TIDMKRPZ
RNS Number : 0360O
Kropz PLC
28 September 2023
Kropz plc ("Kropz", the "Company") and its subsidiaries (the
"Group")
Unaudited Half Year Results for the Six Months ended 30 June
2023
Kropz plc (AIM: KRPZ), an emerging African phosphate developer
and producer, announces its unaudited results for the six months
ended 30 June 2023.
The financial report is available online at the Company's
website www.kropz.com .
FINANCIAL AND OPERATIONAL HIGHLIGHTS
Operational highlights
As the Company entered the new financial period it started with
the first sales being recorded from the trial production phase. The
group recorded revenue of US$ 14.1 million for the six months ended
30 June 2023.
During the first six months of the year, the Company faced
significant challenges due to unprecedented rainfall in the Western
Cape region. The heavy and persistent rains resulted in severely
wet mining conditions, posing obstacles to our operations. To
address this issue, the Company has undertaken various measures,
with a primary focus on increasing in-pit drainage to alleviate the
waterlogged conditions in our mining areas and implementing ore
stockpiling and blending strategies.
The extent of the ultra-fines (natural slimes) in the ore
encountered has also limited our production throughput. In
response, Elandsfontein is making strategic investments in new
equipment that will enable the plant to more effectively handle and
process the challenging slimes material. Elandsfontein aims to
increase its production throughput by more than 40% and enable the
achievement of steady state production.
In addition to addressing the wet mining conditions,
Elandsfontein continues separating and stockpiling the hard bank
material encountered in the ore. As the hard bank material is
phosphate rich and stockpiled, the Company has begun a process to
analyse the hard bank material to identify the appropriate method
of mining and processing to extract phosphate.
The Elandsfontein mine is still in its trial production phase
and further challenges can be expected as it progresses towards
full production.
Key financial indicators
-- The first sales revenues have been recognised by Kropz
Elandsfontein (Pty) Ltd ("Elandsfontein") of US$ 14.1 million for
the six months ended 30 June 2023 (period ended 30 June 2022:
nil);
-- While the Company is still ramping up to steady state
production a gross loss has been recognised in the period due to
discounted sales prices as a new market entrant and operating below
full production level resulting in a cost per tonne higher than
will be expected once in full production;
-- Property, plant, equipment and exploration assets carrying
value is US$ 64.2 million as at 30 June 2023 (31 December 2022: US$
69.0 million);
-- Cash at 30 June 2023 of US$ 2.1 million (31 December 2022: US$ 2.1 million);
-- Shareholder loans and derivative at 30 June 2023 of US$ 66.2
million (31 December 2022: US$ 55.1 million);
-- Trade and other payables at 30 June 2023 of US$ 5.4 million
(31 December 2022: US$ 7.3 million); and
-- In March 2023, Kropz Elandsfontein secured a further ZAR 285
million (approximately US$ 15.5 million) bridge loan facility with
The ARC Fund ("ARC") ("Loan 1") to meet immediate cash requirements
at Kropz Elandsfontein. ZAR 225 million has been drawn by 30 June
2023. The loan is unsecured, repayable on demand, with no fixed
repayment terms and is repayable by Kropz Elandsfontein on no less
than two business days' notice. Interest is payable at the South
African prime overdraft interest rate plus 6%, nominal per annum
and compounded monthly.
Key corporate and operational developments during the period
Corporate
-- As announced on 16 January 2023, Kropz appointed Louis
Loubser to the board of the Company as Chief Executive Officer
("CEO") and executive director;
-- The third drawdown on the ZAR 550 Million Equity Facility of
ZAR 60 million (approximately US$ 3.5 million) occurred on 25
January 2023; and
-- The fourth drawdown on the ZAR 550 Million Equity Facility of
ZAR 40 million (approximately US$ 2.2 million) occurred on 27
February 2023.
Elandsfontein
-- First bulk shipment and sale have been recorded with a total
of 130,000 tonnes of phosphate concentrate sales in the first half
of 2023 from Kropz Elandsfontein, Elandsfontein is managing to
achieve better prices in the market as quality and market
reputation improves.
Hinda
-- The Company has started to identify potential funding
solutions for the development of Hinda;
-- Continued engagement with local government regarding project development; and
-- Reduced sized project is currently being assessed to propose
a fit-for-purpose low capex project to prove the concept of
producing phosphate concentrate in the Congo and exporting it.
Key developments post the period end
Corporate
-- The Company previously announced that it is in the process of
refinancing the BNP loan facility (outstanding amount US$
18,750,000) and that a replacement loan was expected to be in place
in the third quarter of 2023, before expiry of the facility.
Discussions continue with potential lenders regarding a potential
replacement loan and it is now expected that a replacement loan
will be in place by the end of 2023 and the Company is in
discussion with BNP to extend its waiver period in line with this
timetable.
Elandsfontein
-- While several sales have been recorded in 2023, including a
further 63,900 tonnes in the current quarter, sales are below
forecast, due to mine production having been affected by recent
unprecedented seasonal rains;
-- A fifth and final drawdown on Loan 1 of ZAR R60 million was made on 17 August 2023; and
-- As announced on 14 September 2023, Kropz, Kropz Elandsfontein
and ARC Fund agreed to further ZAR 250 million (approximately US$
13.2 million) of bridge loan facility ("Loan 2") to meet immediate
cash requirements at Kropz Elandsfontein. A first draw down of ZAR
155 million (approximately US$ 8 million) was made on 18 September
2023.The loan is unsecured, repayable on demand, with no fixed
repayment terms and is repayable by Kropz Elandsfontein on no less
than two business days' notice. Interest is payable at the South
African prime overdraft interest rate plus 6%, nominal per annum
and compounded monthly. In the event that any amounts are
outstanding under the loan, together with interest thereon, are not
repaid within 6 months from the first utilisation date, the
interest rate will be increased with an additional 2%.
Hinda
-- The reduced sized project continues to be assessed to propose
a fit-for-purpose low capex project to prove the concept of
producing phosphate concentrate in the Congo and exporting it;
-- Good progress is continuing on the community project;
-- The coreshed construction is continuing and the 1st phase
verification of the status of the equipment stored in containers,
before transfer to site; and
-- The situation in the country appears to be under control
following recent rumours of a coup against President Denis Nguesso.
The local government have denied these rumours. The Company are
continuing to assess the situation and the safety of employees in
the country remains our top priority.
