TIDMATM
RNS Number : 9864M
AfriTin Mining Ltd
27 September 2021
AfriTin Mining Limited
("AfriTin" or the "Company" and with its subsidiaries the
"Group")
Unaudited Interim Results
for the six months ended 31 August 2021
AfriTin Mining Limited (AIM: ATM), an African tech-metals mining
company with a portfolio of production, development and exploration
assets in Namibia in tin, lithium and tantalum, is pleased to
announce its unaudited interim results for the six months ended 31
August 2021.
Financial and Operational Highlights:
-- Revenue of GBP5.1 million, an increase of 468% over the
corresponding six-month period ended 31 August 2020 with gross
profit margin recorded of 22%;
-- Positive free cash flow generated of GBP560k during the
six-month period;
-- Cash and cash equivalents of GBP6.3 million at period end;
debt free following the remaining 2019 and 2020 convertible loan
notes settled during the period;
-- Phase 1 pilot processing plant exceeded targets and nameplate
producing 368 tonnes of tin concentrate (227 tonnes of contained
tin) for the six-month period;
-- 313 tonnes of tin concentrate (199 tonnes of contained tin)
shipped to offtake partner, Thaisarco, during the six-month
period;
-- Commencement of Uis Phase 1 expansion project with
commissioning expected to be completed Q2 2022;
-- Lithium and tantalum test work programmes have been designed
to increase the confidence levels of their by-product
potential;
-- Process flow design for a pilot tantalum concentrate
production facility at Uis, with implementation planned for Q4 of
2021; and
-- Since the end of the period under review, outline terms for a
NAD 90 million (GBP4.5 million) Senior Secured Term Loan has been
agreed with Standard Bank Namibia Ltd subject to final
documentation.
Chief Executive Officer's Statement
Against a backdrop of the COVID-19 pandemic and maintaining the
health and safety of all our employees as a priority, the AfriTin
team has once again managed to produce an impressive half-yearly
performance. The Company has continued to exceed production targets
at the Uis Tin Mine, resulting in a marked increase in revenue
during the period. Whilst a firm focus has been on exceeding
steady-state production and ensuring the Phase 1 pilot processing
plant cost base becomes more efficient, attention has also been
directed to the potential for additional revenue streams and
consolidating our tech-metal exposure. We believe the Erongo region
will become a globally significant metallogenic province for new
technology metals, allowing for significant revenues and
potentially substantial economies of scale within the licence areas
and region.
During the period, the operation of the Phase 1 pilot processing
plant achieved production of 368 tonnes of tin concentrate (227
tonnes of contained tin), with 313 tonnes of tin concentrate (199
tonnes of contained tin) shipped to our offtake partner Thaisarco,
resulting in revenues of GBP5.1 million. This represents a 468%
increase from the corresponding six-month period ended 31 August
2020 with an average tin price achieved of US$ 33 794 and a gross
profit margin recorded of 22%. Tin is a critical component of the
decarbonisation revolution, and an increased need for
semi-conductors has seen the demand for tin increase significantly.
On the supply side, COVID-related smelter closures, shipping delays
and decades of underspending on exploration and mine development
have resulted in supply constraints, the net effect of which is the
unprecedented prices that were sustained throughout the period. We
expect these strong prices to continue in the period ahead.
With a firm focus on the Phase 2 operation, a key milestone on
the Company's growth path was the publication in May 2021 of the
Definitive Feasibility Study ("DFS") for the expansion of the Uis
Phase 1 pilot processing plant. The robust economics of the DFS
provides us with an opportunity to increase the production of tin
concentrate by 67%, thereby increasing 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.
The expansion project has since commenced with the ordering of
long-lead items, the appointment of a project implementation team
and engineering detailing to facilitate procurement and
fabrication. Post-period end, headline terms for a NAD 90 million
(approximately GBP 4.5 million) Senior Secured Term Loan were
agreed with Standard Bank Namibia Ltd to finance the Phase 1
expansion.
The Company also plans to capitalise on the opportunity to
develop additional revenue streams to the Company's tin concentrate
product by expediting the lithium and tantalum by-product test work
programmes. The launch of a new technology metal regional expansion
programme in the second half of the financial year is a step toward
unlocking the potential of a new metallogenic province that is the
Erongo region of Namibia. While the current JORC (2012) Ore Reserve
estimate over the V1 and V2 pegmatites only considers tin
mineralisation, the Company intends to add the potential by-product
minerals of tantalum and lithium oxide in due course. In this vein,
the period under review saw the commencement of a larger
exploration focus with the initiation of 8,000 metre lithium and
tantalum exploration drilling programme over the V1/V2 ore body to
run over the next 12 months. This will lead to the existing Ore
Reserve Estimate for tin to be updated for tantalum and lithium
oxide.
In tandem with the exploration focus, lithium and tantalum
extraction test work programmes have been designed to increase the
confidence levels of their by-product potential. This is a
significant step in the movement towards the realisation of
additional revenue streams. While optimisation test work continues,
the Company will proceed with the process flow design for a pilot
tantalum concentrate production facility, with implementation
planned for Q4 of 2021.
