TIDMATM
RNS Number : 0548G
AfriTin Mining Ltd
22 July 2021
22 July 2021
AfriTin Mining Limited
("AfriTin" or the "Company")
Audited Financial Results for the twelve months ended 28
February 2021
AfriTin Mining Limited (AIM: ATM), an African tin mining company
with its flagship asset, the Uis Tin Mine ("Uis") in Namibia, is
pleased to announce its final audited results for the year ended 28
February 2021.
Highlights:
-- First material revenue numbers amounted to GBP5m (2020:
GBP0.069m)
-- Total production for the year amounted to 473t (2020: 32t) of
tin concentrate which equates to 311.7t (2020:18.6t) of contained
tin metal
-- Ended the financial year with cash and cash equivalents of:
GBP1.351m (2020: GBP0.575m)
-- Post balance sheet date:
-- The placing of 216 666 667 ordinary shares to raise GBP13m
(before expenses)
-- The remaining 2019 convertible loan notes and 2020 loan notes
were settled
Anthony Viljoen, CEO of AfriTin Mining Limited had the following
to say:
" Given the backdrop of COVID-19 and the difficulties that the
pandemic presented, the AfriTin team managed to reach significant
milestones in the pursuit of first notable revenues and development
of our flagship Uis Tin Mine. The announcement of first notable
revenues is a monumental first step and a precursor of what is to
ensue as expansion plans are implemented. The robust balance sheet
forms the basis from which AfriTin will grow and underpins our
ambition of becoming a significant multi-commodity tech metals
producer out of Africa.
With tin becoming a new technology metal and the demand for
lithium and tantalum, we believe the economics of the historical
operation have been transformed. We also believe the Erongo region
in which we operate will become a globally significant metallogenic
province for new technology metals, allowing for increased revenues
and economies of scale within AfriTin's licence areas."
The preliminary financial information does not constitute full
statutory accounts but is derived from accounts for the year ended
28 February 2021 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 2021. 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 IFRS.
The auditor's report for the year ended 28 February 2021 was
unqualified.
The full Annual Report along with a Notice of Annual General
Meeting ("AGM") will be distributed to shareholders on 30 July 2021
and will be available on the Company's website from that date.
We will be hosting an investor webcast on Wednesday 28 July 2021
at 11h00 (BST) where the CEO, Anthony Viljoen will be presenting on
becoming the technology metals champion in Africa.
Please register for the event at:
https://webcasting.brrmedia.co.uk/broadcast/60f82a8205da7a5c2646fd6f
AfriTin Mining Limited +27 (11) 268 6555
Anthony Viljoen, CEO
Nominated Adviser +44 (0) 207 220 1666
WH Ireland Limited
Katy Mitchell
James Sinclair-Ford
Corporate Adviser and Joint Broker
H&P Advisory Limited
Andrew Chubb
Jay Ashfield
Nilesh Patel +44 (0) 20 7907 8500
Tavistock Financial PR (United
Kingdom) +44 (0) 207 920 3150
Jos Simson
Nick Elwes
CHAIRMAN'S STATEMENT
In reviewing our financial year, I first want to thank AfriTin's
staff, shareholders and broader stakeholder groups for their
continued support of and belief in this Company. No corner of the
globe has escaped the COVID-19 pandemic during this period, and we
are particularly appreciative of our staff's efforts during these
difficult and testing times.
Given this backdrop, what we have achieved this year as a
Company has been all the more admirable. I would like to
congratulate the AfriTin Mining team for their cohesive efforts on
behalf of those same stakeholders and the non-executive directors.
Despite the challenges of 2020, the Company has had a
transformative year at the Uis Tin Mine, as demonstrated by the
achievements and ramp-up of the Uis Phase 1 pilot plant.
To ramp up production and surpass nameplate production capacity
is a testament to the hard work carried out on site, and to the
team's resolve and determination to deliver.
Since November 2020, Uis continues to grow total monthly
production which has exceeded the planned production of 60 tonnes
of tin concentrate per month.
Having achieved the tin production goals of the Uis Phase 1
pilot plant, the senior management team, led by Anthony Viljoen, is
now focussed on a number of key initiatives:
-- The expansion of Phase 1 to increase production to 120 tonnes of concentrate per month;
-- Exploration work to potentially increase Mineral Resources and Mineral Reserves;
-- Fast tracking test work to assess the potential of unlocking
two additional by-product revenue streams, namely lithium and
tantalum.
These are exciting developments for AfriTin, and we look forward
to seeing the results of the test work and providing further
updates.
The safety of all our staff remains a priority for the Company.
We continue to implement the strictest measures to combat the
pandemic and protect our employees, while also supporting the
communities in which they live.
The Company continues to successfully transition from developer
to producer, which can only be achieved through the focus and
dedication of our team, management, my fellow directors, and of
course, our shareholders, all of whom I thank.
We have built an excellent platform to continue our growth
story, and I look forward to our future.
GLEN PARSONS
Chairman
21 July 2021
CHIEF EXECUTIVE OFFICER'S STATEMENT
The year under review has been transformative for AfriTin
Mining, especially at our flagship Uis Tin Mine in Namibia. These
achievements are even more impressive given the immense challenges
that everyone has faced as a result of the global COVID-19
pandemic.
After navigating these difficult circumstances, the financial
year culminated in the Company announcing the first material
revenue numbers from the mine of GBP5m. Total production for the
year amounted to 473t of tin concentrate (311.7t of contained tin
metal). This is a monumental first step and we believe it's just a
precursor of what is to ensue as the plant cost base becomes more
efficient and the expansion plans are implemented. The post balance
sheet date equity raise also allowed for the extinguishing of all
the loan note obligations, providing a robust balance sheet for the
next growth phase of the Company. We are incredibly proud of our
team for efficiently accomplishing this ramp-up in production,
while maintaining an exemplary safety
record. This basis from which AfriTin will grow underpins our ambition of becoming a significant multi-commodity tech metals producer out of Africa.
The historical mining heritage of the Erongo province resided
primarily in its tin production with no meaningful uses for lithium
and tantalum. Forty years on since the mine closure, tin has become
a new technology metal and the demand for lithium and tantalum has
transformed the economics of the historical operation. We believe
this province will become a globally significant metallogenic
province for new technology metals, allowing for increased revenues
and economies of scale within AfriTin's licence areas.
Despite challenges resulting in project delays, AfriTin's
production has come on stream at a time when tin prices have
reached highs that have not been seen in the last decade. This is
mainly due to an increase in demand from new technologies,
especially electric vehicles and semi-conductors, at a time when
there have been supply issues that are likely to persist after
decades of underspending on exploration and mine development. The
lithium market has matched this buoyancy and AfriTin is well placed
to take advantage of this growth phase. The Uis JORC (2012)
resource of 95,539t of tin, 6,091t of tantalum and 450,265t of
lithium oxide establishes a globally significant resource from the
currently exploited V1 and V2 pegmatites.
We are now planning to grow the Company's revenue streams by
expanding the throughput of the pilot plant and introducing
tantalum and lithium by-product revenue streams. The metallurgical
test work to develop the process design has been a key priority to
unlocking the significant potential of AfriTin.
In December 2020, it was a pleasure to confirm that the
Company's existing offtake partner, Thaisarco, renewed and extended
its tin concentrate offtake agreement for three years. This deal
further cements the Company's future and allows us to supply what
has become a highly demanded product. We were also delighted to
conclude a maiden tantalum concentrate offtake agreement with
AfriMet Resources AG, demonstrating the commercial viability of
AfriTin's plans. We believe these deals are substantive votes of
confidence in AfriTin, its strategy, and its vision, from two
leaders in the global and African metal markets.
In an attempt to direct all of the Company's attention to the
investment-friendly jurisdiction of Namibia, and to unlocking the
metallogenic jewel that is the Erongo region, a decision was made
to relinquish and impair the Company's South African asset base.
Namibia continues to be an incredibly gracious host country within
which to conduct business. An overarching theme in all decisions
and corporate strategy is the safety, health and wellbeing of all
our employees and the people in the surrounding communities where
we operate. We remain sensitive to the environment and its people
and are committed to mitigating the impact of our operations. This
philosophy will continue to be built into our corporate DNA as we
strive to become the new technology metals champion of Africa.
Post period activities
Subsequent to the period under review, we reached two further
significant milestones: publication of the Definitive Feasibility
Study for Phase 1 ('DFS') and declaration of a JORC (2012) Ore
Reserve estimate over the V1 and V2 pegmatites. The robust
economics of the DFS provide us with an opportunity to increase the
revenue and profit margin of the current operation, while
importantly de-risking the expansion of the project into the much
larger Phase 2 operation.
In addition to the above, on 12 May 2021 the Company announced
the placing of 216 666 667 ordinary shares to raise GBP13m (before
expenses). This puts the Company into a position to expedite the
Phase 1 expansion of our flagship Uis Tin Mine and develop the
inherent value of our Namibian licence portfolio through the
unlocking of its metallurgy and exploration potential. This
includes further test work on the lithium and tantalum by-product
potential.
I would like to congratulate and thank our management teams,
staff, and stakeholders for their outstanding efforts and continued
support in what has been a challenging time globally. In addition
to this, I would like to thank the Board of Directors for their
guidance and advice over the past year. We are committed to
expanding and developing Uis and our other Namibian exploration
assets as we look to become a significant African multi-commodity
tech metals producer. I look forward to updating the market on our
progress.
This report was approved by the Board of Directors on 21 July
2021
ANTHONY VILJOEN
Chief Executive Officer
21 July 2021
FINANCIAL REVIEW
I am pleased to report the Company's first notable annual
revenue of GBP5m from the sale of tin concentrate. This was
achieved by ramping up the Uis operation to commercial production
from March through to November 2020 producing 473t of tin
concentrate during the financial year (311.7t of contained tin
metal).
With our flagship asset, the Uis Tin Mine, transitioning from a
developing to a producing operation, administrative expenses across
the Group increased to GBP2.540m for the year (in comparison to
GBP1.815m incurred in the previous financial year, ending 29
February 2020 ("2020")). Furthermore, the increase is as a result
of an increase in salaries and head count given the growth phase of
the business and a discretionary bonus awarded to senior management
in January 2021 settled through the issue of shares.
A decision was made to relinquish and impair the Company's South
African exploration asset base resulting in an impairment charge of
GBP3.069m during the financial year under review.
The increase in finance cost for the year to GBP0.184m (2020:
GBP0.041m) is mainly due to interest on Nedbank facilities no
longer being capitalised to the mining asset subsequent to the
achievement of commercial production at Uis on 1 December 2020.
The Group's loss for the year totalled GBP5.796m (2020:
GBP1.830m). This loss includes an impairment charge of GBP3.069m,
as detailed above.
A basic loss per share from operations of 0.76 pence was
recorded (2020: 0.29 pence loss per share).
Expenditure amounting to GBP0.978m (2020: GBP0.522m) was
capitalised to the intangible exploration and evaluation asset.
This included costs relating to the Definitive Feasibility Study
for the expansion of the Phase 1 mining and processing facility
which was finalised and announced in May 2021, costs relating to
the conversion of the JORC (2012) Mineral Resource estimate into an
initial JORC (2012) Proved and Probable Ore Reserve estimate, as
well as costs relating to additional exploration and evaluation
work.
Capital expenditure relating to the mining asset under
construction amounted to GBP2.028m during FY2021 (2020: GBP7.370m).
Included in this amount is GBP0.418m relating to capitalised ramp
up costs at the Uis operation and GBP0.842m relating to upgrades to
improve plant availability, utilisation and recoveries. The
remainder of the capitalised expenditure related to project team
salary and travel costs and finance costs capitalised to the mining
asset under construction. Upon reaching commercial production, the
mining asset under construction of GBP13.550m was transferred to
the mining asset. Mining asset additions totalled GBP0.124m and
depreciation of the mining asset amounted to GBP0.718m.
As at 28 February 2021, the Group had cash in the bank amounting
to GBP1.351m (2020: GBP0.575m) with the primary movements
reflecting cash used in operations totalling GBP1.501m (mainly the
result of operating costs incurred and changes in working capital),
investing cash outflows of GBP2.955m (mainly due to the capital
expenditure detailed above), and GBP5.160m of financing cash
inflows.
