has been recorded by the Group in the current year.

On 11 November 2014 the Brightstone block was farmed out to BCL Investments (Proprietary) Limited, a Botswana Company, who assumed responsibility for the work programme. Botswana Diamonds will retain a 15% carried interest.

On 6 February 2017 the Group entered into an Option and Earn-In Agreement with Vutomi Mining Pty Ltd and Razorbill Properties 12 Pty Ltd (collectively known as 'Vutomi'), a private diamond exploration and development firm in South Africa.

Pursuant to the terms of the Agreement, Botswana Diamonds has agreed to pay Vutomi a total of GBP942,000 in cash, of which GBP581,000 will be used to fund exploration activities. In addition, the Company will issue 100 million ordinary shares of 0.25p each ("Ordinary Shares") to Vutomi shareholders. The Agreement will be executed in three Phases after which the Company will own 72% of Vutomi. The remaining 28% will continue to be held by Vutomi's Black Economic Empowerment ('BEE') partners. The three Phases are summarised below:

Exclusivity and Option Fee

Botswana Diamonds paid Vutomi an exclusivity and option fee of GBP122,000, with GBP61,000 paid in cash and GBP61,000 paid in the Company's Ordinary Shares at a price of 1.9p. The shares were issued on 3 April 2017. Upon completion of this payment Phase 1 of the earn-in commenced.

Phase 1

Phase 1 will last for a further 12 months, during which period the Company will, subject to available funding, have the option to pay Vutomi GBP215,000 to fund exploration activities to earn an initial 15% of Vutomi. During Phase 1 Vutomi will grant the Company the sole and exclusive right to fund exploration activities in, on and under the Vutomi Prospecting Rights Area in order to prepare a conceptual mining and development plan. The required mining permits are in place.

Phase 2

Phase 2 will last for a further 12 months, during which period the Company will, subject to available funding, have the option to pay Vutomi GBP366,000 to fund exploration activities to earn an additional 25% of Vutomi. It is noted that phase 2 of the earn-in occurred on the 02 April 2019.

Phase 3

Phase 3 will commence within 90 days of the successful completion of Phase 2. Pursuant to the Agreement, the Company will have the option to issue the outstanding balance of 96.8m Ordinary Shares, priced at Volume Weighted Average Price (VWAP), to Vutomi and, subject to available funding, settle Vutomi's shareholders loan accounts of approximately GBP300,000 in cash to earn a further 32% of Vutomi.

In accordance with the extension agreement obtained, phase 3 of the earn-in agreement has been extended to 31 December 2019.

Termination

At any point the Agreement will lapse if the Company does not exercise its option regarding a specific Phase.

The directors believe that there were no facts or circumstances indicating that the carrying value of intangible assets may exceed their recoverable amount and thus no impairment review was deemed necessary by the directors. The realisation of these intangible assets is dependent on the successful discovery and development of economic diamond resources and the ability of the Group to raise sufficient finance to develop the projects. It is subject to a number of significant potential risks, as set out below:

- licence obligations;

- exchange rate risks;

- uncertainties over development and operational costs;

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

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

- title to assets;

- financial risk management;

- going concern; and

- operational and environmental risks.

Included in additions for the year are GBP6,951 (2018: GBP6,951) of share based payments, GBP15,754 (2018: GBP15,516) of wages and salaries and GBP74,620 (2018: GBP75,443) of directors remuneration. The remaining balance pertains to the amounts capitalised to the respective licenses held by the entity.

   5.            CALLED-UP SHARE CAPITAL 
 
 Deferred Shares 
                                             Number   Share Capital   Share Premium 
                                                                GBP             GBP 
 
 At 1 July 2017 and 2018                239,487,648       1,796,157               - 
 
 At 30 June 2018 and 2019               239,487,648       1,796,157               - 
 
 
 Ordinary Shares 
 Allotted, called-up and fully paid: 
                                             Number   Share Capital   Share Premium 
                                                                GBP             GBP 
 
 At 1 July 2017                         379,562,908         948,907       9,085,128 
 Issued during the year                 129,719,600         324,299       1,046,278 
 Share issue expenses                             -               -        (32,845) 
 
 At 30 June 2018                        509,282,508       1,273,206      10,098,561 
 
 
 Issued during the year                  67,272,727         168,182         201,818 
 
 At 30 June 2019                        576,555,235       1,441,388      10,300,379 
 
 

Movements in share capital

On 3 August 2017, the Company raised GBP603,000 through the issue of 48,240,000 new ordinary shares of 0.25p each at a price of 1.25p per share to provide additional working capital and fund development costs. In addition, 31,244,300 warrants were also exercised at a price of 0.85p per warrant for GBP265,577.

