Annual Report & Accounts 2022
Contents
Strategic Report
01 Operational highlights
02 Chairman’s statement
04 Metal and energy markets
06 Operations update
08 West Kytlim
10 Kola battery metals and PGM
12 Key performance indicators (KPIs)
14 Principal risks and uncertainties
Corporate Governance
16 Section 172 statement
18 Environmental, Social and Governance
20 Directors’ report
Financial Statements
26 Independent auditor’s report
33 Consolidated statement of profit or loss and other
comprehensive income
34 Consolidated statement of financial position
35 Company statement of financial position
36 Consolidated statement of changes in equity
37 Company statement of changes in equity
38 Consolidated statement of cash flows
39 Company statement of cash flows
40 Notes to the consolidated financial statements
68 Company information
To find out the most up-to-date information,
visit our website: www.eurasiamining.co.uk
In June 2023, all the relevant authorities approved the
definitive feasibility study for the Monchetundra mine
comprising open pits at West Nittis and Loipishnune, which
the Board believes will be an important milestone for the
Company in achieving a full exit from its Russian assets.
The Group has over many years developed the infrastructure
of the West Kytlim mine. This programme culminated
in the installation of grid hydroelectric power to site and
the acquisition of an electric dragline. No further capital
expenditure is planned for West Kytlim which may operate
at the current scale for several decades. The Board believes
this is also an important milestone in terms of advancing the
possible sale of the Russian assets.
Eurasia Mining Plc
Eurasia Mining Plc is a London listed, battery metals, PGM and green
hydrogen company with a focus on environmental and sustainability-
focused solutions and with awareness of the future outlook for the
world energy supply landscape. Eurasia is an international company
incorporated in the UK with its headquarters in London.
The Company has been seeking buyers for its West Kytlim,
Monchetundra and NKT projects in the Russian Federation,
in line with its strategy for delivering value to shareholders.
Annual Report & Accounts 2022
Eurasia Mining Plc
Our operations
Operational highlights
West Kytlim
Mine product stockpiled with an
approximate PGM concentrate value of
£4.1 million (net of VAT) at 31 December
2022 is securely stored.
Electric dragline, power line and high
voltage substations were the final CAPEX
items to optimise and sell the asset,
with no further investments envisaged
going forward. VAT is also expected to
be receivable on the historical capital
investment cost.
All stationary plant, machinery and
buildings are connected to hydro-derived
grid electricity.
Good safety record with zero injury rate.
Kola Battery Metals and PGM
Monchetundra Definitive Feasibility
Study (TEO of permanent conditions)
submitted December 2022 and now
approved by all the relevant authorities.
NKT Mine (Monchetundra Flanks
licence) formerly an operating base metal
producer, has nickel sulphide ores as
defined by Wardell Armstrong in a CPR
announced on 16 December 2021.
Corporate and Governance
New Board appointment Artem
Matyushok, a senior M&A executive
joined in May 2022.
Post-period end retirement of James
Nieuwenhuys as CEO in July 2023
following completion of the DFS at
Monchetundra and installation of power
and the dragline at the West Kytlim mine.
Ukraine conflict and resulting sanctions
policies monitored closely to comply with
rules and regulations set out by the UK,
the US and the EU.
Nittis-Kumuzhya-Travyanaya (NKT)
Adjacent to Monchetundra, NKT
(Nittis-Kumuzhya-Travyanaya) is a
100% owned Tier 1 scale asset with
JORC MRE containing: 305Kt Nickel,
143Kt Copper, and 57 tonnes PGM
and Gold. NKT is a direct northeast
extension of the Monchetundra (West
Nittis) mineralisation and is a nickel
mine relaunch with associated PGM.
This asset has been included in the sale
strategy, following a JORC CPR published
by Wardell Armstrong International in
December 2021.
Read more on page 11
Kola Battery Metals and PGM
A complex of deposits in the Central Kola
Peninsula in the vicinity of Monchegorsk, a
city with excellent mining infrastructure, and
home to Severonickel, the world’s largest
nickel-copper-PGM processing plant. The
Kola Battery metals and PGM projects are
centred on the 80% owned Monchetundra
asset – a world class PGM (palladium driven)
and Nickel-Copper project.
