PREM Premier African Minerals Limited

28 June 2024

Premier African Minerals Limited 

Final Results

Premier African Minerals Limited ("Premier" or the "Company"), the AIM-traded, multi-commodity mining and natural resource development company focused on Southern Arica, is pleased to announce publication of its audited Annual Report and Accounts for the year ended 31 December 2023 (the "Annual Report").

The Annual Report is available on the Company's website, www.premierafricanminerals.com and is in the process of being posted to Shareholders.

The Annual Report for the year ended 31 December 2023 is set out in full below.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018.

The person who arranged the release of this announcement on behalf of the Company was George Roach.

Enquiries:

Nominated Adviser Statement

Beaumont Cornish Limited ("Beaumont Cornish"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as nominated adviser to the Company in connection with this announcement and will not regard any other person as its client and will not be responsible to anyone else for providing the protections afforded to the clients of Beaumont Cornish or for providing advice in relation to such proposals. Beaumont Cornish has not authorised the contents of, or any part of, this document and no liability whatsoever is accepted by Beaumont Cornish for the accuracy of any information, or opinions contained in this document or for the omission of any information. Beaumont Cornish as nominated adviser to the Company owes certain responsibilities to the London Stock Exchange which are not owed to the Company, the Directors, Shareholders, or any other person.

CEO STATEMENT -Mr George Roach

2023 was a year of extremes. From the excitement of completing assembly of the Zulu Lithium and Tantalum Project ("Zulu") plant to the disappointment when the deficiencies in the ore sorting and comminution circuit became apparent. From completion of mine site infrastructures, civils, roads and access, tailings and water storage, in fact from a little bit of Zimbabwean bush to a complete mine in record time to the disappointment that has been covered in many announcements over the period and into events post December 2023.

Whilst many of the issues associated with the plant at Zulu are discussed in the Strategic Report, it is important to note that the fundamental quality of the deposit at Zulu and the original test work on which the plant supplier based their process and design remains valid and with extensive both independent and in house and ongoing test work, nothing fundamental has changed and it is more apparent today that had the plant met the most basic of the design requirements, Zulu would be in production. The facts are that the ore sorters are not fit for purpose and the Company has successfully implemented interim mitigation steps to deal with this, and the milling and screening completely unable to meet the required specifications, an issue admitted by the plant supplier and eventually resolved but only after Premier agreed to advance the funds needed to effect this repair as the plant supplier was unable to fund this. Reference is made to this in our accounts. The combination of the pull back in SC6 pricing coupled to the delays with getting Zulu into production, whilst presenting short-term difficulties, have not changed the medium and long-term fundamentals of Zulu and the strong future for Premier African Minerals Limited ("Premier" or "Company"). And in this context in particular we are conscious of the opportunities that have emerged that include a crushing and milling circuit able to support an increase in float plant feed up to 100%, stockpiled crushed ore in the small size fractions able to support a separate Dense Medium Separation plant and feed to a new Tantalum recovery circuit under design at present.

With our focus on Zulu, little has been achieved in regard to Premier's other projects. Once matters have been addressed at Zulu, Premier expects that our other projects will see serious attention in the coming year with a view to realising a return that is closer to our original investments than the value we now have elected to include in our accounts. Current pricing of Tungsten is compelling, and we do expect resolution of this with the Zimbabwean authority. Similarly, our interests in Manganese represent an equally compelling opportunity.

_____________________

George Roach

Chief Executive Officer

28 June 2024

STRATEGIC REPORT

The strategic report provides a detailed assessment of the activities of the Company during the period under review. It also details the main objectives of the Company related to our portfolio of assets. The principal risks and uncertainties associated with our activities are outlined in a specific principal risks and uncertainties section.

RHA

49% Interest owned by Premier

51% Locally indigenized owned by National Indigenisation and Economic Empowerment Fund ("NIEEF") NIEEF is controlled by Ministry of Mines and Mining Development

Despite indications to the contrary, nothing has changed. The price of wolframite continues to suggest that RHA should be back into production but with our reticence to commit more funds into RHA under the present share ownership structure, we are unable to predict when and if there will be a return to production notwithstanding that recent discussions with the Ministry of Mines and Mining Development have been positive. What is certain is that with advances in other exploration in Zimbabwe and with a need for additional comminution capacity at Zulu, most of the plant at RHA will be relocated during the latter part of 2024 if we are unable to resolve the present ownership status.

Recoverability of RHA Assets

The RHA assets remain fully impaired at this time and are likely to so remain until we are able to conclude the discussions underway at present.

