ARC MINERALS LIMITED
ANNUAL REPORT
AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2024
CONTENTS
Arc Minerals Limited – Annual Report & Financial Statements December 2024
1
CORPORATE INFORMATION
2
CHAIRMAN’S STATEMENT
4
STRATEGIC REPORT & OVERVIEW OF OPERATIONS
6
DIRECTORS’ REPORT & FINANCE REVIEW
9
CORPORATE GOVERNANCE STATEMENT
14
DIRECTORS' RESPONSIBILITY STATEMENT
21
INDEPENDENT AUDITOR’S REPORT
22
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
27
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
28
CONSOLIDATED STATEMENT OF CASH FLOWS
29
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
30
NOTES TO THE FINANCIAL STATEMENTS
32
CORPORATE INFORMATION
Arc Minerals Limited – Annual Report & Financial Statements December 2024
2
Directors
Nicholas von Schirnding
Rémy Welschinger
Brian McMaster
Valentine Chitalu
Director, Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Operations Officer
Vassilios Carellas
Chief Financial Officer
Ian Lynch
Company Secretary
Ian Lynch
Registered Address
Craigmuir Chambers
Road Town. Tortola
British Virgin Islands, VG 1110
Registered Agent
Harneys Corporate Services Limited
Craigmuir Chambers
Road Town. Tortola
British Virgin Islands, VG 1110
Registrars
Computershare Investor Services
(Channel Islands) Ltd
Ordnance House, 31 Pier Road
St Helier, JE4 8PW
Channel Islands
Independent Auditor
PKF Littlejohn LLP
15 Westferry Circus
London, E14 4HD
United Kingdom
Nominated Advisor and Joint Broker
Zeus Capital Limited
125 Old Broad Street
London, EC2N 1AR
United Kingdom
Company Solicitors (UK)
Hill Dickinson LLP
The Broadgate Tower
20 Primrose Street
London, EC2A 2EW
United Kingdom
Joint Broker
Shard Capital Partners LLP
3rd Floor, 70 St Mary’s Axe
London, EC3A 8BE
United Kingdom
OVERVIEW
Arc Minerals Limited – Annual Report & Financial Statements December 2024
3
Arc Minerals Limited (“Arc Minerals”, “Arc” or the “Company”) is a copper-focused exploration company
operating in Africa. The Company's primary assets are located in Zambia and Botswana, situated in two of the
most prospective copper regions on the continent - the Zambian Copperbelt and the Kalahari Copper Belt.
In Zambia, Arc Minerals is, via the Company’s 67%-owned subsidiary, Unico Minerals Ltd (“Unico”), partner to a
joint venture agreement with a subsidiary of Anglo American plc (“Anglo”) (the “JVA”). Anglo American holds a
70% interest in Handa Resources Ltd, the joint venture company, while Arc's subsidiary, Unico, holds a 30%
stake.
The commercial terms include an investment by Anglo of up to USD 88,500,000, including cash payments to
Unico of up to USD 14,500,000, over three phases. In Phase 1, Anglo will invest USD 24,000,000 in exploration
expenditures over 3 years and make a USD 3,500,000 cash payment to Unico which was received on 13
November 2023, with a further USD1,000,000 cash payment for the three following years (the first of which was
received in December 2024) followed by a $8m bullet payment at the end of year 3.
This partnership represents a pivotal milestone, providing Arc with a well-capitalised and technically robust joint
venture to advance exploration on its highly prospective Zambian licenses.
In Botswana, Arc Minerals has made significant progress on its Virgo project, comprising the PL 135/2017 and
PL 162/2017 prospecting licenses. The Company's maiden scout drilling campaign confirmed the presence of
prospective contact geology and encountered anomalous mineralization in close proximity to Khoemacau's
operations, boding well for Arc's upcoming exploration initiatives.
Coupled with its exciting project portfolio, Arc Minerals has a strong technical and commercial team with
extensive experience in Africa and a proven track record of bringing mining projects into production.
Business Model and Strategy
Arc Minerals' strategy is to leverage its high-quality asset portfolio, experienced technical team, and strong
partnerships to position itself as a leading African-focused base metals exploration and development company.
The Company's business model is underpinned by the following key pillars:
Strategic Asset Portfolio
Arc Minerals has strategically assembled a portfolio of highly prospective copper exploration licenses in two of
Africa's most prolific copper regions. The joint venture with Anglo American in Zambia and the promising Virgo
project in Botswana provide a solid foundation for future growth and value creation.
Robust Partnerships
Arc Minerals recognises the value of strategic partnerships, as exemplified by the joint venture with Anglo
American in Zambia. This collaboration provides access to extensive technical expertise, financial resources, and
operational capabilities, significantly enhancing Arc's exploration and development potential.
Experienced Technical Team
The Company boasts a highly qualified and experienced technical team with a proven track record of discovering
and developing mineral resources in Africa. Their expertise in exploration, geology, and mining operations is
instrumental in driving the Company's success.
Growth-Oriented Approach
Arc Minerals is committed to a growth-oriented approach, with a focus on advancing its exploration projects
through systematic and well-designed exploration campaigns. The Company aims to unlock value by identifying
and developing potential Tier 1 copper deposits, capitalising on the strong demand for copper driven by the
global transition to a low-carbon economy.
Shareholder Value Creation
Underpinning Arc Minerals' strategy is a commitment to creating long-term value for its shareholders. The
Company strives to maintain open and transparent communication, providing regular updates on exploration
progress, results, and strategic developments, fostering trust and confidence among its supportive shareholder
base.
CHAIRMAN’S STATEMENT
Arc Minerals Limited – Annual Report & Financial Statements December 2024
4
2024 Overview
I’m pleased to report on Arc Minerals' year-end results for 2024.
Joint Venture with Anglo American
The joint venture's drilling campaign is led by our partners at Anglo American. Following the completion of an
extensive ground mapping exercise over its Zambian tenements, the Anglo American/Arc joint venture
commenced drilling in August 2024. Drilling initially focused on a new target approximately 1km east of the
oxide occurrence at Cheyeza.
A soil anomaly identified by Anglo’s sampling program was observed at a new target approximately one and a
half kilometres east of the existing oxide occurrence at Cheyeza (as announced on 7 November 2024) and was
verified by diamond drilling. Near surface mineralisation was confirmed by assay data from hole KCDD002
included 40.60m at 0.61% Cu from 22.25m down the hole, including 12.75m @ 1.20% Cu from 22.25m and 7.70m
@ 1.72% Cu from 26.75m.
The KCDD002 assay results demonstrate the potential to add to the known extents of the oxide occurrences at
Cheyeza, where similar high grade zones have been intersected and reported in the past. Historic hole
CHDDE004 intersected 18m @ 2.35% Cu from 30.60m with a higher grade zone of 7.60m @ 4.15% Cu from 39m,
and hole CHDDE060 intersected 39m @ 1.47% Cu with a higher grade zone of 10m @ 2.25% Cu from 41m.
Importantly and unlike the previously reported oxide occurrence which is characterised as being a remobilised
copper oxide occurrence, the oxide mineralisation intersected in hole KCDD002 may be the result of weathering
of sulphide mineralisation at source, which is supported by the presence of sulphide mineralisation below the
oxide zone.
Two holes were drilled at the new target Nkwazhi that is located between Cheyeza and Muswema, testing a
thickened Lower Roan unit in this part of the basin. The first hole intersected copper mineralisation of over 20m
at the base of the Upper Roan along with anomalous nickel in a marker talc-schist unit in the Lower Roan, below
which currently no further mineralisation has been observed. The second hole drilled 400m away did not
intersect mineralisation.
The third target tested was approximately 4km to the south-east of Muswema where a second order soil
geochemical anomaly is present.
Zambia Exploration Acquisition
Arc announced on 7 April 2025 that it had entered into a binding agreement to acquire the Chingola Project
(Licence 38113-HQ-LEL) in the Zambian Copperbelt. Under the terms of the agreement, Arc's 100% owned
Zambian subsidiary, Foreland Minerals Limited, will purchase the entire interest in the licence from Brxton
Construction Limited. The agreement is subject to certain customary conditions such as the completion of
satisfactory due diligence and the receipt of necessary consents and approvals for the transfer. The
consideration for the acquisition comprises an initial cash payment of USD 50,000 and further staged payments,
subject to specific exploration milestones and regulatory approvals, as follows:
(i)
$25,000 in ordinary shares of Arc Minerals Ltd based on the preceding 20-day volume weighted
average price ("Acquisition Shares"), due upon full satisfaction or waiver by Arc of all conditions
precedent ("Completion") ("Completion Payment");
(ii)
$100,000 in cash and $150,000 in Acquisition Shares on the earlier of the commencement of a
drilling programme or 24 months after Completion ("First Instalment");
(iii)
$50,000 in cash and $50,000 in Acquisition Shares falling due within 10 business days of
establishing an economic JORC-compliant 500kt+ Cu resource ("Second Instalment");
(iv)
$50,000 in cash and $50,000 in Acquisition Shares falling due within 10 business days of completing
and announcing a successful definitive feasibility study; and
(v)
A 2% net smelter royalty, capped at $5M, with a right of first refusal in favour of Arc pursuant to a
royalty agreement to be entered into on or before Completion.
Botswana Drilling Campaign
The first phase to the maiden exploration programme in the central part of licence PL135/2017 consisted of
eight holes totalling 3,023m, of which 1,978m were drilled by reverse circulation ('RC') and 1,045m by core
diamond drilling ('DD') methods. The drilling was completed on budget and on time.
CHAIRMAN’S STATEMENT
Arc Minerals Limited – Annual Report & Financial Statements December 2024
5
Of the eight holes drilled, diamond drill hole ALV-DD-004 intersected 3m @1.29% CuEq within a broader 6m @
0.82% CuEq. Six of the remaining seven holes drilled intersected elevated to anomalous copper mineralisation
with initial observations of the core displaying similar geological, stratigraphic and structural settings to that of
MMG's operating Zone 5 underground mine. Assay results from the remaining drill hole in respect of license
PL162/2017 identified no significant intercepts. The full details of the drilling programme are set out in the
announcements dated 14 November 2024 and 14 May 2025.
Prospecting licenses 135/2017 and 162/2017 were extended for an additional two years until 30 September
2026 in accordance with the notification received from the Department of Mines in Gaborone, Botswana.
Outlook
While the drilling campaign by the Anglo American / Arc joint venture was frustrated by a late start to drilling it
nevertheless provided valuable data over the 5 holes drilled, especially with regard to the Cheyeza target, which
will be prioritised for further drilling. In addition, we understand that targets where no work has historically been
completed (particularly the Fwiji and Nyambwezu targets) will be prioritised going forward.
The period ahead promises to be an exciting time for exploration and growth for Arc Minerals including the
planned work at the new Chingola acquisition, assuming the conditions precedent are fulfilled.
Furthermore, with the acceptance by the Botswanan Department of Mines of our applications to extend the
licence terms of the PL135/2017 and PL162/2017 licenses, we expect to continue to explore and unlock the
potential of the Virgo Project licenses for an additional two years, until 2026.
As we forge ahead, our shareholders can expect regular updates on the progress of our exploration activities,
including the results of the geological studies, geophysical surveys, and, most importantly, the drilling
campaigns. We remain committed to maintaining open and transparent communication, keeping you informed
every step of the way.
Nicholas von Schirnding
Executive Chairman
26 June 2025
STRATEGIC REPORT
Arc Minerals Limited – Annual Report & Financial Statements December 2024
6
Overview of Operations
Arc Minerals is incorporated in the British Virgin Islands and is engaged in the business of acquiring, exploring
and developing mineral properties. The Company’s stock trades in British Pounds Sterling on the AIM, a market
of the London Stock Exchange, under the symbol ARCM.
Zambia Copper Projects
The Company, through its Joint Venture (‘JV’) with Anglo American, has a number of areas under licence located
on the opposite flank of the Kabompo Dome to First Quantum’s Sentinel operations.
The JV licence areas are located approximately 900km by road from Lusaka, in Mwinilunga, Northwestern
Province, and are well within the trending arm of the major geological structure known as the Lufilian Arc
(Copperbelt), on the western flank of the Kabompo Dome. The Copperbelt is home to all the major copper mines
in Zambia and these licences represent one of the last dome-related areas in Zambia yet to be explored in any
detail.
Over the last fifteen years, three new major copper mines have been developed and constructed to exploit the
mineral resources in the new western part of the Zambian Copperbelt. This region now accounts for a substantial
part of Zambian copper production and the areas under licence are in close proximity to large operations such
as First Quantum Minerals’ Sentinel and Kansanshi mines and Barrick Gold’s Lumwana mine.
The areas under licence were previously explored by Equinox Minerals Limited (“Equinox”) and Anglo American
Prospecting Services (“AAPS”) by way of the Zambezi Joint Venture’ (the “Zambezi JV”) through AAPS's affiliate
Zamanglo Prospecting Ltd (“Anglo American”) during the late 1990s as part of the Kabompo Project.
The current areas under licence encompass 9 of 30 exploration targets that were ranked in the late-90’s by the
Zambezi JV over the Kabompo Project, which include the top seven ranked targets. First Quantum Minerals’
Kalumbila property, better known as the Trident Project, developed to become the Sentinel copper mine which
in 2020 achieved record copper production of over 251,000 tonnes. First Quantum’s Enterprise Nickel project is
also located on the flanks of the Kabompo Dome and approximately 40 km to the east of the areas under licence.
At the time of the Zambezi JV, Kalumbila was originally ranked number 22 out of the Zambezi JV’s top 30
Kabompo Project targets with an original exploration target size of six million tonnes of ore; eventually a copper
Resource in excess of 1 billion tonnes of ore (one of the largest in Zambia) was demonstrated.
During 2024, the Group’s exploration activities in Zambia were carried out through the joint venture with a
subsidiary of Anglo American as announced on 20 April 2023 (the “Anglo JV”).
By the end of 2024 the Anglo JV had drilled seven holes, one hole towards the end of 2023 and six holes in 2024,
with a total of over 5,000m drilled. Some of the holes extended close to a kilometre in length, and most were
drilled in the vicinity of the Cheyeza and Muswema target areas, with two holes testing a new target (Nkwazhi)
which was identified by the Anglo JV soil sampling program.
A further 10,500 soil samples were collected to better define the stratigraphy along the basin margin and identify
potential soil anomalies.
The Anglo JV areas under licence comprised the following at 31 December 2024:
•
Large-Scale Exploration Licence (23004-HQ-LEL);
•
Large-Scale Exploration Licence (23005-HQ-LEL);
•
Large-Scale Exploration Licence (19906-HQ-LEL);
•
Large Scale Exploration Licence (28700-HQ-LEL).
Three mining licence applications were submitted in 2023 in concluding the Anglo JV, being 33402-HQ-LML,
33403-HQ-LML and 33404-HQ-LML over the exploration licences 23004-HQ-LEL and 19906-HQ-LEL. All of the
mining licence applications were approved and validated by the Mining Cadastre Department and, following
submission of the subsequent requisite documentation, the Mines Advisory Committee (MAC) was expected to
meet to review the finalised LML applications prior to issuance of the Mining Licences.
As announced on 17 June 2024, the Mining Cadastre Department published the results of the MAC meeting
pursuant to which these applications and were rejected. As the applications were validly submitted and
validated by the Zambian Mining Cadastre, the Company had been advised that Handa and Zaco were appealing
the decision of the Mining Licence Committee to reject the Mining Licence Applications and were engaging with
STRATEGIC REPORT
Arc Minerals Limited – Annual Report & Financial Statements December 2024
7
the Mining Cadastre to have the appeal heard as soon as possible so that the applications could be reinstated
and/or considered positively in accordance with the law.
As announced on 5 November 2024, the Anglo JV received confirmation from the Zambian Ministry of Mines
that the large-scale mining licence application submitted by Handa Resources Limited had been reinstated.
Arc had also received confirmation from the Ministry of Mines that the large scale mining application that was
submitted by Zaco Investments Limited was being rectified.
