African Energy Limited
ABN 63 650 431 226
ACN 650 431 226
Annual Report
2023
AFRICAN ENERGY LIMITED
Directors’ report
30 June 2023
The directors present their report, together with the financial statements, on the consolidated entity
(referred to hereafter as the 'Consolidated Entity') consisting of African Energy Limited (referred to
hereafter as the 'Company' or 'Parent Entity') and the entities it controlled at the end of, or during,
the year ended 30 June 2023 (“Year”).
Directors
The following persons were directors of African Energy Limited during the whole of the year and up
to the date of this report, unless otherwise stated:
Alasdair Cooke
Charles (Frazer) Tabeart
Valentine Chitalu
Daniel Davis
Principal activities
The principal activity of the Consolidated Entity during the year was the development of power
projects in southern Africa.
Dividends
No dividends have been paid or declared during the year.
Review of operations
In the last 15-months, the power shortages in southern Africa have worsened significantly. In Zambia
the water levels at Lake Kariba early this year were at the lowest levels seen in over 20-years, causing
restrictions in hydro power generation. In South Africa a further deterioration in Eskom’s coal-fired
fleet availability has resulted in widespread and persistent load shedding. In Botswana ongoing
problems with the Morupule power plant has resulted in regular load shedding. The generation
problems in the major power producers have caused severe power disruptions across the southern
African region with blackouts and widespread load shedding on a regular basis in many countries.
This regional power crisis, which in February was declared as a ‘State of Disaster' in South Africa, is
driving strong interest in the Sese Project.
Sese is one of very few fully permitted, large scale, power generation projects in the Southern African
Power Pool (SAPP) and is therefore one of very few options for quickly developing new generation at
significant scale.
Whilst investment in new coal generation is considered difficult in many western countries, the reality
is that coal remains the main fuel for baseload power in most countries and particularly in the fast-
growing economies of India and China. In sub-Saharan Africa the predominant domestic fuel sources
remain charcoal and animal dung. The harvest of charcoal has devastating impacts on the
environment and is the leading cause of deforestation. The use of these fuels for cooking indoors is
well documented as one of the major health issues for Africa, with respiratory diseases from
particulate inhalation being one of the leading causes of death amongst women. Providing low-cost
electricity is essential to addressing these issues and lifting living standards more generally.
These issues are widely recognised in Africa and the opportunity to use established technology such
as coal fired power generation to address such problems is widely seen as a greater imperative than
reducing CO2 emissions. Once electricity is widely available and living standards increase then other
more expensive forms of renewable power generation may be introduced, as has happened in
developed countries.
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AFRICAN ENERGY LIMITED
Directors’ report
30 June 2023
We expect this process to progress over the coming months with the intention of concluding a
transaction that will see the introduction of a new investor to the Sese Project. This may result in the
Company selling down its equity position in the project to facilitate the new partners and retaining a
minority interest or a coal production royalty. These arrangements will be the subject of commercial
negotiations with the interested parties, and we will provide a further update when possible.
Sese Project and Mmamabula West Project prospecting licences have been renewed until 31
December 2024 or beyond (30 March 2024 in the case of the Mmamabula West Prospecting Licence).
The Mmamantswe Coal Prospecting License has been allowed to lapse due to lower likelihood of
realising a commercial development.
The loss after tax for the consolidated entity amounted to $345,839 (2022: $4,693,202); the net assets
at 30 June 2023 were ($15,713) (2022: $154,659) and the cash inflows from operating activities were
$23,282 (2022: cash outflows $63,142).
Significant changes in the state of affairs
Nil
Matters subsequent to the end of the financial year
Following the end of the reporting period, the Company concluded an agreement with First Quantum
Minerals Ltd (FQM) to terminate the Sese JV and return 100% interest in the Sese Project to African
Energy Limited.
On completion of the transaction, the Sese Project held US$308,457 in working capital and 86,692,308
shares in ASX listed Alma Metals Ltd.
The Company has engaged with multiple parties who are interested in acquiring an interest in the
Sese Project and has commenced a sale process for the Mmamabula West Project. A project data
room has been established for each of these projects, and multiple expressions of interest have been
received.
Aside from this, no matters or circumstances have arisen since the end of the financial year which
have significantly affected or may significantly affect the operations, results, or state of affairs of the
consolidated entity in future financial years.
Likely developments and expected results of operations
Information on likely developments in the operations of the consolidated entity and the expected
results of operations have not been included in this report because the directors believe it would be
likely to result in unreasonable prejudice to the consolidated entity.
Environmental regulation
The consolidated entity is not subject to any significant environmental regulation.
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AFRICAN ENERGY LIMITED
Directors’ report
30 June 2023
Information on directors
Name:
Title:
Alasdair Cooke
Director
Qualifications:
BSc (Hons), MAIG
Experience and
expertise:
Mr Cooke has served as Chairman of the Board since its incorporation.