In May 2021, the Company announced the placing of 216 666 667
ordinary shares to raise GBP 13 million (before expenses). The
capital raised enables the Company to commence 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. The 2019 convertible loan
notes and 2020 loan notes were also settled during the period.
Namibia continues to be an incredibly gracious host country
within which to operate. An overarching theme in all decisions and
corporate strategy is the safety, health and wellbeing of all
employees and those in the surrounding communities where we
operate. We remain conscious of the environment and its people, and
this will continue to be built into our corporate DNA as we strive
to become a significant African multi-commodity tech-metals
producer.
The 2022 financial year continues to be an exciting one for
AfriTin. We look forward to updating the market on the expansion of
the Phase 1 pilot processing plant which is expected to complete in
Q2 2022.
Anthony Viljoen
CEO
AfriTin Mining Limited +27 (11) 268 6555
Anthony Viljoen, CEO
Nominated Adviser +44 (0) 20 7220 1666
WH Ireland Limited
Katy Mitchell
Corporate Advisor and Joint Broker
H&P Advisory Limited
Andrew Chubb
Jay Ashfield
Nilesh Patel +44 (0) 20 7907 8500
Turner Pope Investments
Andy Thacker
James Pope +44 (0) 20 3657 0050
Tavistock Financial PR (United
Kingdom) +44 (0) 20 7920 3150
Jos Simson
Nick Elwes
Oliver Lamb
About AfriTin Mining Limited
Notes to Editors
AfriTin Mining Limited is the first pure tin company listed in
London and its vision is to create a portfolio of globally
significant, conflict-free, tin-producing assets. The Company's
flagship asset is the Uis Tin Mine in Namibia, formerly the world's
largest hard-rock open cast tin mine.
AfriTin is managed by an experienced board of directors and
management team with a current strategy to ramp-up production at
the Uis Tin Mine in Namibia to 10,000 tonnes of concentrate in a
Phase 2 expansion, having reached Phase 1 commercial production in
2020. The Company strives to capitalise on the solid supply/demand
fundamentals of tin by developing a critical mass of tin resource
inventory, achieving production in the near term and further
scaling production by consolidating tin assets in Africa.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the 6 months ended 31 August 2021
6 months 6 months 12 months
ended
31 August ended ended
2021 (unaudited)
GBP 31 August 28 February
2020 2021
(unaudited) (audited)
Notes GBP GBP
Continuing operations
Revenue 5 5 073 337 1 083 996 4 985 107
(3 959
Cost of Sales 149) (1 070 239) (4 987 696)
---------------------- ----------------------- -----------------------
Gross Profit 1 114 188 13 757 (2 589)
Impairment of exploration
licences - - (3 069 232)
(1 390
Other administrative expenses 6 177) (946 182) (2 539 762)
---------------------- ----------------------- -----------------------
(1 390
Total administrative expenses 177) (946 182) (5 608 994)
---------------------- ----------------------- -----------------------
Operating loss (275 989) (932 425) (5 611 583)
Finance income - 14 -
Finance cost 7 (228 285) (109 410) (184 300)
---------------------- ----------------------- -----------------------
Loss before tax (504 274) (1 041 821) (5 795 883)
Income tax expense 8 - - -
---------------------- ----------------------- -----------------------
Loss for the period (504 274) (1 041 821) (5 795 883)
====================== ======================= =======================
Other comprehensive
income/(loss)
Items that will or may be
reclassified
to profit or loss:
Exchange differences on
translation
of share-based payment reserve 1 180 (4 342) (531)
Exchange differences on
translation
of foreign operations 658 735 (1 293 490) (526 231)
Exchange differences on
non-controlling
interest (7 788) 6 213 1 390
Total comprehensive
income/(loss)
for the period 147 853 (2 333 440) (6 321 255)
====================== ======================= =======================
Profit/((loss) for the period
attributable
to:
Owners of the parent (692 252) (999 434) (5 694 962)
Non-controlling interests 187 978 (42 387) (100 921)
----------------------
(504 274) (1 041 821) (5 795 883)
====================== ======================= =======================
Total comprehensive
income/(loss)
for the period attributable to:
Owners of the parent (32 337) (2 297 266) (6 221 724)
Non-controlling interests 180 190 (36 174) (99 531)
----------------------
147 853 (2 333 440) (6 321 255)
====================== ======================= =======================
Loss per ordinary share
Basic and diluted loss per
share
(in pence) 9 (0.07) (0.15) (0.76)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 August 2021
Company number: 63974
31 August 31 August 28 February
2021 2020 2021
(unaudited) (unaudited) (audited)
Notes GBP GBP GBP
Assets
Non-current assets
Intangible assets 10 6 195 625 7 247 261 5 240 461
15 095 12 961 13 634
Property, plant and equipment 11 878 697 701
------------ ------------- ---------------------
21 291 20 163 18 875
Total non-current assets 503 958 162
============ ============= =====================
Current assets
Inventories 12 1 429 694 610 171 996 698
Trade and other receivables 13 1 136 053 362 756 1 188 152
