TIDMKZG
RNS Number : 4756G
Kazera Global PLC
30 March 2022
30 March 2022
Kazera Global plc
Annual Report for the Year Ended 30 June 2021
Kazera Global plc ("Kazera Global", "Kazera" or "the Company"),
the AIM quoted investment company, is pleased to announce, the
Company's annual report for the year ended 30 June 2021 ("the
Period").
CHAIRMAN'S STATEMENT
For the year ended 30 June 2021
Review of the Period
Over the period Kazera has performed well delivering growth
whilst developing significant opportunities in the pipeline for the
future. The Company remains committed to a diversified portfolio
with exposure to the lithium, tantalum, diamonds and heavy mineral
sands commodities' markets.
We have made noteworthy progress operationally across the
portfolio continuing to drive growth and improvement in the Diamond
Project in South Africa as well as the Tantalite Valley Mine
("TVM") in Namibia. The Diamond project was successfully resumed in
October 2020 producing the first "proof of concept" batch of 52
carats which were subsequently sold at auction. This first batch
was also subsequently followed by 39.94carats being sorted in
February 2021, 243.36 in April 2021 and a further 177.12 carats in
June 2021, confirming that the Diamond project will be a profitable
project on a standalone basis. We remain optimistic for new
high-grade development to continue on the asset, further increasing
the potential profitability of the project. We remain focused on
diamond production on larger stones which would deliver higher
market value and maximise returns.
In Namibia, exploration at the Tantalite Valley Mine confirmed
three different minerals in commercially viable quantities across
just 30% of the licence area. Results also delivered strong grades
of feldspar, highlighting the potential of the region.
We continued to advance discussions with potential investors
surrounding the Orange River pipeline. An extensive plant upgrade
has led to us putting the plant into test operation using borehole
water and adopting an aggressive water recycling policy. Interest
remains from local investors in TVM, and the Company continues to
explore all avenues.
Although during the year there were delays to the issuance of
the Company's mining permit and Prospecting Licence at the Heavy
Mineral Sands Project due to COVID we are pleased that the
documentation passed through the correct channels after easing of
COVID restrictions. The final documents are expected shortly.
In June 2021 we were delighted to welcome Dennis Edmonds into
the role of Joint Chief Executive. Dennis has a wide range of
experience and was previously the Director responsible for the
Company's Alexander Bay activities, which given the importance of
the South African activities and the considerable constraints on
travel caused by Covid has been a well-received and logical
appointment. Dennis has since become Chief Executive Officer with
the departure of Larry Johnson who we thank for his significant
contribution to the Company during his 5 years with the
business.
Outlook
Our strategy continues to be to grow the business organically as
well as remaining open to any inorganic opportunities that may
arise.
The uncertainty caused by COVID-19 has delayed the proposed
investments by two prospective Namibian investors who still remain
positive and interested in investing. In the interim, we have also
continued to secure long-term financing through a New Loan
Facility, together with the conversion of the current director
advances into a fixed term loan, providing the Company with a cash
pool to alleviate any short-term unforeseen cash issues that could
arise. As we move into the new year, we look forward to having a
cash generative business to fund our future expansion and look to
securing additional investment where necessary.
Giles Clarke
Chairman
29 March 2022
CHIEF EXECUTIVE OFFICER'S REVIEW
For the year ended 30 June 2021
Overview
I am pleased to provide my first CEO review and look forward to
the year ahead as we continue to build value in both Namibia and
now South Africa. The Company has made significant progress over
the past year. We are set to be a producing and revenue generating
company in the near future which is a true testament to the hard
work the whole company has put in during what has been a testing
time globally during the COVID-19 pandemic.
Kazera secured funding deals from multiple sources during the
year, ran financial and operational due diligence on the Tantalite
Valley Mine and operated efficiently to facilitate growth in the
business as well as optimise the production of high-grade diamonds
from the Mining Project.
Operations
At the start of the reporting period, we made noteworthy
progress with operations at both the Company's Diamond project in
South Africa and Tantalite Valley Mine in Namibia. Although
operations were halted in South Africa due to the impact of
COVID-19 our Diamond Project restarted production in October 2020
and has been in test operation without issue since. Alongside this
our Tantalite Valley Mine produced positive exploration outcomes,
highlighting the potential of the region and in turn of Kazera.
Our Diamond production continues to show the high-grade minerals
available on our licence and with Kazera's expertise the Company is
set to focus on the high-grade mineralisation with the view to
maximise profitability.
Although the Heavy Mineral Sands Project experienced delays to
the issuance of Kazera's Mining Permit and Prospecting Licence due
to the pandemic, management made sure to push forward once easing
was implemented in-country and the licence is expected to be issued
shortly.
The Company is pleased to have two potential Namibian investors
who have each agreed initial terms to subscribe $11 million for
290,576,383 shares in the Company. The funds were largely earmarked
to aid the development of the Tantalite Valley and the building of
the Orange River pipeline, but the Company has now successfully
upgraded the plant and utilised available borehole water to again
get the plant into operation.
Post period the management team was pleased to have acquired 60%
of Whale Head Minerals. It is now awaiting the grant of the Mining
Permit, which it believes to be imminent and which will bring near
term cash flow to the Company from the production of Heavy Mineral
Sands.
Outlook
Kazera is in a prime position to progress and maximise
shareholder value. Within the coming year we anticipate cash
generative production from all three of our current projects. This
will fund the development of further tantalum and lithium resources
in Namibia and a processing facility for HMS in South Africa as
well as further Exploration Licences.
The Company will also continue to progress with investment into
the business where needed and is acutely focussed on driving growth
funding future developments. This is very exciting for the Kazera
Board to see the whole plan now starting to come together and
delivering value to our shareholders and stakeholders.
Dennis Edmonds
Chief Executive Officer
29 March 2022
STRATEGIC REPORT
For the year ended 30 June 2021
The Directors present their strategic report on the Group for
the year ended 30 June 2021.
PRINCIPAL ACTIVITY AND BUSINESS REVIEW
The principal activity of the Group is to act as an investor in
the resources and energy sectors. The Group is currently focused on
its Tantalite project located in Namibia and diamond mine in South
Africa. The Group may be either an active investor and acquire
control of a single company or it may acquire non-controlling
shareholdings.
The Directors recommend that there is no dividend payment for
the year ended 30 June 2021 (2020: nil).
The review of the period is contained within the Chairman's
Statement.
The Chairman's Statement provides a balanced and comprehensive
analysis of the future developments, performance and results of the
Group during the period and of the balance sheet position of the
Group at the end of that period in the context of the Group's
current activities.
INVESTING POLICY
Kazera Global plc (the "Company") seeks to achieve shareholder
return primarily via capital appreciation through direct
investments in companies and projects primarily in, but not limited
to, Africa within the mining and resource sectors (the "Target
Sectors") including traditional direct investments in securities
and similar financial instruments including any combination of the
following:
(a) equity securities (predominantly unlisted);
(b) listed and unlisted debt securities that may be rated or not
rated (bonds, debt instruments, convertible bonds and bonds with
warrants, fund-linked notes with a capital guarantee, loan
facilities etc.); and
(c) hybrid instruments.
The Company may exploit a wide range of investment opportunities
within the Target Sectors as they arise and, to this end, the
Company has complete flexibility in selecting the specific
investment and trading strategies that it sees fit in order to
achieve its investment objective. In this regard, the Company may
seek to gain Board representation and/or managerial control in its
underlying investments if it deems to be the best way of generating
value for Shareholders.
Opportunities will be chosen through a careful selection process
which will appraise both the fundamental factors specific to the
opportunity as well as wider economic considerations. Typical
factors that will be considered are the strength of management, the
quality of the asset base, the investment's scale and growth
potential, the commodity price outlook, any geopolitical concerns,
the underlying financial position, future working capital
requirements as well as potential exit routes. Investments may be
in the form of buy-outs, controlling positions (whether initially
or as a result of additional or follow-on investments) or strategic
minority investments.
There is no fixed limit on the number of projects or companies
into which the Company may invest, nor the proportion of the
Company's gross assets that any investment may represent at any
time.
No material change will be made to the Company's investing
policy without the approval of Shareholders.
KEY PERFORMANCE INDICATORS
The Group considers investment value and return on investment as
its principal key performance indicators. This is monitored
quarterly and reviewed at Board meetings. The Directors believe the
return on investment to be a fair representation of business for
the year. The Company has provided further finance to its
subsidiaries.
Key Performance Indicator 30 June 2021 30 June 2020
GBP'000 GBP'000
---------------------------- -------------- --------------
Investment 3,114 3,114
Return on investment -36% -20%
PRINCIPAL RISKS AND UNCERTAINTIES
The Group's business is to identify, make, manage and realise
investments in accordance with the Group's stated investing policy.
The Directors consider the following risks to be the most material
or significant for the management of the business. These issues do
not purport to be a complete list or explanation of all the risk
factors facing the Group. In particular the Group's performance may
be affected by changes in the market and/or economic conditions and
changes in legal, regulatory or tax requirement legislation.
Additional risks and uncertainties not presently known by the Group
or that the Group currently deems immaterial may also impact the
business.
The Board of Directors monitors these risks and the Group's
performance on a regular basis, considering investment proposals,
the performance of investments made and opportunities for
divestment as appropriate as well as considering the actual
performance of the Group against budgets.
-- Political and Country Risk
Substantially all of the Group's business and operations are
conducted in Namibia and South Arica. The political, economic,
legal and social situation in Namibia introduces a certain degree
of risk with respect to the Group's activities. The Government of
Namibia exercises control over such matters as exploration and
mining license, permitting, exporting and taxation, which may
adversely impact the Group's ability to carry out exploration,
development and mining activities.
Government activity, which could include non-renewal of
licenses, may result in any income receivable by the Group being
adversely affected. In particular, changes in the application or
interpretation of mining and exploration laws and/or taxation
provisions in Namibia could adversely affect the value of the
Group's interests.
The Group's risks are mitigated by liaison with the local
governments and union representatives as well as continuous
monitoring of local situations.
-- Exploration and Development Risk
The exploration for and the development of mineral deposits
involves significant risks, which even a combination of careful
evaluation, experience and knowledge may not eliminate. While the
discovery of an ore body may result in substantial rewards, few
properties which are explored ultimately develop into producing
mines. Major resources are required to establish ore reserves, to
develop metallurgical processes and to construct mining and
processing facilities at the Namibian site.
There is no certainty that the exploration and development
expenditures made by the Group as described in these financial
statements will result in a commercially feasible mining operation.
There is aggressive competition within the mining industry for the
discovery and acquisition of properties considered to have
commercial potential. The Group will compete with other companies,
many of which have greater financial resources, for the opportunity
to participate in promising projects. Significant capital
investment is required to achieve commercial production from
successful exploration efforts.
The commercial viability of a deposit is dependent on a number
of factors. These include deposit attributes such as size, grade
and proximity to infrastructure; current and future market prices
which can be cyclical; government regulations including those
relating to prices, taxes, royalties, land tenure, land use,
importing and exporting of minerals and environmental protection.
The effect of these factors, either alone or in combination, cannot
be entirely predicted, and their impact may result in the Group not
receiving an adequate return on invested capital.
There is no assurance the Group will be able to adhere to the
current development and production schedule or that the required
capital and operating expenditure will be accurate. The Group's
development plans may be adversely affected by delays and the
failure to obtain the necessary approvals, licenses or permits to
commence production or technical or construction difficulties which
are beyond the Group's control. Operational risks and hazards
include: unexpected maintenance, technical problems or delays in
obtaining machinery and equipment, interruptions from adverse
weather conditions, industrial accidents, power or fuel supply
interruptions and unexpected variations in geological
conditions.
Exploration risk is mitigated by using independent third-parties
to determine the resource availability (JORC reports) and the
operational risk is mitigated by using high-quality skilled
drilling contractors.
-- Unable to invest
The Directors may be unable to identify investments which are
consistent with the Group's investment policy and which are
available at a price which the Directors consider suitable, which
would limit the potential for the Group's value to grow.
The Management team are highly experienced at sourcing
investment opportunities
-- Unavailability of finance
The Directors may identify suitable investments at what they
believe to be a suitable price but which may require more funds
than are available to the Group and the Group may then be unable to
raise further funds at all or on terms which the Directors consider
acceptable.
The Group is listed on the public markets where additional
finance can be raised. Additionally, the Company was able to secure
new loan facilities in October 2021, post year end.
-- Covid-19
The Group's operations are principally in Namibia and South
Africa where Covid-19 has had a significant on the local
economies.
The following has been implemented by the Group:
Health and safety - The Group has published policies on
operating within the current government and international
guidelines to ensure our personnel remain safe. No significant
outbreaks of Covid-19 have been identified within our operational
vicinity, however should there be a significant outbreak,
operations will be adversely affected. The current guidelines
implemented by the Group have limited financial impact in the short
term, and as government restrictions are being eased in these
regions, the Group does predict a long-term effect on the
results.
Localised and national lockdowns - To date, there have been
limited lockdowns in the specific regions in which Kazera operate.
Going forward there is a risk that should tighter restrictions be
enforced leading to reduced activity, both future development as
well as mining operations may be impacted.
-- Investment risk
Once an investment has been made, the underlying business
invested in may not perform as the Directors had expected and this
may impair or eliminate the value of the Group's investment.
The management team closely monitors performance of each
activity and takes corrective action where necessary
-- Realisation risk
Once an investment has been made, it may not prove possible to
realise the investment at the time the Directors intend or only to
realise it at a value which damages the Group's value.
The Management team are highly experienced at sourcing and
managing potential opportunities until fruition
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Note 24 to the financial statements sets out the financial risks
to which the Group is exposed, together with its policies for
managing these risks.
