A period of significant
achievement for
AfriTin mining
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AFRITIN MINING • ANNUAL REPORT 2018 TABLE OF CONTENTS
OVERVIEW
Chairman’s Statement
Overview of AfriTin
STRATEGIC REVIEW
CEO Statement
UIS Overview
Mokopane Overview
Sustainability Principles
GOVERNANCE
Directors’ Report
Corporate Governance Report
Statement of Directors’ Responsibilities
Independent Auditor’s Report
FINANCIAL STATEMENTS
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Changes in Cash Flows
Notes to the Consolidated Financial Statements
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OVERVIEW
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AFRITIN MINING • ANNUAL REPORT 2018 CHAIRMAN’S STATEMENT
I am delighted to present AfriTin Mining Limited’s (“AfriTin”) first annual report as an
independent, quoted tin development company.
Since AfriTin’s IPO and gross £4.5 million raising in November 2017, we have progressed
our flagship Uis tin mine to the point where we are keenly anticipating first production of
tin concentrate from our upgraded pilot plant. We will then become the only pure play
producing tin company quoted on AIM. Through our successful IPO and the accessing
of global capital markets we have been able to achieve the successful implementation of
our stated objective of being in production within one year. This important achievement
allows the company to continue implementing the growth strategy of becoming a
primary producer of tin concentrate.
Looking back over the period, we formed AfriTin to take advantage of the current tin
deficit and to become the first AIM quoted conflict-free tin mining company and the tin
champion of Africa.
There is a widespread view in our markets that we may see a reduction in global tin
supply and, as a group, we believe that we will be able to take advantage of this global
deficit.
The global tin market has run at a consistent deficit over the preceding years, as a result
of increasing demand. This demand is driven particularly by the use of tin in consumer
electronics as a solder, where it is a key component in most semiconductor-based
industries due to its high durability and reliable connection of components. In addition
to its use in soldering, it is also used in the chemicals industry, glass manufacturing, tin
plating, and brass and bronze manufacturing.
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AFRITIN MINING • ANNUAL REPORT 2018 Uis could
potentially fall
into the top
ten tin mines
in the world
by amount of
contained tin
Our flagship asset, the Uis project, is located in Namibia
which is seen as one of the safest, conflict-free tin
jurisdictions in the world. The Uis mine itself represents
one of the last open pit, scalable tin deposits in a
market with a significant deficit. Based purely on the
historical resource and reserve estimates ignoring
exploration upside, Uis could potentially fall into the top
ten tin mines in the world by amount of contained tin.
On behalf of the Board I would like to thank all of our
shareholders for their continued support on our first
period results as an AIM quoted company. We as a
company look forward to providing further updates and
progression through the course of 2018.
GLEN PARSONS
CHAIRMAN
OVERVIEW OF AFRITIN
AfriTin Mining is a mining company with a portfolio of
near-term production tin assets in Namibia and South
Africa. The Company was established in 2017 and listed
on AIM in November 2017, to acquire the tin assets
of Bushveld Minerals Limited, an AIM quoted natural
resource company, and was formed to take advantage
of the deficit in primary tin production.
AfriTin is the first pure play tin company listed in
London and has a vision to create a portfolio of world
class, conflict-free, tin producing assets. The Company’s
flagship asset is the Uis brownfield tin mine in Namibia,
formerly the world’s largest hard-rock tin mine. It also
owns the Mokopane Tin Project in South Africa.
AfriTin is managed by an experienced board of
directors and management team with a current two-
fold strategy: fast track Uis brownfield tin mine in
Namibia to commercial production in 2018 ramping
up to 5,000 tonnes of concentrate, and consolidation
of other quality African tin assets. AfriTin strives to
capitalise on the solid supply/demand fundamentals
of tin by developing a critical mass of tin resource
inventory, achieving production in the near term and
further scaling production by consolidating tin assets in
Africa.
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AFRITIN MINING • ANNUAL REPORT 2018 AfriTin is the first pure play tin company
listed in London and has a vision to create
a portfolio of world class, conflict-free, tin
producing assets.
Located in Namibia, the flagship Uis Project was once the largest open cast tin mine of its kind in the
world, and the Directors believe it will consequently add significant value to the Group. It is considered
to be a conflict-free, stable and supportive mining jurisdiction and the Ministry of Mines in Namibia has
confirmed it is supportive of the Uis Tin Project and the AfriTin management team.
AfriTin’s commodity focus is tin, one of the best performing commodities globally. Current prices are
around US$20,000 per tonne and the global tin market is valued at US$8.23bn with robust long-term
fundamentals. In today’s economy, tin is of fundamental value and is used to manufacture modern day
electronics such as mobile phones. AfriTin has identified an opportunity in the market and discovered
that, as a commodity, tin is not well understood as demonstrated by the lack of listed tin companies in
recent years.
STRATEGIC REVIEW
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AFRITIN MINING • ANNUAL REPORT 2018 CEO’S STATEMENT
Introduction
Our first period results since listing on AIM come at an exciting time for AfriTin. Since
our IPO in November 2017, we have achieved a number of key strategic and operational
milestones. The review below provides some colour to the operational achievements
since our listing alongside details of what may lie ahead.
Review of business
AfriTin has embarked on a two-phased development approach for Uis. This period saw
a magnified focus on Phase 1 and the completion thereof. Work to date has involved
the completion of the geological mapping, 3D models and mine design plan for the V1/
V2 pits. For Phase 1, the Company has acquired large parts of the production plant and
equipment which have been adapted to suit our specifications for the construction of
the mine. The work completed in Phase 1 is intended to enhance operational efficiencies
in the production of tin concentrate. These results will allow AfriTin not only to translate
these Phase 1 results into a comprehensive long-term mine plan for Phase 2, (which has
the objective of achieving around 5,000 tonnes of tin concentrate per annum) but also
generating on-going cash flows.
As part of bringing our flagship Uis mine back into production, we purchased a cost
effective front-end crushing component for the processing circuit of the Phase 1 plant.
This equipment included a jaw crusher, three cone crushers, stacking and conveying
equipment, and the electrical switchgear. The procurement of this equipment was our
starting point and represented the entire comminution circuit for Phase 1. Once Phase 1
achieves steady state production in 2019, it is anticipated that production could reach up
to 780 tonnes of tin concentrate per annum.
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AFRITIN MINING • ANNUAL REPORT 2018 In our operational updates, we were pleased to announce the appointment of Crushplant & Utility
Spares CC, a Namibian based engineering firm. They specialise in the construction and installation
of crushing equipment to match the equipment to the required specifications and associated
installation at the mine site. We believe entirely in the fundamentals of Namibia as an investment
destination and we are committed to developing the Namibian economy with this appointment
being a key first step.
In March 2018, we provided the market with another operational update at Uis which included a
number of completed objectives. We have undertaken and finalised a detailed geological mapping
over the V1 and V2 pegmatite bodies at Uis. These were previously identified as priority targets
for ore to supply the new, intermediary plant, based upon a historical report produced for Iscor, by
SRK in 1985. This mapping programme confirmed the presence of mineralisation throughout the
unmined surface extensions along strike and at depth. The key takeaway for AfriTin is that these
results support the detailed work that was contained in the historical SRK report that produced a
70-year life of mine plan and we believe it can provide a foundation for the programme in bringing
Uis back into production.
Strategic approach and outlook
Looking forward to 2018 and beyond, our focus remains on commencing production of first tin
concentrate to the market in H2 2018. As already outlined, we have made a number of key steps in
the achievement of this objective. However there are many other initiatives that we will be looking
to complete in the short to mid-term.
We will continue the upgrading of the current pilot plant operation into a producer of 65 tonnes
per month of tin concentrate. The directors believe that the cash flows and test work conducted
CEO’S STATEMENT CONTINUED
over the course of this development will allow the Company to construct a significant
knowledge base to advance towards a bankable feasibility study. From there, we will
look to expand the plant production of up to 5,000 tons per annum of tin concentrate.
In addition to this, once initial production at the Uis pilot plant commences, the Board’s
intention is to gain a more detailed understanding of the Uis ore body through a detailed
exploration programme and thereafter map out a long-term mine plan.
Events after the reporting period
The Board believes Uis has the resources to be a long-life operation. However this initial
5-year staged approach should provide a platform for sustainable early cash flows and
de-risk the implementation of a larger scale mining and processing facility in the future.
We were delighted to have signed a Non-Binding Memorandum of Understanding with
MRI Trading AG, a world leader in trading metals and minerals. The relationship allows us
to explore a number of objectives for the Company and significantly supports our belief
that there is going to be an increasing demand for tin in the future, coupled with a global
decrease in supply.
Experience is imperative to deal with the complexities of the environment in which we
operate. With that in mind, we were pleased to welcome Terence Goodlace to our Board.
His experience across the African continent, initially with Gold Fields, followed by CEO
roles at both Metorex and Impala, will no doubt prove invaluable as we build our first
mine.
In May 2018, we concluded a successful, oversubscribed placing for £6 million, allowing
us to accelerate our existing workstreams leading up to the bankable feasibility study on
the larger, commercial plant. The support from existing shareholders has demonstrated
confidence in the team achieving their deliverables and furthermore the introduction of a
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new strategic investor bodes well for the ongoing development of the project.
AFRITIN MINING • ANNUAL REPORT 2018 Uis is on
track for
production
in H2 of
2018
A key advancement in ensuring production commences
in H2 2018 was the appointment of a Namibian civil
works contractor. After a comprehensive tender process,
we selected a local contractor who will be responsible
for completion of the plant civil works. Our decision to
appoint a Namibian contractor attests to our commitment
to utilising local skills wherever possible and in turn,
uplifting and developing the Uis community.
Conclusion
In conclusion, I would like to thank my fellow directors,
all our employees, shareholders, advisers and wider
stakeholders for their ongoing support and dedication to
AfriTin, and I look forward to providing further updates in
what I believe will be an exciting year ahead.
This report was approved by the Board on 12 July 2018.
ANTHONY VILJOEN
CEO
OVERVIEW OF PROJECTS
Uis Overview
Uis was discovered in 1911 and was developed by Iscor of South Africa as the largest hard-
rock tin mine in the world. Production started in the 1950s and ended in 1990 as a result of
depressed tin prices.
The Uis Tin Project consists of three project areas in the Erongo region of Namibia, all with
historical production. The subject of the project is a pegmatite hosted tin deposit, one of the
largest open castable deposits of its kind. The Project is located in the Erongo Region, north
western Namibia and is comprised of three separate mining licenses (ML129, ML133, ML134),
each of which has been historically exploited for tin on varying scales.
The project areas are fully permitted and offer near-term production with low stripping ratios
and has a non-JORC compliant resource of 73 million tonnes at 0.136% Sn with an additional
2.7 million tonnes at 0.015% Ta2O5.
