TIDMPRE
RNS Number : 9310T
Pensana PLC
30 March 2021
30 March 2021
LSE: PRE
Pensana Plc
("Pensana", "the Company" or "the Group")
Interim results for the six months ended 31 December 2021
Pensana announces the interim results (unaudited) for the six
months ended 31 December 2020.
Highlights
-- Successful listing on main board of London Stock Exchange.
-- Ongoing support from the Angolan Sovereign Wealth Fund via
the issue of equity to raise US$8.6 million.
-- Mineral resource upgrade to 313 million tonnes. Initial focus
on 33.9 tonnes for business plan.
-- Total comprehensive loss for the period US1,717,491 (31 December 2019: US$2,231,386).
-- Completion of flotation pilot test work programme.
-- Successful generation of high purity mixed rare earth
carbonate ("MREC") from flotation concentrate.
-- Ongoing detailed design towards early works programme and
construction at Longonjo and establishment of the Saltend rare
earth separation plant.
-- High grade rare earths in soil samples confirmed at the Coola
exploration project located 16 kilometres north of the flagship
Longonjo project.
-- Liberum appointed as joint broker to the Company.
-- Appointment of Baroness Northover PC in Nov 2020 and Sandra
Bates in August 2020 as Non-Executive Directors of the Company.
Post period end
-- Delisting from the ASX and company rebranded to Pensana Plc in February 2021.
-- Planning application submitted for the establishment of a
rare earth oxide separation facility at the Saltend Chemicals Park,
Humber, Yorkshire. Award of Freeport status to the Humber, home to
the world-class Saltend Chemicals Park where Pensana proposes to
build its magnet metals separation facility.
-- Appointment, post period end of world renowned rare earth
specialist, Rocky Smith, as Chief Operating Officer.
-- Appointment of Dr Jeremy Beeton in March 2021 as Non-Executive Director.
CEO's review
COVID -19
I would firstly like to express my sincere gratitude to my team
at Pensana, the Angolan Sovereign Wealth Fund ("ASF"), the UK and
Angolan Governments and our key technical advisors for navigating
their way through this period together and ensuring the ongoing
momentum as we looked to insert ourselves further downstream in the
magnet metal supply stream whilst maintaining the safety and
well-being of our employees.
The team has made significant progress over the period despite
the ongoing challenges of Covid. With an LSE listing and a third
placing with our key shareholder the ASF we were able to progress
with the key metallurgical testing workstreams in Austr alia,
complete the production of an MREC, upgrade our mineral resource at
Longonjo, initiate our Coola exploration programme and make a
stepped changed in the Company's direction by progressing key
scoping studies into the Saltend refinery.
UK rare earth processing study
During the Period, the Company announced that it had appointed
Wood Group to undertake a study into the establishment of an
integrated rare earth processing facility in the UK with a view to
creating the world's first sustainable magnet metal supply
chain.
Having progressed the design of the Longonjo project to include
the production of a mixed rare earth sulphate, Pensana had the
unique opportunity to explore the potential to make one further
step downstream and to create additional value by establishing a
rare earth oxide production facility in the UK.
This was followed by the announcement on 8 December 2020 that
the Saltend Chemicals Park in the Humber Local Enterprise
Partnership, Yorkshire, had been selected as the proposed site to
build the UK's first rare earth processing facility.
Post Period-end on 25 January 2021, the Company announced it had
progressed further with the submission of a planning application
for the proposed facility.
The US$125 million Saltend facility is anticipated to generate
around 100 direct jobs once constructed and in operation. It is
being designed by Wood Group to become one of the world's largest
producers of rare earth oxides, crucial components in the
manufacture of powerful permanent magnets which are used in a range
of growing advanced industries including electric vehicles and
offshore wind turbines.
The application, which is expected to take up to three months to
review, supports Pensana's commitment to establish the world ' s
first fully sustainable mine to magnet metal supply chain in the
UK.
The Saltend Chemicals Park is a cluster of world-class chemicals
and renewable energy businesses including BP Chemicals , Ineos,
Nippon Gohsei and Air Products. It is strategically located on the
Humber estuary, a gateway to Europe and the UK ' s busiest ports
complex.
The 370-acre site has had GBP500 million of investment over
recent years and is managed by px Group, a leading provider of
services in complex industrial sectors.
The site provides ' plug and play' services with ready access to
the port, a wide range of utilities, power, chemical supply,
logistics and a large pool of skilled personnel with experience in
the chemicals industry.
OPERATIONS
Longonjo Mineral Resource estimate upgraded
In September a substantial upgrade to the Mineral Resource
estimate for the Longonjo Project was announced.
International mining industry consultants SRK Consulting has
reported an upgraded Measured, Indicated and Inferred Mineral
Resource estimate of:
- 313 million tonnes at 1.43% REO including 0.32% NdPr for
4,470,000 tonnes of REO including 990,000 tonnes of NdPr.
The upgraded estimate contains more than 2.3 times the previous
estimate of the Measured and Indicated resources announced on the
ASX on 15 November 2019, has increased the proportion of the
resources reported in the Measured and Indicated categories from
31% to 68% and has increased the overall contained NdPr by 35%.
Successful development of Mixed Rare Earth salt flow sheet
In October the Company reported on the successful production of
an NdPr rich mixed rare earth carbonate (MREC) from the testwork
currently underway on mineralisation from its Longonjo rare earth
project . This was further developed to produce a mixed rare earth
sulphate ("MRES") as a feedstock to the Saltend refinery.
Downstream process pilot programme
Technical programmes to support the feasibility and detailed
engineering studies for the development of Longonjo and a UK based
rare earth refinery continued on site over the Period with a large
diameter drilling programme concluded in early December. Drilling
was completed to provide feed for further optimisation and pilot
plant programmes, supporting the Company's expanded strategy of
mining and processing operations in Angola and a UK refinery.
A total of 15 drill holes were completed using a specialised
large diameter drill rig to provide representative bulk samples of
weathered zone mineralisation from surface to 24 metres in depth.
100 tonnes of mineralisation from the areas of proposed first
mining is being shipped from site through the port of Lobito to the
Company's test facilities in Perth, Australia.
The pilot plant programme to enable completion of detailed
design for the expanded downstream processing through to the
Saltend refinery is well advanced.
High grade rare earths confirmed at Coola
On 21 December 2020, the Company reported high grade rare earths
in soils from the first sampling programmes completed at its 7,500
square kilometre Coola Project, located 16 kilometres north of its
flagship Longonjo project in Angola.
The Company reported having identified several carbonatite and
alkaline complexes within Coola with geological prospectivity for
critical technology metal commodities that could complement future
NdPr rare earth production from Longonjo.
Systematic soil sampling and geological mapping programmes were
completed over two geological targets in October and assay results
from the first, the Coola Carbonatite itself, were received. Assay
results received from the soil sampling programme show that a high
tenor rare earth in soils anomaly extends over a wide area.