PROMOTION OF THE COMPANY FOR THE BENEFIT OF THE MEMBERS AS A
WHOLE
The Director's believe they have acted in the way most likely to
promote the success of the Company for the benefit of its members
as a whole, as required by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
-- Consider the likely consequences of any decision in the long term,
-- Act fairly between the members of the Company,
-- Maintain a reputation for high standards of business conduct,
-- Consider the interests of the Company's employees,
-- Foster the Company's relationships with suppliers, customers and others, and
-- Consider the impact of the Company's operations on the community and the environment.
The Company is quoted on AIM and its members will be fully
aware, through detailed announcements, shareholder meetings and
financial communications, an updated website, of the Board's broad
and specific intentions and the rationale for its decisions. The
Company has complied with all its obligations under AIM rule
26.
When selecting investments, issues such as the impact on the
community and the environment have actively been taken into
consideration. The Company strives to comply with all local
environmental legislation, and takes it responsibility to the
environment very seriously. Post year end, the Company has focused
on water recycling projects at its processing plant in the
Tantalite Valley.
The Company pays its employees and creditors promptly and keeps
its costs to a minimum to protect shareholders funds. The Company
recognises, communicates with workers' representation unions and
complies with all local employment legislation. There were no
outstanding employment disputes at 30 June 2021.
GOING CONCERN
The financial statements have been prepared assuming the Group
and Company will continue as a going concern. In assessing whether
the going concern assumption is appropriate, the directors have
taken into account all available information for the foreseeable
future; in particular for the 12 months from the date of approval
of these financial statements and performed sensitivity analysis
thereon. This assessment includes consideration of future plans,
expenditure commitments in place, cost reduction measures that can
be implemented and permitting requirements. The Directors estimates
are dependent upon the company's mining operations coming into
operation as planned. In the event that this does not occur the
Directors are confident that further funds could be raised to
bridge any shortfall.
The diamond mines have produced a relatively small number of
carats, up to the December/January cycle when just over 1,000
carats were produced. We expect diamond mining to now provide
consistent revenue. We are now producing small quantities of
Tantalum and have made substantial changes to the plant and
anticipate commercial scale production during April 2022. As a
result, the Directors do not believe performing a stress test to be
appropriate.
The audit report on page 18 makes reference to a material
uncertainty relating to going concern. Further details in respect
of the considerations made can be found in note 2 to the financial
statements.
This report was approved by the board of Directors on 29 March
2022 and signed on its behalf by
Dennis Edmonds
Chief Executive Officer
DIRECTORS' REPORT
For the year ended 30 June 2021
The Directors present their annual report and audited financial
statements for the year ended 30 June 2021.
DIRECTORS
The Directors who served throughout the year, were as
follows:
G Clarke - Chairman
Giles Clarke was appointed as a director on 25 March 2014 and
was independent on appointment as Chairman. He was formerly
Chairman of AIM quoted Amerisur Resources plc prior to its disposal
in 2020, is Chairman of Westleigh Investments Holdings Limited and
AIM quoted Ironveld plc. He began his career as an investment
banker with Credit Suisse First Boston before successfully
establishing, building and selling a number of high-profile
businesses including Majestic Wine, Pet City plc and Safestore plc.
He is also Chairman of several private organisations.
L Johnson - Chief Executive Officer - resigned 20 October
2021
Larry Freeman Johnson has more than 25 years' experience in the
tantalum industry having worked with two large US based publicly
listed companies with core interests in tantalum. Throughout his
career, Larry has held several senior key positions, most recently
as Director: Mining and Global Tantalum Supply Chain at KEMET
Electronics Corporation, and significantly he has spent several
years focussing on the development of conflict-free global supply
chains.
D Edmonds -Executive Director
Mr Edmonds has a wealth of experience in board level positions
in investment banking and venture capital industries. Most
recently, Mr Edmonds was executive Chairman of AIM-quoted Alien
Metals Limited and CEO of Pathfinder Minerals PLC.
Odilon Ilunga - Executive Technical Director - appointed on 26
June 2020
Mr Ilunga is a Metallurgist and Civil Engineer having graduated
with a master's degree in metallurgical engineering from the
University of Witwatersrand. Having begun his career in mining at
Ongolopo Mining Limited in 2004 before moving to Weatherly Mining
Namibia in 2010, Mr Ilunga was appointed Operations Manager at
African Tantalum in 2017, in charge of tantalum ore concentration
and development strategies for the processing plant.
N Harrison - Non-Executive Director
Nick Harrison was appointed as a director on 25 March 2014 and
was independent on appointment. He was formerly Finance Director of
AIM quoted Amerisur Resources plc prior to its sale in 2020, and a
Non-executive Director of Ironveld plc. Mr Harrison has held Board
positions at a number of private companies with international
activities. He is a Chartered Accountant, having qualified with
Arthur Andersen before holding senior roles with Deloitte, Midland
Bank (International) and Coopers & Lybrand.
DIRECTORS' INTERESTS
The Directors who held office during the period and their
beneficial interest in the ordinary shares of the Company were as
follows:
30 June 2021 30 June 2020
----------------------------- ------------------------ ------------------------
Number % held Number % held
----------------------------- ----------- ----------- ----------- -----------
G Clarke (see note below) 19,832,743 2.83% 19,832,743 2.93%
N Harrison (see note below) 20,499,409 2.93% 20,499,409 3.03%
L Johnson 500,000 0.07% 500,000 0.07%
D Edmonds - - - -
O Ilunga - - - -
Note: Westleigh Investments Holdings Limited (a company
beneficially owned by Giles Clarke and Nick Harrison), holds
15,138,095 (2020: 14,338,095) ordinary shares in addition to the
personal holdings shown above.
CAPITAL STRUCTURE
Details of the issued share capital are shown in Note 21. The
Company has one class of ordinary shares which carries no right to
fixed income. Each share carries the right to one vote on a poll at
general meetings of the Company.
There are no specific restrictions on the size of a holding nor
on the transfer of shares, which are both governed by the
provisions of the Articles of Association and prevailing
legislation. The Directors are not aware of any agreements between
holders of the Company's shares that may result in restrictions on
the transfer of securities or on the exercise of voting rights.
No person has any special rights of control over the Company's
share capital and all issued shares are fully paid.
With regard to the appointment and replacement of directors, the
Company is governed by its Articles of Association, the Companies
Acts and related legislation. The Articles themselves may be
amended by special resolution of the shareholders.
EVENTS AFTER THE REPORTING PERIOD
Note 25 details the events after the reporting period.
EMPLOYEES
The Group is an equal opportunities employer.
SUBSTANTIAL SHAREHOLDINGS
As at 31 December 2021 the Board had been notified of the
following disclosures in respect of shareholders with an interest
in 3 per cent or more of the issued ordinary share capital of the
Company (based on a total number of ordinary shares in issue of
760,453,942):
Number of ordinary shares % of ordinary share capital and voting rights
Align Research 204,700,000 27.0%
Hargreaves Lansdown 55,981,971 7.4%
HSDL, Stockbrokers 46,452,026 6.1%
Tracarta 43,181,095 5.7%
Interactive Investor 40,986,991 5.4%
Dowgate Capital 27,234,374 3.6%
Tectonic Gold 23,527,957 3.1%
STATEMENT OF DISCLOSURE TO INDEPENT AUDITORS
Each of the persons who is a director at the date of approval of
this report confirms that:
-- So far as the Director is aware, there is no relevant audit
information of which the Company's auditor is unaware; and
-- The Director has taken all the steps that he ought to have
taken as a director in order to make himself aware of any relevant
audit information and to establish that the Company's auditor is
aware of that information.
INDEPENT AUDITOR
PKF Littlejohn LLP have expressed their willingness to continue
in office as auditor and will be proposed for reappointment at the
next Annual General Meeting.
This report was approved by the board of Directors on 29 March
2022 and signed on its behalf by
Dennis Edmonds
Director
CHAIRMAN'S CORPORATE GOVERNANCE STATEMENT
The Directors recognise the importance of sound corporate
governance while taking into account the Group's size and stage of
development.
With effect from 28 September 2018, corporate governance
regulations apply to all AIM quoted companies and require the
Company to:
-- provide details of a recognised corporate governance code
that the board of directors has decided to apply
-- explain how the Company complies with that code, and where it
departs from its chosen corporate governance code provide an
explanation of the reasons for doing so.
The corporate governance disclosures need to be reviewed
annually, and the company is also required to state the date on
which these disclosures were last reviewed. This Chairman's
Corporate Governance Statement sets out how Kazera seeks to comply
with these requirements.
The Directors acknowledge that they have overall responsibility
for the Company's system of internal control and for reviewing its
effectiveness. Such a system is designed to manage rather than
eliminate the risk of failure to achieve business objectives and
even the most effective system can provide only reasonable, and not
absolute, assurance with respect to the preparation of financial
information and the safeguarding of assets. The close involvement
of the Directors in all decisions and actions undertaken by the
Company is intended to ensure that the risks to the Company are
minimised.
Overview
As Chairman of the Board of Directors of Kazera Global plc
(Kazera, We, or the Company/Group as the context requires), it is
my responsibility to ensure that Kazera has both sound corporate
governance and an effective Board. Kazera is an AIM listed
investing company whose principal activity is as an investor in the
resources and energy sectors. The Group is focused on projects
located in Southern Africa but will also consider investments in
other geographical regions.
Kazera's Board has adopted the principles of the Quoted
Companies Alliance Corporate Governance Code 2018 Edition (QCA
Code) in accordance with the London Stock Exchange's recent changes
to the AIM Rules, requiring all AIM-listed companies to adopt and
comply or explain non-compliance with a recognised corporate
governance code. The QCA Code identifies ten principles to be
followed in order for companies to deliver growth in long term
shareholder value, encompassing an efficient, effective and dynamic
management framework accompanied by communication to promote
confidence and trust. This report follows the structure of these
guidelines and explains how we have applied the guidance as well as
disclosing any areas of non-compliance. We will provide annual
updates on our compliance with the QCA Code. The Board considers
that the Group complies with the QCA Code so far as it is
practicable having regard to the size, nature and current stage of
development of the Company, and will disclose any areas of
non-compliance in the text below.
The sections below set out the ways in which the Group applies
the ten principles of the QCA Code in support of the Group's medium
to long-term success.
Key governance changes during the year include the formal
adoption of the QCA Code.
QCA Principles
1. Establish a strategy and business model which promotes long-term value for shareholders
Kazera Global plc is an investment company focused on
opportunities principally, but not exclusively in the resources and
energy sectors. The Company holds 100% of African Tantalum, a
Namibian based operation and 90% of Deep Blue Minerals, a South
African based operation.
Kazera seeks to achieve shareholder return primarily via capital
appreciation through the purchase and sale of securities and other
direct investments in companies and projects primarily in, but not
limited to, Africa within the mining and resource sectors (the
"Target Sectors") including traditional direct investments in
securities and similar financial instruments including any
combination of the following:
(a) equity securities (predominantly unlisted);
(b) listed and unlisted debt securities that may be rated or not
rated (bonds, debt instruments, convertible bonds and bonds with
warrants, fund-linked notes with a capital guarantee, loan
facilities etc.); and
(c) hybrid instruments.
The Company may exploit a wide range of investment opportunities
within the Target Sectors as they arise and, to this end, the
Company has complete flexibility in selecting the specific
investment and trading strategies that it sees fit in order to
achieve its investment objective. In this regard, the Company may
seek to gain Board representation and/or managerial control in its
underlying investments if it deems to be the best way of generating
value for Shareholders.
Opportunities will be chosen through a careful selection process
which will appraise both the fundamental factors specific to the
opportunity as well as wider economic considerations. Typical
factors that will be considered are the strength of management, the
quality of the asset base, the investment's scale and growth
potential, the commodity price outlook, any geopolitical concerns,
the underlying financial position, future working capital
requirements as well as potential exit routes. Investments may be
in the form of buy-outs, controlling positions (whether initially
or as a result of additional or follow-on investments) or strategic
minority investments.
There is no fixed limit on the number of projects or companies
into which the Company may invest, nor the proportion of the
Company's gross assets that any investment may represent at any
time.
No material change will be made to the Company's investing
policy without the approval of Shareholders.
Challenges to delivering strategy, long-term goals and capital
appreciation are uncertain in relation to organisational,
operational, financial and strategic risks, all of which are
outlined in the Strategic Report on page 4, as well as steps the
Board takes to protect the Company by mitigating these risks and
secure a long-term future for the Company.
2. Seek to understand and meet shareholder needs and expectations
The Board recognises the importance of communication with its
stakeholders and is committed to establishing constructive
relationships with investors and potential investors in order to
assist it in developing an understanding of the views of its
shareholders.
Kazera also maintains a dialogue with shareholders through
formal meetings such as the AGM, which provides an opportunity to
meet, listen and present to shareholders, and shareholders are
encouraged to attend in order to express their views on the
Company's business activities and performance. Members who have
queries regarding the Company's AGM can contact the Company's
Registrars, Link Asset Services on the Shareholder helpline which
is 9871 664 0300 or +44 (0)371 664 0300 if calling from outside the
UK.
The Board welcomes feedback from key stakeholders and will take
action where appropriate and the Chairman of the Board is the
shareholder liaison, and meets shareholders regularly, and informs
other directors of their views and suggestions. Analysts provide
the Board with updates on the Company's business and how strategy
is being implemented, as well as to hear views and expectations
from shareholders. The views of the shareholders expressed during
these meetings are reported to the Board, ensuring that all members
of the Board are fully aware of the thoughts and opinions of
shareholders.
As part of our commitment to shareholder engagement we have been
seeking the views of shareholders through outreach campaigns and
roadshows. The Company maintains effective contact with its
principal shareholders and welcomes communications from its private
investors. The Company's Financial PR contact details are listed on
the website where a contact form is also included.
The Company also has a social media account (Twitter) through
which the Company maintains a dialogue with shareholders and
interested parties.