Zulu

With hindsight the issues associated with the Zulu plant and the deficiencies and oversights in the plant design were all avoidable. It was easy to accept the proposal and purported competencies of the supplier, in particular with the confidence our Company had in the resource and in the test work that had been undertaken by Anzaplan in 2017 and had been updated subsequently. It is worth noting that the resource estimates at Zulu have been undertaken by Shango Solutions an independent consultancy with extensive resource estimation experience, and validation of the amenability of the Zulu ores to successful recovery of SC6 has been undertaken not only by Anzaplan, but also by Geolabs and by our reagent suppliers quite apart from the many float tests undertaken in our laboratory at Zulu.

In our view, the ruling SC6 price, our confidence in the resource and test work, coupled to the assurances and proposal from the equipment supplier adequately addressed the risks associated with proceeding to plant construction. It remains our opinion that constructing the Zulu mine at that time was correct and in the light of the present price structures for SC6, had the Company not proceeded at that time, it is unlikely this mine would have been financed and built today. In terms of the plant, the production of SC6 was to be through a floatation process. The plant was expected to perform the following functions:

It is important to acknowledge the support that has been provided by our offtake and prepayment partner. Our communication remains open and frank and the Company remains committed to meeting the long-term interests of our offtake partner that is focussed on the supply of SC6 into the future. At the same time, our offtake and prepayment partner is aware of the challenges that the production delays have caused, in particular in relation to cash flows and has expressed agreement to the Company seeking other finance opportunities provided the long-term interests of our offtake partner are not impinged.

The Company was able to release updated resource estimates and at the same time identify that the main pegmatite at Zulu is Spodumene Quartz Intergrowths dominant and accordingly is primarily a spodumene rich ore body. This resource estimate, coupled to the emerging extent of pegmatites contained within the EPO, is likely to support both a much longer term life of mine for the present mine plant, but also the expectation of a significantly larger overall resource and the likelihood of an increase in plant production capacity in the immediate future. Application has been made for renewal of the EPO but in the event that this is not forthcoming, the company has registered extensive new mining claims over prospective areas within the EPO.

In subsequent events associated with the plant, the Company engaged Senet Engineering to conduct a preliminary review of the plant as delivered at the time of removal of the previous plant supplier, as much to assist in remedial action required as to set and understand the baseline and other issues associated with the previous plant supplier. Subsequently, the Company intends to further engage similar services to examine and validate the Company's internal discounted cash flow and projected cash flows with a view to moving the operation at Zulu to a fully compliant mineral reserve status. The experience to date, based upon internal assessments, and the production cost associated with spodumene concentrate produced supports the Company's internal projection of a delivered China port all in cost of $828 per tonne for the year ending June 2025.

Extended Lithium Portfolio

We have previously referred to our claims in the eastern part of Zimbabwe and we are pleased to advise that these claims are presently under evaluation by a major Chinese miner who have indicated their intention to formulate a formal offer to acquire these properties.

Turwi Gold Project

Premier had acquired operational control and 50% of this gold exploration project in Southeast Zimbabwe. However, at this time, the focus of Premier will be that of Zulu. Premier will explore other alternative opportunities to releasing the potential value and opportunity of the Turwi Gold Project.

MN Holdings Limited ("MNH")

Delays at Zulu have effectively delayed any further development of this project. It should be noted that the positives associated with Manganese make this investment attractive and Premier will look to increase our interest and control.

In the unaudited management accounts for year ended 30 June 2023, MNH's wholly owned operating subsidiary, Otjozondu reported revenue of approximately N$76 million (equivalent to $4.1 million) and an operating profit before tax (and interest charges to group companies) of approximately N$24.1 million (equivalent to $1.3 million). Total assets as at the same date amounted to approximately N$289 million (equivalent to $15.6 million).

Vortex Limited (formerly Circum Minerals Limited "Circum")

Although the status in Ethiopia has improved, little has been achieved. Frustrations related to cooperative agreements and differing opinions on development of this outstanding worldclass deposit, allied to the Ethiopian status continue to frustrate the realisation of this investment.

Funding

During the reporting period we raised net proceeds of $17.542 million (2022: of $14.838 million).

Principal activities and strategic review of the business

The principal activity of Premier and its subsidiary companies (the Group) during the year under review is the mining, exploration, evaluation development and investment in natural resource properties on the African continent.

Premier was incorporated on 21 August 2007 in the British Virgin Islands (BVI) as a BVI business company with number 1426861. The registered office is Craigmuir Chambers, PO Box 71, Road Town, Tortola, British Virgin Islands. The Company was admitted to trading on the London Stock Exchange's AIM Market on 10 December 2012.

Objectives

During the current year, the primary focus will be:

Principal risks and uncertainties

The Group is subject to a number of risks and uncertainties which could have a material effect on its business, operations, or future performance, including but not limited to:

Credit Risk

Credit risk is the risk of potential loss to the Company if counterparty to a financial instrument fails to meet its contractual obligations. The Company's credit risk is primarily attributable to its liquid financial assets, including cash, receivables, and balances receivable from the government. The Company limits the exposure to credit risk in its cash by only investing its cash with high-credit quality financial institutions in business and savings accounts, guaranteed investment certificates and in government treasury bills which are available on demand by the Company for its programs. The Company does not invest in money market funds. The Company has no risk exposure to asset backed commercial paper or auction rate securities.