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The Uis Tin Project is situated within a transition zone between a semi-arid climate and an arid climate
due to its geographic location in the escarpment between the Namib Desert and the Central Plateau.
Elevations range from 750m above sea level (Licence ML133) to between 800m and 1000m (Licences
ML129 and ML134). To the west, the Brandberg Mountain rises to over 2500m. Both the Uis Tin Project
as a whole, and in particular licence ML134 (incorporating the former Uis tin mine), have been the
focus of numerous investigations since the official discovery of the deposit in 1911. Licences ML129 and
ML133 have also been the subject of various studies and have been partially mined. In 2018 AfriTin
initially plans to fast track Uis to commercial production and then ramping up to 5,000 tonnes of tin
concentrate per year.
Namibia is a stable democracy with a strong, independent legal system and was ranked the 4th most
transparent country in Sub-Saharan Africa in the Corruption Perceptions Index 2016. The company
believes Namibia to be one of the most favourable investment destinations in Africa and that Namibia
promotes foreign investment. Mining in Namibia is long established, supported by good transport
infrastructure, and is the biggest contributor to Namibia’s economy in terms of revenue. The industry is
primarily regulated by the Minerals Act 33 of 1992 which was amended in 2008.
Non-JORC compliant
resource of 73 million
tonnes at 0.136% Sn with
an additional 2.7 million
tonnes at 0.015% Ta2O5
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OVERVIEW OF PROJECTS
Mokopane Overview
The Mokopane Tin Project is situated approximately
65 km west of Polokwane and 45 km north-
northwest of Mokopane in the Mokopane District,
Limpopo Province, South Africa.
It comprises six farms situated over the acid phase
rocks of the Bushveld Complex. The property is
approximately 13,422 ha in extent. The equivalent
of nearly 22,000 tonnes of tin metal have been
historically produced from four of the farms, from
high grade pipe-like mineralisation, and from lower
grade disseminated mineralisation occurring near the
upper parts of a granite sheet.
Targets have been identified on farms and
exploration has been conducted on two targets,
Groenfontein and Zaaiplaats with 18,447 tonnes
contained. A scoping study was based and the
results released in 2014 with base case RoM of 691
ktpa to produce ~700 tpa of 99.5% Sn purity metal
which yields positive economics with a significant
IRR of 34.6%.
The project presents low quartile operating costs at
US$14.276 /tonne of tin metal produced with spot
price – US$21,300/tonne as of 24 September 2014.
Greenhills possesses an interest of 74% in the project,
with the remaining 26% held by local Black Economic
Empowerment partners.
SUSTAINABILITY PRINCIPLES
Safety and health
At AfriTin, we believe it is our obligation to work in the most environmentally and
socially responsible way possible. Our goal is to not only adopt responsible mining
rhetorically, but to also put it into practice. We will take the necessary steps to ensure
that any employee, contractor or visitor to our sites, will return home unharmed each
day and are committed to the principle of zero harm. An employee’s health and safety
take first priority and we do not wish to compromise on this. We will continuously seek
to improve our health and safety standards.
Environment
We endeavour to systematically examine the environmental impact of any of our
operations and will adopt measures to mitigate this. The goal is to minimize the negative
impacts of the different processes related to the extraction of tin on the environment.
With a commitment to the principle of meeting the needs of the present, without
compromising future generations to meet their needs, we believe that we can operate
successfully, whilst minimizing the environmental footprint.
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Community
There exists a theme amongst employees, stakeholders and community members to work
in collaboration with one another and with transparency and accountability. Open dialogue
and engagement with community members at our sites is central to maintaining a successful
relationship and essential to ensuring long-term sustainability for all parties involved. We strive
Our goal is to not only adopt
responsible mining rhetorically,
but to also put it into practice.
to ensure that the social impact of all our operations is taken into account and duly addressed by
upholding fundamental human rights and respect cultures, customs and values in dealings with
employees and others that are involved with AfriTin. AfriTin will engage with and contribute to
local communities and ensure appropriate systems are in place to ensure ongoing interaction.
GOVERNANCE
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AFRITIN MINING • ANNUAL REPORT 2018 DIRECTORS’ REPORT
The directors of AfriTin Mining Limited (“AfriTin” or the
“Company”) hereby present their report together with the
consolidated financial statements for the period from
1 September 2017 to 28 February 2018.
PRINCIPAL ACTIVITIES, BUSINESS REVIEW AND FUTURE DEVELOPMENTS
The principal activity of the Group (AfriTin and its subsidiaries) is the exploration and
development of projects in both Namibia and South Africa. A review of the Group’s
progress and prospects is given in the CEO’s review on pages 12 to 15.
PRINCIPAL RISKS AND UNCERTAINTIES
The Group is subject to a variety of risks, specifically those relating to the mining and
exploration industry. Outlined below is a description of the principal risk factors that
the Board feel may affect performance. The risks detailed below are not exhaustive and
further risks and uncertainties may exist which are currently unidentified or considered
to be immaterial. The risks are not presented in any order of priority.
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AFRITIN MINING • ANNUAL REPORT 2018 Risk and Impact
Mitigation
Volatility of metal prices
factors that are outside of the control of
Tin prices are subject to high levels of
volatility and are impacted by numerous
the Group. A low Tin price may affect the
ability of the Group to fund future growth.
Development projects have no operating
history upon which to base estimates
of future cash operating costs. For
development projects, estimates of proven
and probable reserves and cash operating
costs are, to a large extent, based upon the
interpretation of geological data obtained
from drill holes and other sampling
techniques and feasibility studies which
derive estimates of cash operating costs
Development projects
based upon anticipated tonnage and
grades or ore to be mined and processed,
the configuration of the ore body, expected
recovery rates, comparable facility and
equipment operating costs, anticipated
climatic conditions and other factors.
As a result, it is possible that actual cash
operating costs and economic returns
may differ materially from those currently
estimated.
The Group has no properties producing
positive cash flow and its ultimate success
will depend on its ability to generate cash
flow from producing properties in the
future. Significant capital investment will be
Limited operating history
required to achieve commercial production
from the Group’s existing projects and from
successful exploration efforts. There is no
assurance that the Company will be able to
raise the required funds to continue these
activities.
The Board and management constantly
monitor the market in which the Group
operates. Long term financial planning is
undertaken on a regular basis.
Feasibility studies and construction are
done by experienced engineers. Third
party experts are used to audit and verify
all key assumptions. Using pilot plants to
understand metallurgy and processing
issues provides essential up-front
information for construction of full-scale
plants.
Post year end, the Group raised £6 million
in an over-subscribed equity raise. It
therefore has sufficient funding to bring
the Uis pilot plant into production.
DIRECTORS’ REPORT CONTINUED
Risk and Impact
Mitigation
The business of exploration for minerals
involves a high degree of risk. Few
properties that are explored are ultimately
developed into producing mines.
The operations of the Group may be
disrupted by a variety of risks and
hazards which are beyond the control
Exploration and mining risks
of the Company, including geological,
geotechnical and seismic factors,
environmental hazards, industrial
accidents, occupational and health hazards,
technical failures, labour disputes, unusual
or unexpected rock formations, explosions,
flooding and extended interruptions due to
inclement or hazardous weather conditions
and other acts of God.
The successful extraction of tin will require
The Board and management constantly
monitor the market in which the Group
operates. Long term financial planning is
undertaken on a regular basis.
very significant capital investment. The
The Group has sufficient funds for its near-
Group’s ability to raise further funds will
term goal of bringing the Uis pilot plant
Financing
depend on the success of existing and
into production.
acquired operations. Market conditions
may not be conducive to a financing. The
The Group has a supportive shareholder
Group may not be successful in procuring
base.
the requisite funds.
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AFRITIN MINING • ANNUAL REPORT 2018 RESULTS AND DIVIDEND
The Group’s results show a loss for the period attributable to the equity holders of the Company of
£1,533,834. The directors will not be recommending a dividend.
SHARE CAPITAL AND FUNDING
Full details of the authorised and issued share capital, together with details of the movements in the
Company’s issued share capital during the period, are shown in Note 16. The Company has one class of
ordinary shares which carry no right to fixed income. Each share carries the right to one vote at general
meetings of the Company.
DIRECTORS
The Directors who served the Company since incorporation are as follows:
• Kate Bredin (appointed 1 September 2017, resigned 23 October 2017) - Interim Director
• Anthony Viljoen (appointed 23 October 2017) - Chief Executive Officer
• Glen Parsons (appointed 23 October 2017) - Chairman/Independent Non-Executive Director
• Laurence Robb (appointed 23 October 2017) - Independent Non-Executive Director
• Roger Williams (appointed 23 October 2017) - Independent Non-Executive Director
• Terence Goodlace (appointed 23 May 2018) - Independent Non-Executive Director
DIRECTORS’ INTERESTS
The Directors’ beneficial interests in the shares of the Company at 28 February 2018 were:
Ordinary shares of no par value 28 February 2018
Anthony Viljoen
2 557 131
Glen Parsons
1 025 641
Roger Williams
641 025
Laurence Robb
320 512
None of the Directors have been awarded share options of the Company at 28 February 2018.
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DIRECTORS’ REPORT CONTINUED
DIRECTORS’ INDEMNITY INSURANCE
The Group has maintained insurance throughout the period for its Directors and officers
against the consequences of actions brought against them in relation to their duties for
the Group.
EMPLOYEE INVOLVEMENT POLICIES
The Group places considerable value on the awareness and involvement of its employees
in the Group’s exploration and development activities. Within bounds of commercial
confidentiality, information is disseminated to all levels of staff about matters that affect
the progress of the Group, and that are of interest and concern to them as employees.
CREDITORS’ PAYMENT POLICY AND PRACTICE
The Group’s policy is to ensure that, in the absence of dispute, all suppliers are dealt with
in accordance with its standard payment policy to abide by the terms of payment agreed
with suppliers when agreeing the terms of each transaction. Suppliers are made aware of
the terms of payment. The number of days of average daily purchases included in trade
payable at 28 February 2018 was 30 days.
RELATED PARTY TRANSACTIONS
Details of related party transactions are detailed in Note 21 of the consolidated financial
statements.
POST BALANCE SHEET DATE EVENTS
Post balance sheet date events are detailed in Note 20 of the consolidated financial
statements.
R A WILLIAMS
NON-EXECUTIVE DIRECTOR • 12 JULY 2018
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITOR
The Directors who were in office on 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.
AUDITOR
The Company’s auditor, RSM UK Audit LLP, was appointed in the period and the Directors will place a
resolution before the Annual General Meeting to reappoint RSM UK Audit LLP as the Company’s auditor
for the ensuing year.
ELECTRONIC COMMUNICATIONS
The maintenance and integrity of the Group’s website is the responsibility of the Directors; the work
carried out by the auditor does not involve consideration of these matters and accordingly the auditor
accepts no responsibility for any changes that may have occurred to the financial statements since they
were initially presented on the website.