Information on the Investor Relations section of the Company's
website is kept updated and contains details of relevant
developments, Annual and Interim Results, Regulatory News Service
announcements, presentations and other key information.
3. Take into account wider stakeholder and social
responsibilities and their implications for long-term success
The Board recognises that the long-term success of the Company
is reliant upon the efforts of employees, regulators and many other
stakeholders. The Board has put in place a range of processes and
systems to ensure that there is close oversight and contact with
its key resources and relationships. The Company prepares and
updates its strategic plan regularly together with a detailed
rolling budget and financial projections which consider a wide
range of key resources including staffing, consultants and utility
providers.
The Board is kept updated on questions / issues raised by
stakeholders and incorporates information and feedback into future
decision making.
Kazera fully abides by the provisions of the 2015 Modern Slavery
Act. In accordance with its Code of Business Conduct and Ethics,
Kazera opposes the crime of slavery in all of its forms, including
child labour, servitude, forced or compulsory labour and human
trafficking. Employee feedback is not relevant at present given
retrenchment and realignment of activities.
All employees within the Group are valued members of the team,
and the Board seeks to implement provisions to retain and
incentivise all its employees. The Group offers equal opportunities
regardless of race, gender, gender identity or reassignment, age,
disability, religion or sexual orientation. The directors are in
constant contact with employees and seek to provide continual
opportunities in which issues can be raised allowing for the
provision of feedback. This feedback process helps to ensure that
new issues and opportunities that arise may be used to further the
success of the Company. Share options and other equity incentives
are offered to employees. Kazera complies fully with all Namibian
employment legislation.
4. Embed effective risk management, considering both
opportunities and threats, throughout the organisation
The Board recognises the need for an effective and well-defined
risk management process and it oversees and regularly reviews the
current risk management and internal control mechanisms.
The Board regularly reviews the risks facing the Company as
detailed in the Strategic Report on page 4 and seeks to exploit,
avoid or mitigate those risks as appropriate. The Board is
responsible for the monitoring of financial performance against
budget and forecast and the formulation of the Company's risk
appetite including the identification, assessment and monitoring of
Kazera' principal risks. Additionally, the Board reviews the
mechanisms of internal control and risk management it has
implemented on an annual basis and assesses both for
effectiveness.
On the wider aspects of internal control, relating to
operational and compliance controls and risk management, the Board,
in setting the control environment, identifies, reviews, and
regularly reports on the key areas of business risk facing the
Group.
The Group Board and subsidiary Boards maintain close day to day
involvement in all of the Group's activities which enables control
to be achieved and maintained. This includes the comprehensive
review of both management and technical reports, the monitoring of
interest rates, environmental considerations, government and fiscal
policy issues, employment and information technology requirements
and cash control procedures. In this way, the key risk areas can be
monitored effectively, and specialist expertise applied in a timely
and productive manner.
The effectiveness of the Group's system of internal financial
controls, for the year to 30 June 2021 and for the period to the
date of approval of the financial statements, has been reviewed by
the Directors. Whilst they are aware that although no system can
provide for absolute assurance against material misstatement or
loss, they are satisfied that effective controls are in place.
5. Maintain the Board as a well-functioning, balanced team led by the Chair
The Board recognises the QCA recommendation for a balance
between Executive and Non-Executive Directors and the
recommendation that there be at least two Independent
Non-Executives. The Board currently comprises of two Executive
Directors and two Non-Executive Directors. The Board will take this
into account when considering future appointments. However, all
Directors are encouraged to use their judgement and to challenge
matters, whether strategic or operational, enabling the Board to
discharge its duties and responsibilities effectively. The Board
maintains that the Board's composition will be frequently reviewed
as the Company develops, however, as the Company is small the
current Board reflects this and it is not deemed appropriate to
have audit, remuneration or nominations committees. For the moment,
the responsibilities which would normally be assumed by the
Nominations committee are assumed by the Board as a whole and the
responsibilities of the Audit and Remuneration committees are
assumed by the two Non-Executive Directors in specific sessions of
the Board.
The Group is controlled and led by the Board of Directors with
an established schedule of matters reserved for their specific
approval. The Board meets regularly throughout the year and is
responsible for the overall Group strategy, acquisition and
divestment policy, approval of major capital expenditure and
consideration of significant financial matters. It reviews the
strategic direction of the Company and its individual subsidiaries,
their annual budgets, their progress towards achievement of these
budgets and their capital expenditure programmes.
The role of the Chairman is to supervise the Board and to ensure
its effective control of the business, and that of the Chief
Executive is to manage the Group on the Board's behalf. All Board
members have access, at all times, to sufficient information about
the business, to enable them to fully discharge their duties. Also,
procedures exist covering the circumstances under which the
Directors may need to obtain independent professional advice.
The Board meets regularly and is responsible for formulating,
reviewing and approving the Group's strategy, budgets, performance,
major capital expenditure and corporate actions. Detailed
biographies of the Board members can be found on the website and in
the Directors' Report on page 8. Giles Clarke was independent on
appointment as Chairman and Nick Harrison was independent on
appointment. The Board has subsequently changed with the
resignation of L Johnson. The external time commitments are
reported upon in the director's biographies.
Throughout the year, there have been four Board meetings, with
all Directors in attendance. The Directors of the Company are
committed to sound governance of the business and each devotes
enough time to ensure this happens.
Directors' conflict of interest
The Board is aware of the other commitments and interests of its
Directors, and changes to these commitments and interests are
reported to and, where appropriate, agreed with the rest of the
Board.
6. Ensure that between them the Directors have the necessary
up-to-date experience, skills and capabilities
The Company believes that the current balance of skills in the
Board as a whole reflects a very broad range of personal,
commercial and professional skills, and notes the range of
financial and managerial skills. The Non-Executive Director
maintains ongoing communications with Executives between formal
Board meetings.
Biographical details of the Directors can be found on the
Company's website and in the Directors' Report on page 8 of this
report.
Brian James is the Company Secretary and helps Kazera comply
with all applicable rules, regulations and obligations governing
its operation. The Company's NOMAD assists with AIM matters and
ensures that all Directors are aware of their responsibilities. The
company can also draw on the advice of its solicitors.
The Directors have access to the Company's NOMAD, Company
Secretary, lawyers and auditors as and when required and are able
to obtain advice from other external bodies when necessary. If
required, the Directors are entitled to take independent legal
advice and if the Board is informed in advance, the cost of the
advice will be reimbursed by the Company.
Board composition is always a factor for consideration in
relation to succession planning. The Board will seek to consider
any Board imbalances for future nominations, with areas considered
including board independence and gender balance. The Group
considers however that at this stage of its development and given
the current size of its Board, it is not necessary to establish a
formal Nominations Committee. Instead, the appointments to the
Board are made by the Board as a whole and this position is
reviewed on a regular basis by the Board.
7. Evaluate Board performance based on clear and relevant
objectives, seeking continuous improvement
The Directors consider that the Company and Board are not yet of
a sufficient size for a full Board evaluation to make commercial
and practical sense. In the frequent Board meetings/calls, the
Directors can discuss any areas where they feel a change would
benefit the Company, and the Company Secretary remains on hand to
provide impartial advice. As the Company grows, it expects to
expand the Board and with the Board expansion, re-consider the need
for Board evaluation.
The Board continues to conduct internal and external Board
evaluations which consider the balance of skills, experience,
independence and knowledge of the Company. The evaluation process,
the Board refreshment, use of third-party search companies and
succession planning elements are discussed.
The Board evaluation of the CEO's performance is carried out on
an annual basis. Given the level of activity and size of the
Company, no other evaluation is seen as appropriate.
In view of the size of the Board, the responsibility for
proposing and considering candidates for appointment to the Board
as well as succession planning is retained by the Board. All
Directors submit themselves for re-election at the AGM at regular
intervals.
8. Promote a corporate culture that is based on ethical values and behaviours
The Board recognises that its decisions regarding strategy and
risk will impact the corporate culture of the Company as a whole
and that this will impact the performance of the Company. The Board
is aware that the tone and culture set by the Board will greatly
impact all aspects of the Company as a whole and the way that
employees behave. The corporate governance arrangements that the
Board has adopted are designed to ensure that the Company delivers
long term value to its shareholders, and that shareholders have the
opportunity to express their views and expectations for the Company
in a manner that encourages open dialogue with the Board.
Therefore, the importance of sound ethical values and behaviours
is crucial to the ability of the Company to successfully achieve
its corporate objectives.
The Board places great importance on the responsibility of
accurate financial statements and auditing standards comply with
Auditing Practice Board's (APB's) and Ethical Standards for
Auditors. The Board places great importance on accuracy and
honesty, and seeks to ensure that this aspect of corporate life
flows through all that the Company does.
A large part of the Company's activities is centred upon an open
and respectful dialogue with employees, clients and other
stakeholders. Therefore, the importance of sound ethical values and
behaviours is crucial to the ability of the Company to successfully
achieve its corporate objectives. The Directors consider that the
Company has an open culture facilitating comprehensive dialogue and
feedback and enabling positive and constructive challenge. Whilst
the Company has a small number of employees, the Board maintains
that as the company grows it intends to maintain and develop strong
processes which promote ethical values and behaviours across all
hierarchies.
The Board has adopted an anti-corruption and bribery policy
(Bribery Policy). The Bribery Policy applies to all Directors and
employees of the Group, and sets out their responsibilities in
observing and upholding a zero-tolerance position on bribery and
corruption, as well as providing guidance to those working for the
Company on how to recognise and deal with bribery and corruption
issues and the potential consequences.
The Board complies with Rule 21 of the AIM Rules for Companies
relating to dealings in the Company's securities by the Directors
and other Applicable Employees. To this end, the Company has
adopted a code for Directors' dealings appropriate for a company
whose shares are admitted to trading on AIM and takes all
reasonable steps to ensure compliance by the Directors and any
relevant employees.
9. Maintain governance structures and processes that are fit for
purpose and support good decision-making by the Board
The Board is committed to, and ultimately responsible for, high
standards of corporate governance. The Board reviews the Company's
corporate governance arrangements regularly and expect to evolve
this over time, in line with the Company's growth. The Board
delegates responsibilities to Committees and individuals as it sees
fit.
The Chairman's principal responsibilities are to ensure that the
Company and its Board are acting in the best interests of
shareholders. His leadership of the Board is undertaken in a manner
which ensures that the Board retains integrity and effectiveness,
and includes creating the right Board dynamic and ensuring that all
important matters, in particular strategic decisions, receive
adequate time and attention at Board meetings.
The Chairman of Kazera is the key contact for shareholder
liaison and all other stakeholders.
Executive Directors are responsible for the general day-to-day
running of the business and developing corporate strategy.
The CEO has, through powers delegated by the Board, the
responsibility for leadership of the management team in the
execution of the Group's strategies and policies and for the
day-to-day management of the business. He is responsible for the
general day-to-day running of the business and developing corporate
strategy while the Non-Executive Director is tasked with
constructively challenging the decisions of executive management
and satisfying themselves that the systems of business risk
management and internal financial controls are robust.
All Directors participate in the key areas of decision-making,
including the following matters:
- Strategy
- Budgets
- Performance
- Major Capital Expenditure
- Corporate Actions
The Board would normally delegate authority to a number of
specific Committees to assist in meeting its business objectives,
and the Committees, comprising of at least two independent
Non-Executive Directors, would meet independently of Board
meetings.
However, the current Board structure does not permit this, and
the Directors will seek to take this into account when considering
future appointments. As a result, matters that would normally be
referred to the Nominations and AIM rules compliance committees are
dealt with by the Board as a whole. Matters that would normally be
referred to the Audit and Remuneration committees are dealt with by
the two Non-Executive directors, Giles Clarke and Nick Harrison, in
specific sessions, usually with the CEO in attendance by
invitation.
The Chairman and the Board continue to monitor and evolve the
Company's corporate governance structures and processes, and
maintain that these will evolve over time, in line with the
Company's growth and development.
10. Communicate how the company is governed and is performing by
maintaining a dialogue with shareholders and other relevant
stakeholders
The Board is committed to maintaining effective communication
and having constructive dialogue with its stakeholders. The Company
intends to have ongoing relationships with both its private and
institutional shareholders (through meetings and presentations),
and for them to have the opportunity to discuss issues and provide
feedback at meetings with the Company. In addition, all
shareholders are encouraged to attend the Company's Annual General
Meeting. The Board already discloses the result of General Meetings
by way of announcement and discloses the proxy voting numbers to
those attending the meetings. In order to improve transparency, the
Board has committed to publishing proxy voting results on its
website in the future.
The Company communicates with shareholders through the Annual
Report and Accounts, full-year and half-year results announcements
and the Annual General Meeting (AGM). Information on the Investor
Relations section of the Group's website is kept updated and
contains details of relevant developments, regulatory
announcements, financial reports and shareholder circulars. A range
of corporate information (including all Company announcements and
presentations) is also available to shareholders, investors and the
public on the Company's corporate website.
A detailed description of the Board Committees can be found on
the CSR page of the website.
Shareholders with a specific enquiry can contact us on the
website contact page. The Company uses electronic communications
with shareholders in order to maximise efficiency.
Giles Clarke
Chairman
29 March 2022
DIRECTORS' REPORT ON REMUNERATION
For the year ended 30 June 2021
REMUNERATION
The remuneration of the Directors is set by the Board as a whole
and is reviewed annually. They are remunerated by a fixed fee for
their duties as Directors, but it is anticipated that additional
payments may be made where as a result of the Company's activities
the time to be spent by the Directors on the affairs of the Company
are greater than envisaged by the fixed fee.
The Company does not provide a pension scheme for employees or
Directors and does not contribute to plans established by them.
DIRECTOR'S SERVICE CONTRACTS
The Directors have letters of appointment which commence from
their date of appointment and will continue unless terminated in
accordance with the terms of the letter.
