AMUR MINERALS CORPORATION
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
AMUR MINERALS CORPORATION
CORPORATE DIRECTORY
Directors
Registered office
Auditors
Nominated adviser and broker
Legal advisers
Solicitors
Mr R Schafer
Mr R Young
Mr P Gazzard
Mr T Bowens
Kingston Chambers
P.O. Box 173
Road Town
Tortola
British Virgin Islands
BDO LLP
55 Baker Street
London
W1U 7EU
United Kingdom
S. P. Angel Corporate Finance LLP
Prince Fredrick House
35 – 39 Maddox Street
London
W1S 2PP
United Kingdom
Maples and Calder
PO Box 173
Sea Meadow House
Road Town
Tortola
British Virgin Islands
Bryan Cave Leighton Paisner (Russia) LLP
Capital City Complex
Moscow City Business Centre
8 Presnenskaya Nab. Bldg. 1
Moscow 123100
Russian Federation
Field Fisher Waterhouse LLP
Riverbank House
2 Swan Lane
London
EC4R 3TT
United Kingdom
AMUR MINERALS CORPORATION
CONTENTS
Chairman's statement
Corporate governance
Operating risks and uncertainties
Statement of Directors' responsibilities
Remuneration committee report
Audit committee report
Directors' report
Independent auditors' report to the members of Amur Minerals Corporation
Consolidated statement of financial position
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
Page(s)
1 - 4
5 - 11
12 - 15
16
17 - 18
19 - 20
21 - 22
23 - 27
28
29
30
31
32
33 - 64
AMUR MINERALS CORPORATION
CHAIRMAN'S STATEMENT
Dear Shareholder,
It is with pleasure that I update you on the activities of the Company for the twelve months period to 31 December 2020.
Along with all worldwide corporate entities, Amur Minerals Corporation (the “Company”) has had to balance and endure
the challenging year given the Covid-19 pandemic, despite which the Company progressed its Federation of Russia Kun-
Manie Nickel/Copper sulphide project (“Kun-Manie”). In addition, the Company established a source of income generated
through its ownership of 14% interest Convertible Loan Notes (“CLN””) supporting the resumption of Nathan River
Resources’ (“NRR”) Roper Bar iron ore production located in the Northern Territories of Australia.
We present the Annual Report and Accounts for the year to 31 December 2020. It is noted that over the course of the
year 2020, the Company continued to remain debt free and its cash reserve increased by 600% from US$398,000 (1
January 2020) to US$2,800,000 (31 December 2020). Going forward, the NRR CLN will generate interest revenue
through to Q3 2023 and at the rate of approximately US$170,000 per quarter.
Looking forward, we continue our work toward the completion of the funded Permanent Conditions TEO (“Feasibility
Study level work”) for identification of reserves per the Russian mineral classification system. Subsequent Russian
Federation and western required documentation allowing for production approvals, development and compilation of the
necessary information to provide both a Russian compatible Bankable Feasibility Study (“RBFS”) and western BFS
standard studies shall be undertaken. This binary study approach should provide the Company with the flexibility to
evaluate and identify the best approaches to develop and advance the Company.
Kun-Manie Nickel-Copper Sulphide project
The 2019 Kun-Manie project focus of the Company has been and continues to be the Kun-Manie nickel copper sulphide
project in the far east of Russia. Despite the disruption of the global pandemic, work on the TEO continued throughout
the year with a one year extension to the delivery date being granted. The TEO is a mandatory Russian feasibility study,
independently compiled, addressing the physical and operating project considerations and paving the way for registration
of a project’s mineral reserve by the State Committee on Reserves (“GKZ”). Reserve registration is a necessary milestone
for all companies to undertake detailed engineering, procurement and construction designs suited for compilation of a
Russian Bankable Feasibility Study (“RBFS”).
Planned for delivery in December 2020, the impact of having to work remotely meant that the Company had to request
an extension for the delivery date of the TEO to 1 December 2021. Approved by the Russian Federation, the Company
still accomplished the majority of its TEO related tasks including:
• Russian grade estimates for nickel, copper, cobalt, platinum, palladium, gold and silver. Maiden estimates for
gold and silver were generated;
• Hydrological assessment determined that a more than sufficient water supply is available to support the project;
• Rock mechanics study work confirmed that open pit and/or underground operations can be successfully
implemented;
• Base Line Environmental Assessment have defined the base line preproduction environmental settings and
operational considerations;
• Metallurgical test work confirming that individual copper sulphide and nickel sulphide concentrates can be
generated using standard industry sulphide floatation methods;
• Key equipment list of the key components based the global metallurgical test works has establish specific
equipment lists;
• The 10 tonne representative bulk sample, (as well as multiple test programmes conducted over the years), had
established the nickel and copper can be recovered in individual sulphide concentrate streams improving
revenue generation streams for the project;
• Process flow sheets and estimated operating costs have been substantially refined;
• Non-binding off-take terms and conditions by a confidential metals trader have provided guidance to assist in
the determination of revenue generation;
1
AMUR MINERALS CORPORATION
• Pit designs at four cut-off grades have been generated for each of the three deposits. Reserve resource models
indicate an as yet uncertified potential mine life ranging from 24 to 41 years based on a 6.0 mtpa nominal
operating capacity;
• A comprehensive mine site layout has been identified.
Oreall (a Moscow based independent company licenced to compile TEO study results) has compiled the document to be
provided to the GKZ for reserve certification. As with the the Temporary Conditions TEO done in the past, the Company
is independently verifying the draft results including independent reviews and the inclusion of the newly acquired
metallugical test work results.
Concurrently and separate from the TEO work, RPM Global has recently completed (post 2020) an update to the JORC
resource estimates including all drilling and trenching. The resource for all categories of Measured, Indicated and Inferred
has been increased from the most recent resource number by as much as 14.1% to 15.4% for tonnage of ore and
tonnages of nickel and copper. With regard to Measured and Indicated resources used to define reserves, these have
been increased from 25 to 31% by tonnage of ore and tonnages of nickel and copper.
A 0.3% Nickel cut-off grade has been used to calculate the JORC Resource compared to a 0.4% Nickel cut off-grade.
The reduction in the COG is primarily due to the metallurgical test results by Gipronickel which confirmed that two revenue
generating concentrate products (Ni and Cu) could be produced. Previous resource estimates were based on a single
nickel only payable concentrate being produced with zero revenue contribution being derived from the copper.
Below is a summary of the newly reported JORC resource within the global mineral resource within the 100% owned
(and the operator) Kun-Manie licence area. These results have only recently been obtained from RPM Global.
Kun-Manie Nickel Copper Sulphide Mineral Resource Estimate
(0.3% Ni Eq COG)
Resource
Classification
Ore
Mt
Ni
%
Cu
%
Ni T
(1,000’s)
Cu T
(1,000’s)
Maly Kurumkon / Flangovy
Measured
Indicated
M+I
Inferred
MKF TOTAL
7.3
38.0
45.3
3.1
49
0.76
0.80
0.79
0.79
0.79
0.22
0.22
0.22
0.23
0.22
55
300
355
24
380
Ikenskoe / Sobolevskey /Kubuk
Measured
Indicated
M+I
Inferred
ISK TOTAL
Measured
Indicated
M+I
Inferred
VOD TOTAL
11
88
99
25
120
0.70
0.74
0.73
0.68
0.72
0.19
0.21
0.20
0.19
0.20
Vodorazdelny
1.8
2.2
4.0
1.3
5.3
0.84
0.80
0.80
0.78
0.81
0.24
0.22
0.23
0.22
0.23
77
650
727
170
890
15
17
32
10
43
TOTAL KUN-MANIE
Measured
Indicated
20.1
128.2
0.73
0.75
0.20
0.21
147
697
2
16
84
100
7
110
21
180
201
48
250
4
5
9
3
12
41
269
AMUR MINERALS CORPORATION
M+I
Inferred
148.3
29.4
GLOBAL TOTAL 174.3
0.75
0.69
0.75
TEO Resource (0.3% Ni COG)
0.76
0.21
0.20
0.21
168.1
0.21
1,114
204
1,313
1,279
All (B, C1, C2)
310
58
372
353
Notes;
1.
2.
and Ore Reserves (The Joint Ore Reserves Committee Code – JORC 2012 Edition).
Totals may differ due to rounding, Mineral Resources reported on a dry in-situ basis.
Mineral Resources are reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources
NRR Rope Bar Iron Ore Operation
On 25 August 2020, the Company completed an equity placing of £6,100,000 and an investment of US$4,670,000 to
hold a Convertible Loan Note (“CLN”) on Nathan River Resources Pte Limited (“NRR”) which owns the Roper Bar Iron
Ore Project (“Roper Bar”). Roper Bar is a large established iron ore deposit in the Northern Territory of Australia with a
defined JORC resource of 446,000,000 tonnes at 39.9% Fe and a JORC reserve of 4,760,000 tonnes at 60.1% Fe. NRR
has re-established the mining and shipping of iron ore to China under an offtake agreement with Glencore
The Company is paid on the 14% coupon of the CLN which is convertible into 17% of the current issued share capital of
NRR. During 2020 the Company was due US$205,000 in interest payments, of which US$43,000 was received during
the year and US$162,000 post year end. These notes have a three year maturity life.
Financial Overview
As at 31 December 2020 the Company had cash reserves of US$2,800,000 up from US$398,000 at the start of 2020
and remains debt free.
The Company undertook a number of funding initiatives during 2020 providing total funds from equity placings of
approximately US$10,000,000 net of issue costs. In addition, on 12 March 2020, the Company entered into a £1,500,000
fixed term loan with Plena Global securities LLC (“Plena”) with an immediate initial advance of £500,000. As part of this
loan facility, the Company also granted Plena 52,447,552 warrants with an exercise price of 1.43 pence per ordinary
share.
On 16 April 2020, the Company completed an equity placing of 75,000,000 new ordinary shares at a price of 1p per share
to raise gross proceeds of £750,000. Funds raised from this placing were used to repay in full the initial advance of the
Plena loan facility on 4 May 2020.
On 27 May 2020, the Company completed an equity placing of 47,619,048 new ordinary shares at a price of 1.05 pence
per share to raise gross proceeds of £500,000.
During 2020, Plena has exercised 47,723,776 warrants providing £682,450 of additional funding for the Company. As at
time of writing this report, Plena have 4,723,776 warrants outstanding.
On 19 June 2020, the Company held an Extraordinary General Meeting during which a resolution was passed to increase
the number of shares which the Company is authorised to issue to 2,000,000,000.
On 25 August 2020, the Company completed an equity placing of $6,100,000 and an investment of US$4,670,000 in a
Convertible Loan Note (“CLN”) in NRR.
On the 13 February 2020, the Company appointed Mr. Adam Habib as Advisor to the Board. As part of his appointment,
Mr. Habib was granted 12,809,630 options with an exercise price of 1.95 pence per share, with a further 12,809,630
options subject to the successful completion by the Company of a non-binding off-take agreement, for the completion of
a producing asset investment.
On the 3 April 2020, the Company made a grant of 30,000,000 options with an exercise price of 1.75 pence per ordinary
share to Directors, executives and employees. As at 31 December 2020, the Company has 55,619,260 options
outstanding.
3
AMUR MINERALS CORPORATION
Administration expenses for the 2020 year totalled US$3,000,000 (2019: US$2,000,000). The main reason for the
increase in administration expenses was caused by the hiring of a new Officer and Adviser and modest employee salary
increases totalling US$1,400,000 (2019: US$1,100,000) and professional fees of US$874,000 (2019: US$402,000)
associated with TEO activities. Other Comprehensive income was charged with a translation loss of US$4,100,000 (2019:
gain of US$2,900,000) was due to the weakening of the Russian rouble to the US dollar. Expenditure on exploration was
US$1,200,000 (2019: US$1,300,000) as the Company remained focused on the completion of the TEO. Exploration
assets realized an exchange loss of US$3,800,000 (2019: exchange gain US$2,700,000) also due to the weakening of
the Russian rouble to the US dollar.
As detailed in the notes to the financial statements, the Kun-Manie asset value have been restated by US$486,000. This
is due to certain exploration costs that were incurred and were capitalised within the Parent Company, whereas these
costs should have been capitalised within Russian operating subsidiary in its functional currency, with resulting foreign
exchange gains or losses being recognised at the end of each reporting period end.
Covid-19
Since the start of January 2020, Covid-19 created significant disruption to the global markets and economies, including
Russia. To keep safe its personnel, the Company has put in place special measures to protect its workforce while at the
same time ensuring business continuity. Prior to the outbreak, the Company had the facilities in place to allow remote
working for most members of staff. This capability was enhanced to ensure that the Company can now operate effectively
over an extended period of time without requiring regular access to physical offices. The Company maintains close
contact with its contractors working on the Permanent Conditions TEO as the contractors have also put in place
procedures to work effectively over the coming months in order to ensure that these projects are delivered within their
original schedules. As an additional assurance to shareholders, the Russian Federation subsoil law allows for and was
granted extensions to filing dates.
As of the date of this report, Covid-19 also created significant uncertainty and disruption in the financial markets. The
Company has not realised a negative impact of Covid-19 on its ability to raise funds, having completed equity placements
in April 2020 of £750,000, May 2020 of £500,000 and £6,100,000 in August 2020. However, the Directors are cognizant
that conditions in the financing market are changeable and will continue to monitor developments.
Outlook
The Company’s primary objectives for 2021 are the completion of the TEO and continued work on the commencement
of the Bankable Feasibility Study and the required incumbent study work.
The BFS provides the necessary technical, environmental and economic detail for institutional investors to advance
funding for construction and into production. The BFS is itself a considerable undertaking and the Amur team has been
working on the detailed planning and costing of the BFS programme. This has required considerable interaction with both
Russian and international organisations qualified in conducting BFS level work.
In conjunction with the development of the BFS work programme, the Company has also been maintaining open
discussions with potential offtake partners which the Company believes will provide access to the types of institutional
investors who provide financing, principally through debt, for BFS programmes.
The Company is well placed to take advantage of the growing interest in the global development of low carbon economies
and the key battery materials, especially nickel and copper, that underpin this movement. We believe shareholders have
a good cause to be optimistic about the future of the Company, and we thank them for their patience and continued
support.
On behalf of the Board of Directors, I would like to thank all the staff for their dedication and hard work throughout this
period in getting the TEO programme organised and progressing toward its completion.
Mr. Robert W. Schafer
Non Executive Chairman
29 June 2021
4
AMUR MINERALS CORPORATION
CORPORATE GOVERNANCE
Dear Shareholders,
As Chairman of the Company, I firmly believe that strong corporate governance helps provide the building blocks
that allow an organisation to be successful. The Board is committed to good governance across the business, at
executive level and throughout its operations. In March 2018, the Company adopted The Quoted Companies
Alliance Corporate Governance Code 2018 (the “QCA Code” or the “Code”).