For further information visit www.kropz.com or contact:
Kropz Plc Via Tavistock
+44 (0) 207 920
Louis Loubser (CEO) 3150
Grant Thornton UK LLP Nominated Adviser
Samantha Harrison
Harrison Clarke +44 (0) 20 7383
Ciara Donnelly 5100
Hannam & Partners Broker
Andrew Chubb +44 (0) 20 7907
Ernest Bell 8500
Tavistock Financial PR &
IR (UK)
Nick Elwes +44 (0) 207 920
Jos Simson 3150
Emily Moss kropz@tavistock.co.uk
R&A Strategic Communications PR (South Africa)
Charmane Russell +27 (0) 11 880
Marion Brower 3924
charmane@rasc.co.za
marion@rasc.co.za
About Kropz plc
Kropz is an emerging African phosphate developer and producer
with phosphate projects in South Africa and the Republic of Congo
("RoC"). The vision of the Group is to become a leading independent
phosphate rock producer and to develop into an integrated,
mine-to-market plant nutrient company focusing on sub-Saharan
Africa.
CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
30 June 31 December
2023 2022
Unaudited Audited
Notes US$'000 US$'000
Non-current assets
Property, plant, equipment and mine
development 8 64,284 68,965
Exploration assets 9 43,359 42,415
Other financial assets 783 860
----------- ------------
108,426 112,240
----------- ------------
Current assets
Inventories 5,602 3,273
Trade and other receivables 948 1,857
Cash and cash equivalents 2,078 2,120
----------- ------------
8,628 7,250
----------- ------------
TOTAL ASSETS 117,054 119,490
----------- ------------
Current liabilities
Trade and other payables 5,413 7,284
Shareholder loans and derivative 10 36,232 -
Other financial liabilities 11 19,241 26,808
Current taxation 626 597
61,512 34,689
----------- ------------
Non-current liabilities
Shareholder loans and derivative 10 29,963 55,102
Provisions 2,500 2,697
----------- ------------
32,463 57,799
----------- ------------
TOTAL LIABILITIES 93,975 92,488
----------- ------------
NET ASSETS 23,079 27,002
----------- ------------
Shareholders' equity
Share capital 1,212 1,212
Share premium 194,063 194,063
Merger reserve (20,523) (20,523)
Foreign exchange translation reserve (11,795) (11,195)
Share-based payment reserve 299 271
Accumulated losses (116,754) (116,972)
-----------
Total equity attributable to the owners
of the Company 46,502 46,856
Non-controlling interests (23,423) (19,854)
----------- ------------
23,079 27,002
----------- ------------
The accompanying notes form part of the Condensed Consolidated
Financial Statements.
CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
FOR THE SIX MONTHSED 30 JUNE 2023
Six months Six months
ended ended
30 June 30 June
2023 2022
Unaudited Unaudited
Notes US$'000 US$'000
Revenue 12 14,053 -
Cost of Sales (16,436) -
----------- -----------
Gross loss (2,383) -
Other income 11 500
Selling and distribution expenses (1,647) -
Operating expenses (2,159) (4,796)
----------- -----------
Operating loss (6,178) (4,296)
Finance income 13 57 85
Finance expense 14 (9,720) (4,306)
Fair value gain / (loss) from derivative
liability 15 11,817 (7,637)
Impairment losses 16 - (44,700)
Loss before taxation (4,024) (60,854)
Taxation 17 - -
Loss for the period (4,024) (60,854)
----------- -----------
Profit / (loss) attributable to:
Owners of the Company 1,518 (46,794)
Non-controlling interests (5,542) (14,060)
----------- -----------
(4,024) (60,854)
----------- -----------
Loss for the period (4,024) (60,854)
Other comprehensive income:
Items that may be subsequently reclassified
to profit or loss:
* Exchange differences on translating foreign
operations 73 (3,636)
Total comprehensive loss (3,951) (64,490)
----------- -----------
Profit / (loss) attributable to:
Owners of the Company 918 (50,081)
Non-controlling interests (4,869) (14,409)
----------- -----------
(3,951) (64,490)
----------- -----------
Earnings per share attributable to
owners of the Company :
Basic and diluted (US cents) 18 0.16 (5.09)
----------- -----------
The accompanying notes form part of the Condensed Consolidated
Financial Statements.
CONDENSED INTERM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2023
Foreign
currency Share-based Total
Share Share Merger translation payment Retained attributable Non-controlling Total
capital premium reserve reserve reserve earnings to owners interest equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Unaudited
- six months
ended 30
June 2023
Balance
at 1 January
2023 1,212 194,063 (20,523) (11,195) 271 (116,972) 46,856 (19,854) 27,002
Total
comprehensive
loss for
the period - - - (600) - 1,518 918 (4,869) (3,951)
Share based
payment
charges - - - - 28 - 28 - 28
Investment
in
non-redeemable
preference
shares of
Kropz
Elandsfontein - - - - - (1,300) (1,300) 1,300 -
---------- -------- --------- ------------ ------------ ---------- -------------- ---------------- ---------
Transactions
with owners - - - - 28 (1,300) (1,272) 1,300 28
---------- -------- --------- ------------ ------------ ---------- -------------- ---------------- ---------
Balance
at 30 June
2023 1,212 194,063 (20,523) (11,795) 299 (116,754) 46,502 (23,423) 23,079
---------- -------- --------- ------------ ------------ ---------- -------------- ---------------- ---------
Unaudited
- six months
ended 30
June 2022
Balance
at 1 January
2022 1,194 193,524 (20,523) (7,807) 1,197 (45,626) 121,959 5,778 127,737
Total
comprehensive
loss for
the period - - - (3,287) - (46,794) (50,081) (14,409) (64,490)
Issue of
shares 18 503 - - - - 521 - 521
Share options
exercised - 730 - - (730) - - - -
Share based
payment
charges - - - - 119 - 119 - 119
Investment
in
non-redeemable
preference
shares of
Kropz
Elandsfontein - - - - - (1,999) (1,999) 1,999 -
---------- -------- --------- ------------ ------------ ---------- -------------- ---------------- ---------
Transactions
with owners 18 1,233 - - (611) (1,999) (1,359) 1,999 640
---------- -------- --------- ------------ ------------ ---------- -------------- ---------------- ---------
Balance
at 30 June
2022 1,212 194,757 (20,523) (11,094) 586 (94,419) 70,519 (6,632) 63,887
---------- -------- --------- ------------ ------------ ---------- -------------- ---------------- ---------
The accompanying notes form part of the Condensed Consolidated
Financial Statements.
CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2023
Six months Six months
ended ended
30 June 30 June
2023 2022
Unaudited Unaudited
US$'000 US$'000
Cash flows from operating activities
Loss before taxation (4,024) (60,854)
Adjustments for:
Depreciation of property, plant and
equipment 369 425
Amortisation of right-of-use assets - 18
Impairment losses - 44,700
Share-based payment 21 119
Interest income (57) (85)
Interest expense 5,671 2,414
Fair value (gain) / losses from derivative
liability (11,817) 7,637
Foreign currency exchange differences 4,048 1,884
Fair value (gain) / loss on game animals (24) 21
----------- -----------
Operating cash flows before working
capital changes (5,813) (3,721)
Decrease / (Increase) in trade and other
receivables 783 (478)
Increase in inventories (2,852) (1,117)
(Decrease) / Increase in payables (936) 4,832
Net cash flows used in operating activities (8,818) (484)
----------- -----------
Cash flows used in investing activities
Purchase of property, plant and equipment (1,616) (16,762)
Exploration and evaluation expenditure (190) (194)
Other financial asset (8) 70
Interest received 57 85
Transfers from restricted cash - 4,858
----------- -----------
Net cash flows used in investing activities (1,757) (11,943)
----------- -----------
Cash flows from financing activities
Finance cost paid (1,345) (1,072)
Shareholder loan received 20,183 11,730
Repayment of lease liabilities - (14)
(Repayment) / Proceeds of Other financial
liabilities (7,520) 25
Issue of ordinary share capital - 554
Net cash flows from financing activities 11,318 11,223
----------- -----------
Net increase / (decrease) in cash and
cash equivalents 743 (1,204)
Cash and cash equivalents at beginning
of the period 2,120 2,461
Foreign currency exchange losses on
cash (785) (250)
----------- -----------
Cash and cash equivalents at end of
the period 2,078 1,007
----------- -----------
The accompanying notes form part of the Condensed Consolidated
Financial Statements.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2023
1. General information
Kropz and its subsidiaries (together "the Group") is an emerging
plant nutrient producer with an advanced stage phosphate mining
project in South Africa, Elandsfontein, and a phosphate project in
the RoC, Hinda. The principal activity of the Company is that of a
holding company for the Group, as well as performing all
administrative, corporate finance, strategic and governance
functions of the Group.
The Company was incorporated on 10 January 2018 and is a public
limited company, with its ordinary shares admitted to the AIM
Market of the London Stock Exchange on 30 November 2018 trading
under the symbol, "KRPZ". The Company is domiciled in England and
incorporated and registered in England and Wales. The address of
its registered office is 35 Verulam Road, Hitchin, SG5 1QE. The
registered number of the Company is 11143400.
2. Basis of preparation
These interim consolidated financial statements have been
prepared in accordance with IAS 34 Interim Financial Reporting and
the AIM rules and in accordance with the accounting policies of the
consolidated financial statements for the year ended 31 December
2022. They do not include all disclosures that would otherwise be
required in a complete set of financial statements and should be
read in conjunction with the 2022 annual report. The statutory
financial statements for the year ended 31 December 2022 were
prepared in accordance with UK adopted international accounting
standards and the Companies Act 2006 applicable to companies
reporting under the International Financial Reporting Standards
("IFRS"). They have been filed with the Registrar of Companies. The
auditors' reported on those financial statements was unqualified
but included a material uncertainty related to going concern.
The interim consolidated financial statements have been prepared
under the historical cost convention unless otherwise stated in the
accounting policies. They are presented in United States Dollars,
the presentation currency of the Group and figures have been
rounded to the nearest thousand.
The interim risk assessment is consistent with the assessment of
the annual financial report for 31 December 2022.
The interim financial information is unaudited and does not
constitute statutory accounts as defined in the Companies Act
2006.
The interim financial information was approved and authorised
for issue by the Board of Directors on 27 September 2023.
3. Going concern
During the six months ended 30 June 2023, the Group incurred a
loss of US$ 4 million (six months ended 30 June 2022: US$60.9
million) and experienced net cash outflows from operating
activities. Cash and cash equivalents totalled US$ 2.1 million as
at 30 June 2023 (31 December 2022: US$ 2.1 million)
Elandsfontein is currently the Group's only source of operating
revenue. As Elandsfontein is still in trial production and still
ramping up its operations an operating loss is also expected in the
full year following the date of these accounts. The Group is
consequently dependent on future fundraisings to meet any
production costs, overheads, future development and exploration
requirements and quarterly repayments on the BNP loan that cannot
be met from existing cash resources and sales revenue in trial
production phase.
The going concern assessment was performed using the Group's
15-month forecast. The Group's forecast cash flows are largely
driven by Elandsfontein and are in line with the 31 December 2022
going concern assessment, the Elandsfontein Life of Mine plan
("LOM" or "mine plan") used for the going concern assessment only
considers resources classified as measured and indicated, excluding
any inferred resources, as per the updated Mineral Resource
Estimate ("MRE"). As mining activities and further drilling work
progress, Elandsfontein expects to reclassify more of the resources
from inferred to either measured and indicated as announced on 10
January 2023.
Elandsfontein's forecast cashflows were estimated using
market-based commodity prices, exchange rate assumptions, estimated
quantities of recoverable minerals, production levels, operating
costs and capital requirements over a 15-month period.
The forecast cashflows include a number of estimates which if
the actual outcome were different could have a significant impact
on the financial outcome of the Elandsfontein mine operations and
the Group's funding needs.
The 15-month forecast assumes a refinancing in December 2023 to
repay the BNP loan facility and provide working capital.
Phosphate rock prices and grade : Forecast phosphate rock prices
are based on management's estimates of quality of production. The
forecast selling prices are derived from forward price curves and
long-term views of global supply and demand in a changing
environment, particularly with respect to climate risk, building on
past experience of the industry and consistent with external
sources.
The first bulk shipment and sale was recorded in January 2023
with a total of 130,000 tonnes of phosphate concentrate sales in
the first half of 2023 from Kropz Elandsfontein. Kropz is a new
entrant to the phosphate market and has to date produced variable
grade and has sold its shipments at a discount to prevailing market
prices. As quality and market reputation improves, Elandsfontein is
managing to achieve better prices in the market . The cashflow
model assumes a discount to the prevailing market price for 31%
P(2) O(5) phosphate concentrate for the period up to December 2024
largely due to variability in the grade of Elandsfontein's product
being produced during its ramp-up phase and considering that
Elandsfontein is a new market entrant. The mine plan forecasts
market prices for all shipments from the end of 2024 . The ability
to achieve market rates on sales is largely dependent on
Elandsfontein's ability to consistently produce 31% P(2) O(5)
concentrate. Failing this, the Group may continue to suffer a
discount to market rates.
