Bezant Resources Plc
(Company Registration Number 02918391)
Annual Report
and
Financial Statements
For the year ended 31 December 2022
1
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 - 5
6 - 9
10 - 13
14 - 24
25 - 29
30 - 37
38
39
40
41
42
43
Notes to the financial statements
46 - 68
2
Corporate directory
Directors:
Secretary:
Registered office:
C Bird
E Kirby
R Siapno
R Samtani
E Slowey
M Allardice
Executive Chairman
Non-Executive Director
Non-Executive Director
Finance Director
Technical Director
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 2022
Dear Shareholder,
The year under review, has been similar to the previous year, in that projects have advanced in a very
uncertain global environment. The uncertainty has been both financial and geopolitical with Russia
waging a war on Ukraine and concern amongst some of China doing the same to Taiwan.
The Financial world has been very tumultuous with rising inflation across most developed countries
with the emerging countries taking their consequence. The inflation was caused by massive
disruption in supply lines post Covid, together with “payday” arising from the huge borrowings made
by most countries. Hence, forecasters are predicting more interest rate hikes to lower inflation rates
to around the 2-3% level.
My own view is that changes in work practices, strikes and social disorder have taken their toll on
productivity and the world is busy normalising post Covid, experiencing considerable difficulties in
so doing. Against this disruptive backdrop, stock markets have performed particularly well, but only
at the large cap end of the market, whilst the smaller caps have suffered very badly, particularly
natural resource stocks, with the UK, Australia and Toronto suffering in 2022 & 2023 under
investments with secondary placements being difficult and IPOs very few.
Hope and Gorob Project in Namibia: We have a profound belief in the future need for copper and
as such have employed all available resources to unwrap the potential of our Hope and Gorob Project
in Namibia. Our efforts have been very successful, and we have delineated potential for an open pit
within the Hope and Gorob area as well as undertaking a shallow drill programme at various points
between Hope and Gorob to establish the presence of near surface ore. This campaign has been
hugely successful, and we currently await the outcome of a revised mineral resource statement in
July/August 2023 from Addison Mining Services.
Previous explorers at the Hope and Gorob project have largely ignored the gold contribution in their
quest for copper, which has provided Bezant with a huge opportunity to revalue the project,
encompassing the gold contribution. The current status is that both environmental and mining
licences are in the application stage, and we await government response to our submissions. The
project has significant exploration potential beyond Gorob into the Matchless copper belt, extending
some 55km.
Kanye Manganese Project in Botswana: The Kanye Project in Botswana has been drill tested and
is showing significant promise in terms of tonnage, quality, and metallurgical characteristics. We are
awaiting initial metallurgical test work results in July 2023 and will then plan our next phase of
metallurgical work to test the optimisation of ore for processing as we move towards the objective of
a small battery manganese operation.
Eureka Project Argentina: We maintain our Eureka Project in good standing and post the year end
we have had an updated Environmental Impact Assessment approved which provides for
environmental monitoring and a drill program encompassing 9 drill holes of 200-300 metres each. The
Company will engage an environmental consultant to conduct the environmental monitoring in 2H 2023
and we are seeking a joint venture partner for the exploration of the Eureka Project. In 2021 and into
2022 this was hampered by COVID restrictions in Argentina, but we have recently received
expressions of interest in the project and our focus remains to joint venture or monetise this unique
red bed copper occurrence.
4
Investment in Mankayan Project in Philippines: During the period under review, we subscribed
to a convertible note in IDM International Limited the holding company for the Mankayan Project
and our year end investment in IDM Mankayan Pty Ltd (see note 11.1 ) was fair value adjusted to
£2.2m. At the time of writing we hold a 24.2% investment in IDM International Limited. We are
looking for this investment to be monetised either by direct trade sale or flotation on an individual or
combined project basis. IDM International Limited and Crescent Mining Development Corporation
the licence holder are actively progressing the project, whilst pursuing the various avenues to secure
and advance what is a very large project in a copper hungry world.
As announced in October 2022 by mutual agreement our Cyprus joint venture with Caerus Minerals
was terminated with a de minims effect on the income statement as detailed in note 12.1. It is always
unfortunate when joint venture partners cannot agree on a way forward but we had various concerns
which we could not resolve and therefore Bezant agreed to the termination of the Joint Venture
Agreement and the original option agreement with Caerus as being the best course of action to protect
the assets and resources of Bezant.
Outlook: During the period the copper price has been volatile but the consensus remains that there is
an impending shortage of copper supplies. Recognising the above average copper project portfolio,
we have been in several discussions regarding finance and resource collaboration for their
advancement. At the time of writing, we are still in discussions and negotiations regarding portfolio
advancement.
I would like to thank my fellow directors and management for their untiring efforts to maintain and
advance our projects to a point where our portfolio is well understood by the trade and therefore
financeable going forward.
Yours sincerely,
Mr Colin Bird
Executive Chairman
29 June 2023
5
Board of directors
For the year ended 31 December 2022
Mr Colin Bird (Executive Chairman) (Appointed 2 March 2018)
Experience and Expertise
Executive Chairman Colin is a chartered mining engineer and a Fellow of the Institute of
Materials, Minerals and Mining with more than 40 years’ experience in resource operations
management, corporate management, and finance. Colin has 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 which closed in January 2010.
Other current directorships
Includes African Pioneer Plc, Kendrick Resources Plc, Bird Leisure and Admin (Pty) Ltd,
Galileo Resources Plc, Galileo Resources South Africa (Pty) Ltd, Glenover Phosphate
(Pty) Ltd, Holyrood Platinum (Pty) Ltd, Lion Mining Finance Ltd, Mitte Resources
Investment Ltd, New Age Metals Inc, , Revelo Resources Corp, Sandown Holdings,
Shamrock Holdings Inc.,Tiger Resource Finance Plc, Umhlanga Lighthouse Café CC,
Virgo Business Solutions (Pty) Ltd and Xtract Resources Plc.
Former directorships in the last 5 years
1 Braemore Resources Ltd, Camel Valley Holdings Inc, Crocus-Serv Resources (Pty)
Ltd, Dullstroom Plats (Pty) Ltd , Enviro Mining Ltd , Enviro Processing Ltd, Enviro Props
Ltd, Galagen (Pty) Ltd, Kabwe Operations Mauritius, Maude Mining & Exploration (Pty)
Ltd, NewPlats (Tjate) (Pty) Ltd, Newmarket Holdings, Tjate Platinum Corporation (Pty) Ltd,
Windsor Platinum Investments (Pty) Ltd, Windsor SA Pty Ltd, 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 Metals Group
Plc, Jubilee Smelting & Refining (Pty) Ltd, Jubilee Tailings Treatment Company (Pty) Ltd ,
M.I.T. Ventures Group, 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, Sovereign Energy Plc and Thos Begbie Holdings (Pty) Ltd.
Special responsibilities
Executive Chairman of the Board & Remuneration Committee and member of the Audit
Committee.
Interests in shares and options
307,500,655 ordinary shares in the capital of the Company.
31,250,000 warrants which expired on 26 June 2022 which gave the right to subscribe for
ordinary shares at a price of 0.16p per share.
15,625,000 warrants which expired on 14 September 2022 which gave the right to subscribe
for ordinary shares at a price of 0.16p per share.
6
Board of directors (continued)
For the year ended 31 December 2022
30,769,231 warrants expiring on 4 November 2024 which give the right to subscribe for
ordinary shares at a price of 0.25p 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.
Dr. Evan Kirby (Non-Executive Director) (Appointed 4 December 2008)
Experience and Expertise
Dr Kirby, 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
Technical 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 Kendrick Resources Plc
Former directorships in the last 5 years
Balama resources Pty Ltd, New Energy Minerals Limited (formerly Mustang Resources
Limited and ASX listed).
Special responsibilities
Chairman of the Audit Committee and member of the Remuneration Committee.
Interests in shares and options
25,487,449 fully paid ordinary shares in Bezant Resources Plc.
The following options over ordinary shares 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.
7
Board of directors (continued)
For the year ended 31 December 2022
Mr Ronnie Siapno (Non-Executive Director) (Appointed 25 October 2007)
Experience and Expertise
Mr Siapno, graduated from the Saint Louis University in the Philippines in 1986 with a
Bachelor of Science degree in Mining Engineering and is a lifetime member of the Philippine
Society of Mining Engineers. Since graduation, he has held various consulting positions
such as Mine Planning Engineer to Benguet Exploration Inc., Mine Production Engineer to
Pacific Chrome International Inc., Exploration Engineer to both Portman Mining Philippines
Inc. and Phoenix Resources Philippines Inc. and Geotechnical Engineer to Pacific Falkon
Philippines Inc.
Other current directorships
President of Crescent Mining and Development Corporation and Director of Bezant Holdings
Inc. Non-Executive President and Director of Cleangrean Solutions, Inc.
Former directorships in the last 5 years
Former director of Asean Copper Investment Ltd.
Special responsibilities
Member of the 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 (Finance Director) (appointed 26 October 2020)
Experience and Expertise
Mr. Samtani, is an Associate Chartered Management Accountant, and is Finance Director
of the AIM-listed Tiger Royalties and Investments Plc and standard listed African Pioneer
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
Myning Ventures Ltd
Former directorships in the last 5 years
None
Special responsibilities
Mr. Samtani is the Company’s Finance Director and member of the Audit Committee.
8
Board of directors (continued)
For the year ended 31 December 2022
Interests in shares and options
118,611,078 fully paid ordinary shares in Bezant Resources Plc.
37,500,000 warrants which expired on 26 June 2022 which gave 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 (Technical Director) (appointed 26 October 2020)
Experience and Expertise
Mr. Slowey 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
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
Fulcrum Metals Ltd
Former directorships in the last 5 years
None
Special responsibilities
Mr. Slowey is the Company’s Technical Director with oversight over the Company’s
projects.
Interests in shares and options
20,625,000 fully paid ordinary shares in Bezant Resources Plc.
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.
9
Strategic report
For the year ended 31 December 2022
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 and future prospects
The Chairman’s statement contains a review of 2022 and refers to the Company’s focus on
its copper and gold asset portfolio. During the coming year the Company intends to focus
on its projects in Southern Africa where the Company has projects in Namibia and
Botswana, and completing a joint venture transaction or exploring its Argentina project and
its investment in the Philippines.
Principal risks and uncertainties facing the Company
The principal risks and uncertainties facing the Company are disclosed in the Directors’
report on pages 14 to 24.
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 exploration activity as detailed in note 12.1 to increase 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;
10
Strategic report
For the year ended 31 December 2022
d. the impact of the Company’s operations on the community and the environment;
e. the desirability of the Company maintaining a reputation for high standards of
business conduct; and
the need to act fairly between members of the Company.
f.
The analysis is divided into two sections, the first to address Stakeholder engagement,
which provides information on stakeholders, issues and methods of engagement. The
second section addresses principal decisions made by the Board and focuses on how the
regard for stakeholders influenced decision-making.
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
Equity investors
All significant shareholders
that own more than 3 per
cent. of the Company’s
shares are listed on page 18
of the Directors’ Report.
Company is an exploration
entity whose assets
comprise early-stage
projects that are not yet at
the production stage.
Currently, no revenue is
generated from such
projects. As such, existing
equity investors and
potential investment
partners are important
stakeholders.
Employees
The Company has 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.
Why is it important to engage
this group of stakeholders
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 Namibia
,Botswana and Argentina
and the Company has an
equity investment in a
project in 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
19).
How did Bezant engage with
the stakeholder group
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
from
resulted
What
engagement
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 28.
• 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.
11
Strategic report
For the year ended 31 December 2022
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
interests in exploration
projects or investments
which includes, Botswana,
Namibia, Argentina and the
Philippines.
Community
The local community at the
Company’s exploration
projects in Botswana,
Namibia, and Argentina and
the surrounding area.
Professional service
providers
During the exploration
phase, we will be using key
professional service
providers who provide
drilling, geochemical,
geological analysis,
assaying and other services
under commercial contracts.
At a local level, we also
partner with a variety
smaller
companies/providers, some
of whom are independent,
or family run businesses.
The Group 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.
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.