The Board not only sets expectations for the business but also works towards ensuring that strong values are
set and carried out by the Directors across the business. The Board strives to ensure that the objectives of the
business, the principles and risks are underpinned by values of good governance throughout the Company.
The importance of engaging with our shareholders is key to the success of the business, and the Board strives
to ensure that there are numerous opportunities for investors to engage with both the Board and executive team.
Mr R Schafer
Non-Executive Chairman
29 June 2021
Set out below are the 10 key principals of the QCA code adopted by Amur. In addition to the details provided
below, governance disclosures can be found on the Company’s website at https://amurminerals.com/corporate-
governance-code/.
Principle 1: Establish a strategy and business model which promote long-term value for shareholders
The Board has concluded that the highest medium and long-term value can be delivered to shareholders
through the continued development of the Kun-Maine sulphide nickel deposit located in the far east of Russia.
The Company will continue to develop the project to increase its value whilst simultaneously looking for suitable
strategic partners who can assist in bringing the project to production.
Principle 2: Seek to understand and meet shareholder needs and expectations
The Company remains committed to listening and communicating openly with its shareholders to ensure that its
strategy, business model and performance are clearly understood and communicated. Understanding what
analysts and investors think about us, and in turn, helping these audiences understand our business, is a key
part of driving our business forward and we actively seek dialogue with the market. We do so via investor
roadshows, attending investor conferences, maintaining regular updates on the Companys FAQ page and our
regular reporting.
Amur is committed to providing full and transparent disclosure of its activities via the Regulatory News Service
(RNS) of the London Stock Exchange. Company announcements are also available on the Company’s website.
Amur has an active and effective investor relations programme that includes institutional road-shows and
presentations, effective Annual General Meetings with presentations to shareholders and a high level of
disclosure of the Company’s activity to its shareholders.
In addition, all shareholders are encouraged to attend the Company’s Annual General Meeting and investors
have access to current information on the Company through its website (www.amurminerals.com) and via the
info@amurminerals.com email address. The Company also retains the services of Blytheweigh as PR advisor.
5
AMUR MINERALS CORPORATION
CORPORATE GOVERNANCE (CONTINUED)
Principle 3: Take into account wider stakeholder and social responsibilities and their implications for
long-term success
The Board recognises that the long term success of the Company is reliant upon the efforts of the employees of
the Company and its contractors, suppliers, regulators and other stakeholders. The Board has put in place a
range of processes and systems to ensure that there is close oversight and contact with its key resources and
relationships.
The Company has staff dedicated to ensuring that it has active relationships with local communities who are
within the vicinity of its operations to understand their concerns and expectations thereby seeking to ensure a
mutually beneficial co-operation for both sides. The Company is subject to oversight by a number of different
governmental and other bodies who directly or indirectly are involved with the licencing and approval process of
exploration and mining operations in Russia. The Company makes all reasonable efforts, directly or through its
advisers, to engage in and maintain active dialogue with each of these governmental bodies, to ensure that any
issues faced by the Company, including but not limited to regulations or proposed changes to regulations, are
well understood and ensuring to the fullest extent possible that the Company is in compliance with all appropriate
regulation, standards and specific licencing obligations, including environmental, social and safety, at all times.
The Company has close ongoing relationships with a broad range of its stakeholders and provides them with the
opportunity to raise issues and provide feedback to the Company, and the Board is regularly updated on wider
stakeholder insights into issues that matter to them and the business to enable the Board to understand and
consider these issues in decision making.
The Board recognises that our employees are one of our most important stakeholder groups.
Principle 4: Embed effective risk management, considering both opportunities and threats, throughout
the organisation
Financial controls
The Company has an established framework of internal financial controls, the effectiveness of which is regularly
reviewed by the Executive Management, the Audit Committee and the Board in light of an ongoing assessment
of significant risks facing the Company.
• The Board is responsible for reviewing and approving overall Company strategy, approving revenue and
capital budgets and plans, and for determining the financial structure of the Company including treasury,
tax and dividend policy. Monthly results and variances from plans and forecasts are reported to the
Board.
• The Audit Committee assists the Board in discharging its duties regarding the financial statements,
accounting policies and the maintenance of proper internal business, and operational and financial
controls, including the review of results of work performed by the Group controls function.
• There are comprehensive procedures for budgeting and planning, for monitoring and reporting to the
Board business performance against those budgets and plans, and for forecasting expected
performance over the remainder of the financial period. These cover cash flows, capital expenditure and
balance sheets. Monthly results are reported against budget and compared with the prior year, and
forecasts for the current financial year are regularly revised in light of actual performance.
• The Company has a consistent system of prior appraisal for investments, overseen by the Chief
Financial Officer and Chief Executive Officer, with defined financial controls and procedures with which
each business area is required to comply in order to be granted investment funds for development.
6
AMUR MINERALS CORPORATION
CORPORATE GOVERNANCE (CONTINUED)
Non-financial controls
The Board recognises that maintaining sound controls and discipline is critical to managing the downside risks to
our plan. The Board has ultimate responsibility for the Group’s system of internal control and for reviewing its
effectiveness. However, any such system of internal control can provide only reasonable, but not absolute,
assurance against material misstatement or loss. The Board considers that the internal controls in place are
appropriate for the size, complexity and risk profile of the Group.
The principal elements of the Group’s internal control system include:
• Close management of the day-to-day activities of the Group by the Executive Directors
• An organisational structure with defined levels of responsibility, which promotes entrepreneurial
decision-making and rapid implementation while minimising risks
• A comprehensive annual budgeting process producing a detailed integrated profit and loss, balance
sheet and cash flow, which is approved by the Board
• Detailed monthly reporting of performance against budget
• Central control over key areas such as capital expenditure authorisation and banking facilities
The details of the Group's principal risks and controls to mitigate them are outlined on pages 12-15.
Principle 5: Maintaining the Board as a well-functioning, balanced team led by the Chairman
The Board comprises the Non-Executive Chairman, one Executive Director and three Non-Executive Directors.
The Board of Amur is supported by two members of the senior management team. The details and background
of the members of the Board and senior management can be found on the Company's website at https://
amurminerals.com/management-team/.
The Board is satisfied that it has a suitable balance between independence on the one hand, and knowledge of
the Company on the other, to enable it to discharge its duties and responsibilities effectively. All Directors are
encouraged to use their independent judgement and to challenge all matters, whether strategic or operational.
The following Directors are considered to be independent Directors:
• Robert Schafer (Non-Executive Chairman)
• Paul Gazzard (Non-Executive Director)
• Tom Bowens (Non-Executive Director)
The Board has established an Audit Committee and a Remuneration Committee, particulars of which appear
hereafter. The Board has agreed that appointments to the Board are made by the Board as a whole. The Non-
Executive Directors are considered to be part time but are expected to provide as much time to the Company as
is required. The Board considers that this is appropriate given the Companyʼs current stage of operations. It shall
continue to monitor the need to match resources to its operational performance and costs and the matter will be
kept under review going forward. The Board notes that the QCA recommends a balance between executive and
non-executive Directors and recommends that there be two independent non-executives. The Board shall review
further appointments as scale and complexity grows.
Attendance at Board and Committee Meetings
The Company shall report annually on the number of Board and committee meetings held during the year and
the attendance record of individual Directors. In order to be efficient, the Directors meet formally and informally
both in person and by telephone. During the year there were 17 board meetings and their attendance was as
follows;
Mr R Schafer
17
Mr R Young
Mr B Savage
Mr P Gazzard
Mr L Naumovski
Mr T Bowens
A Habib
17
14
17
5
15
4
7
AMUR MINERALS CORPORATION
CORPORATE GOVERNANCE (CONTINUED)
Key Board activities this year included:
• Discussing strategic priorities
• Continue dialogue with the investment community
• Discussing the Company’s capital structure and financial strategy
• Discussing internal governance processes
• Discussing the Company’s risk profile
• Developing the Bankable Feasibility Study
Directors’ conflict of interest
The Company has effective procedures in place to monitor and deal with conflicts of interest. The Board is aware
of the other commitments and interests of its Directors, and changes to these commitments and interests are
reported to and, where appropriate, agreed with the rest of the Board.
Principle 6: Ensure that between them the Directors have the necessary up-to-date experience, skills
and capabilities
The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and
experience required for the Company. Biographies of the directors are available on the Company’s website. All
Directors receive regular and timely information on the Group’s operational and financial performance. Relevant
information is circulated to the Directors in advance of meetings.
The Board recognises that it currently has limited diversity and this will form a part of any future recruitment
consideration if the Board concludes that replacement or additional directors are required. The Board will also
review annually the appropriateness and opportunity for continuing professional development whether formal or
informal.
Appointment, removal and re-election of Directors
The Board makes decisions regarding the appointment and removal of Directors, and there is a formal, rigorous
and transparent procedure for appointments. The Company’s Articles of Association require that one-third of the
Directors must stand for re-election by shareholders annually in rotation; that all Directors must stand for re-
election at least once every three years; and that any new Directors appointed during the year must stand for
election at the AGM immediately following their appointment.
Independent advice
All Directors are able to take independent professional advice in the furtherance of their duties, if necessary, at
the Company’s expense. In addition, the Directors have direct access to the advice and services of the Company
Secretary and Westend Corporate (external accountancy and financial service).
Principle 7: Evaluate the Board performance based on clear and relevant objectives, seeking continuous
improvement
The Board has determined that it shall itself be responsible for assessing the effectiveness and contributions of
the Board as a whole, its committees (which currently comprise the Audit Committee, the Remuneration
Committee) and individual directors. The size of the Board allows for open discussion and the Chairman has
regular dialogue with the Chief Executive whereby the Board’s role and effectiveness can be considered. The
Chief Financial Officer also has regular dialogue with the Head of the Audit Committee whereby that
Committee’s effectiveness can be considered.
Internal evaluation of the Board, the Committee and individual Directors is to be undertaken on an annual basis
in the form of peer appraisal and discussions to determine the effectiveness and performance of the Directors
and their continued independence. No formal assessments have been prepared however the Board will keep
this matter under review and especially if either the size of the Board or the number of committees increases
which in turn may require a more formalised assessment and evaluation process to be established to ensure
continued effectiveness.
Principle 8: Promote a culture that is based on ethical values and behaviours
The Board recognises that their decisions regarding strategy and risk will impact the corporate culture of the
Company as a whole and that this will impact the performance of the Company. The Board is very aware that the
8
AMUR MINERALS CORPORATION
CORPORATE GOVERNANCE (CONTINUED)
tone and culture set by the Board will greatly impact all aspects of the Company as a whole and the way that
employees behave. The corporate governance arrangements that the Board has adopted are designed to
ensure that Amur delivers long term value to its shareholders and that shareholders have the opportunity to
express their views and expectations for the Company in a manner that encourages open dialogue with the
Board.
A large part of Amurʼs activities is centred upon what needs to be an open and respectful dialogue with
employees, clients and other stakeholders. Therefore, the importance of sound ethical values and behaviours is
crucial to the ability of the Company to successfully achieve its corporate objectives. The Board places great
importance on this aspect of corporate life and seeks to ensure that this flows through all that the Company
does. The directors consider that at present the Company has an open culture facilitating comprehensive
dialogue and feedback and enabling positive and constructive challenge.
Additionally, the Company has adopted a code for Directorsʼ and employeesʼ dealings in securities which is
appropriate for a company whose securities are traded on AIM and is in accordance with the requirements of the
Market Abuse Regulation which came into effect in 2016.
Principle 9: Maintain governance structures and processes that are fit for purpose and support good
decision-making by the Board
Maintenance of Governance Structures and Processes
Ultimate authority for all aspects of the Companyʼs activities rests with the Board, the respective
responsibilities of the Chairman and Chief Executive Officer arising as a consequence of delegation by the
Board. The Board has adopted appropriate delegations of authority which set out matters which are reserved to
the Board. The Chairman is responsible for the effectiveness of the Board, while management of the Companyʼs
business and primary contact with shareholders has been delegated by the Board to the Chief Executive Officer.
Audit Committee
The Audit Committee currently comprises Paul Gazzard and Robert Schafer. This committee has primary
responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the
Company is properly measured and reported. It receives reports from the executive management and auditors
relating to the interim and annual accounts and the accounting and internal control systems in use throughout
the Company. The Audit Committee shall meet not less than twice in each financial year and it has unrestricted
access to the Companyʼs auditors.
Remuneration Committee
The Remuneration Committee comprises Paul Gazzard and Robert Schafer. The Remuneration Committee
reviews the performance of the executive directors and employees and makes recommendations to the Board
on matters relating to their remuneration and terms of employment. The Remuneration Committee also
considers and approves the granting of share options pursuant to the share option plan and the award of shares
in lieu of bonuses pursuant to the Companyʼs Remuneration Policy.
Nominations Committee
Given the size and complexity of Amur, the Board has agreed that appointments to the Board will be made by
the Board as a whole and so has not created a Nominations Committee.
Non-Executive Directors
At each Annual General Meeting one third of the directors must retire by rotation, whereupon they can offer
themselves for re-election if eligible. The Board evaluates its performance and composition on a regular basis
and will make adjustments as and when indicated. When assessing the independence of each Non-Executive
Director, length of service is one of the considerations. The Board will when assessing new appointments in the
future consider the need to balance the experience and knowledge that each independent director has of the
Company and its operations, with the need to ensure that independent directors can also bring new perspectives
to the business.
9
AMUR MINERALS CORPORATION
CORPORATE GOVERNANCE (CONTINUED)
Executive Team
The Executive Team consists of Robin Young, with input from the outsourced CFO and the subsidiary managers
and teams. They are responsible for formulation of the proposed strategic focus for submission to the Board, the
day- to-day management of the Group’s businesses and its overall trading, operational and financial
performance in fulfilment of that strategy, as well as plans and budgets approved by the Board of Directors. It also
manages and oversees key risks, management development and corporate responsibility programmes. The
Chief Executive Officer reports to the Corporation Board on issues, progress and recommendations for change.
The controls applied by the Executive Team to financial and non-financial matters are set out earlier in this
document, and the effectiveness of these controls is regularly reported to the Audit Committee and the Board.
Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue
with shareholders and other relevant stakeholders
The Board is committed to maintaining good communication and having constructive dialogue with its
shareholders. The Company has close ongoing relationships with its private shareholders. Institutional
shareholders and analysts have the opportunity to discuss issues and provide feedback at meetings with the
Company. In addition, all shareholders are encouraged to attend the Companyʼs Annual General Meeting. The
outcomes of all votes will be disclosed in a clear and transparent manner via the RNS of the London Stock
Exchange.
Investors also have access to current information on the Company through its website, www.amurminerals.com,
and via the info@amurminerals.com email post questions that are incorporated into the FAQ page of the
Company’s website. The Company lists contact details on its website and on all announcements released via
RNS, should shareholders wish to communicate with the Board.