Mr Cooke is a geologist with over 30 years’ experience in the resource
exploration industry throughout Australia and internationally. For the
past 20 years Mr Cooke has been involved in mine development through
various private and public resource companies, prior to which he held
senior positions in BHP Billiton plc’s international new business and
reconnaissance group.
Mr Cooke is a founding director of Mitchell River Group, which over the
past seventeen years has established a number of successful ASX listed
resources companies, including Panoramic Resources, operating the
Savannah and Lanfranchi nickel projects in Australia; Albidon, operating
the Munali Nickel Mine in Zambia, Mirabela Nickel, operating the Santa
Rita nickel project in Brazil; Exco Resources, developing copper and gold
resources in Australia; and EVE Investments.
Special
responsibilities:
None
Name:
Title:
Charles (Frazer) Tabeart
Director
Qualifications:
PhD, BSc (Hons) ARSM, MAIG
Experience and
expertise:
Dr Tabeart is a graduate of the Royal School of Mines with a PhD and
Honours in Mining Geology. He has over 30 years’ experience in
international exploration and mining projects, including 16 years with
WMC Resources. Whilst at WMC, Dr Tabeart managed exploration
portfolios in the Philippines, Mongolia and Africa, gaining considerable
experience in a wide variety of commodities and operating with staff
from diverse cultural backgrounds, and developing a particular expertise
in energy minerals and porphyry copper mineralisation.
Dr Tabeart was appointed Managing Director of the Company in
November 2007 after serving two years as General Manager. Under his
stewardship the Company discovered and delineated the coal resource
at the Sese Coal & Power Project.
Special
responsibilities:
None
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AFRICAN ENERGY LIMITED
Directors’ report
30 June 2023
Name:
Title:
Valentine Chitalu
Director
Qualifications:
MPhil, BAcc, FCCA
Experience and
expertise:
Mr Chitalu, a Zambian national and resident, is a Chartered Certified
Accountant, Fellow of the Association of Chartered Certified Accountants
(UK) and holds a practicing certificate from the Zambia Institute of
Certified Accountants. He also holds a Masters Degree in Economics,
Finance and Politics of Development and a Bachelor’s Degree in
Accounting and Finance.
Mr Chitalu has been a Non-Executive Director of Alma Metals since listing
and has assisted the Company through his extensive business and
Government contacts in the region.
Special
responsibilities:
None
Name:
Title:
Daniel Davis
Director and Company Secretary
Qualifications:
CPA
Experience and
expertise:
Mr Daniel Davis is a qualified accountant who has fifteen years-
experience in senior accounting and corporate roles for resources
businesses in all stages from exploration to development, construction
and mining.
Special
responsibilities:
None
Meetings of directors
The number of meetings of the company's Board of Directors ('the Board') and of each Board
committee held during the year, and the number of meetings attended by each director were:
Alasdair Cooke
Charles (Frazer) Tabeart
Valentine Chitalu
Daniel Davis
Full board
Attended
1
1
1
1
Held
1
1
1
1
Shares issued on exercise of options
No shares were issued on exercise of options during the year.
Indemnity and insurance of officers
The company has indemnified the directors and executives of the company for costs incurred, in their
capacity as a director or executive, for which they may be held personally liable, except where there
is a lack of good faith.
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AFRICAN ENERGY LIMITED
Directors’ report
30 June 2023
During the year, the company paid a premium in respect of a contract to insure the directors and
executives of the company against a liability to the extent permitted by the Corporations Act 2001.
The contract of insurance prohibits disclosure of the nature of the liability and the amount of the
premium.
Indemnity and insurance of auditors
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify
the auditor of the company or any related entity against a liability incurred by the auditor.
During the year, the company has not paid a premium in respect of a contract to insure the auditor
of the company or any related entity.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the company, or to intervene in any proceedings to which the company is a
party for the purpose of taking responsibility on behalf of the company for all or part of those
proceedings.
Auditor’s independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations
Act 2001 is set out immediately after this directors' report.
Auditor
BDO Audit (WA) Pty Limited has been appointed the auditor in accordance with section 327A of the
Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
On behalf of the directors
_________________________
Charles Tabeart
Director
31 October 2023
Perth
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Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY JARRAD PRUE TO THE DIRECTORS OF AFRICAN ENERGY
LIMITED
As lead auditor of African Energy Limited for the year ended 30 June 2023, I declare that, to the best
of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of African Energy Limited and the entities it controlled during the period.
Jarrad Prue
Director
BDO Audit (WA) Pty Ltd
Perth
31 October 2023
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability
limited by a scheme approved under Professional Standards Legislation.
