Bezant Resources Plc
(Company Registration Number 02918391)
Annual Report
and
Financial Statements
For the year ended 31 December 2019
Bezant Resources Plc
Contents
Corporate directory
Chairman’s statement
Board of directors
Strategic report
Directors’ report
Corporate governance
Independent auditors’ report
Consolidated statement of profit and loss
Consolidated statement of other comprehensive income
Consolidated statement of changes in equity
Company statement of changes in equity
Consolidated and Company balance sheets
Consolidated and Company statements of cash flows
Page
2
3 - 4
5 - 6
7 - 10
11 - 18
19 - 24
25 - 33
34
35
36
37
38
39
Notes to the financial statements
40 - 65
1
Bezant Resources Plc
Corporate directory
Directors:
Secretary:
C Bird
E Kirby
R Siapno
Executive Chairman
Non-Executive Director
Non-Executive Director
York Place Company Secretaries Limited
Ground Floor
32 Park Cross Street
Leeds
West Yorkshire, LS1 2QH
Registered office:
Floor 6, Quadrant House
4 Thomas More Square
London, E1W 1YW
Registered number:
02918391 (England & Wales)
Nominated adviser:
Beaumont Cornish Limited
Building 3, 566 Chiswick High Road
London, W4 5YA
Broker:
Solicitors:
Auditors:
Registrars:
Bankers:
Novum Securities Limited
8-10 Grosvenor Gardens
London, SW1W 0DH
Joelson JD LLP
30 Portland Place
London, W1B 1LZ
UHY Hacker Young LLP
Quadrant House
4 Thomas More Square
London, E1W 1YW
Link Market Services Limited
34 Beckenham Road
Beckenham
Kent, BR3 4TU
National Westminster Bank Plc
66 High Street
Maidenhead
Berks, SL6 1QA
National Australia Bank
Capital Office, Ground Floor
100 St Georges Terrace
Perth
Western Australia 6000
2
Bezant Resources Plc
Chairman’s Statement
For the year ended 31 December 2019
Dear Shareholder,
During the year under review, the Company remained focused on seeking to develop its existing
projects through strategic alliances / joint ventures / sales and the identification and acquisition of
copper-gold resources moving towards development of projects which pass the relevant criteria for
investment.
Mankayan Project Philippines: During the period the Company sold 80% of its interest in the
Mankayan copper-gold porphyry project in the Philippines to MMIH of Singapore who intend a
reverse takeover or listing on the Singapore or other suitable exchange. For a variety of reasons
interruptions have occurred to that process, but some achievements have been made in extending
deadlines and work commitments for licence maintenance. MMIH are still focussed on the listing
and, we understand, COVID-019 notwithstanding anticipate a favourable outcome.
Eureka Project Argentina: The Eureka Project in Argentina has been kept in good standing with
most of our work being desktop, defining drilling programmes, which will test various geophysical
and geochemical anomalies and , when complete, should define, the nature of the gold distribution
and overall potential of the project. We have received expressions of interest to either joint venture
or sell the project and are still considering the best route to take for the project.
The Board feel that a move of emphasis to Southern Africa is the right direction for the Company
and during the period we acquired an option in relation to the Buffalo Project in Zambia which led us
post year end to acquire an interest in the Kalengwa copper silver project in Zambia and the Hope
Copper Gold project in Namibia.
This year’s annual report is being sent to shareholders in September, so later than usual, and we
have all had to learn to adapt to this new “COVID-19 World” pending the discovery of a vaccine, so
in the circumstances I think it appropriate to write about the Company’s acquisitions in 2020 and the
Company’s outlook going forward.
Kalengwa Project: Our 30% interest in the Kalengwa copper silver project in Zambia, where Bezant
acts as operator, was acquired in April 2020 and comprises a large exploration licence surrounding
one of the richest open pits ever worked in Zambia. During its working life, the Kalengwa mine,
produced 1.9 million tonnes of ore at an average grade of 9.4% copper with over 25% of the ore
mined exceeding 20% copper. The exploration licence has numerous indications of similar geology,
along with poorly tested geochemical and geophysical anomalies, which could lead to discovery of
further typical Copper Belt mineralisation. The key areas of interest include sparsely drilled copper
mineralisation just 4km northeast of the main pit and a 13km strike zone of coincident geochemical
and structural anomalism, which has not been drill tested. We are planning for a reconnaissance
drilling program at Kalengwa.
Hope Copper Gold Project: We completed the acquisition of 100% of Virgo Resources +70%
interest in the Hope and Gorob licences in Namibia, which already have a combined Mineral
Resource of 10.2Mt @1.9% Cu and 0.3g/t Au at a 0.7% Cu cut-off, reported in accordance with the
JORC Code (2012). The concession has a further untested potential mineralised area of over 150km
as well as additional targets for drill testing adjacent to the Hope and Gorob deposits.
3
Bezant Resources Plc
Chairman’s statement (continued)
For the year ended 31 December 2019
Post-acquisition, archive search, showed that the values of gold at Hope were on many occasions
higher than the average in the mineral resource statement, including some values over 1g per tonne.
Samples from the Gorob deposit were not assayed for gold by previous owners, thus giving the
impression that no gold existed. The Company intends to commence a reconnaissance drilling
programme to test the Gorob prospect for gold and to increase the resource base in the area
surrounding the Hope property.
Market Outlook: We at Bezant are excited for the prospects of the Company in the immediate and
mid-term. The gold price is always difficult to predict, but in our projects where gold occurs the
potential for significant revenue addition also exist. We are particularly confident for the prospects
of copper, the demand of which is expected to double by 2030. These forecasts have been made
after review of global demand particularly in in emerging countries. The supply fundamentals have
deteriorated over the last 3 years, mainly due to do the weak financing conditions for explorers and
social challenges in places such as Chile and the DRC. It is our view, that the copper industry will
return to its structure of the 1990s, where small high grade mines existed, medium sized open pit
and underground mines existed and of course, the large open pits which were the key contributors.
Copper Mining Sector: Recent years, have seen the small copper mining sector eradicated and
mid-tier companies with single copper projects, absorbed by the majors. Our belief for the coppers
supply targets to be met, is for all types of copper contribution to resurface. Over the last 15 years
the average grade of copper ore being mined has dropped from 1.1% to 0.62% and is still falling.
When the copper grade falls to such lows, the annual production rate has to be huge to achieve the
necessary unit working cost to provide a surplus of income over expenditure and achieve the
necessary returns on capital. The aforementioned scenario results in the capital cost of new mines
with low grades being in the billions of dollars, thus making the copper arena for low grade projects
confined to just a few companies.
COVID-19 and Brexit: A combination of the COVID-19 pandemic and worsening geo-political
tension has led to a very uncertain world. The paradox against this uncertainty is sharply rising base
metal prices and bullish forecast for commodities for the coming years. We believe that for the
coming year uncertainties will be increased, but that the underlying strong trend in commodities will
be maintained. As everyone has to be monitoring the impact of COVID-19, at the corporate level this
has meant us getting used to working from home and this is working well. Notwithstanding COVID-
19 we have completed two acquisitions and two fundraisings both of which I have participated in.
Notwithstanding local COVID-19 requirements we are finalising drilling agreements and anticipate
commencing our planned reconnaissance drilling in Namibia and Zambia during October 2020. On
a lighter note with no projects in Europe Brexit has a minimal effect on the Company.
I would like to thank my fellow directors of Bezant and management, who have seen many changes
during the year and have been resilient during the transition phase.
I look forward to reporting positive developments in our projects, with the Company well positioned
in the gold-copper space.
Mr Colin Bird
Executive Chairman
29 September 2020
4
Bezant Resources Plc
Board of directors
For the year ended 31 December 2019
Mr Colin Bird (Executive Chairman) (Appointed 2 March 2018)
Experience and Expertise
Mr Bird, aged 76, joined the board in March 2018, replacing Mr Ed Nealon as Chairman, following a
review of Bezant’s portfolio and a strategic investment in the Company undertaken in February 2018
by himself as a private individual and also via Tiger Resource Finance Plc, of which he is Chairman.
Colin is a chartered mining engineer with multi commodity mine management experience in Africa,
Spain, Latin America and the Middle East. He has been the prime mover in a number of public
company listings in the UK, Canada and South Africa. His most notable achievement was founding
Kiwara Resources Plc and selling its prime asset, a copper property in Northern Zambia, to First
Quantum Minerals for US$260 million in November 2009.
Other current directorships
Includes African Pioneer Plc, Bird Leisure and Admin (Pty) Ltd, Braemore Resources Ltd, Dullstroom
Plats (Pty) Ltd, Europa Metals Ltd, Galagen (Pty) Ltd, Galileo Resources Plc, Galileo Resources
South Africa (Pty) Ltd, Glenover Phosphate (Pty) Ltd, Holyrood Platinum (Pty) Ltd, Jubilee Metals
Group Plc, Jubilee Tailings Treatment Company (Pty) Ltd, Lion Mining Finance Ltd, M.I.T. Ventures
Group, Maude Mining & Exploration (Pty) Ltd, New Age Metals Inc, NewPlats (Tjate) (Pty) Ltd,
Revelo Resources Corp, Tiger Resource Finance Plc, Tjate Platinum Corporation (Pty) Ltd,
Umhlanga Lighthouse Café CC, Windsor Platinum Investments (Pty) Ltd and Xtract Resources Plc.
Former directorships in the last 5 years
1 Tara Bar and Restaurant CC, Add X Trading 810 CC, Afminco (Pty) Ltd, Dialyn Café CC, Emanual
Mining and Exploration (Pty) Ltd, Isigidi Trading 413 CC, Jubilee Smelting & Refining (Pty) Ltd,
Mokopane Mining & Exploration (Pty) Ltd, NDN Properties CC, Orogen Gold Plc, Pilanesberg Mining
Co (Pty) Ltd, Pioneer Coal (Pty) Ltd, PowerAlt (Pty) Ltd, SacOil Holdings Ltd and Sovereign Energy
Plc.
Special responsibilities
Chairman of the Board/Remuneration Committee and member of the Audit Committee.
Interests in shares and options
87,500,000 ordinary shares in the capital of the Company.
5,555,555 warrants with each warrant giving the right to subscribe for a new ordinary share at a price
of one pence per share which expired on 6 September 2020.
31,250,000 warrants expiring on 26 June 2022 which give the right to subscribe for ordinary shares
at a price of 0.16p per share.
15,625,000 warrants expiring on 14 September 2022 which give the right to subscribe for ordinary
shares at a price of 0.16p per share.
15,000,000 options over ordinary shares in Bezant Resources Plc at an exercise price of 0.5 pence.
12,500,000 options over ordinary shares in Bezant Resources Plc at an exercise price of 1 pence.
Dr. Evan Kirby (Non-Executive Director) (Appointed 4 December 2008)
Experience and Expertise
Dr Kirby, aged 69, is a metallurgist with over 40 years’ of international involvement. He worked
initially in South Africa for Impala Platinum, Rand Mines and then Rustenburg Platinum Mines. Then
5
Bezant Resources Plc
Board of directors (continued)
For the year ended 31 December 2019
in 1992, he moved to Australia to work for Minproc Engineers and then Bechtel Corporation. After
leaving Bechtel in 2002, he established his own consulting company to continue with his ongoing
mining project involvement. Evan’s personal “hands on” experience covers the financial, technical,
engineering and environmental issues associated with a wide range of mining and processing
projects.
Other current directorships
Non-executive director of Jubilee Metals Group PLC (Aim listed), Non-executive director of Europa
Metals Ltd (listed on AIM and AltX of the JSE), and Director of private companies, Metallurgical
Management Services Pty Ltd and Balama Resources Pty Ltd.
Former directorships in the last 5 years
New Energy Minerals Limited (formerly Mustang Resources Limited and ASX listed), Nyota Minerals
Limited (listed on AIM and ASX), Nyota Minerals (UK) Limited and Kefi Minerals (Ethiopia) Limited
(formerly named Nyota Minerals (Ethiopia) Limited).
Special responsibilities
Chairman of the Audit Committee.
Interests in shares and options
7,479,374 fully paid ordinary shares in Bezant Resources Plc.
5,000,000 options over ordinary shares in Bezant Resources Plc at an exercise price of 0.5 pence.
2,500,000 options over ordinary shares in Bezant Resources Plc at an exercise price of 1 pence.
Mr Ronnie Siapno (Non-Executive Director) (Appointed 25 October 2007)
Experience and Expertise
Mr Siapno, aged 56, graduated from the Saint Louis University in the Philippines in 1986 with a
Bachelor of Science degree in Mining Engineering and is a lifetime member of the Philippine Society
of Mining Engineers. Since graduation, he has held various consulting positions such as Mine
Planning Engineer to Benguet Exploration Inc., Mine Production Engineer to Pacific Chrome
International Inc., Exploration Engineer to both Portman Mining Philippines Inc. and Phoenix
Resources Philippines Inc. and Geotechnical Engineer to Pacific Falkon Philippines Inc.
Other current directorships
President of Crescent Mining and Development Corporation and Director of Bezant Holdings Inc.
Non-Executive President and Director of Cleangrean Solutions, Inc.
Former directorships in the last 5 years
Former director of Asean Copper Investment Ltd.
Special responsibilities
Mankayan Project: Director of Operations.
Remuneration Committee.
Interests in shares and options
1,333,334 fully paid ordinary shares in Bezant Resources Plc.
7,500,000 options over ordinary shares in Bezant Resources Plc at an exercise price of 0.5 pence.
5,000,000 options over ordinary shares in Bezant Resources Plc at an exercise price of 1 pence.
6
Bezant Resources Plc
Strategic report
For the year ended 31 December 2019
Principal activity
The Company is registered in England and Wales, having been first incorporated on 13 April 1994
under the Companies Act 1985 with registered number 02918391 as a public company limited by
shares, in the name of Yieldbid Public Limited Company. On 19 September 1994, the Company
changed its name to Voss Net Plc, with a second change of name to that of Tanzania Gold Plc on
27 September 2006. On 9 July 2007, the Company adopted its current name of Bezant Resources
Plc.
The Company was listed on AIM, a market operated by the London Stock Exchange, on 14 August
1995.
The principal activity of the Group is natural resource exploration, development and beneficiation.
Its FTSE Sector classification is that of Mining and FTSE Sub-sector that of Gold Mining.
Review of Business
The Chairman’s statement contains a review of 2019 and refers to the Company’s focus on its copper
and gold asset portfolio.
Principal risks and uncertainties facing the Company
The principal risks and uncertainties facing the Company are disclosed in the Directors’ report on
pages 15 to 16.
Performance of the Company
The Company is an exploration entity whose assets comprise early-stage projects that are not yet
at the production stage. Currently, no revenue is generated from such projects. The key performance
indicators for the Company are therefore linked to the achievement of project milestones and the
increase in overall enterprise value.
Directors’ section 172 statement
The following disclosure describes how the Directors have had regard to the matters set out in
section 172 and forms the Directors’ statement required under section 414CZA of The Companies
Act 2006. This new reporting requirement is made in accordance with the new corporate governance
requirements identified in The Companies (Miscellaneous Reporting) Regulations 2018, which apply
to company reporting on financial years starting on or after 1 January 2019.
The matters set out in section 172(1) (a) to (f) are that a Director must act in the way they consider,
in good faith, would be most likely to promote the success of the Company for the benefit of its
members as a whole, and in doing so have regard (amongst other matters) to:
a. the likely consequences of any decision in the long term;
b. the interests of the Company’s employees;
c.
the need to foster the Company’s business relationships with suppliers, customers and
others;
d. the impact of the Company’s operations on the community and the environment;
e. the desirability of the Company maintaining a reputation for high standards of business
conduct; and
the need to act fairly between members of the Company.
f.
The analysis is divided into two sections, the first to address Stakeholder engagement, which
provides information on stakeholders, issues and methods of engagement. The second section
addresses principal decisions made by the Board and focuses on how the regard for stakeholders
influenced decision-making.
7
Bezant Resources Plc
Strategic report
For the year ended 31 December 2019
Section 1: Stakeholder mapping and engagement activities within the reporting period
The Company continuously interacts with a variety of stakeholders important to its success, such as
equity investors, employees, government bodies, local community and professional service
providers. The Company works within the limitations of what can be disclosed to the various
stakeholders with regards to maintaining confidentiality of market and/or commercially sensitive
information.