Read more on page 10
West Kytlim
A PGM and gold mine in the Sverdlovsk
Oblast and one of the largest surface
PGM mines globally. The mine switched
to hydro-derived electricity with
commissioning of a large 70m boom,
11m3 shovel electric dragline. Several
washplants consisting of a trommel/
scrubber and sluice are available at site.
Read more on page 08
01
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Our strategy continues to be the eventual
sale of the Company’s assets in Russia,
being the West Kytlim operating mine, the
Monchetundra Project mining licence, the
NKT brownfield project, and the entitlement
to the Nyud brownfield project.
West Kytlim
We took the decision to stockpile the ore from West Kytlim and not
to generate revenue from Russia in 2022 due to our strong cash
position and the expectation of improving prices in the future.
The West Kytlim mine saw significant investment over many years
culminating with a conversion of operations from diesel power
to electricity powered equipment and infrastructure. Hydro-
derived grid power and an electric dragline installed to site. This
allows stripping work to continue through the winter, with the
accommodation and office also on the grid. Significant reductions
in operating costs have been achieved.
As previously announced, we took the decision to stockpile the
mine product (a "black sand" concentrate containing platinum,
palladium, iridium, rhodium and gold) from West Kytlim and not to
generate revenue from Russia during 2022.
Monchetundra
DFS
At Monchetundra, the DFS study for the several open pits at
Loipishnune and West Nittis was completed for the project's
development and submitted at the end of 2022 and the Company
was notified that all authorities were received at the end of
June 2023.
NKT/Monchetundra Flanks
The NKT project comprises a brownfield Tier-1 scale deposit:
305Kt of Nickel, 143Kt of Copper, 57 tons of PGM and Gold
(11.2Moz of Platinum equivalent) as estimated by Wardell
Armstrong International as JORC-compliant resources for an
underground mining operation. We continue to look at the potential
for additional mineralisation on the property. For now the NKT
Project sits as considerable upside adjacent to the Monchetundra
asset.
Nyud Project and Rosgeo agreement
Eurasia retains a right to 75% of the Nyud exploration licence,
which was applied for and later received by Rosgeo’s subsidiary
OOO Monchegorskoye with an intention of establishing a joint
venture with Eurasia’s 100% owned subsidiary, Yuksporskaya
Mining Company, pursuant to the now expired two-year agreement
between Rosgeo and Eurasia as announced 26 March 2021. The
project is now being considered in the context of the Company’s
proposed asset sale.
Possible sale of Russian assets
The Board remains of the view that any buyer is likely to be found in
BRICS countries. This process has now run on substantially longer
than the Company's management team had anticipated.
We acknowledge shareholder frustration regarding the duration
of the sale process, however, we also note recent precedent
transactions which have successfully completed despite the
geopolitical situation. Further updates will be made as appropriate
although there is currently low visibility as to when this might be.
As ever, there can be no guarantee that Eurasia will enter into
binding agreements regarding the sale process.
Company cash position
The Company’s cash position, including US treasury notes, at 29
June 2023 stands at approximately £1.686 million*. In addition,
the Company’s unsold PGM concentrate is valued at £4.1 million
(net of VAT). The Company's cash reserves are held in USD and
GBP accounts outside of Russia and therefore not exposed to
Ruble foreign exchange gains or losses against other major hard
currencies.
Sanctions
During 2022, the Board has maintained a regular dialogue with the
Company's legal advisers regarding the potential impact of any
sanctions. The Board remains satisfied the Company’s activities
are not prohibited under the sanctions’ rules. Furthermore, the
Group does not engage and has not engaged with any sanctioned
persons, entities or agencies.
Directorate change
Management of the Company has also evolved in parallel with the
other changes. With the completion of the Monchetundra DFS, the
open pit mines are ready for construction. While we have a EPCF
agreement for the development of Monchetundra, the Board do
not believe it is appropriate to commence immediately due to the
ongoing sale process of the Russian assets. It is expected that
counterparties will have their own plans for future development,
and it is important to leave such options open. In that regard,
James Nieuwenhuys, an EPC expert, has retired from Eurasia. The
Company is grateful to James for his excellent work as CEO since
2020 and wish him well for the future.
Konstantin Firstov, our CEO at Kola has been appointed the Country
Manager and at West Kytlim, newly appointed CEO Vasily Kudrin is
in charge of pre-sale activities. Vasily has a strong audit background
with Ernst & Young and other firms in various senior roles including
a partner position.