12
Strategic report
For the year ended 31 December 2022
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 14. Decisions post the year end are referred to in note 26 to the financial
statements which is a summary of post balance sheet events.
On behalf of the Board
Mr Colin Bird
Executive Chairman
29 June 2023
13
Directors’ report
For the year ended 31 December 2022
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 2022.
The principal activity, review of the business and future development disclosures are
contained in the Chairman’s Statement on pages 4 to 5 and the Strategic Report on page
10 to 13.
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
2022.
Directors
The following directors have held office during and subsequent to the reporting year:
Colin Bird
Ronnie Siapno
Evan Kirby
Raju Samtani
Edward Slowey
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
0.002p each
320,000,655
25,487,449
1,333,334
118,611,078
20,625,000
Percentage
of issued
share capital
4.25%
0.33%
0.02%
1.55%
0.27%
Options awarded and warrants
On 23 August 2018, 87,500,000 options over ordinary shares of 0.002p 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:
14
Directors’ report (continued)
For the year ended 31 December 2022
C. Bird(1)(2)(3)
L. Read (ex director)
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 0.002p 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
(vested on
31 March
2021)
24,000,000
10,000,000
5,000,000
20,000,000
20,000,000
1 Colin Bird also had 31,250,000 warrants which expired on 26 June 2022 which gave 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
2 Colin Bird also had 15,625,000 warrants which expired on 14 September 2022 which gave 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
3 Colin Bird also has 30,769,231 warrants expiring on 4 November 2024 which give the right to subscribe for ordinary shares at a price
of 0.25p per share which were issued to him 6 January 2022 in lieu of outstanding fees.
4 Raju Samtani had 37,500,000 warrants which expired on 26 June 2022 which gave 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.
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.
15
Directors’ report (continued)
For the year ended 31 December 2022
Executive Directors are entitled to accept appointments outside the Company providing the
Board’s permission is sought.
Aside from the Finance Director whose fees in 2022 were £39,996, the other Directors are
entitled to receive between £12,500 / £19,000 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
16
Directors’ report (continued)
For the year ended 31 December 2022
Directors’ remuneration
Remuneration of the Directors for the years ended 31 December 2022 and 2021 was as
follows:
Directors’
Fees
£
Salary and
Consulting
Fees
£
2022
Total
cash paid
year
ended
£
Share
based
payment -
share
options
£
12,000
14,484
12,000
40,000
18,000
48,000
-
-
-
19,650
60,000
14,484
12,000
40,000
37,650
17,969(1)
-
-
-
-
Total
cash and
share
based
£
77,969
14,484
12,000
40,000
37,650
96,484
67,650
164,134
17,969
182,103
C. Bird
E. Kirby
R. Siapno
R. Samtani
E. Slowey
Total
(1) Includes the issue on 6 January 2022 of 30,769,231 Warrants over ordinary shares exercisable at 0.25 pence per ordinary shares
valid until 4 November 2024 as part settlement of outstanding fees of £ 80,000 which were valued at $17,969 using a Black and Scholes
option pricing model using a risk-free rate of 0.25% and a volatility rate of 86.86%.
Directors’
Fees
£
Salary and
Consulting
Fees
£
2021
Total
cash paid
year
ended
£
Share
based
payment -
share
options
£
12,500
14,226
13,000
41,500
19,000
50,000
-
-
-
24,600
62,500
14,226
13,000
41,500
43,600
34,961
14,567
7,284
29,135
29,135
Total
cash and
share
based
£
97,461
28,793
20,284
70,635
72,735
100,226
74,600
174,826
115,082
289,908
C. Bird
E. Kirby
R. Siapno
R. Samtani
E. Slowey
Total
An amount of £15,000 was paid during 2022 (2021: £15,000) to Lion Mining Finance
Limited, a company controlled by C. Bird, for administration services and use of an office.
Notes:
1. 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 or forfeited 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.
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,
Namibia, Botswana and Argentina and has an equity investment in a project in the
Philippines.
17
Directors’ report (continued)
For the year ended 31 December 2022
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
Guidance and Transparency Rules, or is aware, of the following interests in its ordinary
shares as at 21 June 2023 of those shareholders with a 3% and above equity holding in the
Company based on the Company having 7,637,973,036 ordinary shares in issue on 21 June 2023
(“21 June 2023 Shares in Issue”).
Shareholders per share register
The Bank Of New York (Nominees)
Hargreaves Lansdown (Nominees)
Hargreaves Lansdown (Nominees)
Jim Nominees Limited
Interactive Investor Services
Barclays Direct Investing Nominees
Interactive Investor Services
GHC Nominees Limited
Vidacos Nominees Limited
Hargreaves Lansdown (Nominees)
Number of ordinary
shares
Issued
Share Capital
720,127,695
501,021,412
500,337,154
489,017,772
377,990,908
347,558,164
301,949,904
299,956,382
277,713,260
259,083,811
4,074,756,462
9.43%
6.56%
6.55%
6.40%
4.95%
4.55%
3.95%
3.93%
3.64%
3.39%
53.35%
On 4 November 2021 Christian Cordier submitted a TR-1 notification to the Company that he has an
indirect interest in 313,906,504 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 66,163,350 shares and Breamline Pty Ltd aft Breamline Ministries
167,037,662 shares. Mr Cordier’s interest represented 6.455% at the date of issue of the TR-1 and
4.11% based on the 7,637,973,036 shares in issue on 21 June 2023.
On 15 June 2023 the Company announced that Sanderson Capital Partners Ltd had confirmed that
they and associates would on 21 June 2023 be interested in 761,469,231 Shares which represents
9.97% based on the 7,637,973,036 shares in issue on 21 June 2023.
Political and charitable contributions
There were no political or charitable contributions made by the Group during the year ended
31 December 2022 (2021: 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.
18
Directors’ report (continued)
For the year ended 31 December 2022
Statement of Directors’ responsibilities
The Directors are responsible for preparing the financial statements in accordance with
applicable laws and UK adopted International Accounting Standards. Company law requires
the Directors to prepare financial statements for each financial year which give a true and
fair view of the state of affairs of the Group and of the Company and of the profit or loss of
the Group for that year.
In preparing those financial statements, the Directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable accounting standards have been followed, subject to any
material departures disclosed and explained in the financial statements; and
- prepare the financial statements on a going concern basis, unless it is inappropriate to
presume that the Group will continue in business.
The Directors confirm that the financial statements comply with the above requirements.
The Directors are responsible for keeping adequate accounting records which at any time
disclose with reasonable accuracy the financial position of the Company (and the Group)
and enable them to ensure that the financial statements comply with the Companies Act
2006. The Directors are also responsible for safeguarding the assets of the Company (and
the Group) and for taking steps for the prevention and detection of fraud and other
irregularities.
In addition, they are responsible for the maintenance and integrity of the corporate and
financial information included on the Company’s website.
Statement of disclosure to auditor
So far as all the Directors, at the time of approval of their report, are aware:
-
-
there is no relevant audit information of which the Company’s auditors are unaware, and
the Directors have taken all steps that they ought to have taken as Directors in order to
make themselves aware of any relevant audit information and to establish that the
Company’s auditors are aware of that information.
Auditors
UHY Hacker Young LLP have expressed their willingness to continue as the auditors of the
Company, and in accordance with section 489 of the Companies Act 2006, a resolution to
re-appoint them will be proposed at the Company’s forthcoming Annual General Meeting.
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. The Group does not currently have any mining operations.
19
Directors’ report (continued)
For the year ended 31 December 2022
Principal risks and uncertainties (continued)
The Group seeks to mitigate these risks in relation to exploration and mine planning activities
by using the geological and mining expertise of Board members to oversee and plan
exploration and mine planning activities and by engaging the services of reputable external
geologists, mine engineering and other experts with appropriate skills and experience to
provide exploration and mine planning services for the Group.
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 Namibia,
Botswana and Argentina and an equity investment in a project in the Philippines held via an
Australian company make it subject to 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
but seeks to mitigate this risk by converting funds from Pounds Sterling to other currencies
when making material commitments in other currencies.
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. The Group does not have any commodity price hedges in place as it is not
mining and does not produce any copper and its investment in exploration projects are
exposed to fluctuations in the prices of underlying commodities.
Economic, political, judicial, administrative, taxation or other regulatory factors
The Group’s assets are located in Namibia, Botswana and Argentina and it has an equity
investment in a project in the Philippines held via an Australian company and mineral
exploration and mining activities may be affected to varying degrees by political stability and
government regulations relating to the mining industry.
20
Directors’ report (continued)
For the year ended 31 December 2022
Principal risks and uncertainties (continued)
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. Which the group seeks to mitigate by working with local advisors and / or
partners familiar with the local regulatory environment.
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. The group would seek to mitigate this risk by
ensuring that access to operational infrastructure is included in any pre mining feasibility
studies.
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 profit from all
operations for the year ended 31 December 2022 after tax of £1,436,000 after a fair value
adjustment (see note 11). Excluding the fair value adjustment the loss from all operations
for the year ended 31 December 2022 after tax was £697,000 (2021 restated: £1,266,000),
the Group had negative cash flows from operations and is currently not generating revenues.
Cash and cash equivalents were £57,000 as at 31 December 2022. Post year ended on 12
April 2023 the Company announced a £750,000 fundraising from directors, existing
shareholders and investors to facilitate copper gold mining operations, the issue of shares
to Directors and PDMR at a premium to the share price to settle £174,961 of accrued fees
("Conversion Shares") and the settling of £101,250 of consultancy fees by the issue of
shares to consultants ("Consultant Shares") to conserve the Company's working capital. 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.
21
Directors’ report (continued)
For the year ended 31 December 2022
Principal risks and uncertainties (continued)
COVID-19 pandemic
The COVID-19 pandemic announced by the World Health Organisation in 2020 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 and supply chains.
The Company developed a work at home policy and adopted local procedures for
exploration activities to address the health and wellbeing of its directors, consultants and
contractors, and their families, from COVID-19.
Whilst in many countries, including the United Kingdom with universal vaccination
programmes, COVID-19 appears to be under control the timing and extent of the impact and
recovery from COVID-19 in other countries is still not certain as many countries particularly
in the developing world have yet to fully implement successful vaccination programs
accordingly COVID-19 remains an issue that requires ongoing monitoring in 2023.
Impact Of War in Ukraine
The Directors are aware of the war in Ukraine and related sanctions and there is no impact
on the Company as it has no assets or business activities or suppliers with links in Ukraine
or Russia and is not aware of any persons sanctioned in relation to the Ukraine conflict
owning shares in the Company. An indirect impact of the conflict in Ukraine is the effect that
the conflict and sanctions have had on energy and other prices as many countries are now
experiencing inflation rates not experienced for several years and this may have an effect
on the Company’s costs. The Company seeks to mitigate this risk by obtaining quotes for
and agreeing on material expenditure commitments in advance of engaging services so
costs are known in advance but is not in a position to reduce inflation.
Going Concern
As disclosed in Note 1.1 to the accounts and the Corporate Governance Statement, 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.
Post Balance Sheet events
As disclosed in note 26 to the Accounts:
a) on 9 January 2023 the Company announced it had issued 7,926,024 shares to settle
£6,000 of consultancy fees;
22
Directors’ report (continued)
For the year ended 31 December 2022
Post Balance Sheet events (continued)
b) on 27 March 2023 the Company announced the completion of the sale of its 44 IDM
Mankayan Pty Ltd shares for 19,381,054 fully paid ordinary shares if IDM International
Ltd (“IDM International”) and that an Independent Expert’s Report by BDO Corporate
Finance (WA) Pty Ltd dated 3 February 2023 included a valuation of an IDM International
share on a diluted minority basis following IDM International’s acquisition of IDM
Mankayan and the following table shows these valuations and the corresponding
valuation of the 19,381,054 IDM International shares issued to Bezant using an FX rate
of A$1= GBP0.56 as at 28 February 2023.
