Company registration No 04095614 (England and Wales)
IRONVELD PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
CONTENTS
Directors
Advisors
Chairman's Statement
Strategic Report
Directors' Report
Corporate Governance Statement
Directors' Remuneration Report
Statement of Directors' Responsibilities
Independent Auditors' Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Parent Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Cash Flow Statement
Company Cash Flow Statement
Notes to the Financial Statements
1
2
3-4
5-6
7-9
10-11
12-13
14
15-20
21
22
23
24
25-26
27
28
29
30- 58
YEAR ENDED
30 JUNE
2023
DIRECTORS
John Wardle – Executive Chairman
John Wardle, whose first degree was in Mining Engineering followed by a PhD in Microseismic Geotechnics, was
most recently CEO of Amerisur Resources plc, the AIM-listed Oil & Gas company, from 2007 to 2020 when it was
acquired for approximately £242 million. Prior to this John held roles with BP, Britoil, Emerald Energy and
Pebercan.
Martin Eales - Chief Executive Officer
Martin Eales joined Ironveld in early 2020 and has overseen the Company's transition into production. Prior to
that, Martin spent five years as CEO at Rainbow Rare Earths and had a 15 year career in the City of London
rising to the role of Managing Director at RBC Capital Markets with a strong track record advising natural resource
companies on fundraisings and other corporate transactions. He is also a qualified Chartered Accountant.
Peter Cox - Technical Director
Peter Cox started his career in the mining industry over 30 years ago as a learner surveyor. After studying mining
engineering as a JCI bursar, he worked for that company in various positions at gold and platinum mines, ending
as a senior section manager. In 1987, he joined a privately owned mining and exploration company, Severin
Southern Sphere Mining, as consulting engineer and general manager. Since mid-1991 he has been the
managing director of Goldline Global Consulting (Pty) Ltd, an engineering consulting company which serves the
mining industry worldwide. He holds a Mine Surveyor's and a Mine Manager's Certificate of Competency. He has
a number of achievements to his name, including being the youngest certificated surveyor in South African mining
history and designing the country's narrow reef opencast mining method.
Malebo Ratlhagane – Deputy Group CFO and Executive Director
Malebo Ratlhagane has acted as Head of Finance for all of the Ironveld Group’s South African entities since 2022
and has been with the Company since 2014. She is a Certified Professional Accountant and a member of the
South African Institute of Professional Accountants.
Giles Clarke –Non-Executive Director
Giles Clarke is Chairman of Westleigh Investments Holdings Limited as well as Chairman of several private
organisations. He founded Majestic Wine in 1981 and built it into a national chain of wine warehouses. He also
co-founded Pet City in 1990, which he expanded nationwide before it was listed and subsequently sold in 1996
for £150 million, co-founded Safestore which was sold in 2003 for £44 million and was Chairman of Amerisur
Resources plc, sold for approximately £242 million in 2020.
Nicholas Harrison - Non-Executive Director
Nicholas Harrison qualified as an accountant with Arthur Andersen and subsequently held a number of senior
positions with other professional services organisations. He was Chief Financial Officer of Amerisur Resources
plc until its sale in 2020 and has held finance director and chief executive positions in a number of other
businesses. He is currently Chief Executive of Westleigh Investments Holdings Limited.
.
IRONVELD PLC
1
ADVISORS
Company secretary
B James
Company number
04095614 (England and Wales)
YEAR ENDED
30 JUNE
2023
Registered office
Nominated Adviser
Broker
Joint Broker
Auditors
Bankers
Solicitors
Registrar
Financial PR
Unit D, De Clare House,
Sir Alfred Owen Way
Pontygwindy Industrial Estate
Caerphilly
Wales CF83 3HU
Cavendish
One Bartholomew Close
London EC1A 7BL
Cavendish
One Bartholomew Close
London EC1A 7BL
Turner Pope
8 Frederick’s Place
London EC2R 8AB
Crowe U.K. LLP
55 Ludgate Hill
London EC4M 7JW
HSBC
97 Bute Street
Cardiff CF10 5NA
Kuit Steinart Levy LLP
3 St Mary's Parsonage
Manchester M3 2RD
Link Asset Services
10th Floor Central Square
29 Wellington Street
Leeds LS1 4DL
BlytheRay
4-5 Castle Court
London EC3V 9DL
IRONVELD PLC
2
YEAR ENDED
30 JUNE
2023
CHAIRMAN'S STATEMENT
Dear Shareholder,
I am pleased to present the Annual Report and the Financial Statements for the year to 30 June 2023.
This is my first Chairman’s Statement at Ironveld. I joined the Board in November 2022 and was appointed to the
role of Executive Chairman in November 2023, taking over as Chairman from Giles Clarke. I am delighted that
Giles has remained on the Board as a Non-Executive Director and will continue to share his invaluable experience.
As a long term substantial shareholder in the Company my interests in seeing the project develop and maximise
its potential are fully aligned with all our stakeholders.
During the period, we undertook our first steps from being a development project to becoming a producing
company.
In May 2022, just prior to the end of the last financial year, the Company announced that it had agreed terms with
a business rescue practitioner and a sole creditor to acquire an existing smelter in Rustenburg, South Africa for
a total of ZAR 116 million (approximately £4.9 million), with ZAR 16 million (approximately £675,000) payable
following completion with the balance of ZAR 100 million (approximately £4.3 million) repayable from smelter
cashflows over 10 years. The Company then completed a Placing to raise gross proceeds of £4.5 million in
August 2022 and work commenced to apply these proceeds to the costs of refurbishing the smelter and
commencing mining activities.
The Company was able to announce in January 2023 that the first furnace of three at the smelter had been
repaired and had successfully test processed magnetite ore. A further £2.0 million gross proceeds was raised in
March 2023 by way of an equity placing to assist with the ongoing repairs to the smelter and for working capital
purposes.
Some initial sales were recognised from the smelter just prior to period end, both processed ore and non-core
scrap items from the facility.
Post period end the smelter operations had to address a number of issues, including the repair of the granulator
and securing additional generator power, that impacted planned ramp up of production from the facility. Around
the same time a test project to process third party ferro-silicon slag metal was successfully completed which
demonstrated the flexibility of the smelter equipment. In November 2023, the Company completed a further
fundraising with gross proceeds of £1.0 million in which I again participated. Following this fundraising I was
appointed as Executive Chairman.
In addition, the Company has formed a DMS Magnetite joint venture with Pace SA, named IPace, which secured
capital funding from Sable Exploration and Mining in September 2023 to develop a business to crush and
magnetically separate ore directly from the Company’s mining operations for direct sale to end users. At the time
of writing, this project is well advanced but commencement of activities has been impacted by extended delivery
times for critical electrical components and the first production is expected late January.
The Board believes that the smelter facility, once fully operational, represents the best opportunity for the
Company to maximise value from its magnetite ore as it allows for the opportunity to process the ore into higher
value metal products, namely high purity iron, vanadium slag and titanium slag. Following the initial refurbishment
of the smelter, it was the Board’s stated intention to invest further in capital equipment which will enable production
of higher value iron powders. This is still the intention and, as announced in September and October 2023, the
Company is engaged in direct funding discussions with a financial institution which, if completed, would allow for
the opportunity to advance the project in this manner.
One of my key objectives since assuming the role of Executive Chairman last month has been to analyse all of
the Group’s overhead costs in the UK and South Africa and to make cost savings wherever possible. Earlier this
month we took the decision to suspend operations at the Rustenburg smelter until all of the rented electrical
generation units delivered in September and October 2023 could be replaced by dual-fuel units on hire purchase
basis. These new units offer attractive benefits in terms of both cost and efficiency, being less expensive than
rental units whilst offering a dual-fuel capability. Based on the hire purchase financing term sheet received by the
Company from the supplier, this should result in annual savings of around ZAR 40 – 50 million (£1.7 - £2.1 million)
compared with the rental costs of the previous units. The smelter plant is now secure and operating with a
reduced staff headcount until the new generators are expected be delivered, alongside the institutional
IRONVELD PLC
3
YEAR ENDED
30 JUNE
2023
CHAIRMAN'S STATEMENT (continued)
financing transaction, early in 2024. I believe that this exercise, alongside a similar review of UK overheads, will
realise material benefits to the Group’s ongoing cost levels in the second half of the current financial year.
We remain committed to operating responsibly, working closely with stakeholders and local communities at
grassroots level to improve standards of living. Our local communities have been fully involved in the process to
establish the mining area and have provided all necessary consents. As part of our Social Labour Plan (approved
by the Department of Mineral Resources (“DMR”) in South Africa) we have undertaken to implement water supply
schemes, electrification upgrades and roads and stormwater infrastructure to the municipalities of our mining
communities. In addition, Ironveld has committed to provide training, bursaries and employment to the members
of the various host communities.
Dr John Wardle
Executive Chairman
19 December 2023
IRONVELD PLC
4
YEAR ENDED
30 JUNE
2023
STRATEGIC REPORT
Financial
The Group recorded a loss before tax of £1.2 million (2022: £0.8 million) in the Period. The Company does not
plan to pay a dividend for the year ended 30 June 2023. To date the board has been focussed on bringing the
Company to the point of production and related activities. In future periods the directors expect that KPIs for the
business will be focussed more on operational matters including production, revenue, profitability and the safe
and efficient operation of the smelter complex. Appropriate KPIs will be included in future periods.
Going concern
As at the date of these Financial Statements the direct funding transaction announced by the Company in
September and October 2023 is well advanced but not yet concluded, however the Directors have a reasonable
expectation that it will do so in early 2024.
Taking account of the funds referred to above and the planned investment into expanding operations at the
smelter plant, these Financial Statements have been prepared on a Going Concern basis.
Outlook
The Company expects to close a significant financing transaction early in 2024 which should provide the funding
required to materially develop current operations at the smelter, which has not yet operated in line with initial
expectations.
We would like to thank all of our shareholders for their continuing support for both the Company and the project
and we look forward to providing further updates in the near future.
Principal risks and uncertainties
The Directors consider the following risks to be the most material or significant for the management of the
business. These issues do not purport to be a complete list or explanation of all the risks facing the Group. In
particular the Group’s performance may be affected by changes in market and/or economic conditions, changes
in legal, regulatory or tax requirement legislation.
The Board of Directors monitors these risks and the Group’s performance on a regular basis.
Operational risks - The production of the Company’s range of metals involves a series of processes, from the
mining of the ore at the mine site, to the smelting of material at the Rustenburg smelter. Mining and Smelting
operations are subject to a number of risks, including mechanical outages, supply issues (e.g. fuel), interruptions
due to weather and soil conditions, among many others.
Availability of finance - Expansion of current activities or further development and production from the ore
resources requires significant further capital expenditure and the Group will need to raise further finance. The
terms on which future funds can be raised may not be on terms which the Directors consider acceptable. The
Group is listed on the public markets which greatly assists in the raising of additional finance.
Governance and Compliance - There are multiple governance-based risks which may have an impact on the
business. The Group operates within a complex regulatory environment which focuses on accountability. Failure
to comply with regulations, including applicable licences required for continuous operations, or failure to follow
expected social and business conduct could cause potential interruption or stoppage of operations, potential
financial loss and reputational damage.
Health and Safety - Mining and Smelting operations by their very nature are dangerous working environments
which, if not managed, could lead to serious injuries and a loss of life.
Commodity Markets - A significant decrease in commodity prices for high purity iron, vanadium or titanium would
negatively impact Group revenues.
IRONVELD PLC
5
YEAR ENDED
30 JUNE
2023
STRATEGIC REPORT (continued)
Principal risks and uncertainties (continued)
Inflation - The Group’s cost base is highly susceptible to inflationary pressures. In cycles of high commodity
prices, input costs, such as wages, consumables, diesel and energy often increase at a rate higher than that of
general inflation. Rising costs, which could be triggered by and therefore offset by higher commodity prices, have
a direct impact on the Group’s profitability. In addition, inflationary pressures have an impact on capital
expenditure.
Political and Country risk - Substantially all of the Group’s business and operations are conducted in South
Africa and the political, economic, legal and social situation in South Africa introduces a certain degree of risk
with respect to the Group’s activities.
s172 Statement – Director’s statement in performance of their statutory duties in accordance with s172
(1) Companies Act 2006
During the year ended 30 June 2023 the Board of Directors consider that they have acted in a way that would be
most likely to promote the success of the company for the benefit of its members (having regard to the
stakeholders and the matters set out in s172(1)(a)-(f) of the Companies Act 2006).