Cash and cash equivalents 14 6 290 694 2 578 612 1 351 200
------------ ------------- ---------------------
Total current assets 8 856 441 3 551 539 3 536 050
============ ============= =====================
23 715 22 411
Total assets 30 147 944 497 212
============ ============= =====================
Equity and liabilities
Equity
38 297 23 604 25 608
Share capital 19 431 665 001
Convertible loan note reserve - 3 770 645 2 170 645
(10 733 (10 030
Accumulated deficit 570) (5 364 934) 679)
Warrant reserve 20 192 632 215 956 211 348
Share-based payment reserve 769 658 729 808 743 615
Foreign currency translation (1 402 (2 061
reserve 604) (2 828 598) 339)
------------
Equity attributable to the 27 123 20 127 16 641
owners of the parent 547 542 591
------------ ------------- ---------------------
Non-controlling interests 28 846 (87 986) (151 344)
------------ ------------- ---------------------
27 152 20 039 16 490
Total equity 393 556 247
============ ============= =====================
Non-current liabilities
Environmental rehabilitation
liability 17 202 242 80 968 180 917
Lease liability 18 232 858 140 527 260 512
------------
Total non-current liabilities 435 100 221 495 441 429
============ ============= =====================
Current liabilities
Trade and other payables 16 1 890 700 894 008 1 484 482
Borrowings 15 505 267 2 517 536 3 869 489
Lease liability 18 164 484 42 902 125 565
Total current liabilities 2 560 451 3 454 446 5 479 536
============ ============= =====================
30 147 23 715
Total equity and liabilities 944 497 22 411 212
============ ============= =====================
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 24 September
2021.
ANTHONY VILJOEN
Chief Executive Officer
24 September 2021
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 31 August 2021
Foreign
Convertible Share-based currency
Share loan note Accumulated Warrant payment translation Non-controlling
capital reserve deficit reserve reserve reserve Total interests Total equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Total equity
at 29
February
2020 20 487 239 3 770 645 (4 365 500) 78 651 559 534 (1 535 108) 18 995 461 (51 812) 18 943 649
Loss for the
period - - (999 434) - - - (999 434) (42 387) (1 041 821)
Other
comprehensive
income/(loss) - - - - (4 342) (1 293 490) (1 297 832) 6 213 (1 291 619)
Total
comprehensive
income/(loss) - - (999 434) - (4 342) (1 293 490) (2 297 266) (36 174) (2 333 440)
Transactions
with owners:
Issue of
shares 3 370 743 - - - - - 3 370 743 - 3 370 743
Share issue
costs (253 317) - - - - - (253 317) - (253 317)
Share-based
payments - - - - 174 616 - 174 616 - 174 616
Warrants
granted - - - 137 305 - - 137 305 - 137 305
Total equity
at 31 August
2020 23 604 665 3 770 645 (5 364 934) 215 956 729 808 (2 828 598) 20 127 542 (87 986) 20 039 556
Loss for the
period - - (4 695 528) - - - (4 695 528) (58 534) (4 754 062)
Other
comprehensive
income/(loss) - - - - 3 811 767 259 771 070 (4 824) 766 246
Total
comprehensive
income/(loss) - - (4 695 528) - 3 811 767 259 (3 924 458) (63 358) (3 987 816)
Transactions
with owners:
Share-based
payments - - - - 106 815 - 106 815 - 106 815
Issue of
shares 403 336 - - - (96 819) - 306 517 - 306 517
Share issue
costs - - - 25 175 - - 25 175 - 25 175
Conversion of
convertible
loan notes 1 600 000 (1 600 000) - - - - - - -
Warrants
expired - - 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
Loss for the
period - - (692 252) - - - (692 252) 187 978 (504 274)
Other
comprehensive
income/(loss) - - - - 1 180 658 735 659 915 (7 788) 652 127
Total
comprehensive
income/(loss) - - (692 252) - 1 180 658 735 (32 337) 180 190 (147 853)
Transactions
with owners:
Issue of 13 019 13 009 13 009
shares 672 - - - (10 000) - 672 - 672
Share issue
costs (823 447) - - - - - (823 447) - (823 447)
Share-based
payments - - - - 34 863 - 34 863 - 34 863
Warrants
exercised 63 150 - 18 716 (18 716) - - 63 150 - 63 150
Issue costs
reclassified
to
accumulated
deficit - 29 355 (29 355) - - - - - -
Settlement of
convertible
loan note in
shares 430 055 (430 055) - - - - - - -
Settlement of
convertible
loan note in (1 769 (1 769 (1 769
cash - 945) - - - - 945) - 945)
----------- ----------- ----------- ------------- ------------ ----------- ------------------ --------------- ------------------
Total equity
at 31 August 38 279 (10 733 (1 402 27 123 27 152
2021 431 - 570) 192 632 769 658 604) 547 28 846 393
=========== =========== =========== ============= ============ =========== ================== =============== ==================
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 31 August 2021
Period ended Period ended Year ended
31 August 31 August
2021 (unaudited) 2020 (unaudited)
GBP GBP 28 February
2021
(audited)
Notes GBP
Cash flows from operating
activities
Loss before taxation (504 274) (1 041 821) (5 795 883)
Adjustments for:
Fair value adjustment to
customer
contract 5 (15 238) - (205 635)
Depreciation of property, plant
and equipment 11 736 792 181 520 898 528
Depreciation of intangible
assets 6 086 - -
Impairment of exploration
licences - - 3 069 232
Share-based payments 22 527 114 385 217 407
Equity-settled transactions 19 9 672 320 743 618 260
Finance income - (14) -
Finance costs 7 228 285 109 410 184 300
Changes in working capital:
Decrease/(increase) in
receivables 13 124 981 232 192 (352 953)
Increase in inventory 12 (382 786) (397 485) (753 688)
Increase in payables 16 334 662 81 600 619 573
Net cash generated/(used) in
operating
activities 560 707 (399 470) (1 500 858)
-------------------- ---------------------------- --------------------
Cash flows from investing
activities
Finance income - 14 -
Purchase of intangible assets 10 (822 753) (72 828) (964 191)
Purchase of property, plant and
equipment 11 (1 511 632) (1 751 822) (1 990 856)
-------------------- ---------------------------- --------------------
Net cash used in investing
activities (2 334 385) (1 824 636) (2 955 047)
-------------------- ---------------------------- --------------------
Cash flows from financing
activities
Finance costs 7 (157 458) (1 881) (37 612)
Lease payments 18 (91 258) (30 700) (128 600)
Net proceeds from issue of
shares 19 12 239 703 2 796 683 2 796 683
Settlement of convertible loan
notes (1 769 945) - -
Proceeds from borrowings 15 5 298 880 3 834 387 7 908 028
(2 501
Repayment of borrowings 15 (8 700 696) 805) (5 378 742)
-------------------- ---------------------------- --------------------
Net cash generated from
financing
activities 6 819 226 4 096 684 5 159 757
-------------------- ---------------------------- --------------------
Net decrease in cash and cash
equivalents 5 045 548 1 872 578 703 852
Cash and cash equivalents at
the
beginning of the period 1 351 200 574 600 574 600
Exchange differences (106 054) 131 434 72 748
-------------------- ---------------------------- --------------------
Cash and cash equivalents at
the
end of the period 6 290 694 2 578 612 1 351 200
==================== ============================ ====================
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the period ended 31 August 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 period ended 31 August
2021 and the comparative figures for the 6 month period ended 31
August 2020 and for the year ended 28 February 2021 are shown.
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 31 August 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 Namibian Dollar balances was GBP1 =
N$20.08 and the average rate for the period was GBP1 = N$20.07.
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 interim
financial information has been prepared using the accounting
policies which will be applied in the Group's statutory financial
statements for the year ended 28 February 2022 and which were
applied in the Group's statutory financial statements for the year
ended 28 February 2021.
The Group has adopted the standards, amendments and
interpretations effective for annual periods beginning on or after
1 March 2021. The adoption of these standards and amendments did
not have a material effect on the financial statements of the
Group. See Note 3.
The interim financial information for the six months to 31
August 2021 is unaudited and does not constitute statutory
financial information. The statutory accounts for the year ended 28
February 2021 are available on the Company's website. The auditors'
report on those accounts was unqualified.
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.
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 31 August 2021, the company had cash in the bank of GBP6.3m
and had drawn down GBP0.5m of the GBP2m Nedbank working capital
facility.
Subsequent to period end, outline terms for a N$90m (c. GBP4.5m)
term loan has been agreed with Standard Bank Namibia to finance the
Phase 1 expansion. This is subject to matters such as legal due
diligence and the finalisation of documentation, and whilst there
can be no guarantee that these will be executed the Directors and
Standard Bank have every confidence that this arrangement will be
executed. The intention is that the term loan will have a term of
five years and will incur an interest of 3-month JIBAR (currently
3.67%) plus 4.5% (currently 8.17%). Furthermore, the intention is
that the Group's GBP2m working capital and VAT facility will be
transferred from Nedbank Namibia to Standard Bank Namibia. The
intention is that these short-term banking facilities will incur an
interest rate of Namibian prime lending rate (currently 7.5%) minus
1%.
Management have prepared a detailed cash flow forecast for the
period to 30 September 2022 and stress tests of those forecasts.
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.
-- The base case forecast assumes continuing steady state
production for the current mining and processing facility and
expanded production from May 2022 onwards.
-- The base case forecast includes capital expenditure required for the Phase 1 expansion.
-- The base case forecast includes exploration drilling
programme expenditure for lithium and tantalum.
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.
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.
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 are described
below.
Estimates and judgements are continually evaluated. Revisions to
accounting estimates are recognised in the period in which the
estimates are revised if the revision affects only that period, or
in the period of revision and in future periods if the revision
affects both current and future periods.