The Group’s website is maintained in compliance with AIM Rule 26.
By order of the Board
R A WILLIAMS
NON-EXECUTIVE DIRECTOR • 12 JULY 2018
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CORPORATE GOVERNANCE REPORT
INTRODUCTION
The Company is quoted on AIM, and in accordance with the AIM Rules for Companies
(the “AIM Rules”), has chosen to adopt the Quoted Companies Alliance (QCA) Corporate
Governance Code 2018 for Smaller Companies. In accordance with the AIM Rules this will
be adopted and implemented from September 2018, and a summary will be available on
the Company’s website from that date.
The Company provides a summary of its current corporate governance policies, as set
out below:
THE BOARD OF DIRECTORS
The Board’s role is to provide entrepreneurial leadership of the Group within a framework
of prudent and effective controls which enables risk to be assessed and managed. The
Board sets the corporate and operational strategy and holds regular Board meetings
to review planning, operational and financial performance. The Board is responsible
for setting the Group’s values and standards and ensuring that its obligations to
shareholders and others are met.
The Board comprises five members being the independent Non-Executive Chairman,
three independent Non-Executive Directors, and one Executive Director. There is a
clear division of responsibilities at the head of the Group through the separation of the
positions of Chairman and the Chief Executive Officer.
The Board currently comprises:
Executive Directors
• Anthony Viljoen (appointed 23 October 2017) Chief Executive Officer
Non-Executive Directors
• Glen Parsons (appointed 23 October 2017) Chairman and Independent Non-Executive Director
• Roger Williams (appointed 23 October 2017) Independent Non-Executive Director
• Laurence Robb (appointed 23 October 2017) Independent Non-Executive Director
• Terence Goodlace (appointed 23 May 2018) Independent Non-Executive Director
Operational management in South Africa and Namibia is led by Anthony Viljoen supported by a Chief
Operating Officer, a Chief Financial Officer, geologists and mining engineers. Operational management
is also supported technically through various consultancy agreements that were in place during the
period under review.
The Board met formally 3 times during the review period and also met frequently on an informal basis.
THE AUDIT COMMITTEE
The Audit Committee meets at least twice a year and is composed exclusively of Non-Executive
Directors: Roger Williams (Chairman) and Glen Parsons. The Chief Financial Officer, Rob Sewell, attends
Audit Committee meetings by invitation. The committee is responsible for:
•
reviewing the annual financial statements and interim reports prior to approval, focusing
on changes in accounting policies and practices, major judgemental areas, significant audit
adjustments, going concern and compliance with accounting standards, stock exchange and legal
requirements;
CORPORATE GOVERNANCE REPORT CONTINUED
•
receiving and considering reports on internal financial controls, including reports
from the auditors, and reporting their findings to the Board;
•
considering the appointment of the auditors and their remuneration including
reviewing and monitoring their independence and objectivity;
• meeting with the auditors to discuss the scope of the audit, issues arising from their
work and any matters the auditors wish to raise; and
• developing and implementing policy on the engagement of the external auditor to
supply non-audit services.
The Audit Committee is provided with details of any proposed related party transactions
in order to consider and approve the terms and conditions of such transactions.
THE REMUNERATION COMMITTEE
The Remuneration Committee, comprises the Non-Executive Directors and is chaired
by Glen Parsons. The Committee is responsible for reviewing the performance of senior
management and for setting the scale and structure of their remuneration, determining
the payment of bonuses, considering the grant of options under any share option
scheme and, in particular, the price per share and the application of performance
standards which may apply to any such grant, paying due regard to the interests of
shareholders as a whole and the performance of the Group.
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INTERNAL CONTROLS
The Board acknowledges its responsibility for the Group’s systems of internal control and for reviewing
their effectiveness. These internal controls are designed to safeguard the assets of the Group and to
ensure the reliability of financial information for both internal use and external publication. Whilst they
are aware that no system can provide absolute assurance against material misstatement or loss, in light
of the increased activity and further development of the Group, continuing reviews of internal controls
will be undertaken to ensure that they are adequate and effective.
RISK MANAGEMENT
The Board considers risk assessment to be important in achieving its strategic objectives. Project
milestones and timelines are regularly reviewed.
The Board undertakes on-going risk assessment to identify and consider major internal and external
risks to the business model of the Group. Principal risks and uncertainties are detailed in the Directors’
report.
SHAREHOLDER RELATIONS
Management and the Chairman meet regularly with major shareholders to develop a balanced
understanding of the issues and concerns of shareholders. The Chairman ensures that the views of
shareholders are communicated to the Board as a whole.
The directors have established Audit and Remuneration Committees. Board appointments, succession
planning, Corporate Governance and sustainability issues are dealt with by the full Board of directors.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Directors’ Report and the financial
statements in accordance with applicable law and regulations.
The Companies (Guernsey) Law 2008 requires the Directors to prepare Group financial
statements for each financial year in accordance with generally accepted accounting
principles. The Directors are required by the AIM Rules of the London Stock Exchange to
prepare Group financial statements in accordance with International Financial Reporting
Standards (“IFRS”) as adopted by the European Union (“EU”).
The financial statements of the Group are required by law to give a true and fair view of the
state of the Group’s affairs at the end of the financial period and of the profit or loss of the
Group for that period and are required by IFRS as adopted in the EU to prepare fairly the
financial position and performance of the Group.
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In preparing the Group financial statements, the Directors are
required to:
i) Select suitable accounting policies and then apply them
consistently;
ii) Make judgements and accounting estimates that are
reasonable and prudent;
iii) State whether they have been prepared in accordance with
IFRS as adopted by the EU; and
iv) Prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s
transactions, disclose with reasonable accuracy at any time the
financial position of the Group, and enable them to ensure that
the financial statements comply with The Companies (Guernsey)
Law 2008. They are also responsible for safeguarding the assets
of the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Group’s website. Legislation in Guernsey governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
The Directors confirm they have discharged their responsibilities
as noted above.
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INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF AFRITIN MINING LIMITED
Opinion
We have audited the financial statements of AfriTin Mining Limited and its subsidiaries
(the ‘group’) for the period ended 28 February 2018 which comprise of the Consolidated
Statement of Comprehensive Income, Consolidated Statement of Financial Position,
Consolidated Statement of Changes in Equity, Consolidated Statement of Cash Flows and
notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards (IFRSs) as adopted by the European
Union.
In our opinion the financial statements:
• give a true and fair view of the state of the group’s affairs as at 28 February 2018 and
of the group’s loss for the period then ended;
• are in accordance with IFRSs as adopted by the European Union; and
• comply with the requirements of The Companies (Guernsey) Law, 2008.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK)
(ISAs (UK)) and applicable law. Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit of the financial statements
section of our report. We are independent of the group in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including
the FRC’s Ethical Standard as applied to SME 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.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK)
require us to report to you where:
•
the directors’ use of the going concern basis of accounting in the preparation of the financial
statements is not appropriate; or
•
the directors have not disclosed in the financial statements any identified material uncertainties
that may cast significant doubt about the group’s ability to continue to adopt the going concern
basis of accounting for a period of at least twelve months from the date when the financial
statements are authorised for issue.
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) that we identified. These matters
included 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.
Acquisition of Greenhills Resources Limited (“Greenhills”) and Dawnmin Africa Investments Pty
Limited (“Dawnmin”)
As disclosed on Note 10 to the Annual Report and discussed in the critical accounting estimates
and judgements, during the period, the group acquired both Greenhills and Dawnmin, which hold
tin licenses in both South Africa and Namibia respectively. Management’s judgement is that neither
entities met the definition of the business and as such these transactions are outside the scope of
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INDEPENDENT AUDITOR’S REPORT
CONTINUED
TO THE MEMBERS OF AFRITIN MINING LIMITED
IFRS 3 Business Combinations. Management therefore accounted for both acquisitions as
asset purchases.
Our response:
• We reviewed management’s consideration that Greenhills and Dawnmin did not meet
the definition of a business and the transactions were outside the scope of IFRS 3;
and
•
audited the costs of the asset acquisitions.
Our application of materiality
When establishing our overall audit strategy, we set certain thresholds which help us
to determine the nature, timing and extent of our audit procedures and to evaluate the
effects of misstatements, both individually and on the financial statements as a whole.
During planning we determined a magnitude of uncorrected misstatements that we
judge would be material for the financial statements as a whole (FSM). During planning
FSM was calculated as £89,000, this has subsequently been updated as £120,000 during
the course of our audit due to the increase in gross assets. We agreed with the Audit
Committee that we would report to them all unadjusted differences in excess of £5,000
as well as differences below those thresholds that, in our view, warranted reporting on
qualitative grounds.
An overview of the scope of our audit
The audit was scoped to ensure that we obtained sufficient and appropriate audit
evidence in respect of:
•
the significant business operations of the group;
• other operations which, irrespective of size, are perceived as carrying a significant
level of audit risk whether through susceptibility to fraud, or for other reasons;
•
the appropriateness of the going concern assumption used in the preparation of the
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financial statements.
The audit was scoped to support our audit opinion on group financial statements of AfriTin Mining
Limited and was based on group materiality and an assessment of risk at group level.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report, other than the financial statements and our auditor’s report
thereon. Our opinion on the financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material misstatements, we are
required to determine whether there is a material misstatement in the financial statements or a material
misstatement of the other information. 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.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where The Companies (Guernsey) Law
2008 requires us to report to you if, in our opinion:
• proper accounting records have not been kept by the parent company; or
•
the financial statements are not in agreement with the accounting records; or
• we have failed to obtain all the information and explanations which, to the best of our knowledge
and belief, are necessary for the purposes of our audit.
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INDEPENDENT AUDITOR’S REPORT
CONTINUED
TO THE MEMBERS OF AFRITIN MINING LIMITED
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on
pages 34 and 35, 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 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.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council’s website at: http://www.frc.org.uk/auditors
responsibilities. This description, forms part of our auditor’s
report.
Use of our report
This report is made solely to the company’s members, as
a body, in accordance with section 262 of The Companies
(Guernsey) Law 2008. 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.
RSM UK AUDIT LLP, Auditor
Chartered Accountants
25 Farringdon Street
London, EC4A 4AB
12 July 2018
FINANCIAL STATEMENTS
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AFRITIN MINING • ANNUAL REPORT 2018 CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
For the period ended 28 February 2018
Continuing operations
Administrative expenses
Operating loss
Other income
Finance income
Loss before tax
Income tax expense
Loss for the period
Other comprehensive income
Total comprehensive income for the period
Attributable to:
Owners of the parent
Non-controlling interests
Loss per ordinary share
Period ended
Notes
28 February 2018
£
5
7
8
(1 551 662)
(1 551 662)
17 826
2
(1 533 834)
-
(1 533 834)
-
(1 533 834)
(1 533 464)
(370)
(1 533 834)
Basic and diluted loss per share (in pence)
9
(0.83)
The notes on pages 49 to 82 form part of these financial statements.