The Board has elected to apply the Quoted Company Alliance Corporate Governance Code as part of its
commitment to high standards of corporate governance in all of its activities and complies with its requirements
as far as is practicable and appropriate for a company of its nature and size.
The Directors are aware of their responsibilities to take into consideration the interests of all stakeholders in their
decision making process and to promote the success of the Company in accordance with s172. The Directors
continue to pay full regard to the interests of the stakeholders.
The requirements of s172 are for the Directors to:
• Consider the likely consequences of any decision in the long term,
• Act fairly between the members of the Company,
• Maintain a reputation for high standards of business conduct,
• Consider the interests of the Company’s employees,
• Foster the Company’s relationships with suppliers, customers and others, and
• Consider the impact of the Company’s operations on the community and the environment.
The Company is quoted on AIM and its members will be fully aware, through detailed announcements,
shareholder meetings and financial communications, updated on the website, of the Board’s broad and specific
intentions and the rationale for its decisions. When making decision, the Board of Directors, issues such as the
impact on the community and the environment have actively been taken into consideration. The Company pays
its employees and creditors promptly and keeps its costs to a minimum to protect shareholders funds. The
Company recognises workers’ representation unions and complies with all local employment legislation.
The key decisions made in the year to promote this success are explained in the Strategic Report above.
This report was approved by the Board on 19 December 2023 and signed on its behalf by:
Dr John Wardle
Executive Chairman
IRONVELD PLC
6
DIRECTORS' REPORT
The Directors present their annual report, together with the Group and Parent Company financial statements for
the year ended 30 June 2023. The Corporate Governance Statement set out on pages 10 and 11 forms part of
this report.
Principal activity
The principal activity of the Group for the year continued to be the development of a Vanadiferous and Titaniferous
Magnetite ore deposit in South Africa. The principal activity of the Company for the period was that of a holding
company.
YEAR ENDED
30 JUNE
2023
Dividends
The Directors do not recommend the payment of a dividend for the year.
Directors and their interests
The Directors, who served during the year were as follows:-
G Clarke
N Harrison
P Cox
M Eales
J Wardle (appointed on 1 November 2022)
M Ratlhagane (appointed on 5 June 2023)
The beneficial and other interests of the Directors and their families in the shares of the Company were as follows:
30 November 2023
ordinary
shares
Number
30 June 2023
ordinary
shares
Number
67,221,168
48,562,761
38,785,490
39,168,722
569,428,567
-
67,221,168
48,562,761
38,785,490
39,168,722
403,713,567
-
30 June 2022
ordinary
shares
Number
29,749,281
22,415,208
28,785,400
-
-
-
G Clarke
N Harrison
P Cox
M Eales
J Wardle
M Ratlhagane
G Clarke and N Harrison's interests in 10,062,470 (2022 - 10,062,470) shares above are through their
shareholding in Westleigh Investments Holdings Limited.
Details of Directors' interests in share options are provided in the Directors' remuneration report on page 12.
Political contributions
The Group made no political contributions during this or the preceding period.
Events arising after the reporting period
On 18 September 2023 the Company first announced that it was in direct funding discussions with an institution.
As at the date of these financial statements this transaction is well advanced and the Board has reasonable
expectations that a satisfactory transaction will be concluded early in 2024. On the same date, the Company
announced that certain Directors had agreed to put in place a working capital facility of up to £500,000.
On 26 October 2023, the Company announced an equity fund raising of £1.0 million representing a placing of
360,000,000 ordinary shares at a price of 0.278 pence. The Company issued Warrants alongside the new ordinary
shares to subscribe for 360,000,000 ordinary shares at 0.29 pence for a period of 36 months from Admission. The
share proceeds were raised to fund ongoing working capital requirements of the operations. Following the Placing
Dr John Wardle was appointed as Executive Chairman of the Company.
IRONVELD PLC
7
YEAR ENDED
30 JUNE
2023
DIRECTORS' REPORT (continued)
Going concern
As at the date of approval of these Financial Statements the Rustenburg smelter project has been temporarily
placed on care and maintenance following a decision to cease renting electrical generators and put in place a
hire purchase agreement for similar power generation for approximately 25% of the monthly cost. The proposed
new generator units are available in South Africa and the intention is that the Company will coincide the delivery
and installation of these new units with the anticipated direct funding transaction, which is expected to be
concluded early in 2024.
Whilst some revenues have been generated during 2023 from the operations at the smelter, when operating at a
level below full capacity – particularly during periods of non-operation due to power supply or critical repairs - the
overheads incurred by the facility have consumed more cash than revenues earned. The Company therefore
took the decision earlier this month to conserve cash by returning rented generator units and to temporarily
suspend production, also reducing headcount at the smelter to a level commensurate with care and maintenance
activities.
As at the date of approval of these Financial Statements the Company had not signed definitive transaction
documents, but the Board has reasonable expectations that a significant funding transaction with a financial
institution in South Africa, which has been in process for a number of months, will be concluded early in 2024.
Taking into account existing cash resources, and the assumed receipts of funding detailed above the Directors
have a reasonable expectation that the Group has adequate resources to continue in operational existence for
the foreseeable future, being twelve months from the date of the approval of the financial statements. For this
reason, the Board continues to adopt the going concern basis in the preparation of these financial statements.
Should the agreed funding transaction not be completed or be materially delayed the Company will seek
alternative funding arrangements and those arrangements are not yet committed. This represents a material
uncertainty in relation to the Company’s funding arrangements.
Substantial shareholdings
As at 30 November 2023 the Company had been notified of the following holdings of 3% or more of its issued
share capital other than the Directors' holdings set out on page 6:
Jarvis Investment Management
Premier Miton Investors
Hargreaves Lansdown Stockbrokers
Interactive Investor
HSDL Stockbrokers
Catalyse Capital
Number of
Ordinary shares Percentage
433,038,379
263,000,000
194,568,973
165,988,859
129,096,569
118,900,000
11.00%
6.68%
4.94%
4.22%
3.28%
3.02%
Financial instruments
The Group’s exposure to price risk, credit risk, liquidity risk and cash flow is discussed in the notes to the financial
statements. The Group seeks to mitigate foreign currency risk by maintaining sufficient amounts of currency to
satisfy the anticipated expenditure in each currency and does not use hedging instruments.
Directors' indemnities
The Company has made qualifying third party indemnity provisions for the benefit of its Directors which were in
place during the year and remain in force at the date of this report.
Employee relations
Ironveld complies fully with all South African employment legislation, including covering maternity and paternity
leave and equal pay. The Board feels that the building and maintaining good relationships with stakeholders where
it operates is not only an important part of Ironveld’s strategy and its commitment to be an ethical business, but
also ensures the Company is able to create value for all its stakeholders.
IRONVELD PLC
8
YEAR ENDED
30 JUNE
2023
DIRECTORS' REPORT (continued)
Statement of disclosure to auditors
Each of the persons who is a Director at the date of approval of this annual report confirms that:
•
•
so far as the Director is aware, there is no relevant audit information of which the Company's auditors are
unaware; and
the Director has taken all the steps that he ought to have taken as a director in order to make himself aware
of the relevant audit information and to establish that the Company's auditors are aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies
Act 2006.
This report was approved by the Board on 19 December 2023 and signed on its behalf by:
B James
Company secretary
IRONVELD PLC
9
YEAR ENDED
30 JUNE
2023
CORPORATE GOVERNANCE STATEMENT
Corporate Governance Code
The Board seeks to follow best practice in corporate governance as appropriate for a company of our size, nature
and stage of development, As a public company listed on AIM we recognise the importance of an effectively
operating corporate governance framework. The Board has adopted the principles of the 2018 Quoted Companies
Alliance Corporate Governance Code (“the QCA Code”) to support Company’s governance framework. The
Directors acknowledge the importance of the ten principles set out in the QCA Code and a statement setting out
how the Company currently complies (along with any departures) with the QCA Code is provided on the website
at www.ironveld.com.
The Board of Directors
During the period, the Board comprised the Chairman, three Executive Directors (of whom one was appointed
during the period) and two Non-Executive Directors (of whom one was appointed during the period). The Group
is controlled and led by the Board of Directors with an established schedule of matters reserved for their specific
approval. The Board meets regularly throughout the year and is responsible for the overall Group strategy,
acquisition and divestment policy, approval of major capital expenditure and consideration of significant financial
matters. It reviews the strategic direction of the Company and its individual subsidiaries, their annual budgets,
their progress towards achievement of these budgets and their capital expenditure programmes. The function of
the Chairman is to supervise the Board and to ensure its effective control of the business, and that of the Chief
Executive Officer is to manage the Group on the Board's behalf.
In November 2023, John Wardle replaced Giles Clarke as Chairman of the Company, with Giles Clarke remaining
on the Board as a Non-Executive Director.
All Board members have access, at all times, to sufficient information about the business, to enable them to fully
discharge their duties. Also, procedures exist covering the circumstances under which the Directors may need to
obtain independent professional advice. The Board formally met six times throughout the year.
The Board has established the following committees to fulfil specific functions:
The Audit Committee has been established to determine the terms of engagement of the group's auditors and
will determine, in consultation with the auditors, the scope of the audit. The Audit Committee receives and review
reports from management and the group's auditors relating to the interim and annual accounts and the accounting
and internal control systems in use throughout the Group. The Audit Committee has unrestricted access to the
group's auditors and internal control procedures.
Due to the nature and size of the Group at present it would not be appropriate for the Group to have its own
internal audit department reporting directly to the Audit Committee, this situation is reviewed annually. The Audit
Committee met once during the year.
The Remuneration Committee has been established to review the scale and structure of the Executive Directors'
and senior employees' remuneration and the terms of their respective service or employment contracts, including
share option schemes and other bonus arrangements. The remuneration and terms and conditions of the non-
executive directors of the Company are set by the Board. The Remuneration Committee met three times during
the year.
IRONVELD PLC
10
YEAR ENDED
30 JUNE
2023
CORPORATE GOVERNANCE STATEMENT (continued)
The Nomination Committee has been established to review the structure, size and composition (including the
skills, knowledge and experience) required of the Board compared to its current position and make
recommendations to the Board with regard to any changes.
The Nomination Committee is tasked with ensuring directors are aware of the time commitment requirements
during the recruitment selection process and on an ongoing basis. They also help ensure during the year that
appointees do not have time commitment issues. All Directors receive detailed induction training upon joining the
Board, covering compliance issues, risk management considerations, Board processes and corporate
governance considerations. The Senior Independent Director provides a sounding board for the Chairman and
assists in building relationships between major shareholders and the Board. The Senior Independent Director is
available to shareholders if they have concerns which contact through the normal channels of Chairman, Chief
Executive Officer or other Executive Directors has failed to resolve or for which such contact is inappropriate. The
Board continue to conduct internal and external Board evaluations which consider the balance of skills,
experience, independence and knowledge of the Company. The evaluation process, the Board refreshment, use
of third-party search companies and succession planning elements are discussed. The Nomination Committee
recommends and reviews nominees for the appointments of new Directors to the Board and ensures there is due
process used in selecting candidates.
Status of Non-Executive directors
None of the Non-Executive Directors would be deemed independent under the UK Corporate Governance Code.
However, the Non-Executive Directors have considerable experience which the Company draws upon on a
regular basis. In addition, the Non-Executive Directors are sufficiently independent of management so as to be
able to exercise independent judgement and bring an objective viewpoint and, thereby, protect and promote the
interests of shareholders.
Internal control
On the wider aspects of internal control, relating to operational and compliance controls and risk management,
the Board, in setting the control environment, identifies, reviews, and regularly reports on the key areas of business
risk facing the Group. The Group Board and subsidiary Boards maintain close day to day involvement in all the
Group’s activities which enables control to be achieved and maintained. This includes the comprehensive review
of both management and technical reports, the monitoring of interest rates, environmental considerations,
government and fiscal policy issues, employment and information technology requirements and cash control
procedures. In this way, the key risk areas can be monitored effectively, and specialist expertise applied in a
timely and productive manner. The effectiveness of the Group’s system of internal financial controls, for the year
to 30 June 2023 and for the period to the date of approval of the financial statements, has been reviewed by the
Directors. Whilst they are aware that although no system can provide for absolute assurance against material
misstatement or loss, they are satisfied that effective controls are in place.