AFRICAN ENERGY LIMITED
Contents
30 June 2023
Contents
General information ……………………………………………………………………………………………………..................... 8
Statement of profit or loss and other comprehensive income ………………………………………..…………… 10
Statement of financial position ………………………………………………………………………………………………………. 11
Statement of changes in equity ……………………………………………………………………………………………………… 12
Statement of cash flows ………………………………………………………………………………………………………………… 13
Notes to the financial statements ………………………………………………………………………………………………….. 14
Directors' declaration ……………………………………………………………………………………………………………….……. 29
Independent auditor's report to the members of African Energy Limited ……………………………………… 30
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AFRICAN ENERGY LIMITED
General information
30 June 2023
The financial statements cover African Energy Limited as a consolidated entity consisting of African
Energy Limited and the entities it controlled at the end of, or during, the year. The financial
statements are presented in Australian dollars, which is African Energy Limited 's functional and
presentation currency.
African Energy Limited is an unlisted public company limited by shares, incorporated and domiciled
in Australia. Its registered office and principal place of business are:
Registered office:
Level 1,245 Churchill Avenue
Subiaco WA 6008
Principal place of business:
Level 1,245 Churchill Avenue
Subiaco WA 6008
A description of the nature of the consolidated entity's operations and its principal activities are
included in the directors' report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on
31 October 2023. The directors have the power to amend and reissue the financial statements.
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AFRICAN ENERGY LIMITED
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2023
Note
30-Jun-23
$
30-Jun-22
$
3
3
3
4
Personnel expenses
Professional & administration expense
Exploration & evaluation expensed
Impairment expense
Foreign currency gain / (loss)
Loss before income tax expense
Income tax expense
Loss after income tax expense for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or
loss
Foreign currency translation
Comprehensive loss attributable to the owners of African
Energy Limited
(256,623)
(42,947)
(45,169)
-
(1,100)
(345,839)
-
(345,839)
(7,000)
(114,772)
(30,000)
(4,540,305)
(1,125)
(4,693,202)
-
(4,693,202)
(1,333)
7,456
(347,172)
(4,685,746)
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AFRICAN ENERGY LIMITED
Statement of financial position
As at 30 June 2023
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Net assets
Equity
Share capital
Accumulated loss
Reserves
Total equity attributable to shareholders of the
Company
Note
30-Jun-23
$
30-Jun-22
$
5
6
7
8
9
267,530
859
268,389
268,389
284,102
284,102
284,102
(15,713)
244,248
8,163
252,411
252,411
97,752
97,752
97,752
154,659
4,840,405
(5,039,041)
182,923
4,840,405
(4,693,202)
7,456
(15,713)
154,659
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AFRICAN ENERGY LIMITED
Statement of changes in equity
For the year ended 30 June 2023
At incorporation date 24 May
2021
Loss for the period
Other Comprehensive loss
Effect of translation of foreign
operations to group
presentation currency
Total comprehensive loss for
the year
Transactions with owners in
their capacity as owners:
In specie distribution from Alma
Metals Limited
As at 30 June 2022
Loss for the year
Other Comprehensive loss
Effect of translation of foreign
operations to group
presentation currency
Total comprehensive loss for
the year
Transactions with owners in
their capacity as owners:
Share-based payments
As at 30 June 2023
Contributed
equity
Accumulated
losses
Foreign
Currency
Translation
Reserve
Share-
based
Payments
Reserve
100
-
-
(4,693,202)
-
-
-
-
-
7,456
(4,693,202)
7,456
4,840,305
4,840,405
-
-
-
-
(4,693,202)
(345,839)
-
7,456
-
-
(1,333)
(345,839)
(1,333)
-
-
-
-
-
-
-
-
-
Total
equity
100
(4,693,202)
7,456
(4,685,746)
4,840,305
154,659
(345,839)
(1,333)
(347,172)
-
4,840,405
-
(5,039,041)
-
6,123
176,800
176,800
176,800
(15,713)
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AFRICAN ENERGY LIMITED
Statement of cash flows
For the year ended 30 June 2023
Note
30-Jun-23
$
30-Jun-22
$
Cash flows from operating activities
Receipt of recharged costs
Payments to suppliers and employees
Payments for exploration and evaluation expenditure
Net cash inflow/(outflow) from operating activities
Cash flows from funding activities
Received on in-species distribution
Net cash inflow from funding activities
Cash and cash equivalents at the beginning of the year
Net increase/ (decrease) in cash and cash equivalents
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at the end of the year
16
5
113,978
(45,527)
(45,169)
23,282
-
-
244,248
23,282
-
267,530
-
(33,142)
(30,000)
(63,142)
307,319
307,319
-
244,177
71
244,248
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AFRICAN ENERGY LIMITED
Notes to the financial statements
30 June 2023
Note 1.
Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out
below. The comparative information included in the financial report includes the period from
incorporation on 24 May 2021 to 30 June 2022.
Going concern
The consolidated financial statements have been prepared on a going concern basis, which assumes that
the Group will be able to realise its assets and extinguish its liabilities in the ordinary course of business.
For the year ended 30 June 2023, the Group incurred a loss of $345,839 and had cash and cash
equivalents of $267,530 as at that date, with net cash inflows from operations of $23,282 for the year.