DIRECTORS REMUNERATION
Directors' emoluments for the year are as follows:
Year ended Year ended
Fees Other benefits 30 June 2021 30 June 2020
GBP'000 GBP'000 GBP'000 GBP'000
G Clarke 50 - 50 50
N Harrison 40 - 40 40
D Edmonds 70 - 70 6
L Johnson 126 - 124 140
O Ilunga - - - -
286 - 284 236
------------ -------- --------------- -------------- --------------
Details of the share options and warrants held by Directors are
shown below:
Number outstanding at 30 June 2021 Number outstanding at 30 June 2020
------------ ----------------------------------- -----------------------------------
L Johnson 15,000,000 15,000,000
G Clarke 13,333,333 13,333,333
N Harrison 13,333,333 13,333,333
D Edmonds 10,000,000 10,000,000
O Ilunga - -
51,666,666 51,666,666
------------ ----------------------------------- -----------------------------------
This report was approved by the board of Directors on 29 March
2022 and signed on its behalf by
Giles Clarke
Director
STATEMENT OF DIRECTORS' RESPONSIBILITIES
For the year ended 30 June 2021
The Directors are responsible for preparing the annual report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial period. Under that law the Directors
are required to prepare the Group and Parent Company financial
statements in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006. Under
company law the Directors must not approve the accounts unless they
are satisfied that they give a true and fair view of the state of
affairs of the Group and Company and of the profit or loss of the
Group for that period.
In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- state whether applicable international accounting standards
in conformity with the requirements of the Companies Act 2006 have
been followed, subject to any material departures disclosed and
explained in the financial statements;
-- make judgements and accounting estimates that are reasonable and prudent; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and Company
will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group and
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Group and Company and enable
them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the
assets of the Group and Company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
The Company is compliant with AIM Rule 26 regarding the
Company's website.
Giles Clarke
Director
29 March 2022
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF KAZERA GLOBAL
PLC
Opinion
We have audited the financial statements of Kazera Global Plc
(the 'parent company') and its subsidiaries (the 'group') for the
year ended 30 June 2021 which comprise the Consolidated Statement
of Comprehensive Income, the Consolidated and Parent Company
Statement of Financial Position, the Consolidated and Parent
Company Statement of Changes in Equity, the Consolidated and Parent
Statement of Cash Flows and notes to the financial statements,
including significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable
law and international accounting standards in conformity with the
requirements of the Companies Act 2006 and as regards the parent
company financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
In our opinion:
-- the financial statements give a true and fair view of the
state of the group's and of the parent company's affairs as at 30
June 2021 and of the group's loss for the year then ended;
-- the group's financial statements have been properly prepared
in accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006;
-- the parent company financial statements have been properly
prepared in accordance with international accounting standards in
conformity with the requirement of the Companies Act 2006 and as
applied in accordance with the provisions of the Companies Act
2006; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK,
including the FRC's Ethical Standard as applied to listed entities,
and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2 in the financial statements, which
indicates conditions that may cast significant doubt on the ability
of the group and parent company to continue as a going concern. The
group incurred a net loss of GBP1.2m during the year ended 30 June
2021, and has net current liabilities of GBP0.7m. Furthermore,
either significant funds will need to be raised within the next 12
months or the mines need to become operational and cash generative.
As stated in note 2, these events or conditions indicate that a
material uncertainty exists that may cast significant doubt on the
group and parent company's ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the
director's use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors' assessment of the company's ability to
continue to adopt the going concern basis of accounting included
reviewing of the cashflow forecasts and budgets up to 31 March 2023
and the corresponding assumptions used, discussions with management
regarding future plans, availability of funding, expected
production at the mines and cash position of the group in March
2022.
Based on our review of management's assessments, the group has
the ability to report under the going concern assumption for 12
months from the date of the approval of the financial statements.
However, the assumptions are based on the receipt of funding (the
timing of which is uncertain) or the mines coming into operation as
planned.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Our application of materiality
We apply the concept of materiality in both planning and
performing the audit, and in evaluating the effect of
misstatements. At the planning stage, materiality is used to
determine the financial statements areas that are included within
the scope of the audit and the extent of sample sizes during the
audit.
The materiality applied to the group financial statements was
GBP194,000 (2020: GBP124,000), based on a percentage of gross
assets, as it is from these assets that the group seeks to deliver
returns for shareholders.
As in the prior year, we considered gross assets to be the most
significant determinant of the group's financial position and
performance used by shareholders. This is because the key balances,
as reflected in the Statement of Financial Position, are mines
under construction and property plant and equipment.
The going concern of the group is dependent on its ability to
fund operations going forward, as well as on the valuation of its
mines under construction, which represent the underlying value of
the group. The percentage threshold applied in determining
materiality based on gross assets increased to 5% (2020: 3%) from
the prior year due to lower complexity of transactions that arose
during the current year.
Whilst materiality for the financial statements as a whole was
set at GBP194,000, each significant component of the group was
audited to an overall materiality ranging between GBP43,600 -
GBP174,600 with performance materiality set at 70% for the
significant components and the group. The performance materiality
for the group was set at GBP135,800 (2020: GBP86,800). The
benchmark of 70% has been selected as many of the balances
representing risk areas, including the carrying value of mines
under construction and impairments of investments in subsidiaries,
which we tested 100%. Therefore, we concluded this provided
sufficient coverage of significant and residual risks. We applied
the concept of materiality both in planning and performing our
audit, and in evaluating the impact of misstatements.
We communicated in our audit planning report that all audit
differences identified during the course of our audit in excess of
GBP9,700 (2020: GBP6,200) will be brought to the attention of those
charged with governance. There were no misstatements identified
during the course of our audit that were individually, or in
aggregate, considered to be material.
Materiality for the parent company financial statements was set
at GBP174,600 (2020: GBP108,000), based on a percentage of gross
assets, with performance materiality set at 70%. The performance
materiality for the parent company was set at GBP122,220 (2020:
GBP75,600).
Materiality has been reassessed during the fieldwork and closing
stages of the audit, taking into consideration new information
which arose. No alterations were made to materiality either during
or at the conclusion of the audit.
Our approach to the audit
In designing our audit approach, we determined materiality and
assessed the risk of material misstatement in the financial
statements. In particular, we assessed the areas requiring the
directors to make subjective judgements, for example in respect of
significant accounting estimates including the carrying value of
mines under construction and impairment of investments in
subsidiaries and the consideration of future events that are
inherently uncertain.
An audit was performed on the financial information of the
group's material operating components which, for the year ended 30
June 2021, were located in South Africa and in Namibia. There are
two dormant companies within the group which were not assessed as
material components. Consequently, the audit work performed on
these components consisted of analytical procedures at group
level.
The work performed by component auditors, under our instruction,
on the significant components located in Namibia was directed by us
as group auditor and the Senior Statutory Auditor was responsible
for the scope and direction of the audit process. We ensured that
there was regular interaction with the component auditors during
all stages of the audit and reviewed their working papers to gain
sufficient appropriate evidence for our opinion on the group
financial statements.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. In addition to
the matter described in the Material uncertainty related to going
concern section we have determined the matters described below to
be the key audit matters to be communicated in our report.
Key Audit Matter How our scope addressed this matter
Carrying Value of Mines Under Construction (Note 11)
There is a risk that the Our work in this area included but was
carrying value of the mines not limited to:
under construction might * A review of the costs capitalised, and additions made
be impaired and the assumptions to mine under construction assets during the fiscal
used to estimate impairment year to ensure that transactions are accounted for in
values are not appropriate. accordance with IFRS;
The recoverability of these
balances is ultimately dependent
on the mines being able * Obtaining Management's impairment assessments and
to generate returns. The challenging the inputs used therein;
mines are not yet in the
production phase and the
recoverability and valuation * Assessing whether sufficient funding is available to
of these amounts is dependent bring the mines into production and thereby generate
on management judgement revenue;
and estimation.
The value of the mines under
construction amounts to * Performing sensitivity analysis on the impairment
GBP2,897k (2020: GBP2,817k), calculations;
representing the most material
amount within the financial
statements. * Obtaining and reviewing reports produced by
Given the quantum of the management's experts in support of the underlying
account balance and the mineral resources;
significant level of management
judgement and estimation
involved, the carrying value * Assessing the independence and competence of
of mines under construction management's expert;
is considered to be a key
audit matter.
* A review of the component auditors working papers
through assessing the substantive testing performed
on additions made during the year and tracing an
appropriate sample to supporting document to ensure
that capitalisations are properly accounted for under
the relevant IFRSs;
* Ensuring valid relevant licenses are held and
consider potential impairment if any license have
expired; and
* Ensuring where applicable valid relevant
subcontracting agreements were in place to enable
mining operations.
Based on the audit work performed we
do not consider mines under construction
to be materially misstated as at 30 June
2021. It is important to draw users'
attention to the fact that this is dependent
on sufficient funding becoming available
to bring the mine into use.
Failure to secure the required funding
is likely to result in an impairment
to this balance.
=============================================================
Impairment of Investments in Subsidiaries (Parent Company Only)
(Note 13)
There is a risk that the Our work in this area included but was
carrying value of investments not limited to:
held in subsidiaries at * Obtaining Management's impairment assessments and
a Parent Company level may challenging the inputs used therein;
be impaired.
The recoverability of these
balances is dependent on * Assessing whether sufficient funding is available to
the subsidiaries being able bring the mines into production and thereby generate
to generate returns from revenue;
its underlying mines under
construction and the valuation
of recoverability of these * Performing sensitivity analysis on the impairment
balances is subject to significant calculations;
management estimation and
judgement.
For the year ended 30 June * Obtaining and reviewing reports produced by
2021, the value of investments management's experts in support of the underlying
in subsidiaries amounts mineral resources;
to GBP3,114k (2020: GBP3,114k).
The loan receivables from
the subsidiaries were considerably * Assessing the independence and competence of
higher than the values of management's expert;
the investments at GBP7,644k
(2020: GBP6,831k).
Given the quantum of the * Ensuring valid relevant licenses are held and
balance and the level of consider potential impairment if any license have
management estimation involved, expired; and
the impairment of investments
in subsidiaries is considered
to be a key audit matter. * Ensuring where applicable valid relevant
subcontracting agreements were in place to enable
mining operations and ownership of the investments
held.
Based on the audit work performed we
do not consider the carrying value of
investments to be materially misstated
as at 30 June 2021. It is important to
draw users' attention to the fact that
this is dependent on sufficient funding
becoming available to bring the mine
into use.
Failure to secure the required funding
is likely to result in an impairment
to this balance.
=============================================================
Other information
The other information comprises the information included in the
annual report, other than the financial statements and our
auditor's report thereon. The directors are responsible for the
other information contained within the annual report. Our opinion
on the group and parent company financial statements does not cover
the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the
other information and, in doing so, consider whether the other
information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on
the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
the parent company and their environment obtained in the course of
the audit, we have not identified material misstatements in the
strategic report or the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement, the directors are responsible for the preparation of the
group and parent company financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements,
the directors are responsible for assessing the group and the
parent company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors
either intend to liquidate the group or the parent company or to
cease operations, or have no realistic alternative but to do
so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
-- We obtained an understanding of the group and parent company
and the sector in which they operate to identify laws and
regulations that could reasonably be expected to have a direct
effect on the financial statements. We obtained our understanding
in this regard through, discussions with management, industry
research, application of cumulative audit knowledge and experience
of the sector etc. This is evidenced by discussion of laws and
regulations with the management, reviewing minutes of meetings of
those charged with governance and RNSs and review of legal or
professional expenditures. As for the parent company's
subsidiaries, corresponding instructions have been issued to the
component auditors to assess the compliance of the components to
the applicable laws and regulations.
-- We determined the principal laws and regulations relevant to
the group and parent company in this regard to be those arising
from Companies Act 2006, AIM rules, and local laws and regulations
in South Africa and Namibia relating to exploration and
production.
-- We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by
the group and parent company with those laws and regulations. These
procedures included, but were not limited to:
-- Discussion with management regarding potential non-compliance;
-- Review of the component auditor's work on compliance with laws and regulations;
-- Review of legal and professional fees to understand the
nature of the costs and the existence of any non-compliance with
laws and regulations;
-- Review of minutes of meetings of those charged with governance and RNS announcements.
-- We also identified the risks of material misstatement of the
financial statements due to fraud. Aside from the non-rebuttable
presumption of a risk of fraud arising from management override of
controls, and the presumed risk of fraud on revenue recognition, we
did not identify any significant fraud risks.
-- As in all of our audits, we addressed the risk of fraud
arising from management override of controls by performing audit
procedures which included, but were not limited to: the testing of
journals; reviewing accounting estimates, judgements and
assumptions for evidence of bias; and evaluating the business
rationale of any significant transactions that are unusual or
outside the normal course of business and review of the bank
statements during the year to identify any large and unusual
transactions where the business rationale is not clear.
Because of the inherent limitations of an audit, there is a risk
that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or
non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and
transactions reflected in the financial statements, as we will be
less likely to become aware of instances of non-compliance. The
risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities .
This description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone, other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Joseph Archer (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor
London E14 4HD
29 March 2022
GROUP STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2021
Year ended Year ended
30 June 30 June
2021 2020
Continuing operations Notes GBP'000 GBP'000
---------------------------------------------------------------- ----- ---------- ----------
Revenue 5 55 -
Cost of Sales (55) -
---------------------------------------------------------------- ----- ---------- ----------
Gross Profit - -
Pre-production expenses (111) (290)
Administrative expenses (1,053) (733)
Other operating income - 3
---------------------------------------------------------------- ----- ---------- ----------
Operating loss and loss before tax 6 (1,164) (1,020)
Taxation 9 - -
Loss for the year (1,164) (1,020)
Loss attributable to owners of the Company (1,146) (769)
Loss attributable to non-controlling interests (18) (251)
---------------------------------------------------------------- ----- ---------- ----------
(1,164) (1,020)
---------------------------------------------------------------- ----- ---------- ----------
Other comprehensive income:
Items that may be subsequently reclassified to profit and loss:
Exchange differences on translation of foreign operations 107 (550)
---------------------------------------------------------------- ----- ---------- ----------
Total comprehensive loss for the year attributable to:
The equity holders of the parent (1,039) (1,319)
The non-controlling interests (18) (251)
---------- ----------
(1,057) (1,570)
Earnings per share attributable to owners of the Company
From continuing operations:
Basic and diluted (pence) 10 (0.17) p (0.21) p
The Company has elected to take the exemption under section 408
of the Companies Act 2006 not to present the parent Company pro t
and loss account. The loss for the Parent Company for the year was
GBP423,521 (2020: GBP57,846 profit).