Relations with shareholders
As part of our commitment to shareholder engagement we typically seek the views of shareholders through
outreach campaigns and roadshows. The Company maintains effective contact with its principal shareholders and
welcomes communications from its private investors. The Company’s Financial PR contact details are listed on
the website and a contact form is also included. The Board is kept updated on questions / issues raised by
stakeholders and incorporates information and feedback into future decision making. The directors meet with
institutional shareholders on a regular basis to understand their expectations and elicit feedback. The Company
holds an AGM which provides private shareholders with an opportunity to ask questions and engage with
Company management. The Company also communicates with shareholders through the Annual Report and
Accounts, full-year end and half-year results announcements. A range of corporate information (including all
Company announcements and presentations) is available to shareholders, investors and the public on the
Company’s corporate website. The Company also has a social media account (X formerly Twitter) through which
the Company can maintain a dialogue with shareholders and interested parties.
IRONVELD PLC
11
YEAR ENDED
30 JUNE
2023
DIRECTORS’ REMUNERATION REPORT
Compliance
This report by the Remuneration Committee, on behalf of the Board, contains details of the remuneration of each
Director during the period under review.
Directors’ remuneration policy
The Remuneration Committee aims to ensure that the remuneration packages offered are competitive and are
designed to attract, retain and motivate executives of the right calibre.
Emoluments of the Directors
N Harrison*
G Clarke**
P Cox
M Eales***
J Wardle
M Ratlhagane
Salary
£000
50
50
-
193
33
8
334
Fees
£000
-
-
134
-
-
-
134
2023
Total
£000
50
50
134
193
33
8
468
2022
Total
£000
45
45
74
175
-
-
339
* Member of the Remuneration Committee during the period
** Member and Chairman of the Remuneration Committee during the period
*** Highest-paid Director during the period
In addition to the remuneration disclosed above, the estimated values of share options granted in the year to the
directors and the expense recognised in the year are as follow:
P Cox
M Eales
M Ratlhagane
Other pensions
Expense
Options
Granted Recognised
£000
3
3
1
£000
26
26
6
In addition to the above, pension contributions for M Eales amounting to £15,000 were due for the year (2022 -
£14,000). The Non-Executive Directors’ appointments are not pensionable.
IRONVELD PLC
12
YEAR ENDED
30 JUNE
2023
DIRECTORS’ REMUNERATION REPORT (continued)
Details of the individual share options held by the Directors under the Group’s ‘Long term incentive plan’ as at 30
June 2023, are as follows:
Director
P Cox
G Clarke
N Harrison
P Cox
G Clarke
P Cox
N Harrison
M Eales
P Cox
M Eales
M Ratlhagane
Option
price
1p
1p
1p
1p
1p
1p
1p
1p
0.3p
0.3p
0.3p
Date of
Grant
16/08/2012
16/08/2012
16/08/2012
13/11/2012
07/11/2013
07/11/2013
07/11/2013
10/01/2020
27/02/2023
27/02/2023
27/02/2023
Expiry
date
1 July
2022
(Lapsed)/
Granted
30 June
2023
16/08/2022
1,427,894
16/08/2022
1,427,894
16/08/2022
1,427,894
13/11/2022
6,663,505
07/11/2023
600,000
07/11/2023
600,000
600,000
07/11/2023
09/01/2030 27,400,000
-
27/02/2033
-
27/02/2033
-
27/02/2033
(1,427,894)
(1,427,894)
(1,427,894)
(6,663,505)
-
-
-
-
12,500,000
12,500,000
3,000,000
-
-
-
-
600,000
600,000
600,000
27,400,000
12,500,000
12,500,000
3,000,000
With the exception of the share options granted in the year all share options were exercisable at the year-end.
In respect of the share options granted in the year 1/3 are exercisable on the first anniversary of grant, 1/3 on
the second anniversary of grant and the final 1/3 on the third anniversary of grant.
The market price of the Company’s shares at 30 June 2023 was 0.305p with a range of 0.245p to 0.540p during
the year.
There have been no movements in the Directors’ share options since the year end.
G Clarke
Chairman of the Remuneration Committee
IRONVELD PLC
13
YEAR ENDED
30 JUNE
2023
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable laws and regulations.
Company law requires the Directors to prepare such financial statements for each financial period. Under that law
the Directors are required to prepare Group and Company financial statements in accordance with UK-adopted
International Accounting Standards (IFRSs) and have also chosen to prepare the parent Company financial
statements under UK-adopted international accounting standards. Under Company law the Directors must not
approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that period. In preparing these financial statements,
International Accounting Standard 1 requires that Directors:
-
-
-
-
properly select and apply accounting policies;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable
and understandable information;
provide additional disclosures when compliance with the specific requirements in IFRS are insufficient to
enable users to understand the impact of particular transactions, other events and conditions on the entity's
financial position and financial performance; and
make an assessment of the Company's ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company
and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included
on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
Directors' responsibility statement
We confirm that to the best of our knowledge:
1. the financial statements, prepared in accordance with UK-adopted international accounting standards, give a
true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole; and
2. the strategic report includes a fair review of the development and performance of the business and the position
of the Company and the undertakings included in the consolidation taken as a whole, together with a description
of the principal risks and uncertainties that they face.
3. the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide
the information necessary for shareholders to assess the Company's performance, business model and strategy.
On behalf of the Board
M Eales
Director
19 December 2023
IRONVELD PLC
14
YEAR ENDED
30 JUNE
2023
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IRONVELD PLC
Year ended 30 June 2023
Opinion
We have audited the financial statements of Ironveld Plc (the “Parent Company”) and its subsidiaries (the “Group”)
for the year ended 30 June 2023, which comprise:
•
•
•
•
•
the Group income statement and statement of comprehensive income for the year ended 30 June 2023;
the Group and Parent Company statements of financial position as at 30 June 2023;
the Group and Parent Company statements of changes in equity for the year then ended;
the Group and Parent Company statements of cash flows for the year then ended; and
the notes to the financial statements, including a summary of significant accounting policies and other
explanatory information.
The financial reporting framework that has been applied in the preparation of the 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 of the Parent Company's affairs as at 30 June
•
2023 and of the Group’s loss for the period then ended;
the Group and Parent Company financial statements have been properly prepared in accordance with
UK-adopted international accounting standards; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We are independent of the Group and the Parent Company in
accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2.2 in the financial statements, which indicates that the Company is in the process of
negotiating a significant funding transaction with a financial institution in South Africa, which has been in process
for a number of months and is expected to be concluded early in 2024. At the date of approval of these financial
statements those arrangements are not yet committed and this represents a material uncertainty in relation to the
Company’s funding arrangements that may cast significant doubt on the group’s ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’
assessment of the Group’s and Parent Company’s ability to continue to adopt the going concern basis of
accounting included the following:
•
reviewing and challenging management’s going concern assessment and assumptions including
expected sales volume and price as well as estimated costs linked to production;
• obtaining evidence to support the likelihood of funds being made available to the Group;
considering the track record of the directors in raising funds for the Group in the past;
•
testing the mathematical accuracy of the models used by management in their assessment; and
•
considering the disclosures in the financial statements in relation to going concern.
•
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
IRONVELD PLC
15
YEAR ENDED
30 JUNE
2023
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IRONVELD PLC (continued)
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An item is considered material if it
could reasonably be expected to change the economic decisions of a user of the financial statements. We used
the concept of materiality to both focus our testing and to evaluate the impact of misstatements identified.
Based on our professional judgement, we determined overall materiality for the Group financial statements as a
whole to be £400,000 (2022: £400,000), which was based on approximately 1.5% of the Group’s total assets at
the planning stage. We did not consider it appropriate to change this. We considered an asset basis to be the
appropriate benchmark as the Group has yet to record significant revenues. Materiality for the Parent Company
financial statements as a whole was set at £387,500 (2022: £390,000), which represents approximately 1.5% of
total assets as it is holding company.
We use a different level of materiality (‘performance materiality’) to determine the extent of our testing for the audit
of the financial statements. Performance materiality is set based on the audit materiality as adjusted for the
judgements made as to the entity risk and our evaluation of the specific risk of each audit area having regard to
the internal control environment. This is set at £280,000 (2022: £280,000) for the Group and £271,250 (2022:
£273,000) for the Parent Company.
Where considered appropriate performance materiality may be reduced to a lower level, such as, for related party
transactions and directors’ remuneration.
We agreed with the Audit Committee to report to it all identified errors in excess of £20,000 (2022: £20,000).
Errors below that threshold would also be reported to it if, in our opinion as auditor, disclosure was required on
qualitative grounds.
Overview of the scope of our audit
The statutory audits of the main South African subsidiaries are carried out by a component auditor in South Africa.
We considered the exploration and evaluation assets to be significant balances in the group, we therefore
instructed the component auditor in South Africa to carry out specific audit procedures in this area. We also
reviewed their working papers to ensure the work was carried out in accordance with our group instructions.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified. These matters included 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.
In addition to the matter described in the ‘Material uncertainty related to going concern’ section, we have
determined the following to be the key audit matters. This is not a complete list of all risks identified by our audit.
IRONVELD PLC
16
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IRONVELD PLC (continued)
Key audit matter
How the scope of our audit addressed the key audit
matter
YEAR ENDED
30 JUNE
2023
Carrying value of exploration and
evaluation assets (Group)
(notes 2.1, 2.2 & 12)
At the reporting date the Group had
exploration and evaluation assets with a
carrying value of £24.1 million (2022:
£26.4 million)
There is a risk that expenditure being
capitalised under IFRS 6 does not relate
the exploration and evaluation
to
activities and, additionally, a risk that the
assets are impaired.
We agreed the costs capitalised to underlying supporting
documentation and considered whether they meet the criteria
set out in IFRS 6 “Exploration for and Evaluation of Mineral
Resources”.
We carried out procedures,
the
available technical and preliminary economic assessments of
the project to determine whether there were any indications of
impairment. These included confirming:
including considering
•
•
•
•
that the Group has the continuing right to explore in
the specific area;
that the Group is committed to ongoing substantive
expenditure on further exploration and evaluation
activities:
that exploration and evaluation continues to be
commercially viable; and
that there is sufficient data, including competent
persons’ evaluation, to indicate that development is
likely to proceed and that the carrying amount of the
exploration asset is likely to be recovered in full from
successful development or by sale.
Recognition of assets under
construction and associated debt
obligations (Group)
(notes 2.2, 14 & 18)
to purchase
We considered whether
Ferrochrome Furnaces (Pty) Limited (FCF) was appropriately
capitalised as the purchase of a smelter asset acquisition
rather than as a business combination under IFRS3.
the contract
At the reporting date the Group had
recognised assets under construction
with a carrying value of £6.9 million
(2022: £Nil) and associated debt
obligations of £4.9 million (2022: £Nil) in
relation
the Rustenburg smelter
complex. The acquisition is unconditional
but subject to contract.
to
There is a risk that assets and associated
debt obligations are
inappropriately
recognised.
We evaluated management’s assessment of whether the
smelter complex met the definition of an asset and considered
the requirements of the Conceptual Framework for Financial
Reporting and the recognition criteria in IAS16 and concluded
that it should be recognized as an asset of the Group.
We agreed the refurbishment costs which have been
capitalised to underlying supporting documentation and
considered whether they were appropriately capitalised as
costs of acquiring and bringing the smelter complex to
operational condition.
We examined the context of the transactions to purchase FCF
and in relation to the smelter. We also considered the related
deferred and contingent debt obligations. After appropriate
consultation we formed the judgement that the related
deferred and contingent debt obligations were liabilities of the
Group and should be recognized in the financial statements
and as part of the cost of the smelter asset.
We considered the disclosures in the financial statements in
relation to the smelter asset and the associated critical
judgements.
IRONVELD PLC
17
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IRONVELD PLC (continued)
Key audit matter (continued)
How the scope of our audit addressed the key audit
matter (continued)
YEAR ENDED
30 JUNE
2023
Carrying value of investments in
subsidiary undertakings (Parent
Company)
(notes 2.2, 15)
the
reporting date
At
the Parent
Company had investments in subsidiary
undertakings with a carrying value of
£30.9 million (2022: £26.0 million). The
carrying value of those investments was
in excess of the market capitalisation of
the Group at the reporting date, which is
an indicator of impairment under IAS36.
There is a risk that investments in
subsidiary undertakings are impaired.
The Parent Company’s investments in subsidiary undertakings
of £30.9 million is underpinned by and reflects the underlying
exploration and evaluation asset and the expected future cash
flows from the Rustenburg smelter complex once fully
operational.
We obtained management’s calculations of the expected cash
flows from initial operations of the smelter and evaluated the
directors’ assessment including the following:
•
•
•
of
reviewing and challenging management’s assessment
and assumptions including expected sales volumes
and prices as well as costs of production and the
alternative
reasonably
impact
assumptions including discount rate used;
testing the mathematical accuracy of the models used
by management in their assessment; and
considering the disclosures in the financial statements
in relation to the smelter asset.
probably
Our audit procedures in relation to these matters were designed in the context of our audit opinion as a whole.