The Nedbank working capital facility was successfully renewed
and increased to N$43m (c. GBP2.038m) in July 2020. Furthermore,
Nedbank continued to provide a bank guarantee letter in favour of
Namibia Power Corporation Pty Limited for an amount of N$4.118m (c.
GBP0.195m) in relation to a deposit for the supply of electrical
power to the Uis operations. At 28 February 2021, N$36m (c.
GBP1.7m) had been drawn down on this facility. The facility is due
for annual review in July 2021, and discussions are currently
underway with the lender to secure the rollover of the facility.
The remaining significant financing cash inflows relate to GBP2.05m
raised through loan notes in May 2020 and an equity raise in August
2020 as detailed below. The loan notes matured and were settled
post year-end in May 2021.
The inventory balance increased to GBP0.997m (2020: GBP0.247m)
as a result of the operations at the Uis Tin Mine reaching
commercial production, and GBP0.373m (2020: GBP0.185m) of tin
concentrate (36 tonnes) being on hand and ready for shipment at
year-end (these have subsequently been shipped).
Trade receivables increased to GBP0.717m at year end (2020:
GBP0.043m). Contributing to the increase was an increase in
shipments in transit as a result of the higher production rates
achieved during the last quarter of the financial year, as well as
a fair value adjustment that was passed to reprice the shipments in
transit in accordance with the requirements of IFRS. All trade
receivables relating to the sale of tin concentrate at year end
have been subsequently settled by our valued offtake partner,
Thailand Smelting and Refining Company (Thaisarco).
The movement in the share capital balance for the financial year
under review is accounted for by net proceeds from an equity raise
in August 2020 of GBP2.797m, the conversion of GBP1.6m of the
convertible loan notes held by AfriMet Resources AG, and the issue
of shares to employees, directors and suppliers of GBP0.724m.
Share-based payment charges relating to the share option scheme
amounting to GBP0.175m (2020: GBP0.365m), as well as a charge of
GBP0.107m (2020: GBP0.038m) relating to shares to be issued to
directors, employees and suppliers in lieu of salaries/fees, were
recognised in the share-based payment reserve during the financial
year.
Trade and other payables increased to GBP1.484m (2020:
GBP0.895m) as a result of Uis becoming a fully-fledged operation
running at commercial production levels at year-end.
FUNDING
Subsequent to year-end, on 12 May 2021, an equity placing raised
GBP13m gross proceeds.
Furthermore, the remaining 2019 convertible loan notes and the
2020 loan notes were settled on 25 May 2021. The outstanding
convertible loan notes were partially settled through conversion
into ordinary shares and the remainder settled in cash. The
outstanding loan notes were all settled in cash.
Management and the Board of Directors have considered cash flow
forecasts and stress testing of the cash flow forecasts contained
herein and have concluded that the Company will be able to continue
in operation for the foreseeable future as a going concern and will
be able to realise its assets and discharge its liabilities in the
normal course of operations. Please refer to Note 2 for further
details.
ROBERT SEWELL
Chief Financial Officer
21 July 2021
DIRECTORS' REPORT
The Directors of AfriTin hereby present their report together
with the consolidated financial statements for the year from 1
March 2020 to 28 February 2021.
Principal Activities, Business Review and Future
Developments
The principal activity of the Group (AfriTin and its
subsidiaries) is mineral exploration and the development of mining
and exploration projects in Namibia. 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 commodities and 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 risk and individual project risk. 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.
Risk and Impact Mitigation
COVID-19 COVID-19 resulted in widespread The countries in which
socio-economic disruption the Group operates have
around the world. The countries all instituted measures
where the Group operates, to limit the spread of
namely Namibia, South Africa COVID-19. The Group is
and the United Kingdom continue following the World Health
to be subject to varying levels Organisation (WHO) guidelines
of lockdown restrictions to and is complying with the
contain the spread of the regulations of Namibia,
disease. Despite lockdowns, South Africa and the United
the Group's operation in Namibia Kingdom related to COVID-19.
remained open during the course In addition, the Group
of the reporting period (albeit has updated its health
with a temporary suspension and safety policies and
on mining in April 2020) due procedures to align with
to an exemption granted to the above guidelines and
the mining industry but did to translate these guidelines
suffer supply-chain disruptions into workplace-specific
which delayed production ramp-up. measures.
The Group's operations are
continuing with minimal disruption The Group has adopted technological
now that the global lockdown tools, such as online video
measures have eased. However, conferencing and project
there continues to be a risk and team management software,
that lockdown measures return to enable office-bound
in the event of further COVID-19 staff to work remotely.
outbreaks, which may result
in interruptions to operations
through supply chain disruption,
illness amongst our workforce
and related personnel, together
with potential volatility
in tin, tantalum and lithium
prices.
In addition to the above,
COVID-19 restrictions have
resulted in shipping disruptions
and congestion at container
shipping ports. Despite this,
the shipping of tin concentrate
to Thaisarco has continued.
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Volatility Tin, tantalum and lithium The Board and management
of metal prices prices are subject to high constantly monitor the
levels of volatility and are markets in which the Group
impacted by numerous factors operates. Long-term financial
that are outside of the control planning is undertaken
of the Group. A low tin, tantalum on a regular basis.
or lithium price as well as
commodity demand could affect
the financial performance
of the Group and this may
affect the ability of the
Group to fund future growth.
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Foreign exchange With AfriTin's operations The Group 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 equity funding held in a particular currency
based in Pound Sterling, the to the currency in which
volatility and movement in liabilities are incurred.
the Rand/Namibian Dollar exchange
rate could be a significant
risk factor to the Group.
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Development Development projects have The Group has appointed
projects no operating history upon an experienced team of
which to base estimates of geoscientists and engineers,
future cash operating costs. complemented by experienced
For development projects, consultants in specialist
estimates of proven and probable areas. Any new capital
reserves and cash operating projects are supported
costs are, to a large extent, by feasibility studies.
based on the interpretation The Uis Phase 1 pilot plant
of geological data obtained will assist in understanding
from drillholes and other the metallurgy and processing
sampling techniques and feasibility elements of the project
studies which derive estimates which will provide essential
of cash operating costs based up-front information for
upon anticipated tonnage and the implementation of Phase
grades of ore to be mined 2.
and processed, as well as
the con guration of the orebody,
expected throughput and recovery
rates, comparable facility
and equipment operating costs
and other factors.
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Exploration The business of mineral exploration Exploration projects are
and mining involves a high degree of carefully managed with
risks risk. Whilst the discovery regular review by the Board
of a mineral deposit may result of progress against targets
in substantial rewards, few and expenditure. Funds
properties at the exploration are only expended in areas
stage are ultimately developed deemed prospective.
into producing mines.
The Group adheres strictly
The operations of the Group to a health and safety
may be disrupted by a variety programme. When constructing
of risks and hazards which a mine site, external geotechnical,
are beyond the control of environmental and geo-hydrological
the Group, including geological, consultants are used to
geotechnical and seismic factors, ensure all potential risks
environmental hazards, industrial of this nature are understood
accidents, occupational and and mitigation plans are
health hazards, technical put in place.
failures, labour disputes,
unexpected rock properties,
explosions, ooding, and extended
interruptions due to inclement
or hazardous weather conditions
and other acts of God.
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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 host communities
hazards to both the environment and workers, remains our
and community health and safety. 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
minimise the social and
environmental impacts of
our activities. The Board
oversees the Group's environmental,
safety and health, and
corporate social responsibility
programmes, policies and
performance and is in the
process of setting up an
ESG board sub-committee
to focus on these matters.
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Capital budget Whilst best estimates are Capital expenditure and
overruns used in preparing capital project execution are subject
project budgets, these budgets to pre-defined governance
are dependent on a number and approval procedures,
of external factors which which include feasibility
are beyond the control of studies prior to implementation.
the Group, resulting in a Management and the Board
risk of material overruns regularly review project
versus budget. progress and related expenditure
on projects. This includes
reviewing actual costs
against budgeted costs,
updating working capital
models, and assessing potential
impacts on future cash
flow.
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Power and water Power sources and water supply The Group 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 to the mining and processing
uninterrupted supply, would facility at 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 demonstrated
the viability of using
groundwater sources for
the Phase 1 pilot plant.
This was confirmed with
the implementation and
successful operation of
a water supply network.
Solutions for Phase 2 in
terms of both electrical
power and water supply
are in the process of being
reviewed.
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Country and AfriTin's operations are predominantly The AfriTin team is experienced
political risk based in Namibia. Emerging-market at operating in Africa.
economies are generally subject AfriTin routinely monitors
to greater risks including political and regulatory
legal, regulatory, tax, economic developments in Namibia
and political risks, which at both regional and local
are potentially subject to level.
rapid change.
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Key personnel The success and operational The Group has built a team
risk performance of the Group is of executives, scientists,
dependent on the skills, expertise engineers and support personnel
and knowledge of management who are experienced and
and qualified personnel. Group versatile enough to address
profitability could be impacted shortcomings that may arise
in the event that key personnel from the loss of employees.
leave the business. In addition, the Group
has developed long-standing
relationships with consulting
firms in key specialist
areas. Remuneration arrangements,
given the stage of the
Group's development, are
intended to be sufficiently
competitive to attract,
retain and motivate high-quality
staff capable of achieving
the Group's objectives,
thereby enhancing shareholder
value.
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Financing The successful extraction The Group has sufficient
of tin, tantalum and eventually funds to continue as a
lithium will require signi going concern and has a
cant capital investment. The supportive shareholder
Group's ability to raise further base, as well as significant
funds will depend on the success future investor interest,
of existing operations. Market to engage with for future
conditions may not be conducive funding rounds. The Group
to financing. The Group may monitors cash flows on
not be successful in procuring a monthly basis.
the requisite funds.
--------------------------------------- --------------------------------------
Climate change Climate change and regulatory AfriTin is working towards
actions to reduce its impact implementing the recommendations
may affect our suppliers, of the Task Force on Climate-Related
customers and business model, Financial Disclosures.
and hence affect AfriTin's Current risk mitigation
growth and profitability. around climate change involves
This impact could be amplified assessing exposure across
by the perception that the a wide range of outcomes,
Company is undertaking activities monitoring government action
that are harmful to the environment. around climate change and
constantly striving to
reduce the environmental
impact of our operations.
The Board oversees the
Group's environmental,
safety and health, and
corporate social responsibility
programmes, policies and
performance and is in the
process of setting up an
ESG board sub-committee
to focus on these matters.
--------------------------------------- --------------------------------------
Results and Dividend
The Group's results show a loss for the year of GBP5 795 883.
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 20. 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 and to date
are as follows:
Anthony Viljoen Chief Executive Officer
Glen Parsons Chairman/Independent Non-Executive Director
Laurence Robb Independent Non-Executive Director
Roger Williams Independent Non-Executive Director
(resigned 29 September 2020)
Terence Goodlace Independent Non-Executive Director
Directors' Interests
The Directors' beneficial interests in the shares of the Company
at 28 February 2021 were:
Ordinary
shares of
no par value Share options
Anthony Viljoen 11 296 690 10 600 000
-------------- --------------
Glen Parsons 4 307 486 4 500 000
-------------- --------------
Laurence Robb 1 300 815 4 000 000
-------------- --------------
Terence Goodlace - 4 000 000
-------------- --------------
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 the 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.
Related-party Transactions
Details of related-party transactions are given in Note 26 of
the consolidated financial statements.
Events after Balance Sheet Date
Events after balance sheet date are detailed in Note 25 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 Directors will place a resolution before the Annual General
Meeting to reappoint BDO LLP as the Group's auditor for the ensuing
year.
Electronic Communications
The maintenance and integrity of the Group's website is the
responsibility of corporate management and 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
ANTHONY VILJOEN
Chief Executive Officer
21 July 2021
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
gender, 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 a pure tin company listed in
strategy and business London and its vision is to create a portfolio
model that promotes 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 10 000 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-up production by consolidating
tin assets in Africa.
Sustainable development principles are integrated
into corporate strategies and decision-making
processes by the Board of Directors and management
team. The Company endeavours to ensure that
responsible health and safety, environmental,
human rights and labour practices and policies
are adopted by suppliers and contractors.
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.
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2. Seek to understand The Board is committed to maintaining good communication
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 'Investors'
section of the Company's website.