Who are the key stakeholder
groups
Why is it important to engage
this group of stakeholders
How did Bezant engage with
the stakeholder group
What
engagement
resulted
from
the
Equity investors
All substantial shareholders
that own more than 3 per
cent. of the Company’s
shares are listed on page 13
of the Directors’ Report.
Company is an exploration
entity whose assets
comprise early-stage
projects that are not yet at
the production stage.
Currently, no revenue is
generated from such
projects. As such, existing
equity investors and
potential investment
partners are important
stakeholders.
Employees
The Company has no
employees and at the year
end had four directors. One
of the Directors is a UK
resident and three are
overseas resident Directors.
Subsequent to the year end
the UK resident director
resigned.
As an exploration company
without a revenue
generating project access to
capital is of vital importance
to the long-term success of
our business to be able to
continue developing
exploration projects and
cover corporate overheads.
Through our engagement
activities, we strive to obtain
investor buy-in into our
strategic objectives.
We are seeking to promote
an investor base that is
interested in a long term
holding in the Company and
will support the Company in
achieving its strategic
objectives.
The number of and location
of future employees will be
dependent upon the
development of its
exploration projects which at
the date of this report are
situated in Zambia, Namibia,
Argentina and the
Philippines. The Directors
consider workforce issues
holistically for the Group as
a whole and the Company’s
long-term success in
developing its exploration
projects will be predicated
on the development of a
local workforce in the
countries of its exploration
projects. (see the principal
risk and uncertainty on page
15).
The key mechanisms of
engagement include
• The AGM and Annual and
Interim Reports.
• Investor roadshows and
presentations.
• Access to the Company’s
brokers and advisers
• Regular news and project
updates.
The Company engaged with
investors on topics of
strategy, governance, project
updates and performance.
Please see “Relationship
with shareholders” section of
the Corporate governance
report on page 22.
The Chairman and CEO
presented at a number of
investor roadshows and one
on one meetings.
Post 31 December 2019, the
Company raised £975,000
(before expenses).
• The Company maintained
an open line of
communication between its,
professional service
providers and Board of
Directors.
• The CEO reported
regularly to the Board,
including the provision of
board information.
• There is a formalised
director induction into the
Company’s corporate
governance policies and
procedures.
The Board met to discuss
long term remuneration
strategy.
Board reporting has been
optimised to include sections
on engagement with local
communities and prospects
for future employment.
Directors trained in aspects
of corporate policies and
procedures to engender
positive corporate culture
aligned with the Company
code of conduct.
Meetings were held with
directors to provide project
updates and ongoing
business objectives.
8
Bezant Resources Plc
Strategic report
For the year ended 31 December 2019
Governmental bodies
The Group is impacted by
national, regional and local
governmental organisations
in the UK where it is
incorporated and in
countries in which it has
exploration projects which
includes, Zambia, Namibia,
Argentina and the
Philippines.
The Group will only be able
to develop its exploration
projects once it receives
relevant licences and
permits from local
governments to explore,
mine and undertake mineral
processing.
The community provides
social licence to operate.
We need to engage with the
local community to build
trust. Having the
community’s trust will mean
it is more likely that any
fears the community has
can be assuaged and our
plans and strategies are
more likely to be accepted.
Community engagement will
inform better decision
making.
The Company will in due
course have a social and
economic impact on the
local community and
surrounding area. The
Company is committed to
ensuring sustainable growth
minimising adverse impacts.
The Company will engage
these stakeholders as
appropriate.
Our professional service
providers are fundamental
to ensuring that the
Company can complete
projects on time and budget.
Using quality professional
service providers ensures
that as a business we meet
the high standards of
performance that we expect
of ourselves and those we
work with.
Community
The local community at the
Company’s exploration
projects in Zambia, Namibia,
Argentina and the
Philippines and the
surrounding area.
Professional service
providers
During the exploration
phase, we will be using key
professional service
providers who provide
drilling, geochemical,
geological analysis,
assaying and other services
under commercial contracts.
At a local level, we also
partner with a variety
smaller
companies/providers, some
of whom are independent or
family run businesses.
The Group has given general
corporate presentations to
senior federal government
officials.
To date, the Group has
received its requisite
environmental and land use
permits to enable its
exploration activities.
The Company has systems
in place to engage with the
local community as part its
sustainability initiatives.
Stakeholder identification
enables the Company to
identify representatives of
stakeholder groups and
community groups to engage
with as it develops its
projects.
The Group maintained its
good relations with the
respective government
bodies and frequently
communicates progress.
• The Group engages with
the relevant departments of
the relevant government in
order to progress the
operational licences it will
require
• The Group engages local
in-country experts to advise
it on regulatory matters.
• The Company identifies
key stakeholders within the
local community based on
work programs within the
reporting period.
• Bezant’s modus operandi
is to have open dialogue
with the local government
and community leaders
regarding project
development.
• The Company has existing
CSR policies and
management structure at
corporate level. The
Company will expand on
these policies and structures
at a local project level as the
Company moves into further
exploration activities and
ultimately into construction
and then production.
• the Company continues to
work closely with
professional service
providers to meet
deliverables.
• One on one meetings and
regular project and work
assignment updates with
professional service
providers.
The use of third party
exploration services for
analysis and field operations
as required rather than the
Company maintaining its own
full time in-house exploration
department and conducting
its own exploration activities
in multiple countries with an
in-house team provides very
significant cost savings to the
Company whilst enabling the
Company to diversify its
project and jurisdiction risks.
9
Bezant Resources Plc
Strategic report
For the year ended 31 December 2019
Section 2: Principal decisions by the board post year end
Principal decisions are defined as both those that have long-term strategic impact and are material
to the Group, but also those that are significant to key stakeholder groups. In making the following
principal decisions, the Board considered the outcome from its stakeholder engagement, the need
to maintain a reputation for high standards of business conduct and the need to act fairly between
the members of the Company. The Company makes regular announcements of decisions that
strategically impact the Company with decisions during the year being reported in the Chairman’s
letter to shareholders (page 3) and Directors report on page 11. Decisions post the year end are
referred to in note 26 to the financial statements which is a summary of post balance sheet events.
On behalf of the Board
Mr Colin Bird
Executive Chairman
29 September 2020
10
Bezant Resources Plc
Directors’ report
For the year ended 31 December 2019
The Directors present their report together with the audited financial statements of Bezant Resources
Plc (the “Company”) and its subsidiary undertakings (together, the “Group” or “Bezant”) for the year
ended 31 December 2019.
The principal activity, review of the business and future development disclosures are contained in
the Chairman’s Statement on pages 3 to 4 and the Strategic Report on page 7 to 10.
Results and dividends
The Group’s results for the year are set out in the financial statements. The Directors do not propose
recommending any distribution by way of dividend for the year ended 31 December 2019.
Directors
The following directors have held office during and subsequent to the reporting year:
Colin Bird (appointed 1 March 2018)
Laurence Read (resigned 29 June 2020)
Ronnie Siapno
Evan Kirby
Directors’ interests
The beneficial and non-beneficial interests of the current directors and related parties in the
Company’s shares were as follows:
C. Bird
E. Kirby
R. Siapno
L. Read
Ordinary
shares of
0.2p each
87,500,000
7,479,374
1,333,334
1,060,949
Percentage of
issued share
capital
2.93%
0.25%
0.04%
0.04%
Options awarded and warrants
On 23 August 2018, 87,500,000 options over ordinary shares of £0.002 each in the capital of the
Company (“Ordinary Shares”) were granted pursuant to the Executive Share Option Scheme
approved at the Company's Annual General Meeting (“AGM”) held on 22 June 2018 (the “Options”).
Of the 87,500,000 Options, 75,000,000 were awarded to directors of the Company as detailed below:
Options
exercisable at
1 pence
(vested on 31
January 2019)
C. Bird(1)(2)(3)
12,500,000
12,500,000
L. Read
2,500,000
E. Kirby
R. Siapno
5,000,000
1 Colin Bird also holds 5,555,555 warrants expiring on 6 September 2020 which give the right to subscribe for ordinary shares at a price
of 1 pence per share.
2 Colin Bird also has 31,250,000 warrants expiring on 26 June 2022 which give the right to subscribe for ordinary shares at 0.16p per
share.
3 Colin Bird also has 15,625,000 warrants expiring on 14 September 2022 which give the right to subscribe for ordinary shares at a price
of 0.16p per share.
Options
exercisable at
0.5 pence
(vested on 23
August 2018)
15,000,000
15,000,000
5,000,000
7,500,000
11
Bezant Resources Plc
Directors’ report (continued)
For the year ended 31 December 2019
Report on directors’ remuneration and service contracts
This report has been prepared in accordance with the requirements of Chapter 6 of Part 15 of the
Companies Act 2006 and describes how the Board has applied the principles of good governance
relating to Directors’ remuneration set out in the QCA Corporate Governance Code.
Executive remuneration packages are prudently designed to attract, motivate and retain Directors of
the necessary calibre and to reward them for enhancing value to shareholders. The performance
measurement of the Executive Directors and key members of senior management and the
determination of their annual remuneration packages is undertaken by the Remuneration
Committee. The remuneration of Non-Executive Directors is determined by the Board within limits
set out in the Articles of Association.
Executive Directors are entitled to accept appointments outside the Company providing the Board’s
permission is sought.
Effective from January 2018, the Board agreed to a reduction in board fees. Each Director is entitled
to receive £12,000 / US$18,000 per annum as Directors’ Fees along with relevant Consulting Fees
as applicable, with the aggregate of Salary, Directors’ Fees and Consulting Fees detailed in the
Directors’ Remuneration Summary Table below and in note 24.
Each Director is also paid all reasonable expenses incurred wholly, necessarily and exclusively in
the proper performance of his duties.
Pensions
The Group does not operate a pension scheme and has not paid any contributions to any pension
scheme for Directors or employees.
Directors’ remuneration
Remuneration of the Directors for the years ended 31 December 2019 and 2018 was as follows:
Directors’
Fees
£
Salary and
Consulting
Fees
£
2019
Total
cash paid
year
ended
£
10,650
11,579
14,033
12,000
-
48,000
80,344
-
-
-
58,650
91,923
14,033
12,000
-
Share
based
payment
- share
options
£
2,026
2,026
405
810
-
2018
Total
cash and
share
based
£
Total
cash paid
year
ended
£
60,676
93,948
14,438
12,810
-
87,952
126,925
24,325
29,485
5,000
48,262
128,344
176,606
5,267
181,873
273,687
C. Bird
L. Read
E. Kirby
R. Siapno
B. Olivier
Total
An amount of £15,000 was paid during 2019 (2018: £12,500) to Lion Mining Finance Limited, a
company controlled by C. Bird, for administration services and use of an office.
12
Bezant Resources Plc
Directors’ report (continued)
For the year ended 31 December 2019
Directors’ remuneration (continued)
Notes:
1. Directors’ remuneration shown above comprises all of the salaries, Directors’ fees, consulting fees and other benefits and emoluments
paid to Directors for the year ended 31 December 2019 and 31 December 2018.
4.
2. Mr Read and Mr Bird’s Directors’ fees include NIC and UK payroll tax.
3. On 22 March 2018, Ed Nealon waived fees of £25,000 and Laurence Read waived fees and expenses of £12,558 and the other
directors of the Company elected to convert a total of £31,233 of unpaid fees in relation to the period 1 July to 31 December 2018 into
shares at a conversion price of 0.45 pence per share.
In accordance with the requirements of IFRS 2 Share-based Payments, the weighted average estimated fair value for the share
options granted in 2018 (£121,000) was calculated using a Black and Scholes option pricing model and £115,000 of this theoretical
value has been charged to the Profit and Loss in 2018 (£103,000 of which relates to options granted to directors) and £6,000 was
charged to the Profit and Loss in 2019 (£5,000 of which relates to options granted to directors). None of the 2018 share options have
been exercised as they are out of the money. In the event that the share options are not exercised before expiry, the option cost will
be credited to the Profit and Loss or if expired will be added back to retained earnings. Note 19 to the accounts provides information
on Share-based payments.
Environment, Health, Safety and Social Responsibility Policy Statement
The Company adheres to the above Policy, whereby all operations are conducted in a manner that
protects the environment, the health and safety of employees, third parties and the entire local
communities in general.
The Company is currently principally involved in exploration projects, located within the Philippines
and Argentina and post the reporting period end, Zambia.
The Company is in the process of renewing its Environmental Impact Assessment approvals in
respect of its “Eureka Project” in Argentina.
During the year, current operations were closely managed in order to maintain our policy aims, with
no matters of concern arising. There have been no convictions in relation to breaches of any
applicable legislation recorded against the Group during the year.
Substantial & Significant Shareholdings
The Company has been notified, in accordance with DTR 5 of the FCA’s Disclosure and
Transparency Rules, or is aware, of the following interests in its ordinary shares as at
24 September 2020 of those shareholders with a 3% and above equity holding in the Company.
Shareholder
HARGREAVES LANSDOWN (NOMINEES) 15942
VIDACOS NOMINEES LIMITED CLRLUX
INTERACTIVE INVESTOR SERVICES SMKTISAS
JIM NOMINEES LIMITED JARVIS
BARCLAYS DIRECT INVESTING NOMINEES CLIENT1
INTERACTIVE INVESTOR SERVICES SMKTNOMS
HSDL NOMINEES LIMITED
HARGREAVES LANSDOWN (NOMINEES) HLNOM
THE BANK OF NEW YORK (NOMINEES) 672938
HARGREAVES LANSDOWN (NOMINEES) VRA
Number of Ordinary
Shares
193,961,795
149,338,197
149,149,613
146,226,854
139,009,521
135,637,163
132,997,142
120,783,947
116,730,503
110,808,125
Percentage of issued
share capital
6.49%
4.99%
4.99%
4.89%
4.65%
4.54%
4.45%
4.04%
3.90%
3.71%
13
Bezant Resources Plc
Directors’ report (continued)
For the year ended 31 December 2019
Political and charitable contributions
There were no political or charitable contributions made by the Group during the year ended
31 December 2019 (2018: nil).
Information to Shareholders - Website
The Company has its own website (www.bezantresources.com) for the purposes of improving
information flow to shareholders, as well as to potential investors.
Statement of Directors’ responsibilities
The Directors are responsible for preparing the financial statements in accordance with applicable
laws and International Financial Reporting Standards as adopted by the European Union. Company
law requires the Directors to prepare financial statements for each financial year which give a true
and fair view of the state of affairs of the Group and of the Company and of the profit or loss of the
Group for that year.
In preparing those financial statements, the Directors are required to:
-
select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent;
-
state whether applicable accounting standards have been followed, subject to any material
departures disclosed and explained in the financial statements; and
- prepare the financial statements on a going concern basis, unless it is inappropriate to presume
that the Group will continue in business.
The Directors confirm that the financial statements comply with the above requirements.
The Directors are responsible for keeping adequate accounting records which at any time disclose
with reasonable accuracy the financial position of the Company (and the Group) and enable them to
ensure that the financial statements comply with the Companies Act 2006. The Directors are also
responsible for safeguarding the assets of the Company (and the Group) and for taking steps for the
prevention and detection of fraud and other irregularities.
In addition, they are responsible for the maintenance and integrity of the corporate and financial
information included on the Company’s website.
Statement of disclosure to auditor
So far as all the Directors, at the time of approval of their report, are aware:
-
-
there is no relevant audit information of which the Company’s auditors are unaware, and
the Directors have taken all steps that they ought to have taken as Directors in order to make
themselves aware of any relevant audit information and to establish that the Company’s auditors
are aware of that information.
Auditors
UHY Hacker Young LLP have expressed their willingness to continue as the auditors of the
Company, and in accordance with section 489 of the Companies Act 2006, a resolution to re-appoint
them will be proposed at the Company’s forthcoming Annual General Meeting.
14
Bezant Resources Plc
Directors’ report (continued)
For the year ended 31 December 2019
Principal risks and uncertainties
The Group has identified the following risks to the ongoing success of the business and has taken
various steps to mitigate these, the details of which in relation to its Continuing Operations are as
follows:
Risk of development, construction, mining operations and uninsured risks
The Group’s ability to meet any production, timing and cost estimates for its properties cannot be
assured. Furthermore, the business of mining is subject to a variety of risks such as actual production
and costs varying from estimated future production, cash costs and capital costs; revisions to mine
plans; risks and hazards associated with mining; natural phenomena; unexpected labour shortages
or strikes; delays in permitting and licensing processes; and the timely completion of expansion
projects, including land acquisitions required for the expansion of operations from time to time.