Refer to note 29 for the company's exposure to credit risk.

Liquidity Risk

Liquidity risk is the risk that the Company will not have the resources to meet its obligations as they fall due. The Company manages this risk by closely monitoring cash forecasts and managing resources to ensure that it will have sufficient liquidity to meet its obligations. Also refer to the going concern section below.

Refer to note 29 for the company's exposure to liquidity risk.

Operating Risks

The activities of the Group are subject to all of the hazards and risks normally incidental to exploring and developing natural resource projects. These risks and uncertainties include, but are not limited to environmental hazards, machinery and plant breakdowns, industrial accidents, labour disputes, geo-political risks, encountering unusual or unexpected geologic formations or other geological or grade problems, unanticipated changes in rock formation characteristics and mineral recovery, encountering unanticipated ground or water conditions, land slips, flooding, periodic interruptions due to inclement or hazardous weather conditions and other acts of God or un-favourable operating conditions and losses.

Should any of these risks and hazards affect the Group's exploration, development or mining activities, it may cause the cost of production to increase to a point where it would no longer be economic to extract minerals from the Group's properties, require the Group to write-down the carrying value of one or more of its assets, cause delays or a stoppage of mining and processing, result in the destruction of mineral properties or processing facilities, cause death or personal injury and related legal liability, any and all of which may have a material adverse effect on the Group.

Early-stage Business Risk

The Group's success will depend on its ability to raise capital and generate cash flows from production in the future at Zulu. The board of directors manages this risk by monitoring cash levels and reviewing cash flow forecasts on a regular basis.  In particular, the Group's success will depend on the successful commissioning, modification and optimisation of the processing plant at Zulu and there is no certainty that there may not be further unforeseen delays, plant modifications or unanticipated costs.

Market Risk (exchange rates, commodity, and equity)

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices. These fluctuations may be significant.

Interest Rate Risk: The Company is exposed to interest rate risk to the extent that its cash balances bear variable rates of interest. The interest rate risks on cash and short-term investments and on the Company's, obligations are not considered significant.

Foreign Currency Risk - The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates against the Company's functional currency, which is the United States dollar ("USD").  The Company expects to continue to raise funds in the United Kingdom. The Company conducts its business in Zimbabwe with a significant portion of expenditures in that country historically denominated in USD and now also in RTGS Dollars ("RTGS$"). The introduction of the RTGS$ during the 2019 financial year has resulted in the devaluation of the RTGS$ against the US Dollar. This devaluation has also resulted in the Zimbabwean economy going into hyperinflationary status. As a means to counteract the hyper-inflationary effects and given that the majority of transactions are denominated in USD, all Zimbabwean companies within the group now record and report their financial information in USD with effect from 1 January 2023. Additionally, a portion of the Company's business is conducted in South African Rands ("ZAR"). As such, it is subject to risk due to fluctuations in the exchange rates between the USD and each of the ZAR and GBP. A significant change in the currency exchange rates between the USD relative to foreign currencies could have an effect on the Company's results of operations, financial position, or cash flows.  The Company has not hedged its exposure to currency fluctuations.

Commodity Price Risk - Zulu value is largely related to the price of lithium and the outlook on this mineral.

The Company minority interest in MNH results in limited control of how MNH mitigate the risk associated with Manganese price fluctuations.

Refer to note 29 for the company's exposure to market risk.

Early-stage Project Risk

Zulu moved into early-stage production through the development of a pilot plant without a Definitive Feasibility Study. In advancing Zulu to the stage where it may be cash generative, many risks are faced including without limitation, the inherent uncertainty of mining and continuity of the mineral resource without a DFS support by a measured category resource statement, the capital costs of exploration and production, commodity pricing, operating in remote and often politically unstable environment.

Environmental Risks and Hazards

All phases of the Group's operations are subject to environmental regulation in the areas in which it operates. Environmental legislation is evolving in a manner that may require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors, and employees. There is no assurance that existing or future environmental regulation will not materially adversely affect the Group's business, financial condition, and results of operations. Environmental hazards may exist on the properties on which the Group holds interests that are unknown to the Group at present. The Board manages this risk by working with environmental consultants and by engaging with the relevant governmental departments and other concerned stakeholders.