The accounting policies and notes are an integral part of these
financial statements.
GROUP AND COMPANY STATEMENTS OF FINANCIAL POSITION
As at 30 June 2021
GROUP COMPANY
------------------
2021 2020 2021 2020
Notes GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------------- ----- -------- -------- -------- --------
Non-Current assets
Mines under construction 11 2,897 2,817 - -
Property, plant and equipment 12 716 635 - -
Investment in subsidiaries 13 - - 3,114 3,114
Long-term loan 16 - - 7,644 6,831
3,613 3,452 10,758 9,945
----------------------------------------------- ----- -------- -------- -------- --------
Current assets
Trade and other receivables 17 168 189 23 112
Cash and cash equivalents 18 47 425 3 401
215 614 26 513
--------
Current liabilities
Trade and other payables 19 209 224 180 79
209 224 180 79
----------------------------------------------- ----- -------- -------- -------- --------
Non-Current liabilities
Other payables 19 431 - 301 -
Provisions 20 55 - - -
----------------------------------------------- ----- -------- -------- -------- --------
486 - 301 -
----------------------------------------------- ----- -------- -------- -------- --------
Net current (liabilities) / assets 6 390 (150) 434
Net assets 3,133 3,842 10,303 10,379
----------------------------------------------- ----- -------- -------- -------- --------
Equity
Share capital 21 3,279 3,255 3,279 3,255
Share premium account 21 15,863 15,711 15,863 15,711
Capital redemption reserve 2,077 2,077 2,077 2,077
Share option reserve 22 337 165 337 165
Currency translation reserve (477) (584) - -
Retained earnings (17,917) (16,771) (11,253) (10,829)
----------------------------------------------- ----- -------- -------- -------- --------
Equity attributable to owners of the Company 3,162 3,853 10,303 10,379
Non-controlling interests (29) (11) - -
----------------------------------------------- ----- -------- -------- -------- --------
Total equity 3,133 3,842 10,303 10,379
----------------------------------------------- ----- -------- -------- -------- --------
These financial statements were approved by the Board of
Directors on 29 March 2022.
Signed on behalf of the Board by
Dennis Edmonds
Director
Company number: 05697574
The accounting policies and notes form an integral part of these
financial statements.
GROUP STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2021
Shar e Capital Share
pr r option Currency Equity
Shar e emium edemption reserve translation Retained shareholders' Non-controlling
capital account r eserve GBP'000 reserve earnings funds interests Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================ ======= ======= ========= ======= =========== ======== ============= ================ =======
Balance at 30
June
2019 2,866 14,307 2,077 51 (34) (14,552) 4,715 (1,174) 3,541
---------------- ------- ------- --------- ------- ----------- -------- ------------- ---------------- -------
Comprehensive
income
for the year - - - - - (769) (769) (251) (1,020)
Other
comprehensive
income - - - - (550) - (550) - (550)
---------------- ------- ------- --------- ------- ----------- -------- ------------- ---------------- -------
Total
comprehensive
expense - - - - (550) (769) (1,319) (251) (1,570)
---------------- ------- ------- --------- ------- ----------- -------- ------------- ---------------- -------
Non-controlling
interest
on acquisition
of
a subsidiary - - - - - - - (10) (10)
Transactions
with
Non-controlling
interest - - - - - (1,450) (1,450) 1,424 (26)
Issue of share
capital 389 1,404 - - - - 1,793 - 1,793
Share based
payment
expense - - - 114 - - 114 - 114
Balance at 30
June
2020 3,255 15,711 2,077 165 (584) (16,771) 3,853 (11) 3,842
================ ======= ======= ========= ======= =========== ======== ============= ================ =======
Comprehensive
income
for the year - - - - - (1,146) (1,146) (18) (1,164)
Other
comprehensive
income - - - - 107 107 - 107
---------------- ------- ------- --------- ------- ----------- -------- ------------- ---------------- -------
Total
comprehensive
expense - - - - 107 (1,146) (1,039) (18) (1,057)
---------------- ------- ------- --------- ------- ----------- -------- ------------- ---------------- -------
Issue of share
capital 24 152 - - - - 176 - 176
Share based
payment
expense - - - 172 - - 172 - 172
Balance at 30
June
2021 3,279 15,863 2,077 337 (477) (17,917) 3,162 (29) 3,133
---------------- ------- ------- --------- ------- ----------- -------- ------------- ---------------- -------
The accounting policies and notes form an integral part of these
financial statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2021
Capital Share
Share Share redemption option Retained
capital premium reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ---------- ---------- ------------ ---------- ----------- ---------
Balance at 30 June
2019 2,866 14,307 2,077 51 (10,771) 8,530
-------------------------- ---------- ---------- ------------ ---------- ----------- ---------
Total comprehensive
income for the year - - - - (58) (58)
Issue of share capital,
net of share issue
costs 389 1,404 - - - 1,793
Share based payment
expense - - - 114 - 114
Balance at 30 June
2020 3,255 15,711 2,077 165 (10,829) 10,379
-------------------------- ---------- ---------- ------------ ---------- ----------- ---------
Total comprehensive
income for the year - - - - (424) (424)
Issue of share capital,
net of share issue
costs 24 152 - - - 176
Share based payment
expense - - - 172 - 172
Balance at 30 June
2021 3,279 15,863 2,077 337 (11,253) 10,303
-------------------------- ---------- ---------- ------------ ---------- ----------- ---------
The accounting policies and notes form an integral part of these
financial statements.
GROUP AND COMPANY STATEMENTS OF CASH FLOWS
For the year ended 30 June 2021
GROUP COMPANY
------------------------ ------------------------
Year ended Year ended Year ended Year ended
30 June 30 June 30 June 30 June
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------------------------- ----------- ----------- ----------- -----------
OPERATING ACTIVITIES
Operating loss (1,164) (1,020) (424) (58)
Depreciation and amortisation 126 85 - -
Share based payment expense 172 114 172 114
Shares issued in settlement of fees - 18 - 18
Foreign exchange (39) (547) - (16)
Provisions for mine rehabilitation and decommissioning 55 - - -
Intercompany loan interest - - (312) (630)
--------------------------------------------------------- ----------- ----------- ----------- -----------
Operating cash flows before movement in working capital (850) (1,350) (564) (572)
(Increase)/decrease in receivables 21 (126) 89 (93)
Increase in payables 382 162 312 35
--------------------------------------------------------- ----------- ----------- ----------- -----------
Net cash used in operating activities (447) (1,314) (163) (630)
--------------------------------------------------------- ----------- ----------- ----------- -----------
INVESTING ACTIVITIES
Purchases of property, plant and equipment (197) (70) - -
Development costs - (405) - -
Purchase of subsidiary undertaking - - - (907)
Net cash used in investing activities (197) (475) - (907)
--------------------------------------------------------- ----------- ----------- ----------- -----------
FINANCING ACTIVITIES
Net proceeds from share issues 176 1,793 176 1,793
Advances to subsidiary undertakings - - (501) (218)
Loan received 90 - 90 -
--------------------------------------------------------- ----------- ----------- ----------- -----------
Net cash from financing activities 266 1,793 (235) 1,575
--------------------------------------------------------- ----------- ----------- ----------- -----------
Net (decrease) / increase in cash and cash equivalents (378) 4 (398) 38
Cash and cash equivalents at beginning of year 425 421 401 363
Cash and cash equivalents at end of year 47 425 3 401
--------------------------------------------------------- ----------- ----------- ----------- -----------
The accounting policies and notes are an integral part of these
financial statements .
NOTES TO THE GROUP FINANCIAL STATEMENTS
For the year ended 30 June 2021
1 GENERAL INFORMATION
Kazera Global Plc is a public limited company which is listed
on the Alternative Investment Market (AIM) and incorporated
and domiciled in England and Wales, United Kingdom. The nature
of the Group's operations and its principal activities are set
out in the Strategic Report and the Directors' Report.
2 ACCOUNTING POLICIES
BASIS OF PREPARATION
These consolidated financial statements have been prepared and
approved by the Directors in accordance with international accounting
standards in conformity with the requirements of the Companies
Act 2006.
The consolidated financial statements have been prepared under
the historical cost convention, as modified by the revaluation
of land and buildings.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process
of applying the accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where assumptions
and estimates are significant to the financial statements, are
disclosed in Note 3.
The financial statements are presented in pounds sterling (GBP'000),
which is also the functional currency of the Company and Group.
The principal accounting policies applied in the preparation
of these financial statements are set out below. These policies
have been consistently applied to all the years presented, unless
otherwise stated.
GOING CONCERN
The financial statements have been prepared on the going concern
basis.
In considering the adoption of the going concern basis for accounting
management have considered various scenarios including a scenario
in which all potential investment is received and planned activity
performed and also a worst-case scenario wherein said funding
does not materialize and the Group manages with the funds available
to it including those generated from its mining activities.
Post period end, the Company has secured a loan facility of
GBP450,000 and received equity finance from the exercise of
warrants and the conversion of contractor liabilities totaling
GBP383,250. The Company's Namibian mining are now being operated
under a revenue sharing agreement with a third-party contractor,
thereby reducing the Company's fixed expenditure.
The Group's South African diamond interest are now generating
revenues.
The Directors forecast that future revenue from both operations,
along with existing available cash resources, will be sufficient
to cover operating cash outflows for a period of 12 months from
the date of approval of these financial statements. Future revenues
will be dependent upon the Company's ability to extract diamonds
and produce tantalite in line with their forecasts at budgeted
pricing. In the event that the mining activities do not come
into operation, the Directors are confident that further funds
could be raised to bridge any shortfall.
Should the Group be unable to continue trading, the Directors
are confident that carrying values of the Group's mining assets
are less than their current market value.
A material uncertainty relating to going concern is noted in
the audit report on page 18.
NEW STANDARDS, AMMENTS AND INTERPRETATIONS ADOPTED BY THE
GROUP
The following IFRS or IFRIC interpretations were effective for
the first time for the financial year beginning 1 July 2020.
Their adoption has not had any material impact on the disclosures
or on the amounts reported in these financial statements.
Standards /interpretations Application
----------------------------- -----------------------------------------------
Amendments to IAS1 Classification of Liabilities as Current
or Non-Current - (Effective date not
yet confirmed)
Amendments to IAS 1 Disclosure of Accounting Policies - (Effective
and IFRS Practice Statement date not yet confirmed)
2
Amendments to IAS 8 Definition of Accounting Estimates -
(Effective date not yet confirmed)
Amendments to IFRS Business Combinations - Reference to
3 the Conceptual Framework - (Effective
date not yet confirmed)
Amendments to IAS 16 Property, Plant and Equipment - (Effective
date not yet confirmed)
Amendments to IAS 37 Provisions, Contingent Liabilities and
Contingent Assets - (Effective date not
yet confirmed)
Annual Improvements (Effective date not yet confirmed)
to IFRS Standards 2018-2020
Cycle
NEW STANDARDS, AMMENTS AND INTERPRETATIONS NOT YET ADOPTED
BY THE GROUP
There are no IFRS's or IFRIC interpretations that are not yet
effective that would be expected to have a material impact on
the Company or Group.
BASIS OF CONSOLIDATION
Subsidiaries are all entities (including structured entities)
over which the Group has control. The Group controls an entity
when the Group is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to
affect those returns through its power over the entity. Subsidiaries
are fully consolidated from the date on which control is transferred
to the Group. They are deconsolidated from the date that control
ceases.
Inter-company transactions, balances and unrealised gains on
transactions between group companies are eliminated. Unrealised
losses are also eliminated.
The Group applies the acquisition method to account for business
combinations. The consideration transferred for the acquisition
of a subsidiary is the fair values of the assets transferred,
the liabilities incurred to the former owners of the subsidiary
and the equity interests issued by the Group. The consideration
transferred includes the fair value of any asset or liability
resulting from a contingent consideration arrangement. Identifiable
assets acquired and liabilities and contingent liabilities assumed
in a business combination are measured initially at their fair
values at the acquisition date. The Group recognises any non-controlling
interest in the subsidiary on an acquisition-by-acquisition
basis, either at fair value or at the non-controlling interest's
proportionate share of the recognised amounts of subsidiary's
identifiable net assets.
Acquisition-related costs are expensed as incurred.
Any contingent consideration to be transferred by the Group
is recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that
is deemed to be an asset or liability is recognised either in
profit or loss or as a change to other comprehensive income.
Contingent consideration that is classified as equity is not
re-measured, and its subsequent settlement is accounted for
within equity.
foreign currencies
The individual financial statements of each group company are
presented in Namibian Dollars, which is the currency of the
primary economic environment in which it operates (its functional
currency). For the purpose of the Group financial statements,
the results and financial position of each group company are
expressed in Pounds Sterling, which is the functional currency
of the Company, and the presentation currency for the Group
financial statements.
In preparing the financial statement of the individual companies,
transactions in currencies other than the entity's functional
currency (foreign currencies) are recorded at the rates of exchange
prevailing on the dates of the transactions. At each year end
date, monetary assets and liabilities that are denominated in
foreign currencies are retranslated at the rates prevailing
on the year end date. Non-monetary items carried at fair value
that are denominated in foreign currencies are translated at
the rates prevailing at the date when the fair value was determined.
