Bezant Resources Plc
(Company Registration Number 02918391)
Annual Report
and
Financial Statements
For the year ended 31 December 2020
Bezant Resources Plc
Contents
Corporate directory
Chairman’s statement
Board of directors
Strategic report
Directors’ report
Corporate governance
Independent auditor’s 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
3
4 - 6
7 - 10
11 - 14
15 - 23
24 - 29
30 - 38
39
40
41
42
43
44
Notes to the financial statements
44 - 68
Corporate directory
Directors:
Secretary:
Executive Chairman
C Bird
E Kirby
R Siapno
R Samtani Finance Director
E Slowey
Non-Executive Director
Non-Executive Director
Technical 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
3
Chairman’s Statement
For the year ended 31 December 2020
Dear Shareholder,
In last year’s Chairman’s letter, I mentioned the Board’s move to focus on Southern Africa
and during the year under review, Bezant acquired a 30% interest in the Kalengwa Copper
Silver Project in Zambia, and +70% interest in the Hope Copper Gold Project in Namibia
and also entered into an agreement to acquire the Kanye Manganese Project in Botswana
which closed after the year end. We remained focused on seeking to develop 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.
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. Post the year end on 12th and 22nd
April 2021 we announced the provisional results of our initial two drill holes which were very
pleasing. We have identified 350m of mineralised strike to date and, in order to build up a
significant copper tonnage, we intend to carry out a ground IP geophysics survey as well as
drilling at least two further holes in the vicinity of the two already completed holes. We are
pleased with the results to date as we have not yet tested several other targets on the large
Kalengwa property, including a 13km zone of enhanced soil geochemistry along an
interpreted structure. We plan to carry out initial geophysical surveying on this target while
the geophysics crew is on site.
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. 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. During
the period the Company commenced a reconnaissance drilling programme to test the Gorob
prospect for gold and to increase the resource base in the area surrounding the Hope
property and in January 2021 announced that the result of this initial programme achieved
the objective of confirming our assertion that gold should be present at the Gorob-Vendome
deposit since itis present at the Hope project. Both copper and gold values were pleasing,
and we will obviously internally rework the valuation of Gorob based on the new results. In
the first half of 2021 we tested the130km of strike under license by a heli-airborne
electromagnetic survey and the preliminary evaluation of this announced on 2 June 2021
showed good results as the survey covered areas suspected to be prospective and has also
4
Chairman’s Statement (continued)
For the year ended 31 December 2020
identified further prospective EM and magnetic targets with significant strike lengths. We are
currently interrogating the raw data to refine target selection. Our focus will be on near
surface anomalies and/or targets with significant strike lengths.
Kanye Manganese Project Botswana: We announced on 22 December 2020 the
conditional acquisition of a 100% interest in the Kanye Manganese Project and announced
the completion of the acquisition on 12 February 2021. The project comprises a collection
of nine prospecting licenses, located in south-central Botswana south of the town of
Jwaneng and west of the town of Kanye and 150 km by road from the capital Gaborone.
The licenses cover a total area of 4,043 km2 and provide the holder with the right to prospect
for Metals. The target for manganese mineralisation is manganiferous shale horizons
located on the contact between the Taupone Group and the underlying Black Reef
Formation. This geological setting is similar to that of the Giyani Metals Corp manganese
occurrences on their Kwgakgwe Hill (K-Hill), Otse and Lobatse projects which are located
just a few kilometres off the Kanye property. The most significant of these (K-Hill) comprises
a manganese-rich black shale formation within the lower Taupone Group containing an
Inferred Mineral Resource of 1.24Mt @ 27.3% MnO at a cut-off grade of 8.9% MnO prepared
in accordance with Canadian National Instrument 43-101. (As reported by Giyani Metals
Corp. in April 2020). Post-acquisition the Company has in 2021 commenced an initial
exploration programme involving filed work and trenching.
Mankayan Project Philippines: In 2019 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. Post the period
end on 28 April 2021 the Company announced it had served notice of termination of its
transaction agreement (the "Transaction Agreement") dated 4 October 2019 with Mining
and Minerals Industries Holding Pte. Ltd. ("MMIH"), a private company incorporated in
Singapore, with respect to the sale of 80 per cent. of the Company's interest in the Mankayan
copper
gold project in the Philippines (the "Mankayan Project") to MMJV Pte. Ltd.
("MMJV"), a 100 percent subsidiary of MMIH, (the "Transaction") as MMIH has not met its
Total Funding Commitment as defined in the Transaction Agreement. Bezant, will explore
positioning the Mankayan project within the
and pursue options including the possibility of re
Company's portfolio of copper and gold assets. The Company will provide a further
update(s) as and when appropriate and the termination is referred to in notes 5 & 11.1 to
the accounts
-
-
Eureka Project Argentina: The Eureka Project in Argentina has been kept in good
standing. We have previously undertaken the initial desktop work, to define 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. Argentina has, like many countries, been adversely affected by COVID-19 but 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.
Market Outlook: The gold price is always difficult to predict, but in our projects where gold
occurs it is secondary and has the potential for significant revenue addition particularly in
Namibia. We are particularly confident for the prospects of copper, and as I have indicated
before there are forecast that the demand for copper is expected to double by 2030. The
supply fundamentals have deteriorated over the last 3 to 4 years, mainly due to do the weak
5
Chairman’s Statement (continued)
For the year ended 31 December 2020
financing conditions for explorers and social challenges in places such as Chile and the DRC
and this has been borne out by a strong increase in the copper price over the last year. It
remains 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.
COVID-19 and Brexit: Following on from last year’s Chairman’s letter it is now 15 months
or so when we all first learnt about the COVID-19 pandemic and notwithstanding success in
the development of vaccinations it is still very much with us as second and third waves have
emerged. Geo-political tensions have not in the meantime got any better which 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 continue to believe
that for the coming year uncertainties will be increased, but that the underlying strong trend
in commodities will be maintained. As COVID-19 remains very much a live issue to be
carefully monitored, at the corporate level we have continued to work from home.
Notwithstanding COVID-19 in the period we completed two acquisitions and two
fundraisings both of which I participated in. Notwithstanding local COVID-19 requirements
during the period we commenced our planned reconnaissance drilling in Namibia and post
year end were able to do the same in Zambia. With no projects in Europe Brexit has had 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 copper-gold space.
Mr Colin Bird
Executive Chairman
28 June 2021
6
Board of directors
For the year ended 31 December 2020
Mr Colin Bird (Executive Chairman) (Appointed 2 March 2018)
Experience and Expertise
Mr Bird, aged 77, 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 , 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, Europa Metals 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
Executive Chairman of the Board/Remuneration Committee and member of the Audit
Committee.
Interests in shares and options
91,587,193 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.
The following options over ordinary shares in the Company which all expire 21 June 2028
15,000,000 at an exercise price of 0.5 pence.
12,500,000 at an exercise price of 1 pence.
24,000,000 at an exercise price of 0.425 pence per share.
24,000,000 at an exercise price of 0.564 pence per share.
7
Board of directors (continued)
For the year ended 31 December 2020
Dr. Evan Kirby (Non-Executive Director) (Appointed 4 December 2008)
Experience and Expertise
Dr Kirby, aged 70, 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 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 and member of the Remuneration Committee.
Interests in shares and options
7,479,374 fully paid ordinary shares in Bezant Resources Plc.
The following options over ordinary shares in in the Company which all expire 21 June 2028
5,000,000 at an exercise price of 0.5 pence.
2,500,000 at an exercise price of 1 pence.
10,000,000 at an exercise price of 0.425 pence per share.
10,000,000 at an exercise price of 0.564 pence per share.
Mr Ronnie Siapno (Non-Executive Director) (Appointed 25 October 2007)
Experience and Expertise
Mr Siapno, aged 57 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.
8
Board of directors (continued)
For the year ended 31 December 2020
Special responsibilities
Remuneration Committee.
Interests in shares and options
1,333,334 fully paid ordinary shares in Bezant Resources Plc.
The following options over ordinary shares in in the Company which all expire 21 June 2028
7,500,000 at an exercise price of 0.5 pence per share.
5,000,000 at an exercise price of 1 pence per share.
5,000,000 at an exercise price of 0.425 pence per share.
5,000,000 at an exercise price of 0.564 pence per share.
Mr Raju Samtani (appointed 26 October 2020)
Experience and Expertise
Mr. Samtani, aged 52, is an Associate Chartered Management Accountant, and is Finance
Director of the AIM-listed Tiger Royalties and Investments Plc. Mr. Samtani’s previous
experience includes his position as founder shareholder and Finance Director of Kiwara Plc
which was acquired by First Quantum Minerals Ltd in January 2010. Earlier in his career he
spent three years as Group Financial Controller at marketing services agency - WTS Group
Limited, where he was appointed by the Virgin Group to oversee their investment in the WTS
Group Ltd.