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CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
As at 28 February 2018 • Company number: 63974
Assets
Non-current assets
Intangible assets: exploration and evaluation
Property, plant and equipment
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity and liabilities
Current liabilities
Trade and other payables
Total current liabilities
Net assets
Equity
Share capital
Accumulated deficit
Warrant reserve
Equity attributable to the owners of the parent
Non-controlling interests
Total equity
Period ended
Notes
28 February 2018
£
11
12
13
14
15
16/23
23
17/23
6 300 864
538 369
6 839 233
121 687
2 904 767
3 026 454
9 865 687
(516 107)
(516 107)
9 349 580
10 853 631
(1 533 464)
29 783
9 349 950
(370)
9 349 580
The notes on pages 49 to 82 form part of these financial statements.
The financial statements were authorised and approved for issue by the Board of directors and authorised for
issue on 12 July 2018.
RA WILLIAMS
Director • 12 JULY 2018
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
For the period ended 28 February 2018
Attributable to the owners
Share Capital
Accumulated Deficit
Warrant Reserve
Total
Total equity
Non-controlling
interests
Total equity at 1 September 2017
Loss for the period
Transactions with owners:
Warrants granted in period
Issue of shares
Share issue costs
£
-
-
(29 783)
11 172 559
(289 145)
£
-
(1 533 464)
-
-
-
(1 533 464)
(370)
(1 533 834)
£
-
-
-
-
29 783
£
-
-
11 172 559
(289 145)
£
-
-
-
-
£
-
-
11 172 559
(289 145)
Total equity at 28 February 2018
10 853 631
(1 533 464)
29 783
9 349 950
(370)
9 349 580
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Share Capital
Accumulated Deficit
Warrant Reserve
Total
Non-controlling
interests
Total equity
of the parent company
Total equity at 1 September 2017
Loss for the period
Transactions with owners:
Warrants granted in period
Issue of shares
Share issue costs
£
-
-
(29 783)
11 172 559
(289 145)
(1 533 464)
£
-
-
-
-
£
-
-
£
-
£
-
£
-
(1 533 464)
(370)
(1 533 834)
29 783
-
-
-
11 172 559
(289 145)
-
-
-
-
11 172 559
(289 145)
Total equity at 28 February 2018
10 853 631
(1 533 464)
29 783
9 349 950
(370)
9 349 580
CONSOLIDATED STATEMENT OF
CASH FLOWS
For the period ended 28 February 2018
Cash flows from operating activities
Loss before taxation
Adjustments for:
Depreciation property, plant and equipment
Share-based payments
Equity-settled transactions
Finance income
Changes in working capital:
(Increase) in receivables
Increase in payables
Net cash used in operating activities
Cash flows from investing activities
Finance income
Purchase of exploration and evaluation assets
Cash costs relating to Dawnmin acquisition
Cash element of Greenhills and Dawnmin acquisitions
Purchase of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Net proceeds from issue of shares
Net cash generated from financing activities
Notes
28 February 2018
£
12
7
11
12
(1 533 834)
378
552 520
48 611
(2)
(98 815)
364 078
(667 064)
2
(177 747)
(6 235)
60 799
(515 843)
(639 024)
4 210 855
4 210 855
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
2 904 767
-
Cash and cash equivalents at the end of the period
14
2 904 767
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the period ended 28 February 2018
1. Corporate information and principal activities
AfriTin Mining Limited (“AfriTin”) was incorporated and domiciled in Guernsey on 1
September 2017 and admitted to the AIM market in London on 9 November 2017. The
Company’s registered office is 18 -20 Le Pollet, St. Peter Port, Guernsey, GY1 1WH and
operates from Illovo Edge Office Park, 2nd Floor, Building 3, Illovo Edge Office Park, Corner
Harries and Fricker Road, Illovo, Johannesburg, 2116, South Africa.
The AfriTin Group comprises AfriTin Mining Limited and its subsidiaries as noted below.
The wholly-owned Guernsey subsidiary, Greenhills Resources Limited (GRL) was acquired
by AfriTin by way of a Demerger Agreement with Bushveld Minerals Limited effective 8
November 2017.
GRL is an investment holding company that holds investments in resource-based tin
exploration companies in South Africa and Namibia. The South African subsidiaries are
Mokopane Tin Company Pty Limited “Mokopane” and Pamish Investments 71 Pty Limited
“Pamish 71”, in which GRL holds 100% equity interest.
Mokopane owns a 74% equity interest in Renetype Pty Limited “Renetype” and a 50% equity
interest in Jaxson 641 Pty Limited “Jaxson”. The minority shareholders in Renetype are
African Women Enterprises Investments Pty Limited and Cannosia Trading 62 CC who own
10% and 16% respectively.
The minority shareholder in Jaxson is Lerama Resources Pty Limited who owns a 50% interest
in Jaxson. Pamish 71 owns a 74% interest in Zaaiplaats Mining Pty Limited “Zaaiplaats”. The
minority shareholder in Zaaiplaats is Tamiforce Pty Limited who owns 26%.
On 9 November 2017, GRL acquired the remaining 50.5% equity in Namibian subsidiary,
Dawnmin Africa Investments Pty Limited “Dawnmin”. Dawnmin owns an 85% equity
interest in Guinea Fowl Investments Twenty Seven Pty Limited “Guinea Fowl”. The minority
shareholder in Guinea Fowl is The Small Miners of Uis who own 15%.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the period ended 28 February 2018
As at 28 February 2018, the AfriTin Group comprised:
Company
Equity holding
Country of
and voting rights
incorporation
AfriTin Mining Limited
N/A
Guernsey
Nature of Activities
Ultimate Holding
Company
Greenhills Resources Limited (1)
100%
Guernsey
Holding Company
AfriTin Mining Pty Limited (1)
100%
South Africa
Group support services
Dawnmin Africa Investments Pty
Limited (2)
Guinea Fowl Investments Twenty Seven
Pty Limited (3)
Mokopane Tin Company Pty Limited
(2)
100%
Namibia
Tin Exploration
85%
Namibia
Tin Exploration
100%
South Africa
Holding Company
Renetype Pty Limited (4)
74%
South Africa
Tin Exploration
Jaxson 641 Pty Limited (4)
50%
South Africa
Tin Exploration
Pamish Investments 71 Pty Limited (2)
100%
South Africa
Holding Company
Zaaiplaats Mining Pty Limited (5)
74%
South Africa
Property Owning
1. Held directly by AfriTin Mining Limited
2. Held by Greenhills Resources Limited
3. Held by Dawnmin Africa Investments Pty Limited
4. Held by Mokopane Tin Company Pty Limited
5. Held by Pamish Investments 71 Pty Limited
These financial statements are presented in Pound Sterling (£) because that is the currency
the Group has raised funding on the AIM market in the United Kingdom. Furthermore,
Pound Sterling (£) is the functional currency of the ultimate holding company, AfriTin Mining
Limited.
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2. Significant accounting policies
Basis of accounting
These financial statements have been prepared in accordance with International Financial
Reporting Standards, International Accounting Standards and Interpretations (collectively
“IFRS”) issued by the International Accounting Standards Board (“IASB”) as adopted by the
European Union (“adopted IFRS”). This is the first period of IFRS reporting.
The consolidated financial statements have been prepared under the historical cost
convention. The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to exercise
judgement in the process of applying the Group’s accounting policies. The areas involving a
higher degree of judgement or complexity and areas where assumptions and estimates are
significant to the consolidated financial statements are discussed in further in this note. The
principal accounting policies are set out below.
Going Concern
These financial statements have been prepared on a going concern basis. In arriving at this
position the Directors have had regard to the fact that the AfriTin Group has sufficient cash
and other assets to fund administrative and other committed expenditure for a period of
not less than 12 months from the date of this report. Furthermore, the Group’s financial risk
management objectives and policies are detailed in Note 18 and particulars of a gross placing
of £6m that was done subsequent to the end of the period are detailed in Note 20.
Basis of consolidation
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control.
The Group controls an entity when the Group is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those returns through its
power over the entity. Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are deconsolidated from the date that control ceases.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the period ended 28 February 2018
The Group applies the acquisition method to account for business combinations. The
consideration transferred for the acquisition of a subsidiary is the fair values of the
assets transferred, the liabilities incurred to the former owners of the acquiree and the
equity interests issued by the Group. The consideration transferred includes the fair
value of any asset or liability resulting from a contingent consideration arrangement.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the acquisition date. The Group
recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition
basis, either at fair value or at the non-controlling interest’s proportionate share of the
recognised amounts of acquiree’s identifiable net assets.
If the business combination is achieved in stages, the acquisition date carrying value
of the acquirer’s previously held equity interest in the acquiree is re-measured to fair
value at the acquisition date; any gains or losses arising from such re-measurement are
recognised in profit or loss.
Any contingent consideration to be transferred by the Group is recognised at fair
value at the acquisition date. Subsequent changes to the fair value of the contingent
consideration that is deemed to be an asset or liability are recognised in accordance with
IAS 39 either in profit or loss or as a change to other comprehensive income. Contingent
consideration that is classified as equity is not re-measured, and its subsequent
settlement is accounted for within equity.
Inter-company transactions, balances and unrealised gains/losses on transactions
between Group companies are eliminated. When necessary, amounts reported by
subsidiaries have been adjusted to conform to the Group’s accounting policies.
Disposal of subsidiaries
When the Group ceases to have control any retained interest in the entity is measured
to its fair value at the date when control is lost, with the change in carrying amount
recognised in profit or loss. The fair value is the initial carrying amount for the purposes
of subsequently accounting for the retained interest as an associate, joint venture or
financial asset. In addition, any amounts previously recognised in other comprehensive
income in respect of that entity are accounted for as if the Group had directly disposed of
the related assets or liabilities. This may mean that amounts previously recognised in other
comprehensive income are reclassified to profit or loss.
Non-controlling interests
Non-controlling interests in subsidiaries are identified separately from the Group’s equity
therein. Those interests of non-controlling shareholders that present ownership interests
entitling their holders to a proportionate share of the net assets upon liquidation are initially
measured at fair value. Subsequent to acquisition, the carrying amount of non-controlling
interests is the amount of those interests at initial recognition plus the non-controlling
interests’ share of subsequent changes in equity. Total comprehensive income is attributed
to non-controlling interests even if this results in the non-controlling interests having a deficit
balance.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided
to the chief operating decision-maker. The chief operating decision-maker, who is responsible
for allocating resources and assessing performance of the operating segments, has been
identified as the management steering committee that makes strategic decisions.