Phosphate recoveries : Estimated production volumes are based on
detailed LOM plans of the measured and indicated resource as
defined in the MRE and take into account development plans for the
mine agreed by management as part of the long-term planning
process. Production volumes are dependent on a number of variables,
such as: the recoverable quantities; the production profile; the
cost of the development of the infrastructure necessary to extract
the reserves; the production costs; the contractual duration of
mining rights; and the selling price of the commodities
extracted.
Estimated production volumes are subject to significant
uncertainty given the ongoing ramp up. The production ramp-up has
been delayed largely by the need to re-engineer parts of the fine
flotation circuit proposed by the vendor. Mining and processing
have also been affected by early unpredicted ore variability and
lack of operator experience. The Company has begun a process to
analyse the hard bank material to identify the appropriate method
of mining and processing to extract phosphate. Also the Western
Cape has experienced unprecedented rain this season which has led
to severely wet mining conditions and has hindered ore delivery to
the plant and concentrate production during the six-months to June
2023. This is being addressed by increased drainage. Production
throughput is also being limited by the nature of slimes material
and, the Company is investing in new equipment to seek to overcome
this and aims to increase production throughput by more than
40%.
Reserves and resources: The LOM plan used for the impairment
testing and going concern assessment only includes the measured and
indicated resources as defined in the MRE. Excluding inferred
resources limits the forecast production to only around 4 years.
There was a significant reduction in the measured and indicated
resource in the MRE issued in January 2023 as set out in the
Strategic report in the Annual Report for the year ended 31
December 2022. The Directors believe that the inferred resources in
the MRE are capable of being accessed giving a mine life of around
15 years, but this has not been taken into account in the
cashflows. As drilling operations continue, and confidence
improves, Management expects more of the total resource will be
reclassified to measured and indicated.
Exchange rates : Foreign exchange rates are estimated with
reference to external market forecasts. The assumed average
long-term US dollar/ZAR exchange rate over LOM and for the forecast
cashflows is ZAR18.50/USD.
Operating cost : Operating costs are estimated with reference to
contractual and actual current costs adjusted for inflation. Key
operating cost estimates are mine and plant operating costs and
transportation and port costs. The forecast mine and plant costs
were based on the contracted rates with the current mine and plant
operators.
Transportation costs : Transnet has informed the Group that it
may have to export some shipments through Cape Town in 2023 and
2024 which would lead to higher transportation cost to Cape Town.
The transportation costs in the cashflows assume that 10% of 2023
and 2024 shipments are through Cape Town at the higher logistic
cost. To date all sales have been exported through the port of
Saldanha Bay. As production is still ramping up and the port access
agreement with Transnet has not yet been signed, the actual
operating costs may be higher than the estimates in the discounted
cash flows.
The Group is dependent on future fundraisings to meet any
production costs, overheads, future development and exploration
requirements and quarterly repayments on the BNP loan that cannot
be met from existing cash resources and sales revenue.
ARC Fund, on various occasions in the past provided funding to
support the Group's operations. In March 2023, Kropz, Kropz
Elandsfontein and the ARC Fund agreed to further ZAR 285 million
(approximately US$ 15.5 million) bridge loan facilities to meet
immediate cash requirements at Kropz Elandsfontein. In September
2023, Kropz Elandsfontein and ARC Fund signed a further ZAR 250
million (approximately US$ 13.2 million) bridge loan facility to
meet immediate cash requirements at Kropz Elandsfontein. A first
draw down of ZAR 155 million (approximately US$ 8 million) was made
on 18 September 2023. Management has confirmed with ARC that they
have no intention to call any outstanding loans over the next
12-months for cash repayment.
Management engages frequently with BNP regarding the capital
repayment and refinancing of the BNP debt facility. The Company did
not reach project completion as stipulated in the BNP facility
agreement by 31 December 2022. Considering the delay in achieving
sales, the Company also failed to fund the debt service reserve
account as required. BNP have, to date, waived these requirements,
preventing the Company from falling in default of its loan
terms.
At the end of the waiver period, the bank has the contractual
right to request the immediate repayment of the outstanding loan
amount of US$ 15,000,000. BNP has indicated their willingness to
extend the waivers to December 2023. Kropz Elandsfontein has made
all the capital and interest payments to BNP as required to the
date of this report.
Based on the current cashflow forecast additional funding will
be required over the 15 month forecast period.
Given that BNP Paribas is exiting South Africa, the Group was
unable to refinance the existing loan with them. Significant
progress has been made with the refinancing of the BNP loan
facility and Management, at the date of this report, are in
advanced discussions with several lenders to provide the required
funding to repay the BNP debt facility and provide working capital
and expects that a replacement loan will be in place in by 31
December 2023.
Based on the Group's current available reserves, recent
operational performance, forecast production and sales and
anticipated new borrowing based on discussions with a potential
lenders, coupled with Management's track record to successfully
raise additional funds as and when required, to meet its working
capital and capital expenditure requirements, the Board have
concluded that they have a reasonable expectation that the Group
will continue in operational existence for the foreseeable future
and at least to December 2024.
For these reasons, the financial statements have been prepared
on the going concern basis, which contemplates the continuity of
normal business activities and the realisation of assets and
discharge of liabilities in the normal course of business.
As there can be no guarantee that the required future funding
can be raised in the necessary timeframe, a material uncertainty
exists that may cast significant doubt on 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 report does not include adjustments relating to
the recoverability and classification of recorded asset amounts or
to the amounts and classification of liabilities that might be
necessary should the Group not continue as a going concern.
4. Significant accounting policies
The Company has applied the same accounting policies,
presentation, methods of computation, significant judgements and
the key sources of estimation uncertainties in its interim
consolidated financial statements as in its audited financial
statements for the year ended 31 December 2022, except for the
following amendments and revenue recognition and production start
date which apply for the first time in 2023. However, none of the
recent amendments to IFRS are expected to materially impact the
Group as they are either not relevant to the Group's activities or
require accounting which is consistent with the Group's current
accounting policies.
The following new standards and amendments are effective for the
period beginning 1 January 2023 :
-- Disclosure of Accounting Policies (Amendments to IAS 1
Presentation of Financial Statements and IFRS Practice Statement
2);
-- Definition of Accounting Estimates (Amendments to IAS 8
Accounting policies, Changes in Accounting Estimates and
Errors);
-- Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (Amendments to IAS 12 Income Taxes); and
-- International Tax Reform - Pillar Two Model Rules (Amendment to IAS 12 Income Taxes).