Other current directorships
Tiger Royalties and Investments Plc
Myning Ventures Ltd
African Pioneer Plc
Former directorships in the last 5 years
None
Special responsibilities
Mr. Samtani is the Company’s Finance Director and member of the Audit Committee.
Interests in shares and options
48,611,111 fully paid ordinary shares in Bezant Resources Plc.
37,500,000 warrants expiring on 26 June 2022 which give the right to subscribe for ordinary
shares at a price of 0.16p per share.
The following options over ordinary shares in in the Company which all expire 21 June 2028
20,000,000 at an exercise price of 0.425 pence per share.
20,000,000 at an exercise price of 0.564 pence per share.
Mr Edward Slowey (appointed 26 October 2020)
Experience and Expertise
Mr. Slowey, aged 70, holds a BSc degree in Geology from the National University of Ireland
and is a founder member of The Institute of Geology of Ireland. Mr. Slowey has more than
40 years' experience in mineral exploration, mining and project management including
working as a mine geologist at Europe's largest zinc mine in Navan, Ireland and was
9
Board of directors (continued)
For the year ended 31 December 2020
exploration manager for Rio Tinto in Ireland for more than a decade, which led to the
discovery of the Cavanacaw gold deposit. Mr. Slowey is an experienced exploration
geologist, having worked in Africa, Europe, America and the FSU and his experience
includes joint venture negotiation, exploration programme planning and management
through to feasibility study implementation for a variety of commodities. As a professional
consultant, Mr. Slowey's work has included completion of CPR's and 43-101 technical
reports for international stock exchange listings and fundraising, while also undertaking
assignments for the World Bank and European Union bodies. Mr. Slowey has also served
as director of several private and public companies, including the role of CEO and Technical
Director at AIM-listed Orogen Gold Plc which discovered the Mutsk gold deposit in Armenia.
Other current directorships
Silver Investments Limited
Galileo Resources plc
St Vincent Minerals US Inc
Camel Valley Holdings Inc
Crocus-Serv Resources Pty Ltd
Virgo Business Solutions Pty Ltd
St Vincent Minerals Inc
Former directorships in the last 5 years
NunaMinerals A/S
Orogen Gold Plc (renamed Sosandar Plc)
Orogen Gold Limited
Orogen Gold (Armenia) Limited
Medavinci Gold Limited (formerly BComp 400 Limited)
Special responsibilities
Mr. Slowey is the Company’s Technical Director with oversight over the Company’s
projects.
Interests in shares and options
Mr Slowey does not currently hold any shares, or warrants in the Company.
The following options over ordinary shares in in the Company which all expire 21 June 2028
20,000,000 at an exercise price of 0.425 pence per share.
20,000,000 at an exercise price of 0.564 pence per share.
The rest of this page is intentionally left blank
10
Strategic report
For the year ended 31 December 2020
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 2020 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 21 to 23.
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.
11
Strategic report
For the year ended 31 December 2020
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.
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 19
of the Directors’ Report.
Company is an exploration
entity whose assets
comprise early-stage
projects that are not yet at
the production stage.
sCurrently, no revenue is
generated from such
projects. As such, existing
equity investors and
potential investment
partners are important
stakeholders.
Employees
The Company has one part-
time employee and at the
year-end had five directors 4
of whom are resident
outside the U.K. with one
resident in the U.K. During
the year a 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,
Botswana, 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 starting on page
21).
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 27.
The Chairman. presented on
a number of investor
programs but due to Covid-
19 restrictions was not able
in 2020 to conduct
roadshows or one on one
meetings.
• The Company maintained
an open line of
communication between its,
professional service
providers and Board of
Directors.
• The Executive Chairman
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.
12
Strategic report
For the year ended 31 December 2020
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. Post the
year end the Company
acquired a project in
Botswana.
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.
13
Strategic report
For the year ended 31 December 2020
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 4) and Directors’
report on page 15. Decisions post the year end are referred to in note 25 to the financial
statements which is a summary of post balance sheet events.
On behalf of the Board
Mr Colin Bird
Executive Chairman
28 June 2021
14
Directors’ report
For the year ended 31 December 2020
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 2020.
The principal activity, review of the business and future development disclosures are
contained in the Chairman’s Statement on pages 4 to 6 and the Strategic Report on page
11 to 14.
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
2020.
Directors
The following directors have held office during and subsequent to the reporting year:
Colin Bird
Laurence Read (resigned 29 June 2020)
Ronnie Siapno
Evan Kirby
Raju Samtani (appointed 26 October 2020)
Edward Slowey (appointed 26 October 2020)
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
R Samtani
E Slowey
Ordinary
shares of
0.2p each
91,587,193
7,479,374
1,333,334
48,611,111
-
Percentage
of issued
share capital
2.32%
0.19%
0.03%
1.23%
-
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 on the next page:
15
Directors’ report (continued)
For the year ended 31 December 2020
C. Bird(1)(2)(3)
L. Read
E. Kirby
R. Siapno
Options
exercisable
at 0.5 pence
(vested on
23 August
2018)
15,000,000
15,000,000
5,000,000
7,500,000
Options
exercisable
at 1 pence
(vested on
31 January
2019)
12,500,000
12,500,000
2,500,000
5,000,000
On 9 November 2020, 220,000,000 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 220,000,000 Options, 158,000,000 were awarded to
directors of the Company as detailed below:
C. Bird(1)(2)(3)
E. Kirby
R. Siapno
R Samtani(4)
E Slowey
Options
exercisable
at 0.425
pence
(vested on 9
November
2020)
24,000,000
10,000,000
5,000,000
20,000,000
20,000,000
Options
exercisable
at 0.565
pence
(vesting on
31 March
2021)
24,000,000
10,000,000
5,000,000
20,000,000
20,000,000
1
Colin Bird had 5,555,555 warrants which expired on 6 September 2020 which gave the right to subscribe for ordinary shares at a price
of 1 pence per share which were issued to him on 5 March 2018 on the same terms as all other participants in the £6,00,000 Equity
fundraising announced on 5 February 2018
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 which were issued to him on 26 June 2020 on the same terms as all other participants in the £350,000 Equity fundraising
announced on 19 June 2020
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 which were issued to him on 14 September 2020 on the same terms as all other participants in the £625,000 Equity
fundraising announced on 28 August 2020
4 Raju Samtani has 37,500,000 warrants expiring on 26 June 2022 which give the right to subscribe for ordinary shares at a price of
0.16p per share which were issued to him on 26 June 2020 prior to his appointment as a director of the company, on the same terms as
all other participants in the £350,000 Equity fundraising announced on 19 June 2020 .
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.
16
Directors’ report (continued)
For the year ended 31 December 2020
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 on the next page and in note
22.
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.
The rest of this page is intentionally left blank
17
Directors’ report (continued)
For the year ended 31 December 2020
Directors’ remuneration
Remuneration of the Directors for the years ended 31 December 2020 and 2019 was as
follows:
Directors’
Fees
£
Salary and
Consulting
Fees
£
2020
Total
cash paid
year
ended
£
Share
based
payment -
share
options
£
14,000
6,000
14,821
13,000
8,833
3,500
49,500
39,000
-
-
-
4,950
63,500
45,000
14,821
13,000
8,833
8,450
82,980
-
34,575
17,287
69,150
69,150
Total
cash and
share
based
£
146,480
45,000
49,396
30,287
77,983
77,600
60,154
93,450
153,604
273,142
426,746
Directors’
Fees
£
Salary and
Consulting
Fees
£
2019
Total
cash paid
year
ended
£
Share
based
payment -
share
options
£
10,650
11,579
14,033
12,000
48,000
80,344
-
-
58,650
91,923
14,033
12,000
2,026
2,026
405
810
Total
cash and
share
based
£
60,676
93,948
14,438
12,810
48,262
128,344
176,606
5,267
181,873
C. Bird
L. Read
E. Kirby
R. Siapno
R. Samtani
E. Slowey
Total
C. Bird
L. Read
E. Kirby
R. Siapno
Total
An amount of £15,000 was paid during 2020 (2019: £15,500) to Lion Mining Finance
Limited, a company controlled by C. Bird, for administration services and use of an office.
Notes:
1. Mr Read, Mr Bird and Mr Samtani’s Directors’ fees include NIC and UK payroll tax.
2.
In accordance with the requirements of IFRS 2 Share-based Payments, the estimated fair value for the share options granted in
2020 (£273,142) was calculated using a Black and Scholes option pricing model. None of the 2020 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 18 to the accounts provides information on
Share-based payments.