Foreign Currencies
Functional and presentational currency
The individual financial statements of each Group company are prepared in the currency of
the primary economic environment in which they operate (its functional currency). For the
purpose of the consolidated financial statements, the results and financial position of each
Group company are expressed in Pound Sterling, which is the functional currency of the
Company, and the presentation currency for the consolidated financial statements.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the period ended 28 February 2018
Transactions and balances
Foreign currency transactions are translated into the functional currency using the
exchange rates prevailing at the dates of the transactions or valuation where items are
re-measured. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at period-end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in the income statement,
except when deferred in other comprehensive income as qualifying cash flow hedges
and qualifying net investment hedges. Foreign exchange gains and losses that relate to
borrowings and cash and cash equivalents are presented in the income statement within
“finance income or costs”. All other foreign exchange gains and losses are presented in
the income statement.
Group Companies
The results and financial position of all the Group entities (none of which has the
currency of a hyper-inflationary economy) that have a financial currency different from
the presentation currency are translated into the presentation currency as follows:
a) Assets and liabilities for each balance sheet presented are translated at the closing
rate at the date of that balance sheet;
b) income and expenses for each income statement are translated at average exchange
rates (unless the average is not a reasonable approximation of the cumulative effect
of the rates prevailing on the transaction dates, in which case income and expenses
are translated at the rate on the dates of the transactions); and
c) all resulting exchange differences are recognised in other comprehensive income.
Other income
Other income for the Group is measured at fair value of the consideration received or
receivable. Although it is not a primary activity of the Group income on the sale of sand
is recognised when the risk and rewards of ownership have been transformed from the
seller to the buyer, the amount of income can be reliably measures and it is probable that
economic benefits will flow to the entity.
Finance income
Interest revenue is recognised when it is probable that economic benefits will flow to the
Group and the amount of revenue can be measured reliably. Interest revenue is accrued on a
time basis, by reference to the principal outstanding and the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash receipts through the expected
life of the financial asset to that asset’s net carrying amount on initial recognition.
Share-based payments
Share-based payments of the Group are shares granted to employees for £nil consideration
for which the share price was used to determine the fair value at grant date. That fair value is
charged as an expense in the consolidated statement of profit or loss, with a corresponding
increase in equity.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax charge is based on taxable profit for the period. The Group’s liability for current
tax is calculated by using tax rates that have been enacted or substantively enacted by the
reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the
carrying amount of assets and liabilities in the financial statements and the corresponding tax
bases used in the computation of taxable profit and is accounted for using the “balance sheet
liability” method.
Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax
assets are recognised to the extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised. Deferred tax is calculated at
the tax rates that are expected to apply to the period when the asset is realised or the liability
is settled based upon rates enacted and substantively enacted at the reporting date. Deferred
8
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A
U
N
N
A
•
G
N
I
N
I
M
N
I
T
I
R
F
A
6
5
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the period ended 28 February 2018
tax is charged or credited to profit or loss, except when it relates to items credited or
charged to other comprehensive income, in which case the deferred tax is also dealt with
in other comprehensive income.
Intangible exploration and evaluation assets
All costs associated with mineral exploration and evaluation including the costs of
acquiring prospecting licenses; mineral production licenses and annual license fees;
rights to explore; topographical, geological, geochemical and geophysical studies;
exploratory drilling; trenching, sampling and activities to evaluate the technical feasibility
and commercial viability of extracting a mineral resource; are capitalised as intangible
exploration and evaluation assets and subsequently measured at cost.
If an exploration project is successful, the related expenditures will be transferred at
cost to property, plant and equipment and amortised over the estimated life of the
commercial ore reserves on a unit of production basis (with this charge being taken
through profit or loss). Where a project does not lead to the discovery of commercially
viable quantities of mineral resources and is relinquished, abandoned, or is considered to
be of no further commercial value to the Group, the related costs are recognised in profit
or loss.
The recoverability of deferred exploration costs is dependent upon the discovery of
economically viable ore reserves, the ability of the Group to obtain necessary financing to
complete the development of ore reserves and future profitable production or proceeds
from the extraction or disposal thereof.
Impairment of exploration and evaluation assets
Whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable, the asset is reviewed for impairment. Assets are also
reviewed for impairment at each balance sheet date in accordance with IFRS 6. An asset’s
carrying value is written down to its estimated recoverable amount (being the higher of
the fair value less costs to sell and value in use) if that is less than the asset’s carrying value.
Impairment losses are recognised in profit or loss.
An impairment review is undertaken when indicators of impairment arise but typically when
one of the following circumstances applies:
• unexpected geological occurrences that render the resource uneconomic; or
•
•
•
•
title to the asset is compromised; or
variations in mineral prices that render the project uneconomic; or
variations in foreign currency rates; or
the Group determines that it no longer wishes to continue to evaluate or develop the
field.
Warrants
The warrants issued by the Company are recorded at fair value on initial recognition net of
transaction costs. The fair value of warrants granted is recognised as an expense or as share
issue costs, with a corresponding increase in equity. The fair value of the warrants granted
is measured using the Black Scholes valuation model, taking into account the terms and
conditions under which the options were granted. The amount recognised as an expense is
adjusted to reflect the actual number of warrants that vest.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation.
Land is not depreciated. Depreciation is provided on all plant and equipment at rates
calculated to write each asset down to its estimated residual value, using the straight-line
method over their estimated useful life of the asset as follows:
• The mining assets amortised over the life of the mine or 20 years whichever is the lesser.
Depreciation begins when the asset is available for use and continues until the asset is
derecognised, even if it is idle; and
• Computer equipment over three years.
8
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A
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•
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I
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F
A
8
5
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the period ended 28 February 2018
The estimated useful lives, residual values and depreciation methods are reviewed at
each period end and adjusted if necessary.
Gains or losses on disposal are included in profit or loss.
An asset’s carrying amount is written down immediately to its recoverable amount if the
asset’s carrying amount is greater than its estimated recoverable amount.
Impairment of property, plant and equipment
At each statement of financial position date, the Group reviews the carrying amounts of
its tangible assets to determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of the impairment loss (if any). Where
the asset does not generate cash flows that are independent from other assets, the
Group estimates the recoverable amount of the cash-generating unit to which the asset
belongs.
Where there has been a change in economic conditions that indicate a possible
impairment in a cash-generating unit, the recoverability of the net book value relating
to that mine is assessed by comparison with the estimated discounted future cash flows
based on management’s expectations of future commodity prices and future costs.
The recoverable amount is the higher of fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset for which the estimates of future cash
flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be
less than its carrying amount, the carrying amount of the asset (cash-generating unit)
is reduced to its recoverable amount. An impairment loss is recognised as an expense
immediately, unless the relevant asset is carried at a revalued amount, in which case the
impairment loss is treated as a revaluation decrease.
Where conditions giving rise to impairment subsequently reverse, the effect of the
impairment charge is also reversed as a credit to the income statement, net of any
depreciation that would have been charged since the impairment.
Provisions
General
Provisions are recognised when the group has a present obligation (legal or constructive)
as a result of a past event, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of
the amount of the obligation. Where the group expects some or all of a provision to be
reimbursed, for example under an insurance contract, the reimbursement is recognised as
a separate asset but only when the reimbursement is virtually certain. The expense relating
to any provision is presented in the statement or comprehensive income, provisions are
discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to
the liability. Where discounting is used the increase in the provision due to the passage of
time is recognised as a finance cost.
Environmental rehabilitation liability
Although not the case at balance sheet date, the group may be exposed to environmental
liabilities relating to its operations. Full provision for the cost of environmental and other
remedial work such as reclamation costs, close down and restoration costs and pollution
control is made based on the estimated cost. Annual increases in the provisions relating
to change in the net present value of the provision and inflationary increases are shown
separately in the statement of comprehensive income as a finance cost. Changes in estimates
of the provision are accounted for in the period the change in estimate occurs, and is charged
to either the statement of comprehensive income or the decommissioning asset in property,
plant and equipment, depending on the nature of the liability.
8
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I
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F
A
0
6
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the period ended 28 February 2018
Financial assets and liabilities
Financial assets and financial liabilities are recognised in the Group’s balance sheet when
the Group becomes a party to the contractual provisions of the instrument. Financial
instruments are classified into specified categories dependent upon the nature and
purpose of the instruments and are determined at the time of initial recognition. All
financial assets are recognised as loans and receivables or available for sale investments
and all financial liabilities are recognised as other financial liabilities.
Trade and other receivables
Trade and other receivables are initially recognised at the fair value of the consideration
receivable less any impairment. Impairment provisions are recognised when there is
objective evidence that the Group will be unable to collect all of the amounts due under
the terms of the receivable, the amount of such a provision being the difference between
the carrying amount and the present value of the future expected cash flows associated
with the impaired receivable.
Trade and other receivables are subsequently measured at amortised cost, less any
impairment.
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and deposits on a term of not greater
than three months.
Trade and other payables
Trade and other payables are initially recognised at fair value. They are subsequently
measured at amortised cost using the effective interest rate method.
Financial liabilities and equity
Financial liabilities (including loans and advances due to related parties) and equity
instruments are classified according to the substance of the contractual arrangements
entered into. An equity instrument is any contract that evidences a residual interest in
the assets of the Group after deducting all of its liabilities. When the terms of a financial
liability are negotiated with the creditor and settlement occurs through the issue of the
Company’s equity instruments, the equity instruments are measured at fair value and treated
as consideration for the extinguishment of the liability. Any difference between the carrying
amount of the liability and the fair value of the equity instruments issued is recognised in
profit or loss.
Critical accounting estimates and judgements
In the application of the Group’s accounting policies, the Directors are required to make
judgements, estimates and assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. The estimates and associated assumptions
are based on historical experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
Estimates and judgements are continually evaluated. Revisions to accounting estimates are
recognised in the period in which the estimates are revised if the revision affects only that
period, or in the period of revision and in future periods if the revision affects both current
and future periods.
Key judgements made during the period were:
Acquisition of Greenhills Resources Limited (“Greenhills”)
On 8 November 2017, the Group completed the acquisition of Greenhills which through its
subsidiaries has interests in tin exploration projects in South Africa. The total cost of the
acquisition was £3 328 813. Due to the lack of processes and outputs relating to Greenhills at
the time of purchase, the Board does not consider the entities acquired to meet the definition
of a business. As such, the Group has accounted for the acquisition of Greenhills as an asset
purchase. Further details are disclosed in Note 10.
Acquisition of Dawnmin Africa Investments Pty Limited (“Dawnmin”)
On 9 November 2017, the Group completed the acquisition of Dawnmin which through its
subsidiary has interests in tin exploration projects in Namibia. The total cost of the acquisition
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the period ended 28 February 2018
was £2 749 349. Due to the lack of processes and outputs relating to Dawnmin at
the time of purchase, the Board does not consider the entities acquired to meet
the definition of a business. As such, the Group has accounted for the acquisition of
Dawnmin as an asset purchase. Further details are disclosed in Note 10.
The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of the assets and liabilities within the next financial
year are addressed below.