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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 stakeholders and members
and their implications as a whole. This success is largely reliant
for long-term on its relations with its stakeholders, both
success. internal (employees 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 is essential to ensuring long-term
sustainability for all parties involved. The
Company continually implements inclusive and
supportive approaches with local communities,
to contribute to their economic and social well-being.
The Company endeavours to systematically examine
the environmental impact of any of our operations
and will adopt measures to mitigate this challenge.
The goal is to minimise the negative impacts
on the environment of the different processes
related to the extraction of tin. At our operational
project area, Uis, the non-chemical nature of
ore beneficiation, combined with an ore that
is largely free of deleterious elements, contributes
to a reduced level of environmental risk. Nonetheless,
the Company ensures compliance with its operational
environmental management plan through continuous
monitoring of dust, water and waste management.
The Company maintains a regular dialogue with
key suppliers.
Managing human capital equitably and sustainably
is central to the Company's project development
strategy. The Company promotes an inclusive
work environment through its recruitment policies,
management and remuneration policies and development
initiatives. Within the 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 gives them a stake in
the Company's long-term success.
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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 auditor on the state of the Company's
internal controls, and reports their findings
to the Board.
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5. Maintain the The Board is made up of a Chairman, two Non-Executive
Board as a well-functioning, 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 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 and Laurence Robb)
are considered to be independent of management
and free to exercise independent judgement.
It is acknowledged that the Non-Executive Directors
do have share options. However, the quantum
of these share options is not material and is
too low to affect independence.
The Board meets at least every three months
or at any other time deemed necessary for the
good management of the business. Every Director
has attended all Board meetings whilst being
a Director of the Company.
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6. Ensure that Directors who have been appointed to the Company
between them the have been chosen because of the skills, knowledge
Directors have and experience they offer considering the stage
the necessary of the Company and the strategy that it is pursuing.
up-to-date experience,
skills and capabilities. The composition of the Board as well as biographical
details of Board members can be found on 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.
As part of the induction programme conducted
by the Company's nominated adviser, Directors
are briefed on regulations that are relevant
to their role as directors of an AIM-quoted
company.
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.
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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 Board Members have the necessary skills,
continuous improvement. experience and abilities to fulfil their 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 for 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.
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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 irrespective
of gender, race, colour or creed.
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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, a number
of specific matters are 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;
* corporate strategy;
* projects of a capital nature; and
* major 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 is 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 roles of the Audit Committee and the Remuneration
Committee are 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.
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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 'Investors' section on the Company's website
shareholders and provides all required regulatory information
other relevant as well as additional information shareholders
stakeholders. may find helpful, including:
* information on Board members, advisers 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
for or against resolutions.
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The Board of Directors
The Board currently comprises:
Independent Non-Executive Chairman
-- Glen Parsons (appointed 23 October 2017)
Independent Non-Executive Directors
-- Laurence Robb (appointed 23 October 2017)
-- Terence Goodlace (appointed 23 May 2018)
Executive Director- Chief Executive Officer
-- Anthony Viljoen (appointed 23 October 2017)
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 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.
All press releases, including 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: Glen Parsons (Chairman) and
Terence Goodlace. 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 requirements, and legal requirements;
-- receiving and considering reports on internal financial
controls, including reports from the auditor, and reporting auditor
findings to the Board;
-- considering the appointment of the auditor and their
remuneration, including reviewing and monitoring their independence
and objectivity;
-- meeting with the auditor to discuss the scope of the audit,
issues arising from their work and any matters they 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 three times during the year to consider
the following agenda items:
August 2020:
-- External audit report
-- Critical accounting estimates
-- Going concern assessment
-- Approval of the Annual Report for the period ended February 2020
September 2020:
-- Approval of the half-year results and report to 31 August 2020
-- Going concern assessment
February 2021:
-- Auditor independence
-- External audit plan for the year ended February 2021
The Remuneration Committee
The Remuneration Committee meets at least once a year and is
composed exclusively of Non-Executive Directors: Glen Parsons
(Chairman) and Terence Goodlace.
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 and the performance of the Group.
The Remuneration Committee met formally once during the year to
consider the following agenda items:
December 2020:
-- Repricing of share options
-- Awarding discretionary bonuses to the executive team settled through the issue of shares
-- Consideration of salary increases
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 is
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 and management 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 2021
Year ended Year ended
28 February 29 February
2021 2020
Notes GBP GBP
Continuing operations
Revenue 5 4 985 107 69 032
Cost of Sales (4 987 696) (47 336)
----------------------- -----------------------
Gross (loss)/profit (2 589) 21 696
Impairment of exploration licences 11 (3 069 232) -
Other administrative expenses 6 (2 539 762) (1 815 227)
----------------------- -----------------------
Total administrative expenses (5 608 994) (1 815 227)
Operating loss (5 611 583) (1 793 531)
Finance income - 3 793
Finance cost 8 (184 300) (40 719)
----------------------- -----------------------
Loss before tax (5 795 883) (1 830 457)
Income tax expense 9 - -
----------------------- -----------------------
Loss for the year (5 795 883) (1 830 457)
======================= =======================
Other comprehensive income/(loss)
Items that will or may be reclassified
to profit or loss:
Exchange differences on translation
of share-based payment reserve (531) (1 039)
Exchange differences on translation
of foreign operations (526 231) (1 113 281)
Exchange differences on non-controlling
interest 1 390 4 167
Total comprehensive loss for the
year (6 321 255) (2 940 610)
======================= =======================
Loss for the year attributable to:
Owners of the parent (5 694 962) (1 781 962)
Non-controlling interests (100 921) (48 495)
(5 795 883) (1 830 457)
======================= =======================
Total comprehensive loss for the
year attributable to:
Owners of the parent (6 221 724) (2 896 282)
Non-controlling interests (99 531) (44 328)
(6 321 255) (2 940 610)
======================= =======================
Loss per ordinary share
Basic and diluted loss per share
(in pence) 10 (0.76) (0.29)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 28 February 2021
28 February 29 February
2021 2020
Notes GBP GBP
Assets
Non-current assets
Intangible assets 11 5 240 461 7 441 018
Property, plant and equipment 12 13 634 701 12 467 868
----------------------- --------------------
Total non-current assets 18 875 162 19 908 886
======================= ====================
Current assets
Inventories 13 996 698 246 910
Trade and other receivables 14 1 188 152 648 722
Cash and cash equivalents 15 1 351 200 574 600
----------------------- --------------------
Total current assets 3 536 050 1 470 232
======================= ====================
Total assets 22 411 212 21 379 118
======================= ====================
Equity and liabilities
Equity
Share capital 20 25 608 001 20 487 239
Convertible loan note reserve 27 2 170 645 3 770 645
Accumulated deficit (10 030 679) (4 365 500)
Warrant reserve 21 211 348 78 651
Share-based payment reserve 22 743 615 559 534
Foreign currency translation reserve (2 061 339) (1 535 108)
Equity attributable to the owners
of the parent 16 641 591 18 995 461
----------------------- --------------------
Non-controlling interests 23 (151 344) (51 812)
----------------------- --------------------
Total equity 16 490 247 18 943 649
======================= ====================
Non-current liabilities
Environmental rehabilitation liability 18 180 917 86 005
Lease liability 19 260 512 181 544
Total non-current liabilities 441 429 267 549
======================= ====================
Current liabilities
Trade and other payables 17 1 484 482 894 830
Borrowings 16 3 869 489 1 230 961
Lease liability 19 125 565 42 129
----------------------- --------------------
Total current liabilities 5 479 536 2 167 920
======================= ====================
Total equity and liabilities 22 411 212 21 379 118
======================= ====================
The notes that follow 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 21 July
2021
ANTHONY VILJOEN
Chief Executive Officer
21 July 2021
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 28 February 2021
Foreign
Convertible Share-based currency
Share loan note Accumulated Warrant payment translation Non-controlling Total
capital reserve deficit reserve reserve reserve Total interests equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Total equity at 28
February
2019 17 337 718 - (2 583 538) 78 651 220 729 (421 827) 14 631 733 (7 484) 14 624 249
Loss for the year - - (1 781 962) - - - (1 781 962) (48 495) (1 830 457)
Other
comprehensive
income/(loss) - - - - (1 039) (1 113 281) (1 114 320) 4 167 (1 110 153)
Total
comprehensive
income/(loss) - - (1 781 962) - (1 039) (1 113 281) (2 896 282) (44 328) (2 940 610)
Transactions with
owners:
Share-based
payments in
the year - - - - 403 562 - 403 562 - 403 562
Issue of shares 3 261 208 - - - (63 718) - 3 197 490 - 3 197 490
Share issue costs (111 687) - - - - - (111 687) - (111 687)
Issue of
convertible loan
notes - 3 800 000 - - - - 3 800 000 - 3 800 000
Convertible loan
note issue
costs - (29 355) - - - - (29 355) - (29 355)
---------- ----------- ----------- -------- ----------- ----------- ----------- --------------- -----------
Total equity at 29
February 18 995 18 943
2020 20 487 239 3 770 645 (4 365 500) 78 651 559 534 (1 535 108) 461 (51 812) 649
Loss for the year - - (5 694 962) - - - (5 694 962) (100 921) (5 795 883)
Other
comprehensive
income/(loss) - - - - (531) (526 231) (526 762) 1 390 (525 372)
Total
comprehensive
income/(loss) - - (5 694 962) - (531) (526 231) (6 221 724) (99 531) (6 321 255)
Transactions with
owners:
Share-based
payments in
the year
(includes amounts
due to staff and
suppliers) - - - - 281 431 - 281 431 - 281 431
Issue of shares 3 774 079 - - - (96 819) - 3 677 260 - 3 677 260
Share issue costs (253 317) - - - - - (253 317) - (253 317)
Conversion of
convertible
loan notes 1 600 000 (1 600 000) - - - - - - -
Warrants issued in
the year - - - 162 480 - - 162 480 - 162 480
Warrants expired
in the
year - - 29 783 (29 783) - - - - -
Total equity at 28
February (10 030 16 641 16 490
2021 25 608 001 2 170 645 679) 211 348 743 615 (2 061 339) 591 (151 344) 247
========== =========== =========== ======== =========== =========== =========== =============== ===========
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 28 February 2021
Year ended Year ended
28 February 29 February
2021 2020
Notes GBP GBP
Cash flows from operating activities
Loss before taxation (5 795 883) (1 830 457)
Adjustments for:
Fair value adjustment to customer
contract 5 (205 635) -
Depreciation of property, plant and
equipment 12 898 528 128 130
Impairment of exploration licences 11 3 069 232 -
Share-based payments 22 217 407 184 888
Equity-settled transactions 618 260 109 190
Finance income - (3 793)
Finance costs 8 184 300 40 719
Changes in working capital:
Increase in receivables 14 (352 953) (220 634)
Increase in inventory 13 (753 688) (241 546)
Increase in payables 17 619 573 578 828
-------------------- --------------------
Net cash used in operating activities (1 500 858) (1 254 675)
-------------------- --------------------
Cash flows from investing activities
Finance income - 3 793
Purchase of intangible assets 11 (964 191) (596 291)
Purchase of property, plant and equipment
(including capitalised cash interest
of GBP179 194 (2020: GBP55 235)) 12 (1 990 856) (7 159 313)
-------------------- --------------------
Net cash used in investing activities (2 955 047) (7 751 811)
-------------------- --------------------
Cash flows from financing activities
Finance costs 8 (37 612) (562)
Lease payments 19 (128 600) (68 015)
Net proceeds from issue of shares 20 2 796 683 2 876 705
Net proceeds from issue of convertible
loan notes - 3 770 645
Proceeds from borrowings 16 7 908 028 4 840 989
Repayment of borrowings 16 (5 378 742) (3 610 028)
-------------------- --------------------
Net cash generated from financing
activities 5 159 757 7 809 734
-------------------- --------------------
Net increase/(decrease) in cash and
cash equivalents 703 852 (1 196 752)
Cash and cash equivalents at the beginning
of the year 574 600 1 781 335
Foreign exchange differences 72 748 (9 983)
-------------------- --------------------
Cash and cash equivalents at the end
of the year 15 1 351 200 574 600
==================== ====================
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 28 February 2021
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 PO Box 282, Oak House, Hirzel Street, St Peter Port,
Guernsey GY1 3RH and operates from Illovo Edge Office Park, 2nd
Floor, Building 3, Corner Harries and Fricker Road, Illovo,
Johannesburg, 2116, South Africa.