The soils contain up to 4.69% REO over an outcropping
carbonatite ring dyke system that forms part of the 1.2 kilometre
diameter Coola Carbonatite. The central part of this circular
volcanic structure lies entirely beneath thick soil cover. Several
3 metre deep pits were excavated in the central area but failed to
reach bedrock, so the potential for additional prospective
carbonatite and the mineralisation potential remains unknown. Assay
results from vertical channel samples of the pits are still
awaited.
Outcropping fluorspar mineralisation was located within the
Coola complex during the geological mapping. As well as being
listed as a critical commodity and having direct economic potential
in its own right, fluorspar is also a positive indicator of the
potential for additional technology metals in this geological
setting. Assay results from rock samples of fluorspar
mineralisation are also awaited.
As at Longonjo, the carbonatite associated rare earth anomalism
at Coola is also accompanied by highly elevated levels of
phosphorous, barium, iron, manganese, niobium, strontium and
zinc.
An additional soil sampling programme has been completed over
the Monte Verde alkali, and carbonatite complex and assay results
are expected shortly. Geological mapping and sampling of the large,
twin centre Sulima alkali complex is planned for early 2021. A
stream sediment sampling programme and geological reconnaissance of
a series of geophysical anomalies has commenced and will
continue.
Corporate
London Stock Exchange Listing
On 6 July 2020, the Company completed its listing on the main
board (Standard segment) of the London Stock Exchange under ticker
code "PRE". The Company further appointed SI Capital and Mirabaud
as brokers to the Company shortly after listing.
Appointment of London broker Liberum
On 23 November 2020 the Company reported the engagement of
Liberum to work alongside the Company's existing advisors and
brokers, with the brief to provide advice on how best to meet the
growing demands from investors for sustainable investments .
ASX Delisting
On 24 February 2021 the Company announced that it had officially
delisted from the Australian Securities Exchange whilst maintaining
its primary listing under the stock code PRE on the main board of
the London Stock Exchange. This is part of the Group's ongoing
strategy of focussing on the UK and European markets.
Equity placings
On 1 July 2020 the Company issued 16,508,633 fully paid ordinary
shares to the Angolan Sovereign Wealth fund. This was the balance
of the shares to be allotted out of a total of 25,808,633 fully
paid ordinary shares that formed part of their second equity
placing in the Company of US$ 5million as announced on 11 June
2020.
On 12 August 2020, the Company announced the conversion of
500,000 performance rights into fully paid ordinary shares on
Listing on the London Stock Exchange.
On 12 August 2020, the Company issued 821,157 fully paid
ordinary shares to third party service providers.
On 25 September 2020 the Group announced the raising an
additional US$8.6million via the placing of 13,500,000 fully paid
ordinary shares with the ASF.
Group Restructuring
Pursuant to the scheme of arrangement which saw the
re-domiciliation of the Group to the UK the shares in the wholly
owned subsidiaries, Sable Minerals GmbH and Sable Rare Earths GmbH
were acquired directly by Pensana Plc during the period. This was
part of an ongoing internal group restructure that will see the
removal of redundant holding companies and streamlining of the
Group structure.
Tanzania
On 21 September 2020, as part of the Group's restructuring and
divesting from non-core assets, the Company announced that its
responsibilities in the Miyabi exploration gold project in Tanzania
would be assumed with immediate effect by Drillcraft Limited, a
private company based in Mauritius with an established gold
operational base in Tanzania. As a result of Covid-19, completion
of the transaction was delayed and the Miyabi assets continue to be
shown as held for sale in the statement of financial position as at
the period end. The Company is in ongoing discussions with the
buyer and expects the transaction to complete. The transaction will
comprise the receipt of net cash proceeds by Pensana of
approximately US$0.4 million payable alongside a five-year, 2%
royalty participation agreement over the existing mineral resource
estimate of approximately 0.5 million ounces of gold. Operations
were initially forecast to commence in mid-2021 but this process
has been delayed due to Covid-19.
Management
Post period end, on 8 March 2021, the Company announced the
appointment of Rocky Smith as Chief Operating Officer. Rocky is a
highly experienced Chemical Engineer with 35 years' rare earths
experience. He was Managing Director of Molycorp's Mountain Pass
rare earth project in California, US, which is now owned by New
York Stock Exchange listed MP Materials. Rocky is one of the few
western mining executives with in-depth knowledge of the rare earth
industry, including the supply chain, operational start-up and
running complex chemical processes.
In October 2020 the company announced the departure of Dave
Hammond who stepped down in his role as Chief Operating Officer and
director of the Company, after three years of significant service
in bringing the Longonjo carbonatite to its current resource status
as a world class deposit.
During this time the Company welcomed the appointment of Mr
Grant Hayward as Exploration Manager. Grant is an accomplished
economic geologist and manager with extensive experience in the
exploration for and evaluation of rare earth and associated
commodities including phosphate, fluorspar and niobium. He has been
involved with the evaluation of carbonatites in South Africa,
Malawi, Namibia, Mozambique, Uganda, Zimbabwe and Tanzania as well
as in a range of other commodities and geological styles including
platinum, gold, base metals, graphite and industrial minerals. He
has lead several resource definition programmes to NI43-101
compliant resources including the Zandskopdrift rare earth
carbonatite project in South Africa.
New Board appointments
On 10 August 2020, Ms Sandra Bates was appointed as a
Non-Executive Director to the Board of the Company. Ms Bates is an
international lawyer with over 20 years' experience advising listed
and private companies in the natural resources sector on complex
commercial negotiations and Environmental, Social and Governance
(ESG) engagement.
Ms Bates is a Partner at Keystone Law, the London based law
firm, a Non-Executive Director of LSE listed Adriatic Metals Plc
and a member of Women in Mining UK.
On 2 November the Company announced the appointment of Rt Hon
Baroness Lindsay Northover PC as a Non-Executive Director of the
Company. Baroness Northover was the UK Prime Minister's Trade Envoy
to Angola (2016-2020) and Zambia (2017-2020) and Africa Minister
for the Department for International Development ("DFID") (November
2014 - May 2015).
Further enhancements to the Boards skill set was announced post
period end on 2 March 2021 with the appointment of Dr Jeremy Beeton
as a Non-Executive Director of the Company. Jeremy has extensive
international experience in project management over complex
multi-site, multiple project operations' portfolios for government,
as well as public and private companies. He was Director General of
the GBP9 billion London 2012 Olympic and Paralympic Games, an
Advisory Board member of PricewaterhouseCoopers until October 2018,
and an Independent Non-Executive Director of SSE plc until July
2018.
Operating and Financial Review
The Group's interim results have been presented in the
presentational currency of US Dollars. Prior period figures have
been retranslated from the previously reported Pensana Metals
Limited presentational currency, being Australian Dollar to the new
presentational currency of US Dollars.
In addition, as a result of the Scheme of Arrangement in January
2020 in which the Company was initially incorporated as a wholly
owned subsidiary of Pensana Metals and then acquired 100% of that
company's shares, the merger accounting principles have been
applied in preparing these financial statements as detailed in note
10. Under the accounting policy, the Group is presented as if it
had always been in existence in its current form with comparatives
provided. The assets and liabilities of the former group are
recorded at their book values and share capital reflected at the
nominal value of the shares issued as part of the Scheme of
Arrangement with the difference between the two recorded as a
merger reserve.