Geological grade and product value estimations are based on independent resource calculations,
studies and historical sales records.
Geological risk factors and adverse market conditions could cause actual results to materially deviate
from estimated future production and revenue. Failure to achieve production or cost estimates or
material increases in costs could have an adverse impact on the future business, cash flows,
profitability, results of operations and financial condition. While steps, such as production and mining
planning are in place to limit these risks, occurrences of such incidents do exist and should be noted.
Currency risk
The Group reports its financial results and maintains its accounts in Pounds Sterling, the currency in
which the Group primarily operates. The Group’s operations in the Philippines and Argentina make
it subject to further foreign currency fluctuations and such fluctuations may materially affect the
Group’s financial position and results (see note 17). The Group does not have any currency hedges
in place and is exposed to foreign currency movements.
Copper-gold price volatility
The profitability going forward of the Group’s operations is significantly affected by changes in
realisable copper-gold prices. The price of copper-gold can fluctuate widely and is affected by
numerous factors beyond the Group’s control, including demand, inflation and expectations with
respect to the rate of inflation, the strength of the Pound Sterling and of other currencies, interest
rates, global or regional political or financial events, and production and cost levels.
Economic, political, judicial, administrative, taxation or other regulatory factors
The Group’s assets are located in the Philippines and Argentina and mineral exploration and mining
activities may be affected to varying degrees by political stability and government regulations relating
to the mining industry. The Group is exposed to sovereignty risks relating to potential changes of
local Governments and possible subsequent changes in jurisdiction concerning the maintenance or
renewal of licences and the equity position permitted to be held in the Company’s subsidiaries.
Loss of critical processes
The Group’s future mining, processing, development and exploration activities depend on the
continuous availability of the Group’s operational infrastructure, in addition to reliable utilities and
water supplies and access to roads. Any failure or unavailability of operational infrastructure, for
example, through equipment failure or disruption, could adversely affect future production output
and/or impact exploration and development activities.
15
Bezant Resources Plc
Directors’ report (continued)
For the year ended 31 December 2019
Principal risks and uncertainties (continued)
Competition
The Group competes with numerous other companies and individuals, in the search for and
acquisition of exploration and development rights on attractive mineral properties and also in relation
to the future marketing and sale of precious metals. There is no assurance that the Group will
continue to be able to compete successfully with its competitors in acquiring exploration and
development rights on such properties and also in relation to the future marketing and sale of
precious metals.
Future funding requirements
As referred to in note 1.1 of these financial statements, the Group made a loss from all operations
for the year ended 31 December 2019 after tax of £1.1 million (2018: £1.2 million), had negative
cash flows from operations and is currently not generating revenues. Cash and cash equivalents
were £330,000 as at 31 December 2019. An operating loss is expected in the year subsequent to
the date of these accounts and even though further funding was raised in August 2020, the Company
will likely need to raise funding to provide additional working capital to finance its ongoing activities.
Management has successfully raised money in the past, but there is no guarantee that adequate
funds will be available when needed in the future.
Dependence on key personnel
The success of the Group is, and will continue to be, to a significant extent, dependent on retaining
the services of the directors and senior management and the loss of one or more could have a
materially adverse effect on the Group. A Group-wide share incentive scheme has been
implemented.
COVID-19 pandemic
The COVID-19 pandemic announced by the World Health Organisation post year end is having a
markedly negative impact on global stock markets, currencies and general business activity. The
Company has developed a policy and is evolving procedures to address the health and wellbeing of
its directors, consultants and contractors, and their families, in the face of the COVID-19 outbreak.
The timing and extent of the impact and recovery from COVID-19 is unknown but it may have an
impact on activities and potentially a post balance sheet date impact.
Annual General Meeting
In light of current restrictions on public gatherings and to ensure shareholders comply with the
Government measures, the Company called a procedural Annual General Meeting was held on
Monday 10 August 2020 at which shareholders were not permitted to attend in person. The AGM
was held with only the appointed chair of the meeting and two other nominated shareholders.
As announced on 10 August 2020, all the resolutions proposed and set out below and in the notice
dated 17 July 2020 were all duly approved by shareholders.
1. To approve the re-appointment of Colin Bird as Chairman and Executive Director of the
Company, having been made a director previously and being eligible for re-election.
16
Bezant Resources Plc
Directors’ report (continued)
For the year ended 31 December 2019
Annual general meeting (continued)
2. To ratify the re-appointment of as auditors of the Company and to authorise the directors to fix
their remuneration. “To re-appoint UHY Hacker Young LLP as auditor to the Company, to hold
office until the earlier of (i) the next annual general meeting of the Company or (ii) their resignation
as agreed with the Company upon the identification by the Directors of a replacement auditor at
the end of the proposed tender process for the Company’s auditor, at a fee to be agreed by the
Directors.”
3. THAT, for the purposes of section 551 of the Companies Act 2006 (the “Act”):
(a)
(b)
the directors of the Company be and are hereby generally and unconditionally
authorised to exercise all the powers of the Company to allot shares in the Company
and grant rights to subscribe for or to convert any security into shares in the Company
(the “Rights”) up to an aggregate maximum nominal amount of £70,000 to such
persons and at such times and on such terms and conditions as the Directors think
proper, such authority, unless previously revoked or varied by the Company in a
General Meeting, to expire at the conclusion of the next Annual General Meeting of
the Company following the date on which this resolution is passed or, if earlier, fifteen
months from the date of this resolution; and
the Company be and is hereby authorised prior to the expiry of such period referred
to in sub paragraph (a) above to make an offer or agreement which would or might
require shares to be allotted or Rights to be granted after such expiry and the Directors
may allot shares or grant Rights in pursuance of such an offer or agreement as if the
authority conferred hereby had not expired,
so that all previous and existing authorities conferred on the Directors in respect of the
allotment of shares or grant of Rights pursuant to the said section 551 of the Act be and they
are hereby revoked provided that this resolution shall not affect the right of the Directors to
allot shares or grant Rights in pursuance of any offer or agreement entered into prior to the
date hereof.
SPECIAL RESOLUTIONS
4. THAT, subject to and conditional upon the passing of resolutions numbered 3 above, the
Directors be and are hereby empowered, in accordance with section 570 of the Act, to allot equity
securities (within the meaning of section 560 of the Act), wholly for cash, under the authority
conferred on them by resolution number 5 above as if section 561(1) of the Act did not apply to
such allotment, provided that the power conferred by this resolution shall:
(a)
(b)
be limited to the allotment of equity securities up to an aggregate nominal amount of
£70,000;
be limited to the allotment (otherwise than pursuant to sub-paragraph (a) above) of
equity securities pursuant to the exercise of any share options issued pursuant to the
Executive Share Option Scheme (as approved at the Annual General Meeting held on
22 June 2018) representing up to 10 per cent of the issued ordinary share capital of
the Company from time to time; and
17
Bezant Resources Plc
Directors’ report (continued)
For the year ended 31 December 2019
Annual general meeting (continued)
(c)
expire at the conclusion of the next Annual General Meeting of the Company following
the date on which this resolution is passed or, if earlier, fifteen months from the date
of passing this resolution (unless renewed, varied or revoked by the Company prior to
or on that date) save that the Company may, before such expiry make an offer or
agreement which would or might require equity securities to be allotted after such
expiry and the Directors may allot equity securities in pursuance of any such offer or
agreement notwithstanding that the power conferred by this resolution has expired.
This authority shall replace all existing authorities conferred on the Directors in respect
of the allotment of equity securities to the extent that the same have not previously
been utilised.
On behalf of the Board
Mr Colin Bird
Executive Chairman
29 September 2020
18
Bezant Resources Plc
Corporate governance
For the year ended 31 December 2019
As an AIM-quoted company, Bezant Resources PLC (“Bezant” or the “Company”) and its
subsidiaries are required to apply a recognised corporate governance code and demonstrate how
the Group complies with such corporate governance code and where it departs from it.
The Directors of the Company have formally taken the decision to apply the QCA Corporate
Governance Code (the “QCA Code”). The Board recognises the principles of the QCA Code, which
focus on the creation of medium to long-term value for shareholders without stifling the
entrepreneurial spirit in which small to medium sized companies, such as Bezant, have been
created. The Company is committed to providing annual updates on its compliance with the QCA
Code further details of which are set out below.
The Board
The Board comprises (for the time being) three Directors of which one is an executive and two are
non-executives, reflecting a blend of different experience and backgrounds. The Board considers
Dr. Evan Kirby and Ronnie Siapno to be independent non-executives in terms of the QCA guidelines.
The Company’s Executive Director is Colin Bird who is also Chairman of the Board. Given the stage
of the Company’s early-stage exploration mining projects and the experience of the Chair Mr. Bird
in managing such international exploration mining projects and his familiarity with the Company’s
projects the Company believes that it is appropriate for the roles of Chairman and Chief Executive
Officer to be combined at this stage. The Company will keep this under review as the Company’s
projects develop with a view to splitting the roles when it is clear which projects will become the
principal activities of the Company and can justify the need for and benefit from a separate CEO.
The Company will therefore consider making further appropriate appointments to the Board as an
when considered appropriate.
The Board is responsible for determining policy and business strategy, setting financial and other
performance objectives and monitoring achievement. It meets throughout the year and all major
decisions are taken by the full Board. The Chairman takes responsibility for the conduct of the
Company and Board meetings and ensures that directors are properly briefed to enable full and
constructive discussions to take place. The Group’s day-to-day operations are managed by the
Executive Director as assisted by the Group Company Secretary in respect of corporate matters
generally, compliance and company administration. All Directors have access to the Company’s
Solicitors, along with the Group Company Secretary and any Director needing independent
professional advice in the furtherance of his/her duties may obtain this advice at the expense of the
Group. However, no formal procedure has been agreed with the Board regarding the circumstances
in which individual directors may take independent professional advice.
The Board is satisfied that it has a suitable balance between independence on the one hand, and
knowledge of the Company on the other, to enable it to discharge its duties and responsibilities
effectively, and that all Directors have adequate time to fulfil their roles.
Details of the current Directors, biographical details are set out on pages 5 to 6 and their roles and
background are set out on the Company’s website at www.bezantresources.com
The role of the Chairman is to provide leadership of the Board and ensure its effectiveness on all
aspects of its remit to maintain control of the Group. In addition, the Chairman is responsible for the
implementation and practice of sound corporate governance. The Chairman is considered
independent and has adequate separation from the day-to-day running of the Group.
19
Bezant Resources Plc
Corporate governance (continued)
For the year ended 31 December 2019
The role of the Chief Executive Officer is currently being performed by the Chairman and is for the
strategic development of the Group and for communicating it clearly to the Board and, once approved
by the Board, for implementing it. In addition, the Chief Executive Officer is responsible for
overseeing the management of the Group and its executive management.
Under the Company’s Articles of Association, the appointment of all new Directors must be approved
by shareholders in a general meeting. In addition, one third of Directors are required to retire and to
submit themselves for re-election at each Annual General Meeting.
Application of the QCA Code
In the spirit of the QCA Code, it is the Board’s task to ensure that the Group is managed for the long-
term benefit of all shareholders and other stakeholders with effective and efficient decision-making.
Corporate governance is an important part of that task, reducing risk and adding value to the Group.
The Board will continue to monitor the governance framework of the Group as it grows.
Bezant is an exploration entity whose assets comprise early-stage projects that are not yet at the
production stage. It currently has interests in three copper-gold projects, one in Zambia, one in the
Philippines and one in Argentina. Currently, no revenue is generated from such projects. The
Company seeks to promote long-term value creation for its shareholders by leveraging the technical
knowledge and experience of its directors and senior management to develop and realise value from
its projects. The key performance indicators for the Company are therefore linked to the achievement
of project milestones and the increase in overall enterprise value.
All operations are conducted in a manner that protects the environment and the health and safety of
professional service providers, third parties and local communities in general. Bezant believes that
a successful project is best achieved through maintaining close working relationships with local
communities, such social ideology being at the forefront of all of Bezant’s exploration initiatives via
establishing and maintaining co-operative relationships with local communities, hiring local
personnel and using local contractors and suppliers. Where issues are raised, the Board takes the
matters seriously and, where appropriate, steps are taken to ensure that findings are integrated into
the Company’s strategy.
Careful attention is given to ensure that all exploration activity is performed in an environmentally
responsible manner and abides by all relevant mining and environmental acts. Bezant takes a
conscientious role in all of its operations and is aware of its social responsibility and its environmental
duty.
Both the engagement with local communities and the performance of all activities in an
environmentally and socially responsible way are closely monitored by the Board which ensures that
ethical values and behaviours are recognised.
Corporate Governance Committees
The Board has established two committees comprising Non-Executive Directors and Executive
Directors.
The composition of the committees is as follows:
Audit
Dr. Evan Kirby (Chairman)
Colin Bird
Remuneration
Colin Bird (Chairman)
Dr. Evan Kirby
Ronnie Siapno
20
Bezant Resources Plc
Corporate governance (continued)
For the year ended 31 December 2019
The Audit Committee
The audit committee receives reports from management and the external auditors relating to the
interim report and the annual report and financial statements, reviews reporting requirements and
ensures that the maintenance of accounting systems and controls is effective.
The audit committee has unrestricted access to the Company’s auditors. The audit committee also
monitors the controls which are in force and any perceived gaps in the control environment. The
Board believes that the current size of the Group does not justify the establishment of an independent
internal audit department.
The Audit Committee meets twice during the year to review the published financial information, the
effectiveness of external audit and internal financial controls including the specific matters set out
below.
Significant issues considered by the Audit Committee during the year have been the Principal Risks
and Uncertainties and their effect on the financial statements. The Audit Committee tracked the
Principal Risks and Uncertainties through the year and kept in contact with the Group’s Management,
External Service Providers and Advisers. The Audit Committee is satisfied that there has been
appropriate focus and challenge on the high-risk areas.
UHY Hacker Young LLP, the current external auditors, have been in office since 2007 which was
the last time a tender for the audit took place. The external auditors present their annual audit findings
to the Board.
Remuneration Committee
The Remuneration Committee determines the scale and structure of the remuneration of the
executive Directors and approves the granting of options to Directors and senior employees and the
performance related conditions thereof. The Remuneration Committee also recommends to the
Board a framework for rewarding senior management, including Executive Directors, bearing in mind
the need to attract and retain individuals of the highest calibre and with the appropriate experience
to make a significant contribution to the Group and ensures that the elements of the remuneration
package are competitive and help in underpinning the performance-driven culture of the Group.
The Company does not currently have a separate Nominations Committee, with the entire Board
involved in the identification and approval of Board members which the Board considers to be
appropriate given the Company’s size and nature, but it will continue to monitor the situation as it
grows.
Internal control
The Board is responsible for establishing and maintaining the Group’s system of internal control.
Internal control systems manage rather than eliminate the risks to which the Group is exposed and
such systems, by their nature, can provide reasonable but not absolute assurance against
misstatement or loss. There is a continuous process for identifying, evaluating and managing the
significant risks faced by the Group. The key procedures which the Directors have established with
a view to providing effective internal control, are as follows:
21
Bezant Resources Plc
Corporate governance (continued)
For the year ended 31 December 2019
Identification and control of business risks
The Board identifies the major business risks faced by the Group and determines the
appropriate course of action to manage those risks.
Budgets and business plans
Each year the Board approves the business plan and annual budget. Performance is
monitored and relevant action taken throughout the year through the regular reporting to the
Board of changes to the business forecasts.
Investment appraisal
Capital expenditure is controlled by budgetary process and authorisation levels. For
expenditure beyond specified levels, detailed written proposals have to be submitted to the
Board. Appropriate due diligence work is carried out if a business or asset is to be acquired.
Annual review and assessment
In 2018, the Board conducted a detailed review and assessment of the effectiveness of the
Group’s strategy, a process that will be maintained on an ongoing basis.
Relations with shareholders
The Board attaches considerable importance to the maintenance of good relationships with
shareholders. Presentations by the Directors to institutional shareholders and City analysts are made
as and when considered appropriate by the Board and the Company’s advisers.
All shareholders subject to COVID-19 regulations and restrictions are invited to attend the Annual
General Meeting and all General Meetings, when required, and are encouraged to take the
opportunity of putting questions to the Board.