Botswana Copper Project
In November 2021, Arc Minerals Limited acquired a 75% interest in Alvis-Crest (Proprietary) Limited (‘Alvis’), the
holder of two prospecting licences (PL 135/2017 & PL 162/2017) in Botswana's Kalahari Copper Belt (“KCB”),
colloquially called the Virgo Project/Licences. The Virgo project is located in an emerging copper district in the
Kalahari district, in close proximity to some larger discoveries, and covers an area of over 210km2. The Virgo
licences lie within (PL 165/2017) and adjacent (PL 135/2017) to the highly prospective Central Structural Corridor
and within 10km and 50km of the Zone 5 and Banana Zone copper projects respectively, known as the two
largest copper projects on the KCB.
Historically, two copper-nickel soil anomalies have already been recorded on PL 135/2017 and PL 162/2017 and
they are approximately 3km and 2.5km in strike length, respectively. The largest of the two anomalies, located
on PL 135/2017, overlays an interpreted D’Kar-Ngwako Pan formation (“DKF-NPF”) contact, while a second more
intermittent anomaly may be linked to extensional faulting around the dome edge. The large coherent anomaly
on PL 162/2017, also appears to overlay the interpreted DKF-NPF contact on the northern limb of a syncline.
Following on from the scout drilling campaign in 2023, an Induced Polarisation (“IP”) survey was commissioned
prior to the commencement of the first phase to the maiden exploration programme on the PL135/2017 licence
that consisted of eight holes totalling 3,023m, of which 1,978m were drilled by reverse circulation ('RC') and
1,045m by core diamond drilling ('DD') methods.
The initial aim for the first phase drill campaign was to test for extensions of the mineralisation intersected by
MMG in their adjacent licence. Out of the eight holes drilled, one diamond drill hole intersected 3m @1.29%
CuEq within a broader 6m @ 0.82% CuEq. Six of the remaining seven holes drilled intersected elevated to
anomalous copper mineralisation with initial observations of the core displaying similar geological, stratigraphic
and structural settings to that of MMG's operating Zone 5 underground mine (see announcements dated 14
November 2024 and 14 May 2025).
A review of the assay data and drill core suggested that the first phase drill programme intersected
mineralisation laterally on the fringe of the copper zone, in the iron rich zone, the interpreted outer halo of the
main mineralised zone.
A further diamond drill hole was completed on the PL162/2017 licence targeting a soil anomaly. Whilst the
contact geology was intersected, the assay results from this drill hole not identifying any significant intercepts.
The Company has completed its drilling plans in respect of licence PL135/2017 and, depending on the timing of
the proposed acquisition of the Chingola Project and associated scope of work, will choose to either commence
drilling in Botswana or to progress its work programme at Chingola out of the exploration budget for 2025.
Chingola Licence Acquisition
As announced on the 7 April 2025, the Company entered into a binding agreement to acquire the Chingola
Project (Licence 38113-HQ-LEL) in the Zambian Copperbelt, subject to the satisfaction of certain conditions
precedent. The Company is currently progressing the conditions precedent.
The Chingola exploration licence was granted on 24 August 2024 and is initially valid for four years and can be
renewed twice for periods of up to three years each, with a maximum tenure of 10 years.
The Chingola licence area (311km2) principally surrounds the Katembula and Chisangwa Domes in the Eastern
Zambian Copperbelt, which are basement complex rocks outcropping in the Western and Eastern Parts of the
licence area respectively, rimmed by Roan Group Formations. The Chingola Project is located in close proximity
to existing and well-known operating mines including Nchanga (Vedanta) and Mimbula (Moxico).
GOVERNANCE
Arc Minerals Limited – Annual Report & Financial Statements December 2024
8
BOARD OF DIRECTORS
Nicholas von Schirnding, Director and Executive Chairman
Nick von Schirnding has over 25 years' experience in the mining sector across a number of geographies. Nick was
CEO of Asia Resource Minerals plc, a FTSE listed mining company. Prior to this Nick was a senior executive with
Anglo American plc and De Beers. Mr von Schirnding is a non-executive director of Orosur Mining Inc., a non-
executive director of Jangada Mines plc, and a non-executive director of Sustineri Group Ltd, a private mining
venture.
Rémy Welschinger, Non-Executive Director
Rémy Welschinger has over 20 years' experience in finance. He was Head of Commodities Sales at Deutsche
Bank in Europe and, prior to that, an Executive Director in the Fixed Income and Commodities division of Morgan
Stanley in London. Rémy is a non-executive director of ASX-listed Infinity Lithium and AIM-listed Firering
Strategic Minerals. Remy is President of Viridian Lithium, a private French company.
Brian McMaster, Non-Executive Director
Brian McMaster has over 20 years’ experience in the area of corporate reconstruction and turnaround and
performance improvement and 20 years in the mining and exploration industry. Brian’s recent experience
includes founding Harvest Minerals and Jangada Mines, AIM listed companies with Potash and PGM projects in
Brazil respectively, as well as numerous reorganisations and the recapitalisation and listing of 12 Australian
companies. Brian’s career to date includes significant working periods in the United States, South America, Asia,
India and UK. Brian was a founding director in venture capital and advisory firm, Garrison Capital Pty Ltd, and is
also currently a director of a number of ASX and AIM listed companies.
Valentine Chitalu, Non-Executive Director
Valentine Chitalu is an entrepreneur in Zambia and southern Africa specialising in private equity and local private
sector development. He is the co-founder and Chairman of Phatisa Group, a private equity fund manager in Sub-
Saharan Africa, and has previously worked for the CDC Group in London and Lusaka, focusing on identifying
investment opportunities and portfolio management, and was Chief Executive Officer of the Zambian
Privatisation Agency where he was responsible for the divestiture of over 240 enterprises. Valentine is a
Chartered Certified Accountant and holds a Masters in Economics from Cambridge University.
DIRECTORS REPORT
Arc Minerals Limited – Annual Report & Financial Statements December 2024
9
The Directors present their annual report on the affairs of the Group, together with the financial statements and
Auditor’s Report for the year ended 31 December 2024.
PRINCIPAL ACTIVITIES
The Group is engaged in the business of acquiring, exploring and developing mineral properties in Africa. The
review of the business and future strategy is covered in the Chairman’s Statement on page 4 and Strategic Report
on page 6.
RESULTS AND DIVIDENDS
During the year cash increased by £1.351m (31 December 2023: decrease by £335k).
The loss on continuing operations of the Group after taxation amounted to £1.9m (31 December 2023: Profit of
£7.1m). There were no dividends paid in the year ended 31 December 2024 (31 December 2023: nil).
FINANCING
As announced on 12 March 2024, the Company raised approximately £4.14m (before expenses) through placing
of 209,999,995 Placing Shares at the Issue Price and a subscription of 19,777,775 Subscription Shares at the Issue
Price (the Issue Price being 1.8 pence).
In November 2024, the Company received its share of the $1m cash payment pursuant to the Joint Venture with
a subsidiary of Anglo American.
EVENTS AFTER THE REPORTING DATE
Refer to Note 26
INTEREST >3%
The following shareholders have a notifiable interest in the Company as at 26 June 2025:
Karl-Erik von Bahr
4%
Hargreave Hale Ltd
3%
DIRECTORS
The names of Directors who served as of the date of this report are set out below:
Date of Appointment
Date of Resignation
Executive Directors
Nick von Schirnding
24 January 2017
-
Non-Executive Directors
Rémy Welschinger
31 May 2019
Brian McMaster
1 August 2017
Valentine Chitalu
27 August 2021
DIRECTORS’ REMUNERATION
The Group remunerates the Directors at levels commensurate with its size and experience of its directors. The
Remuneration Committee determines and has reviewed the Directors’ remuneration and believes the levels are
appropriate and in line with industry sector median levels of remuneration.
Further details can be found on discussion about the Remuneration Committee on page 19 within the Corporate
Governance Statement. Details of the Directors’ emoluments and payments made for professional services
rendered are set out in Note 7 to the financial statements.
DIRECTORS REPORT
Arc Minerals Limited – Annual Report & Financial Statements December 2024
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DIRECTORS’ INTEREST
The beneficial interest of the Directors in the shares and options of the Company are set out as follows:
Director
As at 31 Dec 2024
As at 31 Dec 2023
Shares
Options
Warrants
Shares
Options
Warrants
Nicholas von Schirnding
23,748,434
-
5,555,555
17,080,532
-
-
Rémy Welschinger
20,084,399
-
5,555,555
14,258,844
-
-
Brian McMaster
2,555,557
-
-
2,555,557
-
-
Valentine Chitalu (i)
-
-
-
-
2,000,000
-
(i) Mr Chitalu’s options expired on 27 October 2024.
None of the Directors exercised any share options or warrants during the year.
CORPORATE GOVERNANCE
A statement on Corporate Governance is set out on pages 14 to 20.
KEY PERFORMANCE INDICATORS
The Board monitors the activities and performance of the Group on a regular basis and uses both financial and
non-financial indicators to assess the Group’s performance.
Non-Financial KPIs
The Board established the following goals for management in 2025:
1. Expanding Arc’s portfolio of copper exploration and development assets in Africa;
2. Maintaining health and safety standards and providing training and resources that are conducive to
good health and safety in the working environment, to minimise reportable incidents;
Financial KPIs
The current financial KPIs are:
Financial KPIs
Measure
Dec 2024
Dec 2023
Total funds raised (net of share issue costs)
£ 000’s
4,044
29
Exploration costs capitalised
£ 000’s
671
65
These KPI’s relate to interests in Botswana and exclude Zambian entities (that were disposed of in the Joint
Venture Deal with Anglo American BV – See Note 14. These KPIs will continue to be the priorities for the Group.
HEALTH AND SAFETY – NUMBER OF REPORTED INCIDENTS
There were no reportable incidents in the current year or prior year.
RISK MANAGEMENT REPORT
A Risk Management Report is set out on page 12.
ENVIRONMENTAL POLICY
The Group is aware of the potential impact that its subsidiaries and associated company may have on the
environment. The Group uses its best efforts to ensure that its subsidiaries and associated companies comply
with local regulatory requirements and the revised Equator Principles.
DIRECTORS REPORT
Arc Minerals Limited – Annual Report & Financial Statements December 2024
11
EMPLOYMENT POLICY
The Group is committed to promoting policies to ensure that high calibre employees are attracted, motivated
and retained for the ongoing success of the business. Employees and those who seek to work within the Group
are treated equally regardless of sex, marital status, creed, colour, race or ethnic origin.
INSURANCE
The Group maintains insurance in respect of its Directors and Officers against liabilities in relation to the
Company and the Group. The Group maintains insurance in respect of its exploration and development and
operational programmes in Zambia and Botswana, as appropriate.
STATEMENT OF DISCLOSURE TO THE AUDITOR
As at the date of this report the serving Directors confirm:
•
So far as each Director is aware, there is no relevant audit information of which the Group’s auditor is
unaware, and;
•
The Directors have taken all the steps that they ought to have taken in order to make themselves aware
of any relevant audit information and to establish that the Group’s auditor is aware of such information.
AUDITOR
PKF Littlejohn LLP has signalled its willingness to continue in office as auditor.
GOING CONCERN
The Directors have reviewed a forecast for the next 18 months, prepared by the executive and have a reasonable
expectation that the Group has sufficient funds to continue in operation and satisfy liabilities for the foreseeable
future.
Whilst the Group has sufficient funds to meet their day to day working capital needs for a period of 12 months
from the date the financial statements are approved through a mix of reducing exploration spend and other
expenses, along with the deferral of directors’ fees, they will require further funding to finance its exploration
programme in the medium term, which may include a fund raising in the future. The Directors note that the
Group’s ability to remain a going concern beyond the Going Concern assessment period of 12 months from the
date the financial statements is approved is dependent on the Group’s ability to raise further equity and/or debt
finance in the medium term. Whilst the Directors acknowledge that this carries a degree of uncertainty, in part
due to current market volatility, they have a reasonable expectation that the Group will continue to be able to
raise finance as required.
The Directors therefore consider it appropriate for the Company to continue to adopt the going concern basis
in preparing the Annual Report and Financial Statements. Details on the Directors assumptions and their
conclusion are included in the statement on going concern included in Note a.f to the Financial Statements.
DIRECTORS REPORT
Arc Minerals Limited – Annual Report & Financial Statements December 2024
12
RISK MANAGEMENT REPORT
The Company’s risk exposures and the impact on the Company’s financial statements are summarised as follows:
Credit Risk
Credit risk is the risk of potential loss to the Company if a counterparty to a financial instrument fails to meet its
contractual obligations. The Company’s credit risk is primarily attributable to its liquid financial assets, including
cash, receivables, and balances receivable from the government. The Company limits the exposure to credit risk
in its cash by only investing its cash with high-credit quality financial institutions in business and savings
accounts, guaranteed investment certificates and in government treasury bills which are available on demand
by the Company for its programmes. The Company does not invest in money market funds. The Company has
no risk exposure to asset-backed commercial paper or auction rate securities.
Financing Risk
The development of the Group’s properties will depend on the Group’s ability to obtain financing through the
raising of equity capital, joint venture of projects, debt financing, farm outs or other means. There is no
assurance that the Group will be successful in obtaining the required financing. If the Group is unable to obtain
additional financing as needed, some interests may be relinquished, and/or the scope of the operations reduced.
Liquidity Risk
Liquidity risk is the risk that the Company will not have the resources to meet its obligations as they fall due. The
Company manages this risk by closely monitoring cash forecasts and managing resources to ensure that it will
have sufficient liquidity to meet its obligations. The Company’s current financial liabilities are anticipated to
mature within the next twelve months.
Exploration and Development Risk
There is no assurance that the Group’s exploration and development activities will be successful, and statistically
few properties that are explored are ultimately developed into profitable producing mines.
The risk is mitigated by conservatively managing exploration funds such that subsequent exploration
expenditures are not committed until results from previous stages have been evaluated. There is regular lab
testing during the year’s exploration program to minimise unwarranted expenditure.
The Group assembled a talented team of professionals complemented by the regular engagement of
independent consultants.
Market Risk
Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign
exchange rates, and commodity and equity prices. These fluctuations may be significant.
Interest Rate Risk: The Company is exposed to interest rate risk to the extent that its cash balances bear variable
rates of interest. The interest rate risks on cash and short-term investments and on the Company’s, obligations
are not considered significant.
Foreign Currency Risk
The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates against the
Company’s reporting currency, pound sterling. The Company expects to continue to raise funds in London and
Europe in sterling. The Company conducts its business in Zambia and in Botswana. As the Company reports in
Great British Pounds (“GBP”), it is subject to risk due to fluctuations in the exchange rates between the GBP and
each of the United States dollar (“USD”), Zambian kwacha (“ZMW”) and Botswanan pula (“BWP”). Assets and
most liabilities in Zambia and Botswana are denominated in ZMW or BWP, respectively, but the shareholder
loans are denominated in GBP or USD. Changes in the currency exchange rates between the ZMW and BWP
relative to GBP can have a significant impact on the group accounts. The Company has not hedged its exposure
to currency fluctuations.
Commodity Price Risk
While the value of the Company’s mineral resource properties is related to the price of copper and the outlook
for this mineral, the Company currently does not have any operating mines and hence does not have any hedging
or other commodity-based risks in respect of its operational activities.
DIRECTORS REPORT
Arc Minerals Limited – Annual Report & Financial Statements December 2024
13
Copper prices have historically fluctuated and are affected by numerous factors outside of the Company’s
control, including but not limited to: industrial demand; forward sales by producers and speculators; levels of
worldwide production; short-term changes in supply and demand because of speculative hedging activities;
Licensing Risk
The Group’s exploration and development activities are dependent upon the grant of appropriate licences,
concessions, leases, permits and regulatory consents which may be withdrawn or made subject to limitations or
performance criteria. Such licences and permits are as a practical matter subject to the discretion of the
applicable Government or Government office. The Group must comply with known standards, existing laws and
regulations that may entail greater or lesser costs and delays depending on the nature of the activity to be
permitted. The interpretations, amendments to existing laws and regulations, or more stringent enforcement of
existing laws and regulations could have a material adverse impact on the Group’s results of operations and
financial condition. Whilst the Group continually seeks to do everything within its control to ensure that the
terms of each licence are met and adhered to, third parties may seek to exploit any technical breaches in licence
terms for their own benefit. There is a risk that negotiations with a Government in relation to the grant, renewal
or extension of a licence may not result in the grant, renewal or extension taking effect prior to the expiry of the
previous licence period, and there can be no assurance of the terms of any extension, renewal or grant.