During the period the consolidated entity incurred a
comprehensive loss for the period of $1,717,491 (31 December 2019:
$2,231,386).
Administration expenses decreased to $973,415 (2019: $1,110,724)
due in main to the once off costs incurred in the prior period as
part of the group restructuring and scheme of arrangement which saw
the company re-domicile to the UK under the newly incorporated
parent entity Pensana Plc in January 2020..
Corporate expenses of $944,518 increased from $891,076 in the
prior period due primarily to share based award charges associated
with the granting of new performance rights, issued in January
2020, and the additional fees associated with the addition of new
employees and Board members.
Other expenditure of $92,383 (2019: $nil) relates to expenditure
in the period for preparatory works associated the Saltend planning
and application process.
The foreign currency exchange loss relates to the retranslation
of the Group's Sterling and Australian dollar bank balances at
period end into US Dollars for reporting purposes.
Group net assets increased in the period to $22,071,185 from
$14,861,184. This was primarily driven by the capitalisation to the
Longonjo Project of exploration and evaluation expenditure for the
period of $3,412,945 and an increase in cash and cash equivalents
of $3,446,420 on the back of the ASF equity placings. The Group's
movement in share capital for the period comprised the equity
placings detailed below and the settlement of trade creditors
through the issue of shares.
The Group experienced net cash outflows from operating and
investing activities of $5,144,116 (31 December 2019: $2,384,252).
Net cash outflows from operating activities of $1,971,930 increased
from $1,071,206 due to operating losses partially offset by an
increase in trade and other payables. Investing cash flows of
$3,172,409 (2019: $1,313,046) related to exploration expenditure
predominantly at Longonjo and early stage Coola exploration.
Proceeds from the issuance of equity before share issue costs in
the amount of $8,693,305 (31 December 2019: $nil) was the source of
financing to facilitate the exploration spend over the Period. Cash
and cash equivalents totalled $7,552,741 (31 December 2019:
$860,503) at period end.
The Directors have prepared a cash flow forecast for the period
ended 30 June 2022. The forecast indicates that whilst the Group
has sufficient funding to meet its corporate and general operating
costs, the Group will require additional funding over the next
twelve months to meet its committed and planned exploration and
development expenditure and operating costs related to the Saltend
and Longonjo Projects. Please refer note 3 to the financial
statements for more detail on the going concern statement.
Accordingly the Directors have resolved to undertake certain
mitigating actions including actively engaging with institutional
investors and financing institutions in the United Kingdom and
Europe to discuss opportunities around potential future financing
in anticipation of key project investment milestones as part of the
business plan being reached and the associated funding requirements
attached thereto. Such additional funding will be required to meet
the Group's committed and planned development expenditure across
the forthcoming year.
The ability of the Group to continue as a going concern is
dependent on securing such additional funding given its forecast
expenditure above. These conditions indicate a material uncertainty
which may cast significant doubt as to the Group's ability to
continue as a going concern and therefore it may be unable to
realise its assets and discharge its liabilities in the normal
course of business.
PRINCIPAL BUSINESS RISKS
The Group is exposed to a number of risks and uncertainties
which could have a material impact on its long-term development,
and performance and management of these risks is an integral part
of the management of the Group. An overview of the key risks which
could affect the Group's operational and financial performance was
included in the Company's 2020 Annual Report, which can be accessed
at www.pensana.co.uk. These may impact the Group over the medium to
long term; however, the following key risks have been identified
which may impact the Group over the short term.
Financing and liquidity
The Company is of the opinion that the Group does not have
sufficient funding to meet expected liabilities and commitments as
they fall due based on its committed and planned exploration and
development expenditures and operating costs related to the
Longonjo Project and Saltend Project for at least the next 12
months. The Group has no history of NdPr oxide production at its
planned Saltend facility nor mineral production at the Longonjo
Project and accordingly has no revenues from operations and
negative cash flows and will require additional future capital in
the short term to continue its exploration activities and if it
decides to commence development of the Saltend and Longonjo
Project.
COVID-19 pandemic
The outbreak of the COVID-19 pandemic has had an impact on the
Group's businesses. The current government lockdown in Angola led
to a temporary suspension of work at the Longonjo Project albeit
that work has now resumed. Further escalation of the COVID-19
pandemic, and the implementation of any additional
government-regulated restrictions which delays the Group in
carrying out its business activities at the Longonjo and Saltend
Projects (such as preparatory works) ultimately delays the Group's
ability to reach production and start to generate cash and so could
have a material adverse impact on the Group's operations and
financial results. Additionally, COVID-19 has created increased
uncertainty and volatility in debt and equity markets which may
make the requisite funding for the Longonjo and Saltend Projects
more difficult to secure or affect the terms available.
Mr. Tim George
Chief Executive Officer
29 March 2021
INDEPENT REVIEW REPORT TO PENSANA PLC
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 31 December 2020 which comprises the condensed
consolidated statement of comprehensive income, condensed
consolidated statement of financial position, condensed
consolidated statement of changes in equity, the condensed
consolidated statement of cash flows and the related notes.
We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of and
has been approved by the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in note 3, the annual financial statements of the
group are prepared in accordance with International Financial
Reporting Standards (IFRSs) adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union. The condensed set of
financial statements included in this half-yearly financial report
has been prepared in accordance with International Accounting
Standard 34, "Interim Financial Reporting", adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European
Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity", issued by the Financial Reporting Council for use
in the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 31
December 2020 is not prepared, in all material respects, in
accordance with International Accounting Standard 34, adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the
European Union and, and the Disclosure Guidance and Transparency
Rules of the United Kingdom's Financial Conduct Authority.
Material uncertainty related to Going Concern
We draw attention to note 3 to the half-yearly financial report
which indicates the Directors considerations concerning the Group's
ability to continue as a going concern. The matters explained in
note 3 indicate that the Group will require additional funding to
meet its liabilities as they fall due for a period of at least the
next 12 months, that the required capital has not been secured at
the date of this report and the availability of such funding is not
guaranteed. As stated in note 3, these events or conditions, along
with other matters as set out in note 3, indicates that a material
uncertainty exists which may cast significant doubt over the
Group's ability to continue as a going concern. Our conclusion is
not modified in respect of this matter.
Use of our report
Our report has been prepared in accordance with the terms of our
engagement to assist the Company in meeting its responsibilities in
respect of half-yearly financial reporting in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority and for no other purpose. No person is
entitled to rely on this report unless such a person is a person
entitled to rely upon this report by virtue of and for the purpose
of our terms of engagement or has been expressly authorised to do
so by our prior written consent. Save as above, we do not accept
responsibility for this report to any other person or for any other
purpose and we hereby expressly disclaim any and all such
liability.