Licencing Risk

The Company's exploration and development activities are dependent upon the grant of appropriate licences, concessions, leases, permits and regulatory consents which may be withdrawn or made subject to limitations or performance criteria. Such licences and permits are as a practical matter subject to the discretion of the applicable Government or Government office. The Group must comply with known standards, existing laws and regulations that may entail greater or lesser costs and delays depending on the nature of the activity to be permitted. The interpretations, amendments to existing laws and regulations, or more stringent enforcement of existing laws and regulations could have a material adverse impact on the Group's results of operations and financial condition. Whilst the Company continually seeks to do everything within its control to ensure that the terms of each licence are met and adhered to, third parties may seek to exploit any technical breaches in licence terms for their own benefit. There is a risk that negotiations with a Government in relation to the grant, renewal or extension of a licence may not result in the grant, renewal or extension taking effect prior to the expiry of the previous licence period, and there can be no assurance of the terms of any extension, renewal, or grant.

Political and Regulatory Risk

The Group's operating activities in Africa, notably in Zimbabwe, are subject to laws and regulations governing expropriation of property, health and worker safety, employment standards, waste disposal, protection of the environment, mine development, land and water use, prospecting, mineral production, exports, taxes, labour standards, occupational health standards, toxic wastes, the protection of endangered and protected species and other matters. The Group is dependent on the political and economic situation in these countries and may be adversely impacted by political factors such as expropriation, war, terrorism, insurrection, and changes to laws governing mineral exploration and operations.

Internal Control and Financial Risk Management

The Board has overall responsibility for the Group's systems of internal control and for reviewing their effectiveness. The Group maintains systems which are designed to provide reasonable but not absolute assurance against material loss and to manage rather than eliminate risk.

The key features of the Group's systems of internal control are as follows:

The Group's activities expose it to a number of financial risks including cash flow risk, liquidity risk and foreign currency risk. The Group has identified certain short coming in the financial control systems, which are currently in the process of being addressed.

Disclosure of management's objectives, exposure, and policies in relation to these risks can be found in note 29 to these financial statements.

Environmental Policy

The Group is aware of the potential impact that its subsidiary companies may have on the environment. The Group ensures that it complies with all local regulatory requirements and seeks to implement a best practice approach to managing environmental aspects.

Zulu was granted approval of its Environmental Impact Assessment and was permitted to undertake mining operations by the Environmental Management Agency of Zimbabwe.

Health and Safety

The Group's aim is to achieve and maintain a high standard of workplace safety. In order to achieve this objective, the Group provides ongoing training and support to employees and sets demanding standards for workplace safety.

Going Concern

These consolidated financial statements are prepared on the going concern basis. The going concern basis assumes that the Group will continue in operation for the foreseeable future and will be able to realise its assets and discharge its liabilities and commitments in the normal course of business.

There remains an active and very liquid market for the Group's shares.

The Directors have prepared a cash flow forecasts for the 18-month period ended 31 December 2025, taking into account the number of shares available to Premier to raise further equity, forecast operating cash flow and capital expenditure requirements for the Zulu Mine, available working capital and forecast expenditure for the rest of the Group including overheads and other development costs. These key assumptions of this forecast are, inter alia:

The Group

During 2023 the Group issued 4,216,446,124 shares at an average price of 0.4455p per share raising a total of $18.786 million. This cash was used to continue with the commission and development work at Zulu mine.

RHA

Zulu

The Board also believes that it has a valuable asset in Zulu, with an estimated fair value in accordance with the prepayment and offtake agreement is US$200 million. And, in the event that it elected to stop all group funding of Zulu, the group has sufficient share authorities to sustain its reduced holding costs for the period to 31 December 2025.

After careful consideration of those matters set out above, the Directors are of the opinion that the Group will be able to obtain adequate resources to enable it to undertake its planned activities for the period to 31 December 2025 either from production or from additional fund raising and have prepared these consolidated financial statements on the going concern basis. In the event that Premier is not able to meet the above consideration, then a material uncertainty exists which may cast significant doubt on the ability of the Group to continue as a going concern and therefore be unable to realise its assets and settle its liabilities in the normal course of business.

Refer to note 5 for further information.

George Roach

Chief Executive Officer

28 June 2024

Management Team

Directors

DIRECTORS REPORT

Results

The audited financial statements for the year ended 31 December 2023 are set out on pages 32 to 87. The Group reported a loss before and after tax of $20.813 million for the year ended 31 December 2023 (2022: loss $5.803 million).

The loss before and after tax includes:

The total comprehensive loss for the year amounted to $21.312 million (2022: Loss $13.646 million).

Dividends

The Directors do not recommend the payment of a dividend in respect of the year under review.

Fund-raising and capital

During the 2023 financial year net funds of $17.542 million were raised through direct subscriptions from the issue of new ordinary shares (2022: $14.838 million).

There remains an active and very liquid market for the Group's shares.

Borrowings

During the financial year, no additional borrowings were raised.

Other key elements of financial position

The Company's holdings in Vortex Ltd amount to $0.501 million

The Company's holdings in MNH amount to $nil (2022: $nil).