The Company shall include, when relevant, in its annual report, any matters of note arising from the audit or
remuneration committees.
The Board
The Board is comprised of the non-executive chairman, three non-executive directors and a Chief Executive
Officer (“CEO”). The Board has significant industry, financial, public markets and governance experience,
possessing the necessary mix of experience, skills, personal qualities and capabilities to deliver on the Group’s
strategy for the benefit of shareholders over the medium to long-term.
The Chairman has the responsibility of ensuring that the Board discharges its responsibilities and is also
responsible for facilitating full and constructive contributions from each member of the Board in determination of
the Group’s strategy and overall commercial objectives. The Board is responsible for the overall management
and performance of the Group and operates within a framework of prudent and effective controls which enables
risk to be assessed and managed.
The CEO leads the business with the support of a strong team ensuring that the strategic and commercial
objectives are met. They are accountable to the Board for the operational and financial performance of the
business.
The Board as a whole is kept abreast with developments of governance and AIM regulations. The Company’s
lawyers provide updates on governance issues and the Company’s NOMAD provides updates on listing
regulations as well training as part of a director’s onboarding
The directors have access to the Company’s NOMAD, company secretary, lawyers and auditors and are able to
obtain advice from other external bodies as and when required. The 2020 performance of the business and its
staff will be measured across both financial and operational functions and is captured in a corporate scorecard.
The scorecard is made up of various KPIs and is tracked throughout the year.
10
AMUR MINERALS CORPORATION
CORPORATE GOVERNANCE (CONTINUED)
Matters Reserved for the Board
The Board retains full and effective control over the Group and is responsible for the Group’s strategy and key
financial and compliance issues. There are certain matters that are reserved for the Board which are reviewed
on an annual basis, and they include but are not limited to:
• Strategy and Management – approval of strategic aims and objectives; approval of the Group’s annual
operating and capital expenditure budgets and changes; decision to cease to operate all or any material
part of the Group’s business;
• Structure and Capital – major changes to the Group’s corporate structure; any change to the
Company’s listing;
• Financial Reporting and Controls – approval of: financial results; annual reports and accounts;
dividend policy and declaration of any dividend; significant changes in accounting policies/practice;
treasury policies;
•
Internal Controls – ensuring maintenance of a sound system of internal control and management;
• Contracts – major capital contracts; contracts which are material or strategic; major investments or any
acquisitions/disposals;
• Communications – approval or resolutions and documentation put forward to shareholders;
• Board Membership and Other Appointments;
• Remuneration – determining the remuneration policy for directors, senior execs and non-executive
directors, introduction of new share incentive plans, changes to existing plans;
• Corporate Governance Matters – review of the Group’s overall corporate governance arrangements;
• Policies – approval of Group policies, including the share dealing code;
Board Evaluation
The directors consider seriously the effectiveness of the Board, its Committees and individual performance.
The Board generally meets formally five times a year with ad hoc Board meetings as the business demands.
There is a strong flow of communication between the directors, and in particular between the CEO and Chairman.
Board meeting agendas are set in consultation with both the CEO and Chairman, with consideration being given to
both standing agenda items and the strategic and operational needs of the business.
Comprehensive board papers are circulated in advance of meetings, giving directors ample time to review the
documentation and enabling an effective meeting. Resulting actions are tracked for appropriate delivery and
follow up. The directors have a broad knowledge of the business and understand their responsibilities as
directors of a UK company quoted on AIM and developing appropriate corporate governance procedures and
looking forward to building further on the governance structure already in place.
The Company’s Nomad provides annual boardroom training as well as initial training as part of a director’s
onboarding. The Company Secretary helps keep the Board up-to-date with developments in corporate
governance and liaises with the Nomad on areas of AIM requirements. The Company Secretary has frequent
communication with both the Chairman and CEO and is available to other members of the Board as required.
The directors also have access to the Company’s auditors and lawyers as and when required, and the directors
are able, at the Company’s expense, to obtain advice from other external advisers if required.
The Board entered 2020 looking forward to building further on the governance structure already in place. Whilst
being mindful of the size and stage of development of the Company, the board reviews and ensures the highest
level of governance is maintained.
11
AMUR MINERALS CORPORATION
OPERATING RISKS AND UNCERTAINTIES
Set out below are the key operating risks and uncertainties affecting the Group.
The Group’s licences
The Group’s activities are dependent upon the grant and renewal of appropriate licences, permits and regulatory
consents. The Group’s Exploration and Mine Production licence is valid until 1 July 2035 and grants the
Company’s wholly owned subsidiary ZAO Kun-Manie the rights to recover all value from the mineral defined to
be present at Kun-Manie. The Group’s licences are regulated by the Russian governmental agencies and contain
a range of obligations, failure to comply with which could result in additional costs, penalties being levied or the
suspension or revocation of the licence. This would have a material adverse impact on the Group.
Mitigation: management closely monitor compliance with the terms of the Group’s licences and utilises the legal
services of Bryan Cave Leighton Paisner who review all documentation and filings to ensure that
communications, filings and any other required contacts maintain conformity with the regulatory agencies of the
Russian Federation.
Project development risks
Resource estimates are based upon the interpretation of geological data. Project feasibility studies derive
estimates of operating costs based upon anticipated tonnage and grades of ore to be mined and processed, the
configuration of the ore body, expected recovery rates and other factors. As a result, actual operating costs and
economic returns may differ from those currently estimated.
Mitigation: the scale of the project mandates that all work is conducted by Russian experienced, independent
and internationally recognised companies in all areas of proposed and actual project development. Any internally
generated studies are held confidentially within the Company until an independent and qualified group, company
or experts have reviewed, commented and confirmed the results of Company work.
Project work is undertaken by Russian Federation approved agencies prior to the approval of any study,
preproduction, construction and operational approvals are granted. The Company adheres to these regulatory
statutes.
Reserve and resource estimates
Reserve and resource estimates may require revision based on actual production experience. The volume and
grade of reserves mined and processed and recovery rates achieved may vary from those anticipated and a
decline in the market price of metals may render reserves containing relatively lower grades of nickel and copper
mineralisation uneconomic.
Mitigation: resources and reserves are independently calculated by internationally recognised organisations to
JORC standards. Information related to the calculation of such estimates is based on reports from external
companies experienced in metallurgical and processing work as well as the evaluation of long term metal pricing
where the Company utilises information provided by external organisations. As the Company is not in production
at this time, actual production results cannot be utilised to verify predicted resources and reserves.
The Russian Federation requires a separate assessment of reserves and does not recognise resources which
are not contained within a mine plan based on a Russian certified study calculated by a qualified agency or
organisation. Final reserve numbers are audited by the State Commission on Mineral Reserves who is
responsible for tracking and certifying all reserve estimates within the Russian Federation.”
12
AMUR MINERALS CORPORATION
OPERATING RISKS AND UNCERTAINTIES (CONTINUED)
Environmental issues
The Group’s operations are subject to environmental regulation, including environmental impact assessments
and permitting. Russian environmental legislation comprises numerous federal and regional regulations which
are not fully harmonised and may not be consistently interpreted.
Mitigation: the Company utilises Equator Principles standards with regard to its monitoring and maintenance of
environmental protection. Equator Principles is a risk management framework, widely adopted by financial
institutions, for determining, assessing and managing environmental and social risk in projects. These standards
are among the highest in the world and implementation of such standards is required when international
financing of a project is undertaken. By utilising the highest level of standard, the Company meets both Russian
and International standards.
On an internal Russian Federation basis, the Company is inspected on an annual basis to ensure that the
Company is performing and maintaining protection of the environment. The Company employs three suitably
qualified individuals to ensure that all work is done to the highest standards and ultimately approved by the
appropriate Russian authorities and organisations.
Financial risks
The Group operates as a natural resources exploration and development group. To date, it has not earned
revenues and is considered to be in the final stages of exploration and evaluation activities of its Kun-Manie
project. It is therefore reliant on raising additional financing through share placings with new or existing partners
or combination of debt and equity financing from financial institutions. The Group may not be able to raise
additional funds that will be required to support the development of its projects and any additional funds that are
raise may cause dilution to existing shareholders.
Mitigation: the Company maintains a close monitoring of its projected cash requirements and Directors are in
regular negotiations with various parties in respect of raising further funds to ensure sufficient funding is available
as and when required.
Business disruption due to Covid-19
The current situation surrounding Covid-19 global pandemic represents significant uncertainty for the mining
industry. The potential impact could include operational disruptions due to Government restrictions, staff
absences and supply chain delays as well as disruptions to key partners and capital markets.
Mitigation: While the Company has seen little direct impact from Covid-19 pandemic, management have
focused on implementing measures to ensure safety of employees and contractors, and to prepare business to
face potential challenges that could emerge. These include, amongst other things: following Government's
guidelines in all jurisdictions the Company operates, communicating precautionary measure to staff to prevent
the spread of the virus, enabling remote working, exploring available liquidity options, implementing business
continuity measures.
13
AMUR MINERALS CORPORATION
OPERATING RISKS AND UNCERTAINTIES (CONTINUED)
Nickel price volatility
The net present value of the Group’s capitalised exploration assets is directly related to the long-term price of
nickel. The market price of nickel is volatile and is affected by numerous factors which are beyond the Company’s
control. These factors include world production levels, international economic trends, currency exchange
fluctuations and industrial demand.
Mitigation: the Company regularly reviews expected nickel and copper prices from internationally recognised
expert sources and assesses the economic viability of its project based upon long term trends and surveys
compiled by several resource groups specialised in long term price projection. Nickel and copper price sensitivity
is built into the Company’s economic models. Presently, the long term forecast price for nickel is US$7.48 per
pound and is US$3.79 per pound for copper. All study work currently utilises prices of US$8 and US$3 for nickel
and copper respectively.
Political and economic risks
Most of Group’s assets and operations are based in Russia and are subject to Russian federal and regional laws
and regulations. Russian legal and regulatory regime is still undergoing a substantial transformation and is
subject to frequent changes and interpretations. Amendments to current laws and regulations governing the
Group’s operating activities or more stringent implementation or interpretation of these laws and regulations
could have a material adverse impact on the Group.
Additionally, Russian Federation is currently subject to sanctions imposed by various countries, prolonging and
tightening of which could have an impact on the Group’s operations.
Mitigation: the Company utilises its Moscow based legal representatives of Bryan Cave Leighton Paisner to
continuously monitor the situation regarding sanctions and conduct periodic meetings to review changes in the
legal and regulatory regime. The updates are typically undertaken on a 60 day basis. In addition, the Company is
a member of the Mining Advisory Council which consistently works with Russian authorities to assist in the
understanding of regulatory constraints and assists in the modification of legislation designed to clarify
inconsistencies in legislation and interpretation of the law.
The regulatory environment
The Group’s activities are subject to extensive federal and regional laws and regulations governing various
matters, including licensing, production, taxes, mine safety, labour standards, occupational health and safety and
environmental protections. Amendments to current laws and regulations governing operations and activities of
mining companies or more stringent implementation or interpretation of these laws and regulations could have a
material adverse impact on the Group, cause a reduction in levels of production and delay or prevent the
development or expansion of the Group’s properties in Russia.
Mitigation: the Company utilises its Moscow legal team of Bryan Cave Leighton Paisner to monitor changes to
the regulatory system. In addition, the Mining Advisory Council also participates in reviews and working with the
governmental groups responsible for regulatory control and the authoring of new legislation. Proactively, the
Company assesses the potential impact of any proposed modifications and is dynamically changing Company
policies and approaches to match the Russian regulatory environment. Often planning and work is completed in
advance of changes when they are identifiable and could impact exploration and operations.
Taxation
Russian tax legislation has been subject to frequent change and some of the laws relating to taxes to which the
Group is subject are relatively new. The government’s implementation of such legislation, and the courts’
interpretation thereof, has been often unclear or non-existent, with few precedents established. Differing opinions
regarding legal interpretation may exist both among and within government ministries and organisations and
various local inspectorates. The introduction of new tax provisions may affect the Group’s overall tax efficiency
and may result in significant additional tax liability.
Mitigation: the Company continually assesses the tax regime and utilises experienced local staff and state
agencies in submission of taxes at all levels. This includes personal taxes, social taxes and any other taxes that
the Company must pay on behalf of its employees. These documents and approaches are reviewed by the tax
authorities on an annual basis and modifications are undertaken as required.
14
AMUR MINERALS CORPORATION
OPERATING RISKS AND UNCERTAINTIES (CONTINUED)
Russia's physical infrastructure
Some of Russia’s physical infrastructure is in poor condition. This may disrupt the transportation of supplies, add
to costs and interrupt operations, with a potentially material adverse effect on the Group’s business.
The Company's project is remotely located and will need to construct an access road of approximately 320
kilometres from the Baikal Amur rail line to the project site. The Company's position is that they will have to
construct the access road to a standard suitable to support the operation on a year round basis. This includes the
ability to restock consumables and fuel at site. The fuel transported to the project site will support the mobile
equipment fleet (mining fleet included) as well as to fuel on site power generation using diesel fuelled generator
sets which will preclude the need to construct a power line to the site. The Prefeasibility Study incorporates the
construction of the access road into the initial capital expenditures.
15
AMUR MINERALS CORPORATION
STATEMENT OF DIRECTORS' RESPONSIBILITIES
FOR THE YEAR ENDED 31 DECEMBER 2020
The Directors are responsible for preparing the financial statements and have, as required by the AIM Rules of
the London Stock Exchange, elected to prepare the group financial statements in accordance with International
Financial Reporting Standards as adopted by the European Union in order to give a true and fair view of the
state of affairs of the Group and of its profit or loss for that period.
In preparing these financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with IFRSs as adopted by the European Union,
subject to any material departures disclosed and explained in the financial statements;
• 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 records that are sufficient to show and explain the Group’s
transactions and will, at any time, enable the financial position of the Group to be determined with reasonable
accuracy. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable
steps to prevent and detect fraud and other irregularities and for the preparation of any additional information
accompanying the financial statements that may be required by law or regulation.
Website publication
The Directors are responsible for ensuring the annual report and the financial statements are made available on
a website. Financial statements are published on the Company’s website in accordance with legislation in the
British Virgin Islands governing the preparation and dissemination of financial statements, which may vary from
legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of
the Directors. The Directors’ responsibility also extends to the ongoing integrity of the financial statements
contained therein.
Mr R Young
Director
29 June 2021
16
AMUR MINERALS CORPORATION
REMUNERATION COMMITTEE REPORT
Dear Shareholders,
I am pleased to present this report on behalf of the Remuneration Committee and to report on progress made
by the Committee during the year. Throughout 2020 the Committee has focused on how best to align reward
with results and specifically how to incentivise our people to act like business owners.
Remuneration Policy and Aims of the Remuneration Committee
Our overall aim is to align employee remuneration with the successful delivery of long-term shareholder value.