BDO LLP
Chartered Accountants
London, United Kingdom
29 March 2021
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
Condensed consolidated Statement of Comprehensive Income
for the six months ended 31 December 2020
Unaudited Unaudited
6 months 6 months
ended 31 ended 31
December December
2020 2019
(restated)
Note US$ US$
Administration expenses (973,415) (1,110,724)
Corporate expenses 5 (944,518) (891,076)
Other expenditure (92,383) -
Interest income 223 234
Foreign currency exchange loss (621,652) (41,825)
------------ ------------
Loss before income tax (2,631,745) (2,043,391)
Income tax benefit/(expense) - -
------------ ------------
Total loss for the period (2,631,745) (2,043,391)
------------ ------------
Other comprehensive loss
Items that may be reclassified subsequently
to profit or loss
Foreign currency translation 914,254 (187,995)
Total comprehensive loss for the period (1,717,491) (2,231,386)
------------ ------------
Net loss for the period is attributable
to:
Owners of Pensana Plc (2,631,745) (2,043,391)
------------ ------------
Total comprehensive loss is attributable
to:
Owners of Pensana Plc (1,717,491) (2,231,386)
------------ ------------
Loss per share attributable to owners of Pensana Plc:
Basic (cents per share) 15 ( 1.00) (1.37)
Diluted (cents per share) 15 ( 1.00) (1.37)
Notes to the interim financial statements are included on pages
13 to 22
Condensed consolidated Statement of Financial Position
as at 31 December 2020
Unaudited Audited
As at As at
31 December 30 June
2020 2020
Note US$ US$
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 7,813 7,002
Exploration and evaluation expenditure 8 13,055,063 9,642,118
------------- -------------
TOTAL NON-CURRENT ASSETS 13,062,876 9,649,120
------------- -------------
Non-current assets classified
as held for sale 14 2,500,000 2,500,000
------------- -------------
15,562,876 12,149,120
------------- -------------
CURRENT ASSETS
Cash and cash equivalents 6 7,552,741 4,106,321
Trade and other receivables 7 202,951 140,162
Prepayments 58,332 42,792
Other financial assets 120 107
TOTAL CURRENT ASSETS 7,814,144 4,289,382
------------- -------------
TOTAL ASSETS 23,377,020 16,438,502
------------- -------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 9 1,093,991 1,365,474
------------- -------------
TOTAL CURRENT LIABILITIES 1,093,991 1,365,474
------------- -------------
Liabilities directly associated
with non-current assets classified
as held for sale 14 211,844 211,844
TOTAL LIABILITIES 1,305,835 1,577,318
------------- -------------
NET ASSETS 22,071,185 14,861,184
------------- -------------
EQUITY
Issued capital 10 262,140 221,945
Share premium 15,017,486 3,116,850
Reserves 49,893,683 51,992,768
Accumulated losses (43,102,124) (40,470,379)
TOTAL EQUITY 22,071,185 14,861,184
------------- -------------
Notes to the interim financial statements are included on pages
13 to 22.
Condensed consolidated Statement of Changes in Equity
for the six months ended 31 December 2020
Fully Share Shares Accumulated Merger Foreign Share Equity Total
paid premium to be Losses Reserve Currency based Reserve
ordinary issued Reserve Payments
shares Reserve Reserve
Unaudited US$ US$ US$ US$ US$ US$ US$ US$ US$
Balance at 221
1 July 2020 945 3,116,850 3,300,560 (40,470,379) 45,748,045 (2,032,999) 5,477,162 (500,000) 14,861,184
Loss for the
period - - - (2,631,745) - - - - (2,631,745)
Other
comprehensive
income - - - - - 914,254 - - 914,254
---------- ------------- ------------ --------------- ------------- -------------- ------------- ------------ -------------
Total
comprehensive
loss for the
period - - - (2,631,745) - 914,254 - - (1,717,491)
Issue of
shares
(note 10) 39,541 11,954,334 (3,330,560) - - - - - 8,693,305
Cost of
issuing
shares (116,620) - - - - - - (116,620)
Share based
payments
(note
13) - - - - - - 350,797 - 350,797
Issue of
shares
- conversion
of
performance
rights 654 62,922 - - - - (63,576) - -
---------- ------------- ------------ --------------- ------------- -------------- ------------- ------------ -------------
Balance at
31 December
2020 262,140 15,017,486 - (43,102,124) 45,748,045 (1,118,745) 5,764,3833 (500,000) 22,071,185
---------- ------------- ------------ --------------- ------------- -------------- ------------- ------------ -------------
Fully Share Shares Accumulated Merger Foreign Share Equity Total
paid premium to be Losses Reserve Currency based Reserve
ordinary issued Reserve Payments
shares Reserve Reserve
US$ US$ US$ US$ US$ US$ US$ US$ US$
Unaudited
(restated)
Balance at
1 July 2019 198,788 - - (36,394,159) 45,748,045 (1,828,748) 4,647,772 (500,000) 11,871,698
Loss for the
period - - - (2,043,391) - - - - (2,043,391)
Other
comprehensive
expense - - - - - (187,995) - - (187,995)
---------- -------- -------- --------------- ------------- -------------- ------------ ------------ -------------
Total
comprehensive
loss for the
period - - - (2,043,391) (187,995) - - (2,231,386)
Share based
payments (note
13) - - - - - - 448,847 - 448,847
---------- -------- -------- --------------- ------------- -------------- ------------ ------------ -------------
Balance at 31
December 2019 198,788 - - (38,437,550) 45,748,045 (2,016,743) 5,096,619 (500,000) 10,089,159
---------- -------- -------- --------------- ------------- -------------- ------------ ------------ -------------
Notes to the interim financial statements are included on pages
13 to 22.
Condensed consolidated Statement of Cash Flows
for the six months ended 31 December 2020
Unaudited Unaudited
31 December 31 December
2020 2019
(restated)
Note US$ US$
Cash flows from operating activities
Operating cash flows 17 (1,971,930) (1,071,206)
Net cash used in operating activities (1,971,930) (1,071,206)
------------- -------------
Cash flows from investing activities
Interest received 223 234
Proceeds from deposits for Tanzanian
assets disposed in prior periods - 67,448
Payments for exploration expenditure (3,172,409) (1,375,285)
Payment for property, plant & equipment - (5,443)
Net cash used in investing activities (3,172,186) (1,313,046)
------------- -------------
Cash flows from financing activities
Proceeds from issues of equity securities 8,693,305 -
Share issue costs (116,620) -
Net cash provided by financing activities 8,576,685 -
------------- -------------
Net increase/(decrease) in cash and
cash equivalents 3,432,569 (2,384,252)
Cash and cash equivalents at the beginning
of the period 4,106,321 3,312,441
Effects of exchange rate changes on
the balance of cash held in foreign
currencies 13,851 (67,686)
Cash and cash equivalents at the end
of the period 6 7,552,741 860,503
------------- -------------
Notes to the interim financial statements are included on pages
13 to 22
Notes to the financial statements
1. General information
The consolidated financial statements present the financial
information of Pensana Plc (formerly Pensana Rare Earths Plc) and
its subsidiary (collectively, the Group) for the six months ended
31 December 2020 in United States dollars (USD or $). Pensana Plc
(the Company or the parent) is a public company limited by shares
listed on the Main Market of the London Stock Exchange and
incorporated in England & Wales on 13 September 2019. The
registered office is located at 100 Pall Mall, St James, London,
United Kingdom, SW1Y 5NQ.