5. Revenue recognition
The Group is principally engaged in the business of producing
phosphate concentrate. Revenue from contracts with customers is
recognised when control of the goods or services is transferred to
the customer at an amount that reflects the consideration to which
the Group expects to be entitled in exchange for those goods.
The Group has concluded that it is the principal in its revenue
contracts because it typically controls the goods or services
before transferring them to the customer.
6. Production start date
The Group assesses the stage of each mine under
development/construction to determine when a mine moves into the
production phase, this being when the mine is substantially
complete and ready for its intended use. The criteria used to
assess the start date are determined based on the unique nature of
the mine development. The Group considers various relevant criteria
to assess when the production phase is considered to have
commenced. At this point, all related amounts are reclassified from
"trial production" to "steady state production".
Some of the criteria used to identify the production start date
include, but are not limited to:
-- The percentage grade (phosphate concentrate) and volume of
ore being minded is sufficiently economic and consistent with the
plant design specifications;
-- Ability to produce phosphate in saleable form (within specifications); and
-- Ability to sustain ongoing production of phosphate.
When the mine moves into the steady state production, the
capitalisation of certain mine development costs ceases and costs
are either regarded as forming part of the cost of inventory or
expensed, except for the costs that qualify for capitalisation
relating to mining asset additions or improvements, or mineable
reserve development. It is also at this point that
depreciation/amortisation commences.
7. Segmental information
Operating segments
The Board of Directors consider that the Group has one operating
segment, being that of phosphate mining and exploration.
Accordingly, all revenues, operating results, assets and
liabilities are allocated to this activity.
Geographical segments
The Group operates in two principal geographical areas - South
Africa and the RoC.
The Group's revenues and non-current assets by location of
assets are detailed below.
Non-Current
Revenues Assets
30 June 2023 US$'000 US$'000
South Africa 14,053 65,032
Republic of Congo - 43,394
14,053 108,426
----------- ------------
Non-Current
Revenues Assets
31 December 2022 US$'000 US$'000
South Africa - 69,795
Republic of Congo - 42,445
----------- ------------
- 112,240
-------------------------------- ------------
8. Tangible assets - Property, plant, equipment and mine development
30 June 30 June 30 June 31 Dec 31 Dec 31 Dec
2023 2023 2023 2022 2022 2022
Accumulated Accumulated
depreciation Carrying depreciation Carrying
Cost and impairment value Cost and impairment value
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Buildings and
infrastructure
Land 1,280 (795) 485 1,418 (795) 623
Buildings 8,883 (5,028) 3,855 9,840 (5,597) 4,243
Capitalised road
costs 6,861 (5,356) 1,505 7,600 (5,709) 1,891
Capitalised electrical
sub-station costs 2,977 (2294) 683 3,297 (2,445) 852
Machinery, plant
and equipment
Critical spare
parts 1,750 (893) 857 1,786 (1,002) 784
Plant and machinery 85,857 (47,711) 38,146 95,061 (53,486) 41,575
Water treatment
plant 2,264 (1,167) 1,097 2,333 (1,308) 1,025
Furniture and fittings 51 (38) 13 56 (41) 15
Geological equipment 71 (47) 24 79 (48) 31
Office equipment 27 (27) - 30 (28) 2
Other fixed assets 1 (1) - 1 (1) -
Motor vehicles 84 (84) - 93 (93) -
Computer equipment 75 (49) 26 79 (45) 34
Mine development 17,121 (8,711) 8,410 17,724 (9,788) 7,936
Stripping activity
costs 20,127 (11,132) 8,995 22,257 (12,485) 9,772
Game animals 188 - 188 182 - 182
Total 147,617 (83,333) 64,284 161,836 (92,871) 68,965
-------- ---------------- --------- -------- ---------------- ---------
Reconciliation of property, plant, equipment and mine
development - Period ended 30 June 2023
Foreign
Opening Fair value Deprecia-tion exchange Closing
Balance Additions gain charge loss balance
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Buildings
and infrastructure
Land 623 - - - (138) 485
Buildings 4,243 - - (15) (373) 3,855
Capitalised
road costs 1,891 - - (237) (149) 1,505
Capitalised
electrical
sub-station
costs 852 - - (101) (68) 683
Machinery,
plant and equipment
Critical spare
parts 784 142 - - (69) 857
Plant and machinery 41,575 32 - (1) (3,460) 38,146
Water treatment
plant 1,025 164 - - (92) 1,097
Furniture and
fittings 15 - - (2) - 13
Geological
equipment 31 - - (3) (4) 24
Office equipment 2 - - (2) - -
Other fixed
assets - - - - - -
Motor vehicles - - - - - -
Computer equipment 34 4 - (8) (4) 26
-
Mine development 7,936 1,161 - - (687) 8,410
-
Stripping
activity costs 9,772 36 - - (813) 8,995
Game animals 182 - 24 - (18) 188
Total 68,965 1,539 24 (369) (5,875) 64,284
--------- ---------- ----------- -------------- ---------- ---------
Reconciliation of property, plant, equipment and mine
development - Year ended 31 December 2022
Foreign
Opening Fair value Impair- Deprecia-tion exchange Closing
Balance Additions loss ment charge loss balance
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Buildings and
infrastructure
Land 1,515 - - (795) - (97) 623
Buildings 10,458 - - (5,747) (33) (435) 4,243
Capitalised
road costs 5,143 - - (2,522) (527) (203) 1,891
Capitalised
electrical sub-station
costs 2,310 - - (1,137) (229) (92) 852
Machinery,
plant and equipment
Critical spare
parts 1,713 190 - (1,046) - (73) 784
Plant and machinery 86,180 14,911 - (55,775) (1) (3,740) 41,575
Water treatment
plant 2,435 56 - (1,366) - (100) 1,025
Furniture and
fittings 9 10 - - (4) - 15
Geological equipment 20 18 - - (6) (1) 31
Office equipment 11 - - - (9) - 2
Other fixed
assets - - - - - - -
Motor vehicles - - - - - - -
Computer equipment 24 24 - - (12) (2) 34
Mine development 18,938 - - (10,227) - (775) 7,936
Stripping activity
costs 6,126 17,178 - (13,035) - (497) 9,772
Game animals 217 - (21) - - (14) 182
Total 135,099 32,387 (21) (91,650) (821) (6,029) 68,965
--------- ---------- ------------- ---------- -------------- ---------- ---------
Kropz Elandsfontein has a fully drawn down project financing
facility with BNP Paribas for US$ 30 million (see Note 11). BNP has
an extensive security package over all the assets of Kropz
Elandsfontein and Elandsfontein Land Holdings (Pty) Ltd
("Elandsfontein Land Holdings") as well as the share investments in
those respective companies owned by Kropz SA (Pty) Ltd ("Kropz
SA").