Non-monetary items that are measured in terms of historical
cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items,
and on the retranslation of monetary items, are included in
the income statement. Exchange differences arising on the retranslation
of non-monetary items carried at fair value are included in
profit or loss for the period, except for differences arising
on the retranslation of non-monetary items in respect of which
gains and losses are recognised directly in equity. For such
non-monetary items, any exchange component of that gain or loss
is also recognised directly in equity.
For the purpose of presenting Group financial statements, the
assets and liabilities of the Group's foreign operations are
translated at exchange rates prevailing on the year end date.
Income and expense items are translated at the average exchange
rates for the period. Exchange differences arising are classified
as equity and transferred to the Group's translation reserve.
Such translation differences are recognised as income or as
expenses in the period in which the operation is disposed of.
TAXATION
The tax currently payable is based on taxable profit or loss
for the period. Taxable profit or loss differs from net profit
or loss as reported in the income statement because it excludes
items of income or expense that are taxable or deductible in
other years and it further excludes items that are never taxable
or deductible. The Company's liability for current tax is calculated
using tax rates that have been enacted or substantively enacted
by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable
on differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases
used in the computation of taxable profit, and is accounted
for using the balance sheet liability method. Deferred tax liabilities
are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it
is probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets
and liabilities are not recognised if the temporary difference
arises from goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities
in a transaction that affects neither the tax profit nor the
accounting profit.
The carrying value of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to
allow all or part of the deferred tax asset to be recovered.
Deferred tax is calculated at the tax rates that are expected
to apply in the period when the liability is settled or the
asset is realised based on tax laws and rates that have been
enacted at the balance sheet date. Deferred tax is charged or
credited in the income statement, except when it relates to
items charged or credited directly to equity, in which case
the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is
a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes
levied by the same taxation authority and the Company intends
to settle its current tax assets and liabilities on a net basis.
INTANGIBLE ASSETS - EXPLORATION AND EVALUATION EXPITURE
Exploration and evaluation activity involve the search for mineral
resources, the determination of technical feasibility and the
assessment of commercial viability of an identified resource.
Research expenditure is written off in the year in which it
is incurred. The Group recognises expenditure as exploration
and evaluation assets when it determines that the legal rights
to said assets have been obtained. Costs incurred which relate
wholly to exploration work only, are expensed through the statement
of comprehensive income. When a decision is taken that a mining
property becomes viable for commercial production, all further
pre-production expenditure is capitalised.
Expenditure included in the initial measurement of exploration
and evaluation assets and which is classified as intangible
assets, relates to the acquisition of rights to undertake topographical,
geological, geochemical and geophysical studies, exploratory
drilling, trenching, sampling and other activities to evaluate
the technical feasibility and commercial viability of extracting
a mineral source.
MINES UNDER CONSTRUCTION
Expenditure is transferred from "Exploration and evaluation"
assets to "Mines under construction" once the work completed
to date supports the future development of the property and
such development receives the requisite approvals. All subsequent
expenditure on technically and commercially feasible sites is
capitalised within mining rights.
All expenditure on the construction, installation or completion
of infrastructure facilities is capitalised as construction
in progress within "Mines under construction". Once production
starts, all assets included in "Mines under construction" are
transferred into "Property, Plant and Equipment" or "Producing
Mines. It is at this point that depreciation/amortisation commences
over its useful economic life. The asset will be depreciated
using the Units of Production method (UOP).
Mines under construction are stated at cost. The initial cost
comprises transferred exploration and evaluation assets, construction
costs, infrastructure facilities, any costs directly attributable
to bringing the asset into operation, the initial estimate of
the rehabilitation obligation, and, for qualifying assets, borrowing
costs. Costs are capitalised and categorised between mining
rights and construction in progress respectively according to
whether they are intangible or tangible in nature.
PROPERTY, PLANT AND EQUIPMENT
Property, Plant and equipment are recorded at cost, less depreciation,
less any amount of adjustments for impairment, if any.
Significant improvements are capitalised, provided they qualify
for recognition as assets. The costs of maintenance, repairs
and minor improvements are expensed when incurred.
Tangible assets, retired or withdrawn from service, are removed
from the balance sheet together with the related accumulated
depreciation. Any profit or loss resulting from such an operation
is included in the income statement.
Tangible and intangible assets are depreciated on the straight-line
method based on their estimated useful lives from the time they
are put into operation, so that their net cost is diminished
over the lifetime of consideration to estimated residual value
as follows:
Land and buildings - Over 20 years
Plant and machinery- Between 5 and 10 years
Furniture and equipment - Between 5 and 10 years
IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENT AND INTANGIBLE ASSETS
EXCLUDING GOODWILL
Assets that have an indefinite useful life are not subject to
amortisation but are reviewed for impairment annually and where
there are indications that the carrying value may not be recoverable.
An impairment loss is recognised for the amount by which the
carrying value exceeds the recoverable amount.
CASH AND C ASH EQUIVALENTS
Cash and cash equivalents include cash at bank and in hand,
deposits at call with banks, other short-term highly liquid
investments with original maturity at acquisition of three months
or less that are readily convertible to cash, net of bank overdrafts.
For the purpose of the cash flow statement, cash and cash equivalents
consist of the definition outlined above.
EQUITY INSTRUMENTS INCLUDING SHARE CAPITAL
Equity instruments consist of the Company's ordinary share capital
and are recorded at the proceeds received, net of direct issue
costs.
FINANCIAL INSTRUMENTS - INTITIAL RECOGNITION AND SUBSEQUENT
MEASUREMENT
Classification
The Group classifies its financial assets into only one category,
being those to be measured at amortised cost.
The classification depends on the Group's business model for
managing the financial assets and the contractual terms of the
cash flows.
Recognition
Purchases and sales of financial assets are recognised on trade
date (that is, the date on which the Group commits to purchase
or sell the asset). Financial assets are derecognised when the
rights to receive cash flows from the financial assets have
expired or have been transferred and the Group has transferred
substantially all the risks and rewards of ownership.
Measurement
At initial recognition, the Group measures a financial asset
at its fair value plus transaction costs that are directly attributable
to the acquisition of the financial asset.
Debt instruments
Amortised cost: Assets that are held for collection of contractual
cash flows, where those cash flows represent solely payments
of principal and interest, are measured at amortised cost. Interest
income from these financial assets is included in finance income
using the effective interest rate method. Any gain or loss arising
on derecognition is recognised directly in profit or loss and
presented in other gains/(losses) together with foreign exchange
gains and losses. Impairment losses are presented as a separate
line item in the statement of profit or loss.
Impairment
The Group assesses, on a forward-looking basis, the expected
credit losses associated with its debt instruments carried at
amortised cost. The impairment methodology applied depends on
whether there has been a significant increase in credit risk.
For trade receivables, the Group applies the simplified approach
permitted by IFRS 9, which requires expected lifetime losses
to be recognised from initial recognition of the receivables.
FINANCIAL LIABILITIES
All non-derivative financial liabilities are classified as other
financial liabilities and are initially measured at fair value,
net of transaction costs. Other financial liabilities are subsequently
measured at amortised cost using the effective interest rate
method. Other financial liabilities consist of borrowings and
trade and other payables.
Financial liabilities are classified as current liabilities
unless the Company has an unconditional right to defer settlement
of the liability for at least 12 months after the balance sheet
date.
OTHER FINANCIAL LIABILTIES, BANK AND SHORT-TERM BORROWINGS
Other financial liabilities, as categorised above, are initially
measured at fair value, net of transaction costs. Other financial
liabilities are subsequently measured at amortised cost using
the effective interest method, with interest expense recognised
on an effective yield basis. Other financial liabilities are
classified as current liabilities unless the Company has an
unconditional right to defer settlement of the liability for
at least 12 months after the balance sheet date.
TRIAL PRODUCTION REVENUE AND COSTS
Revenue
IFRS 15 establishes a comprehensive framework for determining
whether, how much and when revenue is recognised. These steps
are as follows: identification of the customer contract; identification
of the contract performance obligations; determination of the
transaction price; allocation of the transaction price to the
performance obligations; and revenue recognition as performance
obligations are satisfied.
Under IFRS 15, revenue is recognised when performance obligations
are met. This is the point of delivery of goods to the customer.
Revenue is measured at the fair value of consideration received
or receivable from sales of gold to an end user, net of buyer's
discount, treatment charges, freight costs and value added tax.
The application of the standard including the five-step approach
has not resulted in any changes to the timing of recognition
of revenue in the current or any prior period. Accordingly,
the information for 2020 has not been restated.
Revenues from the sale of tantalite ore produced as a by-product
of the evaluation or "testing" phase are offset against the
cost of the intangible asset that is being created. This can
be seen by reference to Note 11, Mines Under Construction.
Trial Production Costs
Costs associated with the production of gold during the trial
production phase are estimated to match the revenue generated
and are deducted from the mines under construction representing
the cost of said production.
EARNINGS PER SHARE
Basic earnings per share is calculated by dividing:
* the profit attributable to owners of the Company,
excluding any costs of servicing equity other than
ordinary shares;
* by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for
bonus elements in ordinary shares issued during the
year and excluding treasury shares (note 10).
Diluted earnings per share adjusts the figures used in the determination
of basic earnings per share to take into account:
* the after-income tax effect of interest and other
financing cists associated with dilutive potential
ordinary shares; and
* the weighted average number of additional ordinary
shares that would have been outstanding, assuming the
conversion of all dilutive potential ordinary shares.
SEGMENTAL ANALYSIS
Under IFRS 8 operating segments are considered to be components
of an entity about which separate financial information is available
that is evaluated regularly by the chief operating decision
maker in deciding how to allocate resources and assessing performance.
The Company's chief operating decision maker is the Board of
Directors. At present, and for the period under review, the
Company's reporting segments are the tantalite mining operation
in Namibia and the diamond mining operation in South Africa.
3 CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATIONS
In the application of the Group's accounting policies, which
are described in Note 2, the Directors are required to make
judgements, estimates and assumptions that affect the application
of policies and reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions
are based on historical experience and various other factors
that are believed to be reasonable under the circumstances,
the results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ
from these estimates.
Valuation of options
The valuation of the options involves making a number of critical
estimates relating to price volatility, future dividend yields,
expected life of the options and forfeiture rates. These assumptions
and valuation methodology adopted have been described in more
detail in Note 22. The estimates and assumptions could materially
affect the Income Statement.
Carrying value of mines under construction (Note 11)
The Group tests annually whether its mines under construction
have suffered any impairment and management make judgements
in this respect. The judgements are based on the recoverable
amounts of cash generating units ("CGUs") which are determined
based on value in use calculations which require the use estimates
and assumptions such as long-term commodity prices and recovery
rates, discount rates, operating costs and therefore expected
margins and future capital requirements. These estimates and
assumptions are subject to risk and uncertainty and therefore
there is a possibility that changes in circumstances will impact
the recoverable amount.
In assessing the carrying amounts of its tantalite mine under
construction, the Directors have conducted a feasibility study
in conjunction with an independently prepared mineral resource
estimate. The period used in management's assessment is the
anticipated life of the mine to the expiration of the licence.
A discount rate of 15% has been applied. The mineral resource
report concluded on an inferred 297,600 tonnes of tantalum pentoxide
within the White City Tantalum Mineral Resource Area. These
estimates are consistent with external sources of information.
The three principal variables in the Company's forecasts are
as follows: resources, pricing and operational efficiency. In
reviewing sensitivities, the following should be considered:
a further 622,200 tonnes of lithium and tantalite resources
have been identified at Purple Haze and Homestead in addition
to the resources at White City, the Company's financial forecasts
assume a 65% operational efficiency and resources are forecast
to be sold on long term contracts to end users reducing commodity
risk.
In assessing the carrying amounts of its diamond operations,
the Company has commissioned an independent feasibility study
which has concluded that the market value of its operations
is significantly greater than carrying value.
Investment in subsidiaries
The investments in subsidiaries are recognised at cost less
accumulated impairments. Details of the investments are listed
in Note 13.
Upon acquisition, the excess of the sum of the consideration
transferred over the net of the acquisition-date amounts of
the identifiable assets acquired and the liabilities assumed,
is recognised under mines under construction.
Any potential impairments to the investments in subsidiaries
are measured in line with the impairment of mines under construction
in the paragraph above.
The Directors are confident that the future operational cashflows
forecast to be generated from the sale of diamonds, tantalum
and HMS will be sufficient to repay the intergroup loans.
4 SEGMENTAL REPORTING
The Directors are of the opinion that under IFRS 8 - Operating
Segments the Group operates in three primary business segments;
being holding company expenses, tantalite mining and diamond
mining activities. The secondary segment is geographic. Pre-production/
trial revenue earned during the year ended 30 June 2021 were
from immaterial sales to Alexkor and JAE Mining.
The Group's losses and net assets by primary business segments
are shown below.