Impairment of exploration & evaluation assets
Determining whether an exploration and evaluation asset is impaired requires an
assessment of whether there are any indicators of impairment, including by reference
to specific impairment indicators prescribed in IFRS 6 Exploration for and Evaluation of
Mineral Resources. If there is any indication of potential impairment, an impairment test
is required based on value in use of the asset. The valuation of intangible exploration
assets is dependent upon the discovery of economically recoverable deposits which, in
turn, is dependent on future tin prices, future capital expenditures and environmental,
regulatory restrictions and the successful renewal of licenses. The directors have
concluded that there are no indications of impairment in respect of the carrying
value of exploration and evaluation assets at 28 February 2018 based on planned
future development of the projects and current and forecast tin prices. In making this
assessment a tin price of USD20 000/tonne was used. Exploration and evaluation assets
are disclosed fully in Note 10.
8
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A
U
N
N
A
•
G
N
I
N
I
M
N
I
T
I
R
F
A
2
6
3. Adoption of new and revised standards
Accounting standards and interpretations not applied
Standards, amendments and interpretations to existing standards that are not yet effective
and have not been early adopted by the Group:
Amendments
to IFRS 2:
Classification
and
Measurement
of Share-based
Payment
Transactions*
IFRIC 22
Foreign
Currency
Transactions
and Advance
Consideration*
Amendments to provide requirements on the accounting for the effects of
vesting and non-vesting conditions on the measurement of cash-settled
1 January
share-based payments, share-based payment transactions with a net
2018
settlement feature for withholding tax obligations, and a modification
to the terms and conditions of a share-based payment that changes the
classification of the transaction from cash-settled to equity-settled.
1 January
2018
Provides requirements about which exchange rate to use in reporting foreign
currency transactions (such as revenue transactions) when payment is made
or received in advance.
Replacement to IAS 39 and is built on a logical, single classification and
measurement approach for financial assets which reflects both the business
IFRS 9 Financial
Instruments
1 January
model in which they are operated and their cash flow characteristics. Also
2018
addresses the so called ‘own credit’ issue and includes an improved hedge
accounting model to better link the economics of risk management with its
accounting treatment. It is a change from incurred to expected loss model.
IFRS 15
Revenue from
Contracts with
Customers
(IFRS 15
clarifications
not EU-
endorsed)
IFRS 16 Leases
Introduces requirements for companies to recognise revenue to depict
the transfer of goods or services to customers in amounts that reflect the
1 January
consideration to which the company expects to be entitled in exchange for
2018
those goods or services. Also results in enhanced disclosure about revenue
and provides or improves guidance for transactions that were not previously
addressed comprehensively and for multiple element arrangements.
The new standard recognises a leased asset and a lease liability for almost
1 January
all leases and requires them to be accounted for in a consistent manner. This
2019
introduces a single lessee accounting model and eliminates the previous
distinction between an operating lease and a finance lease.
IFRIC 23
Uncertainty
1 January
over Income Tax
2019
Treatments*
The interpretation addresses the determination of taxable profit (tax loss),
tax bases, unused tax losses, unused tax credits and tax rates, when there is
uncertainty over income tax treatments under IAS 12.
* not yet endorsed by the EU
The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no
material impact on the financial statements of the Group, subject to any future business combinations.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the period ended 28 February 2018
4. Segmental reporting
The reporting segments are identified by the management steering committee (who are
considered to be the chief operating decision-makers) by the way that the Group’s operations
are organised. As at 28 February 2018, the Group operated within two operating segments,
tin exploration activities in Namibia and South Africa.
Segment results
The following is an analysis of the Group’s results by reportable segment.
As at 28 February 2018
Operating segments loss
Segmental loss
South Africa
Namibia
£
£
Total
£
(33 828)
(33 828)
(36 574)
(36 574)
(70 402)
(70 402)
The reconciliation of segmental gross loss to the Group’s loss before tax is as follows:
Segmental loss
Unallocated costs
Finance income
Loss before tax
Period ended
28 February 2018
£
(70 402)
(1 463 434)
2
(1 533 834)
Unallocated costs mainly comprise one-off professional fees in relation to the
incorporation and listing of the Company as well as a one-off cost of issuing shares
to staff at £nil consideration.
8
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•
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N
I
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N
I
T
I
R
F
A
4
6
Other segmental information
South Africa
Namibia
£
£
Total
£
As at 28 February 2018
Intangible assets - exploration and evaluation
3 359 388
2 941 476
6 300 864
Other reportable segmental assets
Other reportable segmental liabilities
Unallocated net assets
109 903
(116 087)
-
538 209
(171 039)
-
648 112
(287 126)
2 687 730
Total consolidated net assets
3 353 204
3 308 646
9 349 580
Unallocated net assets are mainly comprised of cash and cash equivalents which are
managed at a corporate level.
5. Expenses by nature
The loss for the period has been arrived at after charging:
Staff costs (see Note 6)
Depreciation of property, plant & equipment
Professional fees
Travelling expenses
Other costs
Auditor’s remuneration
Currency translation differences
Period ended
28 February 2018
£
855 621
378
479 753
74 252
121 262
50 000
(29 604)
1 551 662
8
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2
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R
O
P
E
R
L
A
U
N
N
A
•
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N
I
N
I
M
N
I
T
I
R
F
A
6
6
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the period ended 28 February 2018
6. Staff costs
Key management personnel have been identified as the Board of Directors and Frans van
Daalen, Chief Operating Officer of the Group. Details of key management remuneration are
shown in Note 21.
The average number of staff during the period was 12 with an average total cost for the
period of £16 309. This calculation excludes the one-off cost of £552 520 of issuing ordinary
shares at £nil consideration to staff on admission.
Emoluments of £124 050 were paid in respect of the highest paid Director during the period.
No pension fund contributions were made on behalf of the Directors and other staff
members.
7. Finance income
Bank Interest
8. Income tax expense
Factors affecting tax for the period:
The tax assessed for the period at the Guernsey corporation tax charge rate of 0%,
as explained below:
Loss before taxation
Loss before taxation multiplied by the Guernsey corporation tax charge rate of 0%
Effects of:
Non-deductible expenses
Tax for the period
Period ended
28 February 2018
£
2
Period ended
28 February 2018
£
(1 533 834)
-
-
-
Accumulated losses in the subsidiary undertakings for which there is an unrecognised deferred tax asset are £322 353.
9. Loss per share
From continuing operations
The calculation of a basic loss per share of 0.83 pence, is calculated using the total loss
for the period attributable to the owners of the Company of £1 533 464 and the weighted
average number of shares in issue during the period of 184 033 537. There are no potentially
dilutive shares in issue.
223 555 101 ordinary shares with no par value were issued on 14 June 2018. At the same time,
the General Meeting approved the granting of 17 500 000 director share options and the
share authorities were increased by a further 22 500 000 shares to give the Directors the
authority to set up an employee option scheme.
10. Asset acquisitions
Acquisition of Greenhills Resources Limited (“Greenhills”)
On 8 November 2017, the Group completed the acquisition of Greenhills which through its
subsidiaries has interests in tin exploration projects in South Africa. The consideration of £3
328 313 was satisfied by the issue of 85 341 358 ordinary shares of the company which were
issued partially to Bushveld Minerals Limited, a company listed on the AIM market in London,
the previous owner of Greenhills and partially to Bushveld Minerals shareholders. Due to the
lack of processes and outputs relating to Greenhills at the time of purchase, the Board does
not consider the entities acquired to meet the definition of a business. As such, the Group has
accounted for the acquisition of Greenhills as an asset purchase.
The relative fair values of the identifiable assets and liabilities acquired and included in the
consolidation are:
Intangible assets - exploration and evaluation
Property, plant and equipment
Receivables
Cash
Other liabilities
£
3 349 614
15 366
21 537
17 512
(75 716)
3 328 313
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the period ended 28 February 2018
Acquisition of Dawnmin Africa Investments Pty Limited (“Dawnmin”)
On 9 November 2017, the Group completed the acquisition of Dawnmin which through its
subsidiary has interests in tin exploration projects in Namibia. The consideration of £2 749
349 was satisfied by the issue of 70 336 290 ordinary shares of the Company which were
issued to Naminco Limited, the previous owner of Dawnmin as well as stamp duty costs. Due
to the lack of processes and outputs relating to Dawnmin at the time of purchase, the Board
does not consider the entities acquired to meet the definition of a business. As such, the
Group has accounted for the acquisition of Dawnmin as an asset purchase.
The relative fair values of the identifiable assets and liabilities acquired and included in the
consolidation are:
Intangible assets - exploration and evaluation
Property, plant & equipment
Other tax and social security costs
Cash
Other liabilities
11. Intangible exploration and evaluation assets
Cost and carrying value
As at 1 September 2017
Additions for the period - acquisition of Greenhills Resources Limited
Additions for the period - acquisition of Dawnmin Africa Investments Pty Limited
Additions for the period - other expenditure
As at 28 February 2018
£
2 773 503
7 538
1 335
43 287
(76 314)
2 749 349
£
-
3 349 614
2 773 503
177 747
6 300 864
8
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A
•
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N
I
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M
N
I
T
I
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F
A
8
6
The directors have concluded that there are no indications of impairment in respect of the
carrying value of exploration and evaluation assets at 28 February 2018 based on planned
future development of the projects and current and forecast tin prices. In making this
assessment a tin price of USD20 000/tonne was used.
The Company’s subsidiary, Greenhills Resources Limited has the following:
i)
a 74% interest in Renetype Pty Limited (“Renetype”) which holds an interest in
Prospecting Right 2205.
ii) an 85% interest in Guinea Fowl Investments 27 Pty Limited (“Guinea Fowl”) which holds
an interest in mining rights, ML129, ML133 and ML134.
iii) a 50% interest in Jaxson 641 Pty Limited (“Jaxson”) which holds an interest in
Prospecting Right 428.
iv) a 74% interest in Zaaiplaats Mining Pty Limited (“Zaaiplaats”) which holds an interest in
Prospecting Right 183.
8
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R
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A
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N
I
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M
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I
T
I
R
F
A
0
7
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the period ended 28 February 2018
12. Property, plant and equipment
Land
Mining Assets
Computer
equipment
Cost
As at 1 September 2017
Additions for the period - acquisition of
Greenhills
Additions for the period - acquisition of
Dawnmin
Additions for the period - other
expenditure
£
-
15 366
-
-
£
-
-
7 538
£
-
-
-
Total
£
-
15 366
7 538
511 303
4 540
515 843
As at 28 February 2018
15 366
518 841
4 540
538 747
Accumulated depreciation
As at 1 September 2017
Charge for the period
As at 28 February 2018
Net Book Value
-
-
-
-
-
-
-
378
378
-
378
378
At 28 February 2018
15 366
518 841
4 162
538 369
As at 1 September 2017
-
-
-
-
13. Trade and other receivables
Trade receivables
Other receivables
Other tax and social security costs
Period ended
28 February 2018
£
35 065
13 828
72 794
121 687
The Directors consider that the carrying amount of trade and other receivables approximates
to their fair value due to their short-term nature. No allowance for doubtful receivables is
provided. The total trade and other receivables denominated in South African Rand amount to
£55 102 and denominated in Namibian Dollars amount to £57 335.