The ability of the Group to continue as a going concern is dependent on securing additional funding
through debt or equity to continue to fund its operations.
These conditions indicate a material uncertainty that may cast a significant doubt about the entity’s ability
to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge
its liabilities in the normal course of business. Management believes there are sufficient funds to meet
the entity’s working capital requirements as at the date of this report.
The financial statements have been prepared on the basis that the entity is a going concern, which
contemplates the continuity of normal business activity, realisation of assets and settlement of liabilities
in the normal course of business for the following reasons:
-
-
The Directors are of the opinion that the Group’s exploration and development assets will attract
further capital investment when required; and
The Directors expect the Group to be successful in securing additional fund through debt or
equity issues, when and if required.
Should the Company not be able to continue as a going concern, it may be required to realise its assets
and discharge its liabilities other than in the ordinary course of business, and at amounts that differ from
those stated in the financial statements and that the financial report does not include any adjustments
relating to the recoverability and classification of recorded asset amounts or liabilities that might be
necessary should the entity not continue as a going concern.
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the
current reporting year.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian
Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB')
and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements
also comply with International Financial Reporting Standards as issued by the International Accounting
Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where
applicable, the revaluation of financial assets and liabilities at fair value through profit or loss, financial
assets at fair value through other comprehensive income, investment properties, certain classes of
property, plant and equipment and derivative financial instruments.
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AFRICAN ENERGY LIMITED
Notes to the financial statements
30 June 2023
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process of applying the consolidated entity's
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 2.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the
consolidated entity only. Supplementary information about the parent entity is disclosed in note 13.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of African
Energy Limited ('company' or 'parent entity') as at 30 June 2023 and the results of all subsidiaries for the
financial year then ended. African Energy Limited and its subsidiaries together are referred to in these
financial statements as the 'consolidated entity' or the ‘group’.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity
controls an entity when the consolidated entity 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 to direct the
activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred
to the consolidated entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the
consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides
evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in
ownership interest, without the loss of control, is accounted for as an equity transaction, where the
difference between the consideration transferred and the book value of the share of the non-controlling
interest acquired is recognised directly in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement
of profit or loss and other comprehensive income, statement of financial position and statement of
changes in equity of the consolidated entity. Losses incurred by the consolidated entity are attributed to
the non-controlling interest in full, even if that results in a deficit balance.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including
goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation
differences recognised in equity. The consolidated entity recognises the fair value of the consideration
received and the fair value of any investment retained together with any gain or loss in profit or loss.
Foreign currency translation
The financial statements are presented in Australian dollars (“A$"), which is African Energy Limited's
functional and presentation currency. Functional currency of subsidiaries is US Dollar (“USD”).
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at financial year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange
rates at the reporting date. The revenues and expenses of foreign operations are translated into
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AFRICAN ENERGY LIMITED
Notes to the financial statements
30 June 2023
Australian dollars using the average exchange rates, which approximate the rates at the dates of the
transactions, for the year. All resulting foreign exchange differences are recognised in other
comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment
is disposed of.
Revenue recognition
The consolidated entity recognises revenue as follows:
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method
of calculating the amortised cost of a financial asset and allocating the interest income over the relevant
period using the effective interest rate, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period
necessary to match them with the costs that they are intended to compensate.
Income tax
The income tax expense or benefit for the y is the tax payable on that year's taxable income based on
the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and
liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for
prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to
be applied when the assets are recovered or liabilities are settled, based on those tax rates that are
enacted or substantively enacted, except for:
● When the deferred income tax asset or liability arises from the initial recognition of goodwill or an
asset or liability in a transaction that is not a business combination and that, at the time of the
transaction, affects neither the accounting nor taxable profits; or
● When the taxable temporary difference is associated with interests in subsidiaries, associates or
joint ventures, and the timing of the reversal can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it
is probable that future taxable amounts will be available to utilise those temporary differences and
losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting
date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future
taxable profits will be available for the carrying amount to be recovered. Previously unrecognised
deferred tax assets are recognised to the extent that it is probable that there are future taxable profits
available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset
current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities;
and they relate to the same taxable authority on either the same taxable entity or different taxable
entities which intend to settle simultaneously.
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AFRICAN ENERGY LIMITED
Notes to the financial statements
30 June 2023
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-
current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or
consumed in the consolidated entity's normal operating cycle; it is held primarily for the purpose of
trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or
cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months
after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's
normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12
months after the reporting period; or there is no unconditional right to defer the settlement of the liability
for at least 12 months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other
short-term, highly liquid investments with original maturities of three months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
For the statement of cash flows presentation purposes, cash and cash equivalents also includes bank
overdrafts, which are shown within borrowings in current liabilities on the statement of financial position.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost
using the effective interest method, less any allowance for expected credit losses. Trade receivables are
generally due for settlement within 30 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which
uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have
been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Associates
Associates are entities over which the consolidated entity has significant influence but not control or joint
control. Investments in associates are accounted for using the equity method. Under the equity method,
the share of the profits or losses of the associate is recognised in profit or loss and the share of the
movements in equity is recognised in other comprehensive income. Investments in associates are carried
in the statement of financial position at cost plus post-acquisition changes in the consolidated entity's
share of net assets of the associate. Goodwill relating to the associate is included in the carrying amount
of the investment and is neither amortised nor individually tested for impairment. Dividends received or
receivable from associates reduce the carrying amount of the investment.