These financial statements are for the year ended 28 February
2021 and the comparative figures are for the year ended 29 February
2020. The financial statements for the year ended 28 February 2021
and comparative figures set out in this announcement do not
constitute the Company's statutory annual report and financial
statements but are extracted from the audited financial statements
for those years. The 29 February 2020 accounts have been delivered
to the Registrar of Companies. The statutory financial statements
for 2021 will be delivered to the Registrar of Companies in due
course.
The auditors have reported on the financial statements for the
year ended 28 February 2021 and their report was unqualified.
The AfriTin Group comprises AfriTin Mining Limited and its
subsidiaries as noted below.
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"), 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 Mining
Company Pty Limited ("UTMC"). The minority shareholder in UTMC 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%.
AML holds 100% of Tantalum Investment Pty Limited, a company
containing Namibian exploration licenses EPL5445 and EPL5670 for
the exploration of tin, tantalum and associated minerals.
As at 28 February 2021, the AfriTin Group comprised:
Equity holding
and voting Country of
Company rights incorporation Nature of activities
AfriTin Mining Limited N/A Guernsey Ultimate holding
company
-------------- -------------- --------------------------
Greenhills Resources Limited(1) 100% Guernsey Holding company
-------------- -------------- --------------------------
AfriTin Mining Pty Limited(1) 100% South Africa Group support services
-------------- -------------- --------------------------
Tantalum Investment Pty 100% Namibia
Limited(1) Tin & tantalum exploration
-------------- -------------- --------------------------
AfriTin Mining (Namibia) 100% Namibia
Pty Limited(2) Tin & tantalum operations
-------------- -------------- --------------------------
Uis Tin Mining Company 85% Namibia
Pty Limited(3) Tin & tantalum operations
-------------- -------------- --------------------------
Mokopane Tin Company Pty 100% South Africa
Limited(2) Holding company
-------------- -------------- --------------------------
Renetype Pty Limited(4) 74% South Africa Tin & tantalum exploration
-------------- -------------- --------------------------
Jaxson 641 Pty Limited(4) 50% South Africa Tin & tantalum exploration
-------------- -------------- --------------------------
Pamish Investments 71 Pty 100% South Africa
Limited(2) Holding company
-------------- -------------- --------------------------
Zaaiplaats Mining Pty Limited(5) 74% South Africa Property owning
-------------- -------------- --------------------------
(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.
The Group's key subsidiaries, AfriTin Namibia and UTMC, use the
Namibian Dollar (N$) as their functional currency. The year-end
spot rate used to translate all Nambian Dollar balances was GBP1 =
N$21.10 and the average rate for the financial year was GBP1 =
N$21.31.
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 2020. 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 the basis of
accounting principles applicable to a going concern which assumes
the company will be able to continue in operation for the
foreseeable future and will be able to realize its assets and
discharge its liabilities in the normal course of operations.
At year end, the company had cash in the bank of GBP1.4m and had
drawn down GBP1.7m of the GBP2m Nedbank working capital
facility.
Subsequent to year end, an equity placement in May 2021 raised
gross proceeds of GBP13m.
Furthermore, both long term liabilities and associated interest,
namely the remaining 2019 convertible loan notes and the 2020 loan
notes were settled on 25 May 2021. The outstanding convertible loan
notes were partially settled through conversion into ordinary
shares and partially settled in cash. The outstanding loan notes
were all settled in cash.
Management have prepared a detailed cash flow forecast for the
period to 31 July 2022 and stress tests of those forecasts. The
forecast excludes the Group's GBP2.038m working capital and VAT
facility that is currently due for renewal. The Directors fully
anticipate renewal of the facility based on current discussions
with the lender, the security in place and the history if renewals.
The base case forecast demonstrates that the Group will have
sufficient funds to meet its liabilities as they fall due and
includes the following key assumptions:
-- Prices have been set at $28,100 per tonne of tin and $150,000 per tonne of tantalum.
-- The base case forecast assumes continuing steady state
production for the current mining and processing facility.
-- The base case forecast includes the procurement of long-lead
items relating to the Phase 1 expansion but does not include the
full capital expenditure required for the Phase 1 expansion, which
remains discretionary, as management intends to finance this
requirement with debt financing.
In addition, the Board have considered the risks and
uncertainties associated with COVID-19 on the Group's operations
including the potential impact of production stoppages as a result
of potential outbreaks of the virus at the operation as well as
downside scenarios in relation to commodity pricing and production
across the period. The scenarios demonstrated that the Group will
be able to maintain liquidity without use of its working capital
facilities through management of its expansionary capital project
expenditure.
Accordingly, the Directors have concluded that the going concern
basis in the preparation of the financial statements is appropriate
and that there are no material uncertainties that would cast doubt
on that basis of preparation.
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 value 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 dates of the
transactions 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.
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
IFRS 15 "Revenue from Contracts with Customers" establishes a
comprehensive framework for determining whether, how much and when
revenue is recognised. 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. The Group generates revenue
from its primary activity, the sale of tin concentrate, and it
continued to generate immaterial revenue from the sale of sand.
The Group produces and sells tin concentrate from its Uis tin
mine in Namibia. Once concentrate has been produced at the Uis
plant, it is sampled, bagged and loaded into containers for
transportation to the port in Walvis Bay for shipment.
The company currently has an off-take agreement with its
customer, Thailand Smelting and Refining Co. ("Thaisarco"), which
was signed on 1 August 2019. This contract was renewed on 1
December 2020 for a further 3 years. As per the contract, Thaisarco
pays AfriTin on the basis of actual tin content in the concentrate
per Thaisarco's analysis at the London Metal Exchange price less
treatment charges, unit deductions and impurity charges;
The Group can elect for the sale of each shipment to occur under
the following terms:
Option 1: Standard provisional payment
Thaisarco shall pay 90% provisional payment on the basis of
actual tin content as per their own analysis. Payment is to be made
within 10 working days after the arrival of concentrate at
Thaisarco's works. Title shall pass to Thaisarco when the
concentrate arrives at the Songkhla Port in Thailand.
Option 2: Provisional payment option against original bill of
lading
Thaisarco shall pay 90% provisional payment on the basis of
provisional tin content per UTMC's analysis. The provisional
payment shall be done against presentation of a provisional invoice
and an original bill of lading. Title shall pass to Thaisarco when
UTMC receives the 90% provisional payment.
Option 3: Provisional payment option against warehouse holding
certificate
Thaisarco shall pay 70% provisional payment on the basis of
provisional tin content per UTMC's analysis. The provisional
payment shall be done against presentation of provisional invoice
and original warehouse holding certificate. Thaisarco shall pay an
additional 20% provisional payment upon presentation of the
original bill of lading. Title shall pass to Thaisarco when the
UTMC receives the 70% provisional payment.
During the year, the Group concluded sales under either Option 2
or Option 3.
Revenue is recognised at a point in time when title and control
of the goods has transferred to the customer, which is when the
concentrate arrives at the Songkhla Port in Thailand under Option 1
or when provisional payment is received by UTMC under Option 2 and
Option 3. There is limited judgement needed to identify the point
at which control passes: once physical delivery of the products to
the agreed location has occurred, the Group no longer has physical
possession of the products. At this point, the Group will have a
present right to payment and retains none of the significant risks
and rewards of the goods in question.
Pricing for the provisional payment is determined by the
published tin price on the date that title and control passes.
Pricing for the final payment shall be declared within 20 market
days after arrival at Thaisarco's works. The lower of the cash
price and the 3-month forward-looking price is used in these
calculations.
Variable consideration relating to final assay results is
constrained in estimating revenue unless it is highly probable that
there will not be a future reversal in the amount of revenue
recognised when the final assay has been determined.
Revenue from the sale of sand is recognised at the point in time
when control of the goods has transferred to the customer, which is
when the sand leaves the Group's premises. At this point, the Group
will have a present right to payment and retains none of the
significant risks and rewards of the goods in question.
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 "Impairment of Assets". 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.
Share capital and reserves
i) W a rrant reserve
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 based on their nature, 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.
ii) Convertible loan note reserve
The proceeds received on issue of the Group's convertible loan
notes are allocated into their liability and equity components
based on the terms of the agreement.
The Group takes into account:
-- whether there is a contractual obligation to settle in cash;
-- whether there is a contractual obligation to issue a variable number of shares; and
-- whether the instruments book value is variable.
Where none of the above criteria are met, the convertible loan
notes are allocated as equity.
iii) Share-based payment reserve
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 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 statement of comprehensive income over the remaining vesting
period.
Where equity instruments are granted to persons other than
employees, the 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 at rates
calculated to write off the cost less the estimated residual value
of each asset over its expected useful economic life. The
applicable rates are:
-- The mining assets are depreciated using the units of
production method from the point that commercial production was
achieved. This reflects the production activity in the period as a
proportion of the total mining reserve. Where the units of
production method is used, the assets are depreciated based on a
rate determined by the tonnes of ore processed divided by the
estimate of the mineral reserve.
-- Short-lived assets which are used in the mining and
processing plant are depreciated over a period of between one and
ten years;
-- Right-of-use asset over the period of the lease contract;
-- 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.
Right-of-use asset
At inception of a contract, the Group assesses whether a
contract is, or contains a lease. A contract is, or contains, a
lease if the contract conveys the right to control the use of an
identified asset, for a period of time, in exchange for
consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Group assesses
whether:
-- the contract involves the use of an identified asset. This
may be specified explicitly or implicitly and should be physically
distinct or represent substantially all of the capacity of a
physically distinct asset. If the supplier has a substantive
substitution right, then the asset is not identified;
-- the Group has the right to obtain substantially all of the
economic benefits from use of the asset throughout the period of
use; and
-- the Group has the right to direct the use of the asset. The
Group has the right when it has the decision-making rights that are
most relevant to changing how and for what purposes the asset is
used. In rare cases where the decision about how and for what
purpose the assets is used is predetermined, the Group has the
right to direct the use of the asset if either:
-- the Group has the right to operate the asset; or
-- the Group designed the asset in a way that predetermines how
and for what purpose it will be used.
At inception or on reassessment of a contract that contains a
lease component, the Group allocates the consideration in the
contract to each lease component on the basis of their relative
stand-alone prices.
The right-of-use asset is initially measured at the present
value of the remaining lease payments, discounted using the
incremental borrowing rate.
The right-of-use asset is subsequently depreciated using the
straight-line method from the commencement date to the end of the
lease term. In addition, the right-of-use asset is annually
assessed for impairment and will be adjusted for certain
remeasurements of the lease liability.
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 determined on the fair value less cost
to develop basis. In assessing the recoverable amount, which is
determined on a fair value less costs to develop basis, the
expected future post-tax cashflows from the asset are discounted to
their present value using a post-tax discount rate that reflects
current market assessments of the time value of money and the risks
specific to the asset. The Life of Mine ("LoM") plan is the
approved management plan at the reporting date for ore extraction
and its associated capital expenditure. The capital expenditure
included in the impairment model does not include capital
expenditure to enhance the asset performance outside of the
existing LoM plan. The ore tonnes included in the LoM plan are
those as per the Reserve Statement, which management considers
economically viable.
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
Inventory consists of tin concentrate on hand, the run of mine
stockpile and consumable items.
The tin concentrate is carried at the lower of cost or net
realizable value. The cost of the concentrate includes direct
materials, direct labour, depreciation and overhead costs relating
to processing and engineering activities. Net realizable value is
the estimated selling price net of any estimated selling costs in
the ordinary course of business.
The run of mine stockpile is carried at the lower of cost or net
realizable value. The cost of the stockpile includes direct
materials, direct labour, depreciation and overhead costs relating
to mining activities. Net realizable value is the estimated selling
price net of necessary processing costs and any estimated selling
costs in the ordinary course of business.
Consumables are valued at the lower of cost (determined on the
weighted average basis) and
net realizable value. Cost comprises all costs of purchase,
costs of conversion and other costs incurred in bringing the
inventories to their present location and condition. Replacement
cost is used as the best available measure of net realizable
value.
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
The Company classifies its financial assets in the following
measurement categories:
-- those to be measured subsequently at amortized cost, and
-- those to be measured subsequently at fair value through profit or loss
The classification depends on the Company's business model for
managing the financial assets and the contractual terms of the cash
flows.
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.