Segmentation by continuing business
Year ended Year ended
30 June 30 June
2021 2020
Profit/ (loss) before income tax GBP'000 GBP'000
--------------------------------- ------------ ------------
Holding company (424) (58)
Tantalite mining activity (506) (953)
Diamond mining activity (234) (9)
--------------------------------- ------------ ------------
(1,164) (1,020)
--------------------------------- ------------ ------------
Year ended Year ended
30 June 30 June
2021 2020
Net assets /(liabilities) GBP'000 GBP'000
-------------------------- ------------ ------------
Holding company 10,303 10,379
Tantalite mining activity (5,280) (6,433)
Diamond mining activity (300) (104)
-------------------------- ------------ ------------
Segmentation by geographical area
Year ended Year ended
30 June 30 June
2021 2020
Loss before income tax GBP'000 GBP'000
------------------------- ------------- ------------
United Kingdom (424) (58)
Namibia (506) (953)
South Africa (234) (9)
------------------------- ------------- ------------
(1,164) (1,020)
------------------------- ------------- ------------
Year ended Year ended
30 June 30 June
2021 2020
Net assets /(liabilities) GBP'000 GBP'000
-------------------------- ------------ ------------
United Kingdom 10,303 10,379
Namibia (5,280) (6,433)
South Africa (300) (104)
-------------------------- ------------ ------------
5 REVENUE
Year ended Year ended
30 June 30 June
2021 2020
GBP'000 GBP'000
-------------------------------- ------------ ------------
Revenue from external customers 55 -
--------------------------------------------------- ------------ ------------
Revenues of GBP55,000 were derived from customers in South
Africa, for the sale of the by-products of testing and evaluation
activities in Deep Blue Minerals Limited. The revenues were derived
from pre-production activities and have been considered against the
Mines Under Construction intangible asset recognised in the Group,
(Note 11).
6 OPERATING LOSS
Year ended Year ended
30 June 30 June
2021 2020
GBP'000 GBP'000
---------------------------------------------- ------------ ------------
Loss for the period has been arrived at after
charging:
Staff costs as per Note 8 below 577 410
Auditors' remuneration 40 35
Depreciation of property, plant and equipment 126 85
Share-based payment expense 172 114
7 AUDITORS' REMUNERATION
The analysis of auditors' remuneration is as follows:
Year
Year ended ended
30 June 30 June
2021 2020
GBP'000 GBP'000
----------------------------------------------- ------------------ -------------
Fees payable to the Group's auditors for the
audit of the Group's annual accounts 40 32
Total audit fees 40 32
Fees payable to the Group auditor and their
associates for other services to the Group:
Tax services - 3
40 35
------------------------------------------------------------------ ------------------ -------------
8 STAFF COSTS
The average monthly number of employees (including executive
directors) for the continuing operations was :
Year ended Year ended
30 June 30 June
2021 2020
Number Number
--------------------------------------------- ------------ ------------
Group total staff 16 8
GBP'000 GBP'000
--------------------------------------------- ------------ ------------
Wages and salaries 367 279
Share based payment in respect of exercise
of options 172 114
Other benefits 2 5
Social security costs 36 12
---------------------------------------------------------------- ------------ ------------
577 410
---------------------------------------------------------------- ------------ ------------
Directors' emoluments
An analysis of the directors' emoluments and pension entitlements
and their interest in the share capital of the Company is contained
in the Directors' Remuneration report accompanying these financial
statements. All emoluments are short term in nature and the
Directors are considered to key management.
9 TAXATION
The weighted average applicable tax rate of 28.17% (2020: 28.25%)
is a combination of the rates used in the UK, Namibia and South
Africa.
Year ended Year ended
30 June 30 June
2021 2020
GBP'000 GBP'000
-------------------------------------------------------- -------------- -------------
Analysis of income tax expense:
Current tax - -
Deferred tax - -
-------------------------------------------------------- -------------- -------------
Total income tax expense - -
-------------------------------------------------------- -------------- -------------
Loss on continuing operations before tax (1,164) (1,020)
--------------------------------------------------------------------------- -------------- -------------
Tax at the weighted average tax rate of 28.25%
(2020 28.25%) (329) (288)
Effects of:
Expenses not deductible for tax purposes 1 1
Unutilised tax losses carried forward 328 287
Tax charge for period - -
--------------------------------------------------------------------------- -------------- -------------
The taxation charge in future periods will be affected by any
changes to the corporation tax rates in force in the countries
in which the Group operates.
At 31 December 2021, the Group had unutilised tax losses of
GBP5,497,000 (2020: GBP5,169,000).
10 EARNINGS PER SHARE
The calculation of basic earnings per share is based on the
following data:
Year ended Year ended
30 June 30 June
2021 2020
GBP'000 GBP'000
----------------------------------------------- ----------- -----------
Loss for the year attributable to owners of
the Company (1,164) (769)
Weighted average number of ordinary shares
in issue for basic and fully diluted earnings 686,324,120 369,151,344
------------------------------------------------------------------- ----------- -----------
EARNINGS PER SHARE (PENCE PER SHARE)
BASIC AND FULLY DILUTED:
- from continuing and total operations (0.17) (0.21)
------------------------------------------------------------------- ----------- -----------
The Company has outstanding warrants and options as disclosed
under Note 22 which may be dilutive in future periods. The effect
in respect of the current year would have been anti-dilutive
(reducing the loss per share) and accordingly is not presented.
In addition, the effect of the issue of ordinary shares shortly
after year end, would also have been anti-dilutive, and accordingly
is not considered. The issue however, may be dilutive in future
periods.
11 MINES UNDER CONSTRUCTION
Construction Mining
in progress licences Total
GROUP GBP'000 GBP'000 GBP'000
--------------------------------------- ------------ --------- -------
At 1 July 2019 2,402 10 2,412
-------------------------------------------- ------------ --------- -------
Recognised on acquisition of Deep Blue
Minerals 686 23 709
Sale of by-products (235) - (235)
Exchange translation difference (69) - (69)
============================================ ============ ========= =======
At 30 June 2020 2,784 33 2,817
============================================ ============ ========= =======
Additions - - -
Trial production revenue (55) - (55)
Exchange translation difference 132 3 135
============================================ ============ ========= =======
At 30 June 2021 2,861 36 2,897
============================================ ============ ========= =======
Revenues from the sale of the by-product of testing and
evaluation activities have been offset against the costs of the
intangible asset. These totalled GBP54,952 in the year (2020:
GBP235,462).
12 PROPERTY, PLANT AND EQUIPMENT
Leasehold
land & Plant & Furniture
buildings machinery & equipment Total
GROUP GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ---------- ---------- ------------ -------
Cost
At 1 July 2019 126 1,004 40 1,170
Exchange translation difference (1) (110) (4) (115)
Additions - 70 - 70
Cost at 30 June 2020 125 964 36 1,125
------------------------------------- ---------- ---------- ------------ -------
Exchange translation difference - 24 3 27
Additions - 197 - 197
===================================== ========== ========== ============ =======
Cost at 30 June 2021 125 1,185 39 1,349
===================================== ========== ========== ============ =======
Depreciation
At 1 July 2019 25 412 24 461
Exchange translation difference - (52) (4) (56)
Charge for the year 5 72 8 85
------------------------------------- ---------- ---------- ------------ -------
Depreciation at 30 June 2020 30 432 28 490
------------------------------------- ---------- ---------- ------------ -------
Exchange translation difference - 16 1 17
Charge for the year 5 116 5 126
------------------------------------- ---------- ---------- ------------ -------
Depreciation at 30 June 2021 35 564 34 633
------------------------------------- ---------- ---------- ------------ -------
Net book value at 30 June 2021 90 621 5 716
------------------------------------- ---------- ---------- ------------ -------
Net book value at 30 June 2020 95 532 8 635
------------------------------------- ---------- ---------- ------------ -------
13 INVESTMENT IN SUBSIDIARY UNDERTAKINGS
The Company's investments in its subsidiary and associated undertakings
Total
COMPANY GBP'000
------------------------------------------- --------------------- ---------------------
Cost and net book value
As at 1 July 2019 2,207
Capitalisation of loan to Aftan 281
Acquisition of Deep Blue
Minerals
(Pty) Ltd 600
Acquisition of 25% stake in
African
Tantalum (Pty) Ltd 26
------------------------------------------- --------------------- ---------------------
As at 30 June 2020 3,114
=========================================== ===================== =====================
As at 30 June 2021 3,114
------------------------------------------- --------------------- ---------------------
All principal subsidiaries of the Group are consolidated into
the financial statements.
At 30 June 2021 the subsidiaries were as follows:
Subsidiary Country Principal activity Holding %
undertakings of registration
-------------------- -------------------- ---------------------- ------------- -------
African Tantalum
(Pty) Intermediate holding Ordinary
Ltd Namibia company shares 100%
Namibia Tantalite
Investments Ordinary
(Pty) Ltd Namibia Tantalite mining shares 100%
Tameka Shelf
Company Mining licence Ordinary
Four (Pty) Ltd Namibia holder shares 100%
Deep Blue Minerals
(Pty) Ordinary
Ltd South Africa Mining licence holder shares 90%
Kazera Trading Ordinary
Limited UK Dormant shares 100%
-------------------- -------------------- ---------------------- ---------------------------------- -------
14 BUSINESS ACQUISITION
On 17 June 2020, the Company acquired 90% of the issued share
capital of Deep Blue Minerals (Pty) Ltd ("Deep Blue") for a consideration
of GBP600,000.
In accordance with IFRS 3 'Business Combinations', this transaction
has been accounted for using the acquisition method of accounting.
The consolidated income statement for the year ended 30 June
2020 includes the results of Deep Blue from 17 June 2020, the
date of the acquisition. The assets and liabilities of Deep Blue
have been consolidated from the date of acquisition using the
fair value of the assets and liabilities at that date. The recognised
value of assets purchased were as follows:
Total
GBP'000
---------
Consideration - equity instruments 600
-------------------------------------------------------------------- ------------------ ---------
Total consideration 600
Recognised amounts of identifiable assets acquired and liabilities
assumed
Capitalised exploration 24
Cash and cash equivalents -
Trade and other payables (119)
-------------------------------------------------------------------- ------------------ ---------
Total identifiable net assets (95)
Non-controlling interest 9
Recognised as Mines under Construction 686
-------------------------------------------------------------------- ------------------ ---------
Total 600
-------------------------------------------------------------------- ------------------ ---------
15 TRANSACTIONS WITH NON-CONTROLLING INTERESTS
On 26 June 2020, the Company purchased an additional 25% of the
issued share capital in African Tantalum (Pty) Ltd ("AFTAN")
for GBP26,008. Immediately prior to the purchase, the carrying
amount of the existing 25% non-controlling interest in AFTAN
was GBP1,424,000. The Group recognised the decrease in non-controlling
interests of GBP1,424,000 and a decrease in equity attributable
to the owners of the parent of GBP1,450,000. The effect on the
equity attributable to the owners of Kazera Global plc during
the year is summarised as follows:
Total
GBP,000
---------
Carrying amount of non-controlling
interests acquired 1,424
Consideration paid to non-controlling
interests (1,450)
---------
Excess of consideration paid recognised in
the transactions with non-controlling interests
reserve within equity (26)
---------
16 LONG-TERM LOAN
Loan to Aftan Loan to Deep
Tantalum Blue Minerals Total
COMPANY GBP'000 GBP'000 GBP'000
========================================== ============= ============== ========
As at 1 July 2019 5,984 - 5,984
Part capitalisation of loan to
Aftan (note 13) (281) - (281)
Increase in loan 1,026 102 1,128
As at 30 June 2020 6,729 102 6,831
--------------------------------------------------------------- ------------- -------------- --------
Increase in loan 416 397 813
--------------------------------------------------------------- ------------- -------------- --------
As at 30 June 2021 7,145 499 7,644
--------------------------------------------------------------- ------------- -------------- --------
During the year ended 30 June 2020, approximately 25% of the
intercompany loan was converted into shares in Aftan.
The intercompany loan to Aftan bears interest at 12% p.a. The
Directors are confident that the future operational cashflows
forecast to be generated from the sale of diamonds, tantalum and
HMS will be sufficient to repay the intergroup loans.
17 TRADE AND OTHER RECEIVABLES
GROUP COMPANY
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ------- ------- ------- -------
Other receivables 162 177 17 100
Prepayments and accrued income 6 12 6 12
168 189 23 112
--------------------------------------------------- ------- ------- ------- -------
The Directors consider the carrying amount of intercompany loans
and other receivables approximates to their fair value.
18 CASH AND CASH EQUIVALENTS
GROUP COMPANY
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ------- ------- ------- -------
Cash and cash equivalents 47 425 3 401
----------------------------------------------- ------- ------- ------- -------
Cash and cash equivalents (which are presented as a single class
of asset on the face of the balance sheet) comprise cash at bank
and other short term, highly liquid investments with a maturity of
three months or less.
The Directors consider the carrying amount of cash and cash
equivalents approximates to their fair value.
19 TRADE AND OTHER PAYABLES
GROUP COMPANY
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- -------- -------- --------
Current Liabilities
Trade payables 128 46 108 23
Other payables 7 123 3 -
Accruals 74 55 69 56
-------------------------------------------------- -------- -------- -------- --------
209 224 180 79
-------------------------------------------------- -------- -------- -------- --------
Non-Current Liabilities
Other payables 220 - 90 -
Accruals 211 - 211 -
-------------------------------------------------- -------- -------- -------- --------
431 - 301 -
-------------------------------------------------- -------- -------- -------- --------
The Directors consider the carrying amount of trade payables
approximates to their fair value.
20 PROVISIONS
GROUP COMPANY
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ------- ------- ------- -------
Mine rehabilitation provision 45 - - -
Mine decommissioning provision 10 - - -
---------------------------------------------------- ------- ------- ------- -------
55 - - -
---------------------------------------------------- ------- ------- ------- -------
The provisions for mine rehabilitation and decommissioning
represents the management's best estimate of the costs which will
be incurred in the future to meet the Group's obligations under
existing Namibian law and the terms of the Group's mining and other
licences and contractual arrangements. Estimates are based upon
costs that are regularly reviewed and adjusted as new information
becomes available. The current estimate was discounted at a rate of
7.50% and the liabilities become payable in the next five years
being licence validity period.