We have adopted three key principles to enable us to achieve this goal:
• To offer competitive salary packages that attract, retain and motivate highly-skilled individuals;
• To align remuneration packages with performance related metrics that mirror our long-term business
strategy; and,
• To encourage accountability in the workplace and link reward with success.
The Group currently operates the following remuneration framework:
• Annual salary and associated benefits such as paid holiday;
The Remuneration Committee consists of myself as the Chairman together with one other independent Non-
Executive Director, Paul Gazzard. The Committee aims to meet at least once each year and its key responsibilities
include reviewing the performance of senior staff, setting their remuneration and determining the payment of
bonuses.
The Chief Executive Officer and Chief Financial Officer are invited to attend meetings of the Committee, but no
Director is involved in any decisions relating to their own remuneration. None of the Committee has any
personal financial interest (other than as shareholders), conflicts of interests arising from cross-directorships, or
day-to-day involvement in running the business.
Terms of reference
The terms of reference of the Remuneration Committee are set out below.
• Determine and agree with the Board the Company’s overall remuneration policy and monitor the efficacy of
the policy on an ongoing basis;
• Determine and agree with the Board the remuneration of the Executive Directors and senior
management;
• Determine the objectives and headline targets for any performance-related bonus or incentive schemes;
• Monitor, review and approve the remuneration framework for other senior employees; and,
• Review and approve any termination payment such that these are appropriate for both the individual
and the Company.
Directors Remuneration
Executive Directors
Robin Young
Adam Habib
Non-Executive Directors
Robert Schafer
Brian Savage
Paul Gazzard
Lou Naumovski
Tom Bowens
Salaries
US$'000
Fees
US$'000
2020
Total
US$'000
Salaries
US$'000
Fees
US$'000
2019
Total
US$'000
316
153
-
-
-
-
-
469
-
-
58
172
56
25
50
361
17
316
153
58
172
56
25
50
830
316
-
-
-
-
-
-
-
-
61
52
51
52
20
316
-
61
52
51
52
20
316
236
552
AMUR MINERALS CORPORATION
REMUNERATION COMMITTEE REPORT (CONTINUED)
Details of Directors’ holdings in share options can be found at Note 23 to the financial statements.
The year ahead
We believe that remuneration throughout the business is structured appropriately to incentivise performance,
rewarding behaviour in the spirit of ownership throughout the organisation. This will undergo ongoing review as
the business evolves, in order to ensure that our employees and executives are remunerated optimally in the
interests of the Company.
The Committee and I remain focused on ensuring that reward at the Company continues to be closely aligned
with the delivery of long-term shareholder value.
Mr R Schafer
Chair of the Remuneration Committee
29 June 2021
18
AMUR MINERALS CORPORATION
AUDIT COMMITTEE REPORT
Dear Shareholders,
I am pleased to present this report on behalf of the Audit Committee and to report on progress made by the
Committee during the year.
Aims of the Audit Committee
Our overall aim is to assist the Board in discharging its duties regarding the financial statements, to ensure that a
robust framework of accounting policies is in place and enacted, and to oversee the maintenance of proper internal
financial controls.
The Audit Committee consists of myself as the Chairman together with the non-executive Chairman Robert
Schafer. The Committee aims to meet at least twice each year and its key responsibilities include monitoring the
integrity of the Group’s financial reporting. The Chief Executive Officer and Chief Financial Officer are invited to
attend meetings of the Committee.
Key responsibilities
The Audit Committee is committed to:
• Maintaining the integrity of the financial statements of the Company and reviewing any significant reporting
matters they contain;
• Reviewing the Annual Report and Accounts and other financial reports and maintaining the accuracy and
fairness of the Company’s financial statements including through ensuring compliance with applicable
accounting standards and the AIM Rules;
• Monitoring external auditors' independence, including the scope and extent of non-audit services provision;
• Reviewing the adequacy and effectiveness of the internal control environment and risk management
systems; and,
• Overseeing the relationship with and the remuneration of the external auditor, reviewing their performance
and advising the Board members on their appointment.
The Audit Committee met three times in 2020 and the external auditors were present during each of these meetings.
Activities of the Audit Committee during the year
On behalf of the Board, the Audit Committee has closely monitored the maintenance of internal controls and risk
management during the year. Key financial risks are reported during each Audit Committee meeting, including
developments and progress made towards mitigating these risks.
The Committee received reports from the Chief Financial Officer throughout the year and was satisfied with the
effectiveness of internal controls and risk mitigation. It supports recommendations made by the Chief Financial
Officer and is satisfied with the actions taken and plans in place by management for further improvement.
External audit
The Audit Committee considers various areas when reviewing the appointment of an external auditor including their
performance in conducting the audit and its scope, terms of engagement including remuneration and their
independence and objectivity.
19
AMUR MINERALS CORPORATION
AUDIT COMMITTEE REPORT (CONTINUED)
BDO have been appointed as external auditor since 2011. The Audit Committee has confirmed it is satisfied with
BDO’s knowledge of the Company and its effectiveness as external auditor. As such the Audit Committee has
recommended the reappointment of BDO to the Board. There will be a resolution to this effect at the forthcoming
Annual General Meeting.
The year ahead
The Committee and I remain focused on ensuring that the standard of the Group’s financial reporting is maintained
moving forward, and that the robust framework of internal controls and systems in place is both maintained and
regularly reviewed for improvement. The Committee will also continue to closely monitor the financial risks faced by
the business and progress made towards mitigating these.
Mr P Gazzard
Chair of the Audit Committee
29 June 2021
20
AMUR MINERALS CORPORATION
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
The Directors present their annual report and the audited financial statements for the year ended 31 December
2020.
Principal activities
The Group’s principal activity during the year was that of mineral exploration and development. A full review of
the activity of the business and of future prospects is contained in the chairman’s statement which accompanies
these financial statements.
Results and dividends
The results for the year are set out on page 29.
No ordinary dividends were paid (2019: US$nil). The Directors do not recommend payment of a final dividend
(2019: US$nil).
Directors
The Directors who held office during the year and up to the date of signature of the financial statements were as
follows:
Mr R Schafer
Mr R Young
Mr B Savage
Mr P Gazzard
Mr L Naumovski
Mr T Bowens
A Habib
(Resigned 16 October 2020)
(Resigned 20 May 2020)
(Appointed 2 September 2020, resigned 10 December 2020)
Details of Directors' remuneration and other interests are detailed in note 23.
Listing
The Company’s ordinary shares have been traded on the AIM market of the London Stock Exchange since 15
March 2006. SP Angel Corporate Finance LLP is the Company’s Nominated Adviser and Broker. The share price
at 31 December 2020 was 1.60p.
Donations
The Group has not made any charitable or political donations during the year (2019: US$nil).
Principal risks and uncertainties
The management of the Group’s business and the execution of its strategy are subject to a number of risks.
Risks are formally reviewed by the Board and appropriate processes put in place to monitor and mitigate them. If
more than one event occurs, the overall impact of such events may compound the possible adverse effects on
the Group.
The key financial risks affecting the Group are set out in note 24. The key operating risks affecting the Group are
set out on pages 12 - 15.
Auditors
BDO LLP have expressed their willingness to continue in office and a resolution to re-appoint them will be
proposed at the annual general meeting.
Statement of disclosure to auditors
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit
information of which the Company’s auditors are unaware. Additionally, the Directors individually have taken all
the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant
audit information and to establish that the Company’s auditors are aware of that information.
21
AMUR MINERALS CORPORATION
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
Going Concern
The Group operates as a natural resources exploration and development group. To date, it has not earned any
revenues and is considered to be in the final stages of exploration and evaluation activities of its Kun-Manie
project.
The Directors have reviewed the Group’s cash flow forecast for the period to 31 December 2022 and note that
the Group’s ability to continue to meet its obligations as and when they fall due is dependent on a variety of
factors, one being the receipt of quarterly interest payments from NRR in respect of the convertible loan facility.
Should no further quarterly interest payments be received from the date of this report, it is foreseen that cash
will run out in April 2022.
As the Group approaches bankable feasibility, an alternative funding option will need to be secured in order to
adequately fund this step. The Directors are currently in negotiations with a number of parties in respect of
raising further funds. Whilst progress is being made on a number of potential transactions which would provide
adequate funding to the Group, there are no binding agreements in place. The Company was successful in
completing three equity placements in 2020 and while the Directors are confident of raising additional funding
should it be required, their ability to do this is not completely within in their control.
The uncertainties associated with the level of future cash inflows indicate the existence of a material uncertainty
which may cast significant doubt over the Group’s ability to continue as a going concern. Based on the current
progress of the negotiations with potential investors and providers of finance the Directors believe that the
necessary funds to provide adequate financing to continue with the current work program on its Kun-Manie
project will be raised as required and accordingly they are confident that the Group will continue as a going
concern and have prepared the financial statements on that basis.
The financial statements do not include the adjustments that would result if the Group was not able to continue
as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the
normal course of business.
Approved by the Board of Directors and signed on behalf of the Board by:
Mr R Schafer
Director
29 June 2021
22
AMUR MINERALS CORPORATION
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF AMUR MINERALS CORPORATION
Opinion on the financial statements
In our opinion:
•
•
the financial statements give a true and fair view of the state of the Group’s affairs as at 31 December 2020 and
of the Group’s loss for the year then ended; and
the Group financial statements have been properly prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union.
We have audited the financial statements of Amur Minerals Corporation (the ‘Parent Company’) and its subsidiaries (the
‘Group’) for the year ended 31 December 2020 which comprise the Consolidated statement of financial position, the
Consolidated income statement, the Consolidated statement of comprehensive income, the Consolidated statement of
changes in equity, the 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 the preparation of the Group financial statements is applicable
law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
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 believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We remain independent of the Group and the Parent Company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Conclusions relating to going concern
We draw attention to note 2.3 in the financial statements, which indicates that the Group is dependent on the receipt of
quarterly interest payments from Nathan River Resources Pte Limited in respect of a convertible loan facility. In addition
to this, the Group is reliant on raising additional funds to continue with the current work programme on its Kun-Manie
Project. These conditions, as set out in note 2.3, indicate that a material uncertainty exists that may cast significant doubt
on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
We considered going concern to be a Key Audit Matter as the directors have to make highly subjective judgements and
assumptions in this area. We performed the following work in response to this matter:
•
•
• Considered whether the assumptions and inputs in the cash flow forecast prepared by the directors were in line
with our understanding of the Group’s operations and other information obtained by us during the course of the
audit;
corroborated the December 2020 and May 2021 cash positions by reference to supporting documentation;
critically challenged the forecast expenditure by comparing it to historical run rate. We confirmed that contractually
committed amounts were included;
reviewed the appropriateness of Management’s sensitised cash flows and assessed the impact of reduced income,
reasonably possible changes to costs and mitigating factors available to the Group;
tested the integrity and arithmetic accuracy of the cash flow forecast model prepared by Directors;
discussed with Management and the Board the Group’s strategy to access capital to fund its development plans;
and
reviewed and considered the adequacy of the disclosure within the financial statements relating to the directors’
assessment of the going concern basis of preparation and the disclosure of the material uncertainties.
•
•
•
•
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report.
23
AMUR MINERALS CORPORATION
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF AMUR MINERALS CORPORATION
Overview
Coverage1
Key audit matters
Materiality
100% (2019: 100%) of Group loss before tax
99% (2019: 99%) of Group total assets
Going concern
Carrying value of
Exploration
and
Evaluation assets
2020
ü
ü
2019
ü
ü
Group financial statements as a whole
$453,000 (2019: $400,000) based on 1.4% (2019: 1.4%) of
Total assets
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s
system of internal control, and assessing the risks of material misstatement in the financial statements. We also
addressed the risk of management override of internal controls, including assessing whether there was evidence of bias
by the Directors that may have represented a risk of material misstatement.
The Group’s principal operating location is in Russia, being the Kun-Manie exploration project owned by its subsidiary
ZAO Kun-Manie. Together with the Parent Company and a fellow subsidiary, Carlo Holdings Limited, these represent
the significant components of the Group and were subjected to full scope audits.
The remaining component of the Group was considered non-significant and was principally subject to analytical review
procedures.
The audits of each of the components were performed in the United Kingdom. All of the audits were conducted by BDO
LLP.
Key audit matters
Key audit matters are those matters that, in our professional judgement, 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, including those which had the greatest effect on: the overall audit strategy,
the allocation of resources in the audit, and directing the efforts of the engagement team. These matters were addressed
in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key audit matter
Carrying
value of
Exploration
and
Evaluation
assets.
See Note 3
and Note 6
At 31 December 2020, the
Group held exploration and
evaluation assets of $23.5m,
related to the Kun-Manie mineral
exploration licence.
As the carrying value of these
exploration assets represent a
significant asset to the Group, we
How the scope of our audit addressed the
key audit matter
Our specific audit testing in this regard
included:
• we
reviewed
the Kun-Manie
licence
agreements to confirm its validity, key terms,
to
and verified changes
supporting documentation;
the year
in
• we confirmed that substantive expenditure
for further exploration is planned and that
1 These are areas which have been subject to a full scope audit by the group engagement team
24
AMUR MINERALS CORPORATION
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF AMUR MINERALS CORPORATION
to the
financial
statements
it necessary
to
considered
assess whether any facts or
circumstances exist to suggest
that the carrying amount of this
asset may exceed its recoverable
amount.
As a result, the assets were
for
required
in
indicators
impairment
accordance with IFRS 6.
to be assessed
Because of
judgement
involved in this, we considered
this to be a key audit matter.
the
contractually committed expenditure
included within
forecasts;
is
the Group’s 2021-22
• we reviewed board minutes and market
indications of
for any
announcements
impairment;
• we critically challenged the key judgments
and assumptions made by management in
the discounted cash flow forecasts within
the pre-feasibility study, including forecast
nickel prices, royalties, costs and discount
rates. We assessed the assumptions
against empirical data, independent reserve
reports and to external evidence where
available;
• we performed sensitivity analysis on the
discounted cash flow forecasts to establish
the impact of reasonably possible changes
in key variables such as pricing and the
discount rate; and
• we assessed the adequacy of the related
disclosure within the accounting policies and
Note 6 of the financial statements against the
requirements of the accounting standards.
Key observations:
We found management’s conclusion that no
indication of impairment exists on the
exploration and evaluation assets to be
reasonable. The disclosures in the financial
statements in relation to this matter are
considered appropriate.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could
influence the economic decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below
these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified
misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial
statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and
performance materiality as follows:
Materiality
Basis for
determining
materiality
the
Rationale
benchmark applied
for
Group financial statements
2020
$453,000
1.4% of Total assets
2019
$400,000
1.4% of Total assets
We determined that an asset-based measure is appropriate as the Group’s
principal activity is the exploration & evaluation of the Kun-Manie mine, such
that the asset base is considered to be a key financial metric for users of the
financial statements.