They were not designed to enable us to express an opinion on these matters individually and we express no such
opinion
Other information
The directors are responsible for the other information contained within the annual report. The other information
comprises the information included in the annual report, other than the financial statements and our auditor’s
report thereon. Our opinion on the financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the 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.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion based on the work undertaken in the course of our 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.
IRONVELD PLC
18
YEAR ENDED
30 JUNE
2023
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IRONVELD PLC (continued)
Matters on which we are required to report by exception
In light of the knowledge and understanding of the group and the parent company and their 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 where the Companies Act 2006 requires us to report
to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our
•
audit have not been received from branches not visited by us; or
the Parent Company financial statements are not in agreement with the accounting records and returns;
or
•
certain disclosures of Directors' remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of the directors for the financial statements
As explained more fully in the directors’ responsibilities statement set out on page 12, 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 Parent
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 the parent
company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is
detailed below:
We obtained an understanding of the legal and regulatory frameworks within which the company operates,
focusing on those laws and regulations that have a direct effect on the determination of material amounts and
disclosures in the financial statements. The laws and regulations we considered in this context were the
Companies Act 2006, UK and South African taxation legislation, health & safety law and environmental agency
legislation.
We identified the greatest risk of material impact on the financial statements from irregularities, including fraud,
to be the override of controls by management and judgement surrounding the capitalisation of exploration &
evaluation assets. Our audit procedures to respond to these risks included enquiries of management about their
own identification and assessment of the risks of irregularities, sample testing on the posting of journals and
reviewing accounting estimates for biases.
IRONVELD PLC
19
YEAR ENDED
30 JUNE
2023
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IRONVELD PLC (continued)
Auditor’s responsibilities for the audit of the financial statements (continued)
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some
material misstatements in the financial statements, even though we have properly planned and performed our
audit in accordance with auditing standards. We are not responsible for preventing non-compliance and cannot
be expected to detect non-compliance with all laws and regulations.
These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may
involve sophisticated schemes designed to avoid detection, including deliberate failure to record transactions,
collusion or the provision of intentional misrepresentations.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 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.
19 December 2023
Stephen Bullock (Senior Statutory Auditor)
for and on behalf of
Crowe U.K. LLP
Statutory Auditor
55 Ludgate Hill
London
EC4M 7JW
IRONVELD PLC
20
CONSOLIDATED INCOME STATEMENT
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating loss
Other gains and losses
Investment revenues
Finance costs
Loss before tax
Tax
Loss for the year
Attributable to:
Owners of the Company
Non-controlling interests
Note
4
5
7
8
9
10
2023
£000
103
(29)
74
(1,310)
(1,236)
47
34
(15)
(1,170)
711
(459)
(435)
(24)
(459)
YEAR ENDED
30 JUNE
2023
2022
£000
-
-
-
(798)
(798)
-
4
(17)
(811)
-
(811)
(806)
(5)
(811)
Loss per share - Basic and diluted
11
(0.02p)
(0.06p)
IRONVELD PLC
21
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Loss for the period
Exchange difference on translation of foreign operations
Total comprehensive loss for the year
Attributable to
Owners of the Company
Non-controlling interests
YEAR ENDED
30 JUNE
2023
2022
£000
(811)
(199)
(1,010)
(974)
(36)
(1,010)
2023
£000
(459)
(4,387)
(4,846)
(4,250)
(596)
(4,846)
In respect of the exchange differences on translation of foreign operation, the amounts charged/credited to other
comprehensive income may be reclassified to the income statement in future periods.
IRONVELD PLC
22
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Note
Non-current assets
Intangible assets
Property, plant and equipment
Investments
Other receivables
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Payables and contract liabilities
Lease liabilities
Borrowings
Non-current liabilities
Payables and contract liabilities
Lease liabilities
Deferred tax liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium
Other reserve
Retained earnings
Foreign currency translation reserve
Equity attributable to owners of the Company
Non-controlling interests
Total equity
13
14
15
17
16
17
25
18
19
20
18
19
21
23
24
24
24
24
29
YEAR ENDED
30 JUNE
2023
2022
£000
26,350
2
-
3
26,355
-
198
17
215
2023
£000
24,061
6,938
-
130
31,129
45
307
19
371
31,500
26,570
(1,862)
(10)
-
(1,872)
(4,162)
(27)
(3,284)
(7,473)
(9,345)
(619)
-
(499)
(1,118)
-
-
(4,730)
(4,730)
(5,848)
22,155
20,722
12,694
25,324
94
(8,845)
(9,860)
19,407
2,748
22,155
10,453
21,379
12
(8,421)
(6,045)
17,378
3,344
20,722
These financial statements were approved by the Board and authorised for issue on 19 December 2023.
Signed on behalf of the Board
M Eales
Director
Company Registration No: 04095614
IRONVELD PLC
23
PARENT COMPANY STATEMEMNT OF FINANCIAL POSITION
YEAR ENDED
30 JUNE
2023
Non-current assets
Investments
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Borrowings
Total liabilities
Net assets
Equity
Share capital
Share premium
Other reserve
Retained earnings
Total equity
(Attributable to owners of the Company)
Note
15
2023
£000
2022
£000
30,854
26,017
17
25
18
20
23
24
24
24
57
17
74
60
12
72
30,928
26,089
(267)
-
(267)
(606)
(499)
(1,105)
30,661
24,984
12,694
25,324
94
(7,451)
30,661
10,453
21,379
12
(6,860)
24,984
The loss for the financial year dealt with in the financial statements of the parent Company was £602,000 (2022
– loss £693,000).
These financial statements were approved by the Board and authorised for issue on 19 December 2023
Signed on behalf of the Board
M Eales
Director
Company Registration No: 04095614
IRONVELD PLC
24
YEAR ENDED
30 JUNE
2023
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to owners of the Company:
At 1 July 2021
Loss for the year
Exchange difference on
translation of foreign operations
Issue of share capital
Exercise of share warrants
Share
Capital
£000
Other
Share
Premium Reserve
£000
£000
Retained
earnings
£000
Foreign
currency
translation Total
£000
£000
10,436
21,261
15
(7,618)
(5,877)
18,217
-
-
17
-
-
-
118
-
-
-
-
(3)
(806)
-
(806)
-
-
3
(168)
(168)
-
-
135
-
At 30 June 2022
10,453
21,379
12
(8,421)
(6,045)
17,378
Profit (loss) for the year
Exchange difference on
translation of foreign operations
-
-
-
-
Issue of share capital
2,241
3,945
Issue of share warrants
Share based payments
-
-
-
-
-
-
-
82
-
(435)
-
(435)
-
-
-
11
(3,815)
(3,815)
-
-
-
6,186
82
11
At 30 June 2023
12,694
25,324
94
(8,845)
(9,860)
19,407
IRONVELD PLC
25
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
Total equity:
YEAR ENDED
30 JUNE
2023
Owners of
the Company
£000
Interest
£000
Non-controlling
Total
Equity
£000
At 1 July 2021
Loss for the year
Exchange difference on
translation of foreign operations
Issue of share capital
18,217
3,380
21,597
(806)
(5)
(811)
(168)
135
(31)
-
(199)
135
At 30 June 2022
17,378
3,344
20,722
Profit (loss) for the year
Exchange difference on
translation of foreign operations
Issue of share capital
Issue of share warrants
Share based payments
(435)
(24)
(459)
(3,815)
(572)
(4,387)
6,186
82
11
-
-
-
6,186
82
11
At 30 June 2023
19,407
2,748
22,155
IRONVELD PLC
26
YEAR ENDED
30 JUNE
2023
COMPANY STATEMENT OF CHANGES IN EQUITY
Equity attributable to the equity holders of the Company:
At 1 July 2021
Loss for the year
Issue of share capital
Exercise of share warrants
Share
Capital
£000
Share
Premium
£000
Other
Reserve
£000
Retained
Earnings
£000
Total
Equity
£000
10,436
21,261
15
(6,170)
25,542
-
17
-
-
118
-
-
-
(3)
(693)
(693)
-
3
135
-
At 30 June 2022
10,453
21,379
12
(6,860)
24,984
Loss for the year
-
-
Issue of share capital
2,241
3,945
Issue of share warrants
Share based payments
-
-
-
-
At 30 June 2023
12,694
25,324
-
-
82
-
94
(602)
-
-
11
(602)
6,186
82
11
(7,451)
30,661
IRONVELD PLC
27
Note
25
CONSOLIDATED CASH FLOW STATEMENT
Cash used in operating activities
Interest paid
Net cash used in operating activities
Investing activities
Purchases of property, plant and equipment
Purchase of exploration and evaluation assets
Interest received
Loans to Joint Venture
Loans received from Joint Venture
Net cash used in investing activities
Financing activities
Proceeds on issue of equity (net of costs)
Proceeds from new loans
Repayment of loans
Payment of lease liabilities
Net cash generated by financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning
of year
25
Effects of foreign exchange rates
Cash and cash equivalents at end of year
25
2023
£000
(672)
(3)
(675)
(2,337)
(2,513)
34
(141)
24
(4,933)
5,755
-
(140)
(4)
5,611
3
17
(1)
19
YEAR ENDED
30 JUNE
2023
2022
£000
(337)
-
(337)
(1)
(396)
4
-
-
(393)
-
482
-
-
482
(248)
270
(5)
17
IRONVELD PLC
28
COMPANY CASH FLOW STATEMENT
Note
Cash used in operating activities
25
Net cash used in operating activities
Investing activities
Payments to acquire investments - loans
Net cash used in investing activities
Financing activities
Proceeds on issue of equity (net of costs)
Proceeds from new loans
Repayment of loans
Net cash generated by financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at
beginning of year
Cash and cash equivalents at end of year
25
25
2023
£000
(1,100)
(1,100)
(4,510)
(4,510)
5,755
-
(140)
5,615
5
12
17
YEAR ENDED
30 JUNE
2023
2022
£000
(230)
(230)
(495)
(495)
-
482
-
482
(243)
255
12
IRONVELD PLC
29
YEAR ENDED
30 JUNE
2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. General information
Ironveld Plc is a public company incorporated and domiciled in England and Wales under the Companies Act
2006 whose shares are listed on the Alternative Investment Market of the London Stock Exchange. The address
of the registered office is given on page 2. The nature of the Group's operations and its principal activities are set
out in note 3 and in the Directors Report on page 6.
Adoption of new and revised Standards
In the current year, the Group has applied new or amended standard for the first time which are mandatory for
accounting periods commencing on or after 1 July 2022. None of the standards adopted had a material impact on
the financial statements. The significant new and amended standards adopted were as follows:-
Amendments to IFRS 9 in respect of the derecognition of financial liabilities.
Amendments to IAS 16 in respect of proceeds before intended use.
Amendments to IAS 37 in respect of onerous contracts.
At the date of authorisation of these financial statements, amendments to existing standards and interpretations,
applicable to the group, are not yet effective and have not been adopted early by the Group. The adoption of
these standards, amendments and interpretations is not expected to have a material impact on the Group and
Company’s results or equity.
2.1 Significant accounting policies
The financial statements are based on the following policies which have been consistently applied:
Basis of preparation
The financial statements of the Group and Parent Company have been prepared in accordance with UK-adopted
international accounting standards (IFRSs) in conformity with the requirements of the Companies Act 2006.
The financial statements have been prepared on the historical cost basis. The financial statements are presented
in pounds sterling because that is considered to be the currency of the primary economic environment.
The principal accounting policies are set out below:
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and all entities
controlled by the Company (its subsidiaries) made up to the year-end. Control is achieved where the Company
has power to govern the financial and operating policies of an investee entity so as to obtain benefits from its
activities.
Subsidiaries are consolidated from the date of their acquisition, being the date on which the Company obtains
control and ceases when the Company loses control of the subsidiary. Profit or loss and each component of other
comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total
comprehensive income of the subsidiaries is attributed to the owners of the Company and to the non-controlling
interests even if this results in the non-controlling interests having a deficit balance.
Non-controlling interests in subsidiaries are identified separately from the Group's equity therein. Those interests
of non-controlling shareholders are initially measured at their proportionate share of the fair value of the acquiree’s
identifiable net assets. Subsequent to acquisition, the carrying value of the non-controlling interests is the amount
of initial recognition plus the non-controlling interests' share of the subsequent changes in equity.
Changes in the Group's interests in subsidiaries that do not result in a loss of control are accounted for as equity
transactions. The carrying amount of the Group's interests and the non-controlling interests are adjusted to reflect
the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-
controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in
equity and attributed to the owners of the Company.