21 SHARE CAPITAL AND SHARE PREMIUM
Number of Price per
ordinary Share (pence) Nominal value Share premium
shares GBP'000 GBP'000
ISSUED AND FULLY
PAID:
At 1 July 2019,
shares of 1p each 286,561,208 1 pence 2,866 14,307
27 August 2019 -Share
split
Ordinary shares 286,561,208 0.1 286 -
Deferred shares 286,561,208 0.9 2,580 -
--------------------------------------------- ------------- ---------------- --------------- ---------------
286,561,208 2,866 14,307
Share issues, net
of share issue costs 388,866,666 0.1 389 1,404
--------------------------------------------- ------------- ---------------- --------------- ---------------
At 30 June 2020 675,427,874 3,255 15,711
--------------------------------------------- ------------- ---------------- --------------- ---------------
Share issues 24,339,780 0.1 24 152
At 20 June 2021 699,767,653 3,279 15,863
--------------------------------------------- ------------- ---------------- --------------- ---------------
Share issues
On 2 July 2020, a total of 5,023,114 new ordinary shares were
issued, being 4,523,114 shares at 0.58 pence per share and 500,000
shares at 0.5 pence per share.
On 7 July 2020, 800,000 new ordinary shares were issued to outstanding
creditors at 0.5 pence per share.
On 5 February 2021, 5,000,000 new ordinary shares were issued
at a price of 0.3 pence per share for warrants exercised.
On 18 February 2021, 1,666,666 new ordinary shares were issued
at a price of 0.6 pence per share for warrants exercised.
On 31 March 2021, 5,250,000 new ordinary shares were issued
at a price of 1.0 pence per share for warrants exercised.
On 14 April 2021, 1,500,000 new ordinary shares were issued
at a price of 1.0 pence per share for warrants exercised.
On 21 April 2021, 1,100,000 new ordinary shares were issued
at a price of 1.0 pence per share for warrants exercised.
On 5 May 2021, 4,000,000 new ordinary shares were issued at
a price of 1.0 pence per share for warrants exercised.
Reserves
The Group's reserves are made up as follows:
Share capital : Represents the nominal value of the issued
share capital.
Share premium account : Represents amounts received in excess
of the nominal value on the issue of share capital less any
costs associated with the issue of shares.
Capital redemption reserve : Reserve created on the redemption
of the Company's shares
Share option reserve: Reserve created for the equity settled
share option scheme (note 22)
Currency translation reserve: Reserve arising from the translation
of foreign subsidiaries at consolidation. The total movement
in the foreign currency translation reserve was presented in
both the Statement of Changes in Equity and in Other Comprehensive
Income in the current year. During the prior year, this movement
was presented in the Statement of Changes in Equity.
Retained earnings : Represents accumulated comprehensive income
for the year and prior periods.
22 SHARE-BASED PAYMENTS
Equity-settled share option scheme
The Company operates share-based payment arrangements to incentivise
directors by the grant of share options. Equity-settled share-based
payments are measured at fair value (excluding the effect of
non-market based vesting conditions) at the date of grant. The
fair value determined at the grant date of the equity-settled
share-based payments is expensed on a straight-line basis over
the vesting period, based on the Company's estimate of shares
that will eventually vest and adjusted for the effect of non-market
based vesting conditions.
On 21 December 2018, 10,000,000 options were granted to L. Johnson,
vesting on 21 December 2021 at an exercisable at 1.75p per share.
On 2 October 2019, 3,333,333 share warrants were issued granted
to Peterhouse Capital Limited, at an exercise price of 0.6p
per share.
On 23 March 2020, a total of 66,666,667 share warrants were
issued to G Clarke (8,333,333), N Harrison (8,333,333) and R
Jennings (50,000,000) at an exercise price of 0.3p per share.
On 4 June 2020, a total of 26,500,000 share options were issued
to G Clarke (5,000,000), N Harrison (5,000,000), L Johnson (5,000,000),
D Edmonds (10,000,000) and B James (1,500,000) at an exercise
price of 1p per share.
The fair value of the options has been calculated using the
Black-Scholes valuation model. The assumptions used in the fair
value calculation were as follows: Date of grant 21 Dec 2018 2 Oct 2019 23 Mar 2020 4 Jun 2020
Number of options 10,000,000 3,333,333 66,666,667 26,500,000
Exercise price
(pence) 1.75p 0.6p 0.3p 1p
Risk free interest
(%) 0.5% 0.5% 0.5% 0.5%
Expected volatility
(%) 50% 50% 50% 50%
Expected life
(years) 3.66 2.9 2 5
The total share-based payment expense recognised in the income
statement for the year ended 30 June 2021 in respect of the
share options granted was GBP172,000 (2020: GBP114,000).
The share options are only exercisable when NTI have entered
full production for at least six months.
The total share options at 30 June 2021 are as follows:
-------------------------------------------------------------------------------
Number Exercise Vesting Expiry
price date date
---- --------------------- ------------ --------- ----------- -----------
At 1 July 2019 10,000,000 1.75p 21.12.2021 21.12.2023
Granted 26,500,000 1p 03.06.2025 03.06.2025
Granted 66,666,667 0.3p 23.03.2022 23.03.2022
Granted 3,333,333 0.6p 23.09.2022 23.09.2022
---------------------------- ------------ --------- ----------- -----------
At 30 June 2020 106,500,000
---------------------------- ------------ --------- ----------- -----------
Granted/(Exercised) (5,000,000)
---------------------------- ------------ --------- ----------- -----------
At 30 June 2021 101,500,000
---------------------------- ------------ --------- ----------- -----------
23 FINANCIAL INSTRUMENTS
The Group's financial instruments comprise borrowings, cash
and various items, such as trade receivables and trade payables
that arise directly from its operations. The main purpose of
these financial instruments is to raise finance for the Group's
operations.
FINANCIAL ASSETS BY CATEGORY
Financial assets included in the Statement of financial position
and the headings in which they are included are as follows:
2021 2020
GBP'000 GBP'000
------------------------------------------------ ---------- ----------
Financial assets at amortised cost:
Cash and cash equivalents 47 425
Loans and receivables 162 177
------------------------------------------------- ------------------- ---------- ----------
209 602
--------------------------------------------------------------------- ---------- ----------
FINANCIAL LIABILITIES BY CATEGORY
Financial liabilities included in the Statement of financial
position and the headings in which they are included are as
follows:
2021 2020
GBP'000 GBP'000
---------------------------------------------- --------- --------
Financial liabilities at amortised cost:
Trade and other payables 209 224
209 224
---------------------------------------------- --------- --------
The following table details the Group's remaining contractual
maturity for its non-derivative financial liabilities with agreed
repayment periods. The table has been drawn up based on the
undiscounted cash flows of financial liabilities based on the
earliest repayment date on which the Group can be required to
pay. The table includes both interest and principal cash flows.
To the extent that interest flows are floating rate, the undiscounted
amount is derived from the interest rate curves at the balance
sheet date. The contractual maturity is based on the earliest
date on which the Group may be required to pay.
Less than 3 months Over 5
1 month 1-3 months to 1 year 1-5 years years
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ---------- ---------- ---------- --------- -------
30 June 2021
Non-interest bearing:
Trade and other payables - 209 - - -
Short term borrowings - - - - -
--------------------------- ---------- ---------- ---------- --------- -------
Less than 3 months Over 5
1 month 1-3 months to 1 year 1-5 years years
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- --------- ---------- ---------- --------- -------
30 June 2020
Non-interest bearing:
Trade and other payables - 224 - - -
Short term borrowings - - - - -
------------------------- --------- ---------- ---------- --------- -------
24 RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group is exposed to a variety of financial risks which
result from both its operating and investing activities. The
Group's risk management is coordinated by the Board of Directors,
and focuses on actively securing the Group's short to medium
term cash flows by minimising the exposure to financial markets.
The main risks the Group are exposed to through its financial
instruments and the operations of the Group are credit risk,
foreign currency risk, liquidity risk and market price risk.
These risks are managed by the Group's finance function together
with the Board of Directors.
Capital risk management
The Group's objectives when managing capital are:
* to safeguard the Group's ability to continue as a
going concern, so that it continues to provide
returns and benefits for shareholders;
* to support the Group's growth; and
* to provide capital for the purpose of strengthening
the Group's risk management capability.
The Group actively and regularly reviews and manages its capital
structure to ensure an optimal capital structure and equity
holder returns, taking into consideration the future capital
requirements of the Group and capital efficiency, prevailing
and projected profitability, projected operating cash flows,
projected capital expenditures and projected strategic investment
opportunities. Management regards total equity as capital and
reserves, for capital management purposes.
Credit risk
The Company's principal financial assets are bank balances
and cash and other receivables, which represent the Company's
maximum exposure to credit risk in relation to financial assets.
The credit risk on liquid funds is limited because the counterparties
are banks with high credit ratings assigned by international
credit rating agencies.
The Group's maximum exposure to credit risk is GBP46,780 (2020:
GBP424,920) comprising cash and cash equivalents.
Liquidity risk
Liquidity risk arises from the possibility that the Group might
encounter difficulty in settling its debts or otherwise meeting
its obligations related to financial liabilities. The Group
manages this risk through maintaining a positive cash balance
and controlling expenses and commitments. The Directors are
confident that adequate resources exist to finance current
operations.
Foreign Currency risk
The Group undertakes transactions denominated in foreign currencies.
Hence, exposures to exchange rate fluctuations arise. Following
the acquisition of African Tantalum (Pty) Ltd. Ltd, the Group's
major activity is now in Namibia, bringing exposure to the
exchange rate fluctuations of GBP/GBP Sterling with the Namibian
Dollar and South African Rand, the currencies in which most
of the operating costs are denominated. At the year end the
value of assets denominated in these currencies was such that
the resulting exposure to exchange rate fluctuations was not
material to the Group's operations.
Exchange rate exposures are managed within approved policy
parameters. The Group has not entered into forward exchange
contracts to mitigate the exposure to foreign currency risk.
The Directors consider the assets most susceptible to foreign
currency movements to be the Investment in Subsidiaries. Although
these investments are denominated in South African Rands their
value is dependent on the global market value of the available
Tantalite resources.
The table below details the split of the cash held as at 30
June 2021 between the various currencies. The impact due to
movements in the exchange rates is considered to be immaterial. Namibian Dollar South African Rand GBP Sterling (GBP) Total GBP Sterling
(NAD) (ZAR) (GBP)
1,108 829,906 3,426 46,780
Market Price risk
Going forwards the Group's exposure to market price risk mainly
arises from potential movements in the market price of Tantalite.
The Group is managing this price risk by completing a fixed
price off-take agreement in respect of the major part of its
planned production.
25 EVENTS AFTER THE REPORTING PERIOD
On 17 September 2021, 10,000,000 new ordinary shares were issued
at a price of 1.0 pence per share for warrants exercised.
On 30 September 2021, the Company acquired a 60% controlling
stake in Whale Head Minerals (Pty) Ltd for a consideration of
$250,000, payable by the issue of 13,527,957 shares at 1.358
per share.
On 4 October 2021, 5,000,000 new ordinary shares were issued
at a price of 1.0 pence per share for warrants exercised.
On 7 October 2021, 16,666,666 new ordinary shares were issued
at a price of 0.3 pence per share for warrants exercised.
On 12 October 2021, 1,825,000 new ordinary shares were issued
at a price of 1.0 pence per share for warrants and options exercised.
On 18 October 2021, 1,666,667 new ordinary shares were issued
at a price of 0.6 pence per share for warrants exercised.
On 27 October 2021, the Company announced that it has entered
into a new loan facility of GBP250,000 with RiverFort Global
Opportunities, PCC Limited and Align Research Limited. The facility
allows drawdowns over the next 6 months and is repayable at
the end of 2022. Sums drawn down on the New Facility attract
a fixed interest rate of 5% payable for the period ended 30
April 2022 and 0.5% per month thereafter until the repayment
date of 31 Dec 2022. The lenders may also elect to receive this
interest in new ordinary shares in the capital of the Company
at a deemed price of 2p per share on the repayment date.
On 27 October 2021, the Company announced that Westleigh Investments
Holdings Limited (a company controlled by Giles Clarke and Nick
Harrison) has agreed to formalize the arrangements pursuant
to which it has financed the Company's operations over recent
months into a fixed term loan of GBP200,0000 repayable at the
end of 2022.
On 27 October 2021, the Company also announced that Giles Clark
and Nick Harrison have agreed that the deferred salaries owed
to them of GBP127,493 will be converted into a fixed term loan
repayable at the end of 2022.
On 1 November 2021, 3,500,000 new ordinary shares were issued
at a price of 1.0 pence per share for warrants exercised.
On 31 December 2021, 2,500,000 new ordinary shares were issued
at a price of 1.0 pence per share for warrants exercised. The
Company has also agreed, in exchange for the warrant holder
agreeing to hold new shares issued to them for a period of at
least 3 months, to issue them a further 2,500,000 warrants with
an exercise price of 2p, exercisable on or before 1 February
2023.
On 8 February 2022, the Company issued 5,579,468 new ordinary
shares at a price of 1.2546p per share.
On 2 March 2022, 10,000,000 new ordinary shares were issued
at a price of 1.0 pence per share for warrants exercised.
26 Related party tranSactions
The remuneration of the Directors, who are the key management
personnel of the Company, is set out in the report of the Board
on remuneration accompanying these financial statements.
During the year, Westleigh Investment Holdings Ltd ("WIHL")
received GBP48,000 (2020: GBP48,013) in respect of accounting,
administration and office accommodation services provided to
the Company. WIHL is a substantial shareholder in the Company
and is controlled by Giles Clarke and Nick Harrison.
On 7 July 2020, the Company issued 800,000 ordinary shares at
a price of 0.5p per share to Westleigh Investment Holdings ("WIHL"),
a company which is controlled by Giles Clarke and Nick Harrison.
During the year, WIHL, a company which is controlled by Giles
Clarke and Nick Harrison provided a loan to the Company of GBP90,000.
This loan was still outstanding as at 30 June 2021.
There have been no other material transactions with related
parties.
27 ULTIMATE CONTROLLING PARTY
The Directors do not consider there to be one single ultimate
controlling party.
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END
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March 30, 2022 02:00 ET (06:00 GMT)
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