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 17) 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 31 August 2021 was GBP202 242 (August 2020: GBP80 968 and
February 2021: GBP180 917). In determining the amount attributable
to the rehabilitation liability, management used a discount rate of
12.8% (August 2020: 9.35% and February 2021: 12.8%), an inflation
rate of 6% (August 2020: 5.5% and February 2021: 6%) and an
estimated mining period of 18 years, being the Phase 1 expansion
life of mine.
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 was impaired to nil in the 2021 financial year, 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 31 August 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 10.
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 31
August 2021. The LoM valuation model is on a fair value less cost
to develop basis and includes 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 31 August 2021. Whilst the valuation based on the
operations limited to the 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 in the 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 Tin 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) Waste stripping cost capitalised
Judgement is required in determining a suitable production
measure to allocate waste stripping cost incurred between waste
stripping that provided access to ore mined in the current period
and waste stripping that provides access to ore that is expected to
be mined in future periods. The Group capitalises waste stripping
costs based on waste mining that has occurred related to future
phases of the mineral reserve estimate.
ix) 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
run-of-mine stockpile and the tin concentrate inventory on hand at
period end. Inventory stockpiles are measured using actual mining
and processing costs.
x) 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.
xi) Determining the incremental borrowing rate to measure lease liabilities
The 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.
xii) Determining the fair value of trade receivables classified
at fair value through profit or loss
The consideration receivable in respect of certain sales for
which performance obligations have been satisfied at period 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
London Metal Exchange (LME) 3-month tin price at period end. As at
31 August 2021 the Group recognised a receivable at fair value
through profit or loss of GBP465 529 (August 2020: nil and February
2021: GBP531 583).
3. Adoption of new and revised standards
The following standards, amendments and interpretations to
existing standards are effective and have been adopted by the
Group:
Amendments to IFRS 3 "Business Combinations": Definition of business
Amendments to IAS 1 "Presentation of Financial Statements" and
IAS 8 "Accounting Policies, Changes in Accounting Estimates and
Errors": Definition of material
Amendments to References to the Conceptual Framework in IFRS Standards
The adoption of these amendments did not have a material impact
on the financial statements of the Group.
Accounting standards and interpretations not applied
The following standards, amendments and interpretations to
existing standards are not yet effective and have not been early
adopted by the Group:
Annual Improvements to IFRS: 2018-2020 Cycle
Amendments to IFRS 3 "Business Combinations": Conceptual Framework
for Financial Reporting
Amendments to IAS 37 "Provisions, Contingent Liabilities and Contingent
Assets": Onerous Contracts - Cost of Fulfilling a Contract
Amendments to IAS 16 "Property, Plant and Equipment": Proceeds
before Intended Use
IFRS 17 "Insurance Contracts"
Amendments to IAS 1 "Presentation of Financial Statements": Classification
of Liabilities as Current or Non-Current
Amendment to IFRS 16 "Leases": COVID-19-Related Rent Concessions
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest
Rate Benchmark Reform - Phase 2
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 31 August 2021, the Group operated within two
operating segments, tin exploration and operational activities in
Namibia and tin exploration activities in South Africa.
Segment results
The following is an analysis of the Group's results by
reportable segment.
South Africa Namibia Total
GBP GBP GBP
Period ended 31 August
2021
Results
Revenue 17 778 5 055 559 5 073 337
(4 498 (4 500
Associated costs (2 006) 287) 293)
------------ ---------- ---------
Segmental profit/(loss) 15 772 557 272 573 044
============ ========== =========
Period ended 31 August
2020
Results
1 083
Revenue 13 757 1 070 239 996
(1 385 (1 387
Associated costs (2 715) 083) 798)
------------ ---------- ---------
Segmental profit/(loss) 11 042 (314 844) (303 802)
============ ========== =========
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 loss (3 043 155) (765 710) 865)
============ ========== =========
The reconciliation of segmental gross loss to the Group's loss
before tax is as follows:
Period ended Period ended Year ended
31 August 31 August 2020 28 February
2021 GBP 2021
GBP GBP
Segmental loss 573 044 (303 802) (3 808 865)
Unallocated
costs (849 033) (628 623) (1 802 718)
Finance income - 14 -
Finance costs (228 285) (109 410) (184 300)
------------ --------------- ------------
Loss before
tax (504 274) (1 041 821) (5 795 883)
============ =============== ============
Unallocated costs are mainly comprised of corporate overheads
and costs associated with being listed in London.
Other segmental information
South Africa Namibia Total
GBP GBP GBP
As at 31 August 2021
6 182
Intangible assets 12 718 907 6 195 625
Other reportable segmental 17 326 17 424
assets 98 119 294 413
Other reportable segmental (2 080 (2 144
liabilities (63 974) 988) 962)
Unallocated net asset - - 5 677 317
---------------- ----------------- ---------
21 428 27 152
Total consolidated net assets 46 863 213 393
================ ================= =========
As at 31 August 2020
4 252
Intangible assets 2 994 786 475 7 247 261
Other reportable segmental 13 570 13 632
assets 61 314 933 247
Other reportable segmental
liabilities (58 909) (820 345) (879 254)
Unallocated net asset - - 39 302
---------------- ----------------- ---------
17 003 20 039
Total consolidated net assets 2 997 191 063 556
================ ================= =========
As at 28 February 2021
Intangible assets 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
================ ================= =========
Unallocated net assets/liabilities are mainly comprised of cash
and cash equivalents and the borrowings which are managed at a
corporate level.