9. Intangible assets - exploration and evaluation costs
30 June 31 December
2023 2022
US$'000 US$'000
Capitalised exploration costs
Cost 43,359 42,415
Amortisation - -
--------- ------------
Carrying value 43,359 42,415
--------- ------------
Reconciliation of exploration assets
Foreign
Opening exchange Closing
Balance Additions Disposals Gain balance
US$'000 US$'000 US$'000 US$'000 US$'000
Period ended 30 June 2023
Capitalised exploration
costs 42,415 199 - 745 43,359
------------- ---------- ------------ ---------- ---------
Reconciliation of exploration assets
Foreign
Opening exchange Closing
Balance Additions Disposals loss balance
US$'000 US$'000 US$'000 US$'000 US$'000
Year ended 31 December
2022
Capitalised exploration
costs 44,631 346 - (2,562) 42,415
------------- ---------- ------------ ---------- ---------
The costs of mineral resources acquired and associated
exploration and evaluation costs are not subject to amortisation
until they are included in the life-of-the-mine plan and production
has commenced.
Where assets are dedicated to a mine, the useful lives are
subject to the lesser of the asset category's useful life and the
life of the mine, unless those assets are readily transferable to
another productive mine. In accordance with the requirements of
IFRS 6, the Board of Directors assessed whether there were any
indicators of impairment. No indicators were identified (refer to
Note 16).
10. Shareholder loans and derivative liability
30 June 31 December
2023 2022
US$'000 US$'000
Shareholder loans - ARC Fund 29,963 17,010
Convertible debt - ARC Fund 21,066 15,055
Derivative liability 15,166 23,037
66,195 55,012
--------- ------------
Maturity
Non-current 29,963 55,012
Current 36,232 -
------- -------
Total 66,195 55,012
------- -------
Shareholder loans - ARC Fund
The loans are: (i) US$ denominated, but any repayments will be
made in ZAR at the then prevailing ZAR/US$ exchange rate; (ii)
carry interest at monthly SOFR plus 3%; and (iii) are repayable by
no later than 1 January 2035 (or such earlier date as agreed
between the parties to the shareholder agreements).
Convertible debt - ARC Fund
On 20 October 2021, the Company entered into a new convertible
equity facility of up to ZAR 200 million ("ZAR 200 Million Equity
Facility") with ARC, the Company's major shareholder. Interest is
payable at 14% nominal, compounded monthly. At any time during the
term of the ZAR 200 Million Equity Facility, repayment of the ZAR
200 Million Equity Facility capital amount will, at the election of
ARC, either be in the form of the conversion into ordinary shares
of 0.1 pence each ("Ordinary Shares") in the Company and issued to
ARC, at a conversion price of 4.5058 pence per Ordinary Share each,
representing the 30-day Volume Weighted Average Price ("VWAP") on
21 September 2021, and at fixed exchange rate of GBP 1 = ZAR 20.24
("Conversion"), or payable in cash by the Company at the end of the
term of the ZAR 200 Million Equity Facility which is 27 October
2026. The ZAR 200 Million Equity Facility is fully drawn at the
date of this report.
As announced on 11 May 2022, the Company entered into a new
conditional convertible equity facility of up to ZAR 177 million
("ZAR 177 Million Equity Facility") with ARC. Interest is payable
at 14% nominal, compounded monthly. At any time during the term of
the ZAR 177 Million Equity Facility, repayment of the ZAR 177
Million Equity Facility capital amount will, at the election of
ARC, either be in the form of the conversion into Ordinary Shares
in the Company and issued to ARC, at a conversion price of 9.256
pence per Ordinary Share each, representing the 30-day Volume
Weighted Average Price ("VWAP") on 4 May 2022, and at fixed
exchange rate of ZAR 1 = GBP 0.0504 ("Conversion"), or payable in
cash by the Company at the end of the term of the ZAR 177 Million
Equity Facility which is 2 June 2027. The ZAR 177 Million Equity
Facility is fully drawn at the date of this report.
As announced on 14 November 2022, the Company entered into a new
conditional convertible equity facility of up to ZAR 550 million
("ZAR 550 Million Equity Facility") with ARC. Interest is payable
at the South African prime overdraft interest rate plus 6%, nominal
per annum and compounded monthly. At any time during the term of
the ZAR 550 Million Equity Facility, repayment of the ZAR 550
Million Equity Facility capital amount will, at the election of
ARC, either be in the form of the conversion into Ordinary Shares
in the Company and issued to ARC, at a conversion price of 4.579
pence per Ordinary Share each, representing the 30-day Volume
Weighted Average Price ("VWAP") on 21 October 2022 and at fixed
exchange rate of ZAR 1 = GBP 0.48824 ("Conversion"), or payable in
cash by the Company at the end of the term of the ZAR 550 Million
Equity Facility which is 30 November 2027. The Company drew down a
further ZAR 100 million during the 6-month period ending 30 June
2023, with ZAR 7.5 million remaining undrawn on the ZAR 550 Million
Equity Facility at 30 June 2023.
Derivative liability
It was determined that the conversion option embedded in the
convertible debt equity facility be accounted for separately as a
derivative liability. Although the amount to be settled is fixed in
ZAR, when converted back to Kropz's functional currency will result
in a variable amount of cash based on the exchange rate at the date
of conversion. The value of the liability component and the
derivative conversion component were determined at the date of draw
down using a Monte Carlo simulation. The debt host liability was
bifurcated based on the determined value of the option.
Subsequently, the embedded derivative liability is adjusted to
reflect fair value at each period end with changes in fair value
recorded in profit and loss (refer to Note 21).
Fair value of shareholder loans
The carrying value of the loans approximates their fair
value.
11. Other financial liabilities
30 June 31 December
2023 2022
US$'000 US$'000
BNP Paribas ("BNP") 18,527 26,298
Greenheart Foundation 714 510
--------- ------------
Total 19,241 26,808
--------- ------------
BNP
A US$ 30,000,000 facility was made available by BNP Paribas to
Kropz Elandsfontein in September 2016.