Following James Nieuwenhuys’ departure from the Eurasia
Board, Christian Schaffalitzky will take on additional executive
responsibilities. As such, the Company anticipates announcing
further Board changes to ensure the roles of the Chairman and
CEO are split.
Chairman’s statement
The year 2022 stands out as a uniquely challenging year
not only for Eurasia, but also for the entire mining sector.
Eurasia Mining Plc
02
Annual Report & Accounts 2022
APART FROM THE UKRAINE CONFLICT
WHICH HIT THE WORLD HARD IN
FEBRUARY, THE ENTIRE INDUSTRY HAS
BEEN DISRUPTED BY SUPPLY CHAIN
INTERRUPTIONS ALTHOUGH THIS HAS,
HOWEVER, RESULTED IN POSITIVE PRICE
CHANGES FOR EUA’S METALS. IN THE
MEANTIME, WORK HAS CONTINUED ON
OPTIMISING THE ASSET BASE PRIOR TO A
POSSIBLE SALE.
Mining Company with focus on Battery Metals
and PGM
Platinum and Palladium markets likely to be in deficit for
2023 and medium- to long-term outlook generally positive
for both metals.
Battery metals Nickel and Copper future outlook also
positive.
DFS at Monchetundra achieved during 2022 and now
approved in June 2023, with development work ongoing at
the adjacent NKT Nickel/Copper PGM mine relaunch.
Surface mining with simple and lower cost beneficiation
methods than underground alternatives targeting lower
Carbon PGM production.
Environmental and Social governance
Environment is front of mind for a mining Company.
Low impact (zero concrete and asphalt) low emissions
(hydroelectric dragline) mining at West Kytlim.
Shallow surface mining with remediation following mining.
Mine product with significant demand component in engine
exhaust cleaning.
Senior team of mining and mineral industry licensing
experts with strong governance from Board with wide-
ranging and international experience.
Representative office in Japan to develop connections to Far
East markets – Japan, China, Hong Kong SAR.
West Kytlim PGM and gold mine
Significantly increased available stripping capacity at West
Kytlim using electric dragline.
All Infrastructure and machinery now in place for sustained
production over 15+ years LOM.
Tipil and West Kytlim Flanks licences as exploration upside.
Platinum as primary commodity with associated PGM
(rhodium, iridium, palladium) and gold.
Our investment case for potential
buyers of our Russian assets
Outlook
In terms of the future development of Eurasia Mining Plc, we
continue to look at expanding the business in various ways,
including the development of hydrogen projects outside of Russia
coupled with new mining opportunities in investment friendly
jurisdictions.
Our strategy continues to be the eventual sale of the Company’s
assets in Russia, being the West Kytlim operating mine, the
Monchetundra Project mining licence, the NKT brownfield project,
and the entitlement to the Nyud brownfield project.
In conclusion, and especially for this challenging year, I want to
thank my staff colleagues and fellow Directors for their hard work
and dedication. I would also like to thank shareholders, who have
shown great patience with us in recognising that much of our
planning assumptions have been altered by the events of this past
year which were outside our control. We look forward to providing
our shareholders with further updates regarding our key objectives,
including the possible sale of our Russian assets.
Christian Schaffalitzky
Executive Chairman
2 July 2023
* Please note the cash figures provided by the Company in the announcements dated
21 December 2022 and 11 April 2023 also included US treasury notes held by Eurasia.
03
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Nickel (Kola Projects)
PGM markets
Battery Electric Vehicle
Catalytic Converter
Electrolyte
Separator
Anode
+
–
Cathode
Nickel
A strategically important
raw material and industrial
metal with dominant (65%1)
of demand in stainless steel
production.
Also a key cathode metal in
EV battery production2.
Up to 40Kg of Nickel per
Electric Vehicle3 – a strong
driver of demand medium to
long term – Nickel Sulphide
sources preferable in battery
production4.
Complex trading year
through 2022 with prices
reaching $31,275 per tonne5.
H1 2023 LME closing prices
(US$30,978/tonne (3 January
2023) to US$21,338/tonne
(23 May 2023) significantly
above 2021 prices (full year in
the range circa US$16,000 to
US$21,000)6.