Performance
$339,000
$300,000
25
AMUR MINERALS CORPORATION
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF AMUR MINERALS CORPORATION
materiality
Basis for
determining
performance
materiality
Component materiality
75% of materiality was considered a reasonable basis, taking into
consideration:
•
•
the expected value of misstatements was likely to be low based on
past experience; and
there are few accounts which are subject to estimation.
We set materiality for each component of the Group based on the size and our assessment of the risk of material
misstatement of that component. Component materiality ranged from $200,000 to $300,000. In the audit of each
component, we further applied performance materiality levels of 75% of the component materiality to our testing to
ensure that the risk of errors exceeding component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of $8,000
(2019: $8,000). We also agreed to report differences below this threshold that, in our view, warranted reporting on
qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the
annual report and financial statements other than the financial statements and our auditor’s report thereon. Our opinion
on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in
our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Directors
As explained more fully in the statement of Directors’ responsibilities, 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.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The
extent to which our procedures are capable of detecting irregularities, including fraud are detailed below:
26
AMUR MINERALS CORPORATION
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF AMUR MINERALS CORPORATION
• We obtained an understanding of the legal and regulatory framework applicable to the Group and the industry in
which it operates and considered the significant laws and regulations to be those relating to the financial reporting
framework, BVI Companies Act, tax legislation and environmental regulations in Russia;
• we held discussions with management and the Board to consider any known or suspected instances of non-
compliance with laws and regulations or fraud identified by them;
• we reviewed minutes from board meetings of those charged with governance to identify any instances of non-
compliance with laws and regulations;
• we assessed the susceptibility of the Group's financial statements to material misstatement, including how fraud
might occur;
• we responded to the risk of management override of control by identifying and testing any large or unusual (those
with key risk characteristics) journal entries made in the year;
• we reviewed estimates and judgements applied by Management in the financial statements to assess their
appropriateness and the existence of any systematic bias (refer to Key Audit Matters above); and
• we communicated relevant identified laws and regulations and potential fraud risks to all audit team members and
remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising
that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting
from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through
collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with
laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to
become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body in accordance with the terms of our engagement
letter. Our audit work has been undertaken so that we might state to the Parent 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 Parent Company and the Parent Company’s members
as a body, for our audit work, for this report, or for the opinions we have formed.
Peter Acloque
For and on behalf of BDO LLP, Statutory Auditor
London, UK
29 June 2021
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
27
AMUR MINERALS CORPORATION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
Non-current assets
Exploration and evaluation assets
Property, plant and equipment
Financial assets at fair value
through profit and loss
Current assets
Inventories
Other receivables
Cash and cash equivalents
Notes
6
7
8
9
10
2020
US$'000
23,542
452
5,255
29,249
207
158
2,790
3,155
Restated*
2019
US$'000
Restated*
2018
US$'000
26,227
1,154
-
27,381
276
211
398
885
22,204
1,668
-
23,872
257
191
1,257
1,705
Total assets
32,404
28,266
25,577
Current liabilities
Trade and other payables
Convertible loan notes
Derivative financial liabilities
12
13
Non-current liabilities
Rehabilitation provision
Total liabilities
Net assets
Equity
Share capital
Share premium
Foreign currency translation
reserve
Share options reserve
Retained deficit
Total equity
913
-
-
913
141
1,054
965
-
-
965
164
1,129
802
1,663
153
2,618
146
2,764
31,350
27,137
22,813
15, 16
15, 16
15
15, 17
15
80,449
4,278
(17,474)
577
(36,480)
31,350
69,510
4,790
(13,351)
1,136
(34,948)
27,137
65,674
4,904
(16,282)
2,034
(33,517)
22,813
* Refer to note 27 Prior period adjustment.
The financial statements were approved by the Board of directors and authorised for issue on 29 June 2021
and were signed on its behalf by:
Mr R Young
Director
The accompanying notes on pages 33 – 64 form an integral part of these financial statements.
28
AMUR MINERALS CORPORATION
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2020
Notes
2020
US$'000
Administrative expenses
Operating loss
Finance income
Finance costs
Fair value movements on derivative financial
instruments
Gain on revaluation of assets held at fair
value through profit and loss
Loss on early redemption
(Loss)/Gain on loan modification
Loss before taxation
Tax expense
18
19
20
8
13
21
Loss for the year attributable to owners of
the parent
(3,083)
(3,083)
205
(104)
-
423
(109)
-
(2,668)
-
(2,668)
2019
US$'000
(1,984)
(1,984)
1
(803)
342
-
-
115
(2,329)
-
(2,329)
Loss per share (expressed in cents)
Basic and diluted
22
(0.25)
(0.32)
The items in the above statement are derived from continuing operations.
The accompanying notes on pages 33 – 64 form an integral part of these financial statements.
29
AMUR MINERALS CORPORATION
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
Loss for the year
Other comprehensive (loss)/income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations
Total other comprehensive (loss)/income for the
year
Total comprehensive (loss)/income for the year
attributable to owners of the parent
2020
US$'000
Restated*
2019
US$'000
(2,668)
(2,329)
(4,123)
2,931
(4,123)
2,931
(6,791)
602
* Refer to note 27 Prior period adjustment.
The accompanying notes on pages 33 – 64 form an integral part of these financial statements.
30
AMUR MINERALS CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
Share
capital
Share Foreign
premium currency
translation
reserve
Notes US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Share
options
reserve
Retained
deficit
Total
equity
Balance at 1 January 2019 (as
previously stated)
65,674
4,904
(15,476)
2,034
(33,517)
23,619
Prior year restatement 27
-
- (806)
-
-
(806)
Balance restated at 1 January 2019
65,674
4,904 (16,282)
2,034
(33,517)
22,813
Year ended 31 December
2019:
Loss for the year
Other comprehensive income:
Exchange differences on
translation of foreign operations
Total comprehensive income for
the year
16
Issue of share capital
Conversion of loan
16
Options expired 17
-
-
-
-
- 2,931
-
-
(2,329)
(2,329)
-
2,931
-
1,988
1,848
-
-
2,931
(114) -
-
-
- -
-
-
-
(898)
(2,329)
-
-
898
602
1,874
1,848
-
Balance at 31 December 2019
69,510
4,790
(13,351)
1,136
(34,948)
27,137
Balance at 1 January 2020
Year ended 31 December
2020:
Loss for the year
Other comprehensive income:
Exchange differences on
translation of foreign operations
69,510
4,790
(13,351)
1,136
(34,948)
27,137
-
-
-
-
-
(4,123)
-
-
(2,668)
(2,668)
-
(4,123)
Total comprehensive income for
the year
16
Issue of share capital
Conversion of warrants
16
Options charge for the year 17
Options expired 17
-
10,063
876
-
-
-
(512)
-
-
(4,123)
-
-
-
-
-
-
577
(2,668)
-
-
-
(6,791)
9,551
876
577
-
-
(1,136)
1,136
-
Balance at 31 December 2020
80,449
4,278
(17,474)
577
(36,480)
31,350
The accompanying notes on pages 33 – 64 form an integral part of these financial statements.
31
AMUR MINERALS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
Notes
US$'000
US$'000
US$'000
US$'000
2020
2019
Cash flows from operating activities
Payments to suppliers and employees
Interest expense
Net cash outflow from operating activities
Cash flow from investing activities
Payments for exploration expenditure
Loans granted
Payments for property, plant and equipment
Interest received
(2,196)
-
(2,196)
(1,884)
(18)
(1,902)
(564)
(4,658)
-
43
(501)
-
1
Net cash used in investing activities
(5,179)
(500)
Cash flow from financing activities
Cash received on issue of shares, net of issue
costs
Issue of convertible loans, net of issue costs
Repayment of convertible loans
16
13
13
10,005
607
(720)
1,845
492
(835)
Net cash generated from financing
activities
Net Increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of
year
Exchange differences on cash and cash
equivalents
Cash and cash equivalents at end of year
9,892
2,517
398
(125)
2,790
1,502
(900)
1,257
41
398
The accompanying notes on pages 33 – 64 form an integral part of these financial statements.
32
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1 General information
Amur Minerals Corporation is incorporated under the British Virgin Islands Business Companies Act 2004.
The registered office is Kingston Chambers, P.O. Box 173, Road Town, Tortola, British Virgin Islands.
The Company and its subsidiaries (“Group”) locates, evaluates, acquires, explores and develops mineral
properties and projects in the Russian Far East.
The Company owns 100% of the share capital of Carlo Holdings Limited, which was acquired in the year.
The Company is also the 100% owner of Irosta Trading Limited (“Irosta”), an investment holding company
incorporated and registered in Cyprus. Irosta holds 100% of the shares in ZAO Kun-Manie (“Kun-Manie”),
an exploration and mining company incorporated and registered in Russia, which holds the Group’s mineral
licences.
The Group’s principal place of business is in the Russian Federation.
The Group's principal asset is the Kun-Manie production licence, which was issued in May 2015. The
licence is valid until 1 July 2035 and allows the Company’s subsidiary, ZAO Kun-Manie, to recover all
revenues from 100% of the mined metal that specifically includes nickel, copper, cobalt, platinum,
palladium, gold and silver. The Company’s management are evaluating the project with a view of
determining an appropriate model for the development and ultimate exploitation of the project.
2
Significant accounting policies
2.1 Basis of preparation
These financial statements have been prepared under the historical cost convention, except for the valuation
of derivative financial instruments, on the basis of a going concern and in accordance with International
Financial Reporting Standards (IFRS) and IFRIC interpretations issued by the International Accounting
Standards Board (IASB) as adopted by the European Union.
The financial statements are presented in thousands of United States Dollars.
The principal accounting policies adopted in the preparation of the financial statements are set out below.
The policies have been consistently applied to all the years presented, unless otherwise stated.
The preparation of financial statements in conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the application of policies and reported amounts of assets and
liabilities, income and expenses. The estimates and associated assumptions are based on historical
experience and factors that are believed to be reasonable under the circumstances, the results of which
form the basis of making judgements about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates. The areas involving a higher
degree of judgement or complexity, or where assumptions and estimates are significant to the consolidated
financial statements, are disclosed in note 3.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision only affects that period,
or in the period of revision and future periods if the revision affects both current and future periods.
33
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2
Significant accounting policies
(Continued)
2.2 Changes in accounting policies and disclosures
A number of new and amended standards and interpretations issued by IASB have become effective for the
first time for financial periods beginning on (or after) 1 January 2020 and have been applied by the Group in
these financial statements. None of these new and amended standards and interpretations had a significant
effect on the Group because they are either not relevant to the Group’s activities or require accounting which
is consistent with the Group’s current accounting policies.
New standards, amendments and interpretations that are not yet effective and have not been early
adopted
There are a number of standards, amendments to standards, and interpretations which have been issued by
the IASB that are effective in future accounting periods and which have not been adopted early. None of
these are expected to have a significant effect on the Group, in particular:
Standard
IAS 1 (Amendments)
IAS 37 (Amendments)
Impact on initial application
Classification of Liabilities as Current or Non-
Current.
Provisions, contingent liabilities and contingent
assets
Effective date
1 January 2022
*1 January 2022
* Subject to endorsement
2.3 Going concern
The Group operates as a natural resources exploration and development group. To date, it has not earned
any revenues and is considered to be in the final stages of exploration and evaluation activities of its Kun-
Manie project.
The Directors have reviewed the Group’s cash flow forecast for the period to 31 December 2022 and note
that the Group’s ability to continue to meet its obligations as and when they fall due is dependent on a
variety of factors, one being the receipt of quarterly interest payments from NRR in respect of the convertible
loan facility. Should no further quarterly interest payments be received from the date of this report, it is
foreseen that cash will run out in April 2022.
As the Group approaches bankable feasibility, an alternative funding option will need to be secured in order
to adequately fund this step. The Directors are currently in negotiations with a number of parties in respect
of raising further funds. Whilst progress is being made on a number of potential transactions which would
provide adequate funding to the Group, there are no binding agreements in place. The Company was
successful in completing three equity placements in 2020 and while the Directors are confident of raising
additional funding should it be required, their ability to do this is not completely within in their control.
The uncertainties associated with the level of future cash inflows indicate the existence of a material
uncertainty which may cast significant doubt over the Group’s ability to continue as a going concern. Based
on the current progress of the negotiations with potential investors and providers of finance the Directors
believe that the necessary funds to provide adequate financing to continue with the current work program
on its Kun-Manie project will be raised as required and accordingly they are confident that the Group will
continue as a going concern and have prepared the financial statements on that basis.
The financial statements do not include the adjustments that would result if the Group was not able to
continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its
liabilities in the normal course of business.
34
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
2
Significant accounting policies
(Continued)
2.4 Basis of consolidation
The consolidated financial statements of the Group include the accounts of Amur Minerals Corporation and
its subsidiaries. Subsidiaries are fully consolidated from the date on which control is transferred to the
Group. They are de-consolidated from the date on which control ceases.
Inter-company transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated but considered an impairment indicator of the asset
transferred.
These consolidated financial statements include accounts of the Company and its subsidiaries as set out in
note 1.
The Company’s Russian subsidiary maintains its books and records in accordance with accounting
principles and practices mandated by Russian Accounting Regulations. These records have been adjusted
to comply with IFRS for the purposes of preparing these consolidated financial statements.
Accounting policies of other subsidiaries are consistent with those applied by the Company and the Group.
2.5 Functional and presentation currency
Items included in the financial information of each of the Group’s entities are measured using the currency of
the primary economic environment in which the entity operates (the functional currency).
The consolidated financial statements are presented in US Dollars (US$), which is the Group's presentation
currency and is the functional and presentation currency of the Company. The functional currency of the
Group’s operating subsidiary is the Russian Rouble (RUB).
The exchange rate on 31 December 2020 was US$1:RUB 74.35 (2019: US$1:RUB 62.04), with the average
rates applied to transactions during the year of US$1:RUB 72.27 (2019: US$1:RUB 64.67).
In preparing the financial statement of the individual entities, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the date of the
transaction. At each reporting date, monetary items denominated in foreign currencies are retranslated at the
rates prevailing on the reporting date.
Exchange differences arising on the settlement and on the retranslation of monetary items are included in
profit or loss for the period.
On consolidation, the results of the Group's subsidiaries that have functional currency different from the
Group's presentation currency are translated into the presentation currency at rates approximating to those
ruling when the transactions took place. All assets and liabilities of these subsidiaries are translated at the
rate ruling at the reporting date. Exchange differences arising on translating the opening equity and reserves
at opening/historic rates and the results at actual rates are recognised in other comprehensive income and
accumulated in the foreign currency translation reserve.
Exchange differences recognised in profit or loss of group entities' separate financial statements on the
translation of long-term monetary items forming part of the Group's net investment in the overseas operation
concerned are reclassified to other comprehensive income and accumulated in the foreign exchange
reserve on consolidation.