In May 2020, Kropz Elandsfontein and BNP Paribas agreed to amend
and restate the term loan facility agreement entered into on or
about 13 September 2016 (as amended from time to time). The BNP
Paribas facility amendment agreement extends inter alia the final
capital repayment date to Q3 2024, with eight equal capital
repayments to commence in Q4 2022 and an interest rate of 6.5% plus
SOFR, up to project completion and 4.5% plus SOFR thereafter.
BNP Paribas has an extensive security package over all the
assets of Kropz Elandsfontein and Elandsfontein Land Holdings as
well as the share investments in those respective companies owned
by Kropz SA.
The BNP loan is subject to covenant clauses. Kropz Elandsfontein
did not reach project completion as stipulated in the agreement to
be 31 December 2022 and failed to fund the Debt Service Reserve
Account, however BNP Paribas has provided, a waiver to 30 September
2023. The outstanding balance is therefore presented as a current
liability.
Greenheart Foundation
A loan has been made to the Group by Greenheart Foundation which
is interest-free and repayable on demand. Louis Loubser, a Director
of the Kropz plc, is a Director of Greenheart Foundation.
Fair value of other nancial liabilities
The carrying value of the loans approximate their fair
value.
12. Revenue
Six months Six months
ended ended
30 June 30 June
2023 2022
US$'000 US$'000
Sales to region/Country
South Africa 1,836 -
Australia 1,489 -
Brazil 4,933 -
New Zealand 1,968 -
South Korea 3,827 -
14,053 -
----------- -----------
Timing of transfer of Goods
Delivery to port of departure 14,053 -
----------- -----------
14,053 -
----------- -----------
All revenue from phosphate is recognised at a point in time when
control transfers.
13. Finance income
Six months Six months
ended ended
30 June 30 June
2023 2022
US$'000 US$'000
Interest income 57 85
Total 57 85
----------- -----------
14. Finance expense
Six months Six months
ended ended
30 June 30 June
2023 2022
US$'000 US$'000
Shareholder loans 4,271 1,215
Foreign exchange losses 4,049 1,892
Bank debt 1,343 1,057
BNP Paribas - Debt modification present
value adjustment amortisation (104) (123)
BNP Paribas amendment fee amortisation 91 108
Finance leases - 3
Other 70 154
----------- -----------
Total 9,720 4,306
----------- -----------
15. Fair value gain / (loss) from derivative liability
Six months Six months
ended ended
30 June 30 June
2023 2022
US$'000 US$'000
Fair value gain / (loss) from derivative
liability 11,817 (7,637)
Total 11,817 (7,637)
----------- -----------
The Company has entered into three convertible equity facilities
with the ARC Fund. On 20 October 2021, the Company entered into the
first a convertible equity facility of up to ZAR 200 million ("ZAR
200 Million Equity Facility"). The second convertible equity
facility was entered into on 11 May 2022 of up to ZAR 177 million
("ZAR 177 Million Equity Facility"). On 14 November 2022, the
Company entered into its third conditional convertible equity
facility of up to ZAR 550 million ("ZAR 550 Million Equity
Facility.") with ARC Fund (refer to Note 10).
It was determined that the conversion option embedded in the
convertible debt equity facility be accounted for separately as a
derivative liability. Although the amount to be settled is fixed in
ZAR, when converted back to Kropz's functional currency will result
in a variable amount of cash based on the exchange rate at the date
of conversion. The value of the liability component and the
derivative conversion component was determined at the date of draw
down using a Monte Carlo simulation. The debt host liability was
bifurcated based on the determined value of the option.
Subsequently, the embedded derivative liability is adjusted to
reflect fair value at each period end with changes in fair value
recorded in profit and loss (refer to Note 21).
16. Impairment losses
The following impairment loss was recognised in the six-month
period ended 30 June 2022:
Six months Six months
ended ended
30 June 30 June
2023 2022
US$'000 US$'000
Property, plant, equipment and mine development
assets - 44,700
Total - 44,700
------------ -----------
A bi-annual impairment assessment was performed and it was
determined that no adjustment to the impairment provision for the
period to 30 June 2023 is required. The impairment loss for the
period to 30 June 2022 was recognised in relation to the
Elandsfontein mine. The triggers for the impairment test were
primarily related to the hard bank that was encountered in the pit,
which necessitated further drilling.
17. Taxation
Major components of tax charge Six months Six months
ended ended
30 June 30 June
2023 2022
US$'000 US$'000
Deferred
Originating and reversing temporary differences - -
Current tax
UK tax in respect of current period - -
----------- -----------
Total - -
----------- -----------
The Group had losses for tax purposes of approximately US$ 51.9
million (31 December 2022: US$ 57.5 million) which, subject to
agreement with taxation authorities, are available to carry forward
against future profits. A net deferred tax asset arising from these
losses has not been recognised as steady state production has not
been reached.
18. Earnings per share
The calculations of basic and diluted earnings per share have
been based on the following loss attributable to ordinary
shareholders and the weighted average number of ordinary shares
outstanding:
Six months Six months
ended ended
30 June 30 June
2023 2022
US$'000 US$'000
Profit / (Loss) attributable to ordinary
shareholders 1,518 (46,794)
Weighted average number of ordinary shares
in Kropz plc 926,718,223 920,069,356
Basic and diluted profit / (loss) per share
(US cents) 0.16 (5.09)
------------ ------------
19. Related party transactions
Details of share issues and shareholder loans are explained in
Notes 10 and 11. In addition, the following transactions were
carried out with related parties:
Related party balances
Loan accounts - Owed to related parties
30 June 31 December
2023 2022
US$'000 US$'000
Shareholder loans - ARC Fund 29,963 17,010
Convertible debt - ARC Fund 21,066 15,055
Derivative liability 15,166 23,037
Greenheart Foundation 714 510
--------- ------------
Total 66,909 55,612
--------- ------------
Related party balances
Interest paid to related parties
Six months Six months
ended ended
30 June 30 June
2023 2022
US$'000 US$'000
ARC Fund 4,271 1,215
----------- -----------
Total 4,271 1,215
----------- -----------
20. Seasonality of the Group's business
With the unexpected record rainfall experienced in the Western
Cape the mining plan was amended to consider higher rainfall in
winter periods to minimise the effects of wet mining conditions.
There are no other seasonal factors which materially affect the
operations of any company in the Group.
21. Fair value
The following table compares the carrying amounts and fair
values of the Group's financial assets and financial liabilities as
at 30 June 2023.
The Group considers that the carrying amount of the following
financial assets and financial liabilities are a reasonable
approximation of their fair value:
-- Trade receivables;
-- Trade payables;
-- Restricted cash; and
-- Cash and cash equivalents.