Expert Report Valuation per
IDM International share
No. of Consideration Shares to
be issued to Bezant
Value in A$
Value in £
Valuation in Independent Expert's Report
Low
Preferred
High
AUD
0.232
AUD
0.470
AUD
0.726
19,381,054 IDM International shares
AUD
4,496,405
AUD 9,109,095
AUD
14,070,645
£ 2,517,987
£ 5,101,093 £ 7,879,561
c) On 12 April 2023 the Company announced a fundraising of £750,000 from directors,
existing shareholders and investors to facilitate copper gold mining operation, the issue
of shares to Directors and PDMR at a premium to the share price to settle £174,961 of
accrued fees (“Conversion Shares”) and the settling of £101,250 of consultancy fees
by the issue of shares to consultants (“Consultant Shares”) to conserve the Company’s
working capital;
d) On 5 May 2023 the Company announced the issue of 104,875,000 new Ordinary Shares
(the “Professional Fee Shares”) at 0.04 pence per share, which was the fundraising
price for the fundraising which the Company announced on 12 April 2023. The
Professional Fee Shares were issued to settle fees of £41,950;
e) On 15 June 2023, the Company announced, further to its announcements of 23
November 2021 and 30 June 2022 that it had by an agreement dated 14 June 2023
agreed with Sanderson Capital Partners Limited (“Sanderson Capital” or the “Lender”)
a long-term shareholder in the Company to extend the repayment date for the £700,000
drawn down under the unsecured convertible loan funding facility entered into with
Sanderson Capital on 22 November 2021 (the “Facility”) (the “Agreement”). The
£700,000 drawdown is now repayable by 23 December 2024 and convertible by the
Lender at the fixed price of 0.08 pence per share (the “New Conversion Price”). No
further amounts can be drawn down under the Facility. The Company as a loan extension
fee i) paid the Lender a £70,000 facility extension and documentation fee equivalent to
6.67% per year which was settled by the issue of 87,500,000 new ordinary shares of
0.002p each (“Shares”) at the New Conversion Price (“Facility Extension Fee
Shares”); and ii) issued the Lender 437,500,000 warrants over Shares exercisable at
0.12 pence per Share (the “Warrant Exercise Price”) exercisable for two years from the
date of the Agreement. (the “Facility Extension Fees”).
23
Directors’ report (continued)
For the year ended 31 December 2022
Post Balance Sheet events (continued)
The Company has an option to convert all or part of the £700,000 drawdown if the
Company’s share price exceeds 0.14 pence for 10 or more business days. The New
Conversion Price was at a 113% premium to the closing price of 0.0375 pence per share on
14 June 2023 and a 100% premium to the placing price in relation to the Company’s
£750,000 fundraising announced on 12 April 2023. The Warrant Exercise Price is at a 220%
premium to the closing price on 14 June 2023.
Relations with Shareholders
The Company plan to hold an Annual General Meeting in late July or August 2023 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
29 June 2023
24
Corporate governance
For the year ended 31 December 2022
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 notwithstanding the period they have been in office given they do not
have significant shareholdings in the Company. The Company’s Executive Director is Colin
Bird who is also Chairman of the Board. Given the stage of the Company’s early-stage
exploration mining projects and the experience of the Chair Mr. Bird in managing such
international exploration mining projects and his familiarity with the Company’s projects the
Company believes that it is appropriate for the roles of Chairman and Chief Executive Officer
to be combined at this stage. The Company will keep this under review as the Company’s
projects develop with a view to splitting the roles when it is clear which projects will become
the principal activities of the Company and can justify the need for and benefit from a
separate CEO. The Company will therefore consider making further appropriate
appointments to the Board as an when considered appropriate.
The Board is responsible for determining policy and business strategy, setting financial and
other performance objectives and monitoring achievement. It meets throughout the year and
all major decisions are taken by the full Board. The Chairman takes responsibility for the
conduct of the Company and Board meetings and ensures that directors are properly briefed
to enable full and constructive discussions to take place. The Group’s day-to-day operations
are managed by the Executive Director Colin Bird as assisted by the Group Company
Secretary
in respect of corporate matters generally, compliance and company
administration. All Directors have access to the Company’s Solicitors, along with the Group
Company Secretary and any Director needing independent professional advice in the
furtherance of his/her duties may obtain this advice at the expense of the Group. However,
no formal procedure has been agreed with the Board regarding the circumstances in which
individual directors may take independent professional advice.
The Board is satisfied that it has a suitable balance between independence on the one hand,
and knowledge of the Company on the other, to enable it to discharge its duties and
responsibilities effectively, and that all Directors have adequate time to fulfil their roles.
Details of the current Directors, biographical details are set out on pages 6 to 9 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.
25
Corporate governance (continued)
For the year ended 31 December 2022
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 two copper-gold projects, in Namibia and
Argentina and has an equity investment in a copper – gold project in the Philippines an
interest in a manganese project in Botswana. 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
26
Corporate governance (continued)
For the year ended 31 December 2022
The Audit Committee
The audit committee receives reports from management and the external auditors relating
to the interim report and the annual report and financial statements, reviews reporting
requirements and ensures that the maintenance of accounting systems and controls is
effective.
The audit committee has unrestricted access to the Company’s auditors. The audit
committee also monitors the controls which are in force and any perceived gaps in the
control environment.
The Board believes that the current size of the Group does not justify the establishment of
an independent internal audit department.
The Audit Committee meets twice during the year to review the published financial
information, the effectiveness of external audit and internal financial controls including the
specific matters set out below.
Significant issues considered by the Audit Committee during the year have been the
Principal Risks and Uncertainties and their effect on the financial statements. The Audit
Committee tracked the Principal Risks and Uncertainties through the year and kept in
contact with the Group’s Management, External Service Providers and Advisers. The Audit
Committee is satisfied that there has been appropriate focus and challenge on the high-risk
areas.
UHY Hacker Young LLP, the current external auditors, have been in office since 2007 which
was the last time a tender for the audit took place. The external auditors present their annual
audit findings to the 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
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:
27
Corporate governance (continued)
For the year ended 31 December 2022
¨ 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
was significantly reduced in 2020 and 2021 due to COVID-19 restrictions but the Company
participated in various investor focussed podcasts and as COVID-19 restrictions have been
lifted the Company will with the Company’s advisers look at ways in which the Company can
engage with shareholders.
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.
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
28
Corporate governance (continued)
For the year ended 31 December 2022
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 profit for the year ended 31 December 2022 of £1,436,000 after a fair
value adjustment (see note 11) excluding the fair value adjustment the loss from all
operations for the year ended 31 December 2022 after tax was £697,000 (2021 restated:
£1,266,000), had negative cash flows from operations and is currently not generating
revenues. Cash and cash equivalents were £57,000 as at 31 December 2022. Post year
ended on 12 April 2023 the Company announced a £750,000 fundraising from directors,
existing shareholders and investors to advance the Hope Copper-Gold Project in Namibia
whilst the Company awaits the award of a mining licence ahead of facilitating copper gold
mining operations, for the metallurgical test work on the Kanye manganese project in
Botswana and for the Company’s other projects as well as working capital. The Company
also issued shares to Directors and PDMR at a premium to the share price to settle £174,961
of accrued fees ("Conversion Shares") and the settling of £101,250 of consultancy fees by
the issue of shares to consultants ("Consultant Shares") to conserve the Company's working
capital 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.
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.
Dr. Evan Kirby
Non-Executive Director
29 June 2023
29
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF BEZANT RESOURCES PLC
FOR THE YEAR ENDED 31 DECEMBER 2022
Opinion
We have audited the financial statements of Bezant Resources Plc (the ‘Company’) and its subsidiaries (the
‘Group’) for the year ended 31 December 2022 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 notes to the financial statements, including significant accounting
policies. The financial reporting framework that has been applied in the preparation of the group’s and
company’s financial statements is applicable law and UK adopted International Accounting Standards.
In our opinion:
•
•
•
the financial statements give a true and fair view of the state of the Group’s and Company’s affairs
as at 31 December 2022 and of the Group’s profit for the year then ended;
the financial statements have been properly prepared in accordance with UK adopted International
Accounting Standards; and
the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent of the
Group and 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
(note 1.1) concerning the Group’s and Company’s ability to continue as a going concern. The Group incurred
an operating loss of £697k during the year ended 31 December 2022 and is still incurring operating losses. As
discussed in note 1.1, post year-end the Group raised £750,000 to fund operations and settled accrued fees
through the issue of shares to conserve cash flows. However, 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. The financial statements do not include the
adjustments (such as impairment of assets) that would result if the Group and Company were unable to
continue as a going concern. These conditions, along with other matters discussed in the Principal Accounting
Policies indicate the existence of a material uncertainty which may cast significant doubt about the Group’s
and Company’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
30
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
fundraisings in order to fund its ongoing activities.
We understand it is the group’s intention to fund future exploration programmes by a combination of farm
in and/or further fundraising which the group will need to complete in the next 12 months. Accordingly, the
Group will require additional funding and/or a working capital reduction within twelve months from the date
when the financial statements are authorised for issue.
Given the above factors, we consider going concern to be a significant audit risk area.
The directors' conclusion of the risks and circumstances described in the Going Concern section of the
Principal Accounting Policies of the Group financial statements represent a material uncertainty over the
ability of the Group and Company to continue as a going concern for a period of at least a year from the date
of approval of the financial statements. However, clear and full disclosure of the facts and the directors'
rationale for the use of the going concern basis of preparation, including that there is a related material
uncertainty, is a key financial statement disclosure and so was the focus of our audit in this area. Auditing
standards require that to be reported as a key audit matter.
How our audit addressed the key audit matter
Our audit procedures included:
• Assessing the transparency and the completeness and accuracy of the matters covered in the going
concern disclosure by evaluating management's cash flow projections for the next 12 months and the
underlying assumptions.
• We obtained cash flow forecasts, reviewed the methodology behind these, ensured arithmetically
correct and challenged the assumptions.
• We performed a sensitivity analysis for an increase in costs to consider the impact of inflation and
other unforeseen additional costs incurring.
• 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:
It is clear the group will need to raise funds in order to fund any further exploration costs. The Group has
been able to raise funds in the past, however there is no guarantee that adequate funds will be available
when needed in the future.
Our responsibilities and the responsibilities of the directors with respect 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.
31
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:
Key audit matter
How the matter was addressed during the audit
Impairment of exploration and
evaluation assets in the Group
Our audit work included, but was not restricted to:
the Group’s
The Group has capitalised costs in
respect of
licence
interests in accordance with IFRS 6
‘Exploration for and Evaluation of
(IFRS 6). The
Mineral Resources’
Directors need
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.
assess
to
identified
exploration
the
We
therefore
and
impairment of
evaluation assets as a key audit
matter, which was one of the most
significant assessed risks of material
misstatement.
• Obtaining each of the
licences along with
supporting
for each
information available
exploration project to assess whether the licenses
remain in good standing.
• We discussed each of the licence areas with the
directors and considered their assessment in
conjunction with the available information for
each exploration project and reviewed available
information to assess whether the licenses remain
in good standing.
• We reviewed the future plans of the projects in
respect of funding, viability and development to
assess whether there were any indicators of
impairment.
Key observations
We obtained evidence that the licenses remain valid and
are in good standing.
Where licenses had expired and renewal applications not
yet granted, we reviewed correspondence with the
32
Key audit matter
How the matter was addressed during the audit
mining departments to determine the status of the
renewal and whether there were any indications the
renewals would not be granted. The Mining Acts of the
relevant countries were also reviewed to confirm work
could be continued whilst renewals were in process. There
we no significant matters identified which indicated the
licenses would not be renewed.
Whilst the limited spending on the Eureka Project was
identified as an indicator of impairment, based on a
review of the expiry dates of the licences, potential future
funding and the intention to continue the exploration and
evaluation of this asset, the directors’ assessment that no
impairment was
to be
appropriate.
required was considered
Our audit work included, but was not restricted to:
• Reviewing the investments balances for indicators
• Assessing
the
appropriateness
of impairment in accordance with IAS 36;
of
the
methodology applied by management in their
assessment of the recoverable amount of
intragroup loans by comparing it to the Group’s
accounting policy and IAS 36;
• Assessing management‘s evaluation of
the
recoverable amounts of
loans
including review of the impairment provisions and
net asset values of components that have
intercompany debt;
intergroup
• Checking that
intergroup
loans have been
reconciled and confirming that there are no
material differences.