For assets measured at fair value, gains and losses will be
recorded in profit or loss.
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 "Financial Instruments"
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.
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 or at fair value through profit or loss.
Under its offtake arrangement, the Group receives a provisional
payment upon satisfaction of its performance obligations based on
the tin price at that date. This occurs prior to the final price
determination and the Group then subsequently receives the
difference between the final price and quantity and the provisional
payment. As a result of the pricing structure, the instrument is
classified at fair value through profit or loss and changes in fair
value are recorded as other revenue.
Trade and other receivables are classified as a current asset as
these are expected to be settled within a year.
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,
borrowings 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 income statement. The Group
currently has no financial liabilities carried at fair value
through profit and loss.
Financial liabilities carried at amortised cost:
Trade and other payables
Trade and other payables are initially recognised at fair value
and are subsequently measured at amortised cost, calculated using
the effective interest rate method.
Borrowings
Interest bearing debt is initially recorded at fair value, less
transaction costs and is subsequently measured at amortized cost,
calculated using the effective interest rate method.
Borrowing costs are expensed as incurred except where they
relate to the financing of construction or development of
qualifying assets in which case they are capitalized up to the date
when the qualifying asset is ready for its intended use.
Derecognition
A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is primarily
derecognised when:
-- The rights to receive cash flows from the asset have expired: or
-- The company has transferred its right to receive cash flows
from the asset or has assumed an obligation to pay the received
cash flows in full without material delay to a third party; and
either
- The company has transferred substantially all the risks and
rewards of the asset, or
- The company has neither transferred nor retained substantially
all the risks and rewards of the asset; but has transferred control
of the asset.
A financial liability (in whole or in part) is derecognised when
the Group has extinguished its contractual obligations, it expires
or is cancelled.
Any gain or loss on derecognition is taken to the profit or
loss.
Rehabilitation provision
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 is amortised over the life of the mine
once commercial 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.
Lease liability
The lease liability is initially measured at the present value
of the remaining lease payments, discounted using the interest rate
implicit in the lease. The liability is subsequently measured at
amortized cost using the effective interest method. Lease payments
are apportioned between the finance charges and reduction of the
lease liability using the incremental borrowing rate to achieve a
constant rate of interest on the remaining balance of the
liability.
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) Going concern and liquidity
Significant estimates were required in forecasting cash flows
used in the assessment of going concern including tin and tantalum
prices, the levels of production, operating costs and capital
expenditure requirements. Additionally, judgement has been applied
in assessing the risks associated with COVID-19, together with
mitigating steps available to the Group if required. Refer to going
concern considerations noted earlier in Note 2 for further
details.
ii) Decommissioning and rehabilitation obligations
Estimating the future costs of environmental and rehabilitation
obligations is complex and requires management to make estimates
and judgements as most of the obligations will be fulfilled in the
future and contracts and laws are often not clear regarding what is
required. The resulting provisions (see Note 18) are further
influenced by changing technologies, political, environmental,
safety, business and statutory considerations.
The Group's rehabilitation provision is based on the net present
value of management's best estimates of future rehabilitation
costs. Judgement is required in establishing the disturbance and
associated rehabilitation costs at period end, timing of costs,
discount rates and inflation. In forming estimates of the cost of
rehabilitation which are risk adjusted, the Group assessed the
Environmental Management Plan and reports provided by internal and
external experts. Actual costs incurred in future periods could
differ materially from the estimates, and changes to environmental
laws and regulations, life of mine estimates, inflation rates, and
discount rates could affect the carrying amount of the
provision.
The carrying amount of the rehabilitation obligations for the
Group at 28 February 2021 was GBP180 917 (2020: GBP86 005). In
determining the amount attributable to the rehabilitation
liability, management used a discount rate of 12.8% (2020: 9.35%),
an inflation rate of 6% (2020: 5.5%) and an estimated mining period
of 18 years, being the Phase 1 expansion life of mine. A 1%
increase or decrease in the inflation rate used would result in a
GBP34 074 difference in the liability. A 2% increase or decrease in
the discount rate used would result in a GBP49 935 difference in
the liability.
iii) Impairment indicator assessment for exploration & evaluation assets
Determining whether an exploration and evaluation asset is
impaired requires an assessment of whether there are any indicators
of impairment, including specific impairment indicators prescribed
in IFRS 6: Exploration for and Evaluation of Mineral Resources. If
there is any indication of potential impairment, an impairment test
is required based on value in use of the asset. The valuation of
intangible exploration assets is dependent upon the discovery of
economically recoverable deposits which, in turn, is dependent on
future tin prices, future capital expenditures, environmental and
regulatory restrictions, and the successful renewal of licences.
The Group considers the South African exploration and evaluation
assets to be non-core as it continues to primarily focus on
developing its Namibian assets. Accordingly, the capitalised
exploration and evaluation expenditure relating to the South
African assets has been impaired to nil on the basis that the Group
does not intend to incur any further expenditure on its South
African licences The directors have concluded that there are no
indications of impairment in respect of the carrying value of
Namibian intangible assets at 28 February 2021 based on planned
future development of the Namibian projects, and current and
forecast tin prices. Exploration and evaluation assets are
disclosed fully in Note 11.
iv) Impairment assessment for property, plant and equipment
Management have reviewed the Uis mine for indicators of
impairment and have considered, among other factors, the operations
to date at the Uis mine, planned Phase 1 Stage II expansion of the
Uis operations, forecast commodity prices and market capitalisation
of the group. In undertaking the indicator review, Management have
also reviewed the underlying LoM valuation model for Uis and have
concluded that no indicators of impairment have been noted at year
end. The LoM valuation model is on a fair value less cost to
develop basis and included assessments of different scenarios
associated with capital development and expansion
opportunities.
The forecasts required estimates regarding forecast tin and
tantalum prices, ore resources and production, and operating and
capital costs. The discounted cash flows use a discount rate of
11.7% post tax nominal. Under the base case forecast using a
forecast tin price of $23 889 rising to $24 505 by 2025 and
forecast tantalum price of $150 000, the forecast indicates
headroom as at 28 February 2021. Whilst the valuation based on the
operations limited to Phase 1 Stage II expansion is sensitive to
pricing with a 6% reduction being required to reach break-even
point, the planned additional expansion indicates significant
headroom and reduced pricing sensitivity.
v) Depreciation
Judgement is applied in making assumptions about the
depreciation charge for mining assets when using the
unit-of-production method in estimating the ore tonnes held in
reserves. The relevant reserves are those included the in current
approved LoM plan which relates to the Phase 1 expansion. Judgement
is also applied when assessing the estimated useful life of
individual assets and residual values. The assumptions are reviewed
at least annually by management and the judgement is based on
consideration of the LoM plan, as well as the nature of the assets.
The reserve assumptions included in the LoM plan are evaluated by
management.
vi) Commercial production
Judgement is required to determine when a construction asset is
in the location and condition intended. No specific guidance exists
within IFRS, particularly as to what it means for an asset to be
"in the location and condition necessary for it to be capable of
operating as intended by management", but it is common to simply
refer to the achievement of "commercial production" as the point at
which the assets are commissioned, i.e. ready for their intended
use.
In determining the commercial production date, management uses
certain criteria that are required to be met before commercial
production is achieved. Commercial production is determined to have
been reached when the asset is operating at its designed production
level. The Uis Mine achieved commercial production based on
production levels at 1 December 2020 and commercial production was
declared. At that date capitalisation of cost to the mining asset
ceased and depreciation commenced.
vii) Determination of ore reserves
The estimation of ore reserves primarily impacts the
depreciation charge of evaluated mining assets, which are
depreciated based on the quantity of ore reserves. Reserve volumes
are also used in calculating whether an impairment charge should be
recorded where an impairment indicator exists.
The Group estimates its ore reserves and mineral resources based
on information, compiled by appropriately qualified persons,
relating to geological and technical data on the size, depth, shape
and grade of the ore body and related to suitable production
techniques and recovery rates. The estimate of recoverable reserves
is based on factors such as tin prices, future capital requirements
and production costs, along with geological assumptions and
judgements made in estimating the size and grade of the ore
body.
There are numerous uncertainties inherent in estimating ore
reserves and mineral resources. Consequently, assumptions that are
valid at the time of estimation may change significantly if or when
new information becomes available.
viii) Valuation of inventories
Judgement is applied in making assumptions about the value of
inventories and inventory stockpiles, including tin prices, plant
recoveries and processing costs, to determine the extent to which
the Group values inventory and inventory stockpiles. The Group uses
forecast tin prices to determine the net realisable value of the
ROM stockpile and the tin concentrate inventory on hand at year
end. Inventory stockpiles are measured using actual mining and
processing costs.
ix) Determining the lease term
In determining the lease term, management considers all facts
and circumstances that create an economic incentive to exercise, or
not to exercise, an extension option. Extension options are only
included in the lease term where the company is reasonably certain
that it will extend or will not terminate the lease when the lease
expires. For all leases, the most relevant factors include:
-- If there are significant penalties to terminate, the group is
typically reasonably certain to extend.
-- The group considers other factors including historical lease
durations, related costs and the possible business disruption as a
result of replacement of the leased asset.
The lease term is reassessed on an ongoing basis, especially
when the option to extend becomes exercisable or on occurrence of a
significant event or a significant change in circumstances which
affects this assessment, and that is within the control of the
group.
x) Determining the incremental borrowing rate to measure lease liabilities
Interest rate implicit in leases is not available, therefore,
the group uses the relevant incremental borrowing rate (IBR) to
measure its lease liabilities. The IBR is estimated to be the
interest rate that the group would pay to borrow:
-- over a similar term
-- with similar security
-- the amount necessary to obtain an asset of a similar value to the right of use asset
-- in a similar economic environment
The IBR, therefore, is considered to be the best estimate of the
incremental rate and requires management's judgement as there are
no observable rates available.
xi) Determining the fair value of trade receivables classified
at fair value through profit and loss
The consideration receivable in respect of certain sales for
which performance obligations have been satisfied at year end and
for which the Group has received prepayment under the terms of the
offtake agreement, remain subject to pricing adjustments with
reference to market prices at the date of finalisation. Under the
Group's accounting policies, the fair value of the consideration is
determined, and the remaining receivable is adjusted to reflect
fair value. Management estimated the forward price based on the LME
3-month tin price at year end. As at 28 February 2021 the Group
recognised a receivable at fair value through profit or loss of
GBP531 583 (2020: nil).
3. Adoption of new and revised standards
The Company adopted the following amendments to standards that
became effective for periods commencing on or after 1 March
2020:
IFRS 3 Amendments to IFRS 3 "Business Combinations": 1 January
Definition of business 2020
IAS 1 Amendments to IAS 1 "Presentation of Financial 1 January
and IAS Statements" and IAS 8 "Accounting Policies, 2020
8 Changes in Accounting Estimates and Errors":
Definition of material
---------------------------------------------- -----------
Conceptual Amendments to References to the Conceptual 1 January
Framework Framework in IFRS Standards 2020
---------------------------------------------- -----------
The adoption of these amendments did not have a material impact
on the financial statements of the Group
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:
Annual Improvements to IFRS: 2018-2020 Cycle 1 January 2022
Conceptual Framework for Financial Reporting (Amendments 1 January 2022
to IFRS 3)
----------------
IAS 37 Provisions, Contingent Liabilities and Contingent 1 January 2022
Assets (Amendment - Onerous Contracts - Cost of Fulfilling
a Contract)
----------------
IAS 16 Property, Plant and Equipment (Amendment - 1 January 2022
Proceeds before Intended Use)
----------------
IFRS 17 Insurance Contracts 1 January 2023
----------------
IAS 1 Presentation of Financial Statements (Amendment 1 January 2023
- Classification of Liabilities as Current or Non-Current)
----------------
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.
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 2021, the Group operated within two
operating segments: tin exploration and mining 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
2021
Results
4 950 4 985
Revenue 34 863 244 107
(5 715 (5 724
Associated costs (8 786) 954) 740)
Impairment of exploration (3 069
licence (3 069 232) - 232)
------------ ---------- ---------
(3 808
Segmental profit/(loss) (3 043 155) (765 710) 865)
============ ========== =========
Year ended 29 February
2020
Results
Revenue 21 696 47 336 69 032
Associated costs (14 006) (436 922) (450 928)
------------ ---------- ---------
Segmental profit/(loss) 7 690 (389 586) (381 896)
============ ========== =========
The reconciliation of segmental gross loss to the Group's loss
before tax is as follows:
Year ended Year ended
28 February 29 February
2021 2020
GBP GBP
Segmental profit/(loss) (3 808 865) (381 896)
Unallocated
costs (1 802 718) (1 411 635)
Finance income - 3 793
Finance costs (184 300) (40 719)
------------ ------------
Loss before
tax (5 795 883) (1 830 457)
============ ============
Unallocated costs mainly comprise of corporate overheads and
costs associated with being listed in London.