Political Risk
In conducting operations in Zambia and Botswana, the Group is subject to considerations and risks related to
the political, economic and legal environment in which the Company operates. Among other things, the
Company's results may be impacted by changes in the political and social conditions in Zambia and/or Botswana
and by changes in governmental policies with respect to mining laws and regulations, anti-inflationary measures,
currency conversion and remittance abroad, and rates and methods of taxation.
Dependence on key personnel
The Group is dependent upon its executive management team and various technical consultants. Whilst it has
entered into contractual agreements with the aim of securing the services of these personnel, the retention of
their services cannot be guaranteed. The development and success of the Group depends on its ability to recruit
and retain high quality and experienced staff. The loss of the service of key personnel or the inability to attract
additional qualified personnel as the Group grows could have an adverse effect on future business and financial
conditions.
This Risk Management Report has been approved by the Board and signed on its behalf by:
Nicholas von Schirnding
Director & Executive Chairman
26 June 2025
CORPORATE GOVERNANCE STATEMENT
Arc Minerals Limited – Annual Report & Financial Statements December 2024
14
The Company is committed to maintaining the highest standards in corporate governance throughout its
operations and to ensure that all of its practices are conducted transparently, ethically and efficiently. The
Company believes that scrutinising all aspects of its business and reflecting, analysing and improving its
procedures will result in the continued success of the Company and improve shareholder value. Therefore, and
in accordance with the AIM Rules for Companies (as updated from time to time), the Company continues to
formalise its governance policies by complying with the UK’s Quoted Companies Alliance Corporate Governance
Code (the “QCA Code”).
In November 2023 a revised QCA code was released, the key updates include:
•
Wider Stakeholder Interests: Enhanced focus on ESG responsibilities and stakeholder engagement
(Principle 4).
•
Board Composition: Stricter requirements for board independence and diversity (Principles 6 and 7).
•
Succession Planning: Emphasis on clear succession strategies (Principle 8).
•
Remuneration Policy: New guidelines to align remuneration with long-term value creation (Principle 9).
As is permitted by the guidance set out by the QCA, the transitionary period of 12 months following 1 April 2024
is being utilised to put in place measures to embrace the key updates to the QCA code where possible.
The key challenges facing the company have been set out above in the Chairman’s Statement, the Strategic
Report and the Directors’ Report.
The Board currently consists of four directors: an Executive Chairman, two Non-Independent Non-Executive
Directors (NEDs) and one Senior Independent NED. The Board considers that appropriate oversight of the
Company is provided by the currently constituted Board.
QCA Code
The 10 principles set out in the QCA Code are listed below, with an explanation of how the Company applies
each of the principles and the reason for any aspect of non-compliance. There were no key governance related
matters that occurred during the year.
1.
Business Model and Strategy
The QCA Code states that ‘the board must be able to express a shared view of the Company’s purpose, business
model and strategy.’
Arc’s strategy is to invest in highly prospective copper-cobalt exploration assets primarily in Africa and to realise
their potential either through sale or development. Our aim is to create value for our shareholders by improving
on and expanding existing exploration assets and identifying new exploration targets around existing licence
areas. Arc is currently focused primarily on its copper-cobalt projects in sub-Saharan Africa.
Arc delivers on its strategic aims by (i) defining additional reserves and resources at its projects and surrounding
licence areas; (ii) securing appropriate funding; (iii) developing mineral resources in situ; (iv) maintaining good
community relationships; and (v) employing compliant environmental governance practices.
2.
Understanding Shareholder Needs and Expectations
The QCA Code states ‘the directors must develop a good understanding of the needs and expectations of the
Company’s shareholder base.’
The Board is committed to maintaining good communication and having constructive dialogue with its
shareholders. Significant developments are disseminated through the Regulatory News Service (“RNS”) and
timely updates to the Company’s website. Additionally, the Company holds investor update calls when
appropriate during which investors have access to the Chairman and other Officers. Arc has an active and
effective investor relations programme, which is the responsibility of the Chairman, that includes institutional
road-shows and presentations, effective Annual General Meetings with presentations to shareholders and a high
level of disclosure of activity to its shareholders.
CORPORATE GOVERNANCE STATEMENT
Arc Minerals Limited – Annual Report & Financial Statements December 2024
15
3.
Considering Wider Stakeholder and Social Responsibilities
The QCA Code states that long-term success relies upon good relations with a range of different stakeholder
groups both internal and external. The board needs to identify the Company’s stakeholders and understand
their needs, interests and expectations.
The method used by the Company to obtain feedback from stakeholders is discussed below under the heading
Shareholder Communication.
The board has identified the Company’s stakeholders to include staff, suppliers, customers, partners, local
government and wider communities. A key part of Arc’s business model is identifying the impact that activities
will have on the surrounding communities at Arc’s projects. The Company is always looking for opportunity to
develop the wider communities in which it operates and Arc behaves ethically in its recruitment, training and
engagements. The environmental impact of Arc’s activities is also carefully considered and the maintenance of
high environmental standards applied. Arc has established relationships with local and national governments in
the territories of its projects.
4.
Risk management
The QCA Code states that ‘the board needs to ensure that the Company’s risk management framework identifies
and addresses all relevant risks in order to execute and deliver the Company’s strategy’.
Whilst the Board is ultimately responsible for identifying and managing areas of significant business risk, it has
established an Audit and Risk Committee that ensures effective Risk Management systems are in place that
identify and manage key Company risks, establish and maintain effective controls, and ensure compliance with
risk management policies and the reporting of any non-compliance occurrences.
The Company’s risk management systems have identified the following key risks as applicable to the Company
and appropriate mitigation controls are in place:
•
Exploration and Development Risk
•
Political Risk in sub-Saharan Africa
•
License and Permitting Risk
•
Market Risk
•
Foreign Currency Risk
•
Commodity Price Risk
•
Retention of Key Personnel
•
Financing Risk
•
Liquidity Risk
•
Credit Risk
5.
Well-functioning Board of Directors
The QCA Code states that ‘the board must be maintained as a well-functioning, balanced team led by the Chair.
The board should have an appropriate balance between executive and non-executive directors and have at least
two independent non-executive directors’.
Profiles of the Arc directors are set out on pg. 9 and are also available on the Company’s website at
www.arcminerals.com.
The Board is currently comprised of one executive director (Nick von Schirnding, Executive Chairman), two non-
independent NEDs (Rémy Welschinger and Valentine Chitalu) and one Senior Independent NED (Brian
McMaster).
As at the date of this statement, Arc’s board composition complies with the QCA Code with the exception of not
having the recommended minimum number of two independent non-executive directors. The independent
director has been assessed and is considered to be independent by the board and the Company is monitoring
board independence closely and will consider appropriate appointments in due course. All Directors are
expected to devote the necessary time commitments required by their position.
CORPORATE GOVERNANCE STATEMENT
Arc Minerals Limited – Annual Report & Financial Statements December 2024
16
6.
Appropriate Skills and Experience of the Directors
The QCA Code states that ‘the board must have an appropriate balance of skills and experience and not be
dominated by one person or group of people’.
Arc complies with the QCA Code and full biographical details of the directors and their skills and experience can
be found at www.arcminerals.com/about-us/board-and-management. The Directors who have been appointed
to the Company have been chosen because of the range of their skills and experience and which are appropriate
for the strategy and objectives of the Company. The Board recognises that it currently is limited in diversity and
this continues to form part of recruitment consideration.
The Board considers the current balance of sector, financial and public market skills and experience which it
embodies as appropriate for the size and stage of development of the Company and that the Board has the skills
and requisite experience necessary to execute the Company’s strategy and business plan whilst enabling each
Director to discharge his fiduciary duties effectively.
The Board reviews annually, and when required, the appropriateness of its mix of skills and experience to ensure
that it meets the changing business needs.
The Executive Chairman is assisted by the company secretariat in preparing for and running effective board
meetings, including the timely dissemination of appropriate information. The company secretariat provides
advice and guidance to the extent required by the board on the legal and regulatory environment.
7.
Evaluating Board Performance
The QCA Code states that ‘the board should regularly review the effectiveness of its performance as a unit, as
well as that of its committees and individual directors’.
Arc reviews Board, Committee and individual director performance on an ongoing basis in the context of its
contribution to the Company’s financial performance.
The Remuneration Committee compares the performance of the Board with the requirements of its Terms of
Reference, the Company Vision and KPI’s and critically reviews the composition of the Board. The evaluation of
the Board is carried out annually and the Committee may enlist an independent evaluator as and when it deems
it appropriate.
The Review Process, includes the following key considerations:
•
Board’s mission and goals
•
Board composition and effectiveness
•
Performance against Strategic Plan
•
Board’s protocols and processes
•
Relationships with Stakeholders
•
Continuous professional learning of Board Members
Succession planning is considered by the Board as a whole and reviewed annually.
8.
Corporate Culture
The QCA Code states that ‘the board should promote a corporate culture that is based on ethical values and
behaviours’.
The corporate culture of the Company is promoted throughout its employees and contractors and is
underpinned by compliance with local regulations and the implementation and regular review and enforcement
of various policies as set out below so that all aspects of the Company are run responsibly.
It is the Board’s view that Arc’s corporate culture is consistent with its objectives, strategy and business model.
A significant part of the Company’s 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 is aware that the tone and culture set by the Board will greatly impact all aspects of the Company as
a whole and the way that employees behave. The board adheres to its group-wide corporate governance policies
which include:
CORPORATE GOVERNANCE STATEMENT
Arc Minerals Limited – Annual Report & Financial Statements December 2024
17
•
anti-corruption and bribery;
•
whistleblowing;
•
health and safety;
•
environment and community;
•
IT, communications and systems; and
•
social media.
9.
Maintenance of Governance Structures and Processes
The QCA Code states that ‘the Company should maintain governance structures and processes in line with its
corporate culture and appropriate to its size and complexity’.
Board of Directors
Arc’s key strategic, financial and operational decisions are reserved exclusively for the Board. The Board aims to
meet every six to eight weeks or more frequently if activities require and is supplied with appropriate and timely
information. The Directors are free to seek any further information that they consider necessary. All Directors
have access to advice from the company secretariat as well as independent professionals at the Group's expense.
Training is available for new Directors and other Directors as necessary. The Directors’ biographies can be found
on the Company’s website at www.arcminerals.com/about-us/board-and-management.
It is important that the Board itself contains the right mix of skills and experience in order to deliver the strategy
of the Company. As such, the Board is comprised of:
•
an executive chairman, whose responsibility is the delivery of the Company's strategy and governance
model and communication with shareholders;
•
a senior independent, non-executive director; and
•
two non-independent non-executive directors.
Director experience and qualifications are set out in their profiles on page 8.
The board has appointed Mr Brian McMaster as Senior Independent Director. Additionally, the Executive
Chairman is assisted by the company secretariat in preparing for and running effective board meetings, including
the timely dissemination of appropriate information. The company secretariat provides advice and guidance to
the extent required by the Board on the legal and regulatory environment. The Company does not specify any
minimum time commitment from Directors and instead reviews their time commitment as part of their
individual evaluations. Mr Valentine Chitalu is not currently considered independent due to his ongoing in-
country liaison with respect to Arc and various regulatory bodies.
Director
Position
Independent
(Y/N)
Remuneration
Committee
Membership
Nomination
Committee
Membership
Audit & Risk
Committee
Membership
Nicholas von
Schirnding
Executive
Chairman
N
Member
Member
Member
Brian McMaster
Senior
Independent
Director
Y
Chairman
-
-
Rémy Welschinger Non-Executive
Director
N
-
Chairman
-
Valentine Chitalu
Non-Executive
Director
N
-
-
Chairman
CORPORATE GOVERNANCE STATEMENT
Arc Minerals Limited – Annual Report & Financial Statements December 2024
18
The following matters are reserved for the Board:
Management Structure and Appointments
•
Executive Director responsibilities.
•
Board appointments or removals.
•
Board and senior management succession, training, development and appraisal.
•
Appointment or removal of Company Secretary.
•
Appointment or removal of internal auditor.
•
Remuneration, contracts, grants of options and incentive arrangements for Executive Directors and
senior management, including any plans to be put to shareholders for approval.
•
Delegation of the Board’s powers.
•
Agreeing membership and terms of reference of board committees and task forces.
•
Approval of delegated levels of authority.
•
Matters referred to the Board by the board committees.
Strategic/Policy Considerations
•
Business strategy.
•
Diversification/retrenchment policy.
•
Ensuring maintenance of a sound system of internal control and risk management, including:
•
Group’s risk appetite statements.
•
Procedures for detection of fraud and the prevention of bribery.
•
Approval of the overall levels of insurance for the group, including directors’ and officers’ liability
insurance.
•
Agreement of codes of ethics and business practices.
•
An on-going assessment of significant risks and effectiveness of internal controls.
•
Calling of shareholders’ meetings and approval of resolutions and corresponding documentation to be
put forward to shareholders at a general meeting, plus any circulars, prospectuses and listing
particulars.
•
Avoidance of wrongful or fraudulent trading.
•
Ensuring a satisfactory dialogue with shareholders based on the mutual understanding of objectives.
•
Considering the balance of interests between shareholders, employees, customers and the community.
•
Reviewing the group’s overall corporate governance arrangements.
•
Undertaking an annual review of its own performance, that of its committees and individual directors
and the division of responsibilities.
Transactions
•
Transactions which are notifiable under the AIM Rules.
•
Approval of major capital projects.
•
Contracts which are material strategically or by reason of size entered into by the Company in the
ordinary course of business e.g. bank borrowings over £1 million and acquisitions or disposals of fixed
assets (including intangible assets such as intellectual property) above £1 million.
•
Major investments (including the acquisition or disposal of interests of more than 3 per cent. In the
voting shares of any company or the making of any takeover offer.
•
Contracts not in the ordinary course of business.
•
Actions or transactions where there may be doubt over propriety.
•
Approval of certain announcements, prospectuses, circulars and similar documents.
•
Disclosure of directors’ interests.
•
Transactions with directors or other related parties.
Finance
•
Raising new capital and confirmation of major financing facilities.
•
Changes relating to the group’s capital structure, including the reduction of capital and/or share issues.
•
Treasury policies requested to be put in place by the Board.
•
Discussion of any proposed emphasis of matter on the accounts.
CORPORATE GOVERNANCE STATEMENT
Arc Minerals Limited – Annual Report & Financial Statements December 2024
19
•
Final approval of annual and interim reports and accounts and material changes to accounting policies.
•
Appointment/reappointment or removal of the external auditor, to be put to shareholders for approval
in general meeting, following the recommendation of the Board or its Committee.
•
Charitable and political donations.
•
Approval and recommendation of dividends.
•
Approval before each year starts of operating and capital expenditure budgets for the year and any
material changes to them.
General
•
Major changes to the Group’s corporate structure.
•
Any changes to the Company’s listing status and status as a plc.
•
Approval of key policy documents including the share dealing code and MAR policy, anti- bribery policy
and whistleblowing policy.
•
This schedule of matters reserved for board decisions.
Audit and Risk Committee
Arc’s Audit and Risk Committee is responsible for ensuring that the financial performance of the Company is
properly monitored and reported and, in this capacity, interacts as needed with the Company’s External
Auditors. The Committee also considers risk management and internal financial controls.
Some of the Audit Committee’s duties include:
•
reviewing the Company’s accounting policies and reports produced by internal and external audit
functions.
•
considering whether the Company has followed appropriate accounting standards and made
appropriate estimates and judgements, taking into account the views of the external auditor.
•
reporting its views to the board of directors if it is not satisfied with any aspect of the proposed financial
reporting by the Company.
•
reviewing the adequacy and effectiveness of the Company’s internal financial controls and internal
control and risk management systems.