18
Directors’ remuneration (continued)
For the year ended 31 December 2020
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 Zambia,
Namibia the Philippines and Argentina and post the reporting period end, Botswana.
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 23
June 2021 of those shareholders with a 3% and above equity holding in the Company based on
the Company having 3,939,951,615 ordinary shares in issue on 23 June 2021 (“23 June 21 Shares
in Issue”).
Shareholders per share register
THE BANK OF NEW YORK (NOMINEES)
HARGREAVES LANSDOWN (NOMINEES)
INTERACTIVE INVESTOR SERVICES
BARCLAYS DIRECT INVESTING NOMINEES
HARGREAVES LANSDOWN (NOMINEES)
INTERACTIVE INVESTOR SERVICES
JIM NOMINEES LIMITED
VIDACOS NOMINEES LIMITED
HSDL NOMINEES LIMITED
HARGREAVES LANSDOWN (NOMINEES)
Number of Ordinary
Shares
320,185,158
314,726,162
232,975,577
212,732,069
212,216,647
200,822,508
187,102,152
136,123,598
134,044,427
124,552,254
Percentage of
issued share capital
8.13%
7.99%
5.91%
5.40%
5.39%
5.10%
4.75%
3.45%
3.40%
3.16%
On 4 March 2021 Christian Cordier submitted a TR-1 notification to the Company that he has an
indirect interest in 330,340,451 ordinary shares in relation to the following shareholdings Tonehill Pty
Ltd acting for the (“aft”) The Tonehill Trust 80,705,492 shares, Coreks Super Pty Ltd aft Coreks
Superannuation Fund 77,570,757 shares and Breamline Pty Ltd aft Breamline Ministries
172,064,203 shares. Mr Cordier’s interest represented 8.662% at the date of issue of the TR-1 and
8.384% based on the 23 June 21 Shares in Issue.
On 24th January 2020 the Company announced it was notified that the ultimate beneficial holder of
the 239,000,000 shares in the Company, then representing 18.82% of the company’s issue share
capital as reported in the Form TR-1 submitted by Tavira Securities Ltd, as announced on 6th
January 2020 is Sanderson Capital Partners Ltd. This shareholding now represents 6.07% based
on the C23 June 21 Shares in Issue.
19
Directors’ report (continued)
For the year ended 31 December 2020
Political and charitable contributions
There were no political or charitable contributions made by the Group during the year ended
31 December 2020 (2019: 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.
20
Directors’ report (continued)
For the year ended 31 December 2020
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.
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 16. 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 Zambia, Namibia, 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. Post the year end the
21
Directors’ report (continued)
For the year ended 31 December 2020
Principal risks and uncertainties (continued)
Company acquired a project in Botswana. 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.
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 2020 after tax of £1,026,000 (2019: £1.1
million), had negative cash flows from operations and is currently not generating revenues.
Cash and cash equivalents were £1.1 million as at 31 December 2020. An operating loss
is expected in the year subsequent to the date of these accounts and even though further
funding was raised during the year, 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.
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 in the period initially
had a markedly negative impact on global stock markets although many sectors and stock
market losses have been recovered there is increased volatility as stock markets react to
ongoing news in relation to the short-term and long-term impact of COVID-19 and the
financially implications of the economic stimulus packages adopted by
22
Directors’ report (continued)
For the year ended 31 December 2020
Principal risks and uncertainties (continued)
most governments to protect and / or support their economies this has also, affected
currencies and general business activity. Notwithstanding this the Company was able to
complete and announce fundraisings of £350,000 on 19 June 2020 and £625,000 on 28
August 2020.The Company has developed a work at home policy and adopts local
procedures for exploration activities 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 still not certain as although
certain countries have implemented successful vaccination programs others lag behind ,
many international travel restrictions remain in place and different countries are experiencing
new waves of infection so COVID-19 remains an issue that requires ongoing monitoring in
2021 and likely at least into 2022 but possibly longer.
Relations with Shareholders
In light of current restrictions on public gatherings and the uncertainty as to when and to
what extent these will be lifted and to ensure shareholders comply with the Government
measures, the Company will as in 2020 be calling an Annual General Meeting at which
shareholders will not permitted to attend in person but arrangement will be made for
shareholders to dial into the AGM and submit questions in advance of the AGM.
The Company will hold an Annual General Meeting on or around Friday, 30 July 2021 and
the wording of each resolution to be tabled will be set out in a formal Notice of Annual
General Meeting to be sent to shareholders.
Shareholders who are unable to attend the Annual General Meeting and who wish to
appoint a proxy in their place must ensure that their proxy is appointed in accordance with
the provisions set out in the Notice of Annual General Meeting.
On behalf of the Board
Mr Colin Bird
Executive Chairman
28 June 2021
23
Corporate governance
For the year ended 31 December 2020
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) five Directors of which three are 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 Directors 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 Colin Bird as assisted by the Group Company
in respect of corporate matters generally, compliance and company
Secretary
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 7 to 10 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.
24
Corporate governance (continued)
For the year ended 31 December 2020
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
Namibia, one in the Philippines and one in Argentina and a copper-silver project in Zambia.
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 which could
be through a combination of the development of these projects by the Company or with joint
venture or other partners and / or the sale of the projects.
All operations are conducted in a manner that protects the environment and the health and
safety of employees, 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
local
initiatives via establishing and maintaining co-operative
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.
relationships with
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 (Chairman)
Raju Samtani
Colin Bird
Dr. Evan Kirby
Ronnie Siapno
Remuneration
25
Corporate governance (continued)
For the year ended 31 December 2020
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.
The Audit Committee does not consider there is a need for an internal audit function given
the size and nature of the Group.
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 audit committee.
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
26
Corporate governance (continued)
For the year ended 31 December 2020
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:
¨ 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 is 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 COVID-19 restrictions permitting made as and when considered appropriate by the
Board and the Company’s advisers.
In light of current restrictions on public gatherings and the uncertainty as to when and to
what extent these will be lifted and to ensure shareholders comply with the Government
measures, the Company will in 2021 as in 2020 be calling an Annual General Meeting at
which shareholders will not permitted to attend in person but arrangement will be made for
shareholders to dial into the AGM and submit questions in advance of the AGM.
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 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.
27
Corporate governance (continued)
For the year ended 31 December 2020
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 separate 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.
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 2020 after tax
of £1,026,000 (2019: £1.1 million), had negative cash flows from operations and is currently
not generating revenues. Cash and cash equivalents were £1.1 million as at 31 December
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.
The COVID-19 pandemic announced by the World Health Organisation in the period initially
had a markedly negative impact on global stock markets although many sectors and stock
market losses have been recovered there is increased volatility as stock markets react to
ongoing news in relation to the short-term and long-term impact of COVID-19 and the
financially implications of the economic stimulus packages adopted by most governments
to protect and / or support their economies this has also, affected currencies and general
business activity. Notwithstanding this the Company was able to complete and announce
fundraisings of £350,000 on 19 June 2020 and £625,000 on 28 August 2020. The Company
has developed a work at home policy and adopts local procedures for exploration activities
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 still not certain as although certain countries have implemented
successful vaccination programs others lag behind , many international travel restrictions
remain in place and different countries are experiencing new waves of infection so COVID-
19 remains an issue that requires ongoing monitoring in 2021 and likely at least into 2022
but possibly longer
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
28
Corporate governance (continued)
For the year ended 31 December 2020
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.
Dr. Evan Kirby
Non-Executive Director
28 June 2021
29
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF BEZANT RESOURCES PLC
FOR THE YEAR ENDED 31 DECEMBER 2020
Opinion
We have audited the financial statements of Bezant Resources Plc (the ‘Company’) and its
subsidiaries (the ‘Group’) for the year ended 31 December 2020 which comprise the
Consolidated Statement of Profit and Loss, the Consolidated Statement of Other
Comprehensive Income, the Consolidated and Company Statements of Changes in Equity,
the Consolidated and Company Balance Sheets, the Consolidated and Company
Statements of Cash Flows and related notes to the financial statements, including significant
accounting policies.
The financial reporting framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards 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 Company’s affairs as
at 31 December 2020 and of the Group’s loss and cash flows for the year then ended;
• have been properly prepared in accordance with IFRSs as adopted by the European
Union; and
• 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 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 relating 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 £1m during the year ended 31 December
2020 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 on 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.