Other segmental information
South Africa Namibia Total
GBP GBP GBP
As at 28 February 2021
Intangible assets - exploration
and evaluation 11 309 5 229 152 5 240 461
Other reportable segmental 15 494 15 571
assets 76 460 907 367
Other reportable segmental (1 651 (1 713
liabilities (62 302) 016) 318)
(2 608
Unallocated net liabilities - - 263)
------------ --------- ---------
19 073 16 490
Total consolidated net assets 25 467 043 247
============ ========= =========
As at 29 February 2020
Intangible assets - exploration 4 332 7 441
and evaluation 3 108 713 305 018
Other reportable segmental 13 041 13 102
assets 60 323 793 116
Other reportable segmental
liabilities (64 997) (774 676) (839 673)
Unallocated net liabilities - - (759 812)
------------ --------- ---------
16 599 18 943
Total consolidated net assets 3 104 039 422 649
============ ========= =========
Unallocated net assets/liabilities are mainly comprised of cash
and cash equivalents and the working capital facility which are
managed at a corporate level.
5. Revenue
Year ended Year ended
28 February 29 February
2021 2020
GBP GBP
Revenue from the sale of
tin 4 744 609 47 336
Revenue from the sale of
sand 34 863 21 696
Total revenue from customers 4 779 472 69 032
Other revenue - change in
fair value of
customer contract 205 635 -
Total revenue 4 985 107 69 032
============ ============
The revenue from the sale of tin and sand is recognised at the
point in time at which control transfers. Refer to Note 2 for
further details.
Other revenue relates to the change in the fair value of amounts
receivable under the offtake agreement between the date of initial
recognition and the period end resulting from forecast market
prices at the estimated final pricing date. Refer to Note 2 for
details of trade receivables recorded at fair value through profit
or loss.
6. Other administrative expenses
The loss for the year has been arrived at after charging:
Year ended Year ended
28 February 29 February
2021 2020
GBP GBP
Staff costs 1 201 489 793 687
Depreciation of property,
plant & equipment 275 987 128 130
Professional fees 127 902 88 550
Travelling expenses 44 793 98 988
Uis administration expenses 361 509 199 984
Auditor's remuneration 69 250 52 873
Other costs 458 832 453 015
2 539 762 1 815 227
============ ============
Other costs mainly comprise of corporate overheads necessary to
run the South African head office and the costs associated with
being listed in London.
7. Staff costs
Year ended Year ended
28 February 29 February
2021 2020
GBP GBP
Staff costs capitalised under property,
plant and
equipment 1 094 729 1 185 121
Staff costs capitalised under intangible
assets 261 844 104 521
Staff costs recognised as administrative
expenses 666 746 575 561
Staff costs included in cost of
sales 285 216 -
Share-based payment charge capitalised
under property,
plant and equipment 45 820 186 835
Share-based payment charge capitalised
under
intangible assets 18 204 31 839
Share-based payment charge recognised
as administrative expenses 207 407 184 888
Share issue charge (including amounts
capitalised in the
prior year) 327 336 65 470
2 907 301 2 334 235
============ ============
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 26.
The average number of staff during the period was 108 (2020: 66)
with an average total cost per employee for the year of GBP26 862
(2020: GBP25 970).
Emoluments of GBP289 104 including GBP172 323 of share options
and shares to be issued (2020: GBP190 932 including GBP65 281 of
share options and shares to be issued) were paid in respect of the
highest-paid director during the year.
8. Finance cost
Year ended Year ended
28 February 29 February
2021 2020
GBP GBP
Interest on lease liability 39 691 33 128
Interest on environmental rehabilitation
liability 7 593 7 029
Bank interest 31 696 562
Interest on loan notes 49 863 -
Amortisation of warrant charge 49 541 -
Other interest 5 916 -
------------ ------------
184 300 40 719
============ ============
9. Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
Year ended Year ended
28 February 29 February
2021 2020
Factors affecting tax for the year: GBP GBP
The tax assessed for the year at
the Guernsey corporation
tax charge rate of 0%, as explained
below:
Loss before taxation (5 795 883) (1 830 457)
------------ ------------
Loss before taxation multiplied by - -
the Guernsey corporation
tax charge rate of 0%
Effects of:
Differences in tax rates (overseas
jurisdictions) (549 615) (327 821)
Tax losses carried forward 549 615 327 821
------------ ------------
Tax for the year - -
============ ============
Accumulated losses in the subsidiary undertakings for which
there is an unrecognised deferred tax asset are GBP3 244 873 (2020:
GBP1 797 379).
10. Loss per share from continuing operations
The calculation of a basic loss per share of 0.76 pence (2020:
loss per share of 0.29 pence), is calculated using the total loss
for the year attributable to the owners of the Company of GBP5 694
962 (2020: GBP1 781 962) and the weighted average number of shares
in issue during the year of 749 085 933 (2020: 623 591 330).
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 as at 28 February 2021 is 86 882 728 (2020: 69
080 819). These potentially dilutive ordinary shares may have a
dilutive effect on future earnings per share.
11. Intangible assets
Exploration
and evaluation Computer
assets software Total
GBP GBP GBP
As at 28 February 2019 7 012 317 - 7 012 317
Additions for the year 522 131 125 894 648 025
Exchange differences (209 954) (9 370) (219 324)
As at 29 February 2020 7 324 494 116 524 7 441 018
Additions for the year 977 797 4 598 982 395
Impairment for the year (3 069 232) - (3 069 232)
Exchange differences (108 373) (5 347) (113 720)
As at 28 February 2021 5 124 686 115 775 5 240 461
=========== ========= ===========
For the purposes of impairment testing, the intangible
exploration and evaluation assets are allocated to the Group's
cash-generating units, which represent 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 year end as detailed in the Group's accounting policy.
The Group considers the South African exploration and evaluation
assets to be non-core as it continues to primarily focus on
developing its Namibian assets. Accordingly, the capitalised
exploration and evaluation expenditure relating to the South
African assets of GBP3.069m has been impaired to nil on the basis
that the Group does not intend to incur any further expenditure on
its South African licences.
The directors have concluded that there are no indicators of
impairment in respect of the carrying value of the Namibian
exploration and evaluation assets at 28 February 2021 based on
planned future development of the projects and current and forecast
tin prices.
12. Property, plant and equipment
Mining
asset under Mining Decommissioning Right-of-use Computer
Land construction asset asset Asset Equipment Furniture Vehicles Total
Cost
As at 28
February 5 807
2019 13 439 5 495 771 - 75 180 - 66 198 71 234 85 504 326
Additions for
the 276 7 713
year - 7 370 105 - 10 715 547 35 768 20 290 - 425
Foreign
exchange
differences (1 001) (864 947) - (6 398) (20 583) (7 593) (6 776) (6 369) (931 667)
------- ------------- -------- ---------------- ------------- ---------- ---------- --------- ---------
As at 29
February 12 000 255 12 607
2020 12 438 929 - 79 497 964 94 373 84 748 79 135 084
Additions for
the 2 028 259 21 2 570
year - 009 123 803 90 323 957 46 543 598 - 233
Disposals for
the
year - - - - - (1 955) - - (1 955)
Transfer
between
categories (13 550 13 550
of assets - 114) 114 - - - - - -
Foreign
exchange
differences (576) (478 824) 1 236 (2 777) (9 250) (3 903) (3 681) (3 662) (501 437)
------- ------------- -------- ---------------- ------------- ---------- ---------- --------- ---------
As at 28
February 11 13 675 167 506 135 102 75 14 673
2021 862 - 153 043 671 058 665 473 925
======= ============= ======== ================ ============= ========== ========== ========= =========
Accumulated
Depreciation
As at 28
February
2019 - - - - - 11 040 4 116 7 127 22 283
Charge for
the
year - - - - 58 220 32 573 15 962 21 375 128 130
Foreign
exchange
differences - - - - (4 333) (3 274) (1 468) (2 122) (11 197)
------- ------------- -------- ---------------- ------------- ---------- ---------- --------- ---------
As at 29
February
2020 - - - - 53 887 40 339 18 610 26 380 139 216
Charge for
the
year - - 717 864 - 108 794 35 622 17 566 18 682 898 528
Foreign
exchange
differences - - 6 118 - (1 407) (1 528) (669) (1 034) 1 480
------- ------------- -------- ---------------- ------------- ---------- ---------- --------- ---------
As at 28
February 161 35 44 1 039
2021 - - 723 982 - 274 74 433 507 028 224
======= ============= ======== ================ ============= ========== ========== ========= =========
Net Book
Value
As at 28
February 11 12 951 167 345 67 31 13 634
2021 862 - 171 043 397 60 625 158 445 701
As at 29
February 12 000 12 467
2020 12 438 929 - 79 497 202 077 54 034 66 138 52 755 868
As at 28
February 5 785
2019 13 439 5 495 771 - 75 180 - 55 158 67 118 78 377 043
The Uis tin mine reached commercial production on 1 December
2020. Nameplate capacity (taking into account mining volumes, plant
throughput and recovery) of Stage I of Phase 1 was defined as 60
tonnes of tin concentrate at a grade of 60% tin in concentrate per
month (36 tonnes of contained tin). 63.9 tonnes of tin concentrate
was produced in November 2020 and production of 60 tonnes or more
per month has been consistently achieved subsequently. Management
has therefore determined that commercial production was reached at
this point. Up to this date, costs directly related to the
development of the mine were capitalised to the mining asset.
Included in these costs was capitalised interest of GBP254 539
(2020: GBP55 235).
A deduction to assets under construction of GBP2 805 630 (2020:
GBP38 143) has been recorded in respect of the revenues generated
during the development phase prior to commercial production being
established with a corresponding charge to cost of sales to reflect
the contribution to development cost provided by such revenues.
From 1 December 2020, depreciation of the mining asset commenced
in accordance with IAS 16. The total depreciation charge for the
year was split between administrative expenses and cost of sales.
GBP275 987 was included in administrative expenses, while the
balance of GBP622 541 was included in cost of sales as it was a
cost that was incurred for mining and processing purposes.
13. Inventories
28 February 29 February
2021 2020
GBP GBP
Tin concentrate on hand 373 310 185 338
Run-of-mine stockpile 427 423 -
Consumables 195 965 61 572
-----------
996 698 246 910
=========== ===========
14. Trade and other receivables
28 February 29 February
2021 2020
GBP GBP
Trade receivables 185 451 42 772
Trade receivables at fair
value through profit
or loss 531 583 -
Other receivables 204 779 111 614
VAT receivables 266 339 494 336
1 188 152 648 722
=========== ===========
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 due to no history of
default or non-payment from Thaisarco. The trade receivable from
Thaisarco was settled after year-end.
Trade receivables at fair value through profit or loss relates
to the change in the fair value of trade receivables under the
offtake agreement between the date of initial recognition and the
period end resulting from forecast market prices at the estimated
final pricing date.
The total trade and other receivables denominated in South
African Rand amount to GBP79 888 (2020: GBP65 288), denominated in
Namibian Dollars amount to GBP429 819 (2020: GBP517 322) and
denominated in US Dollars amount to GBP627 566 (2020: nil).
15. Cash and cash equivalents
28 February 29 February
2021 2020
GBP GBP
Cash on hand and in bank 1 351 200 574 600
========= =========
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. 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 GBP119 976 (2020: GBP48 887), the total cash and
cash equivalents denominated in Namibian Dollars amount to GBP13
156 (2020: GBP240 623) and the total cash and cash equivalents
denominated in US Dollars amount to GBP551 832 (2020: GBP132).
16. Borrowings
28 February 29 February
2021 2020
GBP GBP
Working capital facility 1 710 247 1 230 961
Loan note instrument 2 159 242 -
3 869 489 1 230 961
=========== ===========
On 16 August 2019, a working capital facility of N$35 000 000
(c. GBP1.659 million) and a VAT facility for N$8 000 000 (c. GBP379
000) was entered into between the Company's subsidiary, AfriTin
Mining (Namibia) Proprietary Limited and Nedbank Namibia.