14. Cash and cash equivalents
Cash on hand and in bank
Period ended
28 February 2018
£
121 687
Cash and cash equivalents (which are presented as a single class of assets on the face of the
Statement of Financial Position) comprise cash at bank and other short-term highly liquid
investments with an original maturity of three months or less. The Directors consider that the
carrying amount of cash and cash equivalents approximates their fair value. The total cash and
cash equivalents denominated in South African Rand amount to £151 514, the total cash and
cash equivalents denominated in Namibia Dollars amount to £56 275 and the total cash and
cash equivalents denominated in US Dollars amount to £132.
15. Trade and other payables
Trade payables
Other payables
Accruals
Period ended
28 February 2018
£
308 699
145 962
61 446
516 107
Trade and other payables principally comprise amounts outstanding for trade purchases and
on-going costs. The average credit period taken for trade purchases is 30 days.
The Group has financial risk management policies in place to ensure that all payables are paid
within the pre-arranged credit terms. No interest has been charged by any suppliers as a result
of late payment of invoices during the period.
The Directors consider that the carrying amount of trade and other payables approximates to
their fair value. The total trade and other payables denominated in South African Rand amount
to £214 352 and £171 039 is denominated in Namibian Dollars.
8
1
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2
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O
P
E
R
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A
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A
•
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N
I
N
I
M
N
I
T
I
R
F
A
2
7
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the period ended 28 February 2018
16. Share capital
Number of shares issued
and fully paid
Share capital
Balance at 1 September 2017
“Greenhills” acquisition (Note 10)
“Dawnmin” acquisition (Note 10)
Initial public offering
Convertible loan notes converted into shares
Shares issued to staff and service provider for nil
consideration
Warrants exercised 16 January 2018
Warrants exercised 2 February 2018
Share issue costs – excluding warrants
Share issue costs – fair value of warrants (Note 17)
£
-
85 341 358
70 336 290
89 743 584
36 629 947
£
-
2 743 115
2 829 066
499 247
1 000 000
15 413 613
601 131
1 348
15 789
-
-
-
-
(289 145)
(29 783)
Balance at 28 February 2018
297 481 929
10 853 631
Authorised: 386 721 484 ordinary shares of no par value
Allotted, issued and fully paid: 297 481 929 ordinary shares of no par value
A placing and subscription for existing and new institutional and sophisticated private
investors raised gross proceeds of £3.5m with a further £1m raised from convertible loan
notes that converted on admission. Furthermore, 15 413 613 ordinary shares were issued
to directors, employees and a service provider for £nil consideration on admission. These
transactions were recorded at 3.9p per share, being the placing price of the shares.
In accordance with the terms of a Demerger Agreement between Bushveld Minerals
Limited and AfriTin Mining Limited (see Note 10), Bushveld warrant holders are entitled
to exercise the same amount of warrants in AfriTin for £nil consideration subject to
the demerger ratio of 0.08999. This agreement effectively gave rise to 43 120 AfriTin
warrants on admission. 1 348 and 15 789 of these warrants were exercised on 16 January
2018 and 2 February 2018 respectively.
17. Warrants
The following warrants were granted during the period ended 28 February 2018:
Date of grant
Number granted
Contractual life
Estimated fair value per warrant (£)
9 November 2017
1 871 939
3 years
0.01591
The estimated fair values were calculated by applying the Black Scholes pricing
model. The model inputs were:
Date of grant
Share price at grant date
Exercise price
Expected life
Expected volatility
Expected dividends
Risk-free interest rate
9 November 2017
3.9p
3.9p
3 years
60%
Nil
1.24%
In accordance with the terms of a Demerger Agreement between Bushveld Minerals
Limited and AfriTin Mining Limited (see Note 10), Bushveld warrant holders are entitled to
exercise the same amount of warrants in AfriTin for £nil consideration.
The warrants in issue during the period are as follows:
Outstanding at 1 September 2017
Granted during the period
Exercised during the period
Outstanding at 28 February 2018
Exercisable at 28 February 2018
-
1 871 939
(17 137)
1 854 802
1 854 802
The warrants outstanding at the period-end have an exercise price of £0.039, with a
weighted average remaining contractual life of 2.67 years. The Group has recognised a charge
amounting to £29 783 during the period which has been deducted from share capital as the
warrants were issued as consideration for professional fees in relation to the issue of shares.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the period ended 28 February 2018
18. Financial instruments
The Group is exposed to the risks that arise from its use of financial instruments. This note
describes the objectives, policies and processes of the Group for managing those risks and
the methods used to measure them. Further quantitative information in respect of these
risks is presented throughout these financial statements.
Capital Risk Management
The Group manages its capital to ensure that entities in the Group will be able to continue
as going concerns while maximizing returns to shareholders. In order to maintain or adjust
the capital structure, the Group may issue new shares or arrange debt financing.
The capital structure of the Group consists of cash and cash equivalents and equity,
comprising issued capital and retained losses.
The Group is not subject to any externally imposed capital requirements.
Significant accounting policies
Details of the significant accounting policies and methods adopted including the criteria
for recognition, the basis of measurement and the bases for recognition of income and
expenses for each class of financial asset, financial liability and equity instrument are
disclosed in note 2.
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risk
arises, are as follows:
• Trade and other receivables
• Cash and cash equivalents
• Trade and other payables
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Categories of financial instruments
The Group holds the following financial assets:
Measured as loans and receivables:
Trade and other receivables
Cash and cash equivalents
Total financial assets
The Group holds the following financial liabilities:
Measured at amortised cost:
Trade and other payables
Total financial liabilities
Period ended
28 February 2018
£
121 687
2 904 767
3 026 454
Period ended
28 February 2018
£
516 108
516 108
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group’s risk management
objectives and policies. The Board receives reports through which it reviews the
effectiveness of the processes put in place and the appropriateness of the objectives and
policies it set.
The overall objective of the Board is to set policies that seek to reduce risk as far as
possible without unduly affecting the Group’s competitiveness and flexibility. Further
details regarding these policies are set out below:
Credit risk
The Group’s principal financial assets are bank balances and trade and other receivables.
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FINANCIAL STATEMENTS
For the period ended 28 February 2018
Credit risk arises principally from the Group’s cash balances with further risk arising due to
its trade receivables. Credit risk is the risk that the counterparty fails to repay its obligation
to the Group in respect of amounts owed. The Group gives careful consideration to which
organisations it uses for its banking services in order to minimize credit risk. Other than
a limited amount of sales of sand, the Group has no sales hence credit risk relating to
other receivables is minimal. There are no formal procedures in place for monitoring and
collecting amounts owed to the Group. A risk management framework will be developed
over time, as appropriate to the size and complexity of the business.
The concentration of the Group’s credit risk is considered by counterparty, geography and
by currency. The Group has a significant concentration of cash held on deposit with large
banks in South Africa, Namibia and Mauritius with A ratings and above (Standard & Poor’s).
The concentration of credit risk was as follows:
Currency:
Sterling
USD
South African Rand
Namibian Dollars
TOTAL
Period ended
28 February 2018
£
2 696 846
132
151 514
56 275
2 904 767
There are no other significant concentrations of credit risk as at the balance sheet date.
At 28 February 2018, the Group held no collateral as security against any financial asset.
The carrying amount of financial assets recorded in the financial statements, net of any
allowances for losses, represents the Group’s maximum exposure to credit risk without
taking account of the value of any collateral obtained. At 28 February 2018, no financial
assets were past their due date. As a result, there has been no impairment of financial assets
during the period. An allowance for impairment is made where there is an identified loss
event which, based on previous experience, is evidence of a reduction in the recoverability
of the cash flows. Management considers the above measures to be sufficient to control the
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credit risk exposure.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due. Ultimate responsibility for liquidity risk management rests with
the Board of Directors. The Board manages liquidity risk by regularly reviewing the Group’s
gearing levels, cash-flow projections and associated headroom and ensuring that excess
banking facilities are available for future use.
The Group maintains good relationships with its banks, which have high credit ratings and
its cash requirements are anticipated via the budgetary process. At 28 February 2018, the
Group had £2 904 767 of cash reserves.
Market risk
The Group’s activities expose it primarily to the financial risk of changes in foreign currency
exchange rates and interest rates.
Interest rate risk
The Group was exposed to minimal interest rate risk during the period. For this reason, no
sensitivity analysis has been performed regarding interest rate risk.
Foreign exchange risk
The Group has foreign currency denominated assets and liabilities. Exposure to exchange
rate fluctuations therefore arise. The carrying amount of the Group’s foreign currency
denominated monetary assets and liabilities, all in Pound Sterling, are shown below:
Cash and cash equivalents
Other receivables
Trade and other payables
Period ended
28 February 2018
£
207 921
112 437
(385 391)
(65 033)
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the period ended 28 February 2018
The Group is exposed to a level of foreign currency risk. Due to the minimal level of foreign
exchange transactions, the Directors currently believe the foreign currency risk is at an
acceptable level.
The Group does not enter into any derivative financial instruments to manage its exposure
to foreign currency risk.
The following table details the Group’s sensitivity to a 10% increase and decrease in
the Pound Sterling against the Rand and the Namibian Dollar. 10% is the sensitivity rate
used when reporting foreign currency risk internally to key management personnel and
represents management’s assessment of the reasonable possible change in foreign
currency rates. The sensitivity analysis includes only outstanding foreign currency
denominated monetary items and adjusts their translation at the period-end for a 10%
change in foreign currency rates.
Rand denominated
Rand currency impact
Rand currency impact
monetary items
strengthening
Weakening
Assets
Liabilities
Assets
Liabilities
£
206 616
(214 352)
(7 736)
Namibian Dollar
denominated
monetary items
£
113 610
(171 039)
(57 429)
£
227 277
(235 788)
(8 511)
£
185 954
(192 917)
(6 963)
Namibian Dollar currency
Namibian Dollar currency
impact
strengthening
£
124 971
(188 143)
(63 172)
impact
Weakening
£
102 249
(153 935)
(51 686)
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19. Operating Lease Commitments
The Group had no operating lease commitments at the reporting date.
20. Events after Balance Sheet Date
On 23 May 2018, an accelerated book-build and subscription process was undertaken and
gross proceeds of £6m (net proceeds estimated at £5.7m) was raised. The Placing of 223
555 101 shares was done at a price of 2.7p per share. A resolution to issue the new ordinary
shares was passed at a General Meeting on 14 June 2018. Subsequent to the issue of these
new ordinary shares, the issued share capital of the company will be 521 037 126 shares of
no par value.