Future demand and price
strongly linked to general
global economic outlook,
particularly the Chinese
economy’s pandemic
recovery, with China being
the largest producer and
consumer of refined Nickel7.
Nickel consumption
increasing steadily with
market potentially going into
deficit from around 2027 at
consumption above 3,750 kt
per annum.
Copper (Kola Projects)
A critical component in
all energy infrastructure
scenarios – existing,
transitional, future.
Strong correlation to global
economic outlook with
prices falling in recession
and recovering with positive
sentiment8.
Net zero emissions targets
driving new uses and
demand adding an additional
50% demand on current
levels (2021 demand of
25.3m tons)9.
Demand outstripping supply
by the end of the decade
with lack of new mineable
resources being the main
hurdle (demand passing
36m metric tons with supply
around 30m tons)9.
1 https://www.usgs.gov/centers/national-
minerals-information-center/nickel-
statistics-and-information
2 https://nickelinstitute.org/en/about-
nickel-and-its-applications/nickel-in-
batteries/
3 https://www.reuters.com/business/
autos-transportation/costs-nickel-
cobalt-used-electric-vehicle-
batteries-2022-02-03/
4 https://www.bhp.com/-/media/
documents/business/2019/191119_
whatisnickel.pdf
5 https://www.mining-technology.com/
features/nickel-price-surge-2022-
markets/
6 https://www.lme.com/en/metals/non-
ferrous/lme-nickel#Price+graphs
7 https://knoema.com/ydolvrc/nickel-
price-forecasts-long-term-2021-to-2030-
data-and-charts
8 https://www.macrotrends.net/1476/
copper-prices-historical-chart-data
9 https://www.wsj.com/articles/copper-
shortage-threatens-green-transition-
620df1e5
1 https://www.edisongroup.com/
thematic/the-pgm-markets-outlook-and-
price-forecasts/
2 https://platinuminvestment.
comfiles/943761/WPIC_
PlatinumQuarterly_Q1_2023.pdf
3 https://matthey.com/
documents/161599/404086/
PGM+Market+Report+May23.
pdf/2f048a72-74a8-8b23-f18e-
c875000ed76b?t=1684144507321
4 https://www.sfa-oxford.com/platinum-
group-metals/palladium-market-and-
palladium-price-drivers/
NOx CO CHx
H2O CO2 N2
Catalytic substrate
Platinum
The platinum market is
expected to be in a significant
(close to 1m oz) deficit for
20232 following consecutive
surpluses in 2021 and 2022.
Automotive PGM demand
share has for the past decade
been dominated by Palladium
(around 60%) with further
platinum-for-palladium
substitution expected as a
consequence of decisions on
catalyst content taken over the
past number of years in a high
Palladium price environment2.
Platinum automotive demand
is forecast to increase 11% in
2023 to above 3m ounces2.
Emissions control legislation
continues to be advanced with
significant advancements in
China and India from 2023
(see figure 1) with a resulting
positive impact on platinum
demand.
BEV and FCEV technologies
are set to dominate new light
vehicle output while platinum
increasingly finds further
uses in the hydrogen industry,
following from 25% increase in
stationary fuel cells (now at 566
MW) with platinum demand
for use in electrolysers in
Hydrogen production set to
increase 24%2.
Palladium
All time palladium price high
set at $3,339 following the
Ukraine conflict and fears of
threatened Russian supply.
Palladium market also
predicted to be in deficit (565
koz4) for 2023.
Each of the six platinum group metals (PGMs, platinum,
palladium, rhodium, iridium, ruthenium and osmium) contribute
significantly to a cleaner environment owing to their catalytic
properties, which allow for the conversion of detrimental exhaust
gases from combustion engines to less harmful and benign
gases in a more efficient way than any other catalyst. Vehicle
demand and sales drive demand and supply1, but precious and
industrial uses are also significant demand components.