The Company's investment in property, plant and equipment during the year was $53.234 million (2022: $35.997 million).

Events after the reporting date

At the date these financial statements were approved, the Directors were not aware of any significant events after the reporting date other than those set out in note 32 to the financial statements.

Directors

The Directors of Premier who served during the period or subsequently were:

Directors' Fiduciary Statement

The Directors acknowledge their fiduciary duties and consider that they have, both individually and together, acted in the way that, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole. In doing so, they have had regard (amongst other matters) to:

Share capital

Premier's shares are publicly traded on AIM with the stock ticker of PREM. As at 31 December 2023, the Company's issued share capital consists of 26,634,455,000 (note 18) Ordinary Shares of no-par value.

The company does not hold any Ordinary Shares in treasury.

Major Shareholders

As at 28 June 2024 the Company was aware of the following persons who hold, directly or indirectly, voting rights representing 3% or more of the issued share capital of the Company to which voting rights are attached:

* George Roach and/or structures associated with G Roach.

There are no restrictions on the transfer of the Company's AIM securities.

_____________________

George Roach

Chief Executive Officer

28 June 2024

CORPORATE GOVERNANCE STATEMENT

Premier is committed to maintaining the highest standards in corporate governance throughout its operations and to ensure all its practices are conducted transparently, morally, and efficiently. Therefore, and in accordance with the AIM Rules for Companies (March 2018), Premier seeks to comply with the provisions of The UK Corporate Governance Code 2018 as published by the Financial Reporting Council Limited, to the extent the Board consider appropriate, given the Company's size, stage of development and resources (the "Code"). The Code was updated in January 2024 and will apply to financial years beginning on or after 1 January 2025. The 2018 code remains in effect at this time.

Throughout the Reporting Period, the Company has continued to adhere to this Code and the following statement sets out how the Company complies or otherwise departs from the principles of the Code.

Premier constantly seeks to maintain the highest levels of corporate governance whereby the Company ensures that a periodic review of the Company's corporate governance is done. Following this recent review, there have been no corporate governance issues identified by Premier.

Accordingly, the Company has established specific committees and implemented certain policies, to ensure that:

During the year, the board of directors held one formal board meeting that was attended by all members in office. Due to the ongoing medical issues pertaining to one of the members of the board of directors, the board of directors have elected to hold a number of informal virtual board calls with the attendance of most of the directors in office to discuss the operations of the Company. Since the year end, the board continued to implement the policy of holding informal board calls as so required and is also in the process of actively looking to strengthen the board of directors. The various committees of the Company have continued to meet from time to time in accordance with the requirements of the Company's ongoing operations.

In addition, the Company has adopted a comprehensive suite of policies including:

The Code follows 5 Main Principles, which are herein assessed in accordance with Premier commitment to maintain the highest levels of corporate governance.

1.      Leadership

The Role of the Board of Directors

The Board is responsible for the management of the business of the Company, setting its strategic direction and establishing appropriate policies. It is the Directors' responsibility to oversee the financial position of the Company and monitor its business and affairs on behalf of the Shareholders, to whom they are accountable. The primary duty of the Board is always to act in the best interests of the Company. The Board also addresses issues relating to internal control and risk management. The Non-executive Directors bring a wide range of skills and experience to the Company, as well as independent judgment on strategy, risk, and performance. The Non-executive Directors are considered by the Board to be independent at the date of this report. To achieve its objectives, the Board strictly adheres to the Code.

The Board meets at least three times a year with supplementary meetings held as required. The agenda for the Board meetings is prepared jointly by the Chairman and CEO. The Board maintains annual rolling plan ("Agenda") of items for discussion to ensure that all matters reserved for the Board, with other items as appropriate, are addressed. The agenda, with all accompanying documents, generally includes the following:

The Annual Accounts of Premier best reflects the Board key types of decisions that the Board are required to take in their pursuant of maintaining the highest levels of corporate governance. The following matters are reserved for the Board.

Premier has established varies committees to assist the Board in maintain the highest levels of corporate governance. Of these committees, the following two strongly assist the decision making of the Board.

Audit Committee

The Audit Committee ("AC"), which comprises of George Roach and is chaired by Godfrey Manhambara, is responsible for the appointment of auditors and the audit fee, and for ensuring that the financial performance of the Company is properly monitored and reported. The Audit Committee, inter alia, meets with the Company's external auditor and its senior financial management to review the annual and interim financial statements of the Company, oversees the Company's accounting and financial reporting processes, the Company's internal accounting controls and the resolution of issues identified by the Company's auditors.

Other key aspects of the AC include:

Remuneration Committee

The Remuneration Committee comprises of George Roach and is chaired by Godfrey Manhambara. The Remuneration Committee assumes general responsibility for assisting the Board in respect of remuneration policies for Premier. The Committee reviews and recommends remuneration strategies for the Company and proposals relating to compensation for the Company's officers, directors and consultants and assesses the performance of the officers of the Company in fulfilling their responsibilities and meeting corporate objectives. It has the responsibility for, inter alia, administering share and cash incentive plans and programmes for Directors and employees and for approving (or making recommendations to the Board on) share and cash awards for Directors and employees.