30
Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the director’s use of going
concern basis of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the director’s assessment of the entity’s ability to continue to adopt the
going concern basis of accounting included an assessment of the risk and audit procedures
to address this risk:
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 risk:
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 observations
Based on the audit procedures performed we concluded that the Group has a material
uncertainty over the ability to continue as a going concern for a period of at least twelve
months 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
discosure and so was the focus of of our audit in this area. Auditing standards require that
to be reported as a key audit matter.
31
Our responsibilities and the responsibilities of the directors with regard to going concern are
described in the relevant sections of this report.
Our approach to the 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, for example in respect of impairment reviews on exploration
assets that involved making assumptions and considering 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 Company level, we also
tested the consolidation procedures. 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 that we identified during the
course of the audit.
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. This is not a complete list of all risks identified during our audit. Going concern
is a significant key audit matter and is described above. In arriving at our audit opinion above,
the other key audit matters were as follows:
32
Key audit matter
How the matter was addressed during the
audit
Impairment of exploration and
evaluation assets
the
Group
in
of
The Group has capitalised costs
in respect of the Group’s licence
in accordance with
interests
for and
IFRS 6
‘Exploration
Evaluation
Mineral
(IFRS 6). The
Resources’
Directors need to assess the
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.
Our audit work included, but was not restricted
to:
• Obtaining each of the licences along with
supporting information available for each
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
the
available information for each exploration
project and reviewed available information
to assess whether the licenses remain in
good standing.
in conjunction with
• We reviewed the future plans of the
projects in respect of funding, viability and
development to assess whether there
were any indicators of impairment.
therefore
identified
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.
Impairment of
investments
and loans due from subsidiary
the Parent
in
companies
Company
Under International Accounting
‘Impairment of
Standard 36
Assets’, companies are required
to assess whether there is any
indication that an asset may be
impaired at each reporting date.
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,
that no
impairment was required was considered to be
appropriate.
the directors’ assessment
The acquisition of the interests in the Hope
the
Copper-Gold project
Kalengwa project in Zambia have taken place
during the year and no indicators of impairment
were identified in respect of either project.
in Namibia and
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
the recoverable
their assessment of
amount of intragroup loans by comparing
33
Key audit matter
How the matter was addressed during the
audit
Management
assessment
involves significant judgements
and assumptions such as the
timing and extent and probability
of future cash flow.
the
(2019: £2.87m).
The Company has loans due
from subsidiary companies of
In
£4.52m
conjunction with the exploration
assets,
investments
represent the primary balance
on the Company balance sheet
and there is a risk it could be
impaired and
intragroup
loans may not be recoverable as
a
the subsidiary
companies incurring losses.
result of
that
therefore
identified
the
We
impairment of loans due from
subsidiary companies as a key
audit matter in the Company
financial statements, which was
the most significant
one of
assessed
risks of material
misstatement.
Accounting and valuation in
relation to the acquisition of
100% of Virgo Resources Ltd
and a 30%
interest KPZ
International Limited
In the year the group acquired:
• 100% equity of Virgo
Resources Limited and its
the Hope
interest
in
Copper-Gold Project
in
£1,212k
for
Namibia
comprising of shares of
with a fair value of £939k,
share options of £61k ,
cash
and
deferred consideration of
£126k.
£86k
of
it to the Group’s accounting policy and IAS
36;
• 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 that intragroup loans have been
reconciled and confirming that there are
no material differences.
Key observations
The investment balance correlates with the
Eureka Project exploration asset partly held by
within a subsidiary and the new acquisition of the
interests in Virgo Resources Limited and KPZ
International Limited. Our impairment review was
therefore linked to our assessment of indicators
of impairment on the corresponding exploration
licences.
impairment was
considered necessary.
Accordingly no
Our audit work included, but was not restricted
to:
• Obtaining and reviewing
the various
agreements supporting the acquisitions
and agreeing the investment percentage
and consideration associated with the
investments.
• Agreeing
the
the
fair
consideration issued for the investments
made.
value
of
• Reviewing management’s assessment of
the valuation of the investments at the
year end.
• Ensuring that the investments have been
appropriately accounted for in accordance
with IFRS 3 Business Combinations.
• Evaluating
the
disclosures
included in the financial statements for
compliance with IFRS 3.
related
34
Key audit matter
How the matter was addressed during the
audit
in
the consolidated
investments have been
Key observations
included as
Both
subsidiaries
financial
statements due to the indicators of de facto
control as set out in IFRS 10 Consolidated
Financial Statements.
Where the fair value of the consideration paid
exceeded the fair value of the net assets
acquired on the acquisition the difference has
been recognised as an intangible asset, being
Exploration and Evaluation assets.
We consider the accounting for the acquisitions
to have been carried out appropriately.
interest
• 30% equity of KPZ
International Limited and
its
the
Exploration
Kalengwa
[for
Project
of
£193k
shares of £193k
in Zambia
comprising
in
for
issued
involved
judgements
in
The
determining the fair value of the
consideration
the
investments made and acquired
identified assets and liabilities, if
performed
inaccurately, may
lead to a material misstatement
in the financial statements. In
addition, there is a risk that the
disclosure of the investment or
valuation could be misstated.
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 reasonable users.
In order to reduce to an appropriately low level the probability that any misstatements exceed
materiality, we use a lower materiality level, performance materiality, to determine the extent
of testing needed. Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of identified misstatements,
and the particular circumstances of their occurrence, when evaluating their effect on the
financial statements as a whole.
Materiality Measure Group
Overall materiality
We determined
materiality for the
financial statements
as a whole to be:
increase
£141,000 (2019: £95,000)
The
between
2020 and 2019 is primarily
a reflection of the increase
in the net assets of the
Group
How we determine it Based on the main key
indicator, being 2% of the
net assets of the Group
risk
based
our
on
Parent
£112,000 (2019: £76,000)
2% of net assets of the Parent
the
Company
Group materiality amount
exceeded
35
assessment and applying a
benchmark
therefore this was capped to
80% of Group materiality.
Rationale for
benchmarks applied
We believe the net assets are the most appropriate
benchmark due to the size and stage of development of
the Company and Group. This is further supported by the
Group not yet generating any revenue.
Performance
materiality
£84,000
£105,750
On the basis of our risk assessment, together with our
assessment of the Group’s control environment, our
judgment is that performance materiality for the financial
statements should be 75% of materiality.
Specific materiality We also determine a lower level of specific materiality for
certain areas such as directors’ remuneration and related
party transactions of £2,000 as these are considered to
be material by nature.
Reporting threshold
We agreed with the Audit Committee that we would report
to them all misstatements over 5% of Group materiality
identified during the audit, 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.
Other information
The other information comprises the information included in the annual report other than the
financial statements and our auditors’ report thereon. The directors are responsible for the
other information contained within the annual report. Our opinion on the financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in
our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material misstatements, we are required
to determine whether this gives rise to a material misstatement in the financial statements
themselves.
If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
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
36
•
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 Group and 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 Company 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, set out on page 20,
the directors are responsible for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s
and 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 group or Company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue
an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations.
We design procedures in line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below:
Based on our understanding of the Group and the industry in which it operates, we identified
that the principal risks of non-compliance with laws and regulations related to the acts by
the Group which were contrary to applicable laws and regulations including fraud and we
considered the extent to which non-compliance might have a material effect on the financial
statements. We also considered those laws and regulations that have a direct impact on the
37
preparation of the financial statements such as the Companies Act 2006. We evaluated
management’s incentives and opportunities for fraudulent manipulation of the financial
statements (including the risk of override of controls), and determined that the principal risks
were related to inflated revenue and profit.
Audit procedures performed included: review of the financial statement disclosures to
underlying supporting documentation, review of correspondence with legal advisors,
enquiries of management, and testing of journals and evaluating whether there was
evidence of bias by the Directors that represented a risk of material misstatement due to
fraud.
There are inherent limitations in the audit procedures described above and the further
removed non-compliance with laws and regulations is from the events and transactions
reflected in the financial statements, the less likely we would become aware of it. Also, the
risk of not detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through collusion.