When the consolidated entity's share of losses in an associate equals or exceeds its interest in the
associate, including any unsecured long-term receivables, the consolidated entity does not recognise
further losses, unless it has incurred obligations or made payments on behalf of the associate.
The consolidated entity discontinues the use of the equity method upon the loss of significant influence
over the associate and recognises any retained investment at its fair value. Any difference between the
associate's carrying amount, fair value of the retained investment and proceeds from disposal is
recognised in profit or loss.
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AFRICAN ENERGY LIMITED
Notes to the financial statements
30 June 2023
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured
at their fair value at the date of the acquisition. Intangible assets acquired separately are initially
recognised at cost. Indefinite life intangible assets are not amortised and are subsequently measured at
cost less any impairment. Finite life intangible assets are subsequently measured at cost less
amortisation and any impairment. The gains or losses recognised in profit or loss arising from the
derecognition of intangible assets are measured as the difference between net disposal proceeds and
the carrying amount of the intangible asset. The method and useful lives of finite life intangible assets
are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for
prospectively by changing the amortisation method or period.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation
and are tested annually for impairment, or more frequently if events or changes in circumstances
indicate that they might be impaired. Other non-financial assets are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The
value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax
discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not
have independent cash flows are grouped together to form a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to
the end of the financial year and which are unpaid. Due to their short-term nature they are measured at
amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days
of recognition.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs
are expensed in the period in which they are incurred.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave
expected to be settled wholly within 12 months of the reporting date are measured at the amounts
expected to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the
reporting date are measured at the present value of expected future payments to be made in respect of
services provided by employees up to the reporting date using the projected unit credit method.
Consideration is given to expected future wage and salary levels, experience of employee departures
and periods of service. Expected future payments are discounted using market yields at the reporting
date on corporate bonds with terms to maturity and currency that match, as closely as possible, the
estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they
are incurred.
18 | P a g e
AFRICAN ENERGY LIMITED
Notes to the financial statements
30 June 2023
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees
in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange
of services, where the amount of cash is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is
independently determined using either the Binomial or Black-Scholes option pricing model that takes
into account the exercise price, the term of the option, the impact of dilution, the share price at grant
date and expected price volatility of the underlying share, the expected dividend yield and the risk free
interest rate for the term of the option, together with non-vesting conditions that do not determine
whether the consolidated entity receives the services that entitle the employees to receive payment. No
account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in
equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant
date fair value of the award, the best estimate of the number of awards that are likely to vest and the
expired portion of the vesting period. The amount recognised in profit or loss for the year is the
cumulative amount calculated at each reporting date less amounts already recognised in previous
periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by
applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms
and conditions on which the award was granted. The cumulative charge to profit or loss until settlement
of the liability is calculated as follows:
●
●
during the vesting period, the liability at each reporting date is the fair value of the award at that
date multiplied by the expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of
the liability at the reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions
is the cash paid to settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject
to market conditions are considered to vest irrespective of whether or not that market condition has
been met, provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has
not been made. An additional expense is recognised, over the remaining vesting period, for any
modification that increases the total fair value of the share-based compensation benefit as at the date
of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to
satisfy the condition is treated as a cancellation. If the condition is not within the control of the
consolidated entity or employee and is not satisfied during the vesting period, any remaining expense
for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any
remaining expense is recognised immediately. If a new replacement award is substituted for the
cancelled award, the cancelled and new award is treated as if they were a modification.
19 | P a g e
AFRICAN ENERGY LIMITED
Notes to the financial statements
30 June 2023
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure
purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date; and assumes
that the transaction will take place either: in the principal market; or in the absence of a principal market,
in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset
or liability, assuming they act in their economic best interests. For non-financial assets, the fair value
measurement is based on its highest and best use. Valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value, are used, maximising the
use of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy
that reflects the significance of the inputs used in making the measurements. Classifications are reviewed
at each reporting date and transfers between levels are determined based on a reassessment of the
lowest level of input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal
expertise is either not available or when the valuation is deemed to be significant. External valuers are
selected based on market knowledge and reputation. Where there is a significant change in fair value of
an asset or liability from one period to another, an analysis is undertaken, which includes a verification
of the major inputs applied in the latest valuation and a comparison, where applicable, with external
sources of data.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the
company.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other
payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the tax authority, are presented as
operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable
to, the tax authority.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are
not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting
period ended 30 June 2023. The consolidated entity has not yet assessed the impact of these new or
amended Accounting Standards and Interpretations.