5. Revenue
Period ended Period ended Year ended
31 August 31 August 28 February
2021 2020 2021
GBP GBP GBP
Revenue from the sale of tin 5 040 321 1 070 239 4 744 609
Revenue from the sale of sand 17 778 13 757 34 863
------------- ------------ ------------
Total revenue from customers 5 058 099 1 083 996 4 779 472
Other revenue - change in fair
value of
customer contract 15 238 - 205 635
------------- ------------
Total revenue 5 073 337 1 083 996 4 985 107
============= ============ ============
6. Other administrative expenses
The loss for the period has been arrived at after charging:
Period ended Period ended Year ended
31 August 31 August 28 February
2021 2020 2021
GBP GBP GBP
Staff costs 506 904 381 625 1 201 489
Depreciation of property, plant
& equipment 97 166 57 671 275 987
Professional fees 132 991 67 044 127 902
Travelling expenses 56 969 9 128 44 793
Uis administration expenses 230 007 218 759 361 509
Auditor's remuneration 1 500 1 500 69 250
Other costs 364 641 210 455 458 832
1 390 177 946 182 2 539 762
============ ============ ============
7. Finance cost
Period ended Period ended Year ended
31 August 31 August 28 February
2021 2020 2021
GBP GBP GBP
Interest on lease liability 21 060 12 528 39 691
Interest on environmental rehabilitation
liability 12 173 3 704 7 593
Bank interest 60 891 - 31 696
Interest on loan notes 68 836 52 096 49 863
Amortisation of warrant charge 37 594 39 202 49 541
Other interest 27 731 1 880 5 916
------------ ------------ ------------
228 285 109 410 184 300
============ ============ ============
8. Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
Period ended Period ended Year ended
31 August 31 August 28 February
2021 2020 2021
GBP GBP GBP
Factors affecting tax for the period:
The tax assessed for the period
at the Guernsey corporation
tax charge rate of 0%, as explained
below:
Loss before taxation (504 274) (1 041 821) (5 795 883)
------------ ------------ ------------
Loss before taxation multiplied
by the Guernsey
Corporation tax charge rate of
0% - - -
Effects of:
Differences in tax rates (overseas
jurisdictions) (452 848) (188 301) (549 615)
Tax losses carried forward 452 848 188 301 549 615
------------ ------------ ------------
Tax for the period - - -
============ ============ ============
Accumulated losses in the subsidiary undertakings for which
there is an unrecognised deferred tax asset are GBP3 919 522
(August 2020: GBP2 180 918 and February 2021: GBP3 244 873).
9. Loss per share from continuing operations
The calculation of a basic loss per share of pence 0.07 (August
2020: loss per share of 0.15 pence and February 2021: loss per
share of 0.76 pence), is calculated using the total loss for the
period attributable to the owners of the Company of GBP692 251
(August 2020: GBP999 434 and February 2021: GBP5 694 962) and the
weighted average number of shares in issue during the period of 1
016 465 204 (August 2020: 677 705 520 and February 2021: 749 085
933).
Due to the loss for the period, 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 31 August 2021 is 84 895 572 (August
2020: 89 723 725 and February 2021: 86 882 728). These potentially
dilutive ordinary shares may have a dilutive effect on future
earnings per share.