Metal and energy markets
Eurasia Mining Plc
04
Annual Report & Accounts 2022
Figure 1: Emissions legislation, light duty
2021
2025
2029
2023
2027
2031
2022
2026
2030
2024
2028
2032
Europe
South Korea (Gasoline)
Brazil
North America (CARB)
China (Main Economic Areas)
Indonesia (Gasoline)
North America (EPA)
South Korea (Diesel)
India
Japan
China (Nationwide)
Indonesia (Diesel)
Thailand
BS VI Stage II (RDE)
China 6b, no RDE
PROCONVE L-7
China 6b, no RDE
Euro 5 (estimated)
Euro 4
SULEV 30 for non-ZEV
PM = 1 mg/mile
Euro 5 (estimated)
Federal ‘Tier 4’ Phase-in
Euro 5 (July 2025)
Euro 7 (estimated)
Euro 4
China 6b
Euro 2
PROCONVE L-6
BS VI Stage I (Euro 6b)
Euro 6d (RDE Phase II, 97g/km CO2)
LEV III Phase-in
Euro 4
China 6b, no RDE
Federal Tier 3 Phase-in
Euro 6
BS VII (estimated)
China 7 (estimated)
Japan 18 (WLTP)
PROCONVE L-8
LEV IV Phase-in
China 7 (estimated)
LEV III (97g/km CO2 from 2020)
Electric dragline operational at the West Kytlim in 2022
05
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Eurasia Mining Plc is a London listed, battery metals, PGM and green
hydrogen Company with a focus on environmental and sustainability
focused solutions, and with awareness of the future outlook for the world
energy supply landscape.
Operations update
Kola Peninsula, Monchetundra, Russia
Kola battery metals and Surface Platinum Group Minerals
Nittis-Kumuzhya-Travyanaya (NKT) deposit
West Kytlim, Sverdlovsk Oblast,
Russia
Surface Platinum Group Minerals and
Gold mine
UK Head Office,
London
Eurasia is an international company incorporated
in the UK with its headquarters in London.
Installation of
Kytlim Project electric
power line
Following construction of a
power line to site, an electric
dragline was assembled at
the Company’s West Kytlim
PGM and gold mine to provide
a more environmentally
sustainable and attractive
asset as well as a lower cost
operation for the ongoing sale
discussions.
Eurasia Mining Plc
06
Annual Report & Accounts 2022
Overview
The Central Kola
Peninsula Battery Metals
(predominantly Nickel and
Copper) and PGM projects
developed around the
Company’s fully permitted
Monchetundra Project
adjacent to the town of
Monchegorsk, home to
Norilsk’s Severonickel
nickel and PGM
processing facility.
A Definitive Feasibility Study was
approved for the Monchetundra Project,
while the brownfield NKT Mine is
advanced, a former producer.
The Company has demonstrated a
consistent approach to creating value by
bringing quality projects from exploration
through to mining, as well as marketing
for its proposed strategic sale following
the Board’s decision to exit from Russia.
Japan representative office,
Tokyo
07
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Open Pit PGM and Gold mine with a sustainability focus.
Predominantly powered by grid (hydro-derived) electric power.
West Kytlim
Historical CAPEX highlights
Three enrichment plants.
Powerline and electric dragline
projects delivered on schedule
including peripherals and high
voltage substations and hook ups.
A large fleet of equipment to
support the electric dragline,
including: 2X Komatsu D275
Dozers, 1X Cat D8 Dozer, 1X
Shantui SD26AS, 6X Cat 330
excavators as well as one
additional washplant.
Overview
Mining at West Kytlim was initially sub-contracted with
Eurasia retaining control of the concentrate upgrade
and refining components for two seasons in 2017 and
2018. From 2019 to 2021 further machinery including
additional washplants were procured with stripping
of overburden and parts of the mining operation
contracted as required. A 14-kilometre power line was
constructed from the nearby town of Kytlim allowing
the mine site and all stationary plant to switch to
hydro-derived grid electricity. A large electric shovel,
or dragline was also procured and assembled on site
during 2022 and was available to contribute to the
following winter stripping program. This machine with a
70m boom and 11m3 bucket allows stripping at greater
efficiency and a fraction of the cost of excavator/
bulldozer pairings.
The Operation at West Kytlim has seen very
significant upgrades to machinery and mining
equipment over the past years.
Sustainable Mining
Shallow open pitting has reduced
environmental impact compared
to conventional mining methods,
and less long-term environmental
footprint – no blasting on site
and no chemicals used in the
production process.
Recovery to previous land
use within 5 to 10 years post
remediation and with no remnant
pit or tailing dumps. Allows the
mine owner and management
team to make provisions for
remediation on realistic timescale.
Hydro generated electricity
powering ore body development
(dragline) and beneficiation
(stationary plant).