Key observations
The investment balance correlates with the Mankayan
Project, Eureka Project, Hope Copper Gold Project, and
Kanye Manganese Project, held by subsidiaries. Our
to our
impairment
assessment of
the
corresponding exploration assets.
linked
impairment on
indicators of
review was
therefore
No further impairments were considered necessary.
33
Impairment of investments and loans
in the Parent Company
International
Under
Accounting
Standard 36 ‘Impairment of Assets’,
companies are required to assess
whether there is any indication that an
asset may be
impaired at each
reporting date.
involves
Management assessment
significant
and
judgements
assumptions such as the timing and
extent and probability of future cash
flow.
investments of
The Company has
£9.3m
(2021: £6.07m) comprising
investments and loans to subsidiaries
of £7.1m (2021: £5.8m), investments
in joint ventures £nil (2021: £228k) and
investments held at FVPL of £2.3m
(2021: £78k). In conjunction with the
exploration assets, the investments
represent the primary balance on the
Company balance sheet and there is a
risk it could be impaired and that
loans may not be
intragroup
recoverable as a
the
subsidiary companies incurring losses.
result of
identified
loans due
the
therefore
We
impairment of
from
subsidiary companies as a key audit
matter
financial
in the Company
statements, which was one of the
Key audit matter
How the matter was addressed during the audit
most significant assessed risks of
material misstatement.
Valuation and accounting treatment
of convertible loan facility
The Company and Group has a
convertible loan instrument of £700k
(2021: £Nil).
instruments
can be
Convertible
complex, containing a number of
features which can have a significant
impact on the accounting. Therefore,
management were to determine the
correct treatment for the individual
components.
We therefore identified the valuation
and accounting treatment of the
convertible loan as a key audit matter
in the Company and Group financial
statements.
Our audit work included, but was not restricted to:
• Obtaining and reviewing the convertible loan
agreement for key terms which determine the
accounting treatment
• Assessing appropriateness of the accounting
treatment under IFRS 9 Financial Instruments and
IAS 32 Presentation of Financial Instruments
• Review of the key assumptions used to determine
liability and equity
fair value of the
the
component
Key observations
The convertible loan comprises a liability and equity
component. The fair value of equity component has been
calculated at 25% being the estimated rate available on an
unsecured loan with no convertible option.
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
Overall materiality
We determined materiality for
the financial statements as a
whole to be:
How we determine it
Rationale for benchmarks
applied
Group
£194,000 (2021: £170,000)
Parent
£194,000 (2021: £170,000)
Based on the main key
indicator, being 2% of the net
assets of the Group
2% of net assets of the Parent
Company exceeded the Group
materiality amount therefore this
was capped at Group materiality.
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.
34
Performance materiality
Specific materiality
£145,500 (2021: £127,500)
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.
We also determine a lower level of specific materiality for certain
areas such as directors’ remuneration and related party
transactions of £2,000 (2021: £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
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.
35
Responsibilities of directors
As explained more fully in the statement of directors’ responsibilities, set out on page 19, 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.
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 exploration laws and regulations in the
countries the Group operates, and company law 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 preparation of the financial statements such as the Companies Act 2006 and QCA
code. 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 overstatement of assets.
Audit procedures performed included: review of the financial statement disclosures to underlying supporting
documentation, review of legal and professional expenditure, 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.
36
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.
James Astley
(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
29 June 2023
37
Consolidated Statement of Profit and Loss
For the year ended 31 December 2022
CONTINUING OPERATIONS
Group revenue
Cost of sales
Gross profit/(loss)
Operating expenses
Share based payments
Operating loss
Other gains
Impairment of assets
Profit/(loss)before taxation
Taxation
Notes
Year ended
31 December
2022
£’000
Restated
Year ended
31 December
2021
£’000
-
-
-
(668)
(29)
(697)
2,133
-
1,436
-
-
-
-
(788)
(160)
(948)
-
(318)
(1,266)
-
3
3
4
11
5
6
Profit/(loss) for the financial year from continuing
operations
1,436
(1,266)
Profit/(loss) for the financial year
1,436
(1,266)
Attributable to:
Owners of the Company
- Continuing operations
- Discontinued operations
Non-controlling interest
Profit/(loss) per share (pence)
Basic profit/loss per share from continuing operations
Diluted profit/loss per share from continuing operations
7
7
1,436
1,436
-
-
1,436
0.03
0.02
(1,266)
(1,266)
-
-
(1,266)
(0.03)
(0.03)
38
Consolidated Statement of Other Comprehensive Income
For the year ended 31 December 2022
Other comprehensive income:
Loss for the financial year
Items that may be reclassified to profit or loss:
Foreign currency reserve movement
Non-controlling interest
Total comprehensive loss for the financial year
Attributable to:
Owners of the Company
Non-controlling interest
Year ended
31 December
2022
£’000
Restated
Year ended
31 December
2021
£’000
1,436
(120)
12
1,328
1,328
-
1,328
(1,266)
(40)
-
(1,306)
(1,306)
-
(1,306)
39
Consolidated Statement of Changes in Equity
For the year ended 31 December 2022
Year ended 31 December
2022
Balance at 1 January 2022
restated
Current year profit
Foreign currency reserve
Total comprehensive loss for
the year
Shares issued – In lieu of fees
Warrants issued to
shareholders
Warrants exercised
Warrant expired
Equity component of
borrowings
Balance at 31 December
2022
Year ended 31 December
2021
Balance at 1 January 2021
Current year loss
Foreign currency reserve
Prior year adjustment (Note
25)
Total comprehensive loss for
the year restated
Proceeds from shares issued
Share issue costs
Shares issued - Acquisitions
Shares issued – Acquisitions
(2020)2
Shares issued – Legal fees
Warrants issued to
shareholders
Warrants exercised
Share options granted
Balance at 31 December
2021 restated
Share
Capital
£’000
Share
Premium
£’000
Other
Reserves1
£’000
Retained
Losses
£’000
Non
Controlling
interest
£’000
Total
Equity
£’000
2,076
-
-
39,303
-
-
3,781
-
(120)
(37,160)
1,436
-
(12)
12
-
7,988
1,448
(120)
-
2
-
1
-
-
-
162
-
42
-
-
(120)
-
1,436
-
12
-
1,328
164
30
(6)
(167)
154
-
6
167
-
-
-
-
-
30
43
-
154
2,079
39,507
3,672
(35,551)
-
9,707
Share
Capital
£’000
Share
Premium
£’000
Other
Reserves1
£’000
Retained
Losses
£’000
Non
Controlling
interest
£’000
Total
Equity
£’000
2,049
-
-
39,125
-
-
1,523
-
(40)
(35,674)
(1,058)
-
(12)
-
-
7,011
(1,058)
(40)
-
-
-
(208)
-
(208)
-
18
-
6
-
1
-
2
-
-
1,182
(144)
44
(1,120)
71
-
145
-
(40)
-
-
711
1,120
-
(1,266)
-
-
-
-
-
300
(50)
217
(270)
50
-
-
-
-
-
(1,306)
1,200
(144)
761
-
-
-
-
-
-
72
30
147
217
2,076
39,303
3,781
(37,160)
(12)
7,988
1 Other reserves is made up of the share-based payment, foreign exchange and merger reserve.
2 Share premium on acquisitions during the year to 31 December 2020 have been reclassified to merger
reserves during the previous year.
40
Company Statement of Changes in Equity
For the year ended 31 December 2022
Year ended 31 December 2021
Balance at 1 January 2022
Current year loss
Total comprehensive loss for the year
Shares issued – In lieu of fees
Warrants issued to shareholders
Warrants exercised
Warrant expired
Equity component of borrowings
Share
Capital
£’000
Share
Premium
£’000
Other
Reserves1
£’000
Retained
Losses
£’000
Total
Equity
£’000
2,076
-
39,303
-
3,298
-
(35,249)
1,737
9,428
1,737
-
2
-
1
-
-
-
162
-
42
-
-
-
-
30
(6)
(167)
154
1,737
-
-
6
167
-
1,737
164
30
43
-
154
Balance at 31 December 2022
2,079
39,507
3,309
(33,339)
11,556
Year ended 31 December 2021
Balance at 1 January 2021
Current year loss
Total comprehensive loss for the year
Proceeds from shares issued
Share issue costs
Shares issued - Acquisitions
Shares issued – Acquisitions (2020)2
Share Issued – Legal fees
Warrants issued to shareholders
Warrants exercised
Share options granted
Balance at 31 December 2021
Share
Capital
£’000
Share
Premium
£’000
Other
Reserves1
£’000
Retained
Losses
£’000
Total
Equity
£’000
2,049
-
39,125
-
1,000
-
(33,818)
(1,211)
8,356
(1,211)
-
18
-
6
-
1
-
2
-
2,076
-
1,182
(144)
44
(1,120)
71
-
145
-
39,303
-
-
-
711
1,120
-
300
(50)
217
3,298
(1,211)
-
-
-
-
-
(270)
50
-
(35,249)
(1,211)
1,200
(144)
761
-
72
30
147
217
9,428
1 Other reserves is made up of the share-based payment, foreign exchange and merger reserve.
2 Share premium on acquisitions during the year to 31 December 2020 have been reclassified to merger
reserves during the previous year.
41
Consolidated and Company Balance Sheets
As at 31 December 2022
Consolidated
Company
2022
£’000
Restated
2021
£’000
2022
£’000
2021
£’000
Notes
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
Borrowings
Total current liabilities
NET ASSETS
EQUITY
Share capital
Share premium
Share-based payment reserve
Foreign exchange reserve
Merger reserve
Other reserves
Retained losses
Non-controlling interests
TOTAL EQUITY
10
11
12
13
14
15
17
17
18
15
2
2,260
8,398
10,660
76
57
133
133
2
49
7,692
7,743
-
9,328
3,129
12,457
48
728
776
776
54
47
101
101
-
6,066
3,129
9,195
26
710
736
736
10,793
8,519
12,558
9,931
463
623
1,086
531
-
531
379
623
1,002
503
-
503
9,707
7,988
11,556
9,428
2,079
39,507
1,181
506
1,831
154
(35,551)
9,707
-
2,076
39,303
1,325
625
1,831
-
(37,160)
8,000
(12)
2,079
39,507
1,181
143
1,831
154
(33,339)
11,556
-
2,076
39,303
1,325
142
1,831
-
(35,249)
9,428
-
9,707
7,988
11,556
9,428
In accordance with the provisions of Section 408 of the Companies Act 2006, the Parent Company has not presented a
separate income statement. A profit for the year ended 31 December 2022 of £1,737,000 (2021 loss: £1,211,000) has
been included in the consolidated income statement.
These financial statements were approved by the Board of Directors on 29 June 2023 and signed on its behalf by:
Mr Colin Bird
Executive Chairman
Company Registration No. 02918391
42
Consolidated and Company Statements of Cash Flows
For the year ended 31 December 2022
Consolidated
Year
ended 31
December
2022
£’000
Year
ended 31
December
2021
£’000
Company
Year
ended 31
December
2022
£’000
Year
ended 31
December
2021
£’000
Notes
Net cash outflow from operating activities
20
(368)
(837)
(356)
(507)
Cash flows from investing activities
Exploration expenditure
Investment in subsidiary
Loans to subsidiaries
Payments to acquire investments
Cash flows from financing activities
Proceeds from issuance of ordinary shares
Proceeds from borrowings
21
(968)
-
-
(78)
(1,046)
43
700
743
(801)
-
-
-
(801)
1,235
-
1,235
-
-
(972)
(78)
(1,050)
43
700
743
-
(345)
(766)
-
(1,111)
1,235
-
1,235
(Decrease)/increase in cash
(671)
(403)
(663)
(383)
Cash and cash equivalents at beginning of
year
Foreign exchange movement
728
1,128
3
710
-
1,094
(1)
Cash and cash equivalents at end of year
57
728
47
710
43
Notes to the financial statements
For the year ended 31 December 2022
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 AIM 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 profit from all operations for the year ended 31 December 2022 after tax of
£1,436,000 after a fair value adjustment (see note 11). Excluding the fair value adjustment the loss
from all operations for the year ended 31 December 2022 after tax was £697,000 (2021 restated:
£1,266,000). The Group had negative cash flows from operations and is currently not generating
revenues. Cash and cash equivalents were £57,000 as at 31 December 2022. Post year ended on
12 April 2023 the Company announced a £750,000 fundraising from directors, existing shareholders
and investors advance the Hope Copper-Gold Project in Namibia whilst the Company awaits the
award of a mining licence ahead of facilitating copper gold mining operations, for the metallurgical
test work on the Kanye manganese project in Botswana and for the Company’s other projects as
well as working capital. The Company also the issued shares to Directors and PDMR at a premium
to the share price to settle £174,961 of accrued fees ("Conversion Shares") and the settling of
£101,250 of consultancy fees by the issue of shares to consultants ("Consultant Shares") to conserve
the Company's working capital. 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.