20 | P a g e
AFRICAN ENERGY LIMITED
Notes to the financial statements
30 June 2023
Note 2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually
evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and
expenses. Management bases its judgements, estimates and assumptions on historical experience and
on other various factors, including expectations of future events, management believes to be reasonable
under the circumstances. The resulting accounting judgements and estimates will seldom equal the
related actual results. The judgements, estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes)
within the next financial year are discussed below.
Share-based payments (Note 15)
The Group values options issued at fair value at the grant date using the binomial option pricing model
taking into account the exercise price, the term of the option, the impact of dilution, the share price at
grant date, the expected volatility of the underlying share, the expected dividend yield and risk-free
interest rate for the term of the option. Performance rights are valued at face value of the share on the
date of issue. At each reporting period management assess the probability of the vesting of options and
performance rights where applicable in accordance with AASB 2 – Share based payments (non-market
conditions). The probability is assessed to either be less likely or more likely (0% or 100%) and a vesting
expense is recorded accordingly.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The consolidated entity assesses impairment of non-financial assets other than goodwill and other
indefinite life intangible assets at each reporting date by evaluating conditions specific to the
consolidated entity and to the particular asset that may lead to impairment. If an impairment trigger
exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal
or value-in-use calculations, which incorporate a number of key estimates and assumptions.
Note 3.
Expenses
Administration services
Corporate costs
Other administration costs
Share-based payments
Recharges (1)
Employee expenses
Directors fees
Contractors’ fees
Share-based payments
Recharges (1)
Impairment expense
30-Jun-23
A$
30-Jun-22
A$
58,209
19,538
10,200
(45,000)
42,947
12,000
147,000
166,600
(68,977)
256,623
-
-
104,306
10,466
-
114,772
7,000
-
-
-
7,000
(4,540,305)
(4,540,305)
(1) During the year, the Company recovered corporate and employee expenses from African Energy
Holdings SRL.
21 | P a g e
AFRICAN ENERGY LIMITED
Notes to the financial statements
30 June 2023
Note 4.
Income tax expense
(a) The major components of income tax are:
Current income tax
Deferred income tax
(b) A reconciliation between tax expense and the product of
accounting loss before tax multiplied by the Company’s applicable
income tax rate is as follows:
Accounting loss before income tax
At the Company’s statutory income tax rate of 25% (2022: 27.5%)
Non-deductible expenses
Share based payments
Non-assessable amounts
Impact of reduction in future corporate income tax rate
DTA not brought to account as their realisation is not probable
Deferred tax liabilities @ 25% (2020: 27.5%) have not been
recognised in respect of:
Exploration & Evaluation Expenditure
Prepayments
Deferred tax assets have not been recognised in respect of:
Provisions and accruals
Business related costs
Carry forward revenue losses
Capital losses
Note 5. Cash and cash equivalents
A-1+
FNB Botswana (not rated)
Note 6.
Trade and other receivables
GST and VAT receivable
Other receivable
22 | P a g e
30-Jun-23
$
30-Jun-22
$
-
-
-
-
(345,839)
(86,460)
-
44,200
-
-
42,260
-
-
-
-
-
-
-
-
-
(4,693,202)
(1,290,631)
-
-
-
-
1,290,631
-
-
-
-
-
-
-
-
-
30-Jun-23
A$
265,169
2,361
267,530
30-Jun-22
A$
240,090
4,158
244,248
30-Jun-23
A$
30-Jun-22
A$
100
759
859
678
7,485
8,163
AFRICAN ENERGY LIMITED
Notes to the financial statements
30 June 2023
Note 7.
Trade and other payables
Trade creditors
Deferred payables1
30-Jun-23
A$
30-Jun-22
A$
13,351
270,751
284,102
5,002
92,750
97,752
1 Deferred payables include amounts owed to creditors that extended credit terms to defer payment
until such a time where African Energy Limited has sufficient working capital to settle the debt owing and
can continue to meet their debts as and when they fall due for operational requirements.
Note 8.
Share capital
Contributed equity
Balance on incorporation
Share Issue
Balance at 30 June 2022
Balance at 30 June 2023
Ordinary shares
30-Jun-23
A$
4,840,405
4,840,405
30-Jun-22
A$
4,840,405
4,840,405
Date
14/10/2021
Number of
shares
100
692,960,530
692,960,630
692,960,630
Issue
price
$
A$
$0.007
100
4,840,305
4,840,405
4,840,405
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the
company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary
shares have no par value and the company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and
upon a poll each share shall have one vote.
Capital risk management
The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a
going concern, so that it can provide returns for shareholders and benefits for other stakeholders and
to maintain an optimum capital structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position.