The VAT facility is secured by assessed/audited VAT returns
(refunds) which have not been paid by Namibia Inland Revenue.
Nedbank Namibia provides a facility amounting to 70% of the total
unpaid refunds. Any drawdowns against this facility are repaid to
the bank upon receipt of cash from Namibia Inland Revenue.
The working capital facility and the VAT facility were reviewed
on 31 July 2020 and were renewed for a further 12-month period. The
facility is due for annual review in July 2021 and discussions are
currently underway with the lender in securing the rollover of the
facility. Interest accrues on these loans at the prime rate charged
by Nedbank Namibia.
Both AfriTin, as the parent company of AfriTin Mining (Namibia)
Proprietary Limited, and Bushveld Minerals Limited ("Bushveld"), a
shareholder holding approximately 5% of the Company provide
collateral in the form of a joint suretyship.
In addition to the facility amount of N$35 000 000, Nedbank
Namibia have provided AfriTin Mining (Namibia) Pty Limited with a
N$4 117 500 guarantee to Namibia Power Corporation Pty Limited in
relation to a deposit for the supply of electrical power. As a
result of the guarantee provided by Nedbank Namibia, no cash was
paid over for the deposit.
On 5 May 2020, GBP2.05 million financing was secured by way of a
loan note facility. The notes, which are issued in tranches of
GBP50 000, bear an interest rate of 10% per annum to be accrued and
payable in full on redemption, and have a 12-month term.
Reconciliation of net cash flow to movement in borrowings
Balance at 29 February 2020 1 230 961
Cash flows
Proceeds from working capital
facility 5 858 028
Proceeds from loan note
instrument 2 050 000
Repayment of working capital
facility (5 378 742)
Non-cash flows
Interest accrued on loan
note instrument 146 836
Warrants issued during the
year (162 480)
Warrants charge amortised
during the year 124 886
--------------------
Balance at 28 February 2021 3 869 489
====================
17. Trade and other payables
28 February 2021 29 February 2020
GBP GBP
Trade payables 1 094 390 570 779
Other payables 141 677 71 117
Accruals 248 415 252 934
1 484 482 894 830
================ ================
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 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 year.
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 GBP232 071 (2020: GBP165 988) and GBP1 185 802
(2020: GBP622 762) is denominated in Namibian Dollars.
18. Environmental rehabilitation liability
GBP
Balance at 28 February
2019 75 180
Increase in provision 10 717
Interest expense 7 029
Foreign exchange differences (6 921)
-------
Balance at 29 February
2020 86 005
Increase in provision 90 323
Interest expense 7 593
Foreign exchange differences (3 004)
-------
Balance at 28 February
2021 180 917
=======
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 2021.
The rehabilitation provision represents the present value of
decommissioning costs relating to the dismantling of mechanical
equipment and steel structures related to the Phase 1 Pilot Plant,
the demolishing of civil platforms and reshaping of earthworks. A
provision for this requires estimates and assumptions to be made
around the relevant regulatory framework, the magnitude of the
possible disturbance and the timing, extent and costs of the
required closure and rehabilitation activities. In calculating the
appropriate provision, cost estimates of the future potential cash
outflows based on current studies of the expected rehabilitation
activities and timing thereof are prepared. These forecasts are
then discounted to their present value using a risk-free rate
specific to the liability. In determining the amount attributable
to the rehabilitation liability, management used a discount rate of
12.8% (2020: 9.35%), an inflation rate of 6% (2020: 5.5%) and an
estimated mining period of 18 years , being the Phase 1 expansion
life of mine. Actual rehabilitation and decommissioning costs will
ultimately depend upon future market prices for the necessary
rehabilitation works and timing of when the mine ceases
operation.
19. Lease liability
The Company assessed all rental agreements and concluded that
the following rentals fall within the scope of IFRS 16: Leases and
therefore a lease liability has been recognised:
Lease Option to extend/terminate Incremental
term borrowing
rate
Option to extend not specified
in contract. Term of lease determined
Office building 5 years to be 5 years. 13.75%
--------- ---------------------------------------- ------------
Option to extend not specified
in contract. Term of lease determined
Workshop facility 2 years to be 2 years. 7.5%
--------- ---------------------------------------- ------------
The lease will continue automatically
after the initial period for
an open-ended period. Either
party must provide written notice
Residential if they wish to terminate. Lease
housing 5 years term determined to be 5 years. 8.5%
--------- ---------------------------------------- ------------
Office Building Workshop Housing Total
GBP GBP GBP GBP
Balance at 28 February
2019 - - - -
Additions 276 547 - - 276 547
Interest expense 33 128 - - 33 128
Lease payments (68 015) - - (68 015)
Foreign exchange differences (17 987) - - (17 987)
---------------
Balance at 29 February
2020 223 673 - - 223 673
Additions - 108 252 151 705 259 957
Interest expense 24 419 3 923 11 349 39 691
Lease payments (64 201) (30 319) (34 080) (128 600)
Foreign exchange differences (10 749) 818 1 287 (8 644)
---------------
Balance at 28 February
2021 173 142 82 674 130 261 386 077
=============== ======== ======== =========
The following is the split between the current and the
non-current portion of the liability:
28 February 29 February
2021 2020
GBP GBP
Non-current liability 260 512 181 544
Current liability 125 565 42 129
386 077 223 673
=========== ===========
A total of GBP168 792 (2020: GBP113 205) was included in
administrative expenses during the year for the cost of short-term
rentals for vehicles and lifting equipment.
20. Share capital
Number of ordinary
shares of no
par value issued Share Capital
and fully paid GBP
Balance at 28 February 2019 544 588 525 17 337 718
Capital raise - 22 May 2019 99 613 074 2 988 392
Share issue costs - (111 687)
Shares issued to Hannam
& Partners 327 868 10 000
Shares issued to directors/employees 8 616 906 262 816
------------------ -------------
Balance at 29 February 2020 653 146 373 20 487 239
Capital Raise - 3 August
2020 145 238 089 3 050 000
Shares issued to suppliers 15 273 480 320 743
Share issue costs - (253 317)
Shares issued to directors/employees 16 133 440 403 336
Loan note conversion 44 898 630 1 600 000
------------------ -------------
Balance at 28 February 2021 874 690 012 25 608 001
================== =============
Authorised: 1 220 486 913 ordinary shares of no par value
Allotted, issued and fully paid: 874 690 012 shares of no par
value
On 22 May 2019, AfriTin Mining Limited 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.
On 10 December 2019, 8 616 906 ordinary shares of no par value
were issued to various directors and employees in lieu of payment
of director fees and part settlement of salaries. Furthermore 327
868 shares were issued to Hannam and Partners, in accordance with
the terms of their broker agreement with the Company. These shares
were issued at a price of 3.05 pence per share.
On 3 August 2020, the Company completed an equity fundraising by
way of a placing and direct subscription of 145 238 089 ordinary
shares of no par value in the Company at a price of 2.1 pence per
share.
On 3 August 2020, 15 273 480 ordinary shares of no par value
were issued to various suppliers as settlement of invoices for
services rendered. These shares were issued at a price of 2.1 pence
per share.
On 4 January 2021, 16 133 440 ordinary shares of no par value
were issued to various directors and employees in lieu of payment
of director fees and part settlement of salaries. These shares were
issued at a price of 2.5 pence per share.
On 15 February 2021, AfriMet Resources AG elected to convert its
portion of outstanding convertible loan notes, totalling GBP1 600
000 into fully paid ordinary shares. These shares were issued at a
price of 4 pence per share.
21. Warrants
The following warrants were granted during the year ended 28
February 2021:
Date of grant 10 December
2020 7 July 2020 31 May 2020 5 May 2020
Number granted 2 500 000 2 500 000 2 500 000 13 000 000
Contractual life 2.4 years 2.8 years 2.9 years 3 years
Estimated fair value
per warrant (GBP) 0.0101 0.0122 0.0068 0.0069
The warrants in issue during the year are as follows:
Outstanding at 28 February
2019 5 671 939
Exercisable at 28 February
2019 5 671 939
Granted during the year -
Expired during the year -
Exercised during the year -
-----------
Outstanding at 29 February
2020 5 671 939
Exercisable at 29 February
2020 5 671 939
Granted during the year 20 500 000
Expired during the year (1 871 939)
Exercised during the year -
-----------
Outstanding at 28 February
2021 24 300 000
Exercisable at 28 February
2021 24 300 000
The warrants outstanding at the year-end have an average
exercise price of GBP0.023, with a weighted average remaining
contractual life of 2.14 years.
In the year ended 28 February 2021, there was a charge of GBP162
480 (2020: nil) accounted for due to the issue of warrants.
On 22 April 2021, notice was received from warrant holders to
exercise 1 186 666 warrants at an exercise price of 4.5 pence and
500 000 warrants at an exercise price of 1.95 pence.
22. Share-based payment reserve
Director share options
The following director share options were granted during the
year ended 29 February 2020:
18 October 18 October 18 October
Date of grant 2019 2019 2019
Number granted 3 200 000 3 200 000 3 200 000
Vesting period 1 year 2 years 3 years
Contractual life 5 years 5 years 5 years
Estimated fair value
per option (pence) 1.4790 1.3340 1.2510
The estimated fair values were calculated by applying the Black
Scholes pricing model. The model inputs were:
Date of grant 18 October 18 October 18 October
2019 2019 2019
Share price at grant
date (pence) 3.15 3.15 3.15
Exercise price (pence) 3.75 4.50 5.00
18 October 18 October 18 October
Expiry date 2024 2024 2024
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 year are as
follows:
Outstanding at 28 February 17 500
2019 000
Exercisable at 28 February
2019 -
Granted during the year 9 600 000
Forfeited during the year -
Exercised during the year -
Expired during the year -
----------
Outstanding at 29 February 27 100
2020 000
Exercisable at 29 February 13 125
2020 000
Granted during the year -
Forfeited during the year -
Exercised during the year -
Expired during the year -
----------
Outstanding at 28 February
2021 27 100 000
Exercisable at 28 February
2021 8 389 999
On 4 January 2021, 10 600 000 share options held by the Chief
Executive Officer, Anthony Viljoen were repriced by the
Remuneration Committee to align company and shareholder
expectations with long-term incentivisation goals. The exercise
price and the first exercise date were changed, however, the
contractual life of the options remained unchanged. The fair value
of the re-priced options (calculated using the Black Scholes
method) decreased from the initial fair valuation. As such, no
adjustment to amortising of the initial fair value over the vesting
period was made.
The director share options outstanding at the year-end have an
average exercise price of GBP0.045 (2020: GBP0.053), with a
weighted average remaining contractual life of 2.77 years (2020:
3.77 years).
The director must remain as a director of the Company for the
share options to vest. In the event that a director ceases to be a
director during the vesting period, the Board reserves the right to
determine whether the share options will be terminated or not.
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 29 February 2020:
18 October 18 October 18 October
Date of grant 2019 2019 2019
Number granted 4 110 001 4 110 000 4 109 999
Vesting period 1 year 2 years 3 years
Contractual life 5 years 5 years 5 years
Estimated fair value
per option (pence) 1.4790 1.3340 1.2510
The estimated fair values were calculated by applying the Black
Scholes pricing model. The model inputs were:
Date of grant 18 October 18 October 18 October
2019 2019 2019
Share price at grant
date (pence) 3.15 3.15 3.15
Exercise price (pence) 3.75 4.50 5.00
18 October 18 October 18 October
Expiry date 2024 2024 2024
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 year are as
follows:
Outstanding at 28 February 22 500
2019 000
Exercisable at 28 February
2019 -
12 330
Granted during the year 000
Forfeited during the year -
Exercised during the year -
Expired during the year -
-------
Outstanding at 29 February 34 830
2020 000
Exercisable at 29 February 11 250
2020 000
Granted during the year -
Forfeited during the year -
Exercised during the year -
Expired during the year -
-------
Outstanding at 28 February 34 830
2021 000
Exercisable at 28 February
2021 -
On 4 January 2021, 34 830 000 share options held by employees
were repriced by the Remuneration Committee to align company and
shareholder expectations with long-term incentivisation goals. The
exercise price and the first exercise date were changed, however
the contractual life of the options remained unchanged. The fair
value of the re-priced options (calculated using the Black Scholes
method) decreased from the initial fair valuation. As such, no
adjustment to amortising of the initial fair value over the vesting
period was made.