Water a key element in
beneficiation process – recycled
in a closed loop outside of river
course.
Limiting the use of asphalt and
concrete on site, many mine
buildings built from timber milled
on site.
Eurasia Mining Plc
08
Annual Report & Accounts 2022
2022
Grid power delivered
to mine site
Stationary plant switches to
hydro-derived grid power.
Total production for the
year of 200kg concentrate.
2000 - 2014
Anglo Platinum JV
Extensive exploration
focused on both Urals and
Kola Peninsula leading to
Monchetundra and West
Kytlim Discoveries.
2014
2015
Mining licence Issued
Continued self-funded
drilling and increases in
resource base from 2014.
Maiden resource definition
and issue of a Discovery
Certificate allowing
application for a mining
licence.
2015
2020
Typil licence issued
As exploration upside
directly adjacent to the
mining licence.
2017 / 2018 / 2019
Mine expansion
Change of contractor
employed at the mine site.
Kluchiki area opened.
Eurasia control of
concentrate upgrade at site
165kg produced in 2018.
Switch to owner operated
mining in 2019.
2017
2021
Major investments
in mining fleet
Three washplants
operating concurrently.
Commencing work on
power line project.
2021
2016
Production start-up
Contracted mining
operation commences
while advancing drilling
on the mining licence
towards submission of
a new Feasibility Study
(Exploration Project).
2016
2020
New DFS approval
Allowing capacity
expansion and production
at multiple sites.
2018
2019
2019
2020
2022
Timeline of West Kytlim operations
2022
Dragline operational
Increased stripping
capacity at greater
efficiency.
09
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
World class PGM and Nickel-Copper projects on Kola Peninsula –
cornerstone to a proposed new predominantly open-pittable PGM
and Battery Metals mining district.
Kola battery metals and PGM
Monchetundra:
2022 Highlights
Submission of Definitive Feasibility
Study for two open pits at Loipishnune
and West Nittis in December 2022.
Recognition of NKT as a potential
nickel dominant mine relaunch
opportunity, as a standalone project or
integrated with Monchetundra.
Monchetundra:
2023 Highlights (in the year
to date)
Monchetundra DFS final approval
received.
Mine now shovel ready with further
developments to be led by a new
owner in the context of the Company’s
sale-of-assets process.
No significant expenditure or
work programme planned for the
Monchetundra Project during 2023.
To enable the sale of the
assets and to exit from
Russia, the work during
2022 was dominated by
the important Definitive
Feasibility Study (Russian
TEO of permanent
conditions) for the open
pits at Loipishnune and
West Nittis within the
Monchetundra project
(Licence MUR 16493) which
was submitted on time in
December 2022.
The study involved a new metallurgical
sample collected from drill core and
analysed following from the 2016
(pre-feasibility) metallurgical work. Land
surveying, geophysics and hydrogeological
and geotechnical studies were also
completed. The ore at Monchetundra
contains commercial grades of palladium,
nickel, copper, platinum and gold.
Eurasia Mining Plc
10
Annual Report & Accounts 2022
1 Nickel price history : https://www.mining.com/markets/
commodity/nickel/all/ (early 200’s price). Despite
significant volatility from January 2022 nickel has traded
above the US$10/lb line for much of the past two years.
NKT (Nittis-Kumuzhya-
Travyanaya) Project – Base metals
mine relaunch adjacent the
Monchetundra project
Tier-1 scale Nickel deposit with JORC MRE
containing: 305Kt Nickel, 143Kt Copper,
and 57 tonnes PGM and Gold (11.2Moz
of Platinum equivalent) estimated by
Wardell Armstrong International (WAI) as
JORC-compliant resources for a step room
and pillar mining operation, with nickel
comprising half of the value in the metal
basket on a Net Smelter Royalty basis.
The NKT Project is being developed under
licence MUR 00950 BP.
A mine was successfully operated by
Norilsk Nickel in the area, put on hold
because of low IRR at a Nickel price in the
region of US$2-5/lb versus above US$10/
lb today1.
Following receipt of the Monchetundra
Flanks exploration licence in August 2020,
work commenced on collation of the very
significant body of historic and recent
exploration and mining data available.