IRONVELD PLC
30
YEAR ENDED
30 JUNE
2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.1 Significant accounting policies (continued)
Joint ventures
A joint venture (JV) is a type of joint arrangement in which the parties with joint control of the arrangement have
rights to the net assets of the arrangement. A separate vehicle (not the parties) will have the rights to the assets
and obligations for the liabilities, relating to the arrangement. The JV is not dependent on the parties to the
arrangement for funding and the parties to the arrangement have no obligations for the liabilities of the
arrangement. The Group’s investment in its JV is accounted for using the equity method.
Under the equity method, the investment in the JV is initially recognised at cost to the Group. In subsequent
periods, the carrying amount of the JV is adjusted to recognise changes in the Group’s share of net assets of the
JV since the acquisition date. Goodwill relating to the JV is included in the carrying amount of the investment and
is neither amortised nor individually tested for impairment.
The statement of profit or loss and other comprehensive income reflects the Group’s share of the results of the
operations of the JV. In addition, when there has been a change recognised directly in the equity of the JV, the
Group recognises its share of any changes, when applicable, in the statement of changes in equity. Unrealised
gains and losses resulting from transactions between the Group and the JV are eliminated to the extent of the
interest in the JV.
The aggregate of the Group’s share of profit or loss of the JV is shown on the face of the statement of profit or
loss and other comprehensive income as part of operating profit and represents profit or loss after tax and non-
controlling interests in the subsidiaries of JV. The financial statements of the JV are prepared for the same
reporting period as the Group. When necessary, adjustments are made to bring the accounting policies in line
with those of the Group.
After application of the equity method, the Group determines whether it is necessary to recognise an impairment
loss on its investment in the JV. At each reporting date, the Group determines whether there is objective evidence
that the investment in the JV is impaired. If there is such evidence, the Group calculates the amount of impairment
as the difference between the recoverable amount of the JV and its carrying value, then recognises the loss as
‘Share of profit of a joint venture’ in the statement of profit or loss and other comprehensive income.
On loss of joint control over the JV, the Group measures and recognises any retained investment at its fair value.
Any difference between the carrying amount of the JV upon loss of joint control and the fair value of the retained
investment and proceeds from disposal is recognised in the statement of profit or loss and other comprehensive
income.
Business combinations
Acquisitions of subsidiaries which are determined to be business combinations under IFRS3 are accounted for
using acquisition accounting. The consideration for each acquisition is measured at the fair value of assets given,
liabilities incurred or assumed and equity instruments issued by the Group in exchange for control in the acquiree.
Acquisition-related costs are recognised in the income statement as incurred.
Acquisitions of subsidiaries which are determined not to be business combinations under IFRS3 are accounted
for on other bases, taking into account the application guidance in Appendix B of IFRS3. Where the directors
consider it appropriate to do so the directors will apply the concentration test permitted by para B7B of IFRS3 and
account for an acquisition of a subsidiary as an asset acquisition.
Revenue from contracts with customers
The Group is principally engaged in the business of producing Magnetite ore and speciality metals including High
Purity Iron, Vanadium slag and Titanium slag. Revenue is measured based on the consideration specified in a
contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue
when it transfers control of a product or service to a customer. If a customer pays consideration before the Group
transfers the goods or services to the customer a contract liability is recognised when the payment is made or
due (whichever is earlier). Contract liabilities are recognised as revenue when the Group performs under the
contract.
IRONVELD PLC
31
YEAR ENDED
30 JUNE
2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.1 Significant accounting policies (continued)
Exploration and evaluation
Costs incurred prior to acquiring the rights to explore are charged directly to the income statement.
Licence acquisition costs and all other costs incurred after the rights to explore an area have been obtained, such
as the direct costs of exploration and appraisal (including geological, drilling, trenching, sampling, technical
feasibility and commercial viability activities) are accumulated and capitalised as intangible exploration and
evaluation (“E&E”) assets, pending determination. Amounts charged to project partners in respect of costs
previously capitalised are deducted as contributions received in determining the accumulated cost of E&E assets.
E&E assets are not amortised prior to the conclusion of the appraisal activities. At completion of appraisal
activities, if financial and technical feasibility is demonstrated and commercial reserves are discovered then,
following development sanctions, the carrying value of the relevant E&E asset will be reclassified as a
development and production asset in intangible assets after the carrying value has been assessed for impairment
and, where appropriate adjusted. If after completion of the appraisal of the area it is not possible to determine
technical and commercial feasibility or if the legal rights have expired or if the Group decide to not continue
activities in the area, then the cost of unsuccessful exploration and evaluation are written off to the income
statement in the relevant period.
The Group's definition of commercial reserves for such purposes is proved and probable reserves on an
entitlement basis. Proved and probable reserves are the estimated quantities of minerals which geological,
geophysical and engineering data demonstrate with a specified degree of certainty to be recoverable in future
years from the known reserves and which are considered to be commercially producible.
Such reserves are considered commercially producible if management has the intention of developing and
producing them and such intention is based upon:
-
-
-
-
-
a reasonable expectation that there is a market for substantially all of the expected production;
a reasonable assessment of the future economics of such production;
evidence that the necessary production, transmission and transportation facilities are available or
can be made available; and
agreement of appropriate funding; and
the making of the final investment decision.
On an annual basis a review for impairment indicators is performed. If an indicator of impairment exists an
impairment review is performed. The recoverable amount is then considered to be the higher of the fair value less
costs of sale or its value in use. Any identified impairment is written off to the income statement in the period
identified.
Taxation
The tax expense represents the sum of the tax payable and deferred tax.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of
assets and liabilities in the financial statements and the corresponding tax base used in the calculation of the
taxable profit and is accounted for using the statement of financial position liability method. Deferred tax liabilities
are generally recognised on all appropriate taxable temporary differences and deferred tax assets are recognised
to the extent that it is probable that taxable profits will be available against which the deductible timing differences
can be utilised. The carrying amount of deferred tax assets is reviewed at each statement of financial position
date.
IRONVELD PLC
32
YEAR ENDED
30 JUNE
2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.1 Significant accounting policies (continued)
Taxation (continued)
Deferred tax is calculated at the tax rates that are expected to be applicable in the period when the liability or
asset is realised and is based on tax laws and rates substantially enacted at the statement of financial position
date. Deferred tax is charged in the income statement except where it relates to items charged/credited in other
comprehensive income, in which case the tax is also dealt with in other comprehensive income.
Leases
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises
a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the
lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low
value assets (such as tablets and personal computers, small items of office furniture and telephones). For these
leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term
of the lease unless another systematic basis is more representative of the time pattern in which economic benefits
from the leased assets are consumed.
Property, plant and equipment
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off
the cost less the estimated residual value of each asset over its expected useful life, as follows:
Plant and machinery
Motor vehicles
Assets under construction
Between 2 and 6 years straight line basis
6 years straight line basis
Not depreciated until brought into use
Leased assets are depreciated in a consistent manner over the shorter of their expected useful lives and the lease
term.
Inventories
Inventories are measured at the lower of cost and net realisable value on the first-in-first-out basis.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
The cost of inventories comprises of all costs of purchase, costs of conversion and other costs incurred in bringing
the inventories to their present location and condition.
The cost of inventories of items that are not ordinarily interchangeable and goods or services produced and
segregated for specific projects is assigned using specific identification of the individual costs.
The cost of inventories is assigned using the formula. The same cost formula is used for all inventories having a
similar nature and use to the entity.
IRONVELD PLC
33
YEAR ENDED
30 JUNE
2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.1 Significant accounting policies (continued)
When inventories are sold, the carrying amount of those inventories are recognised as an expense in the period
in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value
and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount
of any reversal of any write-down of inventories, arising from an increase in net realisable value, are recognised
as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.
Foreign currencies
The individual financial statements of each group company are presented in the currency of the primary economic
environment in which it operates (its functional currency). For the purposes of the consolidated financial
statements, the results and financial position of each group company are expressed in pounds sterling, which is
the functional currency of the Company, and the presentation currency for the consolidated financial statements.
In preparing the financial statements of the individual companies, transactions in currencies other than the entity's
functional currency are recognised at the rates of exchange prevailing on the dates of the transactions. At each
statement of financial position date, monetary assets and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in
foreign currencies are translated at the rates prevailing at the date the fair value was determined. Non-monetary
items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences
are recognised in the income statement in the period in which they arise.
When presenting the consolidated financial statements, the assets and liabilities of the Group's foreign operations
are translated at the exchange rates prevailing at the statement of financial position date. Income and expense
items are translated at average exchange rates for the period, unless exchange rates have fluctuated significantly
in which case the rates at the date of the transactions are used. Exchange differences arising are recognised in
other comprehensive income and accumulated in equity (attributed to non-controlling interests where
appropriate).
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities
of the foreign entity and translated using the closing rate.
Financial instruments
Financial assets and financial liabilities are recognised in the Group's statement of financial position when the
Group becomes a party to the contractual provisions of the instrument.
Other receivables
Other receivables are measured at initial recognition at fair value, and are subsequently measured at amortised
cost using the effective interest rate method except for short-term receivables when recognition of interest would
be immaterial. The Group recognises appropriate allowances for expected credit losses in the income statement
based on a historical credit loss experience, adjusted for factors that are specific to the debtors and general
economic conditions.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short term highly liquid
investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of
change in value.
IRONVELD PLC
34
YEAR ENDED
30 JUNE
2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.1 Significant accounting policies (continued)
Financial liability and equity
Interest bearing bank and other loans and bank overdrafts are recorded at the proceeds received, net of direct
issue costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs,
are accounted for on an accrual basis in the income statement using the effective interest rate method and are
added to the carrying amount of the instrument to the extent that they are not settled in the period in which they
arise.
The Group classifies financial instruments, or their component parts, on initial recognition as a financial asset,
financial liability or an equity instrument in accordance with the substance of the contractual arrangement.
Financial instruments are initially recognised at fair value and are subsequently amortised using the effective
interest method. Fair value is estimated from available market data and reference to other instruments considered
to be substantially the same.
Trade and other payables
Trade payables and other financial liabilities are initially measured at fair value, and are subsequently measured
at amortised cost, using the effective interest rate method.
The Group's activities expose it primarily to the financial risks of changes in interest rates on borrowings and
foreign exchange risk.
Investments
Investments in subsidiaries are stated at cost less any provision for impairment.
Share-based payments
The Group issues equity-settled share-based payments to certain employees and other parties. Equity settled
share-based payments are measured at fair value at the date of grant. In respect of employee related share based
payments, the fair value determined at the grant date is expensed on a straight-line basis over the vesting period,
based on the Group's estimate of shares that will eventually vest. In respect of other share based payments, the
fair value is determined at the date of grant and recognised when the associated goods or services are received.
Operating segments
The Group considers itself to have one operating segment in the year and further information is provided in note
3.
Going concern
The Directors have, at the time of approving the financial statements, a reasonable expectation that the Company
and the Group has adequate resources to continue in operating existence for the foreseeable future. Thus they
continue to adopt the going concern basis of accounting in preparing the financial statements. Further details are
provided in the note 2.2 and in the Strategic Report on pages 5 to 6. The financial statements therefore do not
include the adjustments that would result if the Group and Company were unable to continue as a going concern.
Cost of sales
When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period
in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value
and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The
amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, is
recognised as a reduction in the amount of inventories recognised as an expense in the period in which the
reversal occurs.
IRONVELD PLC
35
YEAR ENDED
30 JUNE
2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.2 Critical accounting estimates and judgements
The Group makes estimates and assumptions regarding the future. Estimates and judgements are continually
evaluated based on historical experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. In the future, actual experience may differ from these
estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Going concern
As at the date of approval of these Financial Statements the Rustenburg smelter project has been temporarily
placed on care and maintenance following a decision to cease renting electrical generators and put in place a
hire purchase agreement for similar power generation for approximately 25% of the monthly cost. The proposed
new generator units are available in South Africa and the intention is that the Company will coincide the delivery
and installation of these new units with the anticipated direct funding transaction, which is expected to be
concluded early in 2024.
Whilst some revenues have been generated during 2023 from the operations at the smelter, when operating at a
level below full capacity – particularly during periods of non-operation due to power supply or critical repairs - the
overheads incurred by the facility have consumed more cash than revenues earned. The Company therefore
took the decision earlier this month to conserve cash by returning rented generator units and to temporarily
suspend production, also reducing headcount at the smelter to a level commensurate with care and maintenance
activities. As at the date of approval of these Financial Statements the Company had not signed definitive
transaction documents, but the Board has reasonable expectations that a significant funding transaction with a
financial institution in South Africa, which has been in process for a number of months, will be concluded early in
2024.