•
reviewing the adequacy and effectiveness of the Company’s anti-money laundering systems and
controls for the prevention of bribery and receive reports on non-compliance.
•
overseeing the appointment of and the relationship with the external auditor.
The Audit and Risk Committee has two members and at least one member has recent and relevant financial
experience. The current members of the committee are Valentine Chitalu and Nicholas von Schirnding. The
committee chairman is Valentine Chitalu. The full Terms of Reference of the Audit Committee can be found on
the Company’s website.
Remuneration Committee
The purpose of the Remuneration Committee is to determine and agree with the board the framework or broad
policy for the remuneration of the Company’s chairperson and executive directors. The main duties of the
Remuneration Committee include:
•
reviewing the pay and employment conditions across the Company, including the board of directors.
•
approving targets and performance related pay schemes operated by the Company and all share
incentive plans and pension arrangements.
The Remuneration Committee has two members. The current members of the committee are Brian McMaster
and Nicholas von Schirnding. The committee chairman is Brian McMaster. The full Terms of Reference of the
Remuneration Committee can be found on the Company’s website.
CORPORATE GOVERNANCE STATEMENT
Arc Minerals Limited – Annual Report & Financial Statements December 2024
20
Nomination Committee
The purpose of the Nomination Committee is to evaluate and determine the composition of the Board itself.
The main duties of the Nomination Committee therefore include:
•
Regularly reviewing the structure, size and composition (including the skills, knowledge, experience,
independence and diversity) of the Board and make recommendations to the Board with regard to any
changes, succession planning and vacancies.
•
identifying suitable candidates from a wide range of backgrounds to be considered for positions on the
Board.
The Nomination Committee has two members. The current members of the committee are Rémy Welschinger
and Nicholas von Schirnding. The committee chairman is Rémy Welschinger. The full Terms of Reference of the
Nomination Committee can be found on the Company’s website.
Share Dealing Code
The Company has adopted a share dealing code to ensure directors and certain employees do not abuse, and
do not place themselves under suspicion of abusing inside information of which they are in possession and to
comply with its obligations under the Market Abuse Regulation ("MAR") which applies to the Company by virtue
of its shares being traded on AIM. Furthermore, the Company's share dealing code is complaint with the AIM
Rules for companies published by the London Stock Exchange (as amended from time to time).
Under the share dealing code, the Company must:
•
disclose all inside information to the public as soon as possible by way of market announcement unless
certain circumstances exist in which the disclosure of the inside information may be delayed;
•
keep a list of each person who is in possession of inside information relating to the Company;
•
procure that all persons discharging managerial responsibilities and certain employees are given
clearance by the Company before they are allowed to trade in Company securities; and
•
procure that all persons discharging managerial responsibilities and persons closely associated to them
notify both the Company and the Financial Conduct Authority of all trades in Company securities that
they make.
Key Relationships
There are a number of key relationships and resources that are fundamental to the Company's success, such as
maintaining good relationships with local communities and governments where the Company operates as well
as with engineering and financing groups to ensure that the company has adequate resources to deliver its
strategy.
10. Shareholder Communication
The QCA Code states that ‘a healthy dialogue should exist between the board and all of its stakeholders,
including shareholders, to enable all interested parties to come to informed decisions about the company’.
The Company recognises that maintaining strong communications with its shareholders promotes transparency
and will drive value in the medium to long-term. Accordingly, the Company will provide regular updates on the
progress of the Company, detailing recent business and strategy developments, in news releases which will be
posted on the Company's website. In order to continually improve transparency, the board would be delighted
to receive feedback from shareholders. Communications should be directed to info@arcminerals.com. Nicholas
von Schirnding has been appointed to manage the relationship between the Company and its shareholders and
will review and report to the board on any communications received.
Arc is committed to providing full and transparent disclosure of its activities, via the RNS system of the London
Stock Exchange. Historical annual reports and interim accounts are available on the Company’s website.
DIRECTORS’ RESPONSIBILITY STATEMENT
Arc Minerals Limited – Annual Report & Financial Statements December 2024
21
The Directors are responsible for preparing the Directors’ Report, the Risk Management Report, and the
Financial Statements in accordance with applicable law and regulations.
BVI Company law (“Company Law”) requires the Directors to prepare Group and Company Financial Statements
for each financial year. The Directors are required by the AIM Rules of the London Stock Exchange to prepare
Group financial statements in accordance with International Financial Reporting Standards (“IFRS”) as adopted
by the European Union.
Under Company Law the Directors must not approve the Financial Statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group and of the profit or loss of the Group for that period.
In preparing the Group Financial Statements, the Directors are required to:
1. select suitable accounting policies and then apply them consistently;
2. make judgements and accounting estimates that are reasonable and prudent;
3. state whether they have been prepared in accordance with IFRS; and
4. prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the Group and the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Group’s transactions and disclose with reasonable accuracy at any time the financial position of the Group
and company. They are also responsible for safeguarding the assets of the Group and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Arc Minerals website.
INDEPENDENT AUDITOR’S REPORT
Arc Minerals Limited – Annual Report & Financial Statements December 2024
22
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ARC MINERALS LIMITED
Opinion
We have audited the financial statements of Arc Minerals Limited (the ‘group’) for the year ended 31 December
2024 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of
Financial Position, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flows
and notes to the financial statements, including significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union
In our opinion, the financial statements:
•
give a true and fair view of the state of the group’s affairs as at 31 December 2024 and of its loss for
the year then ended;
•
have been properly prepared in accordance with EU-endorsed International Financial Reporting
Standards (“IFRS”).
Basis for opinion
We conducted our audit in accordance with EU-endorsed International Financial Reporting Standards (“IFRS”)
and applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent of the group
in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’
assessment of the group’s ability to continue to adopt the going concern basis of accounting included:
•
checking the mathematical accuracy of management’s cash flow forecast prepared to 31st
December 2026 and confirming the opening cash position,
•
challenging and evaluating management’s underlying cash flow projections, and
•
reviewing the completeness and appropriateness of management’s going concern disclosures
in the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the group's ability to continue as a
going concern for a period of at least twelve months from when the financial statements are authorised for
issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Our application of materiality
The materiality applied to the group financial statements was £265,000 (2023: £274,000), based on a percentage
of gross assets, as it is from these assets that the Group seeks to deliver returns for shareholders.
Performance materiality has been set at 60% (2023: 60%) of materiality. Performance materiality applied to the
group financial statements was therefore £159,000 (2023: £164,400).
The threshold for which we communicate errors to the Audit and Risk Committee has been set at £14,850 (2023:
£13,250). We also agreed to report differences below these thresholds that, in our view warranted reporting on
qualitative grounds.
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
Arc Minerals Limited – Annual Report & Financial Statements December 2024
23
We apply the concept of materiality in both planning and performing the audit and evaluating the effect of
misstatements. At the planning stage, materiality is used to determine the financial statements areas that are
included within the scope of the audit and the extent of the sample sizes during the audit. Materiality has been
reassessed at the closing stages of the audit, taking into consideration new information which arose. There was
a significant alteration made to the materiality subsequent to a management adjustment which materially
altered the gross assets. The amendments to the materiality at the closing stages have been reflected in all audit
procedures during the conclusion of the audit.
Our approach to the audit
Our audit was risk based and was designed to focus our efforts on the areas at greatest risk of material
misstatement, aspects subject to significant management judgement as well as greatest complexity, risk and
size. In designing our audit, we determined materiality, as above, and assessed the risk of material misstatement
in the financial statements.
In particular we looked at areas involving significant accounting estimates and judgements by the directors such
as the carrying value of the exploration and evaluation assets and the recoverability of receivables. As in all of
our audits, we also addressed the risk of Management override of internal controls, including among other
matters, consideration of whether there was evidence of bias that represented a risk of material misstatement
due to fraud.
A full scope audit was performed on the financial information of the group’s material operating components
which, for the year ended 31 December 2024, were Arc Minerals Ltd, Unico Minerals Ltd and Alvis-Crest. The
audit of material components was performed in London solely by PKF Littlejohn LLP using a team with experience
of auditing mineral exploration and publicly listed entities.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our scope addressed this matter
Key Audit Matter 1 – Valuation of Exploration
Assets
The carrying value of intangible assets as at 31
December 2024 was £2,370k (2023: £1,699k) which
comprised
of
exploration
and
evaluation
expenditure on the Botswana licence areas, as
disclosed in Note 10.
There is a risk that the carrying value of these
projects is impaired and that exploration and
development costs capitalised during the year have
not been capitalised in accordance with IFRS 6.
Due to the complexity and estimation uncertainty,
the audit team raised this as a key audit matter.
Our work in this area included:
•
Confirming good title to project licences and that
any minimum expenditure terms therein have
been adequately met or are expected to be met
within the contractual terms.
•
Reviewing
management’s
assessment
of
impairment indicators, providing appropriate
challenge to any significant assumptions.
•
Performing an independent assessment of
whether indicators of impairment are present in
accordance with IFRS 6.
•
Performing substantive testing of a sample of
additions to exploration and evaluation assets
during the year.
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
Arc Minerals Limited – Annual Report & Financial Statements December 2024
24
•
Assessing progress and results of exploration
activities at the group’s projects during the year
and post-year end.
•
Discussing with management and the Board their
plans regarding future exploration on the licence
areas.
•
Reviewing the associated disclosures within the
financial statements to ensure compliance with
IFRS.
Our testing of the accounting estimate (the accuracy,
valuation and allocation of the exploration assets)
involved one or more of the following approaches:
•
Obtaining evidence from events occurring
up to the date of our audit report.
•
Testing how the directors made the
accounting estimate.
•
Developing our own estimate or range.
Key Audit Matter 2 – Recoverability of Receivable
from Regency Ltd
As of 31 December 2024, Arc Minerals Limited had
receivables from Regency Mining Limited in the
amount of £999k (2023: £982k), as disclosed in Note
15.
Regency Mining Limited acquired a 73.5% interest in
the Misisi gold project from Golden Square Equity
Partners Limited, replacing Rackla Metals Inc. as the
acquiror of Misisi.
The terms of the transaction were that Arc Minerals
Limited would be paid USD 250,000 in cash and the
equivalent of USD 1,250,000 in shares in a publicly
listed company in Canada.
As of 31 December 2024, Arc Minerals Limited had
received only USD 250,000 in cash.
There is a risk that the account receivable from
Regency Mining Limited in the amount of £999k
(2023: £982k) will not be recoverable and should be
impaired as at 31 December 2024.
Due to the estimation uncertainty, the audit team
raised this as a key audit matter.
Our work in this area included:
•
Obtaining third party confirmation of the balance
owed and a detailed timeline of repayment
•
Reviewing Regulatory News Service (RNS) and
signed agreements to ensure consistency.
•
Reviewing management’s assessment of the
likelihood of recoverability
•
Ensuring adequate disclosure throughout the
financial statements in line with the reporting
requirements of the applicable standards.
Our testing of the accounting estimate (the accuracy,
valuation and allocation of the receivable from,
Regency Mining Limited involved one or more of the
following approaches:
•
Obtaining evidence from events occurring
up to the date of our audit report.
•
Testing how the directors made the
accounting estimate.
•
Developing our own estimate or range.
Key observations
We draw attention to the disclosure within Note 15
and within the Critical Accounting Estimates and
Judgements that the account receivable balance of
£999k (USD 1,250k) from Regency Mining Limited was
due as of 31 December 2024 and is likely to be
recovered once the Group receives shares equivalent
to the balance held in a related public listed company.
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
Arc Minerals Limited – Annual Report & Financial Statements December 2024
25
Other information
The other information comprises the information included in the annual report, other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information contained
within the annual report. Our opinion on the financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we do not express any form of assurance
conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial statements or our knowledge obtained in the
course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, 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 group 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is
detailed below:
•
We obtained an understanding of the group and the sector in which it operates to identify laws and
regulations that could reasonably be expected to have a direct effect on the financial statements. We
obtained our understanding in this regard through discussions with Management and the application
of cumulative audit knowledge and experience of the sector.
•
We determined the principal laws and regulations relevant to the group in this regard to be those
arising from AIM rules and local mining and exploration regulations applicable to the subsidiaries. There
was regular interaction with the component auditors during all stages of the audit, including procedures
designed to identify non-compliance with laws and regulations, including fraud.
•
We designed our audit procedures to ensure the audit team considered whether there were any
indications of non-compliance by the group with those laws and regulations. These procedures
included, but were not limited to enquiries of management, review of minutes and RNS
announcements and review of legal and regulatory correspondence.
•
We also identified the risks of material misstatement of the financial statements due to fraud. We
considered, in addition to the non-rebuttable presumption of a risk of fraud arising from management
override of controls, that the potential for management bias was identified in relation to the
impairment assessment of intangible assets (KAM above) and recoverability of receivables (KAM
above). We addressed this by challenging the assumptions and judgements made by management
when evaluating any indicators of impairment and assessing recoverability of receivables.
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
Arc Minerals Limited – Annual Report & Financial Statements December 2024
26
•
As in all of our audits, we addressed the risk of fraud arising from management override of controls by
performing audit procedures which included but were not limited to: the testing of journals; reviewing
accounting estimates for evidence of bias; and evaluating the business rationale of any significant
transactions that are unusual or outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including
those leading to a material misstatement in the financial statements or non-compliance with regulation. This
risk increases the more that compliance with a law or regulation is removed from the events and transactions
reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves
intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with our Engagement Letter.
Our audit work has been undertaken so that we might state to the company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone, other than the company and the company's members
as a body, for our audit work, for this report, or for the opinions we have formed.