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 and Statutory Auditor
UHY Hacker Young
4 Thomas More Square
London E1W 1YW
28 June 2021
38
Consolidated Statement of Profit and Loss
For the year ended 31 December 2020
CONTINUING OPERATIONS
Group revenue
Cost of sales
Gross profit/(loss)
Operating expenses
Share based payments
Operating loss
Interest received
Other income
Impairment of assets
Loss before taxation
Taxation
Loss for the financial year from continuing
operations
Notes
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
-
-
-
(658)
(380)
(1,038)
-
12
-
-
-
-
(911)
(6)
(917)
1
-
(211)
(1,026)
(1,127)
-
-
(1,026)
(1,127)
3
3
4
5
6
Loss for the financial year
(1,026)
(1,127)
Attributable to:
Owners of the Company
- Continuing operations
- Discontinued operations
Non-controlling interest
(977)
(977)
-
(49)
(1,127)
(1,127)
-
-
(1,026)
(1,127)
Loss per share (pence)
Basic loss per share from continuing operations
Diluted loss per share from continuing operations
7
7
(0.05)
(0.05)
(0.11)
(0.11)
39
Consolidated Statement of Other Comprehensive Income
For the year ended 31 December 2020
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
Non-controlling interest
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
(1,026)
(1)
(1,027)
(1,127)
(17)
(1,144)
(978)
(49)
(1,144)
-
(1,027)
(1,144)
40
Consolidated Statement of Changes in Equity
For the year ended 31 December 2020
Year ended 31 December
2020
Balance at 1 January 2020
Current year loss
Foreign currency reserve
Total comprehensive loss for
the year
Proceeds from shares issued
Share issue costs
Shares issued - Acquisitions
Warrants issued to
shareholders
Warrants exercised
Share options granted
Non-controlling interests on
acquisition of subsidiary
Balance at 31 December
2020
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
Share
Capital
£’000
Share
Premium
£’000
Other
Reserves1
£’000
Retained
Losses
£’000
Non
Controlling
interest
£’000
Total
Equity
£’000
2,003
-
-
36,429
-
-
840
-
(1)
(34,489)
(977)
-
-
(49)
-
4,783
(1,026)
(1)
-
24
-
12
-
10
-
-
-
951
(105)
1,120
-
730
-
-
(1)
-
-
-
486
(243)
441
(977)
-
-
-
(451)
243
-
(49)
-
-
-
(1,027)
975
(105)
1,132
-
-
-
35
740
441
-
-
37
37
2,049
39,125
1,523
(35,674)
(12)
7,011
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 Other reserves is made up of the share-based payment and foreign exchange reserve.
41
Company Statement of Changes in Equity
For the year ended 31 December 2020
Year ended 31 December 2020
Balance at 1 January 2020
Current year loss
Total comprehensive loss for the year
Proceeds from shares issued
Share issue costs
Shares issued - Acquisitions
Warrants issued to shareholders
Warrants exercised
Share options granted
Balance at 31 December 2020
Year ended 31 December 2019
Balance at 1 January 2019
Current year loss
Share
Capital
£’000
Share
Premium
£’000
Other
Reserves1
£’000
Retained
Losses
£’000
Total
Equity
£’000
2,003
-
36,429
-
316
-
(32,732)
(878)
6,016
(878)
-
24
-
12
-
10
-
2,049
-
951
(105)
1,120
-
730
-
39,125
-
-
-
-
486
(243)
441
1,000
(878)
-
-
-
(451)
243
-
(33,818)
(878)
975
(105)
1,132
35
740
441
8,356
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)
Total comprehensive loss for the year
Proceeds from shares issued
Warrants issued
Lapsed warrants
Share options granted
-
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
1 Other reserves is made up of the share-based payment and foreign exchange reserve.
42
Consolidated and Company Balance Sheets
As at 31 December 2020
Notes
Consolidated
2020
£’000
2019
£’000
Company
2020
£’000
2019
£’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
Non-controlling interests
TOTAL EQUITY
10
11
13
14
15
17
17
3
-
6,405
6,408
28
1,128
1,156
1,156
7,564
4
-
4,778
4,782
65
330
395
395
-
4,516
3,129
7,645
16
1,094
1,110
1,110
1
2,870
3,129
6,000
58
329
387
387
5,177
8,755
6,387
553
553
394
394
399
399
371
371
7,011
4,783
8,356
6,016
2,049
39,125
858
665
(35,674)
7,023
(12)
2,003
36,429
174
666
(34,489)
4,783
-
2,049
39,125
858
142
(33,818)
8,356
-
2,003
36,429
174
142
(32,732)
6,016
-
7,011
4,783
8,356
6,016
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 2020 of £878,000 (2019: £1,216,000) has been
included in the consolidated income statement.
These financial statements were approved by the Board of Directors on 28 June 2021 and signed on its behalf by:
Mr Colin Bird
Executive Chairman
Company Registration No. 02918391
43
Consolidated and Company Statements of Cash Flows
For the year ended 31 December 2020
Consolidated
Year
ended 31
December
2020
£’000
Year
ended 31
December
2019
£’000
Company
Year
ended 31
December
2020
£’000
Year
ended 31
December
2019
£’000
Notes
Net cash outflow from operating activities
20
(629)
(437)
(460)
(352)
Cash flows from investing activities
Interest received
Other income
Option payments
Proceeds from sale of PP&E
Deferred exploration expenditure
Investment in subsidiary
Loans to associates
Loans to subsidiaries
-
53
-
12
(271)
-
-
-
(206)
1
43
(27)
-
-
-
(58)
-
(41)
-
53
-
-
-
(245)
-
(227)
(419)
-
43
-
-
-
-
(58)
(108)
(123)
Cash flows from financing activities
Proceeds from issuance of ordinary shares
21
1,644
329
1,644
329
Increase/(decrease) in cash
809
(149)
765
(146)
Cash and cash equivalents at beginning of
year
Foreign exchange movement
330
(11)
492
(13)
329
-
481
(6)
Cash and cash equivalents at end of year
1,128
330
1,094
329
44
Notes to the financial statements
For the year ended 31 December 2020
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 2020 after tax of
£1,026,000 (2019: £1.1 million), had negative cash flows from operations and is currently not
generating revenues. Cash and cash equivalents were £1.1 million as at 31 December 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.
The COVID-19 pandemic announced by the World Health Organisation in the period initially had a
markedly negative impact on global stock markets although many sectors and stock market losses
have been recovered there is increased volatility as stock markets react to ongoing news in relation
to the short-term and long-term impact of COVID-19 and the financially implications of the economic
stimulus packages adopted by most governments to protect and / or support their economies this
has also, affected currencies and general business activity. Notwithstanding this the Company was
able to complete and announce fundraisings of £350,000 on 19 June 2020 and £625,000 on 28
August 2020. The timing and extent of the impact and recovery from COVID-19 is still not certain as
although certain countries have implemented successful vaccination programs others lag behind ,
many international travel restrictions remain in place and different countries are experiencing new
waves of infection so COVID-19 remains an issue that requires ongoing monitoring in 2021 and likely
at least into 2022 but possibly longer.
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”).
45
Notes to the financial statements (continued)
For the year ended 31 December 2020
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.
New IFRS standards and interpretations
No new and/or revised Standards and Interpretations have been required to be adopted, and/or are
applicable in the current year by/to the Group, as standards, amendments and interpretations which
are effective for the financial year beginning on 1 January 2020 are not material to the Group.
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 (including those acquired during the period), 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.
Fair value of assets and liabilities acquired on acquisition of subsidiaries
The Group determines the fair value of assets and liabilities acquired on acquisition of subsidiaries
by reference to the carrying value at the date of acquisition and by reference to exploration activities
undertaken and/or information that the Directors become aware of post acquisition.
46
Notes to the financial statements (continued)
For the year ended 31 December 2020
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 (note 18).
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.
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
47
Notes to the financial statements (continued)
For the year ended 31 December 2020
1.5
Financial instruments (continued)
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.
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.
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.
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.
48
Notes to the financial statements (continued)
For the year ended 31 December 2020
1.5
Financial instruments (continued)
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
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.
1.6 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.
1.7 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.
49
Notes to the financial statements (continued)
For the year ended 31 December 2020
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.
1.10 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.
1.11 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.
1.12
1.13
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.
1.14 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
50
Notes to the financial statements (continued)
For the year ended 31 December 2020
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.
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.
Segment reporting
For the purposes of segmental information, the operations of the Group are focused in geographical
segments, namely the UK, Argentina, Namibia, Zambia 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, Namibia and the
Philippines.
1.14
1.15
2.
For the year ended 31 December 2020
Consolidated loss before
tax
Included in the
consolidated loss before
tax are the following
income/(expense) items:
Foreign currency loss
Total Assets
Total Liabilities
Continuing operations
UK Argentina
£’000
£’000
Philippines
£’000
Namibia
£’000
Zambia
£’000
Total
£’000
(860)
(53)
-
(32)
(70)
(1,015)
(11)
1,117
(404)
-
4,834
(42)
-
-
-
-
1,405
(107)
-
208
-
(11)
7,564
(553)
51
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)
Notes to the financial statements (continued)
For the year ended 31 December 2020
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
3.
Operating expenses
On-going operating expenses
Depreciation and amortisation
Share option expense
4.
Operating loss
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
Impairment of assets
5
.