Subject to COVID-19 restrictions the Annual General Meeting is regarded as an opportunity to
communicate directly with private shareholders. In light of current restrictions on public gatherings
and to ensure shareholders can comply with the Government measures, the Company called a
procedural Annual General Meeting on 10 August 2020 at which shareholders were not permitted to
attend in person. The AGM was be held with only the appointed chair of the meeting and two other
nominated shareholders. The Company intends, government measures in relation to COVID-19
permitting, to call a general meeting later in the year at which the audited accounts for the year ended
31 December 2019 will be presented and shareholders invited to attend.
Departures from the QCA Code:
In accordance with the requirements of the AIM Rules for Companies, Bezant departs from the QCA
Code in the following ways:
Principle 7 - “Evaluate board performance based on clear and relevant objectives, seeking
continuous improvement.”
Bezant’s board is small and extremely focussed on implementing the Company’s strategy. Given the
size and nature of Bezant, the Board does not consider it appropriate to have a formal performance
evaluation procedure in place, as described and recommended in Principle 7 of the QCA Code. The
Board will closely monitor the situation as the Group grows.
22
Bezant Resources Plc
Corporate governance (continued)
For the year ended 31 December 2019
No Nominations Committee
The QCA Code states that there should be a nomination committee to deal with the appointment of
both executive and non-executive Directors except in circumstances where the Board is small. The
Directors consider the size of the current Board to be small and have not therefore established a
nomination committee. The appointment of executive and non-executive Directors is currently a
matter for the Board as a whole. This position will be reviewed should the number of directors
increase substantially.
Chair is also Chief Executive Officer
The QCA Code states that the role of Chair and Chief Executive Officer should be separate. Given
the stage of the Company’s early-stage exploration mining projects and the experience of the Chair
Mr. Bird in managing such international exploration mining projects and his familiarity with the
Company’s projects the Company believes that it is appropriate for the roles of Chairman and Chief
Executive Officer to be combined at this stage. The Company will keep this under review as the
Company’s projects develop with a view to splitting the roles when it is clear which projects will
become the principal activities of the Company and can justify the need for and benefit from a
separate CEO. The Company will therefore consider making further appropriate appointments to the
Board as an when considered appropriate.
Going concern
The Group made a loss from all operations for the year ended 31 December 2019 after tax of £1.1
million (2018: £1.2 million), had negative cash flows from operations and is currently not generating
revenues. Cash and cash equivalents were £330,000 as at 31 December 2019. Post year end, the
Company raised £350,000 on 19 June 2020 and £625,000 on 28 August 2020. An operating loss is
expected in the year subsequent to the date of these accounts and as a result the Company will
need to raise funding to provide additional working capital to finance its ongoing activities.
Management has successfully raised money in the past, but there is no guarantee that adequate
funds will be available when needed in the future. Subsequent to the year end, the COVID-19
pandemic announced by the World Health Organisation is having a markedly negative impact on
global stock markets, currencies and general business activity. The Company has developed a policy
and is evolving procedures to address the health and wellbeing of its directors, consultants and
contractors, and their families, in the face of the COVID-19 outbreak. The timing and extent of the
impact and recovery from COVID-19 is unknown but it may have an impact on activities and
potentially a post balance sheet date impact. Furthermore, the COVID-19 pandemic may adversely
impact the ability of the Group to raise the necessary funding.
Based on the Board's assessment that the Company will be able to raise additional funds, as and
when required, to meet its working capital and capital expenditure requirements, the Board have
concluded that they have a reasonable expectation that the Group can continue in operational
existence for the foreseeable future. For these reasons, the Group continues to adopt the going
concern basis in preparing the annual report and financial statements.
There is a material uncertainty related to the conditions above that may cast significant doubt on the
Group's ability to continue as a going concern and therefore the Group may be unable to realise its
assets and discharge its liabilities in the normal course of business.
23
Bezant Resources Plc
Corporate governance (continued)
For the year ended 31 December 2019
Going concern (continued)
The financial report does not include any adjustments relating to the recoverability and classification
of recorded asset amounts or liabilities that might be necessary should the entity not continue as a
going concern.
Dr. Evan Kirby
Non-Executive Director
29 September 2020
24
Bezant Resources Plc
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BEZANT RESOURCES PLC
FOR THE YEAR ENDED 31 DECEMBER 2019
Opinion
We have audited the financial statements of Bezant Resources Plc (the “Parent Company”) and its
subsidiaries (the “Group”) for the year ended 31 December 2019, which comprise the Consolidated
Statement of Profit and Loss, the Consolidated Statement of Other Comprehensive Income, the
Consolidated and Company Statement of Changes in Equity, the Consolidated and Parent Company
Balance Sheets, the Consolidated and Parent Company Statements of Cash Flows and related
notes. The financial reporting framework that has been applied in the preparation of the consolidated
financial statements is applicable law and International Financial Reporting Standards as adopted
by the European Union (IFRSs).
In our opinion:
the financial statements give a true and fair view of the state of the Group’s and of the Parent
Company’s affairs as at 31 December 2019 and of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with IFRSs, as
adopted by the European Union;
the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent of
the Group and Parent Company in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed
entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to the Going Concern section of the Accounting Policies of the Group financial
statements concerning the Group’s and Company’s ability to continue as a going concern. The
Group incurred an operating loss of £1.1m during the year ended 31 December 2019 and is still
incurring losses. As discussed in note 1.1, the Company will need to raise further funds in order to
meet its budgeted operating costs for the foreseeable future. These conditions, along with other
matters discussed in note 1.1 indicate the existence of a material uncertainty which may cast
significant doubt about the Group’s and Company’s ability to continue as a going concern. The
financial statements do not include the adjustments (such as impairment of assets) that would result
if the Group and Company were unable to continue as a going concern. These conditions, along with
other matters discussed in the Principal Accounting Policies indicate the existence of a material
uncertainty which may cast significant doubt about the Group’s and Company’s ability to continue
as a going concern.
Our opinion is not modified in respect of this matter.
25
Bezant Resources Plc
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BEZANT RESOURCES PLC (continued)
FOR THE YEAR ENDED 31 DECEMBER 2019
The risk
The group currently does not generate any revenue, therefore in order to provide sufficient working
capital to fund the group commitments as they fall due over the next 12 months the group is reliant
on further fund raisings in order to fund its ongoing activities.
We understand it is the group’s intention to fund future exploration programmes by a combination of
farm in and/or further fundraising which the group will need to complete in the next 12 months.
Accordingly the Group will require additional funding and/or a working capital reduction within twelve
months from the date when the financial statements are authorised for issue.
Given the above factors, we consider going concern to be a significant audit risk area.
The directors' conclusion of the risks and circumstances described in the Going Concern section of
the Principal Accounting Policies of the Group financial statements represent a material uncertainty
over the ability of the Group and Company to continue as a going concern for a period of at least a
year from the date of approval of the financial statements. However, clear and full disclosure of the
facts and the directors' rationale for the use of the going concern basis of preparation, including that
there is a related material uncertainty, is a key financial statement disclosure and so was the focus
of our audit in this area. Auditing standards require that to be reported as a key audit matter.
How our audit addressed the key audit matter
Our audit procedures included:
•
Assessing the transparency and the completeness and accuracy of the matters covered in
the going concern disclosure by evaluating management's cash flow projections for the next
12 months and the underlying assumptions.
• We obtained budgets and cash flow forecasts, reviewed the methodology behind these,
ensured arithmetically correct and challenged the assumptions.
• We obtained post year end results and compared these to budget to ensure budgeting is
reasonable and results are in line with expectations.
• We discussed plans for the Group going forward with management, ensuring these had
been incorporated into the budgeting and would not have an impact on the going concern
status of the Group.
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.
26
Bezant Resources Plc
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BEZANT RESOURCES PLC (continued)
FOR THE YEAR ENDED 31 DECEMBER 2019
Key audit matter
How the matter was addressed during the audit
Impairment of exploration and
evaluation assets in the Group
Our audit work included, but was not restricted to:
to assess
the Group’s
The Group has capitalised costs in
licence
respect of
interests in accordance with IFRS 6
‘Exploration for and Evaluation of
Mineral Resources’ (IFRS 6). The
the
Directors need
exploration assets for indicators of
impairment and where they exist to
undertake a full review to assess the
need for impairment charge. This
involves significant judgements and
assumptions such as the timing and
extent and probability of future cash
flow.
identified
therefore
We
the
impairment of exploration and
evaluation assets as a key audit
matter, which was one of the most
significant assessed risks of material
misstatement.
Obtaining each of
licences along with
the
supporting
for each
information available
exploration project to assess whether the licenses
remain in good standing.
We discussed each of the licence areas with the
directors and considered their assessment in
conjunction with the available information for each
exploration project.
We reviewed the future plans of the projects in
respect of funding, viability and development to
assess whether there were any indicators of
impairment.
Key observations
We obtained evidence that all the licenses remain valid
and are in good standing. Whilst the limited spending on
the Eureka Project was identified as an indicator of
impairment, based on a review of the expiry dates of the
licences, potential future funding and the intention to
continue the exploration and evaluation of this asset, the
directors’ assessment that no impairment was required
was considered to be appropriate.
27
Bezant Resources Plc
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BEZANT RESOURCES PLC (continued)
FOR THE YEAR ENDED 31 DECEMBER 2019
Impairment of investments and
loans
subsidiary
from
companies in the Parent Company
due
Under
International Accounting
Standard 36 ‘Impairment of Assets’,
companies are required to assess
whether there is any indication that
an asset may be impaired at each
reporting date.
judgements
Management assessment involves
significant
and
assumptions such as the timing and
extent and probability of future cash
flow.
assets,
exploration
The Parent Company has loans due
from subsidiary companies of £2.87m
(2018: £3.25m). In conjunction with
the
the
investments represent the primary
balance on the Company balance
sheet and there is a risk it could be
impaired and that intragroup loans
may not be recoverable as a result of
the subsidiary companies incurring
losses.
identified
loans due
the
We
therefore
from
impairment of
subsidiary companies as a key audit
matter
the Parent Company
financial statements, which was one
of the most significant assessed risks
of material misstatement.
in
Our audit work included, but was not restricted to:
Reviewing the investments balances for indicators
of impairment in accordance with IAS 36;
Assessing the appropriateness of the methodology
applied by management in their assessment of the
loans by
recoverable amount of
comparing it to the Group’s accounting policy and
IAS 36;
intragroup
Assessing management‘s evaluation of
the
recoverable amounts of intragroup loans including
review the impairment provisions and net asset
values of components that have intercompany
debt;
Checking
loans have been
reconciled and confirming that there are no
material differences.
intragroup
that
Key observations
The investment balance correlates with the Eureka Project
exploration asset partly held by that subsidiary and our
impairment review was therefore linked to our assessment
of
the corresponding
impairment on
exploration licences. Accordingly no impairment was
considered necessary.
indicators of
28
Bezant Resources Plc
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BEZANT RESOURCES PLC (continued)
FOR THE YEAR ENDED 31 DECEMBER 2019
The valuation of consideration for
the disposal of 80% of the groups
interest in the Mankayan Project
via the sale of 80% of its interest in
Asean
Investments
Limited
Copper
Realisation of the consideration for
the disposal of 80% of the Groups
interest in the Mankayan Project via
the sale of 80% of its interest in
Asean Copper Investments Limited is
contingent on the buyer, Mining and
Minerals Industries Holding Pte. Ltd
(MMIH) funding further exploration of
the asset and the completion of a
reverse takeover transaction to fund
this. Accordingly there is a risk that
the accounting for the consideration
on the disposal of the interest in the
Mankayan Project may not be
correct.
Accounting and valuation
in
relation to the conditional option
to acquire a 50% interest in the
Buffalo Project in Zambia – Group
& Company Risk
There is a risk that the accounting
treatment or valuation of
the
conditional option to acquire a 50%
interest in the Buffalo Project may not
be correct.
Our audit work included, but was not restricted to:
Obtaining
and
transaction
reviewing
agreement along with the terms and conditions
therein.
the
Reviewing management’s assessment of
valuation of consideration at the year end.
the
Reviewing the information available in relation to
the contingent aspects of the consideration such
as the status of the reverse takeover transaction
by China Hongxing Sports Limited of MMIH on the
Singapore Exchange.
Key observations
The value of this disposal will only be realised via MMIH
funding up to £5.05m of further exploration including a
feasibility study in which the group hold an interest. The
receipt of $10m of shares is entirely contingent on the
successful completion of a reverse takeover by China
Hongxing Sports Limited of MMIH, therefore no asset has
been recognised at this stage as this represents a
contingent asset
Our audit work included, but was not restricted to:
Obtaining and reviewing the memorandum of
understanding along with the terms and conditions
therein.
Reviewing management’s assessment of
the
valuation of the option at the year end.
Reviewing the expenditure relating to this option
and the accounting treatment for these costs.
Key observations
In December 2019 the initial option expiry date of 1
February 2020 was extended to 30 April 2020. On 27 April
2020 the Bezant Board concluded that the group will not
be exercising the pre-existing option over the Buffalo
Project in Zambia, this therefore lapsed on its scheduled
expiry date of 30 April 2020. Therefore the option was
deemed to have a nil value. There was no upfront cost of
the option and no costs remain in the balance sheet at the
year end.
29
Bezant Resources Plc
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BEZANT RESOURCES PLC (continued)
FOR THE YEAR ENDED 31 DECEMBER 2019
Our application of materiality
The scope and focus of our audit was influenced by our assessment and application of materiality.
We apply the concept of materiality both in planning and performing our audit, and in evaluating the
effect of misstatements on our audit and on the financial statements.
We define financial statement materiality as the magnitude by which misstatements, including
omissions, could reasonably be expected to influence the economic decisions taken on the basis of
the financial statements by reasonably knowledgeable users.
We also determine a level of performance materiality which we use to determine the extent of testing
needed to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality for the financial statements as a whole.
Materiality Measure Group
Parent
Overall materiality
We determined materiality for the financial statements to be:
£95,000 (2018: £111,000).
£76,000 (2018: £88,800).
How we determine it Based on the main key indicator,
2% of net assets of the Parent
being 2% of net assets of the
Company exceeded
the Group
Group.
materiality amount therefore this
was capped at 80% of Group
materiality.
Rationale
for
We believe the net assets are the most appropriate benchmark due to
benchmarks applied
the size and stage of development of the Company and Group and due
to the Group not yet generating any revenue.
Performance
On the basis of our risk assessment, together with our assessment of the
materiality
Group and Company’s control environment, our judgement is that
performance materiality for the financial statements should be 75% of
materiality being:
£71,250 (2018: £83,250)
£57,000 (2018: £66,600)
30
Bezant Resources Plc
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BEZANT RESOURCES PLC (continued)
FOR THE YEAR ENDED 31 DECEMBER 2019
Reporting threshold
We agreed with the Audit Committee that we would report to them all
misstatements over 5% of Group and company materiality identified
during the audit as set out below, as well as differences below that
threshold that, in our view, warrant reporting on qualitative grounds. We
also report to the Audit Committee on disclosure matters that we
identified when assessing the overall presentation of the financial
statements.
£4,750 (2018: £5,550)
£3,800 (2018: £4,440)
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the financial statements. In particular, we looked at where the directors made
subjective judgements and assumptions in respect of the capitalisation or impairment of the costs
attributable to the Group’s exploration assets where there were future events that are inherently
uncertain.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial statements as a whole, taking into account an understanding of the structure
of the Company and the Group, their activities, the accounting processes and controls, and the
industry in which they operate. Our planned audit testing was directed accordingly and was focused
on areas where we assessed there to be the highest risk of material misstatement.
Our Group audit scope includes all of the group companies. At the parent company level, we also
tested the consolidation procedures. The audit team communicated regularly throughout the audit
with management in order to ensure we had a good knowledge of the business of the Group. During
the audit we reassessed and re-evaluated audit risks and tailored our approach accordingly.
The audit testing included substantive testing on significant transactions, balances and disclosures,
the extent of which was based on various factors such as our overall assessment of the control
environment, the effectiveness of controls and the management of specific risk.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant findings, including any significant deficiencies in internal
control that we identify during the audit.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report, other than the financial statements and our auditors’ report
thereon. Our opinion on the financial statements does not cover the other information and, except to
the extent otherwise explicitly stated in our report, we do not express any form of assurance
conclusion thereon.