Zahir Khaki (Engagement Partner)
15 Westferry Circus
For and on behalf of PKF Littlejohn LLP
Canary Wharf
Statutory Auditor
London E14 4HD
26 June 2025
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Arc Minerals Limited – Annual Report & Financial Statements December 2024
27
For the year ended 31 December 2024
31 December
2024
31 December
2023
Notes
£ 000s
£ 000s
Administrative expenses
3
(1,052)
(5,067)
Operating loss from continuing operations
(1,052)
(5,067)
Gain on disposal of Handa Group
14
-
10,933
Distribution from subsidiaries
6
528
1,918
Share of loss from associate
13
(1,546)
(691)
Profit/(Loss) before income tax
(2,070)
7,093
Income tax expense
5
-
-
Profit/ (Loss) for the year from continuing operations
(2,070)
7,093
Loss from discontinued operations
4
-
(24)
Operating profit (loss)
(2,070)
7,069
Profit/ (Loss) for the year
(2,070)
7,069
Other comprehensive income:
Item that may be subsequently reclassified to profit or loss
Currency translation differences
10
45
Total comprehensive loss for the year, net of tax
(2,060)
7,114
Loss attributable to:
Equity holders of the parent
(2,243)
7,078
Non-controlling interest
173
(9)
(2,070)
7,069
Total comprehensive loss attributable to:
Equity holders of the parent
(2,235)
7,111
Non-controlling interest
175
3
(2,060)
7,114
Earnings per share attributable to owners of the parent during the year
- Basic (pence per share)
8
(0.15)
0.58
- From continuing operations – Basic
8
(0.15)
0.58
- From continuing operations – Diluted
8
n/a
0.57
- From discontinued operations – Basic
8
-
-
- From discontinued operations – Diluted
8
n/a
-
The notes on pages 32 to 58 are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Arc Minerals Limited – Annual Report & Financial Statements December 2024
28
As at 31 December 2024
31 December
2024
31 December
2023
Notes
£ 000s
£ 000s
ASSETS
Non-current assets
Intangible assets
10
2,370
1,699
Investment in Associate
13
912
2,458
Long-term receivable
15
6,261
6,531
Total non-current assets
9,543
10,688
Current assets
Trade and other receivables
15
1,988
1,859
Short term investments
17
-
68
Cash and cash equivalents
1,635
281
Total current assets
3,623
2,208
TOTAL ASSETS
13,166
12,896
LIABILITIES
Current liabilities
Trade and other payables
18
(1,667)
(2,244)
Total current liabilities
(1,667)
(2,244)
Non-current liabilities
Long term payables
9
(103)
(105)
TOTAL LIABILITIES
(1,770)
(2,349)
NET ASSETS
11,396
10,547
Share Capital
19
-
-
Share premium
21
68,508
64,464
Share based payment reserve
20
-
126
Warrant reserve
20
111
84
Foreign exchange reserve
(102)
(61)
Retained earnings
(57,293)
(54,063)
Equity attributable to equity holders of the parent
11,224
10,550
Non-controlling interest
172
(3)
TOTAL EQUITY
11,396
10,547
These financial statements were approved by the Board of Directors on 26 June 2025 and signed on its behalf
by:
Nicholas von Schirnding
Executive Chairman
The notes on pages 32 to 58 are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
Arc Minerals Limited – Annual Report & Financial Statements December 2024
29
For the year ended 31 December 2024
31 December
2024
31 December
2023
Notes
£ 000s
£ 000s
Cash flows from operating activities
Profit/(Loss) before income tax and including discontinued
operations
(2,070)
7,069
Non-cash gains and losses related to Handa (Anglo JV)
14
-
(10,933)
Fair value loss on investments
17
(28)
1,673
Distribution from subsidiary
6
(528)
(1,918)
Share of loss from associate
13
1,546
691
Share based payment expense
3
111
-
Gains and Losses on foreign exchange
3
(175)
476
Depreciation and amortisation
11
-
2
Unwinding of discount (interest)
(401)
-
Net cash used in operating activities before changes in
working capital
(1,545)
(2,940)
Increase in trade and other receivables(i)
15
(75)
(20)
(Decrease) Increase in trade and other payables
18
(583)
743
Net cash used in operating activities
(2,203)
(2,217)
Cash flows from investing activities
Purchase of intangible assets
10
(671)
(65)
Proceeds from disposal of short term investments
96
-
Proceeds from disposal of Handa (Anglo JV)
789
2,863
Distribution to minority shareholder of Unico Minerals Ltd
6
(261)
(945)
Net cash generated from / (used in) investing activities
(47)
1,853
Cash flows from financing activities
Proceeds from issue of ordinary shares – net of share issue
costs (iv)
21
4,044
29
Share buyback
19
(408)
-
Net cash from financing activities
3,636
29
Net decrease in cash and cash equivalents
1,386
(335)
Cash and cash equivalents at beginning of year
281
616
Exchange gains on cash and cash equivalents
(32)
-
Cash and cash equivalents at end of the year
1,635
281
(i)
The movement in trade and other receivables include the movement in both long- and short-term receivables.
The notes on pages 32 to 58 are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Arc Minerals Limited Annual Report & Financial Statements December 2024
30
As at 31 December 2024
Attributable to equity holders of the Company
Share
capital
Share
premium
Foreign
exchange
reserve
Share
based
payment
reserve
Warrant
reserve
Retained
earnings
Total
Non-
controlling
interest
Total equity
£ 000s
£ 000s
£ 000s
£ 000s
£ 000s
£ 000s
£ 000s
£ 000s
£ 000s
Balance as at 1 January 2024
-
64,464
(61)
126
84
(54,063)
10,550
(3)
10,547
Loss for the year
-
-
-
-
-
(2,243)
(2,243)
173
(2,070)
Other comprehensive income(loss) for the year - currency
translation differences
-
-
8
-
-
-
8
2
10
Total comprehensive income for the year
-
-
8
-
-
(2,243)
(2,235)
175
(2,060)
Share capital issued
-
4,293
-
-
-
-
4,293
-
4,293
Cost of issuing shares
-
(249)
-
-
-
-
(249)
-
(249)
Share Buyback
-
-
-
-
-
(408)
(408)
-
(408)
Warrants and Share options expired during the year
-
-
-
(126)
(84)
210
-
-
-
Warrants and Share options expense during the year
-
-
-
-
111
-
111
-
111
Effect of foreign exchange on opening balance
-
-
(49)
-
-
-
(49)
-
(49)
Distribution (see Note 6)
-
-
-
-
-
(789)
(789)
-
(789)
Total transactions with owners, recognised directly in equity
-
4,044
(49)
(126)
27
(987)
2,909
-
2,909
Balance as at 31 December 2024
-
68,508
(102)
-
111
(57,293)
11,224
172
11,396
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Arc Minerals Limited Annual Report & Financial Statements December 2024
31
Attributable to equity holders of the Company
Share
capital
Share
premium
Foreign
exchange
reserve
Share
based
payment
reserve
Warrant
reserve
Retained
earnings
Total
Non-
controlling
interest
Total equity
£ 000s
£ 000s
£ 000s
£ 000s
£ 000s
£ 000s
£ 000s
£ 000s
£ 000s
Balance as at 1 January 2023
-
64,272
1,045
283
84
(59,196)
6,488
(643)
5,845
Loss for the year
-
-
-
-
-
7,078
7,078
(9)
7,069
Other comprehensive income(loss) for the year - currency
translation differences
-
-
33
-
-
-
33
12
45
Total comprehensive income (loss) for the year
-
-
33
-
-
7,078
7,111
3
7,114
Share capital issued
-
192
-
-
-
-
192
-
192
Share options expired during the year
-
-
-
(157)
-
157
-
-
-
Dividends declared (see Note 6)
-
-
-
-
-
(2,863)
(2,863)
-
(2,863)
Effect of Handa group disposal (see Note 4)
-
-
(1,139)
-
-
761
(378)
637
259
Total transactions with owners, recognised directly in equity
-
192
(1,139)
(157)
-
(1,945)
(3,049)
637
(2,412)
Balance as at 31 December 2023
-
64,464
(61)
126
84
(54,063)
10,550
(3)
10,547
Share capital: This represents the nominal value of equity shares in issue and is nil as the shares have a nil par value.
Share premium: This represents the premium paid above the nominal value of shares in issue.
Foreign exchange reserve: This reserve represents exchange differences arising from the translation of the financial statements of foreign subsidiaries and the retranslation of monetary items
forming part of the net investment in those subsidiaries.
Share-based payments reserve: This represents the value of share-based payments provided to employees and Directors as part of their remuneration and provided to consultants and advisors
hired from time to time as part of the consideration paid. The reserve represents the fair value of options and performance share rights recognised as an expense. Upon exercise of options or
performance share rights, any proceeds received are credited to share capital and share premium.
Retained earnings: This represents the accumulated profits and losses since inception of the business and adjustments relating to options and warrants.
Non-Controlling Interest: This represents the Non-Controlling Interest element of Unico Minerals Limited and Alvis-Crest (Pty) Limited.
The notes on pages 32 to 58 are an integral part of these consolidated financial statements.
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
32
1.
Summary of Significant Accounting Policies
a.
General Information and Authorisation of Financial Statements
The Company is registered in the British Virgin Islands under the BVI Business Companies Act 2004 with
registered number 1396532 and is located at Craigmuir Chambers, Road Town, Tortola. The Company’s ordinary
shares are traded on AIM, a market of the London Stock Exchange.
The principal activity of the Company during the year was that of a holding company for a group engaged in the
identification, evaluation, acquisition and development of natural resource projects.
The Financial Statements of Arc Minerals Limited for the year ended 31 December 2024 were authorised for
issue by the Board on 26 June 2025.
b.
Basis of Preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRS) and IFRS Interpretations Committee (IFRS IC) as adopted by the European Union.
The consolidated financial statements have been prepared on the historical convention, as modified by the
measurement to fair value of financial assets through profit and loss and held for sale assets and liabilities as
described in the accounting policies below.
The financial information is presented in Pounds Sterling (£) and all values are rounded to the nearest thousand
Pounds Sterling (£000’s) unless otherwise stated.
The principal accounting policies applied in the preparation of these consolidated financial statements are set
out below. These policies have been consistently applied unless otherwise stated.
c.
New and amended standards adopted by the Group
There were no new standards, amendments or interpretations effective for the first time for periods beginning
on or after 1 January 2024 that had a material effect on the consolidated or company financial statements.
At the date of approval of these financial statements, there were no new standards or amendments to IAS which
have not been applied in these financial statements which were in issue but not yet effective and are expected
to have a material impact on the consolidated and company financial statements.
d.
Basis of Consolidation
The Consolidated Financial Statements comprise the financial statements of the Company and its subsidiaries
made up to 31 December. Control is achieved when the Group is exposed, or has rights, to variable returns from
its involvement with the investee and has the ability to affect those returns through its power over the investee.
Generally, there is a presumption that a majority of voting rights result in control. To support this presumption
and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers
all relevant facts and circumstances in assessing whether it has power over an investee, including:
•
The contractual arrangement with the other vote holders of the investee;
•
Rights arising from other contractual arrangements; and
•
The Group’s voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control.
Subsidiaries
Subsidiaries are entities over which the Group has control. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated from the date that control ceases. Assets,
liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the
consolidated financial statements from the date the Group gains control until the date the Group ceases to
control the subsidiary.
The consolidated financial statements consolidate the financial statements of Arc Minerals Limited and the
audited financial statements of its subsidiary undertakings made up to 31 December 2024.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies into line with the Group's accounting policies. All intra-group assets and liabilities, equity, income,
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
33
expenses and cash flows relating to transactions between members of the Group are eliminated in full on
consolidation.
e.
Associates
Associates are entities over which the Group has significant influence but not control, generally accompanying
a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using
the equity method of accounting. Under the equity method, the investment is initially recognised at cost and
the carrying amount is increased or decreased to recognise the investor’s share of the profit or loss of the
investee after the date of acquisition. The Group’s investment in associates includes any goodwill identified on
acquisition.
Where the ownership interest in an existing investment is increased whereby significant influence is obtained,
the Group re-measures the existing investment immediately prior to obtaining significant influence with
resulting gains/losses recognised immediately in profit or loss. The fair value of the existing investment added
to the fair value of the consideration of the additional investment is treated as the deemed cost and is continued
to be accounted for under the equity method.
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate
share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where
appropriate.
The Group’s share of post-acquisition profit or loss is recognised in the statement of comprehensive income,
and its share of post-acquisition movements is recognised in the other comprehensive income section of the
statement of comprehensive income with a corresponding adjustment to the carrying amount of the
investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate,
including any unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or
constructive obligations or made payments on behalf of the associate.
The Group determines at each reporting date whether there is any objective evidence that the investment in
the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference
between the recoverable amounts of the associate and its carrying value and recognises the amount adjacent
to ‘share of profit/loss of associate’ in the group statement of comprehensive income.
When the Group loses significant influence over an associate, it derecognises that associate and recognises a
profit or loss being the difference between the sum of the proceeds received and any retained interest, and the
carrying amount of the investment in the associate at the date significant influence is lost.
Gains and losses resulting from upstream and downstream transactions between the Group and its associates
are recognised in the Group’s financial statements only to the extent of unrelated investor’s interests in the
associates. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the
asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency
with the policies adopted by the Group.
Impairment gains and losses arising in investments in associates are recognised in the statement of
comprehensive income.
When the Group gains control of an associate the fair value of the associate undertaking is then assessed with
any gain or loss arising being recognised within the income statement.
f.
Going Concern
The Directors have reviewed a forecast for the next 18 months, prepared by the executive and have a reasonable
expectation that the Group has sufficient funds to continue in operation and satisfy liabilities for the foreseeable
future.
Whilst the Group has sufficient funds to meet their day to day working capital needs for a period of 12 months
from the date the financial statements are approved through a mix of reducing exploration spend and other
expenses, along with the deferral of directors’ fees, they will require further funding to finance its exploration
programme in the medium term, which may include a fund raising in the future. The Directors note that the
Group’s ability to remain a going concern beyond the Going Concern assessment period of 12 months from the
date the financial statements is approved is dependent on the Group’s ability to raise further equity and/or debt
finance in the medium term. Whilst the Directors acknowledge that this carries a degree of uncertainty, in part
due to current market volatility, they have a reasonable expectation that the Group will continue to be able to
raise finance as required.
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
34
The Directors therefore consider it appropriate for the Company to continue to adopt the going concern basis
in preparing the Annual Report and Financial Statements.
g.
Business combinations
The Group applies the acquisition method to account for business combinations. The consideration transferred
for the acquisition of the subsidiary is the fair value of the assets transferred, the liabilities incurred to the former
owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the
fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at
their fair values at acquisition date. The Group recognises any non-controlling interest in the acquiree on an
acquisition by acquisition basis; either at fair value or at the non-controlling interest’s proportionate share of
the recognised amounts of the acquiree’s identifiable net asset.
Acquisition related costs are expensed as incurred.
If a business combination is achieved in stages, the acquisition date carrying value of the acquiree’s previously
held interest in the acquire is re-measured to fair value at the acquisition date; any gain or loss arising from such
a re-measurement are recognised in profit or loss.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value
of non-controlling interest over the identifiable net assets acquired and liabilities assumed. If this consideration
is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or
loss in the Income Statement.
Any interest of non-controlling interests in the acquiree is initially measured at the minority’s proportion of the
net fair value of the assets, liabilities and contingent liabilities recognised. There are no non- controlling
shareholders of subsidiaries.
h.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Board,
being the Group’s chief operating decision-maker (“CODM”).
i.
Foreign currencies
The Group presentational currency is pound sterling (GBP). Each entity in the Group determines its own
functional currency and items included in the financial statements of each entity are measured using that
functional currency. At present the functional currency for the Zambian subsidiaries is the Zambian Kwacha
(“ZMW”). The functional currency of the Botswana subsidiary is the Botswanan Pula (BWP). The functional
currency for all other entities is GBP.
The presentational currency (GBP) is used primarily because the Parent Company Arc Minerals Limited is listed
on AIM, a market of the London Stock Exchange, and raises its funding in GBP.
The results and financial position of all the Group entities that have a functional currency different from the
presentation currency are translated into the presentation currency as follows:
•
monetary assets and liabilities for each balance sheet presented are translated at the closing rate at
the date of that balance sheet;
•
income and expenses are translated at average exchange rates during the accounting year; and
•
all resulting exchange differences are recognised in other comprehensive income where material.
On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and
of monetary items receivable from foreign subsidiaries for which settlement is neither planned nor likely to
occur in the foreseeable future are taken to other comprehensive income. When a foreign operation is sold,
such cumulative exchange differences are subsequently reclassified in the income statement as part of the gain
or loss on sale.
j.
Taxation
Tax is recognised in the consolidated Statement of Comprehensive Income, except to the extent that it relates
to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised
in other comprehensive income or directly in equity, respectively.
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
35
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising
from differences between the carrying amount of assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable profit. However, deferred tax liabilities are not
recognised if they arise from the initial recognition of goodwill; deferred tax is not accounted for if it arises from
initial recognition of an asset or liability in a transaction other than a business combination that at the time of
the transaction affects neither accounting nor taxable profit or loss.
In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets
are recognised to the extent that it is probable that taxable profits will be available against which deductible
temporary differences can be utilised.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries
and associates, and interests in joint ventures, except where the Company is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred tax assets and liabilities relate to taxes levied by the same
taxation authority on either the same taxable entity or different taxable entities where there is an intention to
settle the balances on a net basis.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or
the liability is settled. Deferred tax assets and liabilities are not discounted.
There has been no tax credit or expense for the year relating to current or deferred tax.
k.
Intangible assets
Exploration and evaluation assets
Exploration and development costs are carried forward in respect of areas of interest where the consolidated
entity’s rights to tenure are current and where these costs are expected to be recouped through successful
development and exploration, or by sale. Alternatively, these costs are carried forward while active and
significant operations are continuing in relation to the areas of interest and it is too early to make reasonable
assessment of the existence or otherwise of economically recoverable reserves. When the area of interest is
abandoned, exploration and evaluation costs previously capitalised are impaired.
Costs incurred by the Company on behalf of its subsidiaries and associated with mining development and
investment are capitalised on a project-by-project basis pending determination of the feasibility of the project.