On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign exchange
reserve relating to that operation up to the date of disposal are transferred to the consolidated income
statement as part of the profit or loss on disposal.
35
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
2
Significant accounting policies
(Continued)
2.6 Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision makers. The chief operating decision makers have been identified as the Chief Executive
Officer and non-executive Board Members.
The operating results of each of these segments are regularly reviewed by the Group’s chief operating
decision makers in order to make decisions about the allocation of resources and to assess their
performance.
The accounting policies of these segments are in line with those set out in these notes.
2.7 Exploration and evaluation assets
All costs incurred prior to obtaining the legal right to undertake exploration and evaluation activities on a
project are written off as incurred.
All costs associated with mineral exploration and investments are capitalised on a project by project basis,
pending determination of the feasibility of the project. Costs incurred include appropriate technical expenses
as well as administrative costs closely associated with finding specific mineral resources such as
remuneration of employees directly evolved in evaluating technical feasibility or depreciation of property,
plant and equipment used for the evaluation and exploration works.
If an exploration project is successful and the project is determined to be commercially viable (which is when
a bankable feasibility study is obtained, and sufficient project finance is in place) the related costs will be
transferred to mining assets and amortised over the estimated life of the mineral reserves on a unit of
production basis.
Where a project is relinquished, abandoned, or is considered to be of no further commercial value to the
Group, the related costs are written off.
Impairment reviews performed under IFRS 6 'Exploration for and evaluation of mineral resources' are
carried out on a project by project basis, with each project representing a potential single cash generating
unit. An impairment review is undertaken when indicators of impairment arise; typically when one of the
following circumstances applies:
title to the asset is compromised;
• sufficient data exists that render the resource uneconomic and unlikely to be developed;
•
• budgeted or planned expenditure is not expected in the foreseeable future;
•
insufficient discovery of commercially viable resources leading to the discontinuation of activities.
36
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
2
Significant accounting policies
(Continued)
2.8 Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost, net of
depreciation and any impairment losses.
Depreciation is provided on all property, plant and equipment at rates calculated to write off the cost of each
asset on a straight-line basis over its expected useful life as follows:
Office and computer equipment
Operating equipment
Vehicles and machinery
3 to 8 years
5 to 7 years
2 years
The costs of maintenance, repairs and replacement of minor items of property, plant and equipment are
charged to profit or loss for the period.
Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount
by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher
of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are largely independent cash inflows (cash
generating units). Prior impairments are reviewed for possible reversal at each reporting date.
2.9
Inventory
Inventories are stated at the lower of cost and net realisable value and comprise mainly fuel, materials and
spare parts. Costs comprise all costs of purchase and other costs incurred in bringing the inventories to their
present location and condition.
2.10 Cash and cash equivalents
Cash and cash equivalents are carried at cost and include all highly liquid investments with a maturity of
three months or less.
2.11 Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time
in exchange for consideration.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases (i.e., those leases
that have a lease term of 12 months or less from commencement date and do not contain a purchase
option). It also applies the lease of low-value assets recognition exemption to leases of equipment that are
considered of low value (i.e., below $5,000). Lease payments on short-term leases and leases of low-value
assets are recognized as occupancy expense on a straight-line basis over the lease term.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily
determined, the Group uses its incremental borrowing rate.
The right of use assets comprise the initial measurement of the corresponding lease liability, lease payments
made at or before the commencement day and any initial direct costs. They are subsequently measured at
cost less accumulated depreciation and impairment losses.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right of use
asset) whenever:
37
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
·
·
·
The lease term has changed or there is a change in the assessment of exercise of a purchase option,
in which case the lease liability is remeasured by discounting the revised lease payments using a
revised discount rate;
The lease payments change due to changes in an index or rate or a change in expected payment under
a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised
lease payments using the initial discount rate (unless the lease payments change is due to a change in
a floating interest rate, in which case a revised discount rate is used); or
A lease contract is modified and the lease modification is not accounted for as a separate lease, in
which case the lease liability is remeasured by discounting the revised lease payments using a revised
discount rate.
Right of use assets are depreciated over the shorter period of lease term and useful life of the underlying
asset. If a lease transfers ownership of the underlying asset or the cost of the right of use asset reflects that
the Group expects to exercise a purchase option, the related right of use asset is depreciated over the
useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right of use assets are presented as a separate line in the statement of financial position.
The Group applies IAS 36 Impairment of Assets to determine whether a right of use asset is impaired.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease
liability and the right of use asset. The related payments are recognised as an expense in the period in
which the event or condition that triggers those payments occurs.
2.12 Financial instruments
Financial assets and financial liabilities are recognised in the Group's statement of financial position when
the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial
liabilities are only offset and the net amount reported in the consolidated statement of financial position and
income statement when there is a currently enforceable legal right to offset the recognised amounts and the
Group intends to settle on a net basis or realise the asset and liability simultaneously.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets
and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the
financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly
attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are
recognised immediately in profit or loss.
38
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
2
Significant accounting policies
(Continued)
Debt instruments are classified as financial assets measured at fair value through other comprehensive
income where the financial assets are held within the company’s business model whose objective is
achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of
the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.
A debt instrument measured at fair value through other comprehensive income is recognised initially at fair
value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured
at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or
losses recognised through other comprehensive income are directly transferred to profit or loss when the
debt instrument is derecognised.
Financial assets
All Group's recognised financial assets are measured subsequently in their entirety at either amortised cost
or fair value, depending on the classification of the financial assets.
Classification of financial assets
Financial assets that meet the following conditions are measured subsequently at amortised cost using the
effective interest rate method:
• The financial asset is held within a business model whose objective is to hold financial assets in
order to collect contractual cash flows; and,
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
The company classifies the following financial assets at fair value through profit or loss (FVPL):
• debt instruments that do not qualify for measurement at either amortised cost (see above) or
FVOCI;
• equity investments that are held for trading; and
• equity investments for which the entity has not elected to recognise fair value gains and losses
through OCI.
Information about the methods and assumptions used in determining fair value is provided in note 8. For
information about the methods and assumptions used in determining fair value refer to note 8.
The Group does not hold any financial assets that meet conditions for subsequent recognition at fair value
through other comprehensive income (“FVTOCI”).
Impairment of financial assets
The Group does not hold any material financial assets subject to the expected credit loss model as defined
within IFRS 9 "Financial Instruments", except for cash. As such it does not calculate a loss allowance for the
expected credit losses on financial assets that are measured at amortised cost.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset
expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the
asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of
ownership and continues to control the transferred asset, the Group recognises its retained interest in the
asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the
risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the
financial asset and also recognises a collateralised borrowing for the proceeds received.
39
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
2
Significant accounting policies
(Continued)
Financial liabilities
The classification of financial liabilities at initial recognition depends on the purpose for which the financial
liability was issued and its characteristics. All purchases of financial liabilities are recorded on trade date,
being the date on which the Group becomes party to the contractual requirements of the financial liability.
Unless otherwise indicated the carrying amounts of the Group’s financial liabilities approximate to their fair
values.
The Group’s financial liabilities consist of financial liabilities measured at amortised cost and financial
liabilities at fair value through profit or loss.
Financial liabilities measured subsequently at amortised cost
Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held
for trading, or (iii) designated as at FVTPL, are measured subsequently at amortised cost using the effective
interest method. The Group’s financial liabilities measured at amortised cost comprise convertible loan
notes, trade and other payables, and accruals.
The effective interest method is a method of calculating the amortised cost of a financial asset/liability and of
allocating interest income/expense over the relevant period. The effective interest rate is the rate that
discounts estimated future cash receipts/payments through the expected life of the financial asset/liability or,
where appropriate, a shorter period.
Convertible loan notes
On issue of a convertible loan, the fair value of the liability component is determined by discounting the
contractual future cash flows using a market rate for a non-convertible instrument with similar terms. This
value is carried as a liability on the amortised cost basis unless is designated as a Fair Value Through Profit
and Loss (“FVTPL”) at inception.
Financial instruments designated as FVTPL are classified in this category irrevocably at inception and are
derecognised when extinguished. They are initially measured at fair value and transaction costs directly
attributable to their acquisition are recognised immediately in profit or loss. Subsequent changes in fair values
are recognised in the income statement with profit or loss.
Equity instruments are instruments that evidence a residual interest in the assets of an entity after deducting
all of its liabilities. Therefore, when the initial carrying amount of a compound financial instrument is allocated
to its equity and liability components, the equity component is assigned the residual amount after deducting
from the fair value of the instrument as a whole the amount separately determined for the liability component.
The value of any derivative features (such as a call option) embedded in the compound financial instrument
other than the equity component (such as an equity conversion option) is included in the liability component.
Management have designated the convertible loan note with Plena Global Opportunities as a FVTPL financial
instrument. In arriving to its fair value, management used the best available market data and have applied
judgement in arriving to the present value of future cash flows. After determining the fair value at inception,
management have allocated the residual value to the equity component. Upon early settlement, the financial
liability has caused a fair value loss which was recognised as a “Fair value movements on derivative financial
instruments and loans” in the statement of comprehensive income.
40
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
2
Significant accounting policies
(Continued)
Derecognition of financial liabilities
A financial liability (in whole or in part) is derecognised when the Group has extinguished its contractual
obligations, it expires or is cancelled. Any gain or loss on derecognition is taken to the income statement.
Fair value measurement hierarchy
The Group classifies its financial assets and financial liabilities measured at fair value using a fair value
hierarchy that reflects the significance of the inputs used in making the fair value measurement (note 8).
The fair value hierarchy has the following levels:
• Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
•
•
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices) (level 2);
Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
(Level 3).
The level in the fair value hierarchy within the financial asset or financial liability is determined on the basis
of the lowest level input that is significant to the fair value measurement.
2.13 Equity instruments
Financial instruments issued by the Company are treated as equity only to the extent that they do not meet
the definition of a financial liability. The ordinary shares are classified as equity instruments.
Equity instruments issued by the Company are recorded at the proceeds received. Costs which are directly
attributable to the issue of new shares, net of any taxes, are set off against share premium.
2.14 Share-based payments
Where equity settled share options are awarded to employees, the fair value of the options at the date of
grant is charged to the consolidated statement of comprehensive income over the vesting period. Non-
market vesting conditions are taken into account by adjusting the number of equity instruments expected to
vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is
based on the number of options that eventually vest. Non-vesting conditions and market vesting conditions
are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a
charge is made irrespective of whether market vesting conditions are satisfied. The cumulative expense is
not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not
satisfied.
Equity-settled share-based payment transactions with other parties are measured at the fair value of the
goods and services received, except where the fair value cannot be estimated reliably, in which case they
are measured at the fair value of the equity instruments granted at the date the entity obtains the goods or
the counterparty renders the service.
Fair value is measured using the Black-Scholes model. The expected life used in the model has been
adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions
and behavioural considerations.
41
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
2
Significant accounting policies
(Continued)
2.15 Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
Current tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the
reporting date in the countries where the Company and its subsidiaries operate. Taxable profit differs from
net profit as reported due to income tax effects of permanent and temporary differences. Non-profit based
taxes are included within administrative expenses.
Deferred tax
Deferred tax is provided for temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Temporary differences relating to
initial recognition of assets or liabilities that affect neither accounting nor taxable profit are not provided for.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the reporting
date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be
available against which the deductible temporary differences can be utilised. Deferred tax assets are
reduced to the extent that it is no longer probable that the related tax benefit will be realised.
42
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
3 Critical accounting estimates and judgements
The preparation of financial statements requires management to make estimates and assumptions
concerning the future, which by definition will seldom result in actual results that match the accounting
estimates. The estimates and assumptions that have a significant risk of causing a material adjustment to
the carrying amount of assets and liabilities within next financial year are discussed below:
Critical judgements
Recoverability of the exploration and evaluation assets
The most significant judgement in the preparation of these financial statements relates to the recoverability
of capitalised exploration costs included in non-current assets. The Directors have assessed whether there
are any indicators of impairment in respect of exploration and evaluation costs. In making this assessment
they have considered resource estimates, future processing capacity, the forward market and longer term
price outlook for nickel.
Management’s estimates of these factors are subject to risk and uncertainties affecting the recoverability of
the exploration and evaluation costs. Any changes to these estimates may result in the recognition of an
impairment charge with a corresponding reduction in the carrying value of such assets. After consideration
of the above factors, the Directors do not consider that there are any indicators that exploration and
evaluation costs are impaired at the year end.
In February 2019 the Group announced the results of its Pre-feasibility study on the Kun-Manie nickel-
copper sulphide project. The study looked at two possible production scenarios, with the first being a toll
smelt and the second option being the production of a low-grade matte. The study produced economic
results on each production scenario of:
• Toll smelt – NPV post tax of US$614.5 million using long-term nickel price of US$8 per pound and a
discount rate of 10% with free post-tax cashflow of US$2,041 million. Initial capital expenditure of
US$570.4 million
• Low-grade matte – NPV post tax of US$987.4 million using long-term nickel price of US$8 per
pound and a discount rate of 10% with free post-tax cashflow of US$2,980 million. Initial capital
expenditure of US$695.0 million.
The recoverability of the amounts shown in the Group statement of financial position in relation to deferred
exploration and evaluation expenditure are dependent upon the discovery of economically recoverable
reserves, continuation of the Group’s interests in the underlying mining claims, the political, economic and
legislative stability of the regions in which the Group operates, compliance with the terms of the relevant
mineral rights licences, the Group’s ability to obtain the necessary financing to fulfil its obligations as they
arise and upon future profitable production or proceeds from the disposal of properties.
43
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
3 Critical accounting estimates and judgements
(Continued)
Key sources of estimation uncertainty
Valuation of derivative financial liabilities
The Group issued a hybrid financial instrument which comprised a convertible loan that could be converted
to share capital at the option of the holder. The loan was recognized at present value at the initiation date
using a market rate of interest which was higher than the nominal interest rate. In arriving to its fair value,
management used the best available market data and have applied judgement in arriving to the present
value of future cash flows. After determining the fair value at inception, management have allocated the
residual value to the equity component. At the reporting date the derivative financial liability was fully
extinguished through conversion and repayment of the related loan.
Share-based payments
The Company makes equity-settled share-based payments to certain directors, employees, advisers and
funding providers.
Equity-settled share-based payments are measured at the fair value of the services received, unless the fair
value cannot be estimated reliably in which case they are measured using a Black-Scholes valuation model
at the date of grant based on certain assumptions. Those assumptions are described in the notes to the
accounts and include, among others, expected, volatility, expected life of the options and number of options
expected to vest. These inputs are considered to be key sources of estimation in the opinion of
management. This is discussed further in note 17.