31
Bezant Resources Plc
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BEZANT RESOURCES PLC (continued)
FOR THE YEAR ENDED 31 DECEMBER 2019
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material misstatements, we are
required to determine whether there is a material misstatement in the financial statements or a
material misstatement of the other information.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the strategic report and the directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with
applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the
course of the audit, we have not identified material misstatements in the strategic report or the
directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
•
adequate accounting records have not been kept by the Company, or returns adequate for
our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
•
•
certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors’ responsibilities, the directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’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
Company or to cease operations, or have no realistic alternative but to do so.
32
Bezant Resources Plc
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BEZANT RESOURCES PLC (continued)
FOR THE YEAR ENDED 31 DECEMBER 2019
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at 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 part 3 of
Chapter 16 of the Companies Act 2006. 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.
Daniel Hutson (Senior Statutory Auditor)
For and on behalf of UHY Hacker Young
Chartered Accountants
Statutory Auditor
Quadrant House
4 Thomas More Square
London E1W 1YW
29 September 2020
33
Bezant Resources Plc
Consolidated Statement of Profit and Loss
For the year ended 31 December 2019
CONTINUING OPERATIONS
Group revenue
Cost of sales
Gross profit/(loss)
Operating expenses
Group operating loss
Interest received
Other income
Impairment of assets
Loss before taxation
Taxation
for
Loss
operations
the
financial year
from continuing
Notes
Year ended
31 December
2019
£’000
Year ended
31 December
2018
£’000
-
-
-
(917)
(917)
1
-
(211)
(1,127)
-
-
-
(656)
(656)
-
9
(199)
(846)
-
-
(1,127)
(846)
3
4
5
6
7
DISCONTINUED OPERATIONS
Loss for the financial year from discontinued operations
15
-
(341)
Loss for the financial year
(1,127)
(1,187)
Attributable to:
Owners of the Company
- Continuing operations
- Discontinued operations
Non-controlling interest – discontinued operations
Loss per share (pence)
Basic and diluted from continuing operations
Basic and diluted from discontinued operations
Basic and diluted from all operations
8
8
8
(1,127)
(1,127)
-
-
(1,127)
(0.11)
-
(0.11)
(1,242)
(846)
(396)
55
(1,187)
(0.10)
(0.05)
(0.15)
34
Bezant Resources Plc
Consolidated Statement of Other Comprehensive Income
For the year ended 31 December 2019
Other comprehensive income:
Loss for the financial year
Items that may be reclassified to profit or loss:
Foreign currency reserve movement
Total comprehensive loss for the financial year
Attributable to:
Owners of the Company
- Continuing operations
- Discontinued operations
Non-controlling interest - discontinued operations
Year ended
31 December
2019
£’000
Year ended
31 December
2018
£’000
(1,127)
(1,187)
(17)
(1,144)
(1,144)
(1,144)
-
-
(1,144)
(102)
(1,289)
(1,343)
(863)
(480)
54
(1,289)
35
Bezant Resources Plc
Consolidated Statement of Changes in Equity
For the year ended 31 December 2019
Year ended 31 December
2019
Balance at 1 January 2019
Current year loss
Foreign currency reserve
Total comprehensive loss for
the year
Proceeds from shares issued
Warrants issued
Lapsed warrants
Share options granted
Balance at 31 December
2019
Year ended 31 December
2018
Balance at 1 January 2018
Current year loss
Foreign currency reserve
Total comprehensive loss for
the year
Proceeds from shares issued
Warrants issued
Lapsed warrants
Share options granted
Disposal of operations
Balance at 31 December
2018
Share
Capital
£’000
Share
Premium
£’000
Other
Reserves1
£’000
Retained
Losses
£’000
Non
Controlling
interest
£’000
1,998
-
-
36,074
-
-
840
-
(17)
(33,362)
(1,127)
-
-
5
-
-
-
-
366
(38)
27
-
(17)
-
38
(27)
6
(1,127)
-
-
-
-
-
-
-
-
-
-
-
-
Total
Equity
£’000
5,550
(1,127)
(17)
(1,144)
371
-
-
6
2,003
36,429
840
(34,489)
-
4,783
1,225
-
-
35,433
-
-
802
-
(101)
(32,124)
(1,242)
-
(50)
55
(1)
5,286
(1,187)
(102)
-
773
-
-
-
-
-
659
(27)
9
-
-
(101)
-
27
(9)
121
-
(1,242)
-
-
-
-
4
54
-
-
-
-
(4)
(1,289)
1,432
-
-
121
-
1,998
36,074
840
(33,362)
-
5,550
1 Other reserves is made up of the share-based payment and foreign exchange reserve.
36
Bezant Resources Plc
Company Statement of Changes in Equity
For the year ended 31 December 2019
Year ended 31 December 2019
Balance at 1 January 2019
Current year loss
Total comprehensive loss for the
year
Proceeds from shares issued
Warrants issued
Lapsed warrants
Share options granted
Share
Capital
£’000
Share
Premium
£’000
Other
Reserves1
£’000
Retained
Losses
£’000
Total
Equity
£’000
1,998
-
36,074
-
299
-
(31,516)
(1,216)
6,855
(1,216)
-
5
-
-
-
-
366
(38)
27
-
-
-
38
(27)
6
(1,216)
-
-
-
-
(1,216)
371
-
-
6
Balance at 31 December 2019
2,003
36,429
316
(32,732)
6,016
Year ended 31 December 2018
Balance at 1 January 2018
Current year loss
Total comprehensive loss for the
year
Proceeds from shares issued
Warrants issued
Lapsed warrants
Share options granted
1,225
-
35,433
-
160
-
(30,788)
(728)
-
773
-
-
-
-
659
(27)
9
-
-
-
27
(9)
121
(728)
-
-
-
-
6,030
(728)
(728)
1,432
-
-
121
Balance at 31 December 2018
1,998
36,074
299
(31,516)
6,855
1 Other reserves is made up of share-based payment and foreign exchange reserve.
37
Consolidated and Company Balance Sheets
As at 31 December 2019
Notes
Consolidated
2019
£’000
2018
£’000
Company
2019
£’000
2018
£’000
ASSETS
Non-current assets
Plant and equipment
Investments
Exploration and evaluation assets
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Total current liabilities
NET ASSETS
EQUITY
Share capital
Share premium
Share-based payment reserve
Foreign exchange reserve
Retained losses
11
12
13
14
16
18
18
4
-
4,778
4,782
65
330
395
395
6
279
4,781
5,066
65
492
557
557
1
2,870
3,129
6,000
58
329
387
387
2
3,252
3,129
6,383
60
481
541
541
5,177
5,623
6,387
6,924
394
394
73
73
371
371
69
69
4,783
5,550
6,016
6,855
2,003
36,429
174
666
(34,489)
1,998
36,074
157
683
(33,362)
2,003
36,429
174
142
(32,732)
1,998
36,074
157
142
(31,516)
TOTAL EQUITY
4,783
5,550
6,016
6,855
In accordance with the provisions of Section 408 of the Companies Act 2006, the Parent Company has not presented a
separate income statement. A loss for the year ended 31 December 2019 of £1,216,000 (2018: £728,000) has been
included in the consolidated income statement.
These financial statements were approved by the Board of Directors on 29 September 2020 and signed on its behalf by:
Mr Colin Bird
Executive Chairman
Company Registration No. 02918391
38
Consolidated and Company Statements of Cash Flows
For the year ended 31 December 2019
Consolidated
Year
ended 31
December
2019
£’000
Year
ended 31
December
2018
£’000
Company
Year
ended 31
December
2019
£’000
Year
ended 31
December
2018
£’000
Notes
Net cash outflow from operating activities
21
(437)
(1,105)
(352)
(821)
Cash flows from investing activities
Interest received
Other income
Option payments
Investment in existing subsidiary
Proceeds from Disposal Group, net of cash
disposed
Loans to associates
Loans to subsidiaries
Cash flows from financing activities
Proceeds from issuance of ordinary shares
1
43
(27)
-
-
(58)
-
(41)
-
63
-
-
281
(265)
-
79
-
43
-
-
-
(58)
(108)
(123)
-
63
-
(120)
329
(265)
(254)
(247)
22
23
329
1,302
329
1,302
(Decrease)/increase in cash
(149)
276
(146)
234
Cash and cash equivalents at beginning of
year
Foreign exchange movement
Cash and cash equivalents at end of year
492
(13)
330
251
(35)
492
481
(6)
329
227
20
481
39
Notes to the financial statements
For the year ended 31 December 2019
General information
Bezant Resources Plc (the “Company”) is a company incorporated in England and Wales. The address of
its registered office and principal place of business is disclosed in the corporate directory. The Company is
quoted on the Alternative Investment Market (“AIM”) of the London Stock Exchange and has the TIDM code
of BZT. Information required by AIM Rule 26 is available in the section of the Group’s website with that
heading at www.bezantresources.com.
1.
Accounting policies
1.1
Accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise
stated below.
Going concern basis of accounting
The Group made a loss from all operations for the year ended 31 December 2019 after tax of
£1.1 million (2018: £1.2 million), had negative cash flows from operations and is currently not
generating revenues. Cash and cash equivalents were £330,000 as at 31 December 2019. Post
year end, the Company raised £350,000 on 19 June 2020 and £625,000 on 28 August 2020. An
operating loss is expected in the year subsequent to the date of these accounts and as a result the
Company will need to raise funding to provide additional working capital to finance its ongoing
activities. Management has successfully raised money in the past, but there is no guarantee that
adequate funds will be available when needed in the future. Subsequent to the year end, the COVID-
19 pandemic announced by the World Health Organisation is having a markedly negative impact on
global stock markets, currencies and general business activity. The Company has developed a policy
and is evolving procedures to address the health and wellbeing of its directors, consultants and
contractors, and their families, in the face of the COVID-19 outbreak. The timing and extent of the
impact and recovery from COVID-19 is unknown but it may have an impact on activities and
potentially a post balance sheet date impact. Furthermore, the COVID-19 pandemic may adversely
impact the ability of the Group to raise the necessary funding.
Based on the Board's assessment that the Company will be able to raise additional funds, as and
when required, to meet its working capital and capital expenditure requirements, the Board have
concluded that they have a reasonable expectation that the Group can continue in operational
existence for the foreseeable future. For these reasons the Group continues to adopt the going
concern basis in preparing the annual report and financial statements.
There is a material uncertainty related to the conditions above that may cast significant doubt on the
Group's ability to continue as a going concern and therefore the Group may be unable to realise its
assets and discharge its liabilities in the normal course of business.
The financial report does not include any adjustments relating to the recoverability and classification
of recorded asset amounts or liabilities that might be necessary should the entity not continue as a
going concern.
Basis of preparation
The financial information, which incorporates the financial information of the Company and its
subsidiary undertakings (the “Group”), has been prepared using the historical cost convention and
in accordance with International Financial Reporting Standards (“IFRS”) including IFRS 6
‘Exploration for and Evaluation of Mineral Resources’, as adopted by the European Union (“EU”).
40
Notes to the financial statements (continued)
For the year ended 31 December 2019
1.1
Accounting policies (continued)
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and its
subsidiary undertakings and have been prepared using the principles of acquisition accounting,
which includes the results of the subsidiaries from their dates of acquisition.
All intra-group transactions, income, expenses and balances are eliminated fully on consolidation.
A subsidiary undertaking is excluded from the consolidation where the interest in the subsidiary
undertaking is held exclusively with a view to subsequent resale and the subsidiary undertaking has
not previously been consolidated in the consolidated accounts prepared by the parent undertaking.
Business combination
On acquisition, the assets and liabilities and contingent liabilities of a subsidiary are measured at
their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values
of the identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of
acquisition below the fair values of the identifiable net assets acquired (i.e. discount on acquisition)
is credited to profit and loss in the year of acquisition. The interest of non-controlling shareholders is
stated at the minority’s proportion of the fair values of the assets and liabilities recognised.
Subsequently, any losses applicable to the non-controlling interest in excess of the non-controlling
interest are allocated against the interests of the parent.
Investment in associated companies is accounted for using the equity method.
New IFRS standards and interpretations
The Group applied IFRS 16 Leases and IFRIC 23 Uncertainty over Income Tax Treatments for the
first time from 1 January 2019. The nature and effect of these changes did not have a material impact
on the Group/Company’s financial statements given that leases are of a short-term nature and related
to low-value assets and the Company has elected to apply the exemptions allowed under IFRS 16.
At the date of approval of these financial statements, the following Standards and Interpretations
which may be applicable to the Group, but have not been applied in these financial statements, were
in issue but not yet effective:
Standard
IFRS 3
Business
Combinations
Details of amendment
Definition of a Business: The amendments:
o confirmed that a business must include inputs
Effective date
1 January 2020
together
and a process, and clarified that:
– the process must be substantive; and
–
the
inputs and process must
significantly contribute to creating outputs.
o narrowed the definitions of a business by
focusing the definition of outputs on goods
and services provided to customers and other
income from ordinary activities, rather than on
providing dividends or other economic
benefits directly to investors or lowering costs;
and
41
Notes to the financial statements (continued)
For the year ended 31 December 2019
1.1
Accounting policies (continued)
New IFRS standards and interpretations (continued)
Standard
Details of amendment
Effective date
o added a test that makes it easier to conclude
that a company has acquired a group of
assets, rather than a business, if the value of
the assets acquired
is substantially all
concentrated in a single asset or group of
similar assets.
IAS 1
Presentation of
Financial
Statements
the definition of
Disclosure Initiative: The amendments clarify and
‘material’ and provide
align
guidance to help improve consistency in the
application of that concept whenever it is used in
IFRS Standards.
IAS 8
Accounting
Policies,
Changes in
Accounting
Estimates and
Errors
the definition of
Disclosure Initiative: The amendments clarify and
align
‘material’ and provide
guidance to help improve consistency in the
application of that concept whenever it is used in
IFRS Standards.
1 January 2020
1 January 2020
The Group does not anticipate that the adoption of these standards will have a material effect on its
financial statements in the year of initial adoption.
1.2
Significant accounting judgments, estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and
assumptions of future events. The key estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of certain assets and liabilities within the next
annual reporting year are:
Share-based payment transactions:
The Group measures the cost of equity-settled transactions with directors, consultants and
employees 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 and Scholes model which takes into account
expected share volatility, strike price, term of the option and the dividend policy.
Impairment of investments, options and deferred exploration expenditure:
The Group determines whether investments, options and deferred exploration expenditure are
impaired when indicators, based on facts and circumstances, suggest that the carrying amount may
exceed its recoverable amount. Such indicators include the point at which a determination is made
as to whether or not commercial mining reserves exist in the associate in which the investment is
held or whether exploration expenditure capitalised is recoverable by way of future exploitation or
sale, obviously pending completion of the exploration activities associated with any specific project
in each segment.
42
Notes to the financial statements (continued)
For the year ended 31 December 2019
1.3
1.4
Interest income
Interest revenue is recognised on a time proportionate basis that takes into account the effective
yield on the financial asset.
Share-based payments
The Company offered share-based payments to certain directors and advisers by way of issues of
share options, none of which to date have been exercised. The fair value of these payments is
calculated by the Company using the Black Scholes option pricing model. The expense is recognised
on a straight line basis over the year from the date of award to the date of vesting, based on the
Company’s best estimate of shares that will eventually vest. All of the Company’s share-based
payments are currently vested in full.
1.5
Financial instruments
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the
contractual provisions of the financial instrument, and are measured initially at fair value adjusted by
transactions costs, except for those carried at fair value through profit or loss, which are measured
initially at fair value. Subsequent measurement of financial assets and financial liabilities are
described below.
Financial assets are derecognised when the contractual rights to the cash flows from the financial
asset expire, or when the financial asset and all substantial risks and rewards are transferred. A
financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and subsequent measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are
measured at the transaction price in accordance with IFRS 15, all financial assets are initially
measured at fair value adjusted for transaction costs (where applicable).
For the purpose of subsequent measurement, financial assets other than those designated and
effective as hedging instruments are classified into the following categories upon initial recognition:
•
•
•
•
amortised cost
fair value through profit or loss (“FVPL”)
equity instruments at fair value through other comprehensive income (“FVOCI”)
debt instruments at FVOCI
All income and expenses relating to financial assets that are recognised in profit or loss are presented
within finance costs, finance income or other financial items, except for impairment of trade
receivables which is presented within other expenses.
43
Notes to the financial statements (continued)
For the year ended 31 December 2019
1.5
Financial instruments (continued)
Classification and subsequent measurement of financial assets (continued)
Classifications are determined by both:
• The entities business model for managing the financial asset;
• The contractual cash flow characteristics of the financial assets.