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 UK adopted International Accounting Standards including IFRS 6 ‘Exploration
for and Evaluation of Mineral Resources’.
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.
44
Notes to the financial statements (continued)
For the year ended 31 December 2022
1.1
Accounting policies (continued)
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
At the date of authorisation of these financial statements, the company has not early adopted the
following amendments to Standards and Interpretations that have been issued but are not yet
effective:
Standard or Interpretation
Effective for annual periods
commencing on or after
Amendments to IAS 1 and IFRS Practice Statement 2:
Disclosure of Accounting Policies
1 January 2023
Amendments to IAS 8: Definition of Accounting Estimates
1 January 2023
Amendments to IAS 12: Deferred Tax Related to Assets and
Liabilities arising from a Single Transaction.
1 January 2023
Amendments to IAS 1: Classification of Liabilities as Current or
Non-Current
1 January 2024
Amendments to IFRS 16 Leases: Liability in a Sale and
Leaseback
As yet, none of these have been endorsed for use in the UK and will not be adopted until such time
as endorsement is confirmed. The directors do not expect any material impact as a result of adopting
the standards and amendments listed above in the financial year they become effective.
1 January 2024
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 subsidiary or 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.
45
Notes to the financial statements (continued)
For the year ended 31 December 2022
1.2
Significant accounting judgments, estimates and assumptions (continued)
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 (note 12).
Investments at fair value through profit and loss (‘Equity investments’)
Equity investments are initially measured at cost, including transaction costs. At each reporting date,
the fair value is assessed and any resultant gains and losses are included directly in the Consolidated
Statement of Profit and Loss under IFRS 9.
Valuation of Equity Instruments Convertible Loan (Borrowings)
Convertible instruments can be complex, containing a number of features which can have a
significant impact on the accounting under IFRS 9 Financial Instruments and IAS 32 Presentation of
Financial Instruments. The Company determined that the £700,000 convertible note drawndown
during the period (note 15) was an equity instrument as the conversion feature results in the
conversion of a fixed amount of stated principal into a fixed number of shares, it satisfies the ‘fixed
for fixed’ criterion and, therefore, it is classified as an equity instrument which requires the valuation
of the liability component and the equity conversion component. The fair value of the liability
component, included in current borrowings, at inception was calculated using a market interest rate
for an equivalent instrument without conversion option. The discount rate applied was 25%.
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).
1.3
1.4
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
46
Notes to the financial statements (continued)
For the year ended 31 December 2022
1.5
Financial instruments (continued)
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 expected credit
losses of trade receivables which is presented within other expenses.
Classifications are determined by both:
• The entities business model for managing the financial asset;
• The contractual cash flow characteristics of the financial assets.
Subsequent measurement financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and
are not designated as FVPL):
•
•
they are held within a business model whose objective is to hold the financial assets and
collect its contractual cash flows
the contractual terms of the financial assets give rise to cash flows that are solely
payments of principal and interest on the principal amount outstanding
After initial recognition, these are measured at amortised cost using the effective interest method.
Discounting is omitted where the effect of discounting is immaterial. The Group’s cash and cash
equivalents, trade and most other receivables fall into this category of financial instruments.
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).
Investments at fair value through profit and loss (‘Equity investments’)
Equity investments are initially measured at cost, including transaction costs. At each reporting date,
the fair value is assessed and any resultant gains and losses are included directly in the Consolidated
Statement of Profit and Loss under IFRS 9.
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.
IFRS 9’s impairment requirements use more forward-looking information to recognize expected
credit losses – the ‘expected credit losses (“ECL”) model’.
47
Notes to the financial statements (continued)
For the year ended 31 December 2022
1.5
Financial instruments (continued)
The Group considers a broader range of information when assessing credit risk and measuring
expected credit losses, including past events, current conditions, reasonable and supportable
forecasts that affect the expected collectability of the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is made between:
•
•
financial instruments that have not deteriorated significantly in credit quality since
initial recognition or that have low credit risk (‘Stage 1’) and
financial instruments that have deteriorated significantly in credit quality since initial
recognition and whose credit risk is not low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting
date.
‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit
losses’ are recognised for the second category.
Measurement of the expected credit losses is determined by a probability-weighted estimate of
credit losses over the expected life of the financial instrument.
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting for trade and other receivables as well
as contract assets and records the loss allowance at the amount equal to the expected lifetime credit
losses. In using this practical expedient, the Group uses its historical experience, external indicators
and forward-looking information to calculate the expected credit losses using a provision matrix.
Classification and measurement of financial liabilities
The Group’s financial liabilities include trade and other payables and borrowings classified as an
Equity Instrument..
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.
Equity Investments are accounted for under IFRS 9 Financial Instruments and IAS 32 Presentation
of Financial Instruments which requires the valuation of the liability component and the equity
conversion component. The fair value of the liability component, is included in current borrowings,
at inception using a market interest rate for an equivalent instrument without conversion option and
the equity conversion component is expensed in the income statement within finance costs.
Cash and cash equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments
that are readily convertible to known amounts of cash and which are subject to an insignificant risk
of changes in value. For the purposes of the Cash Flow Statement, cash and cash equivalents
consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.
Trade and other receivables
Trade receivables are recognised and carried at original invoice amount less an allowance for any
expected credit loss amounts.
1.6
1.7
48
Notes to the financial statements (continued)
For the year ended 31 December 2022
1.8
Foreign currency transactions and balances
(i) Functional and presentational currency
Items included in the Group’s financial statements are measured using Pounds Sterling (“£”), which
is the currency of the primary economic environment in which the Group operates (“the functional
currency”). The financial statements are presented in Pounds Sterling (“£”), which is the functional
currency of the Company and is the Group’s presentational currency.
The individual financial statements of each Group company are presented in the functional currency
of the primary economic environment in which it operates.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in the income statement.
Transactions in the accounts of individual Group companies are recorded at the rate of exchange
ruling on the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are translated at the rates ruling at the balance sheet date. All differences are taken to
the income statement.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the
Group’s foreign operations are translated at exchange rates prevailing on the balance sheet date.
Income and expense items are translated at the average exchange rates for the year. Exchange
differences arising recognised in other comprehensive income and transferred to the Group’s
translation reserve within equity as ‘Other reserves’. Upon disposal of foreign operations, such
translation differences are derecognised as an income or as expenses in the year in which the
operation is disposed of in other comprehensive income.
Taxation
Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the
amount already paid in respect of current and prior periods exceeds the amount due for those
periods, the excess is recognised as an asset. Deferred tax is provided in full in respect of taxation
deferred by timing differences between the treatment of certain items for taxation and accounting
purposes. A deferred tax asset is recognised for all deductible temporary differences to the extent
that it is probable that taxable profit will be available against which the deductible temporary
difference can be utilised. A deferred tax asset is not recognised when it arises from the initial
recognition of an asset or liability in a transaction at the time of the transaction, affects neither
accounting profit nor taxable profit. Deferred tax balances are not discounted.
Plant and equipment
Plant and equipment are stated at historical cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included
in the asset's carrying amount, only when it is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item can be measured reliably. All other repairs
and maintenance are charged to the profit and loss account during the financial year in which they
are incurred.
Depreciation on these assets is calculated using the diminishing value method to allocate the cost
less residual values over their estimated useful lives as follows:
Plant and equipment - 33.33%
Fixtures and fittings - 7.5%
The assets' residual values and useful lives are reviewed, and adjusted if appropriate at the balance
sheet date.
1.9
1.10
49
Notes to the financial statements (continued)
For the year ended 31 December 2022
1.11
1.12
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.
1.13 Exploration, evaluation and development expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each
identifiable area of interest. These costs are only carried forward to the extent that they are expected
to be recouped through the successful development of the area or where activities in the area have not
yet reached a stage which permits reasonable assessment of the existence of economically
recoverable reserves. Accumulated costs in relation to an abandoned area are written off in full in the
year in which the decision to abandon the area is made. When production commences, the
accumulated costs for the relevant area of interest are transferred to development assets and amortised
over the life of the area according to the rate of depletion of the economically recoverable reserves. A
regular review is undertaken of each area of interest to determine the appropriateness of continuing to
carry forward costs in relation to that area of interest.
Costs of site restoration are provided when an obligating event occurs from when exploration
commences and are included in the costs of that stage. Site restoration costs include the dismantling
and removal of mining plant, equipment and building structures, waste removal and rehabilitation of the
site in accordance with clauses of the mining permits. Such costs have been determined using
estimates of future costs, current legal requirements and technology on a discounted basis.
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.
1.14
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.
50
Notes to the financial statements (continued)
For the year ended 31 December 2022
2.
Segment reporting
For the purposes of segmental information, the operations of the Group are focused in geographical segments, namely the UK, Argentina, Namibia, and Botswana,
and comprise one class of business: the exploration, evaluation and development of mineral resources. The UK is used for the administration of the Group and
includes equity investments in non-group companies.
The Group’s loss before tax arose from its operations in the UK, Argentina, Namibia, and Botswana
For the year ended 31 December 2022
Consolidated loss before tax
Included in the consolidated loss before tax are the following
income/(expense) items:
Foreign currency loss
Total Assets
Total Liabilities
For the year ended 31 December 2021
Consolidated loss before tax restated
Included in the consolidated loss before tax are the following
income/(expense) items:
Foreign currency loss
Total Assets restated
Total Liabilities
UK Argentina
£’000
£’000
1,554
(119)
125
-
Continuing operations
Namibia
£’000
Botswana
£’000
(1)
-
2
-
2,386
(1,004)
4,856
(82)
2,522
-
1,029
-
Total
£’000
1,436
125
10,793
(1,086)
UK Argentina
£’000
£’000
(1,175)
(87)
(22)
686
(506)
-
5,201
(25)
Continuing operations
Botswana
Namibia
£’000
£’000
Total
£’000
(3)
-
1,840
-
(1)
(1,266)
-
792
-
(22)
8,519
(531)
51
Notes to the financial statements (continued)
For the year ended 31 December 2022
3.
Operating expenses
On-going operating expenses
Share option expense
4.
Operating loss
The Group’s operating loss is stated after charging:
Parent Company auditor’s remuneration - audit services
Parent Company auditor’s remuneration - tax services
Parent Company auditor’s remuneration - other services
Operating lease - premises
Foreign exchange (gain)/ loss
5.
Impairment of assets
Provision for impairment of investment – Kalengwa Project
(Zambia) (1)
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
668
29
697
788
160
948
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
42
3
7
14
(125)
32
-
2
15
22
Year ended
31 December
2022
£’000
Restated
Year ended
31 December
2021
£’000
-
-
318
318
(1) As per note 12.1 In light of technical and regulatory issues related to the Kalengwa project the
Company has with the agreement of its partners agreed to pause work on this project pending
resolution of these issues and accordingly has decided to make a full provision against its investment
in the Kalengwa project.
6.
Taxation
UK Corporation tax
- current year
Total current tax charge
Factors affecting the tax charge for the year:
Profit/(loss) on ordinary activities before tax
Profit/(loss) on ordinary activities multiplied by the
standard rate of UK corporation tax of 19% (2021: 19%)
Effects of:
Non-deductible expenses
Tax losses (unprovided deferred tax)
Total tax charge
52
Year ended
31 December
2022
£’000
-
Restated
Year ended
31 December
2021
£’000
-
-
-
1,436
(1,266)
273
-
(273)
-
(240)
-
240
-
Notes to the financial statements (continued)
For the year ended 31 December 2022
6.