The employee share options outstanding at the year-end have an
average exercise price of GBP0.034 (2020: GBP0.053), with a
weighted average remaining contractual life of 2.96 years (2020:
3.96 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 GBP16 342 (2020: GBP24 050) are owing to the
directors at the end of the year. These fees will be settled
through the issuing of shares. The corresponding credit has been
recorded in the share-based payment reserve.
Employee shares to be issued
Employee salaries of GBP17 720 (2020: GBP13 961) are owing to
employees at the end of the year. These salaries will be settled
through the issuing of shares. The corresponding credit has been
recorded in the share-based payment reserve.
23. Non-controlling Interests
Non-controlling interest that is material in the group relates
to the Small Miners of Uis ("SMU") who own 15% of UTMC. SMU is a
non-profit association incorporated in Namibia. The entity was set
up by the Ministry of Mines and Energy to act on behalf of
small-scale miners across Namibia.
Other includes the following minority interests which are not
material:
-- Cannosia Trading 62 CC who own 16% of Renetype
-- African Women Enterprise Investments (Pty) Ltd who own 10% of Renetype
-- Lerama Resources (Pty) Ltd who own 50% of Jaxson
-- Tamiforce (Pty) Ltd who own 26% of Zaaiplaats
As at 28 February 2021
UTMC Other Total
Amount attributable to all shareholders:
Loss after tax (659 673) (7 150) (666 822)
Non-current assets 2 678 021 15 233 2 693 254
Current assets 2 524 054 - 2 524 054
------------------- --------- --------------------
Total assets 5 202 076 15 233 5 217 308
------------------- --------- --------------------
Non-current liabilities 5 136 254 43 275 5 179 529
Current liabilities 997 620 11 964 1 009 584
------------------- --------- --------------------
Total liabilities 6 133 874 55 239 6 189 113
------------------- --------- --------------------
Net liabilities 931 798 40 006 971 804
=================== ========= ====================
Amount attributable to non-controlling
interest:
Loss after tax (98 951) (1 970) (100 921)
Net liabilities 139 770 11 574 151 344
As at 29 February 2020
UTMC Other Total
Amount attributable to all shareholders:
Loss after tax (299 949) (13 243) (313 192)
Non-current assets 2 165 378 1 037 166 3 202 544
Current assets 699 699 - 699 699
---------- ---------- ----------
Total assets 2 865 077 1 037 166 3 902 243
---------- ---------- ----------
Non-current liabilities 2 531 291 1 057 484 3 588 775
Current liabilities 612 209 14 058 626 267
---------- ---------- ----------
Total liabilities 3 143 500 1 071 542 4 215 042
---------- ---------- ----------
Net liabilities 278 423 34 376 312 799
========== ========== ==========
Amount attributable to non-controlling
interest:
Loss after tax (44 992) (3 502) (48 495)
Net liabilities 41 764 10 049 51 812
24. 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, issued
convertible loan notes, borrowings 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 basis 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
-- Borrowings
-- Lease liability
-- Convertible loan notes
Categories of financial instruments
The Group holds the following financial assets:
Year ended Year ended
28 February 29 February
2021 2020
GBP GBP
Measured at amortised
cost:
Trade and other receivables 390 230 154 386
Cash and cash equivalents 1 351 200 574 600
Measured at fair value
through profit
or loss:
Trade and other receivables 531 583 -
Total financial assets 2 273 013 728 986
============ ============
Under its customer sale arrangement, the Group receives a
provisional payment upon satisfaction of its performance
obligations based on the spot price at that date. This occurs prior
to the final price determination, with the Group then subsequently
receiving or paying the difference between the final price and
quantity and the provisional payment. As a result of the pricing
structure, the instrument is classified at fair value through
profit or loss and measured at fair value with resulting changes in
fair value recorded as other revenue.
Trade receivables at fair value through profit or loss fail the
criteria for being measured at amortised cost owing to the
variability resulting from final pricing adjustments. Financial
instruments measured at fair value are presented by level within
which the fair value measurement is categorized. The levels of fair
value measurement are determined as follows:
-- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
-- Level 2: inputs other than quoted prices included in Level 1
that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices).
-- Level 3: inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
The Group's contract receivable at 28 February 2021 is recorded
at fair value through profit or loss and fair valued based on the
estimated forward prices that will apply under the terms of the
sales contracts on the product reaching the port of destination.
The trade receivables fair value reflects amounts receivable from
the customer adjusted for forward prices expected to be
realised.
The forward price is based on the LME 3-month tin price as at 28
February 2021. Given the short period to final pricing, the time
value of money is not considered to be significant.
Fair value of this trade receivable at fair value through profit
or loss is categorized at Level 1. During the year there were no
transfers between levels of fair value hierarchy.
The Group holds the following financial liabilities:
Year ended Year ended
28 February 29 February
2021 2020
GBP GBP
Measured at amortised
cost:
Trade and other payables 1 484 482 894 830
Borrowings 3 869 489 1 230 961
Lease liability 386 077 223 673
Total financial liabilities 5 740 048 2 349 464
============ ============
Maturity analysis of the contractual undiscounted cashflows:
Between Between Total
Up to Between 3 1 2
3 months and 12 months and 2 years and 5 years
Trade and other
payables 1 484 482 - - - 1 484 482
Borrowings 2 159 242 1 710 247 - - 3 869 489
Lease Liability 29 834 95 730 128 066 132 447 386 077
---------- --------------- ------------- ------------- ----------
3 673 558 1 805 977 128 066 132 447 5 740 048
========== =============== ============= ============= ==========
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.
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. Credit risk
relating to other receivables is minimal.
The concentration of the Group's credit risk is considered by
counterparty, geography and by currency. The Group has split its
cash reserves across multiple banks in an effort to mitigate credit
risk. The Pound Sterling and US Dollar accounts are held with a
bank in Mauritius which has a rating of Baa1(Moody's), the Rand
account is held with a bank in South Africa which has a rating of
Ba2 (Moody's), and the Namibian Dollar account is held with a bank
in Namibia with a rating of Ba3 (Moody's). While the credit ratings
of the countries in which the cash is held have been downgraded
during the year, the banks chosen remain stable and do not present
any further risks.
The concentration of credit risk was as follows:
28 February 29 February
2021 2020
GBP GBP
Currency
Sterling 666 236 284 958
USD 551 832 132
South African
Rand 119 976 48 887
Namibian Dollars 13 156 240 623
1 351 200 574 600
=========== ===========
Please refer to note 14 for the concentration of credit risk
relating to trade receivables.
At 28 February 2021, 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. 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 and its
cash requirements are anticipated via the budgetary process. At 28
February 2021, the Group had GBP1 351 200 (2020: GBP574 600) of
cash reserves.
Market risk
The Group's activities expose it primarily to the financial risk
of changes in commodity prices, foreign currency exchange rates and
interest rates.
Interest rate risk
The Group was exposed to minimal interest rate risk during the
year. 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 Year ended
28 February 29 February
2021 2020
GBP GBP
Cash and cash equivalents 684 964 289 642
Other receivables 1 137 272 88 274
Trade and other
payables (1 417 873) (788 750)
Borrowings (1 710 247) (1 230 961)
(1 305 884) (1 641 795)
============ ============
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 199 863 219 849 179 877
Liabilities (232 071) (255 278) (208 864)
---------------- ---------------- ----------------
(32 208) (35 429) (28 987)
================ ================ ================
Namibian dollar Namibian dollar Namibian dollar
denominated currency impact currency impact
monetary items Strengthening Weakening
GBP GBP GBP
Assets 442 975 487 273 398 678
Liabilities (2 896 049) (3 185 654) (2 606 444)
---------------- ---------------- ----------------
(2 453 074) (2 698 381) (2 207 767)
================ ================ ================
25. Events after balance sheet date
Exercise of warrants
On 22 April 2021, notice was received from warrant holders to
exercise 1 186 666 warrants at an exercise price of 4.5 pence and
500 000 warrants at an exercise price of 1.95 pence.
Equity Fundraising
On 12 May 2021, GBP13 million (before expenses) was raised by
way of a private placement. 216 666 667 ordinary shares of no-par
value in the company at a price of 6 pence per share were
issued.
Settlement of convertible loan notes
On 25 May 2021, the remaining GBP2.2m of the GBP3.8m 2019
convertible loan notes was settled. GBP0.759m of the outstanding
amount was settled through the issuing of 18 963 699 ordinary
shares of no par value in the Company at a conversion price of 4
pence per ordinary share and the remaining portion totalling
GBP1.8m (including GBP0.328m of accrued interest) was redeemed in
cash.
Settlement of loan notes
On 25 May 2021, the 2020 loan note facility of GBP2.05m and
associated interest of GBP0.216m was settled in full in cash.
Issue of shares
On 25 May 2021, 327 868 ordinary shares of no-par value were
issued in lieu of broker fees at a price of 6 pence.
26. 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 prior
year, the Group acquired a DMS plant from Goldiblox for GBP155 678.
There were no transactions during the current year. At year end,
the Group did not owe Goldiblox any funds (2020: nil).
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 period, Bushveld charged
the Group GBP82 423 (2020: GBP85 596) for the use of office space.
At period end, the Group owed Bushveld GBP112 962 (2020: GBP71
762). Furthermore, Bushveld provide suretyship of N$30m (approx
GBP1.42m) as collateral for the Nedbank Namibia working capital
facility.
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 2021 Shares
Issued Shares
Share in Relation Issued Director
Option to Director in Relation Fees/ Other
Charge Fees/Salary to Bonus Salary Fees Total
GBP GBP GBP GBP GBP GBP
Non-Executive Directors
Glen Parsons (Chairman) 10 893 40 000 - - - 50 893
Terence Goodlace 10 761 - - 28 750 - 39 511
Laurence Robb 10 761 13 000 - 12 000 - 35 761
Roger Williams (resigned
28 September 2020) 10 761 - - 14 583 - 25 344
Executive Director
Anthony Viljoen (Chief Executive 289
Officer) 26 090 17 365 128 868 116 781 - 104
Other key management personnel
Robert Sewell (Chief Financial 172
Officer) 19 599 - 65 919 86 745 - 263
Frans van Daalen (Chief Operating 215
Officer) 22 099 - 81 178 112 322 - 599
------------
828
110 964 70 365 275 965 371 181 - 475
======= ============ ============ ======== ===== ======
29 February 2020 Shares
Issued Shares
Share in Relation Issued Director
Option to Director in Relation Fees/ Other
Charge Fees/Salary to Bonus Salary Fees Total
GBP GBP GBP GBP GBP GBP
Non-Executive Directors
57
Glen Parsons (Chairman) 17 626 40 000 - - - 626
44
Terence Goodlace 15 471 - - 28 772 - 243
22 62
Laurence Robb 15 471 13 000 - 12 000 000 471
40
Roger Williams 15 471 25 000 - - - 471
Executive Director
Anthony Viljoen (Chief Executive 125 190
Officer) 41 440 23 841 - 650 - 932
Other key management personnel
Robert Sewell (Chief Financial 185
Officer) 43 078 55 147 - 87 257 - 482
Frans van Daalen (Chief 114 194
Operating Officer) 68 944 10 994 - 656 - 594
------------
217 368 22 775
501 167 983 - 335 000 819
======= ============ ============ ======== ===== =====
27. Reserves within equity
Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
Convertible loan note reserve
The convertible loan note reserve represents net proceeds on
outstanding convertible loan notes.
On 26 November 2019, the Group raised GBP3.8m through the
issuing of convertible loan notes which mature in May 2021. The
instruments entitle the holders to a 10% coupon. Under the terms of
the instrument the Group can elect to settle the loan note into a
fixed number of shares at a 4 pence conversion rate. The Group can
elect to redeem the loan notes early in cash at a premium of 10%.
As there is no obligation to settle in cash the loan notes have
been accounted for in equity as an increase in the convertible loan
note reserve.
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 of unexercised share options at the balance
sheet date as well as fees/salaries owed to directors/employees to
be settled through the issuing of shares.
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 represents the
cumulative profit and loss net of distribution to owners.
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