10. Intangible assets
Exploration
and evaluation Computer
assets software Total
Cost GBP GBP GBP
As at 31 August 2020 7 139 010 108 251 7 247 261
Additions for the period 899 133 1 064 900 197
Impairment for the year (3 069 232) - (3 069 232)
Exchange differences 155 775 6 460 162 235
As at 28 February 2021 5 124 686 115 775 5 240 461
Additions for the period 835 088 - 835 088
Exchange differences 120 295 5 862 126 157
As at 31 August 2021 6 080 069 121 637 6 201 706
=============== ========= ===========
Accumulated Depreciation
As at 31 August 2020 - - -
Charge for the period - - -
Exchange differences - - -
--------------- --------- -----------
As at 28 February 2021 - - -
Charge for the period - 6 086 6 086
Exchange differences - (5) (5)
--------------- --------- -----------
As at 31 August 2021 - 6 081 6 081
--------------- --------- -----------
Net Book Value
As at 31 August 2021 6 080 069 115 556 6 195 625
As at 28 February 2021 5 124 686 115 775 5 240 461
As at 31 August 2020 7 139 010 108 251 7 247 261
11. Property, plant and equipment
Mining
Mining Asset
asset under Mining - Decommissioning Right-of-use Computer
Land construction Asset Stripping asset Asset Equipment Furniture Vehicles Total
Cost GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP
As at 31
August 12 549 230 13 098
2020 11 187 130 - - 71 499 213 88 737 76 277 71 174 217
Additions for 90 259 42 21
the period 353 125 123 803 - 323 957 591 598 - 891 397
Disposals for
the period - - - - - - (1 955) - - (1 955)
Transfer
between
categories
of (13 550 (13 550
assets 114) 114) - - - - - - -
Exchange 16
differences 675 647 859 1 236 - 5 221 501 5 685 4 790 4 299 686 266
------ ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- --------
As at 28
February 11 13 675 167 506 135 102 75 14 673
2021 862 - 153 - 043 671 058 665 473 925
Additions for 746 1 576
the period - 390 218 332 990 257 - 61 909 31 081 14 147 - 602
Disposals for (3
the period - - - - - - 060) - - (3 060)
Exchange
differences 601 - 621 259 (502) 8 458 25 613 6 819 5 161 3 821 671 230
------ ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- --------
As at 31
August 14 629 745 175 594 169 121 16 918
2021 12 463 390 218 402 755 501 193 898 973 79 294 697
====== ============= ========= ========== ================ ============= ========== ========== ========= ========
Accumulated
Depreciation
As at 31
August
2020 - - - - - 72 699 52 018 24 181 32 622 181 520
Charge for
the 83 19
period - - 717 864 - - 975 467 9 980 9 571 840 857
Exchange
differences - - 6 118 - - 4 600 2 948 1 346 1 835 16 847
------ ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- --------
As at 28
February 161 74 35 44 1 039
2021 - - 723 982 - - 274 433 507 028 224
Charge for
the
period - - 622 781 - 4 778 68 404 19 514 11 397 9 918 736 792
Exchange
differences - - 30 918 - (3) 8 120 3 774 1 772 2 223 46 803
------ ------------- --------- ---------- ---------------- ------------- ---------- ---------- --------- --------
As at 31
August 237 1 822
2021 - - 1 377 680 - 4 775 798 97 721 48 676 56 169 819
====== ============= ========= ========== ================ ============= ========== ========== ========= ========
Net Book
Value
As at 31
August 13 251 745 170 356 15 095
2021 12 463 390 218 722 755 726 395 72 177 73 297 23 125 878
As at 28
February 11 12 951 167 345 60 67 31 13 634
2021 862 - 171 - 043 397 625 158 445 701
As at 31
August 12 549 157 12 916
2020 11 187 130 - - 71 499 514 36 719 52 096 38 552 697
12. Inventories
31 August 31 August 28 February
2021 2020 2021
GBP GBP GBP
Run-of-mine stockpile 962 781 261 424 373 310
Tin concentrate on hand 167 367 285 971 427 423
Consumables 299 546 62 776 195 965
---------- --------- -----------
1 429 694 610 171 996 698
========== ========= ===========
13. Trade and other receivables
31 August 31 August 28 February
2021 2020 2021
GBP GBP GBP
Trade receivables 120 042 164 573 185 451
Trade receivables at fair
value through profit
or loss 465 529 - 531 583
Other receivables 165 475 100 690 204 779
VAT receivables 385 007 97 493 266 339
----------- ---------
1 136 053 362 756 1 188 152
=========== ========= ===========
14. Cash and cash equivalents
31 August 31 August 28 February
2021 2020 2021
GBP GBP GBP
--------- ---------
Cash on hand and in bank 6 290 694 2 578 612 1 351 200
========= ========= ===========
15. Borrowings
31 August 31 August 28 February
2021 2020 2021
GBP GBP GBP
Working capital facility 505 267 763 543 1 710 247
Loan note facility - 1 753 993 2 159 242
505 267 2 517 536 3 869 489
========= ========= ===========
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.
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 were issued in tranches of
GBP50 000, accrued interest at a rate of 10% per annum which was
payable in full on redemption, and had a 12-month term. These notes
were settled in full in cash in May 2021.
16. Trade and other payables
31 August 31 August 28 February 2021
2021 2020 GBP
GBP GBP
Trade payables 1 436 435 676 674 1 094 390
Other payables 78 520 109 690 141 677
Accruals 375 745 107 644 248 415
---------- ---------
1 890 700 894 008 1 484 482
========== ========= ================
17. Environmental rehabilitation liability
GBP
Balance at 31 August 2020 80 968
Increase in provision 90 323
Interest expense 3 888
Foreign exchange differences 5 738
-------
Balance at 28 February
2021 180 917
Increase in provision -
Interest expense 12 173
Foreign exchange differences 9 152
-------
Balance at 31 August 2021 202 242
=======
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 31 August 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% (August 2020: 9.35% and February 2021: 12.8%), an inflation
rate of 6% (August 2020: 5.5% and February 2021: 6%) 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.