Subsequent measurement financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are
not designated as FVPL):
•
•
they are held within a business model whose objective is to hold the financial assets and
collect its contractual cash flows
the contractual terms of the financial assets give rise to cash flows that are solely payments
of principal and interest on the principal amount outstanding
After initial recognition, these are measured at amortised cost using the effective interest method.
Discounting is omitted where the effect of discounting is immaterial. The Group’s cash and cash
equivalents, trade and most other receivables fall into this category of financial instruments as well
as government bonds that were previously classified as held-to-maturity under IAS 39.
Financial assets at fair value through profit or loss (FVPL)
Financial assets that are held within a different business model other than ‘hold to collect’ or ‘hold to
collect and sell’ are categorised at fair value through profit and loss. Further, irrespective of business
model financial assets whose contractual cash flows are not solely payments of principal and interest
are accounted for at FVPL. All derivative financial instruments fall into this category, except for those
designated and effective as hedging instruments, for which the hedge accounting requirements apply
(see below).
Equity instruments at fair value through other comprehensive income (Equity FVOCI)
Investments in equity instruments that are not held for trading are eligible for an irrevocable election
at inception to be measured at FVOCI. Under Equity FVOCI, subsequent movements in fair value
are recognised in other comprehensive income and are never reclassified to profit or loss. Dividends
from these investments continue to be recorded as other income within the profit or loss unless the
dividend clearly represents return of capital. This category includes unlisted equity securities that
were previously classified as ‘available-for-sale’ under IAS 39.
Debt instruments at fair value through other comprehensive income (Debt FVOCI)
Financial assets with contractual cash flows representing solely payments of principal and interest
and held within a business model of collecting the contractual cash flows and selling the assets are
accounted for at debt FVOCI.
Any gains or losses recognised in OCI will be reclassified to profit or loss upon derecognition of the
asset.
44
Notes to the financial statements (continued)
For the year ended 31 December 2019
1.5
Financial instruments (continued)
Impairment of Financial assets
IFRS 9’s impairment requirements use more forward looking information to recognize expected credit
losses – the ‘expected credit losses (“ECL”) model’.
The Group considers a broader range of information when assessing credit risk and measuring
expected credit losses, including past events, current conditions, reasonable and supportable
forecasts that affect the expected collectability of the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is made between:
•
•
financial instruments that have not deteriorated significantly in credit quality since initial
recognition or that have low credit risk (‘Stage 1’) and
financial instruments that have deteriorated significantly in credit quality since initial
recognition and whose credit risk is not low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting
date.
‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit
losses’ are recognised for the second category.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit
losses over the expected life of the financial instrument.
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting for trade and other receivables as well
as contract assets and records the loss allowance at the amount equal to the expected lifetime credit
losses. In using this practical expedient, the Group uses its historical experience, external indicators
and forward-looking information to calculate the expected credit losses using a provision matrix.
Classification and measurement of financial liabilities
As the accounting for financial liabilities remains largely unchanged from IAS 39, the Group’s financial
liabilities were not impacted by the adoption of IFRS 9.
The Group’s financial liabilities include trade and other payables.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction
costs unless the Group designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method
except for derivatives and financial liabilities designated at FVPL, which are carried subsequently at
fair value with gains or losses recognised in profit or loss (other than derivative financial instruments
that are designated and effective as hedging instruments).
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported
in profit or loss are included within finance costs or finance income.
45
Notes to the financial statements (continued)
For the year ended 31 December 2019
1.6
1.7
Cash and cash equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments
that are readily convertible to known amounts of cash and which are subject to an insignificant risk
of changes in value. For the purposes of the Cash Flow Statement, cash and cash equivalents
consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.
Trade and other receivables
Trade receivables are recognised and carried at original invoice amount less an allowance for any
expected credit loss amounts.
1.8
Foreign currency transactions and balances
(i) Functional and presentational currency
Items included in the Group’s financial statements are measured using Pounds Sterling (“£”), which
is the currency of the primary economic environment in which the Group operates (“the functional
currency”). The financial statements are presented in Pounds Sterling (“£”), which is the functional
currency of the Company and is the Group’s presentational currency.
The individual financial statements of each Group company are presented in the functional currency
of the primary economic environment in which it operates.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in the income statement.
Transactions in the accounts of individual Group companies are recorded at the rate of exchange
ruling on the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are translated at the rates ruling at the balance sheet date. All differences are taken to
the income statement.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the
Group’s foreign operations are translated at exchange rates prevailing on the balance sheet date.
Income and expense items are translated at the average exchange rates for the year. Exchange
differences arising recognised in other comprehensive income and transferred to the Group’s
translation reserve within equity as ‘Other reserves’. Upon disposal of foreign operations, such
translation differences are derecognised as an income or as expenses in the year in which the
operation is disposed of in other comprehensive income.
1.9
Interest in jointly controlled entities
The Group’s interests in jointly controlled entities are brought to account using the equity method of
accounting in the consolidated financial statements. The parent entity’s interests in jointly controlled
entities are brought to account using the cost method. Where the Group acquires an interest in a
jointly controlled entity, the acquisition cost is amortised on a basis consistent with the method of
amortisation used by the jointly controlled entity in respect to assets to which the acquisition costs
relate.
46
Notes to the financial statements (continued)
For the year ended 31 December 2019
1.10
1.11
1.12
1.13
1.14
Taxation
Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount
already paid in respect of current and prior periods exceeds the amount due for those periods, the
excess is recognised as an asset. Deferred tax is provided in full in respect of taxation deferred by
timing differences between the treatment of certain items for taxation and accounting purposes. A
deferred tax asset is recognised for all deductible temporary differences to the extent that it is
probable that taxable profit will be available against which the deductible temporary difference can
be utilised. A deferred tax asset is not recognised when it arises from the initial recognition of an
asset or liability in a transaction at the time of the transaction, affects neither accounting profit nor
taxable profit. Deferred tax balances are not discounted.
Plant and equipment
Plant and equipment are stated at historical cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included
in the asset's carrying amount, only when it is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item can be measured reliably. All other repairs
and maintenance are charged to the profit and loss account during the financial year in which they
are incurred.
Depreciation on these assets is calculated using the diminishing value method to allocate the cost
less residual values over their estimated useful lives as follows:
Plant and equipment - 33.33%
Fixtures and fittings - 7.5%
The assets' residual values and useful lives are reviewed, and adjusted if appropriate at the balance
sheet date.
Impairment of assets
At each reporting date, the Company reviews the carrying values of its tangible and intangible assets
to determine whether there is any indication that those assets have been impaired. If such an
indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less
costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s
carrying value over its recoverable amount is expensed to the profit and loss account.
Trade and other payables
Trade payables and other payables are carried at amortised costs and represent liabilities for goods
and services provided to the Group prior to the end of the financial year that are unpaid and arise
when the Group becomes obliged to make future payments in respect of the purchase of these goods
and services.
Exploration, evaluation and development expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each
identifiable area of interest. These costs are only carried forward to the extent that they are expected
to be recouped through the successful development of the area or where activities in the area have
not yet reached a stage which permits reasonable assessment of the existence of economically
recoverable reserves. Accumulated costs in relation to an abandoned area are written off in full in
the year in which the decision to abandon the area is made. When production commences, the
accumulated costs for the relevant area of interest are transferred to development assets and
amortised over the life of the area according to the rate of depletion of the economically recoverable
reserves. A regular review is undertaken of each area of interest to determine the appropriateness
of continuing to carry forward costs in relation to that area of interest.
Costs of site restoration are provided when an obligating event occurs from when exploration
commences and are included in the costs of that stage. Site restoration costs include the dismantling
and removal of mining plant, equipment and building structures, waste removal and rehabilitation of
the site in accordance with clauses of the mining permits. Such costs have been determined using
estimates of future costs, current legal requirements and technology on a discounted basis.
47
Notes to the financial statements (continued)
For the year ended 31 December 2019
1.14
1.15
1.16
Exploration, evaluation and development expenditure (continued)
Any changes in the estimates for the costs are accounted for on a prospective basis. In determining
the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration
due to community expectations and future legislation. Accordingly, the costs have been determined
on the basis that the restoration will be completed within one year of abandoning the site.
Investments
Investments in subsidiaries, joint ventures and associated companies are carried at cost less
accumulated impairment losses in the Company’s balance sheet. On disposal of investments in
subsidiaries, joint ventures and associated companies, the difference between disposal proceeds
and the carrying amounts of the investments are recognised in profit or loss.
Non-current assets or disposal groups held-for-sale and discontinued operations
Non-current assets or disposal groups are classified as held-for-sale if their carrying amount will be
recoverable principally through a sale transaction, not through continuing use. The condition is
regarded as met only when the sale is highly probable and the asset is available for immediate sale
in its present condition.
These assets may be a component of an entity, a disposal group or an individual non-current asset.
Upon initial classification as held-for sale, non-current assets and disposal groups are recognised at
the lower of carrying amount and fair values less cost to sell.
A discontinued operation is a significant distinguishable component of the Group’s business that is
abandoned or terminated pursuant to a single formal plan, and which represents a separate major
line of business or geographical area of operation. Classification as a discontinued operation occurs
upon disposal or when the operation meets the criteria to be classified as held-for-sale.
The profit or loss on sale or abandonment of a discontinued operation is determined from the
formalised discontinuance date. Discontinued operations are separately recognised in the financial
statements once management has made a commitment to discontinue the operation without a
realistic possibility of withdrawal which should be expected to quality for recognition as a completed
sale within one year of classification.
2.
Segment reporting
For the purposes of segmental information, the operations of the Group are focused in geographical
segments, namely the UK, Argentina, Colombia and the Philippines and comprise one class of
business: the exploration, evaluation and development of mineral resources. The UK is used for the
administration of the Group.
The Group’s loss before tax arose from its operations in the UK, Argentina, Colombia (discontinued
operations) and the Philippines.
For the year ended 31 December 2019
Consolidated loss before
tax
Included in the consolidated
loss before tax are the
following income/(expense)
items:
Impairment
Depreciation
Foreign currency loss
Total Assets
Total Liabilities
Continuing operations
UK Argentina
Philippines
£’000
(716)
£’000
(99)
£’000
(312)
Discontinued
Colombia
£’000
Total
£’000
-
(1,127)
-
(1)
(154)
389
(336)
-
-
-
4,788
(58)
(211)
-
-
-
-
-
-
-
-
-
(211)
(1)
(154)
5,177
(394)
48
Continuing operations
Argentina
UK
£’000
£’000
Philippines
£’000
Discontinued
Colombia
£’000
Total
£’000
(591)
(56)
(199)
(341)
(1,187)
-
(1)
293
547
(72)
-
-
-
4,797
(1)
(199)
-
-
279
-
(72)
-
-
-
-
(271)
(1)
293
5,623
(73)
Notes to the financial statements (continued)
For the year ended 31 December 2019
2.
Segment reporting (continued)
For the year ended 31 December 2018
Consolidated loss before
tax
Included in the
consolidated loss before
tax are the following
income/(expense) items:
Impairment
Depreciation
Foreign currency loss
Total Assets
Total Liabilities
3.
Operating expenses
On-going operating expenses
Depreciation and amortisation
Share option expense
4.
Operating loss
Year ended
31
December
2019
£’000
Year ended
31
December
2018
£’000
910
1
6
917
534
1
121
656
Year ended
31
December
2019
£’000
Year ended
31
December
2018
£’000
35
4
3
15
13
1
154
37
3
1
13
-
1
293
The Group’s operating loss is stated after charging/(crediting):
Parent Company auditor’s remuneration - audit services
Parent Company auditor’s remuneration - tax services
Parent Company auditor’s remuneration - other services
Operating lease - premises
Shares issued at a discount
Depreciation of tangible assets
Foreign exchange loss
49
Notes to the financial statements (continued)
For the year ended 31 December 2019
5.
Other income
Shares issued at a premium
Year ended
31
December
2019
£’000
Year ended
31
December
2018
£’000
-
-
9(1)
9
(1) In satisfaction of certain accrued directors’ fees, salaries and certain fees outstanding to senior management
and consultants which had been unpaid for the period from 1 July 2017 to 31 December 2018, Bezant issued
18,544,445 new ordinary shares of 0.2 pence each in the Company on 22 March 2018 and a further 12,400,000
new Ordinary Shares in respect of certain fees and expenses owed by the Company to Verona Investment Group
Inc. (“Verona”). The conversion was made at a price of 0.45 pence per share which represented a premium of
approximately 7.14 per cent. to the closing mid-market share price of 0.42 pence on 21 March 2018. In total,
unpaid fees of, in aggregate, £139,250 were converted into new ordinary shares.
6.
Impairment of assets
Impairment loss on loan to associate
Year ended
31
December
2019
£’000
Year
ended 31
December
2018
£’000
211
211
199
199
The Mankayan project owned by Crescent Mining and Development Corporation is part of the
continuing operations and was fully impaired in 2016 (see note 12) due to then significant lingering
uncertainty concerning the political and tax environment in the Philippines. Although the political and
tax environment has subsequently improved it was not considered prudent in the 2018 accounts to
write back any of the provision made in 2016 and the provision made in 2017 and the first half of
2018 in relation to additional funds lent in 2017 and H1 2018. The funds advanced in the second
half of 2018 were not impaired given that the Exploration Period under the MPSA was in April 2018
extended for 2 years and based on the improved economics in the recent Mining Plus study
announced on 12 February 2019. In 2019 , as per note 12.1, the Group has sold 80% of its interest
in the Mankayan copper-cold project and derecognised its investment in its subsidiary, Asean
Copper Investments Limited and the loan balances outstanding have been fully impaired.
50
Notes to the financial statements (continued)
For the year ended 31 December 2019
7.
Taxation
UK Corporation tax
- current year
Total current tax charge
Factors affecting the tax charge for the year:
Loss on ordinary activities before tax
Loss on ordinary activities multiplied by the
standard rate of UK corporation tax of 19% (2018: 19%)
Effects of:
Non-taxable income
Non-deductible expenses
Tax losses (unprovided deferred tax)
Total tax charge
Year ended
31
December
2019
£’000
Year
ended 31
December
2018
£’000
-
-
-
-
(1,127)
(1,187)
(214)
(226)
-
68
146
-
(2)
32
196
-
At 31 December 2019, the Group had unused losses carried forward of £12,011,000 (2018:
£11,401,000) available for offset against suitable future profits. Most of the losses were sustained
in the United Kingdom.
The Group’s deferred tax asset as at 31 December 2019 that arose from these losses has not
been recognised in respect of such losses due to the uncertainty of future profit streams. The
contingent deferred tax asset, which has been measured at 17%, is estimated to be £2,042,000
(2018: £1,938,000). A net deferred tax asset arising from these losses has not been established
as the Directors have assessed the likelihood of future profits being available to offset such
deferred tax assets is uncertain.
8.
Loss per share
The basic and diluted loss per share have been calculated using the loss attributable to equity
holders of the Company for the year ended 31 December 2019 of £1,127,000 (2018: £1,242,000)
of which £1,127,000 (2018: £846,000) was from Continuing Operations and £nil (2018: £396,000)
was from Discontinued Operations. The basic loss per share was calculated using a weighted
average number of shares in issue of 1,018,075,876 (2018: 871,214,591).
The diluted loss per share has been calculated using a weighted average number of shares in
issue and to be issued of 1,018,075,876 (2018: 871,214,591).
The diluted loss per share and the basic loss per share are recorded as the same amount, as
conversion of share options decreases the basic loss per share, thus being anti-dilutive.
51
Notes to the financial statements (continued)
For the year ended 31 December 2019
9.
Directors’ emoluments
The Directors’ emoluments of the Group are as follows:
Wages, salaries, fees and share options
Refer to page 12 for details of the remuneration of each director.
10.
Employee information
Average number of employees including directors and consultants:
Management and technical
Year ended
31
December
2019
£’000
Year ended
31
December
2018
£’000
182
274
Year ended
31
December
2019
Year ended
31
December
2018
5
5
Year ended
31
December
2019
£’000
Year ended
31
December
2018
£’000
Salaries (excluding directors’ remuneration)
-
-
11.
Plant and equipment
Consolidated
2019
£’000
2018
£’000
Company
2019
£’000
2018
£’000
Plant and equipment
Cost
At beginning of year
Exchange differences
At end of year
Depreciation
At beginning of year
Charge for the year
Exchange differences
At end of year
73
(5)
68
67
1
(4)
64
84
(11)
73
74
1
(8)
67
60
-
60
58
1
-
59
Net book value at end of year
4
6
1
60
-
60
57
1
-
58
2
52
Notes to the financial statements (continued)
For the year ended 31 December 2019
12.