Originally developed as early as the 1930s,
some further drilling was completed in
the early 1990s. Subsequently, further
exploration programmes were completed
by SeveroNickel, PechengaNickel, Kolskaya
Mining Metallurgical Company (Kolskaya
MMC), and more recently a drilling
programme undertaken by Rosgeo from
2015 to 2017.
Eurasia commissioned Wardell Armstrong
International to complete a JORC analysis of
the principal targets on the site during 2021
leading to publication of an NKT Competent
Persons Report describing the feasibility of
a room and pillar mining operation based
on a 93,422kt (room-and-pillar mineable
ore per 2021 WAI CPR) with a total resource
of Tier-1 scale: 305Kt of Nickel, 143Kt of
Copper, 57 tons of PGM and Gold (11.2Moz
of Platinum equivalent) – as estimated by
WAI as JORC-compliant resources. The
net present value "NPV" using an 8.33%
discount rate for the underground part of
the NKT project is US$1.2 billion under the
WAI price forecast and US$1.7 billion under
spot prices. The study had an IRR of 47%
with a payback period of three years.
The WAI report also included open pit
optimisations for the project area and a
development programme progressed to
further detail the overall geometry of all
open pittable mineralisation throughout
the project area but principally at
Kumuzhya, while also gathering additional
information on underground mining targets.
Mineralisation presents in two principal
categories throughout the area, both of
which contribute to both open pit and
underground mineral resources:
A. Shallow epigenetic/post-magmatic
low sulphide nickel-palladium
disseminated and vein (chalcopyrite-
pyrrhotite-pentlandite) mineralisation
more concentrated in the axis of the
massif.
B. Bottom lode syngenetic
mineralisation (wider interval and
lower grade) occurring on the
margins of the massif – Open pit and
underground mining potential.
11
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Key performance indicators (KPIs)
* Based on Yahoo finance closing prices for 1 January 2022 to
31 December 2022
Results for the year
The Group has made a loss
before tax of £7,230,088 for
the year ended 31 December
2022 (2021: loss before tax of
£3,138,521). The single largest
item causing this variation is the
absence of revenue in 2022.
Shareholder return and share price performance
The Company’s shares are quoted on the AIM
market of the London Stock Exchange and the
shares have traded at between 4.1 pence and
28.5 pence*(2021: 15 pence – 36.5 pence) during
the year under review. A range of factors both
internal and external to the Company can impact
share price performance, including significant
geopolitical developments and uncertainty therein,
commercial and new business developments,
operational performance and metal price
and metal price forecasting fluctuations. The
emergence of conflict in Ukraine in February
and March 2022 had an immediate effect on the
Company’s share price as investor perception was
affected across all business sectors.
Exploration and development
The Group maintained sufficient funding to
develop and expand operations during the year
reported.
The West Kytlim asset, following considerable
investment over the past number of years is
considered by management to be fully capitalised
and capable of sustained production at current
levels for a life of mine of up to 15 years, excluding
further resources and reserves to be defined in
both the West Kytlim Flanks and Typil licence areas
adjacent to the mining licence.
A Definitive Feasibility Study "DFS" for the
Monchetundra Project was completed during
2022. No further significant expenses are forecast
for the Monchetundra Project.
The NKT Project is being assessed either as
a standalone mine relaunch adjacent to the
Monchetundra Project or with its reserves
and resources integrated with those at
the Monchetundra Project for concurrent
development.
No funds were raised in equity or debt capital
markets and no warrants or options were
exercised in the period reported.
Eurasia Mining Plc
12
Annual Report & Accounts 2022
Non-financial KPIs
Environmental
management
The Group has environmental
policies in place and receives
annual approvals for
development work at West
Kytlim, where adherence to
the relevant environmental
subsoil licensing laws is
clearly stipulated. All relevant
codes in managing exploration
programmes (specifically
drilling) are also strictly
adhered to. Performance
against environmental policies
is continuously monitored and
annually audited including a
provision for environmental
rehabilitation (Note 28).
Health and safety
The Group has occupational
health and safety policies and
procedures in place ensuring
that all efforts are made to
minimise adverse personal
and corporate outcomes,
through best practice
training, implementation
and monitoring. These were
appropriately reviewed
including appointment of a
permanent health and safety
office following supply of high-
voltage electric power and
oversized machinery to West
Kytlim. The Group’s LTIFR
(Lost time injury frequency
ratio) remains at zero for the
year reported.