Taxation (continued)
At 31 December 2022, the Group had unused losses carried forward of £12,597,000 (2021 restated:
£14,033,000) 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 2022 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 25%, is estimated to be £3,149,000 (2021 restated:
£3,508,250). 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.
7.
Loss per share
The basic and diluted profit per share have been calculated using the profit attributable to equity
holders of the Company for the year ended 31 December 2022 of £1,436,000 (2021 restated:
£1,266,000 loss) of which £1,436,000 (2021 restated: £1,266,000 loss) was from Continuing
Operations and £nil (2021: nil) was from Discontinued Operations. The basic loss per share was
calculated using a weighted average number of shares in issue of 5,051,721,316 (2021:
4,015,035,915).
The diluted loss per share has been calculated using a weighted average number of shares in issue
and to be issued of 6,262,005,415 (2021: 4,813,590,723).
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.
8.
Directors’ emoluments
The Directors’ emoluments of the Group are as follows:
Wages, salaries, fees and share options
Refer to page 17 for details of the remuneration of each director.
9.
Employee information
Average number of employees including directors and
consultants:
Management and technical
Salaries (excluding directors’ remuneration)
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
182
290
Year ended
31 December
2022
Year ended
31 December
2021
5
5
Year ended
31 December
2022
£’000
-
Year ended
31 December
2021
£’000
-
53
Notes to the financial statements (continued)
For the year ended 31 December 2022
10.
Plant and equipment
Consolidated
2022
£’000
2021
£’000
Company
2022
£’000
2021
£’000
Plant and equipment
Cost
At beginning of year
Exchange differences
At end of year
Depreciation
At beginning of year
Charge for the year
Exchange differences
At end of year
Net book value at end of year
11.
Investments
67
-
67
65
-
-
65
2
67
-
67
64
1
-
65
2
Consolidated
2022
£’000
2021
£’000
Loan to associate
Impairment provision
Investments under fair value through
profit and loss (note 11.1)
Debt instruments under fair value
through profit and loss (note 11.1)
Investment in subsidiaries (note 11.2)
Impairment Provision
Investments in Joint Ventures
Loan to subsidiaries
Provision for subsidiary loan
recoverability
-
-
2,182
78
-
-
-
-
-
211
(211)
49
-
-
-
-
-
-
60
-
60
60
-
-
60
-
Company
2022
£’000
-
-
2,182
78
2,771
-
-
4,297
-
11.1
Investments
2,260
49
9,328
60
-
60
59
1
-
60
-
2021
£’000
124
(124)
49
-
2,978
(208)
228
3,779
(760)
6,066
On 13 September 2021 the Company, entered into a conditional agreement with IDM Mankayan Pty
Ltd (“IDM Mankayan”), a company incorporated in Australia, to take the Mankayan Project in the
Philippines forward (the “IDM Mankayan Agreement”). The IDM Mankayan Agreement completed
on 20 October 2021 and the Company paid A$90,000 (GBP49K)_to IDM Mankayan and owns 44
IDM Mankayan shares (the “IDM Mankayan Investment”) of the 160 shares issued by IDM
Mankayan but has no management control over or right to appoint directors of IDM Mankayan which
is why the IDM Mankayan Investment is held as an equity investment under IFRS 9. The Mankayan
project's MPSA was originally issued for a standard 25 year period, which expired on 11 November
2021, and as announced by the Company on 18 March 2022 has been renewed for a second 25 year
term with effect from 12 November 2021.
On 26 October 2022 the Company entered into a conditional share purchase agreement with IDM
International Ltd (“IDM International”) the parent company of IDM Mankayan to sell the IDM
Mankayan Investment for 19,381,054 fully paid ordinary shares of IDM International (the “IDM
International SPA”). The IDM International SPA was conditional on approval of the IDM International
SPA by the shareholders of IDM International and completed post the year end on 27 March 2023.
54
Notes to the financial statements (continued)
For the year ended 31 December 2022
11.1
Investments (continued)
On 26 October 2022 the Company entered into a convertible loan note agreement with IDM
International to invest A$137,500 (GBP 78K) in IDM International to acquire 137,500 notes (the “IDM
International Convertible Loan Note Investment”). The Company has the right to convert the whole
but not part of the face value of each Note into IDM International Shares at A$0.20 at any time (and
as many times) prior to the Maturity Date which is 11 November 2026. As at 31 December 2022, the
fair value of the debt instrument was £78k and no unrealised gain/loss was recognised.
Investments under fair value through
profit and loss
Unquoted investments 1 January 2022
Increase in fair value during year1
Unquoted investments at 31 December
2022
Consolidated
2022
£’000
2021
£’000
49
2,133
2,182
49
-
49
Company
2022
£’000
49
2,133
2,182
2021
£’000
49
-
49
1 19,381,054 shares valued at AUD$0.20 (£0.112) being the share subscription price at which at which third
parties subscribed for shares in IDM International on 4 April 2023.
Investments are initially valued at cost. At each reporting date these investments are measured at fair
value with any gains or losses recognised through the Consolidated Statement of Profit and Loss. In
2022, the Group and Company had unrealised gains of £2,133,000.
This along with other valuations are estimates based on the Directors’ assessment of the performance
of the underlying investment and reliable information such as recent fundraising. There is however
inherent uncertainty when valuing private companies such as these in the natural resources sector.
11.2
Investments - subsidiary undertakings
The Company’s significant subsidiary undertakings held as fixed asset investments as at
31 December 2022 were as follows:
Company Name and
registered office
Country of
incorporation
Principal
Activity
Percentage of
ordinary share
capital held
Held directly
Tanzania Gold Limited
FDW House, Blackthorn Business Park
Coes Road, Dundalk, Co. Louth, Ireland
Virgo Resources Limited
Minerva Corporate Level 8, 99 St
Georges Terrace, Perth, WA 6000,
Australia
Hope Copper Gold Investments Ltd
Tortola Pier Park, Building 1, Second
Floor, Wickhams Cay 1, Road Town,
Tortola, British Virgin Islands
Held indirectly
Anglo Tanzania Gold Limited
Quadrant House, 4 Thomas More
Square, London, E1W 1YW
Ireland
Holding Company
100%
Australia
Holding Company
100%
BVI
Holding Company
100%
England
Gold and copper
exploration
100%
55
Notes to the financial statements (continued)
For the year ended 31 December 2022
11.2
Investments - subsidiary undertakings (continued)
Eureka Mining & Exploration SA
Independencia 219, San Salvador de
Jujuy, Provincia de Jujuy, Argentina
4600
Puna Metals SA
Independencia 219, San Salvador de
Jujuy, Provincia de Jujuy, Argentina
4600
Hepburn Resources Pty Ltd
Minerva Corporate Level 8, 99 St
Georges Terrace, Perth, WA 6000,
Australia
Hope and Gorob Mining Pty Ltd
Unit 3, 2nd Floor, Ausspannn Plaza, Dr
Agostinho Neto Road, Ausspannplatz,
Windhoek, Namibia
Hope Namibia Exploration Pty Ltd
Unit 3, 2nd Floor, Ausspannn Plaza, Dr
Agostinho Neto Road, Ausspannplatz,
Windhoek, Namibia
Metrock Resources Pty Ltd
Minerva Corporate Level 8, 99 St
Georges Terrace, Perth, WA 6000,
Australia
Coastal Resources Pty Ltd
Minerva Corporate Level 8, 99 St
Georges Terrace, Perth, WA 6000,
Australia
Coastal Minerals Proprietary Limited
Plot 102 ,Unit 13, Gaborone
International Commerce
Park, Gaborone, Botswana
Cypress Sources Proprietary Limited
Plot 102 ,Unit 13, Gaborone
International Commerce
Park, Gaborone, Botswana
Argentina
Gold and copper
exploration
Argentina
Gold and copper
exploration
Australia
Gold and copper
exploration
Namibia
Gold and copper
exploration
Namibia
Gold and copper
exploration
100%
100%
100%
70%
80%
Australia
Holding Company
100%
Australia
Gold and copper
exploration
Botswana
Gold and copper
exploration
Botswana
Gold and copper
exploration
100%
100%
100%
12.
Exploration and evaluation assets
Consolidated
Company
Balance at beginning of year
Acquisitions during year
- Botswana (note 12.1)
Exploration expenditure
Write back of liability in relation to
joint venture expenditure (note
12.1)
Provision for impairment (note 5)
Carried forward
at end of year
2022
£’000
7,692
-
934
(228)
Restated
2021
£’000
6,405
532
1,073
-
-
(318)
2022
£’000
2021
£’000
3,129
3,129
-
-
-
-
-
-
-
-
8,398
7,692
3,129
3,129
56
Notes to the financial statements (continued)
For the year ended 31 December 2022
12.1 Exploration Assets
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.
A new Environmental Impact Assessment (EIA) was presented in 2021 and approved in February 2023
in respect of 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 new EIA approval covers environmental monitoring and a drill
program encompassing 9 drill holes of 200-300 metres each. The Company will engage an
environmental consultant to conduct the environmental monitoring in Q3 2023 and is seeking a joint
venture partner to work with in relation to an exploration drilling program.
Notwithstanding the absence of new exploration activities on-site during the period the directors, given
their intention post COVID-19 in Argentina to focus on finding a joint venture partner for the project
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. The capitalised cost at 31 December 2022 was £4,775,249.
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 which comprise i) 70% of Hope and Gorob
Mining Pty Ltd incorporated in Namibia which owns EPL5796, and ii) 80% of Hope Namibia Mineral
Exploration Pty Ltd Incorporated in Namibia which owns EPL6605 and iEPL7170. The balance of the
project is held by local Namibian partners.
JORC Resource: The Hope project area on EPL5796 contains a combined gross mineral resource
within three closely-spaced deposits (namely Hope, Gorob-Vendome and Anomaly) of 10.18Mt at 1.89%
Cu and 0.3 g/t Au at 0.7% Cu cut-off reported in accordance with the JORC code (2012), with 192kt of
contained Cu and 3,190kg of contained Au. Approximately 30% of the Mineral Resource tonnage is
classified in the Indicated Mineral Resource category with the balance in the Inferred Mineral Resource
category and was based on 339 drill holes for a total of 63,855 metres.
The Hope deposit itself has an Indicated Mineral Resource of 3.09Mt @ 2.53% Cu and 0.84g/t Au at a
0.7% Cu cut-off. Historic drill intersections include 23.31m @ 1.59% Cu & 0.23g/t Au from 464.09m,
including 9.68m @ 3.18% Cu & 0.42g/t Au from 477.17m (hole HDD82) and 10.12m @ 5.72% Cu &
0.56g/t Au from 525.57m (hole HDD91).
During the period on 7 February 2022, 15 March 2022, 14 June 2022 and 9 August 2022 the Company
announced positive results in relation to exploration activities undertaken post acquisition which
support the Company’s confidence in the Hope Copper-Gold Project. The 9 August 2022
announcement highlighted that; the Company has submitted a mining licence application for the Hope-
Gorob copper-gold project area on EPL5796 to the Namibian authorities; the Mining Licence
application is based on an updated Scoping Study completed in May 2022 by external consultants
incorporating historic mineral resource estimates which did not yet include additional near-surface
copper-gold resources generated by the Company's shallow drill programme completed in early 2022;
the Scoping Study indicated that the potential for the development of a surface and underground
copper mine exists at the Hope and Gorob deposits and recommended completion of the additional
work required for optimisation of mine development plans including the work necessary to obtain
granting of environmental permits and also recommended that further exploration work continues to
fully define resource potential at these deposits; the recently completed shallow drilling has continued
to extend the strike and up-dip extension of mineralisation at both the Hope and Vendome prospects.
The new drillholes have added more than 1.5km to the mineralised strike length, with the potential to
add significantly to the previously estimated mineral resource; and continuous copper and gold
mineralisation has been intersected in drill intercepts over substantial downhole widths of up to
29.74m.