The Company is focussed on the establishment of an integrated
rare earth processing facility in the UK with a view to creating
the world's first sustainable magnet metal supply chain.
In early 2020, Pensana Metals Ltd re-domiciled the group to the
United Kingdom pursuant to a scheme of arrangement in which Pensana
Metals Ltd became a wholly owned subsidiary of Pensana Plc. Prior
to the transaction the Company was incorporated on 13 September
2019 and was a wholly owned subsidiary of Pensana Metals Ltd.
The Board of Pensana Plc resolved to restructure the group to
remove redundant holding companies and streamline the group
structure. As part of this restructuring process the shares in the
wholly owned subsidiaries, Sable Minerals GmbH and Sable Rare
Earths GmbH were acquired directly by Pensana Rare Earths Plc and
it is anticipated that additional dormant entities in Tanzania and
Australia will be liquidated during the next 6 months.
2. New accounting standards and interpretations
(a) Changes in accounting policies and disclosures
The IASB has issued new standards, amendments and
interpretations to existing standards with an effective date on or
after 1 July 2020 which are not considered to have a material
impact on the Group during the Period under review.
(b) Accounting standards and interpretations issued but not yet
effective:
Certain new standards, amendments and interpretations to
existing standards have been published that are mandatory for the
Group's accounting periods beginning after 1 January 2021 or later
periods. The only standard which is anticipated to be significant
or relevant to the Group is:
Amendments to IAS 1: Classification of Liabilities as Current or
Non-current
Amendments to IAS 1, which are intended to clarify the
requirements that an entity applies in determining whether a
liability is classified as current or non-current. The amendments
are intended to be narrow scope in nature and are meant to clarify
the requirements in IAS 1 rather than modify the underlying
principles. The amendments include clarifications relating to:
-- how events after the end of the reporting period affect
liability classification;
-- what the rights of an entity must be in order to classify a
liability as non-current;
-- how an entity assesses compliance with conditions of a
liability (e.g. bank covenants); and
-- how conversion features in liabilities affect their
classification.
The amendments were originally effective for periods beginning
on or after 1 January 2022 which was deferred to 1
January 2023 by the IASB in July 2020.
Management has reviewed and considered the new standard and
interpretation thereof and it is not expected to have a material
effect on the reported results or financial position of the Group.
The Group has not elected to early adopt any new standards or
amendments that are issued but not yet effective.
3. Significant accounting policies and Going Concern
Basis of preparation
The interim results, which are unaudited, have been prepared in
accordance with the requirements of International Accounting
Standard 34. This condensed interim report does not include all the
notes of the type normally included in an annual financial report.
This condensed report is to be read in conjunction with the Annual
Report for the year ended 30 June 2020, and any public
announcements made by the Group during the interim reporting
period. The comparative financial information for the year ended 30
June 2020 in this interim report does not constitute statutory
accounts for that year. The statutory accounts for 30 June 2020
have been delivered to the Registrar of Companies. The auditors'
report on those accounts was unqualified but drew attention to a
material uncertainty in relation to going concern. It did not
contain a statement under 498(2) or 498(3) of the Companies Act
2006. The annual financial report for the year ended 30 June 2020
was prepared in accordance with International Financial Reporting
Standards adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union ("IFRS's") and the accounting
policies applied in this condensed interim report are consistent
with the polices applied in the annual financial report for the
year ended 30 June 2020 unless otherwise noted.
As disclosed in the 30 June 2020 Annual the Company was
incorporated on 13 September 2019 as a wholly owned subsidiary of
Pensana Metals Ltd. The Company subsequently acquired 100% of the
share capital of Pensana Metals and its subsidiary companies for
the effective issuance of 152,973,315 shares to the shareholders of
Pensana Metals Ltd further to the scheme of arrangement approved on
22 January 2020 and completed on 5 February 2020.
The shares issued to the former shareholders of Pensana Metals
Ltd comprised the 50,000,000 shares with a nominal value of
GBP0.001 per share subscribed on incorporation of the Company by
Pensana Metals Ltd which were transferred to CHESS Depositary
Nominees Pty Ltd (a subsidiary of the ASX) for use in the scheme of
arrangement and 102,973,314 shares with a nominal value of GBP0.001
per share additionally issued by the Company to CHESS Depositary
Nominees Pty Ltd for us in the scheme of arrangement. CHESS
Depositary Nominees Ltd subsequently issued CHESS Depositary
Instruments in proportion to the interests the former shareholders
of Pensana Metals held in that company for trading on the ASX with
152,973,315 CHESS Depositary Instruments issued for trading. The
transaction represented a group reconstruction and common control
transaction. The accounting for common control transactions is
scoped out of IFRS 3 and, accordingly the Group has developed an
accounting policy with reference to methods applied in alternative
GAAPs (Generally Accepted Accounting Principles). Consequently, the
consolidated financial statements are presented as if the Company
has always been the holding Company for the Group and the Group has
elected to apply merger accounting principles. Under this policy,
the Company and its subsidiaries are treated as if they had always
been a Group. The results are included from the date the
subsidiaries joined the Group and the comparatives reflect the
results of the Company and its subsidiaries. No fair value
adjustments occur as a result of the transaction and the assets and
liabilities are incorporated at their predecessor carrying
values.
The consolidated financial statements are presented in United
States Dollars (US$) rounded to the nearest dollar. Prior period's
consolidated financials have been previously presented in
Australian dollars ("A$"). The financial statements were presented
in United States dollars for the first time for the year ended 30
June 2020. The presentation currency of the Group has historically
been considered to be Australian Dollars (A$). Due to the Scheme of
Arrangement and the Groups redomiciling to the UK environment
alongside the fact that majority of future revenue generation and
funds will be held in US dollars, the presentation currency of the
Group has been changed to United States Dollars (US$) the group has
applied this change retrospectively resulting in restatement of
prior periods. Accordingly the period ended 31 December 2019 has
been restated. Refer to the 30 June 2020 Annual Report for
details.
Going Concern
The consolidated financial statements have been prepared on a
going concern basis with the Directors of the opinion that the
Group can meet its obligations as and when they fall due.
At 31 December 2020 the Group has a net asset position of
US$22,071,185 including cash and cash equivalents of $7,552,741,
had incurred a loss after income tax of $2,631,745 and experienced
cumulative net cash outflows from operating and investing
activities of $5,144,116.
The Directors have prepared a cashflow forecast for a period of
at least twelve months from the date of this report. In assessing
the going concern basis of preparation, the Directors have given
consideration to the principal risks and uncertainties facing the
business, including specific consideration of the impact of
COVID-19 in terms of the availability of funding and progression of
the rare earth oxide separation facility at the Saltend Chemicals
Park in the UK and the Longonjo NdPr and Coola exploration projects
in Angola. The forecasts demonstrate that whilst the Group has
sufficient funding to meet its corporate costs and day to day
operating costs, additional capital will need to be secured to meet
expected liabilities and commitments as they fall due based on its
committed and planned exploration and development expenditures and
operating costs related to the Longonjo Project and Saltend .