Taking into account existing cash resources, and the assumed receipts of funding detailed above the Directors
have a reasonable expectation that the Group has adequate resources to continue in operational existence for
the foreseeable future, being twelve months from the date of the approval of the financial statements. For this
reason, the Board continues to adopt the going concern basis in the preparation of these financial statements.
Should the agreed funding transaction not be completed or be materially delayed the Company will seek
alternative funding arrangements and those arrangements are not yet committed. This represents a material
uncertainty in relation to the Company’s funding arrangements.
Exploration and evaluation assets
The Group has adopted a policy of capitalising the costs of exploration and evaluation and carrying the amount
without impairment assessment until impairment indicators exist (as permitted by IFRS 6). The directors consider
that as at the Period end the Group remained in the exploration and evaluation phase and therefore, under IFRS
6, the directors have to make judgements as to whether any indicators of impairment exist and the future activities
of the Group. No such indicators of impairment were identified and therefore, in accordance with IFRS 6, no
impairment review has been carried out. The Directors remain committed to development of the asset.
Acquisition of Ferrochrome Furnaces (Pty) Limited (“FCF”)
On 24 May 2022 the Company announced that it had agreed Heads of Terms and on 31 August 2022 further
announced that it had signed a share purchase agreement to acquire 100% of the share capital of FCF, which
would provide the Group with an existing smelting facility (the Rustenburg Smelter) which, following refurbishment,
would provide the Group with the opportunity to commence processing the ore. The acquisition by subsidiary
Ironveld Smelting (Proprietary) Limited, reflected an agreement with the shareholders and the Business Rescue
Practitioner of FCF to acquire the entire share capital for a nominal amount but at the date of these accounts the
agreement remained subject to contract. Under the agreed terms, the Group will be required to enter into a debt
purchase agreement with the sole creditor of FCF for a total of R116 million (approximately £4.8 million). Since
the transaction becoming unconditional the Group has incurred £2 million on refurbishing the smelter complex.
This results in the directors making two critical judgements in preparing these financial statements.
IRONVELD PLC
36
YEAR ENDED
30 JUNE
2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.2 Critical accounting estimates and judgements (continued)
Acquisition of Ferrochrome Furnaces (Pty) Limited (“FCF”) (continued)
Nature of the acquisition - The directors have considered application notes of IFRS3 and elected to apply the
optional test set out in paragraph B7B of IFRS 3 (the ‘concentration test’) which permits a simplified assessment
of whether an acquired set of activities and assets is not a business. Having determined that the concentration
test is met and the set of activities and assets is not a business no further assessment is considered necessary.
The acquisition of FCF will therefore be accounted for as an asset acquisition and not a business combination.
Recognition of assets under construction and related debt obligations -The directors have considered the
definition of an asset set out in Chapter 4 of the Conceptual Framework for Financial Reporting issued by the
International Accounting Standards Board. In their consideration the directors have had regard to the Group’s
unencumbered use of the smelter, including the right to use it to generate revenue, management’s actions in
refurbishing the smelter complex for long term use, the status of the Business Rescue process and consents
obtained from the sole creditor of FCF and the probability of a range of possible outcomes and of inflows or
outflows of economic benefits. The directors have also considered IAS 16 para 7 in relation to recognition criteria,
in particular paragraph 7 (a) which refers to whether it is probable that future economic benefits will flow to the
group. Based on the nature of the facts and the actions of management the directors consider that the ‘probable’
threshold has been passed and therefore it is appropriate to recognise the asset as an asset under construction
at the year end.
As a consequence of their determination the directors have recognised the Rustenburg smelter complex in assets
under construction (see note 14) and also the deferred and contingent debt obligations under the Debt Purchase
Agreement (see note 18)
Until the Business Rescue process in South Africa is fully concluded in all respects the acquisition remains subject
to contract and there is an element of uncertainty over this accounting treatment. If for any reason, the likelihood
of which the directors consider to be remote, final closure of the Business Rescue process does not take place it
is probable that asset under construction of £6.9 million and associated deferred and contingent debt obligations
of £4.8 million would be derecognised and capitalised refurbishment expenditure of £2.3 million would be
expensed.
Investment impairment indicators
The Company statement of financial position includes an investment in subsidiary companies of £30,854,000
which is underpinned and reflects the underlying subsidiary exploration and evaluation assets discussed above.
At the reporting date the group’s market capitalisation was less than the carrying value of the investment, which
is an indicator of impairment under IAS36. An impairment review has been carried out in the period – see note
15.
Deferred tax assets
The directors must judge whether the future profitability of the Group is likely in making the decision whether or
not to recognise a deferred tax asset in respect of taxation losses. No deferred tax assets have been recognised
in the year.
IRONVELD PLC
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. Business and geographical segments
Information reported to the Group Directors for the purposes of resource allocation and assessment of segment
performance is focused on the activity of each segment and its geographical location. The directors consider that
there is only one business segment, which is the activity of prospecting, exploration and mining based in South
Africa.
4. Revenue
YEAR ENDED
30 JUNE
2023
Revenue from contracts with customers – disaggregated revenue information
Sale of goods – Magnetite Ore
Sale of goods – Other sales
All revenue represented the sale of goods and was recognised at a point in time.
5. Operating loss
Operating loss for the year is shown after charging:
Depreciation on tangible assets
Short term payments under leases
Share based payment charge
Foreign exchange loss/(gain)
Cost of inventories recognised as expense
Auditors’ remuneration
2023
£000
18
85
103
2023
£000
17
32
11
5
29
2022
£000
-
-
-
2022
£000
1
14
-
(2)
-
Fees payable to the auditors for the audit of the Company’s accounts
40
38
IRONVELD PLC
38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. Staff costs
Group
Wages and salaries
Social security costs
Pension costs
Share based payments
Directors other fees
YEAR ENDED
30 JUNE
2023
2023
£000
2,042
48
84
11
134
2,319
2022
£000
377
22
14
-
74
487
The average monthly number of employees, including Directors, during
the period was as follows:
2023
Number
2022
Number
Administration and management
Mining and smelting
Directors remuneration and other fees
Pension
Share based payments
22
77
99
2023
£000
468
15
7
490
12
-
12
2022
£000
339
14
-
353
IRONVELD PLC
39
YEAR ENDED
30 JUNE
2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. Staff costs (continued)
The aggregate remuneration and fees paid to the highest paid Director was
Pension
Share based payments
2023
£000
193
15
3
211
Further details of the Directors’ remuneration are given in the Directors’ Remuneration Report on page
11.
Company
Wages and salaries
Social security costs
Share based payments
Pension costs
2023
£000
334
41
3
15
393
2022
£000
175
14
-
189
2022
£000
265
21
-
14
300
The average monthly number of employees, including Directors, during
the period was as follows:
2023
Number
2022
Number
Administration and management
6
4
7. Other gains and losses
Gain on settlement of financial liabilities with equity
8. Investment revenues
Interest on financial deposits
2023
£000
47
2023
£000
34
2022
£000
-
2022
£000
4
IRONVELD PLC
40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
9. Finance costs
Loan interest and similar charges
Interest on lease liabilities
Other finance costs
10. Tax
a) Tax charge/(credit) for the period
Corporation tax:
Current period
Deferred tax (note 21)
b) Factors affecting the tax charge for the period
Loss on ordinary activities for the period before taxation
Loss on ordinary activities for the period before taxation multiplied by
effective rate of corporation tax in the UK of 19% (2022 – 19%)
Effects of:
Expenses not deductible for tax purposes
Tax losses not recognised
Tax losses not previously recognised
Change in tax rates
Tax charge/(credit) for the period
YEAR ENDED
30 JUNE
2023
2023
£000
11
2
2
15
2023
£000
-
(711)
(711)
2022
£000
17
-
-
17
2022
£000
-
-
-
(1,170)
(811)
(222)
(154)
1
118
(451)
(157)
(711)
5
149
-
-
-
c) Factors that may affect future tax charges – The Group has estimated unutilised tax losses amounting to
£6,078,000 (2022 - £5,149,000) the values of which are not recognised in the statement of financial position. The
losses represent a potential deferred taxation asset of £1,524,000 (2022 - £1,287,000) based on the enacted
future tax rate of 25% in the United Kingdom and 27% in South Africa, which would be recoverable should the
Group make sufficient suitable taxable profits in the future.
In addition, the Group has pooled exploration costs incurred of £9,610,000 (2022 - £8,901,000) which are
expected to be deductible against future trading profits of the Group.
IRONVELD PLC
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11. Loss per share
Loss attributable to the owners of the Company
Loss per share – Basic and diluted
Continuing operations
YEAR ENDED
30 JUNE
2023
2023
£000
(435)
2022
£000
(806)
(0.02p)
(0.06p)
The calculation of basic earnings per share is based on 2,963,582,067 (2022 – 1,322,831,729) ordinary shares,
being the weighted average number of ordinary shares in issue during the year. Where the Group reports a loss
for the current period, then in accordance with IAS 33, the share options are not considered dilutive. Details of
such instruments which could potentially dilute basic earnings per share in the future are included in note 23.
12. Loss attributable to owners of the parent Company
As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the parent Company is not
presented as part of these accounts. The parent Company's loss for the financial year amounted to £602,000
(2022 - £693,000).
13. Intangible assets
Group
Cost:
At 1 July 2021
Additions
Exchange differences
At 30 June 2022
Additions
Exchange differences
At 30 June 2023
Impairment and amortisation:
At 1 July 2021, 30 June 2022 and at 30 June 2023
Net book value at 30 June 2023
Net book value at 30 June 2022
Exploration
and
evaluation
assets
£000
26,191
396
(237)
26,350
2,513
(4,802)
24,061
-
24,061
26,350
The Group's exploration and evaluation assets all relate to South Africa.
In respect of the exploration and evaluation assets which remain in the appraisal phase, the Group has
performed a review for impairment indicators, as required by IFRS 6 and in the absence of such indicators no
impairment review was carried out.
IRONVELD PLC
42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. Property, plant and equipment
YEAR ENDED
30 JUNE
2023
Group
Cost:
At 1 July 2021
Additions
At 30 June 2022
Additions
Exchange differences
At 30 June 2023
Depreciation:
At 1 July 2021
Charge for the period
At 30 June 2022
Charge for the period
Exchange differences
At 30 June 2023
Net book value at 30 June 2023
Net book value at 30 June 2022
Assets under Motor
vehicles
construction
£000
£000
Plant and
machinery
£000
Total
£000
-
-
-
7,132
(252)
6,880
-
-
-
-
-
-
6,880
-
-
-
-
58
(6)
52
-
-
-
12
(1)
11
41
-
39
1
40
22
(9)
53
37
1
38
5
(7)
36
39
1
40
7,212
(267)
6,985
37
1
38
17
(8)
47
17
6,938
2
2
The asset under construction represents the cost of refurbishment of the Rustenburg smelter and includes
£4,829,000 deferred costs which at the balance sheet date were unconditional but remained subject to contract.
All non-current assets in 2023, 2022 and 2021 were located in South Africa.
IRONVELD PLC
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15. Investments
Group – Loans to other entities
Cost:
At 1 July
Exchange differences
At 30 June
Impairment:
At 1 July
Exchange differences
At 30 June
Book value at 30 June
YEAR ENDED
30 JUNE
2023
2023
£000
2022
£000
352
(61)
291
352
(61)
291
-
355
(3)
352
355
(3)
352
-
The investment represented the R7 million refundable deposit to Siyanda Smelting and Refining Proprietary
Limited which the Group paid in exchange for a period of exclusivity to conclude a potential acquisition of the
company. The period of exclusivity expired in 2017. The deposit is interest free and becomes refundable should
the acquisition not proceed. The investment was fully impaired as at 30 June 2023 whilst the directors pursued
other alternative opportunities.
Company - Subsidiary undertakings
Cost:
At 1 July 2021
Additions
At 30 June 2022
Additions
At 30 June 2023
Loans
£000
Equity
£000
Total
£000
5,168
515
20,334 25,502
515
-
5,683
20,334
26,017
4,837
-
4,837
10,520
20,334
30,854
Net book value at 30 June 2023
10,520
20,334
30,854
Net book value at 30 June 2022
5,683
20,334
26,017
The loans represent loans to Ironveld Holdings (Propriety) Limited of £10,342,000 (2022 - £5,525,000) which incur
interest at a rate not exceeding the base lending rate applicable in England and Wales. Under the initial terms of
the loan, £2,500,000 was repayable 31 December 2019 with the remainder due 31 December 2020 however
further agreement has extended the loan period until project finance is agreed. Also included in loans are working
capital loans to Ironveld Mauritius Limited of £178,000 (2022 - £158,000) which are interest free.