The Committee is satisfied that the advice received has been objective and independent as at the date of this report.

The Division of Responsibility of the Board of Directors

It is important that the Board itself contains the right mix of skills and experience to deliver the strategy of the Company. The roles of the Chairman and Chief Executive Officer ("CEO") are split and Godfrey Manhambara acts as chairman. There is no one individual or group of individuals on the Board that have unfettered powers of discretion nor is there any undue influence in the collective decision-making ability of the Board.

The responsibilities of the Chairman, CEO and Non-executive director are set out in writing and are reviewed by the Board annually to ensure that it remains relevant and accurate. In brief summary, they are responsible as follows:

2.      Effectiveness

The Composition of the Board

The Board and its committees should have the appropriate balance of skills, experience, independence, and knowledge of the Company to enable them to discharge their respective duties and responsibilities effectively.

 As such, the Board has been structured to ensure that correct mix of skills and experience are in place to allow it to operate effectively:

The Code requires that a smaller company (and which the Company is under the Code) should have at least two independent non-executive directors. Godfrey Manhambara is independent under the Code. The Board also regards Wolfgang Hampel as independent, notwithstanding that he participates in the Company's share option plan and provides some technical advice to the board. The Board is satisfied that Wolfgang Hampel acts independently irrespective of these interests. The Board also notes that no single individual will dominate decision making and further notes that there has been sufficient challenge of executive management at meetings of the Board thereby confirming that the Board is capable of operating effectively.

The Board has not appointed a senior Finance Director but is actively seeking for the appropriate candidate with financial expertise to provide board oversight on all report prepared by the group financial manager, Mr Tomas Apetauer who is a chartered accountant with extensive audit and financial management experience. Additionally, the Company has a Company Secretary in the United Kingdom who assists the Chairman and CEO in preparing for and running effective board meetings, including the timely dissemination of appropriate information. The Company Secretary provides advice and guidance to the extent required by the Board on the legal and regulatory environment.

The Nomination Committee ("NC") has been established to regularly review and ensure that the Board has the appropriate balance of skills, experience, and knowledge of the Company. NC meets as required to consider the composition of and succession planning for the Board, and to lead the process of appointments to the Board. The Committee is made up of George Roach and Wolfgang Hampel and is chaired by George Roach.

Other key aspects of the NC include:

Appointments to the Board

The appointment of new Directors to the Board is led by the NC who has the responsibility for nominating candidates for appointment. Both the NC and Board considers the need for diversity, including equality, and that the new directors must exhibit the required skills, experience, knowledge, and independence.

The Board acknowledges that the Company is not in compliance with the Code whereby the NC should comprise a majority of independent directors. The Board considers that the NC has a strong enough independent component with Godfrey Manhambara.

Commitment

The Board requires that all directors should be able to allocate sufficient time to the Company to discharge their responsibilities in accordance their letter of appointment. The Company maintains records of each letter of appointment, which can be inspected at an agreed time, at the Company's registered office.

The NC is responsible for considering on an annual basis, whether each director is able to devote sufficient time to their duties.

Development

All directors are required to familiarise themselves with the Board and should regularly update and refresh their skills and knowledge. The Company provides each joining director with an induction on the Company. Each induction is tailored to the specific background and requirements of the new director. In general, the induction contains information on:

Information and Support

As Premier constantly seeks to maintain the highest levels of corporate governance, it is imperative that information is supplied to the Board in a form and of a quality appropriate to enable the Board to discharge its duties in a timely manner. The supply of the information is done by the Chairman with the assistance of the Company Secretary.

Premier encourage all Board members to seek independent professional advice (at the reasonable expense of the Company) in the furtherance of their duties. The Board is given sufficient opportunity to meet with any manager, consultant, or contractor to gain further insight into Premier.

Evaluation

The Board recognises that it should undertake a formal and rigorous annual evaluation of its own performance, that of its committees and individual directors.

The evaluation of the Board's performance is an assessment of the following key factors:

The Board is not in compliance with the Code as the evaluation process is usually conducted internally due to the size and complexity of the operations of the Company. Furthermore, the Board believes that internal assessment best help identify the key strength and weaknesses to allow for effective evaluation. The Board will continue to assess the internal review process against the growth of the Company as should the Company grow in size it may consider getting an independent assessment.

Re-election

The Board believe that all directors should be submitted for re-election at regular intervals, subject to the continued satisfactory performance of the Company.

The Director longest in office since their last appointment is required to retire by rotation or stand for reappointment at the Annual General Meeting ("AGM").