On 20 December 2017, 235,300 warrants were exercised at a price of 0.85p per warrant for GBP2,000.

On 14 February 2018, the Company raised GBP500,000 through the issue of 50,000,000 new ordinary shares of 0.25p each at a price of 1p per share to provide additional working capital and fund development costs.

On 28 January 2019, the Company raised GBP370,000 through the issue of 67,272,727 new ordinary shares of 0.25p each at a price of 0.55p per share to provide additional working capital and fund development costs. Each placing share has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per share for a period of two years from 23 January 2019.

   6.            SHARE-BASED PAYMENTS 

The Group issues equity-settled share-based payments to certain directors and individuals who have performed services for the Group. Equity-settled share-based payments are measured at fair value at the date of grant.

Fair value is measured by use of a Black-Scholes valuation model.

The Group plan provides for a grant price equal to the average quoted market price of the ordinary shares on the date of grant.

                                                                                                                               2019                                                          2018 
                                                                                                                                      Weighted                                                  Weighted 
                                                                                                                                         average                                                     average 
                                                                                                 30/06/2019       exercise price          30/06/2018           exercise price 
                                                                                                         Options                 in pence                 Options                    in pence 

Outstanding at beginning of year 11,410,000 5.14 11,410,000 5.14

Issued - - - -

Outstanding at end of the year 11,410,000 5.14 11,410,000 5,14

Exercisable at end of the year 11,410,000 5.14 10,410,000 5.14

During the year ended 30 June 2017, 3,000,000 options were granted with a fair value of GBP20,853. These fair values were calculated using the Black-Scholes valuation model. These options vested over a 3 year period contingent on the provision of services over the vesting period and are capitalized on a straight line basis over the vesting period.

The inputs into the Black-Scholes valuation model were as follows:

Grant 30 November 2016

Weighted average share price at date of grant (in pence) 1.75p

Weighted average exercise price (in pence) 1.75p

Expected volatility 37.8%

Expected life 7 years

Risk free rate 0.5%

Expected dividends none

Expected volatility was determined by management based on their cumulative experience of the movement in share prices over a period of 3 years.

The terms of the options granted do not contain any market conditions within the meaning of IFRS 2.

The Group capitalised expenses of GBP6,951 (2018: GBP6,951) and expensed costs of GBPNil (2018: GBP Nil) relating to equity-settled share-based payment transactions during the year.

Warrants 2019 2018

                                                                                                                                      Weighted                                                 Weighted 
                                                                                                                                         average                                                      average 
                                                                                                 30/06/2019       exercise price          30/06/2018           exercise price 
                                                                                                         Options                 in pence                 Options                    in pence 

Outstanding at beginning of year 28,298,700 0.85 59,778,300 0.85

Issued 67,272,727 0.60

Exercised - (31,479,600) 0.85

Expired (28,298,700) (0.85) - -

Outstanding at end of the year 67,272,727 0.60 28,298,700 0.85

During the current year 28,298,700 warrants that were granted on 22 December 2015 expired.

As part of the placing on 28 January 2019, the Company issued 67,272,727 warrants to each subscriber of the placing shares. Each placing share has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per share for a period of two years from 23 January 2019.

   7.            POST BALANCE SHEET EVENTS 

On 18 July 2019, the Company announced that they had raised GBP250,000 via the placing of 50,000,000 new ordinary shares with new and existing investors at a price of 0.5p per share.

   8.            GENERAL INFORMATION 

The Annual Report and Accounts will be mailed shortly only to those shareholders who have elected to receive it. Otherwise, shareholders will be notified that the Annual Report and Accounts will be available on the website at www.botswanadiamonds.co.uk. Copies of The Annual Report will also be available for collection from the company's registered office at Suite 1, 3(rd) Floor, 11-12 St. James's Square, London, SW1Y 4LB

   9.            ANNUAL GENERAL MEETING 

The Annual General Meeting is due to be held on Thursday 12(th) December 2019 in the London Marriott Marble Arch Hotel, 134 George Street, Marylebone, London W1H 5DN at 11am. A Notice of the Annual General Meeting is included in the Company's Annual Report.

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END

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November 15, 2019 02:00 ET (07:00 GMT)