Costs incurred include appropriate technical and administrative expenses but not general overheads. If a mining
development project is successful, the related expenditures will be written-off over the estimated life (useful
economic life) of the commercial ore reserves on a unit of production basis. Impairment reviews are carried out
regularly by the Directors of the Company. Where a project is abandoned or is considered to be of no further
commercial value, the related costs will be written off to the Statement of Comprehensive Income.
The recoverability of these costs is dependent upon the discovery of economically recoverable reserves, the
ability of the Group to obtain necessary financing to complete the development of reserves and future profitable
production or proceeds from the disposal of recoverable reserves.
l.
Significant accounting judgements, estimates and assumptions
Critical Accounting Estimates and Judgements
The preparation of financial statements using accounting policies consistent with IFRS requires the Directors to
make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities and the reported amounts of income and expenses. The preparation of financial
statements also requires the Directors to exercise judgement in the process of applying the accounting policies.
Changes in estimates, assumptions and judgements can have a significant impact on the financial statements.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised prospectively from the period in which the estimates are revised. The following are the key estimate
and assumption uncertainties that have a significant risk of resulting in a material adjustment within the next
financial year:
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
36
(i)
Valuation of exploration, evaluation and development expenditure
Exploration and evaluation assets held as intangible fixed assets on the statement of financial position comprises
all costs which are directly attributable to the exploration of a project area. The Group recognises expenditure
as exploration and evaluation assets when it determines that those assets will be successful in finding specific
mineral resources. Expenditure capitalised as exploration and evaluation assets relates to the acquisition of
rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching,
sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral
resource. Capitalisation of pre-production expenditure ceases when the mining property is capable of
commercial production.
(ii)
Valuation of Casa Royalty
There are a number of key factors which affect the valuation of the Casa Royalty which has a face value of US$
45m (GBP 40m). These include (a) development and construction timeframe; (b) appropriate discount factor; (c)
availability of construction financing; (d) political stability (e) gold price and (f) ability to control timing of receipt.
Given these uncertainties the Company has elected to assign nil value to the Royalty. The Company will reassess
this carrying value in future as the Misisi Project progresses along the development curve.
Further information can be found in Note 4 (d)(ii)
(iii)
Valuation of short term investments
Short term investments are measured initially, and subsequently revalued at reporting dates, at fair value
through profit or loss. Similarly, changes in fair value are recognised through profit and loss. Additional
information is contained in Note 17.
(iv)
Investment in associate
The investment in associate arose as a result of the partial disposal in 2023 of Handa Resources Limited (Handa)
as a subsidiary. The investment shareholding decreased from 66% (a subsidiary) to 30% (an associate). Unico
lost control in a series of five contractual arrangements that were entered into for the purposes of the Joint
Venture (JV) agreement with Anglo American BV. Consequently, single transaction accounting was applied in
accounting for the transaction. See Note 14 for details of this agreement). The remaining investment, after the
partial disposal of Handa, was fair valued as at the date of the disposal (See Note 13) and has been subsequently
measured using the equity method at year end.
(v)
Regency recoverability
Whilst outstanding for some time, management believes, having made reasonable enquiries, that this remains
recoverable.
m.
Equity
Equity comprises the following:
•
“Share capital” represents the nominal value of the Ordinary shares;
•
“Share Premium” represents consideration less nominal value of issued shares and costs directly
attributable to the issue of new shares;
•
“Share based payment reserve" represents stock options awarded by the group;
•
“Warrant reserve” represents warrants granted by the group;
•
“Foreign exchange reserve” represents the translation differences arising from translating the financial
statement items from functional currency to presentational currency and foreign exchange differences
arising on the elimination of intercompany loans forming part of the investment of subsidiaries;
•
“Retained earnings” represents retained losses.
•
“Non-controlling interest” represents the interests of minority shareholders in the assets and liabilities
of the Group.
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
37
n.
Cash and cash equivalents
Cash and cash equivalents comprise current balances with banks and similar institutions and liquid investments
generally with maturities of 3 months or less. They are readily convertible into known amounts of cash and have
an insignificant risk of changes in value.
o.
Trade and other receivables
Receivables are recognised initially at amortised cost, being their initial fair value. These are classified as loans
and receivables and so are subsequently carried at amortised cost using the effective interest method. The
Directors are of the view that such items are collectible and that no provisions are required.
p.
Financial instruments
(i) Classification
The Group classifies its financial assets at amortised cost and at fair value through the profit or loss or OCI. The
classification depends on the purpose for which the financial assets were acquired. Management determines
the classification of its financial assets at initial recognition
(ii) Recognition and measurement
Amortised cost
Regular purchases and sales of financial assets are recognised on the trade date at cost – the date on which the
Group commits to purchasing or selling the asset. Financial assets are derecognized when the rights to receive
cash flows from the assets have expired or have been transferred, and the Group has transferred substantially
all of the risks and rewards of ownership.
Fair value through the profit or loss
Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at
FVTPL.
Financial assets at FTVPL, are measured at fair value at the end of each reporting period, with any fair value
gains or losses recognised in profit or loss. Fair value is determined by using market observable inputs and data
as far as possible. Inputs used in determining fair value measurements are categorised into different levels based
on how observable the inputs used in the valuation technique utilised are (the ‘fair value hierarchy’):
- Level 1: Quoted prices in active markets for identical items (unadjusted)
- Level 2: Observable direct or indirect inputs other than Level 1 inputs
- Level 3: Unobservable inputs (i.e. not derived from market data).
The classification of an item into the above levels is based on the lowest level of the inputs used that has a
significant effect on the fair value measurement of the item. Transfers of items between levels are recognised
in the period they occur.
Listed investments are valued at closing bid price on 31 December 2024. For measurement purposes, financial
investments are designated at fair value through the income statement. Gains and losses on the realisation of
investments are recognised in the income statement for the period. The difference between the market value
of financial instruments and book value to the Company is shown as a gain or loss in the income statement for
the period.
(iii) Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair
value through profit or loss. ECLs are based on the difference between the contractual cash flows due in
accordance with the contract and all the cash flows that the Group expects to receive, discounted at an
approximation of the original Effective Interest Rate (“EIR”). The expected cash flows will include cash flows
from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in
credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are
possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
38
significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables (not subject to provisional pricing) and other receivables due in less than 12 months, the
Group applies the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group does not
track changes in credit risk, but instead, recognises a loss allowance based on the financial asset’s lifetime ECL
at each reporting date.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in
certain cases, the Group may also consider a financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into
account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows and usually occurs when past due for more than one year
and not subject to enforcement activity.
At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit
impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the
estimated future cash flows of the financial asset have occurred.
(iv) Derecognition
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.
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying
amount and the sum of the consideration received and receivable is recognised in profit or loss. This is the same
treatment for a financial asset measured at FVTPL.
Financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,
loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as
appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings
and payables, net of directly attributable transaction costs. The Group’s financial liabilities include trade and
other payables and loans.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Trade and other payables
After initial recognition, trade and other payables are subsequently measured at amortised cost using the
Effective Interest Rate (“EIR”) method. Gains and losses are recognised in the statement of profit or loss and
other comprehensive income when the liabilities are derecognised, as well as through the EIR amortisation
process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit
or loss and other comprehensive income.
Derecognition
A financial liability is derecognised when the associated obligation is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in profit or loss and other comprehensive income.
Financial liabilities included in trade and other payables are recognised initially at fair value and subsequently at
amortised cost.
Fair value measurement
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
39
IFRS 13 establishes a single source of guidance for all fair value measurements. IFRS 13 does not change when
an entity is required to use fair value but rather provides guidance on how to measure fair value under IFRS
when fair value is require or permitted. The resulting calculations under IFRS 13 affected the principles that the
Company uses to assess the fair value, but the assessment of fair value under IFRS 13 has not materially changed
the fair values recognised or disclosed. IFRS 13 mainly impacts the disclosures of the Company. It requires
specific disclosures about fair value measurements and disclosures of fair values, some of which replace existing
disclosure requirements in other standards.
q.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment
losses.
Depreciation is provided on all property, plant and equipment to write off the cost less estimated residual value
of each asset at 25% on a straight-line basis.
Property, plant and equipment are tested for impairment if events or changes in circumstances (assessed at
each reporting date) indicate that the carrying amount may not be recoverable.
r.
Impairment of assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate
of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use. This is
determined for an individual asset, unless the asset does not generate cash inflows that are largely independent
of those from other assets or groups of assets, and the asset's value in use cannot be estimated to be close to
its fair value. In such cases, the asset is tested for impairment as part of the cash-generating unit to which it
belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, it is
considered impaired and is written down to its recoverable amount.
In assessing value in use, estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. Impairment losses relating to continuing operations are recognised in those expense categories
consistent with the function of the impaired asset, unless the asset is carried at revalued amount (in which case
the impairment loss is treated as a revaluation decrease).
An assessment is also made at each reporting date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. If such indication exists, the
recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a
change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was
recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That
increased amount cannot exceed the carrying amount that would have been determined, net of depreciation,
had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the Statement
of Comprehensive Income unless the asset is carried at revalued amount, in which case the reversal is treated
as a revaluation increase. After such a reversal, the depreciation charge is adjusted in future periods to allocate
the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
s.
Share-based payments
The Group provides benefits to senior personnel, consultants and advisors of the Group in the form of share-
based payments, whereby such parties render services in exchange for shares or rights over shares (equity-
settled transactions).
The cost of these equity-settled transactions with such parties is measured by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by using a Black-Scholes
model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions
linked to the price of the shares of Arc Minerals Limited (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant
party become fully entitled to the award (the vesting period).
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
40
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date
reflects:
(i)
the extent to which the vesting period has expired, and;
(ii)
the Group’s best estimate of the number of equity instruments that will ultimately vest.
No adjustment is made for the likelihood of market performance conditions being met, as the effect of these
conditions is included in the determination of fair value at grant date. The charge to the Income Statement for
a period represents the movement in cumulative expense recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only
conditional upon a market condition.
Upon expiry, the associated portion of the share option reserve is derecognised and recorded against retained
losses.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of
earnings/ (loss) per share.
t.
Earnings per share
Basic EPS is calculated as profit attributable to equity holders of the parent for the period, adjusted to exclude
any costs of servicing equity (other than dividends), divided by the weighted average number of ordinary shares,
adjusted for any bonus element. Fully-diluted EPS adjusts Basic EPS to reflect the impact if all share purchase
warrants and options were exercised.
u.
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently
carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption
value is recognised in the income statement over the period of the borrowings, using the effective interest
method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that
it is probable that some or all of the facility will be drawn down. To the extent that there is no evidence that it
is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity
services and amortised over the period of the facility to which it relates.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of
the liability for at least 12 months after the end of the reporting period.
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
41
2.
Segmental analysis
Segment information has been determined based on the information reviewed by the Board for the purposes
of allocating resources and assessing performance. No revenue is currently being generated.
Head office activities are administrative in nature whilst the activities in Zambia and Botswana relate to
exploration and development work.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can
be allocate on a reasonable basis.
31 December 2024
BVI
Zambia
Botswana
Total
£ 000's
£ 000's
£ 000's
£ 000's
Result
Gain / (loss) from continuing operations
(455)
(1,546)
(69)
(2,070)
Gain / (loss) before Income Tax
(455)
(1,546)
(69)
(2,070)
Other information
Non-controlling interest
190
-
(18)
172
190
-
(18)
172
Assets
Non-current Assets
-
6,413
2,370
8,783
Investment in associate
912
-
912
Investments at fair value through profit
and loss
-
-
-
-
Current assets excluding cash and cash
equivalents
1,836
-
-
1,836
Cash and equivalents
1,613
-
22
1,635
Consolidated total assets
3,449
7,325
2,392
13,166
Liabilities
Non-current liabilities
-
-
(103)
(103)
Current liabilities
(1,528)
(6)
(133)
(1,667)
Consolidated total liabilities
(1,528)
(6)
(236)
(1,770)
31 December 2023
BVI
Zambia
Botswana
Total
£ 000's
£ 000's
£ 000's
£ 000's
Result
Loss / (Gain) from continuing operations
4,395
2,735
(37)
7,093
Loss before Income Tax
4,395
2,735
(37)
7,093
Other information
Non-controlling interest
-
-
3
3
-
-
3
3
Assets
Non-current Assets
-
8,989
1,699
10,688
Investments at fair value through profit
and loss
68
-
-
68
Current assets excluding cash and cash
equivalents
1,858
-
1
1,859
Cash and equivalents
279
-
2
281
Consolidated total assets
2,205
8,989
1,702
12,896
-
-
-
-
Liabilities
Non-current liabilities
-
-
(105)
(105)
Current liabilities
(2,241)
-
(3)
(2,244)
Consolidated total liabilities
(2,241)
-
(108)
(2,349)
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
42
3.
Expenses by nature
31 Dec
2024
31 Dec
2023
Note
£ 000's
£ 000's
Directors' fees
7
608
1,538
Office expenses
103
121
Travel and subsistence expenses
48
46
Professional fees – legal, consulting, exploration
350
1,006
AIM related costs including Public Relations
276
204
Auditor's remuneration – audit
75
50
Gain on disposal of investment
17
(28)
1,673
Long term Anglo receivable – unwinding of present value
(401)
-
Share based payments
111
-
Other expenses
3
(82)
Copala group administration costs
13
-
Alvis-Crest administration costs
69
37
Gains and losses on foreign exchange
(175)
474
Total operating expenses
1,052
5,067
Auditors Remuneration
During the year, the Group obtained the following services from the Company’s auditor:
31 Dec
2024
31 Dec
2023
£ 000's
£ 000's
Fees payable to the auditor for the audit of the consolidated financial
statements - current financial year
60
50
Fees payable to the auditor for the audit of the consolidated financial
statements – prior financial year (not accrued in prior year)
15
-
Total
75
50
Employee information
The average number of persons employed in the Group through payroll was nil (2023 – nil) at a cost of nil (2023
– nil). See Note 7 for details of key management remuneration.
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
43
4.
Disposals of held for sale assets
Handa Disposal as part of Anglo Joint Venture
On 12 May 2022 the Company announced that it, together with its partners, had entered into an agreement
with Anglo American with the intention to form a joint venture in respect of its Zambian copper interests. The
key commercial terms of the Joint Venture were that, upon signing of a binding Joint Venture Agreement (“JV
Agreement”), Anglo American would have an initial ownership interest of 70% with Arc and its partners holding
the balance via Unico Minerals Ltd (“Unico”) in which Arc will have a 67% interest with the balance held by its
partners. On 20 April 2023, the JV Agreement was signed subject to completing certain conditions precedent
including a restructuring of the Group’s assets, obtaining approvals from relevant government and regulatory
authorities and other customary conditions. On 10 November 2023 (the Effective Date), the Company satisfied
the Conditions Precedent (see Note 14).
The related financial information is set out below:
a) Results of disposal group prior to disposal
Nov
2023
Nov
2023
Handa
Group
Total
£ 000's
£ 000's
Administrative Expenses
-
(24)
Loss before income tax
-
(24)
Income tax
-
-
Loss after tax
-
(24)
Loss from discontinued operations
-
(24)
Other comprehensive income from
discontinued operations
-
-
b) Cash flows of disposal group prior to disposal
Nov
2023
Nov
2023
Handa
Group
Total
£ 000’s
£ 000’s
Operating activities
(177)
(177)
Investing activities
-
-
Financing activities
172
172
Cash used
(5)
(5)
c) Assets and liabilities of disposal group
Nov
2023
Nov
2023
Handa
Group
Total
£ 000's
£ 000's
Intangible assets
2,406
2,406
Investment in subsidiary
219
219
Fixed assets
4
4
Trade and other receivables
401
401
Long-term payables
(223)
(223)
Total
2,807
2,807
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
44
d) Disposal group on 10 November 2023
Nov
2023
Nov
2023
Handa
Group
Total
£ 000's
£ 000's
Assets
3,030
3,030
Liabilities
(223)
(223)
Net Asset Value on 10 November 2023
2,807
2,807
5.