18. 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 31 August 2020 183 429 - - 183 429
Additions - 108 252 151 705 276 547
Interest expense 11 891 3 923 11 349 33 128
Lease payments (33 501) (30 319) (34 080) (68 015)
Foreign exchange differences 11 323 818 1 287 (17 987)
---------------
Balance at 28 February
2021 173 142 82 674 130 261 386 077
Additions 61 909 - - 61 909
Interest expense 13 193 2 611 5 256 21 060
Lease payments (45 150) (27 595) (18 513) (91 258)
Foreign exchange differences 8 747 4 202 6 605 19 554
---------------
Balance at 31 August 2021 211 841 61 892 123 609 397 342
=============== ======== ======== ========
The following is the split between the current and the
non-current portion of the liability:
31 August 31 August 28 February
2021 2020 2021
GBP GBP GBP
Non-current liability 232 858 140 527 260 512
Current liability 164 484 42 902 125 565
--------- ---------
397 342 183 429 386 077
========= ========= ===========
19. Share capital
Number of ordinary
shares of no
par value issued Share Capital
and fully paid GBP
Balance at 31 August 2020 813 657 942 23 604 665
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
Warrants exercised - 22 April
2021 1 686 666 63 150
Capital raise - 13 May 2021 216 666 667 13 000 000
Share issue costs - (823 447)
Convertible loan note settled
- 25 May 2021 18 963 699 430 055
Shares issued to broker 327 868 19 672
------------------ -------------
Balance at 31 August 2021 1 112 334 912 38 297 431
================== =============
Authorised: 1 220 486 913 ordinary shares of no par value
Allotted, issued and fully paid: 1 112 334 912 shares of no par
value
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.
On 22 April 2021, warrant holders exercised 1 186 666 warrants
at an exercise price of 4.5 pence and 500 000 warrants at an
exercise price of 1.95 pence.
On 12 May 2021, 216 666 667 ordinary shares of no par value were
issued as a result of an accelerated bookbuild. These shares were
issued at a price of 6 pence per share.
On 25 May 2021, 18 963 699 ordinary shares of no par value were
issued to various holders to settle a portion of the outstanding
convertible loan note (the remainder of the convertible loan note
was settled in cash on this date).
On 25 May 2021, 327 868 ordinary shares of no par value 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 6 pence per share.
20. Warrant reserve
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 estimated fair values were calculated by applying the Black
Scholes pricing model. The model inputs were:
Date of grant 10 December
2020 7 July 2020 31 May 2020 5 May 2020
Share price at grant
date (pence) 2.35 3 1.8 1.8
Exercise price (pence) 1.95 1.95 1.95 1.95
Expected life 2.4 years 2.8 years 2.9 years 3 years
Expected volatility 60% 60% 60% 60%
Expected dividends Nil Nil Nil Nil
Risk-free interest
rate 1.24% 1.24% 1.24% 1.24%
The warrants in issue during the year are as follows:
Outstanding at 31 August
2020 23 671 939
Exercisable at 31 August 23 671
2020 939
Granted during the period 2 500 000
(1 871
Expired during the period 939)
Exercised during the period -
-----------
Outstanding at 28 February 24 300
2021 000
Exercisable at 28 February 24 300
2021 000
Granted during the period -
Expired during the period -
Exercised during the period (1 686 666)
-----------
Outstanding at 31 August
2021 22 613 334
Exercisable at 31 August
2021 22 613 334
The warrants outstanding at the end of the period have an
average exercise price of 2.4 pence, with a weighted average
remaining contractual life of 1.63 years.
In the period ended 31 August 2021, there was no charge
accounted for due to the issue of warrants (August 2020: GBP137 305
and February 2021: GBP162 480).
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.
21. Events after balance sheet date
Standard Bank Term Loan and short-term banking facilities
A credit approved term sheet for a term loan to finance the
Phase 1 expansion of NAD 90 million (c. GBP 4.5 million) was agreed
with Standard Bank on 20 September 2021. The final agreement is
subject to legal opinion and negotiation of documents.
Once executed, the intention is that the term of the loan will
be 5 years and will incur an interest rate of 3-month JIBAR
(currently 3.67%) plus 4.5% (currently equal to 8.17%) and will be
ranked as senior secured debt.
The term loan has certain financial covenants which require
measurement at the operating company level. Management are
currently assessing the financial covenant definitions and their
applicability as part of the final documentation.
In addition to the term loan, the intention is Standard Bank
will re-finance the Company's existing short-term banking
facilities (working capital facilities) with Nedbank Namibia
totalling NAD 43 million (approximately GBP 2.2 million). These
facilities will incur an interest rate of Namibian prime lending
rate (currently 7.50%) minus 1.00%.
Furthermore, it is intended that Standard Bank will provide
AfriTin Mining (Namibia) Pty Limited with a NAD 5 million guarantee
to Namibia Power Corporation Pty Limited in relation to a deposit
for the supply of electrical power.
22. 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.
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 GBP38 305 (August 2020: GBP39 556 and February 2021:
GBP82 423) for the use of office space. At period end, the Group
owed Bushveld GBP71 906 (August 2020: GBP95 391 and February 2021:
GBP112 962).
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END
IR PPUWCBUPGPPQ
(END) Dow Jones Newswires
September 27, 2021 02:00 ET (06:00 GMT)
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