Impairment loss on loan to associate
Year ended 31
December 2020
£’000
-
-
Year ended 31
December
2019
£’000
211
211
52
Year ended
31
December
2020
£’000
Year ended
31
December
2019
£’000
657
1
380
1,038
910
1
6
917
Year ended
31
December
2020
£’000
Year ended
31
December
2019
£’000
28
2
1
15
-
-
8
35
4
3
15
13
1
154
Notes to the financial statements (continued)
For the year ended 31 December 2020
5
Impairment of assets (continued)
The Mankayan project owned by Crescent Mining and Development Corporation is part of the continuing
operations and was fully impaired in 2016 (see note 11) 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 2019 accounts to write back any of the
provision made in prior years.
In 2019, as per note 11.1, the Group sold 80% of its interest in the Mankayan copper-gold project and
derecognised its investment in its subsidiary, Asean Copper Investments Limited and the loan balances
outstanding have been fully impaired.
On 28 April 2021 post the period end ( see note 25 ) the Company announced that it had served notice
of termination of its transaction agreement (the "Transaction Agreement") dated 4 October 2019 with
Mining and Minerals Industries Holding Pte. Ltd. ("MMIH"), a private company incorporated in Singapore,
with respect to the sale of 80 per cent. of the Company's interest in the Mankayan copper
gold project
in the Philippines (the "Mankayan Project") to MMJV Pte. Ltd. ("MMJV"), a 100 percent subsidiary of
-
MMIH, (the "Transaction") as MMIH has not met its Total Funding Commitment as defined in the
positioning
Transaction Agreement. Bezant, will explore and pursue options including the possibility of re
the Mankayan project within the Company's portfolio of copper and gold assets but in the meantime the
previous provisions against the Company’s investment in the Mankayan Project writing it down to Nil
have not been written back.
-
Taxation
6
.
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% (2019: 19%)
Effects of:
Non-deductible expenses
Tax losses (unprovided deferred tax)
Total tax charge
Year ended 31
December 2020
£’000
-
-
Year ended 31
December
2019
£’000
-
-
(1,026)
(1,127)
(196)
-
196
-
(214)
68
146
-
At 31 December 2020, the Group had unused losses carried forward of £13,037,000 (2019:
£12,011,000) 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 2020 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 £2,336,000 (2019:
£2,042,000). 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.
53
Notes to the financial statements (continued)
For the year ended 31 December 2020
7.
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 2020 of £977,000 (2019: £1,127,000)
of which £977,000 (2019: £1,127,000) was from Continuing Operations and £nil (2019: nil) was
from Discontinued Operations. The basic loss per share was calculated using a weighted
average number of shares in issue of 2,046,170,268 (2019: 1,018,075,876).
The diluted loss per share has been calculated using a weighted average number of shares in
issue and to be issued of 2,397,420,278 (2019: 1,018,075,876).
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.
Directors’ emoluments
The Directors’ emoluments of the Group are as follows:
Wages, salaries, fees and share options
Refer to page 18 for details of the remuneration of each
director.
9.
Employee information
Year ended 31
December 2020
£’000
427
Year ended
31
December
2019
£’000
182
Average number of employees including directors and consultants:
Management and technical
Year ended
31 December
2020
Year ended
31 December
2019
5
5
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
Salaries (excluding directors’ remuneration)
-
-
10.
Plant and equipment
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
Consolidated
2020
£’000
2019
£’000
Company
2020
£’000
2019
£’000
68
(1)
67
64
1
(1)
64
73
(5)
68
67
1
(4)
64
60
-
60
59
1
-
60
60
-
60
58
1
-
59
Net book value at end of year
3
4
-
1
54
Notes to the financial statements (continued)
For the year ended 31 December 2020
11.
Investments
Consolidated
2020
£’000
2019
£’000
Loan to associate (note 11.1)
Impairment provision (note 5)
Investment in subsidiaries
Loan to subsidiaries
Provision for subsidiary loan
recoverability
211
(211)
-
-
-
-
Company
2020
£’000
3,980
(3,980)
2,077
3,022
2019
£’000
3,980
(3,980)
655
2,798
211
(211)
-
-
-
-
(583)
(583)
4,516
2,870
11.1
The Group’s share of the results of its associate and its assets and liabilities:
The Group’s share of the results of its associates and its assets and liabilities has in prior periods
related to the Group’s interest in Crescent Mining and Development Corporation which holds the
Mankayan copper-gold porphyry project and Bezant Holdings Inc a Philippine company with a
shareholding in Crescent Mining and Development Corporation which were throughout the period and
at the year-end held via the Groups’ 20% shareholding in Asean Copper Investments Ltd. Throughout
the period and at the year-end Asean Copper Investments Limited had a 40% shareholding in each of
Crescent Mining and Development Corporation and Bezant Holdings Inc.
No information has been provided in relation to Crescent Mining and Development Corporation and
Bezant Holdings Inc as the investments in these two companies have been written down to Nil as no
asset is recognised in the Group accounts in relation to its interest in the Mankayan Project,
Termination of Agreement with MMIH: In 2019 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. Post the period end on 28 April 2021 the
Company announced it had served notice of termination of its transaction agreement (the "Transaction
Agreement") dated 4 October 2019 with Mining and Minerals Industries Holding Pte. Ltd. ("MMIH"), a
private company incorporated in Singapore, with respect to the sale of 80 per cent. of the Company's
interest in the Mankayan copper
gold project in the Philippines (the "Mankayan Project") to MMJV
Pte. Ltd. ("MMJV"), a 100 percent subsidiary of MMIH, (the "Transaction") as MMIH has not met its
Total Funding Commitment as defined in the Transaction Agreement. Bezant, is exploring and pursuing
options including the possibility of re
positioning the Mankayan project within the Company's portfolio
of copper and gold assets. As mentioned in note 5 the previous provisions writing the Group investment
in the Mankayan Project to Nil have not been written back. Due to the termination of the Transaction
Agreement the contingent consideration due to the Company under the Transaction Agreement of S$10m
shares in a ListCo has not been recognised.
-
-
Background on the Transaction Agreement with MMIH through to its termination
As announced on 7 October 2019, Bezant Resources Plc (“Bezant”) entered into the Transaction
Agreement with 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 Project with the Company to be paid S$10M (approximately £5.6m) in shares when MMIH
completed a successful reverse takeover transaction of the Singapore Stock Exchange. MMIH’s
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") was terminated in 2020. MMIH then entered on or around 2
October 2020 into a non-binding term sheet with AsiaPhos Ltd ("AsiaPhos") a company listed on the
SGX) Catalist Board, to acquire MMJV Pte. Ltd. ("MMJV"), a 100 percent subsidiary of MMIH, which, if
successfully completed, would constitute a reverse takeover (the "RTO Transaction") under the listing
rules of the SGX. MMIH subsequently entered into a conditional Sale and Share Purchase Agreement.
55
Notes to the financial statements (continued)
For the year ended 31 December 2020
11.1 The Group’s share of the results of its associate and its assets and liabilities:
(continued)
with AsiaPhos on 12 November 2020 ( the “AsiaPhos SPA”) under which the Company was due to be issued
S$10M (approximately £5.6m) of shares in the listed entity holding MMJV but as per the Company’s
announcement on 8 April 2021 the AsiaPhos SPA was terminated by AsiaPhos.
AsiaPhos' rationale for the termination of the AsiaPhos SPA was that MMIH will require additional time to find
investors to raise the necessary funds for the fundraising which was due to be undertaken as a condition
precedent under the AsiaPhos SPA and that due to the ongoing Covid-19 pandemic and travel restrictions
AsiaPhos believes that it will not be possible to complete the AsiaPhos SPA before it's long stop date being on
or before 12 November 2021 (or such other date mutually agreed in writing) at the latest or three (3) months from
the date on which the proposed whitewash.
Background Information on the original terms of the Transaction Agreement
the Total Funding Commitment and the status of the MPSA
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". As mentioned earlier
the Company announced on 28 April 2021 it had served notice of termination of the Transaction Agreement as
MMIH has not met its Total Funding Commitment as defined in the Transaction Agreement.
On 1 March 2020 Crescent Mining and Development Corporation filed with the Mines and Geoscience Bureau
(MGB) a division of the Department of Environment and Natural Resources of the Philippines Government a
renewal application in relation to the MPSA which expires on 11 November 2021. As at the date of these
accounts this renewal application is still being processed.