As at 30 June As at 31 December
2023 2022
Carrying Fair Carrying Fair
amount value amount value
US$'000 US$'000 US$'000 US$'000
Financial Assets
Other financial assets 783 783 860 860
Total 783 783 860 860
--------- --------- --------- ---------
Financial Liabilities
Shareholder loans 51,029 51,029 32,065 32,065
Derivative liability 15,166 15,166 23,037 23,037
Other financial liabilities 19,241 19,241 26,808 26,808
--------- --------- --------- ---------
Total 85,436 85,436 81,910 81,910
--------- --------- --------- ---------
This note provides an update on the judgements and estimates
made by the Group in determining the fair values of the financial
instruments.
(i) Financial instruments Measured at Fair Value
The financial instruments recognised at fair value in the
Statement of Financial Position have been analysed and classified
using a fair value hierarchy reflecting the significance of the
inputs used in making the measurements.
(ii) Fair value hierarchy
The fair value hierarchy consists of the following levels
-- Quoted prices in active markets for identical assets and liabilities (Level 1);
-- Inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices) (Level 2); and
-- Inputs for the asset and liability that are not based on
observable market date (unobservable inputs) (Level 3).
Level Level Level
1 2 3 Total
US$'000 US$'000 US$'000 US$'000
30 June 2023
Derivative liability - - 15,166 15,166
---------- ---------- --------- ---------
31 December 2022
Derivative liability - - 23,037 23,037
---------- ---------- --------- ---------
There were no transfers between levels for recurring fair value
measurements during the year.
(iii) Reconciliation: Level 3 fair value measurement
Six months
ended Year ended
30 June 31 December
2023 2022
US$'000 US$'000
Derivative liability
Opening balance (23,037) (2,656)
Fair value at initial recognition (3,083) (31,852)
Fair value gain recognised in profit
and loss 11,817 10,807
Foreign exchange (863) 664
----------- -------------
Closing balance (15,166) (23,037)
----------- -------------
(iv) Valuation technique used to determine fair value
Derivative liability:
The fair value is calculated with reference to market rates
using industry valuation techniques and appropriate models from a
third-party provider. The Monte-Carlo model utilised includes a
high level of complexity and the main inputs are share price
volatility, risk margin, foreign exchange volatility and UK
risk-free rate. A number of factors are considered in determining
these inputs, including assessing historical experience but also
considering future expectations. The determined fair value of the
option is multiplied by the number of shares available for issue
pursuant to the ZAR 200 Million Equity Facility, ZAR 177 Million
Equity Facility and the ZAR 550 Million Equity Facility (refer to
Note 10).
Valuation results (as at 30 June 2023)
Total loan amount Value per Number of Total Value
Facility (ZAR) share (p) Shares (GBP)
----------------- ----------------- --------- ----------- ---------------
ZAR200m facility 200,000,000 1.18 219,272,938 2,594,239
ZAR177m facility 177,000,000 0.65 96,378,566 621,771
ZAR550m facility 542,500,000 1.51 578,445,513 8,744,119
----------------- ----------------- --------- ----------- ---------------
Total 894,097,017 11,960,129
----------------- ----------------- --------- ----------- ---------------
Sensitivity Valuation results (as at 30 June 2023) -
Volatility
Total Value
(GBP) -
100% Total Value
historical (GBP) - 50%
Base volatility volatility historical
Facility volatility
assumption (75%) (38%)
----------------- --------------- ----------- -----------
ZAR200m facility 63% 4,443,173 1,120,995
ZAR177m facility 63% 1,461,751 125.010
ZAR550m facility 63% 15,217,593 3,765,510
----------------- --------------- ----------- -----------
Total 21,122,517 5,011,515
----------------- --------------- ----------- -----------
Sensitivity Valuation results (as at 30 June 2023) - Risk
Margin
Total Value Total Value
Base risk margin (GBP) - 7% (GBP) - 3%
Facility assumption risk margin risk margin
----------------- ---------------- -------------- -----------
ZAR200m facility 5% 2,727,344 2,463,408
ZAR177m facility 5% 669,854 575,190
ZAR550m facility 5% 9,192,309 8,301,860
----------------- ---------------- -------------- -----------
Total 12,589,507 11,340,458
----------------- ---------------- -------------- -----------
Sensitivity Valuation results (as at 30 June 2023) - FX
volatility
Total Value Total Value
(GBP) -
20% (GBP) - 10%
Facility Base FX volatility FX volatility FX volatility
----------------- ------------------ ------------- -------------
ZAR200m facility 14% 2,367,251 2,755,410
ZAR177m facility 14% 530,650 687,339
ZAR550m facility 14% 7,982,928 9,265,707
----------------- ------------------ ------------- -------------
Total 10,880,829 12,708,456
----------------- ------------------ ------------- -------------
Sensitivity Valuation results (as at 30 June 2023) - UK
risk-free rate
Total Value Total Value
(GBP) - (GBP) - UK
UK rf rf
Base UK risk-free
Facility rate + 2% -2%
----------------- ----------------- ----------- -----------
ZAR200m facility 4.3% 2,727,344 2,463,408
ZAR177m facility 4.1% 669,854 575,190
zAR550m facility 3.6% 9,192,309 8,301,860
----------------- ----------------- ----------- -----------
Total 12,589,507 11,340,458
----------------- ----------------- ----------- -----------
22. Events after the reporting period
A further shipment and sale of 33,000 tonnes of phosphate
concentrate from Kropz Elandsfontein was recorded in July 2023 and
a further 30,900 tonnes in September 2023.
The fifth and final drawdown on the ZAR 285 million bridging
facility of ZAR 60 million was made on 17 August 2023.
As announced on 14 September 2023, Kropz, Kropz Elandsfontein
and ARC Fund agreed to further ZAR 250 million (approximately US$
13.2 million) bridge loan facilities ("Loan 2") to meet immediate
cash requirements at Kropz Elandsfontein. A first draw down of ZAR
155 million (approximately US$ 8 million) was made on 18 September
2023. The loan is unsecured, repayable on demand, with no fixed
repayment terms and is repayable by Kropz Elandsfontein on no less
than two business days' notice. Interest is payable on the Loan at
the South African prime overdraft interest rate plus 6%, nominal
per annum and compounded monthly. In the event that any amounts
outstanding under the Loan, together with interest thereon, is not
repaid within 6 months from the first utilisation date, the
interest rate will be increased with an additional 2%.
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END
IR DZGZLMRMGFZM
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September 28, 2023 07:47 ET (11:47 GMT)
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