The net proceeds of the Placing will be used as follows:
•
to commence with an exploration drilling programme and geo-scientific work with the
goal of declaring a JORC-compliant resource in due course. It is anticipated that the
programme will confirm the historical mineral resources as published by SRK Consulting
in 1987, although there can be no guarantee that this will occur. This programme will
require the procurement of geological equipment, drilling into the V1/V2 pegmatite and
other pegmatites (with a view to expand the resource base), sample analysis, geological
modelling and reporting;
•
to initiate and progress with a bankable feasibility study (BFS) for the final mine
configuration (Phase 2). Approximately 50 per cent. of this amount is planned for a geo-
metallurgical characterization, metallurgical test work and process flow design, with the
balance reserved for mine planning, infrastructure design and financial modelling;
•
to incorporate upgrades to the process design of the Phase 1 plant to improve the
planned beneficiation performance. The intention is that these upgrades will involve
the addition of a fourth crushing stage, a second stage in the dense medium separation
circuit, as well as the dewatering equipment to improve the planned process water
recovery; and
•
for general corporate and working capital costs.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the period ended 28 February 2018
The General Meeting also approved the granting of 17 500 000 Director Share Options and
the share authorities were increased by a further 22 500 000 shares to give the Directors
the authority to set up an employee option scheme.
21. Related party transactions
Balances and transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this note.
VM Investments Pty Ltd (“VM Investments”) is a related party due to Anthony Viljoen, CEO
of AfriTin Mining Limited being a 50% shareholder of VM Investments. During the period,
VM Investments charged the Group £57 361 for management services. At the end of the
period, the Group did not owe VM Investments any funds. At period-end, VM Investments
held 733 621 ordinary shares in AfriTin Mining Limited.
Goldiblox Pty Ltd (“Goldiblox”) is a related party due to Frans van Daalen, key
management personnel of AfriTin Mining Limited being a 50% shareholder of Goldiblox.
During the period, Goldiblox charged the Group £119 973 for management services and re-
imbursables. At the end of the period, the Group did not owe Goldiblox any funds.
The remuneration of the Directors, who including Frans van Daalen are the key
management personnel of the Group, is set out alongside.
Directors and key management personnel were given shares for £nil consideration when
the Company was admitted to the AIM market in London. The value of these shares is also
included in the totals alongside.
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28 February
28 February
28 February
28 February
2018
£
2018
£
2018
£
Director Fees/
Salary
Other Fees
Total
2018
£
Shares
40 000
12 500
25 000
-
4 000
-
-
-
2 809
40 000
16 500
27 809
124 050
119 445
-
-
Non-executive directors
Glen Parsons (Chairman)
Laurence Robb
Roger Williams
Executive director
Anthony Viljoen
(Chief Executive Officer)*
78 000
46 050
Other Key Management Personnel
Frans van Daalen
(Chief Operating Officer)**
78 000
41 445
233 500
91 495
2 809
327 804
* The salary cost of £46 050 was paid to Anthony Viljoen via VM Investments.
** The salary cost of £41 445 was paid to Frans van Daalen via Goldiblox.
Naminco Limited (“Naminco”) is a related party due to Naminco owning 24% of AfriTin
Mining Limited during the period under review. During the period, AfriTin entered into an
agreement with Naminco to purchase property, plant and equipment to the value of £94 242.
At the period end, the Group owed Naminco £39 855.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the period ended 28 February 2018
22. Comparative Figures
The financial statements as presented are for the period from incorporation, 1 September
2017, to 28 February 2018. As these are the first financial statements of the Group, no
comparative figures are reflected.
23. Reserves within equity
Share capital
Ordinary shares are classified as equity. Incremental cost directly attributable to the issue
of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Warrant reserve
The warrant reserve represents the cumulative charge to date in respect of unexercised
share warrants at the balance sheet date.
Retained earnings/Accumulated deficit
The retained earnings/accumulated deficit represent the cumulative profit and loss net of
distribution to owners.
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8
NOTICE OF
ANNUAL GENERAL MEETING
AfriTin Mining Limited (Incorporated in Guernsey under registered number 63974)
Registered office:
18-20 Le Pollet, St Peter Port Guernsey, GY1 1WH
19 July 2018
THIS DOCUMENT AND THE ACCOMPANYING FORM OF PROXY IS IMPORTANT AND
REQUIRES YOUR IMMEDIATE ATTENTION
If you are in any doubt as to what action you should take, you are recommended to seek
your own financial advice immediately from your stockbroker, bank manager, solicitor,
accountant or other independent financial advisor who specialises in advising on shares or
other securities and who is, in the case of UK shareholders, authorised under the Financial
Services and Market Act 2000.
If you have sold or transferred your shares in AfriTin Mining Limited, please forward this
document at once to the purchaser or transferee or to the stockbroker, bank or other agent
through whom the sale or transfer was effected, for delivery to the purchaser or transferee.
If you have sold or transferred part of your registered holding of shares, please consult the
stockbroker, bank or other agent through whom the sale or transfer was effected.
Notice of an Annual General Meeting of AfriTin Mining Limited to be held at 11:00 am
on 15 August 2018 at 18-20 Le Pollet, St Peter Port, Guernsey, GY1 1WH. Members of the
Company are requested to return the enclosed Form of Proxy which, to be valid, must
be completed and returned in accordance with the instructions printed thereon so as to
be received as soon as possible by the Company’s Registrars, Link Asset Services, PXS,
34 Beckenham Road, Beckenham, BR3 4TU, but in any event so as to be received by
the company Secretary at the registered office in accordance with the provisions of the
Company’s Articles of Incorporation not less than 48 hours before the time appointed for
the Annual General Meeting. Completion and return of a Form of Proxy will not preclude
a member of the Company from attending and voting in person at the Annual General
Meeting should they so wish.
NOTICE OF
ANNUAL GENERAL MEETING
CONTINUED
ORDINARY RESOLUTIONS
1. To receive and adopt the Annual Financial Statements of the Company and
the Directors’ report and the report of the Auditors for the period ended 28
February 2018.
2. To re-elect Glen William Parsons as a director of the Company.
3. To re-elect Anthony Richard Viljoen as a director of the Company.
4. To re-elect Terence Philip Goodlace as a director of the Company.
5. To re-elect Laurence John Robb as a director of the Company.
6. To re-elect Roger Alyn Williams as a director of the Company.
7. That Messrs RSM UK Audit LLP be reappointed as Auditors to the Company.
8. That the Directors be authorised to approve the remuneration of the Company’s
Auditors.
9.
In substitution for any and all previous authorisations, the Directors of the
Company be and are hereby authorised to exercise all powers of the Company
to issue, grant rights to subscribe for, or to convert any securities into, up to
155,399,166 shares (together “Equity Securities”) in the capital of the Company
in accordance with Article 4.2 of the Articles of Incorporation of the Company
such authority to expire, unless previously renewed, revoked or varied by the
Company by ordinary resolution, at the end of the next Annual General Meeting
of the Company or, if earlier, at the close of business on the date falling 15
months from the date of the passing of this Resolution, but in each case, during
this period the Company may make offers, and enter into agreements, which
would, or might, require Equity Securities to be issued or granted after the
authority given to the Directors of the Company pursuant to this Resolution
ends and the Directors of the Company may issue or grant Equity Securities
under any such offer or agreement as if the authority given to the Directors of
the Company pursuant to this Resolution had not ended. This Resolution is in
substitution for all unexercised authorities previously granted to the Directors
of the Company to issue or grant Equity Securities.
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EXTRAORDINARY RESOLUTION
10. If Resolution 9 is passed, the Directors of the Company be and they are hereby authorised
to exercise all powers of the Company to issue or grant Equity Securities in the capital
of the Company pursuant to the issue or grant referred to in Resolution 4 as if the pre-
emption rights contained in Article 5.2 of the Articles of Incorporation of the Company
did not apply to such issue or grant provided that the authority hereby conferred, unless
previously renewed, revoked or varied by the Company by special resolution, shall expire
at the end of the next Annual General Meeting of the Company or, if earlier, at the close
of business on the date falling 15 months from the date of the passing of this Resolution,
save that the Company may before such expiry make an offer or agreement which would
or might require Equity Securities to be issued or granted after such expiry and the
Directors may issue or grant Equity Securities in pursuance of such an offer or agreement
as if the authority conferred by the above resolution had not expired. This Resolution is
in substitution for all unexercised authorities previously granted to the Directors of the
Company to issue or grant Equity Securities in the capital of the Company as if the pre-
emption rights contained in Article 5.2 of the Articles of Incorporation of the Company did
not apply to such issue or grant.
SPECIAL RESOLUTION
11. That article 40.1 of the articles of incorporation of the Company be deleted and replaced
with the following:
“40.1 A notice may be given by the Company to any Member either personally or by
sending it by post in a pre-paid envelope addressed to the Member at his registered
address or by Electronic Means in accordance with this Article. Unless the Law shall
specify otherwise a notice shall, unless the contrary is shown, be deemed to have been
received:
40.1.1
in the case of a notice sent by post to an address in the United Kingdom,
Channel Islands or the Isle of Man, on the second day after the day of posting
40.1.2
in the case of a notice sent by post elsewhere by airmail, on the third day
after posting;
NOTICE OF
ANNUAL GENERAL MEETING
CONTINUED
40.1.3
in the case of a notice sent by Electronic Means, immediately after it was
transmitted in accordance with Article 40.10,
excluding, in the first two cases, any day which is a Saturday, Sunday, Good Friday,
Christmas Day, a bank holiday in Guernsey or a day appointed as a day of public
thanksgiving or public mourning in Guernsey.”
By order of the Board
AR VILJOEN
Director
19 July 2018
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COMPANY INFORMATION
Company Secretary
Legal Counsel – SA
Registered Office & Head Office
Edward Nathan Sonnenberg
18 - 20 Le Pollet
St Peter Port
Guernsey
Representative Office
2nd Floor, Building 3
150 West Street Sandown
Sandton Johannesburg 2196 South Africa
Independent Auditor
RSM UK Audit LLP
25 Farringdon Street London
Illovo Edge Office Park
EC4A 4AB United Kingdom
Investor Relations – UK
Tavistock
1 Cornhill London
EC3V 3ND United Kingdom
Investor Relations – SA
Lifa Communications
32 Fricker Road
Illovo
Johannesburg, 2196
South Africa
Corner Harries & Fricker Road Illovo
Johannesburg, 2116
South Africa
Tel: +27 11 268 6555
Nominated Advisor & Broker
WH Ireland
24 Martin Ln London
EC4R 0DR
United Kingdom
Joint Broker
Novum Securities
8-10 Grosvenor Gardens London
SW1W 0DH
Legal Counsel – UK
Gowling WLG
4 More London Riverside London
SE1 2AU
United Kingdom
www.afritinmining.com
D e s i g n e d b y L i f a C o m m u n i c a t i o n s