The Directors have therefore considered mitigating actions and
are confident of being able to raise the required capital through
either debt or equity financing during the 12 month period, but
note that the required capital has not been secured at the date of
this report and the availability of such funding is not guaranteed.
These circumstances indicate the existence of a material
uncertainty which may cast significant doubt about the Group's
ability to continue as a going concern and therefore it may be
unable to realise its assets and discharge its liabilities in the
normal course of business. The financial statements do not include
the adjustments that would result if the Group was unable to
continue as a going concern.
Critical accounting judgements and key sources of estimation
uncertainty
In applying the Group's accounting policies management
continually evaluates judgements, estimates and assumptions based
on experience and other factors, including expectations of future
events that may have an impact on the Group. All judgments,
estimates and assumptions made are believed to be reasonable based
on the most current set of circumstances available to management.
Actual results may differ from the judgements, estimates and
assumptions. Significant judgements, estimates and assumptions made
by management in the preparation of these financial statements are
outlined below:
(i) Significant accounting judgements
Impairment of assets and exploration and evaluation
expenditure
The ultimate recovery of the value of exploration and evaluation
assets is dependent on the successful development and commercial
exploitation, or alternatively, sale, of the exploration and
evaluation assets. See note 8 for the disclosure of the exploration
and evaluation asset.
Management considered whether there are indicators as to whether
the asset carrying values for exploration and evaluation assets
exceed their recoverable amounts. This consideration includes
assessment of the following:
- expiration of the period for which the entity has the right to
explore in the specific area of interest with no plans for
renewal;
- substantive expenditure on further exploration for and
evaluation of mineral resources in the specific area is neither
budgeted nor planned;
- exploration for and evaluation activities have not led to the
discovery of commercially viable quantities of mineral resources
and the entity has decided to discontinue such activities in the
specific area; and
- whether sufficient data exists to indicate that, although a
development in the specific area is likely to proceed, the carrying
amount of the exploration and evaluation asset is unlikely to be
recovered in full from successful development or by sale.
Management judgement is required to determine whether the
expenditures which are capitalised as exploration and evaluation
assets will be recovered by future exploitation or sale or whether
they should be impaired. In assessing this, management determines
the possibility of finding recoverable ore reserves related to a
particular area of interest, which is a subject to significant
uncertainties. Many of the factors, judgements and variables
involved in measuring resources are beyond the Group's control and
may prove to be incorrect over time. Subsequent changes in
resources could impact the carrying value of exploration and
evaluation assets.
Based on the information the Company has on the above, it was
concluded by management that no impairment indicator existed at 31
December 2020 for the exploration and evaluation assets (30 June
2020: no impairment indicator). In forming this assessment the
Directors exercised judgement and considered the results of ongoing
exploration work, the significant increase in demand for NdPr and
associated pricing, the implied valuations provided by the equity
placings in the period, the progression in the Business Plan
towards project start up and the resource statement.
(ii) Significant accounting estimates and assumptions
Share-based payment transactions
The Group measures the cost of equity-settled transactions with
directors and others by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value
is determined using a Binomial model and requires estimates for
inputs such as share price volatility. The share-based payments
arrangements are expensed on a straight line basis over the vesting
period, based on the Group's estimate of shares that will
eventually vest. At each reporting date, vesting assumptions are
reviewed to ensure they reflect current expectations and
immediately recognises any impact of the revision to original
estimates. Judgement is required as to the likelihood of the
vesting conditions being met, such as project milestones being
achieved if fully vested share options are not exercised and expire
then the accumulated expense in respect of these is reclassified to
accumulated losses.
Assets held for sale
The carrying value of assets at Miyabi, considered on the basis
of classification as non-current assets held for sale, are carried
at the lower of carrying value and fair value less cost to sell.
Judgement was applied in determining that the asset remained held
for sale and that a sale was highly probable within 12 months,
noting the delay to the transaction but considering engagement with
the purchasers. The assessment of fair value less cost to sell was
considered by the Board and represented a key judgement, based on
internal valuation models and the current sale process. The sale
terms include a royalty arrangement which the Board valued as part
of its assessment of the fair value less cost to sell. This
required estimates of future production from the project based on
the purchaser's proposed mine plan and studies, gold price
assumptions and discount rates. A 10% change in the forecast gold
price or a 1% change in the discount rate would indicate a $0.2
million or $0.04 million change in the fair values less cost to
sell respectively.
4. Operating Segments
Description of segments
The Group has identified its operating segments based on the
internal reports that are used by the chief operating decision
makers in assessing performance and determining the allocation of
resources.
The Group has identified that it has one operating segment, for
the period under review, being related to the activities in Angola,
on the basis that the assets in Tanzania do not form part of the
Group's future strategy and are shown as held for sale, as detailed
in note 14. Operations in the UK and Australia relate to running
the Corporate Head Office only with any significant activity as
regards Saltend only expected Q2 2021 subject to planning approval
and final investment decision sign off.
All significant exploration and evaluation expenditure are
domiciled in Angola.
Consolidated
Audited
Unaudited As at
As at 30 June
31 December 2020 2020
US$ US $
Non-current assets
Angola 13,055,063 9,642,118
Unallocated 7,813 7,002
Total non-current assets per statement of financial position 13,062,876 9,649,120
------------------ ----------
Current and non-current Liabilities
Angola - -
Unallocated 1,093,991 1,365,474
Total liabilities per statement of financial position 1,093,991 1,365,474
---------- ----------
Non-current assets for this purpose consist of plant and
equipment and evaluation and evaluation assets. The assets related
to UK and Australia are related to corporate costs and therefore
not presented above. The assets in Tanzanian held for sale were
reclassified to non-current assets held for sale as at 30 June
2020.
5. Corporate Expenses
Consolidated
Unaudited Unaudited
For the six months to For the six months to
31 December 2020 31 December 2019
(restated)
US $ US $
Corporate expenses
Employee Benefits
Charged to statement of comprehensive income
Performance rights and options granted to directors,
officers and employees (refer to note
13) 350,797 448,847
Directors fees, superannuation and salaries & wages 593,721 442,229
--------------------------- -----------------------
944,518 891,076
----------------------- -----------------------
6. Cash and Cash Equivalents
Consolidated
Unaudited Audited
As at As at
31 December 30 June
2020 2020
US$ US$
Cash at bank and on hand 7,552,741 4,106,321
------------- ----------
7,552,741 4,106,321
------------- ----------
7. Trade and Other Receivables
Consolidated
Unaudited Audited
As at As at
31 December 30 June
2020 2020
US$ US$
Other debtors 202,951 140,162
------------- ---------
202,951 140,162
------------- ---------
8. Exploration and Evaluation Expenditure
Consolidated
Unaudited Audited
As at As at
31 December 30 June
2020 2020
US$ US$
Carrying value:
Balance at beginning of the period 9,642,118 6,445,573
Additions 3,412,945 3,196,545
------------- ----------
Balance at end of the period 13,055,063 9,642,118
------------- ----------
At the end of the period, book value net of accumulated amortisation and
impairment (i) 13,055,063 9,642,118
(i) The above amounts represent capitalised costs of exploration
carried forward as an asset in accordance with the Company
accounting policies. The ultimate recoupment of the exploration and
evaluation expenditure in respect to the areas of interest carried
forward is dependent upon the discovery of commercially viable
reserves and the successful development and exploitation of the
respective areas or alternatively the sale of the underlying areas
of interest for at least their carrying value.