3.      Accountability

Financial and Business reporting

A key duty of the Board is to oversee the financial affairs of the Company. The Financial Statements is the Board's primary means of presenting a fair, balanced and understandable assessment of the Company's positions that also best provides the information necessary to allow shareholders to assess the Company's performance, business model and strategy for that period.

You can view Premier Annual Report and Financial Statements on the Company's webpage at the following address, www.premierafricanminerals.com. Under the Strategic Review section of the Company's Annual Report and Financial Statements for the year ended December 2023, the Board set outs the strategic objectives of the Company, how these will be delivered, Premier business model and how the Company will generate and preserve value over the longer term for shareholders.

The Board have a reasonable expectation that the Group has adequate resources to continue in operations or existence for the foreseeable future thus continues to adopt the going concern basis in preparing its Annual Report and Financial Statements. Refer to note 5 to the financial statements.

Risk Management and Internal Control

The Board is responsible for determining the nature and extent of the significant risks it is willing to take in achieving its strategic objectives. The Board manages the risk through the implementation of internal control systems.

The Board has identified the following as some of the risks and their mitigation:

The Board has overall responsibility for maintaining and reviewing the Group's system of internal control and ensuring that the controls are robust and effective in enabling risks to be appropriately assessed and managed.

Refer to the principal risks and uncertainties as set out in the Strategic Report for additional information on these risks.

On behalf of the Board, the AC conducts an annual review of the effectiveness of the systems of internal control including financial, operational and compliance controls and risk management systems.

Audit Committee and Auditors

The functions of the AC are clearly described as part of the Leadership function in this note.

Whilst the Board sets the Company risk appetite, it reviews the operations and effectiveness of the Company's risk management activities through the AC, which undertake the day-to-day oversight of the risk management framework on behalf of the Board. The Chairman of the AC regularly provides an update on the work carried out by the AC to the board.

It is noted that the AC follow the recommendations of the Code whereby they monitor and review the effectiveness of the internal audit activities. However, at this time, the Board have determined that the appointment of internal auditor is not required due to the size of the Company.

4.      Remuneration

The Level and Components of Remuneration

Executive directors' remuneration should be designed to promote the long-term success of the Company. Performance-related elements should be transparent, stretching and rigorously applied. The Board delegates the responsibility for setting the appropriate levels of remuneration for its directors to the Remuneration Committee.

The levels of Remuneration to directors are disclosed to shareholders in Premier Annual Report and Financial Statements. Both the Board and Remuneration Committee seek to provide appropriate reward for the skill and time commitment required so at to retain the right calibre of director at a cost to the Company and which reflects the current market rates.

Procedure

The Board have a formal and transparent procedure for developing policy on the executive remuneration and for fixing the remuneration packages of individual directors. As strict policy, no director is involved in deciding their own remuneration.

The Remuneration Committee consider and approves the remuneration and where applicable, incentives and benefits, and makes recommendations to the Board. The Committee will also govern employee share schemes. The Chairman of the Committee will be consulted by the CEO in respect of the Company and director's performance approvals, compensation and in respect of any appointment/departures from roles.

The remuneration of non-executive directors shall be a matter for the executive members of the Board.

The Company has adopted a share dealing code to ensure directors and certain employees do not abuse, and do not place themselves under suspicion of abusing inside information of which they are in possession and to comply with its obligations under MAR which applies to the Company by virtue of its shares being traded on AIM. Furthermore, the Company's share dealing code is compliant with the AIM Rules for Companies published by the London Stock Exchange (as amended from time to time).

Under the share dealing code, the Company must:

Additionally, under the share dealing code, no person discharging managerial responsibilities is permitted to deal in Company securities (whether directly or through an investment manager) during a closed period; being the period either: from the end of the relevant financial year up to the release of the preliminary announcement of the Company's annual results; from the end of the relevant financial period up to the release of the Company's half-yearly financial report or; 30 calendar days before the release of each of the Company's first quarter report and third quarter report.

For details of the directors' remuneration refer to note 27.

5.      Relations with Shareholders

Dialogue with shareholders

The Company recognises that maintaining strong communications with its shareholders promotes transparency and will drive value in the medium to long-term. Accordingly, the Company has an established programme to communicate with shareholders. This done by providing regular updates on the progress of the Company, detailing recent business and strategy developments, in news releases which will be posted on the Company's website and through certain social media channels.

The Board has responsibility for approval and monitoring compliance with the Company's disclosure controls and procedures. It has the responsibility, inter alia, determining whether information is inside information, deciding whether the inside information is to be announced as soon as possible and reviewing the scope, content, and accuracy of disclosure. The Company has adopted a share dealing code governing the share dealings of the Directors and applicable employees during close periods and is in accordance with Rule 21 of the AIM Rules.