Taxation
31 Dec
2024
£’000
31 Dec
2023
£’000
Current income tax charge
-
-
Deferred tax charge/ (credit)
-
-
Total taxation charge/ (credit)
-
-
Taxation reconciliation
The charge for the year can be reconciled to the loss per the consolidated statement of comprehensive income:
31 Dec
2024
31 Dec
2023
£’000
£’000
(Income)/Loss before income tax
2,070
(7,093)
Tax on (income)/ loss at the weighted average Corporate tax rate of 6.2% (Dec 2023:
25.2%)
Effects of:
Permanent differences
Tax losses carried forward
Losses not subject to corporation tax
(479)
-
-
479
(697)
-
-
697
Total income tax expense
-
-
The weighted average applicable tax rate of 6.2% (2023: 25.20%) used is a combination of the 0% corporation
tax in the BVI (2023:0%), 30% corporation tax in Zambia (2023: 30%) and 22% corporation tax in Botswana (2023:
22%).
A deferred tax asset has not been provided for in accordance with IAS 12 due to uncertainty as to when profits
will be generated against which to relieve any such asset. The Group does not have a material deferred tax
liability at the year end.
The tax rate used is the weighted average rate of the British Virgin Islands, the Republic of Botswana and the
Republic of Zambia (up to the date of the disposal of the Zambian subsidiaries). Unused taxable losses available
in Botswana approximate BWP 1.563M (£91k) at 31 December 2024 (31 December 2023 - BWP 367k (£22k)).
6.
Distribution
Unico distributed to its shareholders £789k (31 December 2023 £2,863k) of which 67% £ 528k (31 December
2023 £1,918) was distributed to the Company on 27 November 2024. The net difference of £261k (31 December
2023 £945k) was the distribution to Unico’s minority shareholder.
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
45
7.
Key management remuneration
31 Dec
2024
31 Dec
2023
£ 000’s
£ 000’s
Key management remuneration
1,572
1,501
31 December 2024
Short term
benefits
Bonus
Share based
payments
Total
£ 000’s
£ 000’s
£ 000’s
£ 000’s
Executive Directors
Nicholas von Schirnding
310
-
-
310
Non-Executive Directors
Brian McMaster
48
-
-
48
Valentine Chitalu
48
-
-
48
Rémy Welschinger(i)
202
-
-
202
Key Management Personnel
Ian Lynch (CFO)
135
-
-
135
Vassilios Carellas (COO)
164
-
-
164
907
-
-
907
31 December 2023
Short term
benefits
Bonus(iv)
Share based
payments
Total
£ 000’s
£ 000’s
£ 000’s
£ 000’s
Executive Directors
Nicholas von Schirnding
309
225
-
534
Rémy Welschinger
(1 Jan 2023 to 31 Oct 2023)(i)
194
171
-
365
Non-Executive Directors
Brian McMaster
48
24
-
72
Valentine Chitalu
48
24
-
72
Rémy Welschinger
(1 Nov 2023 to 31 Dec 2023)
39
-
-
39
Caleb Mulenga
(1 Jan 2023 to 27 Mar 2023)(ii)
12
-
-
12
Key Management Personnel
Ian Lynch (CFO)
(1 Nov 2023 to 31 Dec 2023)(iii)
22
101
-
123
Vassilios Carellas (COO)
164
120
-
284
836
665
-
1,501
(i) Includes contractual notice with respect to R Welschinger’s former office as Finance Director.
(ii) C Mulenga resigned effective 27 March 2023.
(iii) I Lynch was appointed to the office of Chief Financial Officer in November 2023.
(iv) This represents 50% of bonuses declared in 2023 on a deferred basis with the balance payable in 2024, in cash or in shares at the discretion of Management.
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
46
8.
Earnings (loss) per share
The calculation of Earnings per share is based on the profit/ (loss) attributable to equity holders divided by the
weighted average number of shares in issue during the year.
31 Dec
2024
31 Dec
2023
£ 000’s
£ 000’s
Gain/(Loss) Gain
(1,907)
7,069
Weighted average number of ordinary shares (000s)
1,398,572
1,226,801
Potential diluted weighted average number of shares (000s)(ii)
1,654,661
1,247,549
Basic earnings per share (expressed in pence)
(0.15)
0.58
Net Profit (loss) per share continuing operations – Basic
(0.15)
0.58
Net Profit (loss) per share continuing operations – Diluted(i)
n/a
0.57
Net Profit (loss) per share discontinued operations – Basic
-
-
Net Profit (loss) per share discontinued operations – Diluted(i)
n/a
-
(i) Due to the loss in 2024, the effect of options and warrants in calculating a diluted loss per share would be anti-dilutive and was therefore not calculated.
(ii) The potential diluted weighted average number of shares as at 31 Dec 2023 has been corrected for a clerical error and the relevant diluted net earnings per share for the
year ended 31 Dec 2023 has been restated.
9.
Long term payables
31 Dec
2024
31 Dec
2023
£ 000’s
£ 000’s
Minority shareholder loans
103
105
103
105
•
The minority shareholder loans are payable to the minority shareholder Alvis-Crest (Proprietary)
Limited in the amount of BWP 1,797,430 (GBP 103k), as at 31 December 2024 (31 December 2023: BWP
1,797,430 (GBP 105k)). The loans are unsecured and loan holders have agreed to roll forward the loans
until a liquidity event occurs.
•
The minority shareholder loans rank equally with Arc’s working capital loan to Alvis-Crest of BWP
23,231,411 (GBP 1.327M) (31 December 2023: BWP 12,055,723 (GBP 704k)), which is eliminated on
consolidation. The loans are unsecured and loan holders have agreed to roll forward the loans until a
liquidity event occurs.
10. Intangible assets
Deferred
Exploration
Assets
Total
Alvis-Crest
£ 000’s
£ 000’s
At 1 Jan 2024
1,699
1,699
Additions
671
671
Transfer of intangibles
-
-
Disposal of Handa Group
-
-
Currency gain/(loss)
-
-
Net book value as at 31 Dec 2024
2,370
2,370
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
47
Deferred Exploration Assets
Total
Zaco
Handa
Alvis-Crest
£ 000’s
£ 000’s
£ 000’s
£ 000’s
Cost
At 1 Jan 2023
1,103
2,162
1,968
5,233
Additions
9
-
56
65
Transfer of intangibles
-
-
-
-
Disposal of Handa Group
(729)
(1,683)
(301)
(2,713)
Currency gain/(loss)
(383)
(479)
(24)
(886)
Net book value as at 31 Dec 2023
-
-
1,699
1,699
The Group’s Intangible assets are comprised of evaluation and exploration rights and exploration expenses with
respect to the licences in Botswana.
The exploration project in Botswana is at an early stage of development and there is no JORC (Joint Ore Reserves
Committee) or non-JORC compliant resource estimates available to enable value in use calculations to be
prepared.
The Directors have undertaken a review to assess whether circumstances exist which could indicate the
existence of impairment as follows:
•
The Group no longer has title to mineral leases.
•
A decision has been taken by the Board to discontinue exploration due to the absence of a commercial
level of reserves.
•
Sufficient data exists to indicate that the costs incurred will not be fully recovered from future
development and participation.
Following their assessment, the Directors concluded that no impairment indicators exist which would require a
formal impairment assessment and therefore that no impairment has been recognised.
11. Fixed Assets
Motor
Vehicles
Furniture &
Fittings
Total
£ 000’s
£ 000’s
£ 000’s
Cost
At 1 Jan 2023
37
2
39
Disposals
(25)
(2)
(27)
Additions
-
-
-
Foreign exchange
-
-
-
At 31 Dec 2023
12
-
12
At 1 Jan 2024
12
-
12
Disposals
-
-
-
Additions
-
-
-
Foreign exchange
-
-
-
At 31 Dec 2024
12
-
12
Accumulated Depreciation
At 1 Jan 2023
(26)
(1)
(27)
Disposals
16
1
17
Zamsort transfer
-
-
-
Depreciation
(2)
-
(2)
Reclassification of fixed assets to held for sale assets
-
-
-
Foreign exchange
-
-
-
At 31 Dec 2023
(12)
-
(12)
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
48
Motor
Vehicles
Furniture &
Fittings
Total
£ 000’s
£ 000’s
£ 000’s
At 1 Jan 2024
(12)
(-)
(12)
Disposals
-
-
-
Zamsort transfer
-
-
-
Depreciation
-
-
-
Reclassification of fixed assets to held for sale assets
-
-
-
Foreign exchange
-
-
-
At 31 Dec 2024
(12)
-
(12)
Net book value – 31 Dec 2023
-
-
-
Net book value – 31 Dec 2024
-
-
-
12. Investment in subsidiary and associate companies
At 31 December 2024, the Company held interests in the share capital of the following subsidiary and associate
companies.
Company
Place of Business
Ownership
Held (%)
Direct/
Indirect
Ownership
Nature of business
Alvis-Crest (Proprietary) Limited
Republic of Botswana
75%
Direct
Mineral Exploration
Unico Minerals Limited
British Virgin Islands
67%
Direct
Holding Company
Handa Resources Limited
Republic of Zambia
30%
Indirect
Mineral Exploration
Copala Holdings Limited
British Virgin Islands
100%
Direct
Holding Company
Foreland Minerals Limited
Republic of Zambia
100%
Direct
Mineral Exploration
Unico Minerals Limited registered office at Craigmuir Chambers, Road Town, Tortola, British Virgin Islands, VG 1110.
Handa Resources Limited registered office at Plot No. 1266, Haile Selassie Avenue, Longacres, Lusaka, Zambia – Handa was a subsidiary of the Company until it was disposed
as part of the joint venture agreement to Anglo American Exploration BV – see Note 14.
Alvis Crest (Proprietary) Limited is registered at Desert Secretarial Services (Pty) Limited, Plot 64518, Deloitte House, Fairground, PO Box 211008, Bontleng, Gaborone,
Botswana.
Copala Holdings Limited registered office at Craigmuir Chambers, Road Town, Tortola, British Virgin Islands, VG 1110.
Foreland Minerals Limited registered office at Plot No. A5562, Chamba Valley, Lusaka, Zambia.
The non-controlling interest shown within the primary statement arises as a result of the Group owning less
than 100% of a subsidiary company.
13. Investment in Associate
Handa
Group
Handa
Group
31 Dec
2024
31 Dec
2023
£ 000’s
£ 000’s
Opening balance
2,458
-
At acquisition fair value of associate at 10 Nov 2023
(Note 14)
-
3,149
Share of losses
(1,546)
(691)
At 31 Dec 2024
912
2,458
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
49
The Investment in Associate comprises of the investment in Handa Resources Limited (Group), being the vehicle
for the joint venture with Anglo American BV (“Anglo”), which was acquired on 10 November 2023 following
satisfaction of all conditions precedent. Details of the joint venture are set out in Note 14.
Anglo’s accounting policy requires exploration expenditure to be expensed through profit and loss. As such, the
share of losses includes the Group’s share of exploration expenditure incurred during the period 1 January to 31
December 2024.
During 2023, the Group submitted three mining license applications as part of preparing for completion of the
JV with a subsidiary of Anglo American, being 33402-HQ-LML, 33403-HQ-LML and 33404-HQ-LML over the
exploration licenses 23004-HQ-LEL and 19906-HQ-LEL. All of the mining licence applications were approved and
validated by the Mining Cadastre Department and, following submission of the subsequent requisite
documentation, the Mines Advisory Committee (MAC) was expected to meet to review the finalised LML
applications prior to issuance of the Mining Licenses.
As announced on 17 June 2024, the Mining Cadastre Department published the results of the MAC meeting
pursuant to which these applications and were rejected and Zaco Investments Limited’s application with respect
to 23004-HQ-LEL was marked as deferred pending an information request. As the applications were validly
submitted and validated by the Zambian Mining Cadastre, the Company has been advised that Handa and Zaco
will be appealing the decision of the Mining Licence Committee to reject the Mining Licence Applications and
are engaging with the Mining Cadastre to have the appeal heard as soon as possible so that the applications can
be reinstated and/or considered positively in accordance with the law.
With the exception of the licence mentioned above, none of the Company's other licences were affected by the
recent Mining Licence Committee Meeting review and Anglo continued to mobilise for the planned exploration
activities.
14. Joint Venture Agreement with Anglo American
On 12 May 2022 the Company announced that it, together with its partners, had entered into an agreement
with Anglo American with the intention to form a joint venture in respect of its Zambian copper interests. The
key commercial terms of the Joint Venture were that, upon signing of a binding Joint Venture Agreement (“JV
Agreement”), Anglo American would have an initial ownership interest of 70% with Arc and its partners holding
the balance via Unico Minerals Ltd (“Unico”) in which Arc will have a 67% interest. On 20 April 2023, the JV
Agreement was signed subject to completing certain conditions precedent including a restructuring of the
Group’s assets, obtaining approvals from relevant government and regulatory authorities and other customary
conditions. On 10 November 2023 (the “Effective Date”), the Company announced that it had satisfied the
conditions precedent. The key commercial terms of the Joint Venture are as follows:
Handa Resources Limited - the Joint Venture vehicle - was reconstituted to reflect the initial ownership interests
of Anglo American and Unico of 70% and 30%, respectively ("Initial Ownership Interests");
•
Anglo American has the right to retain an Ownership Interest of 51%, by:
funding exploration expenditures equal to USD 24,000,000 on or before the date that is 180 days after
the third anniversary of the Effective Date ("Phase I End Date"); and making cash payments to Unico
totalling up to USD 14,500,000, as follows:
•
USD 3,500,000, which was received on 13 November 2023;
•
USD 1,000,000, which was received on 27 November 2024;
•
The balance receivable of USD 11M becomes due as follows:
o
USD 1,000,000 on the second anniversary of the Effective Date;
o
USD 1,000,000 on the third anniversary of the Effective Date; and
o
USD 8,000,000 by the Phase I End Date.
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
50
Following the completion of Phase I, Anglo American will have the right to retain an additional ownership
interest equal to 9% (for a total ownership interest of 60%) by funding USD 20,000,000 of additional exploration
expenditures within 2 years of the Phase I End Date ("Phase II End Date")
Following the completion of Phase II, Anglo American will have the right to retain an additional ownership
interest equal to 10% (for a total ownership interest of 70%) by funding USD 30,000,000 within 2 years of the
Phase II End Date ("Phase III End Date").
During the period up to the Phase III End Date, 30% of the total funds contributed by Anglo will be deemed to
have been contributed by Unico Minerals Limited (“Deemed Contribution”). The Deemed Contribution is not
reflected in these accounts and will be fully calculated and reconciled with the records of Handa at the end of
each phase of the JV.
Anglo American, for as long as it holds the largest interest in the Joint Venture, shall have the right to nominate
three directors and Unico shall have the right to nominate two directors. Joint Venture board decisions shall be
adopted by simple majority vote.
Details of the group’s gain on disposal of the Zaco and Handa subsidiaries is as follows:
Group
31 Dec 2023
£ 000’s
Total Proceeds
10,497
Net Asset Value of Zaco
Retained Earnings
225
Share Capital
(219)
Share Premium
(990)
Profit for the year
34
(950)
Unico’s 72.5% share of the Net Asset Value
(690)
Net Asset Value of Handa
Retained Earnings
132
Share Capital
(172)
Share Premium
(1,818)
Profit for the year
0
Consideration
(1,858)
Arc’s 66% share of the Net Asset Value
(1,226)
Fair value uplift on recognition of the Handa JV
2,352
Group gain on disposal of subsidiaries
10,933
Following the transaction with Anglo, the group’s interest in Handa reduced to 30% and as part of the disposal
accounting, the directors assessed that their interest in Handa would be accounted for an investment in
associate and the value of the investment amounted to £3.149m that they have deemed on recognition.