9. Trade and Other Payables
Consolidated
Unaudited Audited
As at As at
31 December 30 June
2020 2020
US$ US$
Trade and other payables(i) 715,228 803,889
Accrued expenses 378,763 561,585
1,093,991 1,365,474
------------- ----------
(i) There has been no interest charged on the trade payables
10. Issued Capital
Unaudited Audited
As at 31 December 2020 As at 30 June 2020
Consolidated No. US$ No. US$
Fully paid ordinary shares
Balance at beginning of the period reflecting incorporation
and Scheme of Arrangement 171,766,032 221,945 152,973,315 198,788
Share Placement 16,508,633 20,342 16 948 670 20 885
Shares issued in lieu of fees 821,157 1,728 1,844,047 2,272
Share issue - conversion of performance rights 500,000 654 - -
Share Placement 13,500,000 17,471 - -
Balance at end of the period 203,095,822 262,140 171,766,032 221,945
--------------- --------- ------------ --------
Shares not yet issued - - 16,508,633 20,342
--------------- --------- ------------ --------
On 13 September 2019, the Company was incorporated with
50,000,000 shares with a par value of GBP0.001 subscribed by
Pensana Metals Ltd for GBP50,000 ($62,530) with an irrevocable
undertaking for settlement upon completion of the proposed scheme
of arrangement. At that time, the Company was a wholly owned
subsidiary of Pensana Metals Ltd.
On 5 February 2020, the Group completed a scheme of arrangement,
which was approved by the court in Australia and the Majority of
shareholders of Pensana Metals Ltd. The scheme resulting in the
acquisition of Pensana Metals Ltd by Pensana Plc, resulting in the
re-domicile of the Pensana Group in the United Kingdom and the
ultimate holding Company, Pensana Plc incorporated in England and
Wales. The shares issued to the former shareholders of Pensana
Metals comprised the 50,000,000 shares subscribed on incorporation
of the Company by Pensana Metals Ltd which were transferred by that
company to CHESS Depositary Nominees Pty Ltd (a subsidiary of the
ASX) for use in the scheme of arrangement and 102,973,314 shares
additionally issued by the Company to CHESS Depositary Nominees Pty
Ltd for us in the scheme of arrangement. CHESS Depositary Nominees
Ltd subsequently issued CHESS Depositary Instruments in proportion
to the interests the former shareholders of Pensana Metals held in
that company for trading on the ASX. The 152,973,315 shares issued
and transferred with a nominal value of GBP0.001 per share equated
to $198,788.
Pensana Metals Ltd became a wholly owned subsidiary of Pensana
Plc and was removed from the official list of ASX. Pensana Plc was
admitted to the official list of ASX and Pensana Plc CDI's were
admitted for official quotation by ASX under the ticker PM8.
The Company raised approximately $6,4million through the issue
of 2 placements on the Company's UK share register to the Angolan
Sovereign Wealth Fund. The March 2020 placing was for 7,648,670
fully paid ordinary shares at GBP0.14 to raise a US Dollar
equivalent of US$1,365,884.
The June 2020 placement was for 25,808,633 fully paid ordinary
shares at an average of GBP0.15 to raise a US Dollar equivalent of
approximately US$5,000,000. The shares were issued in two tranches
as follows:
- Tranche 1: 9,300,000 fully paid ordinary shares at GBP0.1491
raising $1,739,028
- Tranche 2: 3,978,388 fully paid ordinary shares at GBP0.159
and 12,530,245 fully paid ordinary shares at GBP0.161 for which
consideration had been received at 30 June 2020 but the shares had
not been issued and are therefore classified as shares to be issued
within equity at $3,249,034. The shares were issued on 1 July
2020.
On 23 June 2020 the Company issued 1,844,047 GBP0.001 shares in
lieu of amounts due to creditors' equivalent to $351,592. A further
$265,284 of transaction costs were incurred in relation to
placings.
On 6 July 2020, the Company was admitted on the main board of
the London Stock Exchange under the ticker PRE: LSE.
On 12 August 2020 the Company issued 821,157 GBP0.001 shares in
lieu of amounts due to creditors' equivalent to $192,002. A further
500,000 shares were issued on the conversion of performance
rights.
On 25 September 2020 the a placement of 13,500,000 fully paid
ordinary shares at an average of GBP0.5021 (US$0.64) to raise a US
Dollar equivalent of US$8,576,685, net of share issue costs.
Ordinary shares participate in dividends and proceeds on winding
up of the Company in proportion to the number of shares held. At
shareholders' meetings, each ordinary share is entitled to one vote
when a poll is called; otherwise each shareholder has one vote on a
show of hands. Management controls the capital of the Group in
order to fund its operations and continue as a going concern. The
Consolidated Entity does not have any externally imposed capital
requirements.
Share premium
The movement in the share premium reserve for the current period
was $11,837,714 net of costs. This represents the difference
between the par value of $0.001 per share and the subscription
value per share on all shares issued during the period.
Share options on issue
During the period 250,000 unlisted options exercisable at GBP
0.16986 cents (US$0.226) cents were exercised and the shares were
issued subsequent to period end.
As at 31 December 2020, there are no options on issue (31
December 2019: 450,000 options).
Performance rights on issue
As at 31 December 2020 there are 10,358,037 performance rights
on issue (31 December 2019: 7,858,037 performance rights).
11. Commitments for Expenditure
The Group has certain obligations to perform exploration work
and expend minimum amounts of money on mineral exploration
tenements. No provision has been made in the accounts for minimum
expenditure requirements in respect of tenements (31 December 2019:
nil).
No provision has been made in the accounts for the possibility
of a native title claim application. Any substantial claim may have
an effect on the value of the relevant tenement. These obligations
will vary from time to time, subject to statutory approval (31
December 2019: nil).
(i) Exploration Commitments
Commitments for payments under exploration permits and mineral
leases in existence at the reporting date but not recognised as
liabilities payable are as follows:
Consolidated
Audited
Unaudited As at
As at 30 June
31 December 2020 2020
US$ US$
Exploration and evaluation expenditure
Not longer than 1 year 655,200 10,382
Longer than 1 year and not longer than 5 years 4,344,800 38,655
Longer than 5 years - -
------------------ ---------
5,000,000 49,037
------------------ ---------
12. Contingent Liabilities and Contingent Assets
The Directors are not aware of any other contingent liabilities
or contingent assets that are likely to have a material effect on
the results of the Group as disclosed in these financial
statements.