56
Notes to the financial statements (continued)
For the year ended 31 December 2020
11.2
Investments - subsidiary undertakings
The Company’s significant subsidiary undertakings held as fixed asset investments as at
31 December 2020 were as follows:
Country of
incorporation
Principal
Activity
Percentage of
ordinary share
capital held
Held directly
Tanzania Gold Limited
Virgo Resources Limited
KPZ International Limited
Held indirectly
Anglo Tanzania Gold Limited
Ireland
Australia
BVI
England
Eureka Mining & Exploration SA
Argentina
Puna Metals SA
Argentina
Hepburn Resources Pty Ltd
Australia
Hope and Gorob Mining Pty Ltd
Namibia
Hope Namibia Exploration Pty Ltd
Namibia
KPZ Processing Zone Limited
Zambia
Holding Company
Holding Company
Holding Company
Gold and copper
exploration
Gold and copper
exploration
Gold and copper
exploration
Gold and copper
exploration
Gold and copper
exploration
Gold and copper
exploration
Gold and copper
exploration
100%
100%
30%
100%
100%
100%
100%
70%
80%
30%
12.
Acquisition of subsidiaries
Acquisition of Virgo Resources Limited
Namibia
On 14 August 2020 the Company completed the acquisition of 100% of Virgo Resources Ltd and its
interests in the Hope Copper-Gold Project in Namibia.
The fair value of the assets and liabilities acquired were as follows:
Consideration
Equity consideration
- Ordinary shares (issued)
- Ordinary shares (deferred)
- Options
Cash consideration
Fair value of assets and liabilities acquired
- Assets
- Liabilities
Deemed fair value of
exploration assets acquired
2020
£’000
939
126
61
86
1,212
33
(104)
(71)
1,283
57
Notes to the financial statements (continued)
For the year ended 31 December 2020
12. Acquisition of subsidiaries (continued)
Acquisition of KPZ International Limited
On 27 April 2020 the Company entered into a binding joint venture agreement with KPZ International
Limited ("KPZ Int") 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.
The fair value of the assets and liabilities acquired were as follows:
Consideration
Consideration
- Was due to be paid in cash but
subsequently agreed to be settled
by Ordinary shares (issued)
Fair value of assets and liabilities acquired
- Assets
- Liabilities
Deemed fair value of
exploration assets acquired
2020
£’000
193
193
53
-
53
140
13.
Exploration and evaluation assets
Consolidated
2020
£’000
2019
£’000
Balance at beginning of year
Acquisitions during year
- Namibia (note 12)
- Zambia (note 12)
Exploration expenditure
Exchange differences
Carried forward
at end of year
13.1 Exploration Assets
4,778
1,283
131
218
(5)
6,405
Company
2020
£’000
3,129
-
-
-
-
-
2019
£’000
3,129
-
-
-
-
-
4,781
-
-
-
-
(3)
4,778
3,129
3,129
Argentina
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 Eureka 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
58
Notes to the financial statements (continued)
For the year ended 31 December 2020
13.1
Exploration assets (continued)
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 the Company is in the process of applying for the
extension of the validity period of the May 2019 EIA approvals.
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.
Namibia
On 14 August 2020 the Company completed the acquisition of 100% of Virgo Resources Ltd and its
interests in the Hope Copper-Gold Project in Namibia. Post the year end the Company on 14 January
2021 and 2 June 2021 announced positive results in relation to exploration activities undertaken post
acquisition which support the Company’s confidence in the Hope Copper-Gold Project. Post acquisition
there have been no indications that any impairment provisions are required in relation to the carrying value
of the Hope Copper-Gold Project.
Zambia
On 27 April 2020 the Company entered into a binding agreement with KPZ International Limited ("KPZ
Int") (the “KPZ 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") (the “Kalengwa Project”) by acquiring a 30 per cent.
shareholding in KPZ Int. Under the terms of the KPZ Agreement the Company has the right to appoint
the majority of directors to the Board of KPZ Int and has operational control of the Kalengwa Project
therefore in accordance with IFRS 10 the Company’s investment in KPZ Int has been consolidated.
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. Cash consideration for the acquisition was US$250,000 (₤202,493) which was settled on 6
November by the issue of 76,923,077 shares and costs of £23,775. Post the year end the Company on
12 April 2021 and 24 April 2021 announced positive results in relation to exploration activities undertaken
post acquisition which support the Company’s confidence in the Kalengwa Project. Post acquisition there
have been no indications that any impairment provisions are required in relation to the carrying value of
the Kalengwa Project.
14.
Trade and other receivables
Due within one year:
VAT recoverable
Other debtors
Consolidated
2019
£’000
2020
£’000
Company
2020
£’000
2019
£’000
10
18
28
34
31
65
10
6
16
34
24
58
59
Notes to the financial statements (continued)
For the year ended 31 December 2020
15.
Trade and other payables
Trade creditors
Directors
Accruals
Deferred acquisition costs (note 12)
16.
Financial instruments
Consolidated
2019
£’000
2020
£’000
Company
2020
£’000
2019
£’000
229
50
148
126
553
242
126
26
-
394
75
50
148
126
399
221
126
24
-
371
(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.
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
NA Dollars
Other
2020
£’000
2
5
33
-
40
Assets
2019
£’000
1
325
8
-
334
Liabilities
2020
£’000
2019
£’000
15
111
42
1
-
169
46
19
58
12
135
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 2019.
US Dollars
AU Dollars
AR Pesos
Other
60
2020
£’000
(1)
11
(1)
-
2019
£’000
5
(31)
4
1
Notes to the financial statements (continued)
For the year ended 31 December 2020
16.
Financial instruments (continued)
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.
17.
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 for exploration project acquisitions
Shares issued on exercise of warrants
Sub-divided to deferred shares (1)
Total ordinary shares at end of year
2020
£’000
-
100
9,900
2019
£’000
-
100
9,900
10,000
10,000
25
24
12
10
-
71
1,998
5
-
(1,978)
25
61
Notes to the financial statements (continued)
For the year ended 31 December 2020
17.
Share capital (continued)
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
Ordinary and deferred as at end of year
Ordinary share capital is summarised below:
As at beginning of the year
Share subscription
Shares issued for exploration project acquisitions
Shares issued on exercise of warrants
Shares issued to settle third party fees
As at end of year
Deferred share capital is summarised below:
As at beginning of the year
Issued due to sub-division (1)
As at end of year
1,978
-
1,978
2,049
-
1,978
1,978
2,003
Number of
shares 2020
Number of
shares 2019
1,269,755,181
1,218,750,000
578,318,935(3)
476,875,000
-
998,773,038
250,000,000
-
-
20,982,143(2)
3,543,699,116
1,269,755,181
-
998,773,038
-
998,773,038
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.
(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) On 14 August 2020 the Company completed the acquisition of 100% of Virgo Resources Ltd and
its interests in the Hope Copper-Gold Project in Namibia. Acquisition consideration included the issue
of 501,395,858 ordinary shares to the vendors of the project (note 12).
62
Notes to the financial statements (continued)
For the year ended 31 December 2020
17.
Share capital (continued)
On 27 April 2020 the Company entered into a binding agreement with KPZ International Limited ("KPZ
Int") 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.
Consideration for the acquisition was US$250,000 (₤202,493) settled on 6 November by the issue of
76,923,077 shares and costs of £23,775.
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 issued - Acquisitions
Share issue costs
Warrants lapsed
Warrants exercised
Warrants issued
2020
£’000
36,429
951
-
-
1,120
(105)
-
730
-
2019
£’000
36,074
345
-
42
(21)
27
-
(38)
As at end of year
39,125
36,429
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.
18.
Share-based payments
At the year end, the Company had the following share-based payment plans involving equity
settled share options and warrants in existence:
Scheme
Number
Warrants
6,363,636
Date
granted
13/10/2017
Exercise
price
1.1p
Maximum
term
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
Vesting conditions
Vested immediately
upon being granted
Vested on 23 August
2018
Vested on 31 January
2019
Vested immediately
upon being granted
Warrants
115,625,000
26/06/2020
0.16p
Warrants
10,937,500
26/06/2020
0.08p
Share
options
98,361,250
14/08/2020
0.3p
2 years Vested immediately
upon being granted
2 years Vested immediately
upon being granted
2 years Vested immediately
upon being granted
63
Notes to the financial statements (continued)
For the year ended 31 December 2020
18.
Share-based payments (continued)
Warrants
265,312,500
14/09/2020
0.16p
Warrants
18,750,000
14/09/2020
0.08p
Share
options
Share
options
110,000,000
06/11/2020
0.425p
110,000,000
06/11/2020
0.565p
2 years Vested immediately
upon being granted
2 years Vested immediately
upon being granted
Vested immediately
upon being granted
Vesting on 31
March 2021
Expire on
21/06/2028
Expire on
21/06/2028
The number and weighted average exercise prices of the above options and warrants are as
follows:
31 December 2020
31 December 2019
Outstanding at beginning of year
Share options issued (1)
Lapsed/exercised warrants/options
Warrants issued (2)
Outstanding at end of year
Number
106,363,636
318,361,250
(476,875,000)
887,500,000
835,349,886
Weighted
average
exercise
price
0.79p
0.435p
1.5p
0.14p
0.33p
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
(1) Share options issued during the year have been valued using a Black and Scholes option pricing
model.