The CEO is contactable via email. Their email address can be obtained at either the Company's registered office or by requesting them at the below address. To continually improve transparency, the Board would be delighted to receive feedback from shareholders. Communications should be directed to info@premierafricanminerals.com. The CEO has been appointed to manage the relationship between the Company and its shareholders and will review and report to the Board on any communications received.

Constructive Use of General Meetings

The Company holds AGM each year, whereby all of the directors aim to attend the AGM and value the opportunity of welcoming individual shareholders and other investors to communicate directly and address their questions.

In addition to the mandatory information required and procedures to calling a general meeting, which can be found under the Company's constitutional documents on the webpage, the Board ensure that a full, fair, and balanced explanation of business of all general meetings is sent in advance to shareholders.

Statement of directors' responsibilities

The directors are responsible for preparing the annual report and financial statements and have prepared the Group financial statements in accordance with UK adopted International Accounting Standards in order to give a true and fair view of the state of affairs of the Group and of its profit or loss for that period, in accordance with the rules of the London Stock Exchange for companies trading securities on AIM.

In preparing these financial statements the directors are required to:

•          select suitable accounting policies and then apply them consistently.

•          make judgements and accounting estimates that are reasonable and prudent.

•          state whether they have been prepared in accordance with UK adopted International Accounting Standards, subject to any material departures disclosed and explained in the financial statements; and

•        prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and the Group will continue in business.

The directors are responsible for keeping records that are sufficient to show and explain the Group and Company's transactions and will, at any time, enable the financial position of the Group and Company to be determined with reasonable accuracy. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

All reports and accounts, taken as a whole, is fair, balanced, understandable, and provides the information necessary for shareholders to assess the Company's position, performance, business model and strategy.

Statement of disclosure to auditor

The directors who were in office at the date of approval of these financial statements have confirmed that, as far as they are aware, there is no relevant audit information of which the auditor is unaware. Each of the directors has confirmed that they have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that it has been communicated to the auditor.

Viability statement and going concern

The Board has assessed the prospects of the Group over a period of 12 months from the date of approval of these financial statements, involving a review of the Group's forecast prepared for the 12 months ending 30 June 2025. and taking account of the Board's intentions for future activities after that date. As explained further in note 5, taking account of the Group's current position and principal risks, over a 12-month period, the Board has a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over that period.

The Board considers these periods of assessment to be appropriate because they contextualise the Company's financial position, business model and strategy.

George Roach

Chief Executive Officer

28 June 2024 

NON-STATUTORY INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PREMIER AFRICAN MINERALS LIMITED

Opinion on non-statutory financial statements

We have audited the consolidated non-statutory financial statements of Premier African Minerals Ltd (the 'Group') for the year ended 31 December 2023 which comprise the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of financial position, the consolidated statement of cash flows, the consolidated statement of changes in equity and the related notes, including a summary of significant accounting policies.

The financial reporting framework that has been applied in the preparation of the financial statements UK adopted international accounting standards.

In our opinion, the non-statutory financial statements:

Basis for opinion

We conducted our audit in accordance with UK adopted international accounting standards. 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 in accordance with the ethical requirements that are relevant to our audit of the financial statements, 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 relating to going concern

We draw attention to the Strategic Report and note 5 in the financial statements, which indicates that the Group is loss making and has net current liabilities. As stated in note 5, these events or conditions, along with the other matters as set forth in note 5 and the Strategic Report, indicate that a material uncertainty exists that may cast significant doubt on the Group'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 directors' 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 entity's ability to continue to adopt the going concern basis of accounting included:

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

An overview of the scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the directors made subjective judgments, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits we also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which they operate.

The Group financial statements are a consolidation of reporting units, comprising the Group's operating businesses and holding companies.

We performed full scope audits of the financial information of the components within the Group which were individually financially significant and material. We also performed specified audit procedures over certain account balances and transaction classes that we regarded as material to the Group, as well as analytical procedures, for components which were not significant and not material. The audit work and specified audit procedures accounted for 100% of the Group's consolidated expenditures and 100% of the Group's absolute loss before tax (i.e. the sum of the numerical values without regard to whether they were profits or losses for the relevant reporting units).

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. This is not a complete list of all risks identified by our audit.

Our application of materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

Based on our professional judgment, we determined materiality for the financial statements as a whole as follows:

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 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.

Responsibilities of directors

As explained more fully in the directors' responsibilities statement as set out in the Corporate Governance Statement, the directors are responsible for the preparation of the 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 financial statements, the directors are responsible for assessing the Group'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.

The extent to which the audit was considered capable of detecting irregularities including fraud.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

We assessed the susceptibility of the Group's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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 this report

This report is made solely to the Company's members, as a body, in accordance with our engagement letter. 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.

MAH, Chartered Accountants

2nd Floor, 154 Bishopsgate,

London, EC2M 4LN

28 June 2024