Valuation of convertible loan receivable
The Group purchased convertible loan notes from Nathan River Resources in the year which had a value
at cost of $4,670,000 at the year end. In accordance with IFRS 9, the instrument is measured at fair value
through profit and loss and management are required to undertake a valuation exercise at the period end
to determine the instrument’s fair value as at that date. In doing so, the Directors considered the movement
in various inputs between the inception of the loan and the period end, such as the risk free rate, volatility
and corporate bond yields. These inputs are considered to be key sources of estimation in the opinion of
management. At the reporting date, the Directors concluded that the fair value of the convertible loan note
had increased by $423,000 and a fair value gain was recognised in the loss for the year.
44
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
4
Segmental reporting
The Group has one reportable segment being Kun-Manie which is involved in the exploration for minerals
within the Kun-Manie licence areas in Russia. The Group's non-current assets are located in Russia.
The operating results of this segment is regularly reviewed by the Group's chief operating decision makers
in order to make decisions about the allocation of resources and assess the performance.
As the Group has no revenue, the following is an analysis of the Group’s results from continuing operations
by reportable segment.
Reportable information as at 31 December 2020:
Administrative expenses
Finance income
Finance expense
Fair value movements on derivative financial instruments
Loss on loan modification
Gain on revaluation of assets held at fair value through
profit and loss
Corporate
(Unallocated)
US$'000
Kun-Manie
Total
US$'000
US$'000
(2,742)
205
(104)
-
(109)
423
(341)
-
-
-
-
-
(3,083)
205
(104)
-
(109)
423
Loss for the year
(2,327)
(341)
(2,668)
Non-current assets
Inventories
Trade and other receivables
Cash and cash equivalents
5,255
-
121
2,652
23,994
207
37
138
29,249
207
158
2,790
Segment assets
8,028
24,376
32,404
Trade and other payables
Rehabilitation provision
Segment liabilities
(865)
-
(865)
(48)
(141)
(913)
(141)
(189)
(1,054)
Segment net assets
7,163
24,187
31,350
Capital expenditure
Property, plant and equipment
Exploration and evaluation
-
-
-
1,155
-
1,155
45
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
4
Segmental reporting (continued)
Reportable information as at 31 December 2019
(restated):
Corporate
(Unallocated)
US$'000
Kun-Manie
US$'000
Total
US$'000
Administrative expenses
Finance income
Finance expense
Fair value movements on derivative financial instruments
Gain on loan modification
(1,564)
1
(803)
342
115
(420)
-
-
-
-
(1,984)
1
(803)
342
115
Loss for the year
(1,909)
(420)
(2,329)
Non-current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Segment assets
Trade and other payables
Rehabilitation provision
Segment liabilities
Segment net assets
Capital expenditure
Property, plant and equipment
Exploration and evaluation
-
-
20
346
366
(27)
-
(27)
27,381
276
191
52
27,381
276
211
398
27,900
28,266
(938)
(164)
(965)
(164)
(1,102)
(1,129)
339
26,798
27,137
-
-
3
1,310
3
1,310
The accounting policies of the reportable segment are the same as the Group’s accounting policies described in
note 2
Segment loss represents the loss incurred by the segment without allocation of central administration costs
and Directors’ salaries and finance income or costs. This is the measure reported to the chief operating
decision makers for the purposes of resource allocation and assessment of segment performance.
46
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
5 Acquisition of Carlo Holdings
On 25th August 2020 Amur Minerals Corporation acquired 100% of the issued share capital of Carlo Holdings
Limited, a holding company for the purpose of the NRR convertible loan (see Note 8). The purchase consideration
was £1 which was equal to the net assets of Carlo Holdings Limited on the acquisition date, thus no goodwill arose
on acquisition.
The share capital of Carlo Holdings was acquired from a related party, details of which have been disclosed in Note
26.
The result of Carlo Holdings Limited for the year ended 31 December 2020 was revenue of $nil and profit of
$215,000 which includes interest received in the amount of $205,000. 100% of this profit occurred post-acquisition
and has been included in the consolidated loss for the year.
There were no acquisitions in the year ended 31 December 2019.
6
Exploration and evaluation assets
Cost and carrying amount
At 1 January 2019 (as previously stated)
Restatement
At 1 January 2019 (restated)
Additions
Foreign currency adjustments
At 31 December 2019 (restated)
Additions
Foreign currency adjustments
At 31 December 2020
Exploration and evaluation assets
US$'000
23,010
(806)
22,204
1,310
2,713
26,227
1,155
(3,840)
23,542
Exploration and evaluation assets relate to the Group’s mineral exploration licence, Kun-Manie and include
the following costs capitalised during the year:
• Wages and salaries of US$244,000 (2019: US$259,000).
• Depreciation of US$504,000 (2019: US$683,000).
Total accumulated depreciation capitalised on exploration and evaluation assets amounted to US$2.6m at the
year end.
47
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
7
Property, plant and equipment
Cost
At 1 January 2019
Additions
Foreign currency adjustments
At 31 December 2019
Disposals
Foreign currency adjustments
At 31 December 2020
Accumulated depreciation
At 1 January 2019
Charge for the year
Foreign currency adjustments
At 31 December 2019
Charge for the year
Depreciation on disposals
Foreign currency adjustments
At 31 December 2020
Carrying amount
At 1 January 2019
At 31 December 2019
At 31 December 2020
Office and
computer
equipment
US$'000
Operating
equipment
US$'000
Vehicles
and
machinery
US$'000
Total
US$'000
52
-
6
58
-
(9)
49
24
6
3
33
6
-
(5)
34
28
25
15
1,444
3
173
1,620
-
(268)
2,982
-
357
3,339
(23)
(554)
4,478
3
536
5,017
(23)
(831)
1,352
2,762
4,163
1,250
108
154
1,512
18
-
(250)
1,536
574
208
2,318
486
(23)
(384)
2,810
688
365
3,863
510
(23)
(639)
1,280
2,397
3,711
194
1,446
1,668
108
1,021
1,154
72
365
452
48
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
8
Financial assets at fair value through profit and loss
Convertible loan notes receivable
Convertible loan note interest receivable
The movement in the asset is analysed as follows:
At 1 January 2020
Principal loaned
Interest income charged
Interest payments received
FV gain on revaluation
At 31 December 2020
2020
US$'000
5,093
162
5,255
2019
US$'000
-
-
-
US$'000
-
4,670
205
(43)
423
5,255
During the year, the Group acquired convertible loan notes of US$4,670,000 from Nathan River Resources (“the
issuer”, “NRR”). The loan notes are owned by Carlo Holdings Limited, a subsidiary of Amur Minerals Corporation
which was acquired during the period. See Note 5.
The loan notes carry an interest rate of 14%, of which US$205,000 was charged in the year and US$163,000 has
been included as a receivable at the year end. Other key terms of the convertible loan notes are as follows;
· Date of maturity of July 2023.
· Conversion price is equal to A/B, where A means the AUD equivalent of the total initial aggregate
principal amount of the Notes issued on the Issue Date; and B means the number of Ordinary shares
equal to 19% of the Ordinary Shares in NRR as at the issue date.
The asset is secured by way of an equitable mortgage over the issuer’s secured property, being all of
the Issuer’s present and future interest in or under any marketable securities, its intercompany loan
receivables and all of the issuer’s additional rights.
·
· Covenants attached to the asset are as follows;
o The issuer must provide a report in relation to the implementation status of the project plan on a
quarterly basis; and
o Upon request, the issuer must provide evidence of the net operating cash flow conditions, which
must be in a net positive position over any 6 month period.
Upon the completion of the transaction, a success fee was paid to a related party and has been disclosed in
Note 26.
At the year end management undertook a valuation exercise to determine the fair value of the instrument in line
with the requirements of IFRS 9 and the fair value hierarchy per IFRS 13;
•
•
•
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly or indirectly
Level 3 inputs are unobservable inputs for the asset or liability.
NRR is a private company and quoted prices were unavailable for use in the valuation exercise. However, Level
2 inputs were observable from comparable companies who operate in similar jurisdictions and within the iron-
ore market.
49
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
The table below shows the input ranges for the assumptions used in the valuation model:
Volatility
Vega
Change in share price of comparable companies
Strike price of comparable options
Change in base rate
Interest yield
40.08 – 41.62%
0.04 – 0.05
29.16%
0.8 – 2.38
0.021%
15.02%
The key estimates and judgements applied by management during this exercise have been detailed in note 3.
9
Inventories
Other materials and supplies
Fuel
9 10 Other receivables
VAT recoverable
Prepayments
2020
US$'000
2019
US$'000
123
84
207
160
116
276
2020
US$'000
2019
US$'000
5
153
158
32
179
211
Prepayments represent prepayment and annual fees paid in advance under the normal course of business.
11 Financial assets - credit risk
The principal financials assets of the Group are bank balances. The credit risk on liquid funds is limited
because the counterparties are banks with credit ratings assigned by international credit rating agencies.
The Group’s maximum exposure to credit risk by class of individual financial instrument is shown in the
table below:
Carrying value
Maximum exposure
2020
US$'000
2019
US$'000
2020
US$'000
2019
US$'000
Cash and cash equivalents
2,790
398
2,790
398
The fair values of financial assets are considered to approximate to their book values due to their short term
nature.
50
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
12 Trade and other payables
Trade payables
Accruals
Other payables
13 Convertible loan notes
2020
US$'000
2019
US$'000
306
606
1
913
352
579
34
965
On 13 March 2020, the Group entered into a £1.5 million (US$4,625,000) convertible loan facility with
Plena Global Opportunities LLC (“the Investor”). Under the agreement, the Group received a US$596,000
(principal less transaction costs) advance on 13 March 2020. A second advance of £0.5 million is available
after three months and a final advance of £0.5 million is available after six months by mutual consent. The
loan was unsecured, bore 10% annual compound interest and was repayable 3 months after the advance.
Upon redemption of the loan notes, the Company shall make a repayment equal to 105 per cent of the
principal amount plus interest equal to 10 per cent. The Investor can also elect to convert the outstanding
advance into ordinary shares of the Company at a price of 90% of the VWAP over the last three trading
days.
In conjunction with the Initial Advance, the Investor was issued with 52,447,552 three year warrants with
an exercise price of 1.43 pence per ordinary share.
The convertible loan was fully repaid on 30 April 2020.
Attached warrant equity instrument were allocated with a residual value of US$93k. The movement in
convertible loan is analysed as follows:
At 1 January 2020
Principal loaned
Warrant instrument
Transaction costs
Interest charged on principal
Early redemption fee
FV loss on early redemption
Foreign exchange gain
Loan and accrued interest repaid
At 31 December 2020
14 Financial liabilities - Liquidity risk
US$'000
-
607
(93)
29
13
62
109
(11)
(716)
-
The Group has to date funded its operations through equity and seeks to manage financial risk to ensure
sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.
Management monitors rolling cash flow forecasts of the Group to ensure that the sufficient funds are
available to meet the Group’s commitments. The review consists of considering the liquidity of local
markets, projecting cash flows and the level of liquid assets to meet these commitments. Management
raises additional capital financing when the review indicates this to be necessary.
At the reporting date all Group's financial liabilities had the contractual maturities of 1 month or less (2019: 6
months or less).
51
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
52
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
15 Reserves
Group reserves comprise the following:
Share capital
Amounts subscribed for share capital at proceeds received (note 16).
Share premium
Share premium represents the amounts received by the Company on the issue of its shares which was in
excess of the nominal value of the terms of the shares prior to the shares being changed to having no par
value, presently utilised for share issue costs.
Foreign currency translation reserve
The foreign currency translation reserve includes movements that relate to the retranslation of the
subsidiaries whose functional currencies are not the US Dollars and the long-term monetary items forming
part of the Group's net investment in the overseas operations.
Share options reserve
The balance held in the share options reserve relates to the fair value of the share options that have been
charged to the profit or loss since adoption of IFRS 2 'Share-based payment'.
Retained deficit
Cumulative net gains and losses recognised in the income statement and the statement of other
comprehensive income less any amounts reflected directly in other reserves.
53
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
16 Share capital
Ordinary share capital
Authorised
Ordinary shares of no par value
Issued and fully paid
1,379,872,315 (2019: 845,441,101) ordinary shares of no par value
Reconciliation of movements during the year:
At 1 January 2019
Service providers
Cash issue
Conversion of loan notes
At 31 December 2019
Service providers
Cash issue
Conversion of warrants
At 31 December 2020
2020
Number
2019
Number
2,000,000,000
1,000,000,000
2020
US$'000
2019
US$'000
80,449
69,510
Number
US$'000
685,939,046
65,674
(a)
(b) and (c)
(d)
2,463,965
85,137,702
71,900,388
66
1,922
1,848
845,441,101
69,510
(e) and (f)
(g), (h) and (i)
(j)
15,516,969
471,190,469
47,723,776
422
9,641
876
1,379,872,315
80,449
(a) During 2019 the Company issued 2,463,965 new Ordinary Shares to certain directors and senior
management in settlement for their outstanding fees in the amount of US$66,000, measured at the fair
value of the services received.
(b) During 2019 the Company raised US$387,000 through issued of 14,549,467 new Ordinary Shares to
certain directors and advisers
(c) On 4 November 2019, the Company raised US$1,536,000 (£1.2 million) before expenses through the
subscription of 70,588,235 ordinary shares of no par value of the Company at a price of 1.7 pence per
share ("Subscription"). The subscription is by an asset manager specialising in natural resources.
54
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
16 Share capital
(Continued)
(d) Between January and November 2019, pursuant to the convertible loan agreement entered into on 13
February 2018, the Company issued 71,900,388 new Ordinary Shares to Cuart Investment PPC Ltd and
YA II PN Ltd in settlement of US$1,848,000 of principal and accrued interest.
(e) On 25 August 2021 the Company issued 6,671,429 Ordinary Shares to a Company in which A Habib
is a Director in settlement of outstanding fees, totaling US$151,775.
(f) During the year the Company issued 8,845,540 new Ordinary Shares to certain directors and senior
management in settlement for their outstanding fees in the amount of US$270,231, measured at the fair
value of the services received.
(g) On 16 April 2020, the Company raised US$870,252 through the subscription of 75,000,000 ordinary
shares of no par value of the Company at a price of 1 pence per share.
(h) On 27 May 2020, the Company raised US$632,800 through the subscription of 47,619,048 ordinary
shares of no par value of the Company at a price of 1 pence per share.
(i) On 25 August 2020, the Company raised US$8.14m before expenses through the subscription of
348,571,421 ordinary shares of no par value of the Company at a price of 1.75 pence per share.
(j) Between July and September 2020, the Company issued 47,723,776 new Ordinary Shares to Pelena
Global Opportunities LLC in respect of the conversion of warrants, raising US$875,693.