At the reporting date the Group’s market capitalisation was less than the carrying value of the Company’s
investments in subsidiaries, which is an indicator of impairment under IAS36. An impairment review has been
carried out in the period.
IRONVELD PLC
44
YEAR ENDED
30 JUNE
2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15. Investments (continued)
Company - Subsidiary undertakings (continued)
The Company’s investments in subsidiary undertakings of £30,854,000 is underpinned and reflects the underlying
exploration and evaluation assets and the expected future cash flows from the Rustenburg smaller complex once
fully operational. These have been treated as a single cash generating unit for the purposes of the review.
Impairment was tested by discounting the expected cash flows of a pilot scale operation of the smelter complex
over a 10 year period. Cash flows, net of acquisition debt repayments, were discounted using an industry standard
appraisal rate of 10% and sensitised for reasonably possible alternative scenarios, including discount rate. The
Company’s investment on subsidiaries is not impaired on the base case or in any of the reasonably possible
alternative scenarios applied.
The Company has investments in the following subsidiaries.
Name of company
Subsidiary undertakings
Ironveld (Mauritius)
Ironveld Holdings (Proprietary) Limited
Ironveld Mining (Proprietary) Limited
Ironveld Energy (Proprietary) Limited
Ironveld Smelting (Proprietary) Limited
HW Iron (Proprietary) Limited
Lapon Mining (Proprietary) Limited
Luge Prospecting and
Mining (Proprietary) Limited
Joint venture
Ipace Proprietary Limited
Shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Proportion of
voting rights
and shares held
Nature of
business
*100%
100%
100%
100%
74%
68%
74%
Holding Company
Holding Company
Mining and exploration
Ore processing and smelting
Ore processing and smelting
Prospecting and mining
Prospecting and mining
Ordinary
74%
Prospecting and mining
Ordinary
50%
Sale of Magnetite ore
* Held directly by Ironveld Plc all other holdings are indirect.
All subsidiary undertakings are incorporated and domiciled in South Africa, other than Ironveld Mauritius Limited,
which is incorporated and domiciled in Mauritius.
The registered office of all subsidiaries with the exception of Ironveld (Mauritius) was Gartner House, 33 Wessel
Road, Rivonia 2128, South Africa.
The registered office of Ironveld (Mauritius) is - C/o Rogers Capital Corporate Services Limited, 3rd Floor, Rogers
House, No. 5 President John Kennedy Street, Port Louis, Republic of Mauritius.
Further details of non-wholly owned subsidiaries of the Group are provided in note 29.
16. Inventories
Group
Ore stockpile
Due within 12 months
Due after more than 12 months
2023
£000
45
45
(45)
-
2022
£000
-
-
-
-
Company
2023
£000
2022
£000
-
-
-
-
-
-
-
-
IRONVELD PLC
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17. Trade and other receivables
Group
Trade receivables
Other receivables
Amounts owed by related parties
Amounts owed by joint ventures
Prepayments
Due within 12 months
Due after more than 12 months
2023
£000
7
222
5
125
78
437
(307)
130
2022
£000
-
134
3
-
64
201
(198)
3
YEAR ENDED
30 JUNE
2023
Company
2023
£000
2022
£000
-
6
-
-
51
57
(57)
-
-
2
-
-
58
60
(60)
-
Amounts owed by related parties represent expenses paid on behalf of the non-controlling interest shareholders
by the company and are expected to be recovered in more than 12 months. The amounts are unsecured and
interest free.
Credit risk
The Group's principal financial assets are bank balances, cash balances, amounts due from joint ventures and
other receivables. The Group's credit risk is primarily attributable to its other receivables of which £107,000 (2022
- £107,000) is due from a third party financial institution and further information is provided in note 22. The
remaining other receivable relates to recoverable VAT. The amounts presented in the balance sheet are net of
allowances for doubtful receivables.
18. Payables and contract liabilities
Group
Company
Trade payables
Taxation and social security costs
Other payables
Contract liabilities
Amounts owed to joint ventures
Accruals
Due within 12 months
Due after more than 12 months
2023
£000
753
10
4,852
195
21
193
6,024
(1,862)
4,162
2022
£000
132
4
5
-
-
478
619
(619)
-
2023
£000
134
10
5
-
-
118
2022
£000
132
3
5
-
-
466
267
(267)
606
(606)
-
-
Other payables includes £4,829,000 (R116,000,000) in respect of the proposed Rustenburg smelter acquisition
which was unconditional at the year end but which remained subject to contract. On completion, £4,163,000
(R100,000,000) will be due after 12 months with the remainder anticipated to be due within 12 months.
Contract liabilities at both 1 July 2022 and at 1 July 2021 were £Nil.
IRONVELD PLC
46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19. Leases
The Group has lease contracts for certain items of motor vehicles with lease terms of six years. In addition, the
Group uses short-term leases (less than 12 months term) where considered appropriate to its requirements and
takes advantage of the recognition exemptions for such leases.
YEAR ENDED
30 JUNE
2023
Right-of-use assets
Cost:
At 1 July
Additions
Exchange differences
At 30 June
Depreciation:
At 1 July
Charge for the period
Exchange differences
At 30 June
Net book value at 30 June
Lease liabilities
At 1 July
Additions
Interest expense
Payments
Exchange differences
Due within 12 months
Due after more than 12 months
Group
2023
£000
2022
£000
Company
2023
£000
2022
£000
-
47
(6)
41
-
10
(1)
(9)
32
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Group
2023
£000
2022
£000
Company
2023
£000
2022
£000
-
47
2
(6)
(6)
37
(10)
27
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
IRONVELD PLC
47
YEAR ENDED
30 JUNE
2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19. Lease liabilities (continued)
Maturity analysis
On demand
Within 1 year
Between 1 to 2 years
Between 2 to 5 years
Over 5 years
Total undiscounted liabilities
Future finance charges and other adjustments
Lease liabilities in the financial statements
Group
2023
£000
2022
£000
Company
2023
£000
2022
£000
-
10
10
30
6
56
(19)
37
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Amounts recognised in the income statement as an expense during the period in respect of lease arrangements
are as follows:
Expense relating to short-term leases
Depreciation
Interest
20. Borrowings
Other loans
Due within 12 months
Due after more than 12 months
Group
2023
£000
32
10
2
Group
2023
£000
-
-
-
2022
£000
14
-
-
2022
£000
499
499
-
Company
2023
£000
2022
£000
-
-
-
-
-
-
Company
2023
£000
-
-
-
2022
£000
499
499
-
The others loans represented amounts due to a consortium of high net worth investors and existing shareholders
and were repaid in the year. The loans attracted a fixed interest rate of between 7% and 8% per annum.
The financing of the group comprises the contingent consideration (note 18) and the leases (note 19), both of
which are detailed in their respective note.
IRONVELD PLC
48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21. Deferred tax
Balance at 1 July
Change in tax rates
Relating to origination and reversal of temporary differences
Exchange differences
Balance at 30 June
YEAR ENDED
30 JUNE
2023
Group
2023
£000
4,730
(157)
(554)
(735)
3,284
2022
£000
4,774
-
-
(44)
4,730
The Group has unrelieved tax losses carried forward which represent a deferred tax asset of £1,524,000 (2022 -
£1,287,000) based on current tax rates. This asset is not recognised in these financial statements.
The deferred tax liability is made up as follows:
Exploration and evaluation assets
Temporary timing difference on foreign exchange gains and losses
Other temporary timing differences
Balance at 30 June
22. Financial instruments
Group
2022
£000
2023
£000
3,777
(440)
(53)
3,284
4,730
-
-
4,730
The Group's policies as regards derivatives and financial instruments are set out in the accounting policies in note
2. The Group does not trade in financial instruments.
Capital risk management
The Company and the Group manages its capital to ensure that they will be able to continue as a going concern
whilst maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group's
overall strategy remains unchanged from 2022.
The capital structure of the Group consist of equity attributable to equity holders of the parent Company. The
Company and the Group are not subject to any externally imposed capital requirements.
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss
to the Company. The Company and the Group have adopted a policy of only dealing with creditworthy
counterparties as a means of mitigating the risk of financial loss from defaults. The Group's exposure and the
credit ratings of its counterparties are continuously monitored and the aggregate value of the transactions
concluded is spread where possible.
Liquidity Risk Management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an
appropriate liquidity risk management framework for the management of the Company and the Group's short,
medium and long term funding and liquidity management requirements. The Company and the Group manage
liquidity risk by assessing required reserves and banking facilities by continuously monitoring forecast and actual
cash flows, and by matching the maturity profiles of financial assets and liabilities. At the year end the Group has
no undrawn bank facilities. The Company is in the process of negotiating a significant funding transaction with a
financial institution in South Africa which is expected to be concluded in early 2024.
IRONVELD PLC
49
YEAR ENDED
30 JUNE
2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22. Financial instruments (continued)
Interest rate risk profile
The Company and the Group is exposed to interest rate risk because the Group borrows funds for working capital
at fixed and variable rates. The Group exposure to interest rates on financial assets and liabilities are detailed in
the liquidity risk management section of this note.
Financial assets
The Group has no financial assets, other than short-term receivables and cash deposits of £19,000 (2022 -
£17,000). The cash deposits attract variable rates of interest. At the year end the effective rate was 0.36% (2022
– 0.35%). The cash deposits held were as follows:-
Sterling - United Kingdom banks
USD – Mauritius banks
South African Rand - United Kingdom banks
South African Rand - South African banks
Financial liabilities - Lease liabilities
2023
£000
2022
£000
16
-
2
1
19
12
1
-
4
17
Lease liabilities of £37,000 (2022 - £Nil) attract interest at a variable rate of 2.49% above the First National Bank
Prime lending rate which was 12.99% at the year end.
Sensitivity analysis - As the interest bearing liabilities are not significant to the overall Group then an increase
of 1% in interest rates in South Africa at the balance sheet date would not have a significant effect on the profit
and loss of the group.
Currency exposures
The Group undertakes transactions denominated in foreign currencies and is consequently exposed to
fluctuations in exchange rates. The carrying amounts of the Group's foreign currency denominated monetary
assets and monetary liabilities were as follows:-
As at 30 June 2023
British Pound Sterling (£)
USD ($)
South African Rand (R)
As at 30 June 2022
British Pound Sterling (£)
USD ($)
South African Rand (R)
Assets
£000
Liabilities
£000
17
-
258
275
257
6
5,594
5,857
Assets
£000
Liabilities
£000
12
1
119
132
1,102
10
2
1,114
IRONVELD PLC
50
YEAR ENDED
30 JUNE
2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22. Financial instruments (continued)
Financial commitments and guarantee
Rehabilitation guarantees of £1,157,000 (R 27,797,984) have been issued to the Department of Mineral
Resources for three subsidiaries, HW Iron Proprietary Limited, Lapon Mining Proprietary Limited and Luge
Prospecting and Mining Company Proprietary Limited in order to comply with Section 41 of the Mineral and
Petroleum Resources Development Act, 2002 (Act 28 of 2002). Under this agreement the Group will pay deposits
to a third-party financial institution to be held pending discharge of any potential claim on this guarantee. At 30
June 2023 £107,000 (R 2,581,388) (2022 - £107,000 (R 2,123,000)) had been deposited in respect of this
agreement and is included in other receivables. This receivable represents a concentration of credit risk and the
Group is exposed to currency risk on these amounts. As the project had not yet commenced then no liability is
considered to have arisen under this guarantee at the reporting date.
23. Share capital
Group and Company
Allotted, called up and fully paid
3,574,996,887 (2022 – 1,333,668,130) Ordinary shares of 0.1p each
322,447,158 (2022 – 322,447,158) deferred shares of 1p each
5,894,917,569 (2022 – 5,894,917,569) deferred shares of 0.1p each
2023
£000
3,574
3,224
5,896
2022
£000
1,333
3,224
5,896
12,694
10,453
On 2 August 2022, a further 1,559,460,724 ordinary shares were issued and admitted to trading to settle existing
liabilities and raise gross working capital of £4,400,000 for the Group.
On 1 March 2023, a further 280,000,000 ordinary shares were issued and admitted to trading to raise gross
working capital of £840,000 for the Group.
On 14 March 2023, a further 386,666,666 ordinary shares were issued and admitted to trading to raise gross
working capital of £1,160,000 for the Group.