Investments
Consolidated
2019
£’000
2018
£’000
Investment in associates
Loan to associate
Impairment provision (note 6)
Investment in subsidiaries
Loan to subsidiaries
Provision for subsidiary loan
recoverability
-
211
(211)
-
-
-
-
Company
2019
£’000
-
3,980
(3,980)
655
2,798
2018
£’000
-
3,947
(3,668)
655
2,901
-
478
(199)
-
-
-
(583)
(583)
279
2,870
3,252
12.1
The Group’s share of the results of its associate and its assets and liabilities:
As announced on 7 October 2019 (the "Transaction Date"), Bezant Resources Plc (“Bezant”) entered
into a conditional transaction agreement (the "Transaction Agreement") with Mining and Minerals
Industries Holding Pte. Ltd. ("MMIH"), a private company incorporated in Singapore, with respect to the
proposed disposal of 80 per cent. of the Company's interest (via Asean Copper Investments Limited) in
the Mankayan copper-gold project in the Philippines (the "Mankayan Project"). MMIH has itself
previously entered into a separate agreement to vend certain mining assets in the Philippines to China
Hongxing Sports Limited ("CHX"), a public company listed on the Main Board of the Singapore Exchange
Securities Trading Limited (the "Singapore Stock Exchange" or "SGX"), which, if successfully
completed, would constitute a reverse takeover (the "RTO Transaction") by CHX under the listing rules
of the SGX.
Pursuant to the terms of the Transaction Agreement, MMJV Pte. Ltd. ("MMJV"), a wholly-owned
subsidiary of MMIH, acquire an 80 per cent. shareholding (the "MMJV Shares") in Asean Copper
Investments Limited ("Asean Copper") (the "Acquisition").
Asean Copper holds a 40 per cent. shareholding in Crescent Mining and Development Corporation
("CMDC"), which is incorporated in the Philippines and is the sole holder of Mineral Production Sharing
Agreement No. 057-96-CAR (the "MPSA") in respect of the Mankayan Project. Asean Copper also holds
a 40 per cent. shareholding in Bezant Holdings Inc., which is incorporated in the Philippines and holds
the balancing 60 per cent. interest in CMDC, and has an option (scheduled to expire on 30 June 2022)
to acquire the balancing 60 per cent. of Bezant Holdings Inc. (together, the "Asean Copper Ownership
Structure").
The project's MPSA was originally issued for a standard 25 year period, which expires on 11 November
2021, and the current exploration period under the MPSA, which is subject to certain work programme
commitments (the "Exploration Period Requirements"), was scheduled to expire in April 2020 and
was subsequently also extended to 11 November 2021.
The consideration payable by MMIH comprises:
i.
ii.
iii.
a funding commitment of up to US$2.25m (approximately £1.82m) to be provided to Asean
Copper / CMDC to be deployed, inter alia, to satisfy the Exploration Period Requirements;
subject to the MPSA being renewed following completion of the Exploration Period
Requirements to the satisfaction of the relevant Philippine authorities, a further funding
commitment of up to S$5.5m (approximately £3.23m) to be provided to Asean Copper/ CMDC
and applied in undertaking a definitive feasibility study; and
the issue of S$10m (approximately £5.87m) of shares in CHX or other listed entity holding
MMJV on the Singapore Stock Exchange ("ListCo") to the Company, subject to successful
completion of the abovementioned RTO Transaction.
The funding commitments in i) and ii) collectively are the "Total Funding Commitment".
53
Notes to the financial statements (continued)
For the year ended 31 December 2019
12.
Investments (continued)
12.1 The Group’s share of the results of its associate and its assets and liabilities:
(continued)
Due to the current COVID-19 restrictions and delays experienced in the Philippines and
Singapore in respect of the RTO Transaction, the contingent consideration of the S$10m
shares in CHX have not been recognised. The shares are considered to be a contingent
asset given that the receipt of the consideration at the year-end was not virtually certain.
Crescent Mining and Development Corporation (incorporated and operates in the Philippines)
2018
£’000
2019
£’000
Assets
Liabilities
Loss for the year
% Interest Directly Held
% Interest Indirectly Held
% Interest held - Total
473
(519)
10
8
5
13
Bezant Holdings Inc. (incorporated and operates in the Philippines)
2019
£’000
Assets
Liabilities
Loss for the year
% Interest held
12.2
Investments - subsidiary undertakings
10
(8)
2
8
2,296
(2,623)
(184)
40
24
64
2018
£’000
42
(42)
(3)
40
The Company’s significant subsidiary undertakings held as fixed asset investments as at
31 December 2019 were as follows:
Held directly
Tanzania Gold Limited
Country of
incorporation
Principal
Activity
Percentage of
ordinary share
capital held
Ireland
Holding Company
100%
Held indirectly
Anglo Tanzania Gold Limited
England
Eureka Mining & Exploration SA
Argentina
Puna Metals SA
Argentina
Gold and copper
exploration
Gold and copper
exploration
Gold and copper
exploration
100%
100%
100%
54
Notes to the financial statements (continued)
For the year ended 31 December 2019
13.
Exploration and evaluation assets
Balance at beginning of year
Exchange differences
Carried forward
at end of year
Consolidated
2018
£’000
4,790
(9)
2019
£’000
4,781
(3)
Company
2019
£’000
3,129
-
2018
£’000
3,129
-
4,778
4,781
3,129
3,129
The amount of capitalised exploration and evaluation expenditure relates to 12 licences comprising
the Eureka Project and are located in north-west Jujuy near to the Argentine border with Bolivia and
are formally known as Mina Eureka, Mina Eureka II, Mina Gino I, Mina Gino II, Mina Mason I, Mina
Mason II, Mina Julio I, Mina Julio II, Mina Paul I, Mina Paul II, Mina Sur Eureke and Mina Cabereria
Sur, covering, in aggregate, an area in excess of approximately 5,500 hectares and accessible via a
series of gravel roads. All licences remain valid and in May 2019 the Company obtained a two year
renewal of its Environmental Impact Assessment (EIA) approvals in respect of its Mina Eureka, Mina
Gino I, Mina Gino II, Mina Mason I, Mina Mason II, Mina Julio I, Mina Julio II, Mina Paul I, Mina Paul
II, being the 9 northern most licences which are the intended focus of a future exploration programme.
Notwithstanding the absence of new exploration activities on-site during the period the directors have
assessed the value of the intangible asset having considered any indicators of impairment, and in their
opinion, based on a review of the expiry dates of licences, future expected availability of funds to
develop the Eureka Project and the intention to continue exploration and evaluation, no impairment is
necessary.
14.
Trade and other receivables
Due within one year:
VAT recoverable
Escrow funds receivable
Other debtors
Consolidated
2018
£’000
2019
£’000
Company
2019
£’000
2018
£’000
34
-
31
65
14
39
12
65
34
-
24
58
14
39
7
60
15.
Non-current assets and disposal groups classified as held for sale
Following a comprehensive review of the strategic options available for its operations in Colombia,
Bezant entered into a legally binding agreement on 25 April 2018 (the “Sale Agreement”) with Auvert
Mining Group Limited ("Auvert") for the sale of its wholly owned subsidiary Ulloa Recursos Naturales
S.A.S. (“Ulloa”), which held the Group’s wholly owned alluvial platinum and gold licences, located in
the Choco region of Colombia, and the associated processing plant, mobile test plant and other
mining equipment located in the licence area (the “Choco Project”).
As a result of the transaction, this group of assets (the “disposal group”) were disclosed as a
disposal group held for sale. The total consideration payable by Auvert to the Company in respect
of the Disposal was, in aggregate, US$500,000 payable in cash, of which US$450,000 was paid in
2018 and the balance of US$50,000 was held in escrow with the Company’s solicitors and was
released to Bezant in 2019 following the delivery of satisfactory receipt by Auvert of certain post-
completion deliverables.
55
Notes to the financial statements (continued)
For the year ended 31 December 2019
15.
Non-current assets and disposal groups classified as held for sale (continued)
Analysis of the results of discontinued operations and the results recognised on the measurement of
assets of disposal groups is as follows:
Comparative
comparability.
information has been restated
to ensure
Revenue
Cost of sales
Operating expenses
Other income
Loss before tax of discontinued operations
Tax charge
Loss after tax of discontinued operations
Impairment loss on disposal group
Loss for the year from discontinued operations
2018
£’000
-
(130)
(405)
266
(269)
-
(269)
(72)
(341)
(159)
179
20
Cash flow information
Operating cash flows
Investing cash flows
Total cash flows
16.
Trade and other payables
Trade creditors
Directors
Accruals
17.
Financial instruments
Consolidated
2018
£’000
2019
£’000
Company
2019
£’000
2018
£’000
242
126
26
394
17
-
56
73
221
126
24
371
16
-
53
69
(a) Interest rate risk
As the Group has no borrowings, it is not exposed to interest rate risk on financial liabilities. The
Group’s interest rate risk arises from its cash held on short term deposit, which is not significant.
(b) Net fair value
The net fair value of financial assets and financial liabilities approximates to their carrying amount
as disclosed in the balance sheet and in the related notes.
(c) Foreign currency risk
The Group undertakes certain transactions denominated in foreign currencies, hence exposure to
exchange rate fluctuations arise. The Group has not hedged against currency depreciation but
continues to keep the matter under review.
56
Notes to the financial statements (continued)
For the year ended 31 December 2019
17.
Financial instruments (continued)
(c) Foreign currency risk (continued)
The carrying amount of the Group’s foreign currency denominated monetary assets and monetary
liabilities at the reporting date is as follows:
US Dollars
AU Dollars
AR Pesos
Other
2019
£’000
Assets
2018
£’000
Liabilities
2019
£’000
2018
£’000
1
325
8
-
6
414
12
-
334
432
46
19
58
12
135
5
9
1
-
15
Sensitivity analysis
A 10 per cent strengthening of the British Pound against the foreign currencies listed above at
31 December would have increased/(decreased) profit or loss by the amounts shown below. The
analysis assumes that all other variables remain the same. The analysis is performed on the same
basis as at 31 December 2018.
US Dollars
AU Dollars
AR Pesos
Other
2019
£’000
5
(31)
4
1
2018
£’000
-
(41)
(2)
-
A 10 per cent weakening of the British Pound against the foreign currencies listed above at
31 December would have had the equal but opposite effect to the amounts shown above, on the
basis that all other variables remain constant.
(d) Financial risk management
The Directors recognise that this is an area in which they may need to develop specific policies should
the Group become exposed to wider financial risks as the business develops.
(e) Liquidity risk management
The Directors have regard to the maintenance of sufficient cash resources to fund the Group’s
immediate operating and exploration activities. Cash resources are managed in accordance with
planned expenditure forecasts.
(f) Capital risk management
The Directors recognise that the Group’s capital is its equity reserves. The Group’s current objective
is to manage its capital in a manner that ensures that the funds raised meet its operating and
exploration expenditure commitments. Currently, the Company does not seek any borrowings to
operate the Company and all future supplemental funding is raised through investors as and when
required in order to finance working capital requirements and potential new project opportunities, as
they may develop.
57
Notes to the financial statements (continued)
For the year ended 31 December 2019
18.
Share capital
Number
Authorised
5,000,000,000 ordinary shares of 0.2p each
5,000,000,000 ordinary shares of 0.002p each
5,000,000,000 deferred shares of 0.198p each
Allotted ordinary shares, called up and fully paid
As at beginning of the year
Share subscription
Shares issued to directors and management
Shares issued to settle third party fees
Sub-divided to deferred shares (1)
Total ordinary shares at end of year
Allotted deferred shares, called up and fully paid
As at beginning of the period
Sub-divided from ordinary shares (1)
Total deferred shares at end of period
2019
£’000
-
100
9,900
10,000
1,998
5
-
-
(1,978)
25
-
1,978
1,978
2018
£’000
10,000
-
-
10,000
1,225
711
37
25
-
1,998
-
-
-
Ordinary and deferred as at end of year
2,003
1,998
Ordinary share capital is summarised below:
As at beginning of the year
Share subscription
Shares issued to directors and management
Shares issued to settle third party fees
Number of
shares 2019
Number of
shares 2018
998,773,038
250,000,000
-
20,982,143(2)
612,273,038
355,555,555
18,544,445(3)
12,400,000(4)
As at end of year
1,269,755,181
998,773,038
Deferred share capital is summarised below:
As at beginning of the year
Issued due to sub-division (1)
As at end of year
-
998,773,038
998,773,038
-
-
-
(1) On 24 May 2019, a resolution was passed at the Company’s Annual General Meeting to approve
the reorganisation of the Company's share capital in order to reduce the nominal value of the
Company's ordinary shares such that the Company is able to issue new ordinary shares at a price
below £0.002 per ordinary share in the event that the Directors seek to raise additional equity finance
at such a price to provide, inter alia, additional working capital for the group. Pursuant to this
resolution, every existing ordinary share in the capital of the Company in issue of £0.002 each
("Existing Ordinary Shares") on 24 May 2019 was re-designated and sub-divided into 1 (one) new
ordinary share of £0.00002 each ("New Ordinary Shares") and 1 (one) deferred share of £0.00198
each ("Deferred Shares"). The New Ordinary Shares have been admitted for trading on AIM in place
of the Existing Ordinary Shares. The New Ordinary Shares continue to carry the same rights as
attached to the Existing Ordinary Shares (save for the reduction in their nominal value). The Deferred
Shares have very limited rights and are effectively valueless as they have no voting rights and have
no rights as to dividends and only very limited rights on a return of capital. The Deferred Shares are
not admitted to trading or listed on any stock exchange and are not freely transferable.
58
Notes to the financial statements (continued)
For the year ended 31 December 2019
18.
Share capital (continued)
(2) On 5 December 2019, certain professional fees amounting to £29,375 owed to Novum Securities
Ltd was settled by the issue of 20,982,143 new Ordinary Shares (the “Fee Shares”). The Fee Shares
were issued at a price of 0.14 pence per share, being the price at which the Company completed its
fundraise announced on 5 December 2019 which represented a discount of approximately 30 per
cent. to the Company's closing mid-market share price of 0.2 pence on 4 December 2019.
(3) Certain of the Company’s directors agreed to convert outstanding fees of £31,233, due in respect
of the period from 1 July 2017 to 31 December 2018, into 6,940,667 new Ordinary Shares and the
Company’s management agreed to convert outstanding fees and salaries of £22,217, due in respect
of the same period, into 4,937,111 new Ordinary Shares. In addition, £30,000 of fees due to Dr.
Bernard Olivier, the Company’s former CEO who resigned as a director on 15 January 2018, were
converted into 6,666,667 new Ordinary Shares. The Director Shares, Management Shares and Fee
Conversion Shares were all issued on 22 March 2018 at a price of 0.45 pence per share, being the
price at which the Company had completed its then most recent fundraise announced on 5 February
2018 which represented a premium of approximately 7.14 per cent. to the Company's closing mid-
market share price of 0.42 pence on 21 March 2018.
(4) Certain fees and expenses amounting to £55,800 owed by the Company to Verona Investment
Group Inc. (“Verona”) were settled by the issue of 12,400,000 new Ordinary Shares at a price of 0.45
pence per share on 22 March 2018.
The share premium was as follows:
As at beginning of year
Share subscription
Shares issued to directors and management
Shares issued to settle third party fees
Share issue costs
Warrants lapsed
Warrants issued
2019
£’000
36,074
345
-
42
(21)
27
(38)
2018
£’000
35,433
689
41
27
(98)
9
(27)
As at end of year
36,429
36,074
Each fully paid ordinary share carries the right to one vote at a meeting of the Company. Holders of
ordinary shares also have the right to receive dividends and to participate in the proceeds from sale
of all surplus assets in proportion to the total shares issued in the event of the Company winding up.
19.
Share-based payments
During the year, the Company had the following share-based payment plans involving equity settled
share options and warrants in existence:
Scheme
Number
Warrants
5,000,000
Date
granted
21/03/2017
Exercise
price
1.5p
Maximum
term
2 years
Warrants
34,411,765
12/07/2017
2p
1 year
Warrants
1,470,588
12/07/2017
1.5p
2 years
Vesting conditions
Vested immediately
upon being granted
Vested immediately
upon being granted
Vested immediately
upon being granted
59
Notes to the financial statements (continued)
For the year ended 31 December 2019
19.