57
Notes to the financial statements (continued)
For the year ended 31 December 2022
12.1 Exploration Assets (continued)
Reported downhole assay peak intercepts from the shallow drill programme on EPL5796 include:
o 4.6% Cu, 2.80g/t Au over 3.81m from 39.32m depth in hole VED001
o 2.4% Cu, 0.36g/t Au over 14.28m from 25.2m depth in hole HPD003
o 1.90% Cu, 0.36g/t Au over 9.30m from 33.80m depth in hole HPD005
o 1.49% Cu, 0.23g/t Au over 16.97m from 15.50m depth in hole HPD004
It was also noted that gold values typically return grades of approximately 0.3g/t Au providing a
significant potential by-product value addition; and the drill programme was successful in confirming
the presence of shallow mineralisation at three prospects to date. Results are sufficiently encouraging
to warrant further drilling along strike to evaluate an estimated additional linear 10km or more of
projected mineralisation never previously tested.
A renewal application has been made for EPL6605 to be renewed to 25 September 2024 which the
Company anticipates will be granted once the Ministry of Mines and Energy review has been
completed.
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. The capitalised cost at 31 December 2022 was
£2,596,041 which included capitalised exploration expenditure during the period of £683,648 (2021
£627,477).
Botswana
On 12 February 2021 the Company further to its announcement on 22 December 2020 announced the
completion of the acquisition of 100% of Metrock Resources Ltd (“Metrock”) and its manganese mineral
exploration licences in Southern Botswana comprising the Kanye Manganese Project (the “Kanye
Manganese Project”). The Kanye Manganese Project i) comprises a 1,668 sq. km land package with
125 km of potential on trend manganese mineralisation across the licences ii) has historical trenching
results have yielded in the case on one prospect of between 53% and 74% manganese oxide ("MnO"),
and iii) project area is near the ground of a TSX listed public company that has a preliminary economic
assessment showing high rates of return based on a MnO grade of 27.3.
The Kanye Manganese Project comprises collection of five prospecting licenses, namely PLs 129/2019 ,
421/2018, 423/2018, 424/2018, and PL 425/2018 (the "Project Licences"), 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 1,668 sq. km and provide the holder with the right
to prospect for Metals. Four licenses are held by Cypress Sources Pty Ltd, a 100% owned subsidiary of
Coastal Resources Pty Ltd which in turn is 100% owned by Metrock Resources Limited. The fifth licence
PL 129/2019 s held by Coastal Minerals Pty Ltd which is 100% owned by Coastal Resources Pty Ltd.
Reconnaissance mapping, prospecting and sampling work on the Kanye property since acquisition in
February 2021 (through October 2022) has been focussed on PL 129/2019 has highlighted the following;
in relation to PL 129/2019 up to four historic manganese occurrences were successfully located and
sampled in the field within an 8km-belt; 40 grab samples were obtained which assayed from traces up
to high-grade results of 67.18% MnO occurring at the Moshaneng borrow pit and 68.01% MnO at the
Mheelo prospect; geological mapping indicates that the target horizon hosting high-grade manganese
may extend continuously for at least 4km between the Loltware and Moshaneng prospects on the Bezant
ground; laboratory assays from trench sampling by Bezant at the Loltware manganese prospect
(announced on 22 March 2022) returned in-situ chip/grab sample peak results of 41.4% MnO, 49.23%
MnO and 40.83% MnO from one metre wide zones of siliceous manganese mineralisation within a
continuously mineralised zone of 40m @ 11.53% MnO; At the Moshaneng Borrow Pit, excavation of
shallow clays by a local contractor for road fill has exposed further manganese-rich pods over a width of
approximately 12-15m and a strike length of about 300m within a continuous 2km long soil anomaly.
58
Notes to the financial statements (continued)
For the year ended 31 December 2022
12.1 Exploration Assets (continued)
Maiden drill testing for both the Moshaneng and Loltware targets commenced in October 2022 and
comprised 11 mainly shallow, angled RC holes totaling 682m at Moshaneng prospect as well as one
short diamond drill hole at Loltware prospect the results of which were announced on 9 February2023
and highlighted; Moshaneng drilling intersected a zone of flat-lying detrital, supergene manganese-
iron mineralisation which appears to infill an irregular karst surface over a minimum strike length of
400m; potential for at least another 100m of strike extension to the southeast of holes MS-RC-07 and
MS-RC-012 would extend the total strike length to a minimum of 500m; less than 25% of the more
than 2km potential extent of the target defined by soil geochemistry has been drill tested; grades
compare favourably with reported grades on neighbouring more advanced manganese projects and
therefore the Kanye project warrants detailed evaluation and drilling with a view to establishing the
mineral resource potential; drilling at Loltware encountered encouraging manganese enhancement in
core, warranting further investigation.
The Moshaneng drill results included the following assay intervals:
• 6m @ 28.64% MnO from 6m depth in hole MS-RC-12
§
Including 4m @ 35.38% MnO from 8m depth
• 3m @ 21.85% MnO from 4m depth in hole MS-RC-06
3m @ 21.20% MnO from 2m depth in hole MS-RC-07
Post-acquisition there have been no indications that any impairment provisions are required in relation
to the carrying value of the Kanye Manganese Project.
The capitalised cost at 31 December 2022 was £1,028,984 which included capitalised exploration
expenditure during the period of £237,133 (2021 £260,024).
Cyprus
On 11 November 2021 the Company announced that it had entered into a Joint Venture Agreement
with Caerus Mineral Resources PLC in relation to three of Caerus’s copper gold projects in Cyprus.
The Bezant interims to 30 June 2022 (“Bezant Interims”) and 2021 accounts recognised a carrying
value of GBP228,307 under exploration and evaluation assets and a liability of GBP227,549 as
Bezant’s share of the Joint Venture expenditure. Following the change of management and business
direction announced by Caerus in 2022 the Company entered into discussions with Caerus in
relation to the Joint Venture. On 18 October 2022 the Company announced that following these
discussions, it was not possible for the parties to agree on a mutual way forward in relation to the
Joint Venture and it was mutually agreed to terminate the Joint Venture.
The Company therefore in the period made the following provisions in its Company and consolidated
accounts in relation to the Cyprus Joint venture:
Provision against exploration and evaluation assets
Write back of liability in relation to joint venture expenditure
Charge to Operating Expenses
2022
£
228,307
(227,549)
758
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”). Cash
consideration for the acquisition was US$250,000 (₤202,493) which was settled on 6 November
2020 by the issue of 76,923,077 shares and costs of £23,775. On 30 June 2022 the Company
announced in light of technical and regulatory issues related to the Kalengwa project the Company
had with the agreement of its partners agreed to pause work on this project pending resolution of
these issues. Accordingly in 2021 the Company made a provision of ₤318,000 in relation to the
Kalengwa Project to reduce its carrying value as at 31 December 2021 to Nil.
59
Notes to the financial statements (continued)
For the year ended 31 December 2022
13.
Trade and other receivables
Due within one year:
VAT recoverable
Other debtors
14.
Trade and other payables
Trade creditors
Directors
Accruals
Deferred acquisition costs (note 12)
15.
Borrowings
Balance at beginning of year
Convertible loan receipts
Equity allocation
Finance charge accrued
Consolidated
2022
£’000
2021
£’000
Company
2022
£’000
2021
£’000
47
29
76
19
29
48
25
29
54
19
7
26
Consolidated
2022
£’000
2021
£’000
Company
2022
£’000
2021
£’000
256
120
44
43
463
113
135
240
43
531
172
120
44
43
379
85
135
240
43
503
Consolidated
2022
£’000
2021
£’000
Company
2022
£’000
2021
£’000
-
700
(154)
77
623
-
-
-
-
-
-
700
(154)
77
623
-
-
-
-
-
As announced on 30 June 2022 the Company further to its announcement of 23 November 2021 confirmed
that it had issued two drawdown notices of £350,000 each (“Tranche 1” and “Tranche 2”) for a total amount
of £700,000 (the “Drawdowns”) under its £1,000,000 interest free unsecured convertible loan funding facility
with Sanderson Capital Partners Ltd (the “Lender”), a long-term shareholder in the Company (the “Facility”).
The amount drawdown is interest free and repayable in 12 months or can be converted at any time at the
Lender’s option into Bezant shares at fixed prices for Tranche 1 of £350,000, at 0.19 pence per share and for
Tranche 2 of £350,000 at 0.225 pence per share. As the conversion feature results in the conversion of a fixed
amount of stated principal into a fixed number of shares, it satisfies the ‘fixed for fixed’ criterion and, therefore,
it is classified as an equity instrument it is classified as an equity instrument. The value of the liability component
of £546,000 and the equity conversion component of £154,000 were determined at the date of the Drawdowns.
The fair value of the liability component, included in current borrowings, at inception was calculated using a
market interest rate for an equivalent instrument without conversion option. The discount rate applied was
25%.
Under the terms of the Facility the Lender is due;
i) a drawdown fee of £14,000 being 2% of the amount drawdown which was settled by the issue of 12,522,361
new ordinary shares of £0.00002 each (“Shares”) credited as fully paid at 0.1118 pence per share being the
five-day VWAP on 28 June 2022 (the “Drawdown Fee Shares”); and
ii) £350,000 of three year warrants over Shares (the “Warrants”). The exercise price for the Warrants are as
follows:
• £175,000 at 0.25 pence per share for the drawdown of Tranche 1; and
• £175,000 at 0.30 pence per share for the drawdown of Tranche 2.
60
Notes to the financial statements (continued)
For the year ended 31 December 2022
16.
Financial instruments
(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
2022
£’000
2
1
8
-
Assets
Liabilities
2021
£’000
9
2
9
-
2022
£’000
2
7
82
-
2021
£’000
15
111
42
1
11
20
91
169
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 2021.
US Dollars
AU Dollars
AR Pesos
2022
£’000
3
(1)
(5)
2021
£’000
(1)
-
1
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.
61
Notes to the financial statements (continued)
For the year ended 31 December 2022
17.
Share capital
Number
Authorised
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
Shares issued to settle directors’ and management fees
Shares issued to settle third party fees
Total ordinary shares at end of year
Allotted deferred shares, called up and fully paid
As at beginning of the period
Total deferred shares at end of period (1)
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 directors’ and management fees
Shares issued to settle third party fees
2022
£’000
100
9,900
2021
£’000
100
9,900
10,000
10,000
98
-
-
1
1
1
101
71
18
6
2
-
1
98
1,978
1,978
1,978
1,978
2,079
2,076
Number of
shares 2022
Number of
shares 2021
4,913,028,538
-
-
41,562,500
100,000,000(2)
26,808,075(3)
3,543,699,116
923,076,923
304,064,999
92,187,500
-
50,000,000
As at end of year
5,081,399,113
4,913,028,538
Deferred share capital is summarised below:
As at beginning of the year (1)
As at end of year
998,773,038
998,773,038
998,773,038
998,773,038
(1) 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 6 January 2022 the Company issued 100,000,000 shares to directors and management and
50,000,000 warrants over ordinary shares exercisable at 0.25 pence per ordinary shares valid until 4
November 2024 to settle outstanding fees of £130,000.
(3) (a) On 6 January 2022 the Company issued 14,285,714 shares to settle professional fees of £20,000.
(b) On 30 June 2022 the Company issued 12,522,361 to settle loan drawdown fees.
62
Notes to the financial statements (continued)
For the year ended 31 December 2022
17.
Share capital (continued)
The share premium was as follows:
As at beginning of year
Share subscription
Shares issued to settle third party fees
Shares issued – Acquisitions
Shares issued – 2020 Acquisitions
Shares issued – Directors’ and Management Fees
Share issue costs
Warrants exercised
As at end of year
2022
£’000
39,303
-
34
-
-
128
-
42
39,507
2021
£’000
39,125
1,181
71
44
(1,120)
-
(144)
146
39,303
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:
Share Options
Number
50,000,000
37,500,000
110,000,000
110,000,000
31,800,000
Warrants
Number
461,538,462
46,153,846
50,000,000
70,000,000
58,333,333
Date
granted
23/08/2018
23/08/2018
06/11/2020
06/11/2020
12/02/2021
Exercise
price
0.5p
1.0p
0.425p
0.565p
0.40p
Date
granted
29/12/2021
29/12/2021
06/01/2022
01/07/2022
01/07/2022
Exercise
price
0.25p
0.13p
0.25p
0.25p
0.30p
Maximum term
Vesting dates
Expire on 21/06/28
Expire on 21/06/28
Expire on 21/06/2028
Expire on 21/06/2028
Expire on 30/09/2024
23 August 2018
31 January 2019
Upon being granted
31 March 2021
Upon being granted
Maximum term
Vesting dates
3 years Upon being granted
2 years Upon being granted
Expire on 04/11/2024 Upon being granted
Expire on 24/06/2025 Upon being granted
Expire on 24/06/2025 Upon being granted
63
Notes to the financial statements (continued)
For the year ended 31 December 2022
18.