On 6 June 2023, a further 15,201,367 ordinary shares were issued and admitted to trading to settle existing
liabilities.
Unlike ordinary shares, the deferred shares have no voting rights, no dividend rights and on a return of capital or
winding up are entitled to a return of amounts credited as paid. The deferred shares are not transferrable and
beneficial interests in the deferred shares can be transferred to such persons as the Directors may determine as
custodian for no consideration without sanction of the holder. For this reason the deferred shares are excluded
from any Earnings per share calculations.
Further information on the issue of shares after the period end is provided in note 30.
IRONVELD PLC
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. Share capital (continued)
Share options
The Company has a share option scheme for certain employees and former employees of the Group. The share
options in issue during the year were as follows:
YEAR ENDED
30 JUNE
2023
Date
granted
Exercise
price
16 August 2012
1p
14 November 2012 1p
1p
16 April 2013
1p
7 November 2013
1p
1 May 2014
1p
1 October 2015
1p
10 January 2020
0.3p
27 February 2023
As at
1 July
2022
No.
4,283,682
6,663,505
33,334
2,086,667
200,000
2,500,000
27,400,000
-
Granted
in year
No.
Exercised
in year
No.
-
-
-
-
-
-
-
50,000,000
-
-
-
-
-
-
-
-
As at
30 June
2023
No.
Lapsed/
Cancelled
No.
(4,283,682)
(6,663,505)
-
-
33,334
2,086,667
200,000
2,500,000
27,400,000
(1,750,000) 48,250,000
-
-
-
-
-
At the year-end, 31,220,001 options were exercisable (2022 – 42,167,188) as follows.
Date
granted
Exercise
price
16 August 2012
1p
14 November 2012 1p
1p
16 April 2013
1p
7 November 2013
1p
1 May 2014
1p
1 October 2015
1p
10 January 2020
As at
30 June
2022
No.
4,283,682
6,663,505
33,334
2,086,667
200,000
1,500,000
27,400,000
Granted
in year
No.
Exercised
in year
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Lapsed/
Cancelled
No.
(4,283,682)
(6,663,505)
-
-
-
-
-
As at
30 June
2023
No.
-
-
33,334
2,086,667
200,000
1,500,000
27,400,000
The exercise period of the options is as follows:
Date
granted
Expiry date
Exercise period
16 April 2013
7 November 2013
1 May 2014
1 October 2015
10 January 2020
27 February 2023
Exercise period
16 April 2023
7 November 2023
1 May 2024
1 October 2025
9 January 2030
27 February 2033
*
*
*
*
**
*
* - 1/3 on the first anniversary of grant, 1/3 on the second anniversary of grant and the final 1/3 on the third
anniversary of grant.
** - ½ on grant and the remaining ½ one year after the grant date.
Of the options granted on 1 October 2015, 1,000,000 are exercisable following first commercial production from
the proposed 15 MW smelter.
IRONVELD PLC
52
YEAR ENDED
30 JUNE
2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. Share capital (continued)
The Group recognised a share based payment expense of £11,000 (2022 - £nil) in the year. No options were
exercised in the year.
Share warrants
Pursuant to the share placing on 14 December 2020 Turner Pope were appointed as joint broker to the Placing
and in addition to 3,333,333 ordinary shares were issued with 95,833,333 broker warrants, exercisable at 0.3p
(the placing price) for a period of 36 months from the date of admission. The broker warrants were transferrable
and on 4 March 2021 17,500,000 warrants were exercised for £52,500. At the year-end, there were 78,333,333
broker warrants in issue.
Pursuant to the loan facilities agreement, dated 19 May 2022, the Company issued share warrants to the lenders
over 13,000,000 shares at 1 pence per share. The warrants had a 3 years life and the lender was able to use the
outstanding balances under the loan facilities to exercise the warrants. The loans were repaid in the year. In
accordance with the agreement, the price was adjusted downwards to the subsequent placing price of 0.3p per
share. At the year end, there were 13,000,000 lender warrants in issue.
Pursuant to the share placing on 2 August 2022 Turner Pope were appointed as sole broker to the Placing and
were issued with 375,000,000 broker warrants, exercisable at 0.3p (the placing price) for a period of 3 years from
the date of admission. At the year-end, there were 375,000,000 broker warrants in issue.
Pursuant to the share placing in March 2023, the Company issued to subscribers to the Placing with warrants to
subscribe for new ordinary shares on the basis of one (1) warrant for every two (2) Placing Shares. The investor
warrants are exercisable at 0.50 pence for a period of two years from the date of their grant. At the year end, there
were 333,333,333 investor warrants in issue. In addition, the Company issued TPI, the sole broker to the Placing,
with 135,000,000 broker warrants, exercisable at 0.3p (the placing price) for a period of three years from the date
of admission. At the year-end, there were 135,000,000 broker warrants in issue.
24. Reserves
Group and Company
Other reserves represent the equity component of share options and share warrants issued in the year.
The balance classified as share premium is the premium on the issue of the Group's equity share capital, less
any costs of issuing the shares.
The foreign currency translation reserve accumulates the foreign currency gains and losses on the translation of
foreign operations.
Retained earnings is made up of cumulative profits and losses to date, share based payments, adjustments arising
from changes in non-controlling interests and exchange differences on translation of foreign operations.
IRONVELD PLC
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25. Cash used in operations
Group
Operating loss
Depreciation on property, plant and equipment
Share based payment charge
Foreign exchange
Operating cash flows before movements in working capital
Movement in inventories
Movement in receivables
Movement in payables and contract liabilities
Cash used in operations
Cash and cash equivalents
Cash and bank balances
Company
Operating loss
Share based payment charge
Foreign exchange adjustments
Operating cash flows before movements in working capital
Movement in receivables
Movement in payables
Cash used in operations
Cash and cash equivalents
Cash and bank balances
YEAR ENDED
30 JUNE
2023
2022
£000
(798)
1
100
-
(697)
-
(8)
368
(337)
2022
£000
17
2022
£000
(696)
100
-
(596)
(1)
367
2023
£000
(1,236)
17
11
(117)
(1,325)
(51)
(203)
907
(672)
2023
£000
19
2023
£000
(911)
3
-
(908)
(45)
(147)
(1,100)
(230)
2023
£000
17
2022
£000
12
26. Significant non-cash transactions
The company settled liabilities and paid for services by the issue of shares. The value of the shares issued was
as follows:-
Loan repayments
Accrued directors fees
Services provided
2023
£000
2022
£000
360,000
192,000
45,000
-
-
135,000
IRONVELD PLC
54
YEAR ENDED
30 JUNE
2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27. Related party transactions
Group
During the year the Group incurred £134,000 (2022 - £74,000) for consultancy services to Goldline Global
Consulting (Pty) Limited, a company in which P Cox is materially interested. At 30 June 2022, £Nil (2022 - £Nil)
remained unpaid in accruals.
Group and Company
The key management personnel of the Group are the directors. Directors’ remuneration is disclosed in Note 6.
During the year the Company paid £59,000 (2022 - £48,000) for accounting services to Westleigh Investments
Limited, a company in which G Clarke and N Harrison are materially interested.
Included in other loans at 30 June 2023 was a short term loan due to G Clarke of £Nil (2022 - £100,000) and
accrued interest of £Nil (2022 - £2,827). The loan attracted interest at 7% per annum and a loan arrangement fee
of 2.5% of the facility amount and was repaid in the year.
Included in other loans at 30 June 2023 was a short term loan due to N Harrison of £Nil (2022 - £100,000) and
accrued interest of £Nil (2022 - £2,827). The loan attracted interest at 7% per annum and a loan arrangement fee
of 2.5% of the facility amount and was repaid in the year.
Included in other loans at 30 June 2023 was a short term loan due to M Eales of £Nil (2022 - £38,500) and accrued
interest of £Nil (2022 - £667). The loan attracted interest at 7% per annum and a loan arrangement fee of 2.5%
of the facility amount and was repaid in the year.
Further directors’ remuneration of £12,000 (2022 - £344,936) was unpaid at the year-end and is included in
accruals. During the year £192,000 (2022 - £ Nil) of director’s fees were settled by the issue of shares.
28. Financial commitments
At the year end the Group had no financial commitments under operating leases (2022 - £Nil).
On 24 May 2022, the Group announced that it had signed Heads of Terms to acquired 100% of the share capital
of Ferrochrome Furnaces (Pty) Limited (“FCF”) which will provide the Group with an existing smelting facility and
the opportunity to commence mining and processing in the short term. The share capital was to be acquired for a
nominal fee but debt was to be acquired of R116m (approximately £4.8m) repayable over a 10 year period. At the
year end the acquisition was unconditional but remained subject to contract and the R116m was accrued in these
financial statements. The Group commenced plans during the Period to bring the smelter back in to production
with overall costs estimated to be between R40m to R65m (£2m to £3.2m).
IRONVELD PLC
55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
29. Non-controlling interest
At 1 July
Exchange adjustments
Share of loss for the period
At 30 June
YEAR ENDED
30 JUNE
2023
2023
£000
3,344
(572)
(24)
2022
£000
3,380
(31)
(5)
2,748
3,344
The table below shows details of non-wholly owned subsidiaries of the Group that have material non-controlling
interests:
Proportion of
voting rights
and shares held
2023
(2022)
(32%)
HW Iron (Proprietary) Limited
Lapon Mining (Proprietary) Limited (26%)
Other non-controlling interests
(32%)
(26%)
Profit/ (loss)
allocated to
non-controlling
interests
Accumulated
non-controlling
interests
2023
£000
14
6
(44)
(24)
2022
£000
-
-
(5)
(5)
2023
£000
896
1,903
(51)
2,748
2022
£000
1,067
2,291
(14)
3,344
IRONVELD PLC
56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
29. Non-controlling interest (continued)
Summarised financial information in respect of each of the Group's subsidiaries that have material non-controlling
interests is set out below. The summarised financial information below represents amounts before intragroup
eliminations. The accounts of the subsidiaries have been translated from their presentational currency of South
African Rand (R) using the R: GBP exchange rate prevailing at 30 June 2023 of 24.023 (2022 – 19.896).
YEAR ENDED
30 JUNE
2023
HW Iron (Proprietary) Limited
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Equity attributable to owners of the Company
Non-controlling interest
Revenue
Expenses
Tax
Profit/(loss) for the year
Attributable to the owners of the Company
Attributable to the non-controlling interests
Net cash (outflow)/inflow from operating activities
Net cash outflow from investing activities
Net cash inflow from financing activities
Net cash inflow
Net cash flow - Attributable to the non-controlling interests
2023
£000
6,011
5
(5)
(3,212)
2022
£000
6,913
-
-
(3,579)
2,799
3,334
1,903
896
2,267
1,067
-
(1)
43
42
28
14
(1)
(317)
318
-
-
-
(1)
-
(1)
(1)
-
2
(99)
97
-
-
IRONVELD PLC
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
29. Non-controlling interest (continued)
Lapon Mining (Proprietary) Limited
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Equity attributable to owners of the Company
Non-controlling interest
Revenue
Expenses
Tax
Profit/(loss) for the year
Attributable to the owners of the Company
Attributable to the non-controlling interests
Net cash inflow from operating activities
Net cash outflow from investing activities
Net cash inflow from financing activities
Net cash flow
Net cash flow - Attributable to the non-controlling interests
30. Events arising after the reporting period
YEAR ENDED
30 JUNE
2023
2023
£000
2022
£000
12,248
10
(172)
(4,768)
14,158
-
-
(5,347)
7,318
8,811
5,415
1,903
6,520
2,291
18
(108)
114
24
18
6
91
(446)
355
-
-
-
(1)
-
(1)
(1)
-
3
(85)
82
-
-
On 18 September 2023 the Company first announced that it was in direct funding discussions with an institution.
As at the date of these financial statements this transaction is well advanced and the Board has reasonable
expectations that a satisfactory transaction will be concluded early in 2024. On the same date the Company
announced that certain Directors had agreed to put in place a working capital facility of up to £500,000.
On 26 October 2023, the Company announced an equity fund raising of £1.0m representing a placing of
360,000,000 ordinary shares at a price of 0.278 pence. The Company issued Warrants alongside the new ordinary
shares to subscribe for 360,000,000 ordinary shares at 0.29 pence for a period of 36 months from Admission. The
share proceeds were raised to fund ongoing working capital requirements of the operations. Following the Placing
Dr John Wardle was appointed as Executive Chairman of the Company.
31. Control
The Directors consider that there is no overall controlling party.
IRONVELD PLC
58