13. Share-based Payments
Half year ended 31 December 2020
During the current period, no performance rights were issued.
$350,797 was charged to the statement of comprehensive income in
respect of existing performance rights. As at 31 December 2020
there are 10,358,037 performance rights on issue.
During the period, 500,000 performance rights were converted to
ordinary shares on the successful listing on the London Stock
Exchange.
During the current period, no options were issued. No amount was
charged to the statement of comprehensive income in respect of
existing options. As at 31 December 2020 there are were no options
on issue.
Half year ended 31 December 2019
During the prior period, no performance rights were issued.
$431,787 was charged to the statement of comprehensive income in
respect of performance rights issued in earlier periods.
During the prior period, no options were issued. $17,060 amount
was charged to the statement of comprehensive income in respect of
options issued in earlier periods.
Reconciliation of options outstanding
The following reconciles outstanding share options provided as
share-based payments at the beginning and end of the financial
period:
Unaudited for the half year ended Audited for the year ended
31 December 2020 30 June 2020
Weighted average Weighted average
Number of options exercise price Number of options exercise price
------------------ ----------------------- ------------------ -----------------------
Balance at beginning of
the financial year 250,000 $0.226 22,500,000 $0.035
Issued or to be issued
during the financial
period - - - -
Expired during the
financial period - - - -
------------------ ----------------------- ------------------ -----------------------
Balance pre 10:1
consolidation 250,000 $0.226 22,500,000 $0.035
------------------ ----------------------- ------------------ -----------------------
Balance Post 10:1
Consolidation 250,000 $0.226 2,250,000 $0.35
Forfeited during the
financial period - - - -
Exercised during the
financial period (250,000) $0.226 - -
Expired during the
financial period - - (2,000,000) $0.35
------------------ ----------------------- ------------------ -----------------------
Balance at end of the
financial period - - 250,000 $0.226
------------------ ----------------------- ------------------ -----------------------
14. Assets held for Sale
The Tanzanian assets are held at fair value less cost to sell,
being lower than the original cost. The fair value of the Group's
capitalised Tanzanian mineral exploration and evaluation assets has
been determined based on an offer received during the prior
period.
The fair value methodology adopted is categorised as Level 3 in
the fair value hierarchy. In determining the fair value less cost
to dispose (FVLCD), estimates are made in relation to transaction
value from sales agreements or offers received, which are
significant inputs to the valuation. Any changes in these estimates
could impact the FVLCD of the underlying asset. The sale terms
involved a net cash consideration of $0.5 million and a 2% royalty
from future gold sales over 5 years. Management have estimated the
fair value of the disposal group based on the cash consideration
and royalty. The royalty instrument has been valued using a
discounted cash flow model with the following key assumptions:
forecast gold price $1,300/oz, production of 126,955Oz, discount
rate of 8%.
$169,063 of expenses were incurred during the period in relation
to the Miyabi exploration project. Management do not consider the
Miyabi project to represent a separate major line of business and
therefore the expenses have not been disclosed separately as a loss
from discontinued operations.
The principal classes of assets and liabilities for Tanzania
classified as held for sale as are as follows:
Unaudited
As at Audited
31 December As at
2020 30 June 2020
US$ US$
Assets
Exploration and valuation assets 2,500,000 2,500,000
Assets held for sale 2,500,000 2,500,000
------------ -------------
Liabilities
Accrued expenses 211,844 211,844
Net assets directly associated with disposal
group 2,288,156 2,288,156
------------ -------------
15. Loss per share
2020 2019
cents per share cents per share
Basic loss per share
From continuing operations 1.00 1.37
Total basic loss per share 1.00 1.37
----------------- -----------------
Diluted loss per share
From continuing operations 1.00 1.37
Total diluted loss per share 1.00 1.37
----------------- -----------------
Basic loss per share
The net loss and weighted average number of ordinary shares used
in the calculation of basic loss per share are as follows:
Unaudited
Unaudited As at
As at 31 December
31 December 2020 2019
US$ US$
Net loss ( 2,631,745 ) (2,043,391)
------------------ -------------
Losses used in the calculation of basic loss per share from continuing
operations ( 2,631,745 ) (2,043,391)
------------------ -------------
Losses used in the calculation of diluted loss per share attributable to
ordinary shareholders ( 2,631,745 ) (2,043,391)
------------------ -------------
Unaudited
Unaudited As at
As at 31 December
31 December 2020 2019
No. No.
Weighted average number of ordinary shares for the purposes of calculating basic
loss per
share and diluted loss per share(1) 195,710,638 155,723,451
(1) The weighted average number of ordinary shares shown above
for the current and prior period are post 10:1 consolidation
numbers which was approved by shareholders on 9 August 2019.
Performance rights of 10,358,037 (2019: 7,858,037) and nil
options (2019: 450,000) have not been included in the diluted
earnings per share as they are anti-dilutive in the current period,
however they could potentially dilute basic earnings per share in
the future once milestones have been met.
16. Related party transactions
Transactions with Key Management Personnel and Related
Parties
- Selection Capital Limited, a Company controlled by Mr Paul
Atherley, has charged the Company $183,251 for consultancy fees
during the current period (2019: $119,804).
- Fernan Pty Ltd (Fernan Trust) controlled by Mark Hohnen, was
paid $18,368 during the current period for director fees (2019:
$81,950)
17. Notes to the Consolidated Statement of Cashflows
Reconciliation of loss for the period to net cash flows from
operating activities
Consolidated
Unaudited
For the six months to
Unaudited for the half year ended 31 December 2019
31 December 2020 (restated)
US$ US$
Net loss (2,631,745) (2,043,391)
Add/less non-cash items
Depreciation - 1,186
Share based payments 350,797 448,847
Unrealised FX gain/ (loss) 621,652 41,825
(Increase)/decrease in assets:
Trade and other receivables (62,791) (22,332)
Other current assets (15,540) 12,289
Increase/(decrease) in liabilities:
Trade and other payables (234,303) 490,370
Net cash used in operating activities (1,971,930) (1,071,206)
---------------------------------- -----------------------
18. Subsequent events
Subsequent to the period end the following events occurred:
- Submission of planning application for Saltend in January 2021
- Appointment of Dr Jeremy Beeton as Non-Executive Director of the Company in March 2021
- Appointment of Rocky Smith as Chief Operating Officer in March 2021
No other matters or circumstances have arisen since 31 December
2020 that have significantly affected, or may significantly
affect:
- The Group's operations in future financial years; or
- The results of those operations in future financial years; or
- The Group's state of affairs in future financial years.
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge: a. the Condensed
Financial Statements have been prepared in accordance with IAS 34
Interim Financial Reporting and give a true and fair view of the
assets, liabilities, financial position and profit of the Group;
and a. the Interim Management Report includes a fair review of the
information required by FCA's Disclosure and Transparency Rules
(DTR 4.2.7 R and 4.2.8 R).
By order of the Board
Mr Paul Atherley
29 March 2021
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END
IR GUGDXUUXDGBG
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