Share-based payments (continued)
The number and weighted average exercise prices of the above options and warrants are as
follows:
31 December 2022
31 December 2021
Outstanding at beginning of year
Share options issued
Lapsed/exercised warrants/options
Warrants issued (1)
Outstanding at end of year
Number
1,282,654,694
-
(435,662,386)
178,333,333
1,025,325,641
Weighted
average
exercise
price
0.30p
-
0.20p
0.27p
0.35p
Number
835,349,886
31,800,000
(92,187,500)
507,692,308
1,282,654,694
Weighted
average
exercise
price
0.33p
0.40p
0.16p
0.24p
0.30p
(1) 128,333,333 Warrants were issued as free attaching warrants part of the loan funding facility
and valued using a Black Scholes option pricing model using a risk-free rate 1.67% and a volatility
rate of 100%.
50,000,000 Warrants were issued to directors and management in lieu of fees and were valued
using a Black and Scholes option pricing model using a risk-free rate of 0.25% and a volatility rate
of 86.86%.
19.
Reconciliation of movements in shareholders’ funds
Consolidated
Company
Year ended
31 December
2022
£’000
Restated
Year ended
31 December
2021
£’000
1,328
(1,306)
164
-
-
43
30
-
154
-
7,988
9,707
1,056
-
217
147
102
761
-
-
7,011
7,988
Year ended
31 December
2022
Year ended
31 December
2021
£’000
1,737
164
-
-
43
30
-
154
-
9,428
11,556
£’000
(1,211)
1,056
-
217
147
102
761
-
-
8,356
9,428
Total comprehensive loss for the
year
Shares issued
Currency translation differences on
foreign currency operations
Share option expense
Warrants exercised/expired
Warrants issued
Shares issued – Acquisitions
Equity component of borrowings
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 2022
20. Reconciliation of operating loss to net cash outflow from operating activities
Consolidated
Company
Year ended 31
December
2022
£’000
Year ended
31 December
2021
£’000
Year ended 31
December
2022
£’000
Year ended
31 December
2021
£’000
Operating profit/(loss) from all
operations
(697)
(948)
(401)
(832)
Share options
Shares issued –
Legal/finance fees
Foreign exchange gain
(Increase)/decrease in
receivables
Increase in payables
Net cash outflow from
operating activities
29
92
-
(28)
236
160
72
(6)
(20)
(95)
29
92
-
(28)
(48)
160
72
(6)
(10)
109
(368)
(837)
(356)
(507)
21.
Proceeds from the issuance of ordinary shares
Share capital and premium at end of year
(note 17)
Shares issued – Legal and finance fees
Shares issued – Directors and management
fees
Share issued on acquisition on subsidiaries
Share issue costs
Share capital and premium at beginning of
year
Consolidated
Year
ended 31
December
2022
£’000
Year
ended 31
December
2021
£’000
Company
Year
ended 31
December
2022
£’000
Year
ended 31
December
2021
£’000
41,586
(34)
41,379
(72)
41,586
(34)
41,379
(72)
(130)
-
-
-
989
113
(130)
-
-
-
989
113
(41,379)
(41,174)
(41,379)
(41,174)
43
1,235
43
1,235
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 remuneration and fees 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 2022
22.
Related party transactions (continued)
31 December 2022
31 December 2021
Colin Bird (1)
Metallurgical Management Services
Pty. Ltd
R Siapno
R. Samtani
E. Slowey
42
4
12
-
13
71
50
10
-
33
24
117
278
Paid
in
the
year
£’000
Due by at
year-end
date
£’000
Paid
in
the
year
£’000
85
29
20
71
73
Due by at
year-end
date
£’000
80
-
-
-
-
80
(1) Includes the issue of 30,769,231 Warrants issued to in lieu of fees and were valued at $17,969
using a Black and Scholes option pricing model using a risk-free rate of 0.25% and a volatility rate
of 86.86%.
An amount of £15,000 was incurred during 2022 (2021: £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
Metallurgical Management Services Pty. Ltd is a consultancy company controlled by the director Dr.
Evan Kirby.
Silver Investments Ltd is a consultancy company controlled by the director Edward Slowey.
23.
Commitments
Non-cancellable lease rentals payable as follows:
Less than one year
Between two and five years
2022
£’000
2021
£’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.
25.
Prior Year Adjustment
In 2021 an impairment provision of £110,000 was recognised against the investment in the
Kalengwa Project. The impairment provision has been restated to £318,000 to include additional
capitalised exploration expenditure related to this project.
66
Notes to the financial statements (continued)
For the year ended 31 December 2022
26.
Subsequent events
On 9 January 2023 the Company announced that it issued 7,926,024 new Ordinary Shares at
0.0757 pence per share, which is the 3 month VWAP of the Bezant share price for the three
months to 9 December 2022, to settle consultancy fees of £6,000 due in relation to the three months
to 9 December 2022.
On 27 March 2023 following a general meeting of IDM International shareholders on 24 Match
2023 (the “IDM International Shareholders Meeting”) to approve the IDM International SPA and
the acquisition by IDM International of the shares of the other shareholder of IDM Mankayan (the
“Proposed IDM International Transaction”). The Company announced the completion of the
IDM International SPA (see note 11.1) and the sale of its 44 IDM Mankayan shares for 19,381,054
fully paid ordinary shares of IDM International. The Notice of meeting of the IDM International
Shareholders meeting incorporated as Annexure 1 an Independent Expert’s Report by BDO
Corporate Finance (WA) Pty Ltd dated 3 February 2023 as to whether the Proposed Transaction
was fair and reasonable for existing IDM International shareholders (“Independent Expert’s
Report"). IDM International's sole asset following the Proposed Transaction is its interest in the
Mankayan Project. The Independent Expert’s Report included a valuation of an IDM International
share on a diluted minority basis following the Proposed IDM International Transaction and the
table below shows these valuations and the corresponding valuation of the 19,381,054 IDM
International shares to be issued to Bezant following the completion of the IDM International SPA
using an FX rate of A$1= GBP0.56 as at 28 February 2023.
Expert Report Valuation per
IDM International share
No. of Consideration Shares
to be issued to Bezant
Valuation in Independent Expert's Report
Low
Preferred
High
AUD 0.232
AUD 0.470
AUD 0.726
19,381,054 IDM International shares
Value in A$
AUD 4,496,405
AUD 9,109,095
AUD 14,070,645
Value in £
£ 2,517,987
£ 5,101,093
£ 7,879,561
On 12 April 2023 the Company announced a fundraising of £750,000 from directors, existing
shareholders and investors to facilitate copper gold mining operation, the issue of shares to
Directors and PDMR at a premium to the share price to settle £174,961 of accrued fees
(“Conversion Shares”) and the settling of £101,250 of consultancy fees by the issue of shares
to consultants (“Consultant Shares”) to conserve the Company’s working capital,
Fundraising: The Company raised £750,000 before expenses (the “Fundraising”) at 0.04 pence
per Ordinary Share (the “Fundraising Price”) for the issue of 1,875,000,000 new Ordinary Shares
(the “Fundraising Shares”) conditional upon admission of the Fundraising Shares to trading on
AIM (“Admission”). The Fundraising comprised a placing of 1,375,000,000 new Ordinary Shares
(the “Placing Shares”) for £550,000 at the Fundraising Price (the “Placing”), via Shard Capital
Partners LLP, and share subscriptions for 500,000,000 new Ordinary Shares at the Fundraising
Price to raise £200,000 (the “Share Subscriptions"). The Fundraising included £25,000 by Colin
Bird, Bezant’s Executive Chairman for 62,500,000 Fundraising Shares and £15,000 by Raju
Samtani, Bezant’s Finance Director for 37,500,000 Fundraising Shares together representing
5.33 per cent. of the total Fundraising amount.
Director & other PDMR Conversion Shares: The Company agreed to settle £174,960 of outstanding
remuneration due to its directors, another PDMR and their related parties (the “Outstanding
Fees”) at 0.08 pence per new ordinary shares (“Director’s Conversion Price”) _to conserve the
Company’s cash by the issue of 218,700,942 new ordinary shares (the “Conversion Shares”)
(the “Fee Conversion). The Director’s Conversion Price represented a premium of 21 per cent. to
the closing middle market price of an Ordinary Share of .066 pence on 11 April 2023, being the
67
Notes to the financial statements (continued)
For the year ended 31 December 2022
Subsequent events (continued)
latest practicable date prior to the announcement of the Fundraising. As shown in the table below
£128,406 of the Outstanding Fees was owed to directors of the Company (or their service companies)
and related parties and £46,554 was owed to Quantum Capital & Consulting Limited, a personal
service company of Michael Allardice who is a person discharging managerial responsibilities on
behalf of the Company.
Person
Period of Outstanding Fees Accrued Fees (£) Conversion Shares
Colin Bird
Raju Samtani
Ed Slowey
Dr. Evan Kirby
Directors Total
March 22 - March 23
March 22 - March 23
May 22 - March 23
May 22 - Mach 23
Michael Allardice
March 22 - March 23
Other PDMRs Total
Total Directors and PDMR
71,500
26,000
16,500
14,406
128,406
46,554
46,554
174,960
89,375,000
32,499,967
20,625,000
18,008,075
160,508,042
58,192,900
58,192,900
218,700,942
Consultant Shares: Consultant Shares comprised 246,808,068 new Ordinary Shares issued to
settle £101,250 of fees due to consultants. Of the Consultant Shares issued 238,125,000 new
Ordinary shares were issued at the Fundraising Price to settle £95,250 of fees and 8,683,068 new
Ordinary shares were issued at 0.691 pence per share, which is the 3 month VWAP of the Bezant
share price for the three months to 9 March 2023, to settle consultancy fees of £6,000 due in
relation to the three months to 9 March 2023.
On 5 May 2023 the Company announced the issue of 104,875,000 new Ordinary Shares (the
“Professional Fee Shares”) at 0.04 pence per share, which was the fundraising price for the
fundraising which the Company announced on 12 April 2023. The Professional Fee Shares were
issued to settle fees of £41,950.
On 15 June 2023, the Company announced, further to its announcements of 23 November 2021
and 30 June 2022 confirms that it has by an agreement dated 14 June 2023 agreed with
Sanderson Capital Partners Limited (“Sanderson Capital” or the “Lender”) a long-term
shareholder in the Company to extend the repayment date for the £700,000 drawn down under
the unsecured convertible loan funding facility entered into with Sanderson Capital on 22
November 2021 (the “Facility”) (the “Agreement”). The £700,000 drawdown is now repayable by
23 December 2024 and convertible by the Lender at the fixed price of 0.08 pence per share (the
“New Conversion Price”). No further amounts can be drawn down under the Facility.
The Company will as a loan extension fee i) pay the Lender a £70,000 facility extension and
documentation fee equivalent to 6.67% per year which was settled by the issue of 87,500,000
new ordinary shares of 0.002p each (“Shares”) at the New Conversion Price (“Facility Extension
Fee Shares”); and ii) issue the Lender 437,500,000 warrants over Shares exercisable at 0.12
pence per Share (the “Warrant Exercise Price”) exercisable for two years from the date of the
Agreement. (the “Facility Extension Fees”). The Company has an option to convert all or part of
the £700,000 drawdown if the Company’s share price exceeds 0.14 pence for 10 or more
business days.
The New Conversion Price was at a 113% premium to the closing price of 0.0375 pence per share
on 14 June 2023 and a 100% premium to the placing price in relation to the Company’s £750,000
fundraising announced on 12 April 2023. The Warrant Exercise Price is at a 220% premium to
the closing price on 14 June 2023.
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