23 | P a g e
AFRICAN ENERGY LIMITED
Notes to the financial statements
30 June 2023
Note 9. Reserves
Foreign Currency Translation Reserve
Opening
Movement
Closing
Share-based Payments Reserve
Opening
Movement
Closing
Total Reserves
Foreign currency reserve
30-Jun-23
A$
30-Jun-22
A$
7,456
(1,333)
6,123
-
176,800
176,800
182,923
-
7,456
7,456
-
-
-
7,456
The reserve is used to recognise exchange differences arising from the translation of the financial
statements of foreign operations to Australian dollars. It is also used to recognise gains and losses on
hedges of the net investments in foreign operations.
Note 10. Financial instruments
Financial risk management objectives
The consolidated entity’s activities expose it primarily to market and liquidity financial risks. The
consolidated entity’s overall risk management program focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the financial performance of the
consolidated entity.
Risk management is carried out by the Board of Directors (‘the Board’). The Board identifies, evaluates
and hedges financial risks within the consolidated entity.
Market risk
Foreign currency risk
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed
to foreign currency risk through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and
financial liabilities denominated in a currency that is not the entity’s functional currency. The risk is
measured using sensitivity analysis and cash flow forecasting.
At 30 June 2023, with the foreign currency denominated cash balance of $2,361 (2022: $4,158) and no
outstanding trade creditors balance (2022: $875), both denominated in US Dollars (“US$”), the
consolidated entity was not exposed to a significant foreign currency risk.
Price risk
The consolidated entity is not exposed to any significant price risk.
Interest rate risk
The consolidated entity is not exposed to any significant interest rate risk.
Liquidity risk
Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets
(mainly cash and cash equivalents) to be able to pay debts as and when they become due and payable.
24 | P a g e
AFRICAN ENERGY LIMITED
Notes to the financial statements
30 June 2023
The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available
borrowing facilities by continuously monitoring actual and forecast cash flows and matching the maturity
profiles of financial assets and liabilities.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 11. Remuneration of auditors
BDO Audit (WA) Pty Ltd were paid $11,473 during the year (2022: $10,000).
Note 12. Contingencies and commitments
Contingent assets and liabilities
The consolidated entity had no contingent assets or liabilities at 30 June 2023 (2022: nil).
Commitments
The consolidated entity had no capital or other commitments at 30 June 2023 (2022: nil).
Note 13. Parent entity information
Current Assets
Non-Current Assets
Total Assets
Current Liabilities
Total Liabilities
Contributed equity
Accumulated losses
Reserves
Total Equity
Loss for the year
Other comprehensive income / (loss) for the year
Total comprehensive loss for the year
30-Jun-23
A$
266,027
2,362
268,389
30-Jun-22
A$
242,752
8,784
251,536
284,102
284,102
96,877
96,877
4,840,405
(5,032,918)
176,800
(15,713)
4,840,405
(4,685,746)
-
154,659
(352,673)
-
(352,673)
(4,685,746)
-
(4,685,746)
There were no commitments, contingent liabilities or contingent assets at the parent level at 30 June
2023 (2022: nil).
25 | P a g e
AFRICAN ENERGY LIMITED
Notes to the financial statements
30 June 2023
Note 14. Related parties
a) Group structure
The consolidated entity consists of African Energy Limited, being the parent company, and its
subsidiaries, as per the table below.
Name of entity
Botswana Energy Solutions Limited
Mmamantswe Coal (Pty) Ltd
African Energy Holdings SRL 2
Phokoje Power (Pty) Ltd
b) Subsidiaries
Country of
incorporation
British Virgin Is.
Botswana
Barbados
Botswana
Ownership
interest
30-Jun-23
100%
100%
100%
100%
Ownership
interest
30-Jun-22
100%
100%
100%
100%
During the previous financial year African Energy Limited (“parent entity”) acquired interests in its
subsidiaries via the in-specie distribution from Alma Metals Limited under a Restructure Agreement. In
the parent entity the value of the distributed net assets was recorded as an investment in subsidiaries
and increase in share capital.
Net assets transferred to the consolidated entity upon completion of the in-specie distribution were as
follows:
Cash
Sese investment1
Liabilities
Net assets
A$
307,319
4,533,410
(425)
4,840,304
1 Sese investment was fully impaired during the period ended 30 June 2022.
c) Key management personnel disclosure
Director fees
Consulting fees
Total short-term benefits
Share-based payments
Total KMP remuneration
30-Jun-23
A$
30-Jun-22
A$
12,000
135,000
147,000
136,000
283,000
7,000
78,750
85,750
-
85,750
No payments of short-term benefits were made to KMP. The outstanding balance of unpaid fees at 30
June 2023 is $154,000 (2022: $7,000).
During the year, the KMP were granted 40 million options over ordinary shares as follows
Charles Tabeart
Alasdair Cooke
Daniel Davis
Valentine Chitalu
15,000,000
15,000,000
9,000,000
1,000,000
40,000,000
Options are fully vested on grant date, have an exercise price of 1.5 cents per option and expire on 31
December 2025. Detailed terms of options are disclosed in note 15.