17
Share-based payment transactions
Options granted
Number of share options Weighted average exercise
2020
2019
price
2020
(pence)
2019
(pence)
Outstanding at 1 January
Granted
Expired
6,912,000
55,619,260
(6,912,000)
12,374,000
-
(5,462,000)
26.25
1.84
26.25
Outstanding at 31 December
55,619,260
6,912,000
1.84
Vested
25,619,260
-
1.95
26.25
-
8.47
26.25
-
Exercisable at 31 December
25,619,260
6,912,000
1.95
26.25
The fair value of the options is estimated at the grant date using a Black-Scholes model, taking into account
the terms and conditions on which the options were granted. This uses inputs for share price, exercise price,
expected volatility, option life, expected dividends and risk-free rate.
6,912,000 options expired in the year resulting in a charge to retained earnings of $1,136,000.
55
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
The table below shows the input ranges for the assumptions used in the valuation models:
13 February 2020 issue;
Fair value at grant date
Exercise price
Share price at grant date
Annual share price volatility (weighted average)
Risk free rate
Expected life
3rd April 2020 issue;
Fair value at grant date
Exercise price
Share price at grant date
Annual share price volatility (weighted average)
Risk free rate
Expected life
1.2p
1.95p
1.85p
85%
0.5%
5 years
0.5p
1.75p
1.1p
85%
0.5%
3 years
The 30 million options granted to Directors, management and Russian employees vest 12 months from the
grant date. Of the 25,619,260 options granted to Mr. Adam Habib, 12,809,630 vested immediately on grant
and the remaining 12,809,630 is performance based and will vest upon the successful completion by the
Company of an off-take agreement or completion of a producing asset investment.
The share price is the price at which the shares can be sold in an arm’s length transaction between
knowledgeable, willing parties and is based on the mid-market price on the grant date. The expected
volatility is based on the historic performance of Amur Minerals shares on the Alternative Investment
Market of the London Stock Exchange. The option life represents the period over which the options
granted are expected to be outstanding and is equal to the contractual life of the options. The risk-free
interest rate used is equal to the yield available on the principal portion of US Treasury Bills with a life
similar to the expected term of the options at the date of measurement.
A charge of US$484,546 has been recognised in loss for the year in respect of these options.
56
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
18 Operating loss
Operating loss for the year is stated after charging:
Employee costs, including Directors' fees
Share options expense
Legal fees
Consultancy
Net foreign exchange gains
Fees payable to the Company's auditors for the audit of the Group's
financial statements
Fees payable to the Company’s auditors for non-audit services
Depreciation of property, plant and equipment
2020
US$'000
2019
US$'000
1,480
485
215
337
(6)
109
35
5
1,179
-
113
-
(1)
89
-
6
The average number of employees for the Group for the period to 31 December 2020 was 32 (2019: 28
employees).
19 Finance income
Interest received on convertible loan notes (note 8)
Other finance income
20 Finance costs
Effective interest on convertible loan notes (note 13)
Other finance costs expensed
2020
US$'000
2019
US$'000
205
-
205
-
1
1
2020
US$'000
2019
US$'000
13
91
104
723
80
803
57
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
21 Tax expense
Current tax - BVI corporation tax
Current tax - Russian corporation tax
Continuing operations
2019
US$'000
-
-
2020
US$'000
-
-
-
-
The charge for the year can be reconciled to the loss per the income statement as follows:
Loss before taxation
Expected tax charge based on the BVI corporation tax rate of 0%
Expenses not deductible in determining taxable profit
Income not taxable
Utilisation of tax losses not previously recognised
Effect of overseas tax rates
Tax charge for the year
2020
US$'000
2019
US$'000
(2,668)
(2,329)
-
545
(119)
-
(426)
-
-
590
(191)
(2)
(397)
-
During the exploration and development stages, the Group will accumulate tax losses which may be carried
forward. At the reporting date, the subsidiary in Russia had unrecognised tax losses carried forward of:
Tax losses carried forward
Potential deferred tax impact at the standard
rate of corporation tax in Russia of 20%
2020
US$'000
2019
US$'000
18,068
14,905
3,614
2,981
On 23 May 2016, certain tax incentives for regional investment projects in excess of US$5 million were
introduced in Russia. Although assessed on project by project basis, this could reduce the Group’s future
regional profit tax to between 0% - 10% for the first 10 years of production.
58
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
22 Loss per share
Basic and diluted loss per share are calculated and set out below. The effects of warrants and share
options outstanding at the year ends are anti-dilutive and the total of 90.1 million (2019: 27.1 million) of
potential ordinary shares have therefore been excluded from the following calculations:
Number of shares
Weighted average number of ordinary shares used in the calculation of basic
earnings per share
1,071,175,000 735,839,463
2020
2019
Earnings
Net loss for the year from continued operations attributable to equity
shareholders
2020
US$'000
2019
US$'000
(2,688)
(2,329)
Loss per share for continuing operations (expressed in cents)
Basic and diluted loss per share
(0.25)
(0.32)
59
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
23 Directors' remuneration
The aggregate remuneration of the Directors of the Company was as follows:
Executive Directors
Robin Young
Adam Habib
Non-Executive Directors
Robert Schafer
Brian Savage
Paul Gazzard
Lou Naumovski
Tom Bowens
Salaries
US$'000
Fees
US$'000
2020
Total
US$'000
Salaries
US$'000
Fees
US$'000
2019
Total
US$'000
316
153
-
-
-
-
-
-
-
58
172
56
25
50
316
153
58
172
56
25
50
316
-
-
-
-
-
-
-
-
61
52
51
52
20
316
-
61
52
51
52
20
469
361
830
316
236
552
The following tables show the beneficial interests of the Directors who held office at the end of the year in
the ordinary shares of the Company and the interests of the Directors in share options:
Shares held
At 1 January 2019
Additions
Robert
Schafer
Robin
Young
576,748
2,444,567
3,924,751 1,157,044
Brian
Savage
478,512
Paul
Gazzard
138,499
58,226 1,423,372
Lou
Naumovski
Tom Bowens
A Habib
138,499
58,226
-
7,527,604
-
-
At 31 December 2019 6,369,318
Additions
1,733,792
1,561,871
- 1,433,715 4,000,000 1,196,809
536,738
196,725
-
7,527,604
1,217,676
-
6,671,429
At 31 December 2020 6,369,318
3,167,507
4,536,738
2,758,680
196,725
8,745,280
6,671,429
60
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
23 Directors' remuneration
Options held
Exercise Exercise
price
dates
£0.2625
27.07.15-
(US$0.32) 27.07.20
£0.2625
19.09.16-
(US$0.32) 27.07.20
3,301,000
748,000
635,000
-
-
-
-
338,000
Robin
Young
Robert
Schafer
Brian
Savage
Paul
Gazzard
Lou
Naumovski
Tom
Bowens
A Habib
-
-
-
-
-
-
-
-
-
-
-
25,619,260
At 1 January 2020
3,301,000
748,000
635,000
338,000
Options granted;
£0.0195
(US$0.03) 13.02.25
13.02.20-
£0.0175
(US$0.02) 03.04.23
03.04.20-
-
-
-
3,900,000
5,800,000
5,800,000
-
-
3,900,000
5,800,000
-
-
Options expired / lapsed
(3,301,000) (748,000) (635,000) (338,000)
-
-
At 31 December 2020
3,900,000 5,800,000 5,800,000
-
3,900,000
5,800,000 25,619,260
US$ exercise prices are shown for indicative purposes only, calculated at 31 December 2020 exchange rates.
61
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
24 Financial and capital risk management
The Group is exposed to risks that arise from its use of financial instruments and capital management.
The main purpose of financial instruments is to raise and utilise finance in the Group’s operations.
The main risks arising from the Group’s financial instruments are credit risk (note 11), liquidity risk (note 14),
interest risk, and currency risk.
The Directors review and agree policies for managing these risks and these are summarised below.
Interest rate risk
The Group finances its operations through equity financing to alleviate the interest rate risk. The interest
rate exposure of the financial assets of the Group as at 31 December 2020 related wholly to floating interest
rates in respect of cash at bank. Cash at bank in interest bearing accounts was held in demand accounts
with one-month maturities throughout the year. This policy was unchanged from 2019.
The Group is exposed to cash flow interest rate risk from its deposits of cash and cash equivalents with
banks. The cash balances maintained by the Group are managed in order to ensure that the maximum
level of interest is received for the available funds but without affecting working capital flexibility.
The Group is not currently exposed to cash flow interest rate risk on borrowings as it has no debt with
variable interest rates or fixed rate finance leases. No subsidiary of the Group is permitted to enter into any
borrowing facility or lease agreement without the Company’s prior consent.
Currency risk
The Group undertakes certain transactions denominated in foreign currencies hence exposures to
exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy
parameters by holding bank deposits in Russian Roubles, US Dollars and Pound Sterling.
The NRR convertible loan receivable is denominated in USD, however the value of shares received upon
conversion of the notes is dictated by the AUD equivalent of the notes, translated at the spot rate on the date of
conversion. The Directors do not deem it necessary to hedge against the Australian Dollar at this time.
Management reviews its currency risk exposure periodically and hedges part of its exposure to Pound
Sterling by buying and holding on Pound Sterling deposits. The Group also hold Roubles in order to cover
a proportion of anticipated Rouble expenditures. As at 31 December 2020 the Group had on deposit
approximately US$2,350,000 in Pound Sterling (2019: US$330,000) and US$32,000 in Rouble (2019:
US$24,000) bank accounts.
An analysis of the Group’s net monetary assets and liabilities by functional currency of the underlying
companies at the year-end is as follows:
Functional currency
Russian Rouble
2020
US$'000
US Dollar
2020
US$'000
Total
2020
US$'000
51
2,288
13
2,352
118
-
20
138
169
2,288
33
2,490
Currency of net monetary assets/liabilities
US Dollar
Pound Sterling
Russian Rouble
At 31 December
62
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
24 Financial and capital risk management
(Continued)
Currency of net monetary assets/liabilities
US Dollar
Pound Sterling
Russian Rouble
At 31 December
Functional currency
Russian Rouble
2019
US$'000
US Dollar
2019
US$'000
Total
2019
US$'000
6
(318)
16
(296)
27
-
(69)
33
(318)
(53)
(42)
(338)
The table above indicates that the Company’s primary exposure is to exchange rate movements between
UK Pound Sterling and the US Dollar. The table below shows the impact of changes in exchange rates on
the result and financial position of the Company.
Pound Sterling 10% weakening against US Dollar
Pound Sterling 10% strengthening against US Dollar
Pound Sterling 20% weakening against US Dollar
Pound Sterling 20% strengthening against US Dollar
2020
US$'000
235
(235)
464
(464)
2019
US$'000
32
(32)
64
(64)
In the Directors’ opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as
the year end exposure reflects only the impact on the year-end balance sheet of changes in exchange
rates and does not reflect the exposure on on-going and future expenditure. Rouble denominated
expenditures is seasonal with higher volumes in the second and third quarters of the financial year.
Capital risk
The Group’s objectives when managing capital (i.e. share capital, share premium and retained deficit) and
loans/debt are to safeguard the Group’s ability to continue as a going concern in order to provide returns
for shareholders and benefits for other shareholders. Historically the Company has issued share capital to
provide funds for the exploration programmes. The need for further finance is kept under review by the
Board through review of cash flow forecasts and further finance, from equity or debt, will be considered for
future exploration and development work.
63
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
25
Commitments
Capital commitments
Contracted for but not provided in the financial statements:
2020
US$'000
2019
US$'000
Acquisition of property, plant and equipment
-
-
Short-term lease commitments
The Group leases two offices in Russia under non-cancellable lease agreements. The leases are short-term
in nature and the minimum non-cancellable payments at the reporting date were as follows:
2020
US$'000
2019
US$'000
Less than 1 year
26
Related party transactions
18
18
26
26
Remuneration of key management personnel
The remuneration of key management personnel, who are considered to be the Directors and senior
management, is set out below in aggregate for each of the categories specified in IAS 24 'Related Party
Disclosures'.
Short-term employee benefits
Share based payments
2020
US$'000
2019
US$'000
1,218
270
1,488
948
-
948
US$nil (2019: US$77,000) of the short-term employee benefits amount related to key management
personnel were capitalised within exploration and evaluation assets.
The fees of US$316,000 (2019: US$316,000) in respect of Robin Young's director services are paid to
Western Services Engineering Inc., a company of which he is also a director and a shareholder.
US$239,217 was outstanding at the reporting date (2019: US$nil).
During the year various transactions occurred between the Group and La Tourelle Consulting Ltd (“LTCL”),
a Company in which A Habib’s partner is the sole-shareholder. Details of these transactions are as follows;
· On the 25th August 2020, the Group purchased Carlo Holdings Limited from LTCL and details of the
·
·
transaction are disclosed in Note 5.
Fees totaling US$16,117 were charged to the Group by LTCL for the management of Carlo Holdings
and for other consultancy work during the year.
La Tourelle received a consultancy fee in relation to the successful transaction with NRR. A
payment of US$235,039 was made in cash and shares.
There were no other related party transactions in the current or preceding years.
64
AMUR MINERALS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
27 Prior year restatement
Since incorporation in 2005 costs incurred by Amur Minerals Corporation (the “Company”), relating to exploration
and mining activity, have been capitalised on the Group Statement of Financial Position as Exploration and
Evaluation costs. During the year ended 31 December 2020 management has undertaken an exercise to reassess
these costs and has determined that, given the parent company does not hold the overarching exploration and
mining licences of the Group or directly controls these assets, the capitalisation of these costs as Exploration and
evaluation costs in the parent company was done in error. These costs have been incurred on behalf of the Parent
company’s subsidiaries and should have been capitalised within the Russian Operating subsidiary’s functional
currency with resulting foreign exchange gains or losses being recognised at each reporting period end on
consolidation into the Group’s presentation currency. These costs would have been capitalised using the
subsidiaries’ functional currency, which is the Russian Rouble. A cumulative adjustment has been calculated to
reflect the translation of these costs into Russian Rouble and then back to the Group’s presentation currency of
USD on consolidation. This has had the following impact –
Group Balance Sheet (2019)
Exploration and Evaluation assets has decreased by $486,193 to an adjusted balance of $26,227,000.
The Foreign Currency translation reserve within equity has increased by $486,193 to an adjusted balance of
$13,351,000. A third balance sheet has been included in the financial statements to demonstrate the effects of this
adjustment on prior periods.
Group Statement of Comprehensive Income/(Loss) (2019)
The Exchange difference on translating foreign operations has increased by $319,104 to $2,931,000.
We note that these adjustments have had no impact upon the Group Profit after Tax.
28 Events after the reporting date
The terms and conditions for the Company's Kun-Manie "Detailed Exploration and Mine Production Licence"
("DEMP"), were amended and registered with Rosnedra, the State Licencing Agency. The certified modification
to the DEMP was received 9 February 2021 from Amurnedra and is dated effective 30 November 2020. The
Company submitted the application to amend the delivery date of the 1 December 2020 TEO which has now
been successfully extended to 1 December 2021 for its delivery.
65