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
51
15. Receivables
Long-term receivables
Group
Group
31 Dec
2024
31 Dec
2023
£ 000’s
£ 000’s
Receivable – Anglo JV (USD 8M)
6,261
6,531
Total
6,261
6,531
Trade and other receivables
Group
Group
31 Dec
2024
31 Dec
2023
£ 000’s
£ 000’s
Receivable – Anglo JV (USD 1M)
798
744
Receivable – Casa Sale (USD 1.25M)
999
982
Other Receivables
191
121
Prepayments
-
12
Total
1,988
1,859
Receivable – Anglo JV
The £798k is due in November 2025, being the sterling equivalent of the net present value of USD 1M receivable
upon the second anniversary of the Effective Date of the Anglo JV. A long-term receivable component of
£6.261M has been recognised, representing the net present value of the remaining USD 9M proceeds arising
from the Anglo JV agreement by the Phase I End Date. The total proceeds had a nominal value of USD 14.5M
and was discounted at a rate of 5.5% and a USD/GBP exchange rate of £ 0.80. See Note 14 for details of amounts
receivable pursuant to the joint venture agreement with Anglo American.
Receivable – Casa Sale
Included in receivables at 31 December 2024 is £999k (USD 1.25M) (2023: £982k (USD1.25M)) to reflect the
overdue Consideration Shares due to Arc in relation to the disposal of Casa Mining Limited:
As announced on 29 April 2022, Regency Mining Ltd (“Regency”) acquired a 73.5% interest in the Misisi gold
project (“Misisi Project”) from Golden Square Equity Partners Limited (“Golden Square”), replacing Rackla Metals
Inc. as the acquiror of Misisi. The terms of the transaction were that Arc would be paid USD 250,000 in cash and
the equivalent of USD 1,250,000 in shares in a publicly listed company in Canada (“Consideration Shares”). The
agreement also provided Arc with a royalty agreement on the same terms as the previous royalty agreement
announced on 5 May 2021.
On 30 June 2023, the Company received the first cash payment of USD 125,000 towards the USD 1,500,000
receivable from the disposal of its Casa interests. On 12 September 2023, the Company received the second cash
payment of USD 125,000, bringing the aggregate cash payments received by the Company to date to USD
250,000. The balance of USD 1,250,000 is to be settled by the issuance of listed stock which has been delayed
due to corresponding delays in the listing process of the underlying entity. Management continues to follow up
on progress and the directors consider the balance recoverable.
The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies:
Group
Group
31 Dec
2024
31 Dec
2023
Current trade and other receivables
£ 000’s
£ 000’s
UK Pounds
191
132
US Dollars
1,409
1,726
Zambian Kwacha
-
-
Botswana Pula
-
1
Total
1,600
1,859
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
52
16. Royalties
Net Smelter Royalty - Casa Mining Ltd
On 18 March 2020 the Company announced the sale of its shareholding in Casa Mining Limited in return for a
USD 5,000,000 interest-free note originally payable on 19 March 2021 and a 3% Royalty calculated on net
smelter production capped at USD 45,000,000. The USD 5m loan note was subsequently extended and, as
announced in the RNS dated 29 April 2022, satisfied in full.
There were a number of key factors which affect the valuation of the Casa Royalty which has a face value of USD
45,000,000. These include (a) development and construction timeframe; (b) appropriate discount factor; (c)
availability of construction financing; (d) political stability and (e) gold price.
Given these uncertainties the Company has elected to assign nil value to the Royalty. The Company will reassess
this carrying value in future as the Misisi Project progresses along the development curve.
17. Short-term Investments Held at Fair Value Through Profit and Loss
The Group’s investments held at fair value through profit and loss consist of investments publicly traded on the
London Stock Exchange and the Over-The-Counter (OTC) market. These investments are valued at the mid-price
as at year end.
Level 1
Level 2
Level 3
Total
£ 000's
£ 000's
£ 000's
£ 000's
At 1 January 2024
68
-
-
68
Additions
-
-
-
-
Profit on disposal
28
-
-
28
Disposals
(96)
-
-
(96)
Foreign exchange
-
-
-
-
At 31 December 2024
-
-
-
-
Level 1
Level 2
Level 3
Total
£ 000's
£ 000's
£ 000's
£ 000's
Gains on short-term investments held at fair value through profit and loss
Profit on disposal
28
-
-
28
Realised loss on impairment of
investments
-
-
-
-
At 31 December 2024
28
-
-
28
Level 1
Level 2
Level 3
Total
£ 000's
£ 000's
£ 000's
£ 000's
At 1 January 2023
1,738
-
-
1,738
Additions
-
-
-
-
Fair value loss
(1,509)
-
-
(1,509)
Impairment of TMNA shares
(164)
-
-
(164)
Foreign exchange
3
-
-
3
At 31 December 2023
68
-
-
68
Level 1
Level 2
Level 3
Total
£ 000's
£ 000's
£ 000's
£ 000's
Losses on short-term investments held at fair value through profit and loss
Fair value loss on investments
(1,509)
-
-
(1,509)
Realised loss on impairment of
investments
(164)
-
-
(164)
At 31 December 2023
(1,673)
-
-
(1,673)
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
53
The fair value Agri-Fintech Holdings Inc. (TMNA), formerly Tingo Inc., declined significantly in 2023. The fair value
losses recognised represent the decline in value. Amid widely publicised FBI and SEC investigations, TMNA
announced its intention to liquidate in the fourth quarter of 2023. Following this announcement, the investment
was impaired in full. The Company continues to monitor developments.
18. Trade and other payables
Included in trade and other payables are the following:
Group
Group
31 Dec
2024
31 Dec
2023
Current trade and other payables
£ 000’s
£ 000’s
Surrendered share options payable
1,181
1,181
Minority shareholder loans
53
47
Trade payables, other payables, deferrals and accruals
433
1,016
1,667
2,244
19. Share capital
Authorised
£ 000’s
Unlimited ordinary shares of no par value
Called up, allotted, issued and fully paid
Number
of shares
Nominal
Value
Average
price
per share
(pence)
Gross
Consideration
Value
GBP’000
As at 1 January 2023
1,225,744,782
8,752
Issued to creditors in lieu of payment
5,593,099
-
2.932
164
Issued pursuant to warrant exercises
980,584
-
2.9
28
As at 31 December 2023
1,232,318,465
8,944
As at 1 January 2024
1,232,318,465
8,944
Issued to creditors in lieu of payment
2,840,664
-
1.902
54
Issued pursuant to placing
235,488,880
-
1.800
4,239
Cancelled pursuant to the Share Buyback(i)
(22,539,746)
-
(1.800)
(408)
As at 31 December 2024
1,448,108,263
12,829
Share issue costs in the amount of £249k (31 December 2023 – £nil) were incurred in the year and set off against
the share premium account.
(i) The Company announced on 26 March 2024 that it had executed an off-market share buyback agreement pursuant to which it had acquired 22,539,746 ordinary shares
of no par value each (the "Buyback Shares") from Sveriges Lärare (formerly Lärarnas Riksförbund) for a total consideration of £405,715.43 (the "Share Buyback"). Each
Buyback Share was acquired for 1.8 pence per Buyback Share (being the same price paid by investors in the Company's placing as set out in the Placing Announcements).
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
54
20. Share based payments and Warrants
Share Options
During the year the following share options were issued and valued using the Black Scholes method:
Weighted
Avg Price
(pence)
Number
Exercise
Price
(pence)
Share price
at grant
(pence)
Weighted Avg
Term
(years)
Value
(000s)
**
1 January 2023
3.85
20,133,334
1.83
283
Expired
(11,200,000)
-
-
-
(157)
Exercised during the year
-
-
-
-
-
Granted
-
-
-
-
-
31 December 2023
4.56
8,933,334
-
-
0.52
126
1 January 2024
4.56
8,933,334
-
-
0.52
126
Expired
(8,933,334)
-
-
-
(126)
Exercised during the year
-
-
-
-
-
Granted
-
-
-
-
-
31 December 2024
-
-
-
-
-
-
No options are/were subject to vesting conditions.
Options can be settled in cash and are typically granted for a term between three and five years at the discretion
of the Board of Directors upon recommendation by the Remuneration Committee.
There are no options outstanding at 31 December 2024. The weighted average exercise price of the options
outstanding at 31 December 2023 was 4.56 pence.
** Under IFRS 2 “Share-based Payments”, the Company determines the fair value of options issued to Directors,
Employees and other parties as remuneration and recognises the amount as an expense in the Statement of
Comprehensive Income with a corresponding increase in equity.
During the year 8,933,334 share options expired unexercised. The value of these expired share options was
calculated based on a pro-rata allocation of the opening balance.
The charge incurred during the year in relation to share based payments was £nil (31 December 2023 – £27,000).
Warrants
Grant
date
Number
Exercise
Price
(pence)
Term
(years)
Share Price at
grant
pence
1 January 2024
11,815,063
Exercised during the year
-
Granted during the year
256,088,879
3.00
2.23
1.80
Expired during the year
(11,815,063)
TOTAL 31 December 2024
256,088,879
Weighted Average
3.00
2.23(i)
(i) Remaining term as at 31 December 2024
The charge incurred during the year in relation to warrants was £111k (31 December 2023 – nil).
Grant
date
Number
Exercise
Price
(pence)
Term
(years)
Share Price at
grant
pence
1 Jan 2023
12,795,647
Exercised during the year
980,584
Expired during the year
-
TOTAL 31 December 2023
11,815,063
Weighted Average
4.41
0.5 (i)
(i) Remaining term as at 31 December 2023
The charge incurred during the year in relation to warrants was nil.
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
55
21. Share premium
31 Dec
2024
31 Dec
2023
£ 000s
£ 000s
Opening Balance
64,464
64,272
Total Additions
4,293
192
Share issue costs
(249)
-
As at 31 December
68,508
64,464
See Note 19 for a breakdown of share issues during the year.
22. Financial instruments and capital risk management
Categories of financial instruments
The categories of financial assets and liabilities included in the statement of financial position are as follows:
2024
2023
£000
£000
Financial assets at amortised cost:
Long-term receivable
6,649
6,531
Trade and other receivables
1,600
1,859
Cash and cash equivalents
1,635
281
Financial assets at fair value through profit or loss:
Short term investments
-
68
Financial assets at carrying value using equity method
Investment in associate
912
2,458
10,796
11,197
2024
2023
£000
£000
Financial liabilities at amortised cost:
Trade and other payables
1,667
2,244
Long-term payables
103
105
1,770
2,349
Financial Risk Management
Financial Risk Factors
The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency risk and
price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial
performance.
Risk management is carried out by the Board of Directors under policies approved at Board meetings. The Board
frequently discusses principles for overall risk management including policies for specific areas such as foreign
exchange.
a) Market Risk
i) Foreign Exchange Risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency
exposures, primarily with respect to the pound sterling, US dollar (“USD”), Zambian kwacha (“ZMW”) and
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
56
Botswanan pula (“BWP”). Foreign exchange risk arises from recognised monetary assets and liabilities, where
they may be denominated in a currency that is not the Group’s functional currency.
The Zambian kwacha depreciated by approximately 7% (51% in 2023) - it has shown to be a volatile currency.
The kwacha risk is mitigated by the fact that the Group’s Zambian entities were disposed of during 2023 – See
Note 14. The Group’s exposure is limited to Foreland Minerals Limited subsidiary.
The Botswanan pula depreciated by approximately 2% (appreciated 11% in 2023), Whilst less volatile than the
ZMW, the pula risk is similarly mitigated to that of the kwacha by the fact that the Group’s Botswanan entity
would only have one month’s cash requirement on hand at any one time.
On the assumption that all other variables were held constant, and in respect of the Group and the Company’s
expenses the potential impact of a 20% increase/decrease in the GBP:ZMW foreign exchange rate on the Group’s
loss for the year and on equity is as follows:
Potential impact on Zambian kwacha and Botswanan Pula expenses: 2023
Group (BWP)
Group (ZMW)
Increase/(decrease) in exchange rates
£ 000’s
£ 000’s
20%
6
6
-20%
(8)
(9)
Potential impact on Zambian kwacha and Botswanan pula expenses: 2024
Increase/(decrease) in exchange rates
20%
(11)
-
-20%
18
-
b) Credit Risk
Credit risk arises from cash and cash equivalents.
The Group considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk.
The Group will only keep its holdings of cash and cash equivalents with reputable institutions.
The Group considers that it is not exposed to major concentrations of credit risk.
The Group holds cash as a liquid resource to fund its obligations. The Group’s cash balances are held primarily
in USD. The Group’s strategy for managing cash is to assess opportunity for interest income whilst ensuring cash
is available to match the profile of the Group’s expenditure. This is achieved by regular monitoring of interest
rates and monthly review of expenditure forecasts. Short term interest rates on deposits remained very
unattractive during the fiscal year and management employed short-term investment strategies to protect
working capital reserves.
The Group has a policy of not hedging and therefore takes market rates in respect of foreign exchange risk;
however, it does review its currency exposures on an ad hoc basis. Currency exposures relating to monetary
assets held by foreign operations are included within the foreign exchange reserve in the Group Balance Sheet.
The currency profile of the Group’s cash and cash equivalent is as follows:
Dec
2024
Dec
2023
Cash and cash equivalents
£ 000’s
£ 000’s
Sterling
1,024
49
US Dollars
589
230
Zambian Kwacha (ZMK)
-
-
Botswana Pula (BWP)
22
2
At end of year
1,635
281
On the assumption that all other variables were held constant, and in respect of the Group’s cash position, the
potential impact of a 20% increase in the GBP:USD foreign exchange rate would not have a material impact on
the Group’s cash position and as such is not disclosed.
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
57
c) Liquidity Risk
To date the Group has relied upon equity funding to finance operations. The Directors are confident that
adequate funding will be forthcoming with which to finance operations. Controls over expenditure are carefully
managed.
The Group ensures that its liquidity is maintained by a management process which includes projecting cash flows
and considering the level of liquid assets in relation thereto, monitoring Balance Sheet liquidity and maintaining
funding sources and back-up facilities.
Listed securities
Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by
valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets.
Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are
observable, either directly or indirectly.
Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based
on observable market such as industry knowledge and experience of the Directors.
Risk arises from uncertainty about the future valuations of financial instruments held in accordance with the
Company’s investment objectives. These future valuations are determined by many factors but include the
operational and financial performance of the underlying investee companies, as well as market perceptions of
the future of the economy and its impact upon the economic environment in which these companies operate.
As at year end, the Company held no investments in companies that are listed on stock markets.
Capital Risk Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to position as a going concern
and to continue its exploration and evaluation activities. The Group has capital, defined as the total equity and
reserves of the Group, of £11,448,000 (December 2023: £10,547,000).
The Group monitors its level of cash resources available against future planned exploration and evaluation
activities and issues new shares in order to raise further funds from time to time.
23. Commitments
Alvis-Crest committed exploration expenditure
Until a decision to mine is reached, the Group is committed to spending, during any consecutive three year
period, not less than USD 200,000 per year, on average, on the Virgo Project. The licences were renewed in 2024
for a further 2 years to 2026. The Group is committed to spending at least USD 200,000 over any consecutive 3
year period.
Exploration commitments
Ongoing exploration expenditure is required to maintain title to the Group’s mineral exploration permits. No
provision has been made in the Group financial statements for these amounts as the expenditure is expected to
be fulfilled in the normal course of the operations of the Group.
24. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in this note. There were no other transactions with related parties during
the reporting year, except as disclosed below:
Remuneration of Key Management Personnel
The remuneration of the Directors and PDMRs is set out in Note 7.
Of the amounts set out in Note 7:
NOTES TO THE FINANCIAL STATEMENTS
Arc Minerals Limited Annual Report & Financial Statements December 2024
58
£164k (2023 – £284k) was incurred with VC Resources Ltd, a PSC owned by Vassilios Carellas, as remuneration
for his position as Chief Operating Officer.
£135k (2023 – £123k) was incurred with HFS Consulting Ltd, a company owned by Ian Lynch, as remuneration
for his position as Chief Financial Officer.
25. Ultimate controlling party
There is no ultimate controlling party in the opinion of the Board.
26. Events after the reporting date
Issuance of LTIPs
On 7 April 2025, the Company announced that the Board had approved the issuance of a combination of
restricted stock units and share options.
Chingola Acquisition
On 7 April 2025, the Company announced that it had entered into a binding agreement to acquire the Chingola
Project (Licence 38113-HQ-LEL) in the Zambian Copperbelt, subject to the satisfaction of certain conditions. The
Company is currently progressing the conditions precedent.