(2) 828,125,000 Warrants were issued as free attaching warrants part of the capital raising and
valued using a Black Scholes option pricing model. 59,375,000 Warrants were issued to brokers
and were valued using a Black and Scholes option pricing model.
19.
Reconciliation of movements in shareholders’ funds
Consolidated
Company
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
(1,027)
(1,127)
870
-
441
740
35
1,132
37
4,783
7,011
371
(17)
6
-
-
-
5,550
4,783
(878)
870
-
441
740
35
1,132
6,016
8,356
(1,216)
371
-
6
-
-
-
6,855
6,016
Total comprehensive loss for the
year
Proceeds from shares issued
Currency translation differences on
foreign currency operations
Share option expense
Warrants exercised
Warrants issued
Shares issued – Acquisitions
Non-controlling interests on
acquisition of subsidiary
Opening shareholders’ funds
Closing shareholders’ funds
64
Notes to the financial statements (continued)
For the year ended 31 December 2020
20. Reconciliation of operating loss to net cash outflow from operating activities
Consolidated
Year ended 31
December 2020
£’000
Year
ended 31
December
2019
£’000
(1,038)
(917)
-
(53)
380
-
5
37
40
1
(43)
6
13
154
29
320
Company
Year ended 31
December 2020
£’000
(879)
-
(53)
380
-
5
42
45
Year
ended 31
December
2019
£’000
(907)
1
(43)
6
13
247
31
300
(629)
(437)
(460)
(352)
Operating loss from all
operations
Depreciation and
amortisation
VAT refunds received
Share options
Shares converted at a
discount
Foreign exchange gain
(Increase)/decrease in
receivables
Increase in payables
Net cash outflow from
operating activities
21.
Proceeds from the issuance of ordinary shares
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 issued on acquisition on subsidiaries
Share issue costs settled in shares
Share capital and premium at beginning of
year
Consolidated
Year
ended 31
December
2020
£’000
Year
ended 31
December
2019
£’000
Company
Year
ended 31
December
2020
£’000
Year
ended 31
December
2019
£’000
41,174
-
-
-
(1,132)
34
38,432
(29)
(13)
11
-
-
41,174
-
-
-
(1,132)
34
38,432
(29)
(13)
11
-
-
(38,432)
(38,072)
(38,432)
(38,072)
1,644
329
1,644
329
22.
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 11.
(c) Associates
Interests in associates are set out in note 11.
(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:
65
Notes to the financial statements (continued)
For the year ended 31 December 2020
22.
Related party transactions (continued)
31 December 2020
31 December 2019
Paid
in
the
year
£’000
Due by at
year-end
date
£’000
Paid
in
the
year
£’000
Due by at
year-end
date
£’000
Colin Bird
Laurence Read
Mowbrai Ltd
Metallurgical Management Services
Pty. Ltd
R Siapno
R. Samtani
E. Slowey
146
45
-
49
30
78
78
68
59
-
7
2
-
-
61
16
78
14
13
-
48
10
53
8
7
-
* The above amounts represent directors’ fees inclusive of share options awarded during 2020 and are included
in directors’ remuneration per note 8.
426*
136
182
126
An amount of £15,000 was incurred during 2020 (2019: £15,000) 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.
23.
Commitments
Non-cancellable lease rentals payable as follows:
Less than one year
Between two and five years
2020
£’000
2019
£’000
-
-
-
-
-
-
Payments represent rentals payable by the Company for administration services and office
occupancy.
24.
Control
Bezant Resources Plc is listed on the AIM market of the London Stock Exchange and not under
the control of any one party.
66
Notes to the financial statements (continued)
For the year ended 31 December 2020
25.
Subsequent events
1. Termination of Agreement with MMIH: In 2019 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. Post the period end on 28
April 2021 the Company announced it had served notice of termination of its transaction agreement
(the "Transaction Agreement") dated 4 October 2019 with Mining and Minerals Industries Holding
Pte. Ltd. ("MMIH"), a private company incorporated in Singapore, with respect to the sale of 80 per
cent. of the Company's interest in the Mankayan copper
gold project in the Philippines (the
"Mankayan Project") to MMJV Pte. Ltd. ("MMJV"), a 100 percent subsidiary of MMIH, (the
"Transaction") as MMIH has not met its Total Funding Commitment as defined in the Transaction
Agreement. Bezant, is exploring and pursuing options including the possibility of re
positioning the
Mankayan project within the Company's portfolio of copper and gold assets. As mentioned in note
5 the previous provisions writing the Group investment in the Mankayan Project to Nil have not been
written back. Due to the termination of the Transaction Agreement the contingent consideration due
to the Company under the Transaction Agreement of S$10m shares in a ListCo has not been
recognised.
-
-
2. Completion of acquisition of 100% of Metrock Resources: On 12 February 2021 the Company
announced the completion of its share purchase agreement with the shareholders of Metrock (the
"Vendors") dated 21 December 2020 to acquire 100% of Metrock Resources Ltd, incorporated in
Australia (ACN 634 959 274) ("Metrock") (the "Acquisition"). Metrock through its 100% owned
Australian subsidiary Coastal Resources Pty Ltd (ACN 624 968 752) owns i) 100% of Cypress
Sources Pty Ltd incorporated in Botswana which owns PLs 377/2018, 378/2018, 379/2018,
420/2018, 421/2018, 423/2018, 424/2018, 425/2018, and ii) 100% of Coastal Minerals Pty Ltd
Incorporated in Botswana which owns PL129/2019.
The initial consideration payable by Bezant at completion of the Acquisition ("Completion") was i)
£405,000 by the issue of 150,000,000 new ordinary shares of 0.002 pence each in the capital of the
Company ("Bezant Shares") at a deemed issue price of 0.27 pence per Bezant Share ("Ordinary
Shares Consideration") which was a premium of 17.4% to the closing price of 0.23 pence on 11
February 2021, ii) the issue of 31,800,000 Unlisted Options in the share capital of Bezant. The options
will have a strike price of 0.40 pence per share and will have an expiry date of 30 September 2024
("Option Consideration"). The Company will also issued a total of 84,597,407 Bezant Shares to
acquire Loans of £198,213 and settle creditors of £30,200 owed by Metrock which will be issued i)
to two of the Vendors namely 50,422,222 Bezant Shares to Breamline Pty Ltd and 5,860,370 Bezant
Shares to M&A Wealth Pty Ltd and ii) 28,314,815 Bezant Shares to Tiger Royalties and Investments
Plc (AIM:TIR) ("Loan Accounts Consideration Shares") (the "Consideration"). The Company at
Completion settled creditors of Metrock of approximately A$26,508 (approximately £14,900) in cash.
3. Issue of Namibian Licence: On 12 February 2021 the Company, further to its announcement of
19 June 2020 announced that EPL 7170 has been granted and is registered in the name of the
group’s 80% owned subsidiary Hope Namibia Mineral Exploration Pty Ltd . The consideration for the
acquisition of EPL 7170 was the issue of 15,763,889 new ordinary shares at a deemed issue price
of 0.27 pence per share, which was at a premium of 17.4% to the closing price of 0.23 pence on 11
February 2021 issued to Bezant's local partner in relation to the issue of EPL 7170 and its transfer
to Hope Namibia (the "Initial Shares") and a further 15,763,889 Bezant Shares are to be issued on
13 July 2021 (the "Balance Shares") (together the "New Shares").
67
Notes to the financial statements (continued)
For the year ended 31 December 2020
25.
Subsequent events (continued)
4. Issue of equity regarding acquisition of Virgo Resources Ltd: On 1 March 2021 the Company
announced the issue of 34,000,000 ordinary shares representing the Balance of Assets Sellers
Shares referred to the Company’s 17 August 2020 announcement
5. Exercise of warrants. On the following dates the Company announced the exercise of warrants
at a price on 0.16p per share;
i)
ii)
iii)
iv)
28 April 2021- 16,250,000 warrants for £26,000;
7 May 2021 – 26,250,000 warrants for £42,000;
11 May 2021 – 6,250,000 warrants for £10,000; and
17 May 2021 – 43,437,500 warrants £69,500
Other that these matters, no significant events have occurred subsequent to the reporting date that
would have a material impact on the consolidated financial statements.
68