26 | P a g e
AFRICAN ENERGY LIMITED
Notes to the financial statements
30 June 2023
d) Other related party transactions
The terms and conditions of the transactions with directors and associates and their related entities were
no more favourable than those available, or which might reasonably be expected to be available, on
similar transactions to non-director related entities on an arm’s length basis.
Alma Metals Limited1
Geological consultancy
Unpaid at 30 June
Mitchell River Group2
Geological consultancy
Equity settled - late rent payment3
Unpaid at 30 June
30-Jun-23
A$
30-Jun-22
A$
21,215
1,780
5,582
10,200
673
10,198
198
248
-
149
1 Alma Metals Limited is a company related by directors Alasdair Cooke, Frazer Tabeart and Valentine
Chitalu.
2 Mitchell River Group is a company related by directors Alasdair Cooke and Frazer Tabeart.
3 The Company granted 3 million options to Mitchell River Group in lieu of a late rent payment; terms of
options are set out in note 15.
There were no other transactions with related parties during the year ended, or the outstanding balance
at 30 June 2023 (2022: nil).
Note 15. Share-based payments
During the year, the Company issued 52 million options over ordinary shares to KMP, employees and
suppliers. Terms of the options are set out in the table below:
Date of issue
Number of options
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Expiry date
Expected life of the option (years)
Option exercise price (cents per option)
Vesting hurdle
Vesting date
Share price at grant date (cents)
Fair value per option (cents per option)
Total value at grant date ($)
Vested during the year
Expensed during the year ($)1
KMP
18/01/2023
40,000,000
-
100.00%
3.15%
31/12/2025
2.95
1.5
Employees
18/01/2023
9,000,000
-
100.00%
3.15%
31/12/2025
2.95
1.5
Supplier
18/01/2023
3,000,000
-
100.00%
3.15%
31/12/2025
2.95
1.5
TOTAL
18/01/2023
52,000,000
-
100.00%
3.15%
31/12/2025
2.95
1.5
18/01/2023
0.7
18/01/2023
0.7
18/01/2023
0.7
18/01/2023
0.7
0.34
136,000
40,000,000
136,000
0.34
30,600
9,000,000
30,600
0.34
10,200
3,000,000
10,200
0.34
176,800
52,000,000
176,800
1 KMP and employee expense is included in Personnel expenses; supplier expense is included in
Professional & administration expense in the Statement of profit or loss and other comprehensive
income.
27 | P a g e
AFRICAN ENERGY LIMITED
Notes to the financial statements
30 June 2023
Note 16. Reconciliation of profit after income tax to net cash from operating activities
(Loss) for the year
Adjusted for:
Share-based payments
Impairment
Change in operating assets & liabilities
(Increase) / decrease in receivables
Increase / (decrease) in payables
Net cash from/(used in) operating activities
30-Jun-23
$
30-Jun-22
$
(345,839)
(4,693,202)
176,800
-
-
4,540,305
7,304
185,017
23,282
(8,063)
97,818
(63,142)
Note 17. Events after the financial year
Following the end of the reporting period, the Company concluded an agreement with First Quantum
Minerals Ltd (FQM) to terminate the Sese JV and return 100% interest in the Sese Project to African Energy
Limited.
On completion of the transaction, the Sese Project held US$308,457 in working capital and 86,692,308
shares in ASX listed Alma Metals Ltd.
The Company has engaged with multiple parties who are interested in acquiring an interest in the Sese
Project and has commenced a sale process for the Mmamabula West Project. A project data room has
been established for each of these projects, and multiple expressions of interest have been received.
No other matters or circumstances have arisen since the end of the financial year which have significantly
affected or may significantly affect the operations, results, or state of affairs of the consolidated entity in
future financial years.
28 | P a g e
AFRICAN ENERGY LIMITED
Independent auditor's report to the members of African Energy Limited
Directors’ declaration
In the directors' opinion:
● the attached financial statements and notes comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements;
● the attached financial statements and notes comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board as described in note 1 to the
financial statements;
● the attached financial statements and notes give a true and fair view of the consolidated entity's
financial position as at 30 June 2023 and of its performance for the year ended on that date;
● there are reasonable grounds to believe that the company and its subsidiaries will be able to pay its
debts as and when they become due and payable.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the
Corporations Act 2001.
On behalf of the directors
_________________________
Charles Tabeart
Director
31 October 2023
Perth
29 | P a g e
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of African Energy Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of African Energy Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2023, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of African Energy Limited, is in accordance with the
Corporations Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability
limited by a scheme approved under Professional Standards Legislation.
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group’s
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
Other information
The directors are responsible for the other information. The other information obtained at the date of
this auditor’s report is information included in the Director’s report, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information obtained prior to the date of this
auditor’s report, 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 the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group 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 to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is 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 the Australian Auditing Standards 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 this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_responsibilities/ar3.pdf
This description forms part of our auditor’s report.
BDO Audit (WA) Pty Ltd
Jarrad Prue
Director
Perth
31 October 2023