Share-based payments (continued)
Warrants
6,363,636
13/10/2017
1.1p
5 years
Share
options
Share
options
Warrants
50,000,000
23/08/2018
37,500,000
23/08/2018
12,500,000
5/12/2019
0.5p Expire on
21/06/28
1.0p Expire on
21/06/28
3 years
0.14p
Vested immediately
upon being granted
Vested on 23 August
2018
Vested on 31 January
2019
Vested immediately
upon being granted
The number and weighted average exercise prices of the above options and warrants are as follows:
31 December 2019
31 December 2018
Outstanding at beginning of year
Share options issued
Share options issued
Lapsed warrants/options
Warrants issued
Outstanding at end of year
Number
100,334,224
-
-
(6,470,588)
12,500,000
106,363,636
Weighted
average
exercise
price
0.79p
-
-
1.5p
0.14p
0.67p
Number
47,245,989
50,000,000
37,500,000
(34,411,765)
-
100,334,224
Weighted
average
exercise
price
1.81p
0.5p
1.0p
2p
-
0.79p
In accordance with the requirements of IFRS 2 Share-based Payments, the weighted average
estimated fair value for the warrants granted in 2017 (£75,000) and share options granted in 2018
(£121,000) was calculated using a Black and Scholes option pricing model and £115,000 of this
theoretical value has been charged to the Profit and Loss in 2018 and £6,000 was charged to the
Profit and Loss in 2019. None of the 2018 share options have been exercised as they are out of the
money. In the event that the share options are not exercised before expiry, the cost will either be
credited to the Profit and Loss or added back to retained earnings depending on the reason why the
options are not exercised.
20.
Reconciliation of movements in shareholders’ funds
Consolidated
Year
ended 31
December
2019
£’000
Year
ended 31
December
2018
£’000
Company
Year
ended 31
December
2019
£’000
Year
ended 31
December
2018
£’000
Loss for the year
(1,127)
(1,242)
(1,216)
(728)
Proceeds from shares issued
Currency translation differences on
foreign currency operations
Share option expense
Disposal of operations
Opening shareholders’ funds
371
1,432
371
1,432
(17)
6
-
5,550
(101)
121
4
5,336
-
6
-
6,855
-
121
-
6,030
Closing shareholders’ funds
4,783
5,550
6,016
6,855
60
Notes to the financial statements (continued)
For the year ended 31 December 2019
21.
Reconciliation of operating loss to net cash outflow from operating activities
Consolidated
Year
ended 31
December
2019
£’000
Year
ended 31
December
2018
£’000
Company
Year
ended 31
December
2019
£’000
Year
ended 31
December
2018
£’000
Operating loss from all operations
(917)
(1,191)
(907)
(325)
Depreciation and amortisation
VAT refunds received
Share options
Shares converted at a discount
Foreign exchange gain
Decrease in receivables
Increase in payables
1
(43)
6
13
154
29
320
1
(63)
121
-
(293)
141
179
1
(43)
6
13
247
31
300
1
(63)
121
-
(411)
115
(259)
Net cash outflow from operating activities
(437)
(1,105)
(352)
(821)
22.
Proceeds from Disposal Group, net of cash disposed
Proceeds from sale*
Cash of disposal group
Consolidated
Year
ended 31
December
2019
£’000
Year
ended 31
December
2018
£’000
Company
Year
ended 31
December
2019
£’000
Year
ended 31
December
2018
£’000
-
-
-
329
(48)
281
-
-
-
329
-
329
* The gross consideration was US$500,000 of which US$450,000 was received by the Company in the
year and US$50,000 was paid to the Company’s lawyers in escrow and was released to the Company
on 14 January 2019.
23.
Proceeds from the issuance of ordinary shares
Consolidated
Year
ended 31
December
2019
£’000
Year
ended 31
December
2018
£’000
Company
Year
ended 31
December
2019
£’000
Year
ended 31
December
2018
£’000
38,432
(29)
(13)
11
38,072
(139)
9
18
38,432
(29)
(13)
11
38,072
(139)
9
18
(38,072)
(36,658)
(38,072)
(36,658)
329
1,302
329
1,302
Share capital and premium at end of year
(note 19)
Directors’ fees/creditors converted to shares
Shares converted at a (discount)/premium
Warrants lapsed and issued
Share capital and premium at beginning of
year
61
Notes to the financial statements (continued)
For the year ended 31 December 2019
24.
Related party transactions
(a) Parent entity
The parent entity within the Group is Bezant Resources Plc.
(b) Subsidiaries
Interests in subsidiaries are set out in note 12.
(c) Associates
Interests in associates are set out in note 12.
(d) Transactions with related parties
The following table provides details of payments to related parties during the year and outstanding
balances at the year-end date:
Colin Bird
Laurence Read
Mowbrai Ltd
Metallurgical Management Services
Pty. Ltd
R Siapno
Serengeti Resources Pty. Ltd
31 December 2019
31 December 2018
Paid
in
the
year
£’000
Due by at
year-end
date
£’000
Paid
in
the
year
£’000
Due by at
year-end
date
£’000
61
16
78
14
13
-
48
10
53
8
7
-
88
49
78
24
30
5
182*
126
274*
-
-
-
-
-
-
-
* The above amounts represent directors’ fees inclusive of share options awarded during 2018 and are included
in directors’ remuneration per note 9.
An amount of £15,000 was paid during 2019 (2018: £12,500) to Lion Mining Finance Limited, a
company controlled by C. Bird, for administration services and use of an office as well as a deposit
of £2,500 which is included in trade and other receivables.
Related parties
Mowbrai Limited is a consultancy company controlled by the director Mr Laurence Read.
Metallurgical Management Services Pty. Ltd is a consultancy company controlled by the director Dr.
Evan Kirby. Serengeti Resources Pty. Ltd is a consultancy company controlled by the former director
Dr. Bernard Olivier.
62
Notes to the financial statements (continued)
For the year ended 31 December 2019
25.
Commitments
Non-cancellable lease rentals payable as follows:
Less than one year
Between two and five years
2018
£’000
3
-
3
2017
£’000
15
3
18
Payments represent rentals payable by the Company for administration services and office
occupancy.
26.
Subsequent events
1. Decision not to exercise option in relation to Buffalo Project in Zambia
As announced on 3 January 2020, the Company was granted an extension to the initial expenditure
phase in respect of its conditional option to acquire a 50 per cent. interest in small scale copper
mining licence number 15164-HQ-SML in The Republic of Zambia (the "Licence"), as announced
on 23 April 2019, which contains the Buffalo exploration project (the "Buffalo Project") (the
"Buffalo Option"). Under the original terms of the Buffalo Option and as consideration for a 50 per
cent. interest in the Buffalo Project, Bezant was required to complete an initial assessment of the
Licence area at a cost of up to US$200,000 by 1 February 2020 (the "Initial Expenditure Phase").
The Initial Expenditure Phase was extended to 30 April 2020, to enable the Company to progress
its ongoing assessment of the Buffalo Project.
As announced on 27 April 2020 the Company will be focusing its resources on progressing the
larger scale Kalengwa Exploration Project announced on the same date, and the Bezant Board
decided that the Company will not be exercising its pre-existing option over the Buffalo Project in
Zambia which therefore lapsed on its scheduled expiry date of 30 April 2020.
2. Acquisition of 30% interest in Kalengwa Project in Zambia
As announced on 27 April 2020, the Company entered into a binding joint venture agreement dated
24 April 2020 with KPZ International Limited ("KPZ Int") (the "JV Agreement") in relation to the
acquisition of a 30 per cent. interest in the approximate 974 km2 large scale exploration licence
numbered 24401-HQ-LEL in the Kalengwa greater exploration area in The Republic of Zambia (the
"Licence") by acquiring a 30 per cent. shareholding in KPZ Int. The Licence is held by Kalengwa
Processing Zone Ltd ("KPZ"), a 100 per cent. (less one share) Zambian subsidiary of KPZ Int, and
is for the exploration of copper, cobalt, silver, gold and certain other specified minerals. The Licence
was granted on 2 April 2019 and is valid for an initial period up to 1 April 2023.
3. Sale of 80% of interest in Mankayan Project in Philippines
On 15 June 2020, the Company announced an update on its transaction with Mining and Minerals
Industries Holding Pte. Ltd. ("MMIH"), a private company incorporated in Singapore, with respect
to the disposal of 80 per cent. of the Company's interest in the Mankayan copper-gold project in
the Philippines (the "Mankayan Project") (the "Transaction"). MMIH updated Bezant regarding
its preparations in respect of the proposed listing of MMJV, its wholly-owned subsidiary which holds
its 80 per cent. interest in the Mankayan project as follows:
63
Notes to the financial statements (continued)
For the year ended 31 December 2019
26.
Subsequent events (continued)
1. MMIH, via China Hongxing Sports Limited ("CHX"), made a formal application to the
Singapore Exchange Securities Trading Limited (the "Singapore Stock Exchange" or
"SGX") to extend the time period in which to complete its proposed reverse takeover of
CHX (the "RTO Transaction"). Such application was initially refused, but an appeal has
subsequently been lodged on the grounds that the RTO Transaction has been hampered
by the COVID-19 pandemic. MMIH is simultaneously pursuing alternative opportunities to
achieve a potential listing and fundraising on certain other recognised global stock
exchanges in the event that the targeted RTO Transaction or similar initial public offering
on the SGX is unviable or cannot be achieved by the 31 December 2020 deadline
prescribed in the Transaction Agreement.
2. The Philippines has only recently started to ease its COVID-19 lockdown restrictions which
have severely restricted movement and required all non-essential offices to be closed,
such that there has been no exploration activity at the Mankayan Project site since the
local COVID-19 lockdown commenced in mid March 2020.
3. Singapore has similarly been under a two month COVID-19 lockdown period and is also
now slowly beginning to ease its restrictions.
4. Accordingly, MMIH has advised Bezant that it has to date not been able to fulfil its
expenditure commitments pursuant to the terms of the Transaction Agreement due to the
abovementioned delays in their proposed RTO Transaction and, more recently, due to
COVID-19 restrictions in the Philippines. MMIH has communicated to Bezant that, to date,
CMDC, the MPSA holder, has undertaken the following activities on the Mankayan Project:
· Successfully applied to the requisite Philippine Government Mining Agency for an
extension to the exploration period to the MPSA’s scheduled expiry date of 11
November 2021 and certain revisions to the associated work programme
commitments under the MPSA
engaged an independent expert to update the JORC 2004 resource information to
JORC 2012; and
completed the technical and social audits for 2018 as required under the requisite
Philippines Government Mining Agency rules and regulations.
·
·
4. Fundraising
On 19 June 2020, the Company announced a £350,000 (before expenses) fundraising. The
fundraising comprised a placing of 406,250,000 new Ordinary Shares (the "Placing Shares") for
£325,000 at a price of 0.08 pence per Ordinary Share (the "Placing Price") (the "Placing") and a
subscription by Colin Bird, Bezant's Executive Chairman, who has invested £25,000 to subscribe
for 31,250,000 new Ordinary Shares at the Placing Price (the "Subscription Shares") (the
"Subscription"), representing 7.14 per cent. of the total Fundraising amount. Each of the
participants in the Fundraising will also receive a warrant exercisable at a 100% premium to the
Placing Price for each Fundraising Share which they have subscribed valid for 2 years from
Admission. The Company is also issuing a warrant to Novum to subscribe for 21,875,000 new
Ordinary Shares exercisable at the Placing Price for a period of 2 years from Admission.
As announced on 28 August 2020, the Company raised £625,000 before expenses from a
fundraising comprising 750,000,000 new Ordinary Shares (“Placing Shares”) for £600,000 at a
price of 0.08 pence per Ordinary Share (the "Placing Price") (the "Placing") and a subscription by
Colin Bird, Bezant's Executive Chairman, who has invested £25,000 to subscribe for 31,250,000
new Ordinary Shares at the Placing Price (the "Subscription Shares") (the "Subscription"),
representing 4.17 per cent. of the total Fundraising amount. Each of the participants in the
Fundraising will also receive half a warrant exercisable at 0.16 pence for each Fundraising Share
which they have subscribed valid for two years from Admission. The Company is also issuing a
warrant to Novum to subscribe for 37,500,000 new Ordinary Shares exercisable at the Placing
Price for a period of two years from Admission.
64
Notes to the financial statements (continued)
For the year ended 31 December 2019
26.
Subsequent events (continued)
5. Acquisition of interest in Hope Copper Gold Project in Namibia
The Company has entered into an exclusive and legally binding Heads of Agreement dated 18
June 2020 to acquire 100% of Virgo Resources Ltd, incorporated in Australia (ACN 626 148 347)
("Virgo") (the "Acquisition"). Virgo through its 100% owned Australian subsidiary Hepburn
Resources Pty Ltd (ACN 624 189 162) owns i) 70% of Hope and Gorab Mining Pty Ltd incorporated
in Namibia which owns EPL5796, ii) 80% of Hope Namibia Mineral Exploration Pty Ltd
Incorporated in Namibia which owns EPL6605 and iii) has the option to acquire a 80% interest in
EPL7170 (under application). The share and cash consideration payable by Bezant at completion
of the Acquisition ("Completion") is i) the issue of 422,062,525 new ordinary shares of 0.002 pence
each in the capital of the Company ("Bezant Shares") at a deemed issue price of 0.2 pence per
Bezant Share ("Ordinary Shares Consideration"), ii) £135,000 to be settled by the issue of new
Bezant Shares based on the share price on the day of settlement ("Asset Sellers Consideration");
and iii) cash of £85,600 (the "Consideration"). The Acquisition is subject to various Conditions
Precedent detailed below including a 30 day due diligence period and Bezant and Virgo obtaining
all necessary regulatory approvals or waivers and shareholder approvals pursuant to the AIM Rules
or any other laws or statute.
On 15 July 2020 further to its announcement of 19 June 2020 in relation to the proposed acquisition
of 100 per cent. of Virgo Resources Ltd and its interest in the hope gold copper project in Namibia,
the Company announced that its due diligence progressed as anticipated. As part of the Due
Diligence Review and based on historical drilling information it has come to light the Hope Copper-
Gold Project (EPL5796) and adjacent tenures (EPL6605 and EPL7170) cover over 1,200 km2 of
the highly prospective Matchless Copper Belt, hosts multiple high-grade copper-gold VMS-style
sulphide deposits, such as historically mined Otjihase Copper Mine (>16Mt @ 2.2% Cu & 1.2g/t
Au). The project area contains a combined Mineral Resource of 10.2Mt @ 1.9% Cu and 0.3g/t Au
at a 0.7% Cu cut-off, reported in accordance with the JORC Code (2012). Approximately 30% of
the mineral resource in the 'Indicated' Mineral Resource category and the balance in the 'Inferred'
Mineral Resource category. Also, due to the fact that many of the historic drill holes were not
assayed for gold, the overall gold grade in the current mineral resources (0.3g/t Au) is interpreted
to be a significant underestimate.
As announced on 17 August 2020, the Company completed its acquisition of 100% of Virgo
Resources Ltd and its interests in the Hope Copper-Gold Project in Namibia. The share and cash
consideration paid by Bezant at completion of the Acquisition ("Completion") is i) the issue of
422,062,525 new Ordinary Shares of the Company ("Bezant Shares") at a deemed issue price of
0.2 pence ("Ordinary Shares Consideration"), ii) £135,000 to be settled by the issue of
113,333,333 Bezant Shares based on the share price on 14 August 2020 ("Asset Sellers Share
Consideration") of which 79,333,333 Bezant Shares are to be issued now ("Initial Asset Sellers
Shares") and 34,000,000 Bezant Shares on 15 February 2021 ("Balance of Assets Sellers
Shares"); and iii) cash of AUD157,021 (approx. £86,600) (the "Consideration").
The COVID-19 pandemic announced by the World Health Organisation post year end is having a
markedly negative impact on global stock markets, currencies and general business activity. The
Company has developed a policy and is evolving procedures to address the health and wellbeing
of its directors, consultants and contractors, and their families, in the face of the COVID-19
outbreak. The timing and extent of the impact and recovery from COVID-19 is unknown but it may
have an impact on activities and potentially a post balance sheet date impact.
Other than these matters, no significant events have occurred subsequent to the reporting date
that would have a material impact on the consolidated financial statements.
65