Operational
The Group has achieved
further milestones at each
of the Monchetundra, NKT
and West Kytlim Projects
during the year in review, as
discussed in the Operations
section herewith. Key
deliverables at each project
are the Definitive Feasibility
Study at Monchetundra, the
provision of electric power to
West Kytlim and the ongoing
development programme for
the NKT Project.
Governance
The Company followed the
appointment of two Board
members during 2021 with
the appointment of Artem
Matyushok in May 2022.
Artem brings significant
international mergers and
acquisitions experience
to the Board which now
comprises four Directors
and an Executive Chairman
and Managing Director. New
appointments were made to
roles within key subsidiary
Kosvinsky Kamen and the
creation of a new Country
Manager role in May 2023.
13
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Environmental
The Group’s operations
are subject to statutory
environmental regulation,
including environmental impact
assessments and permitting
including forestry permitting.
The environmental legislation
comprises numerous federal
and regional codes discussed
further in the environmental
report herewith. The Group
makes an assessment of the
environmental impact when
applying for permits and
licences. Review and approval
of the rehabilitation plan is a
prerequisite of the mine plan
approval for each season of
mining.
Mitigation:
The Group mitigates risk to
the operation arising from
environmental issues by
strictly adhering to relevant
environmental laws and
codes and by ensuring an
appropriate plan for managing
the environmental impact of
any operation is in place prior
to commencement of on-site
activity. The West Kytlim mine,
by nature of the relatively
simple beneficiation methods
employed does not require
management of hazardous
mine and process plant
tailings within a tailings dam,
as is necessary in large scale
underground and open pit
mining operations.
Political risk and
sanctions compliance
In view of sanctions imposed
on individuals and entities in
Russia, from 2014 until the
present time, further legal
and economic risks may
arise. Further sanctions were
imposed on Russia from late
February 2022 and were
subject to further updates
during 2022. The Group has
generated no revenue from
Russia since the beginning of
February 2022.
Mitigation:
Strict adherence to the Group’s
sanctions policy. The Group
does not engage with politically
exposed or sanctioned persons
or entities. The Company
employs expert legal advisers
and continues to monitor
updates to international
sanctions legislation focused
on Russia and resulting from the
conflict in Ukraine to determine
their effect on the businesses
operations and medium and
long-term strategies. Two
in-depth reviews of operations
against changes in the UK
and EU sanctions landscape
were carried out in May and
December 2022.
Operating mine risks
Machinery breakdowns,
departures from expected
grade and other operational
risks may have a significant
impact on revenue, which is
a component of the Group’s
financial capacity.
Mitigation:
Multiple areas are developed
concurrently to mitigate risks
of a lower than calculated
grade at any location. In-fill
drilling and in pit sampling
are carried out as required,
and in addition to resource
definition requirements. The
majority of the machinery mine
fleet is relatively new, having
been acquired from 2021
onwards. Skilled operators and
mechanics were appointed as
required to operate and service
this significant new item of
machinery at the mine site, as
well as new health and safety
protocols.
Exploration and project
development risks
Mineral exploration presents an
inherent risk in that information
on in-ground resources is
both limited (quantitatively
and qualitatively) and in
most instances expensive
to obtain. This presents
a challenge which if not
properly managed can lead to
misallocation of exploration
funds, not identifying reserves
and resources or, following
discovery, not demonstrating
the economics of an ore reserve
to accepted industry standards.
The necessary consents
and approvals to conduct
exploration and development
work must also be obtained
and managed.
Mitigation:
The Group maintains
appropriate in-house expertise
and long-standing relationships
with external consultancies
in mining and metallurgy to
keep abreast of their changing
requirements, and to make sure
all regulatory obligations are
met and duly reported. Together
these increase the prospect of
a successful outcome which
is measured in terms of a
project meeting its licensing
and reporting requirements
and the overall financial and
other metrics of the project.
The Board impresses on senior
management the need to
identify and address the major
sources of execution risk in any
development project, and to
continuously monitor diversion
from schedules or targets.
The risks affecting the Group and the Company are described
in detail in the Directors’ report and Notes 2 (Going concern)
and 32 (Risk management objectives and policies) to the
financial statements. The principal operating risks affecting
the Group are highlighted below:
The risks inherent in all mineral exploration and
development businesses are kept under constant
review by the Board and the executive team.
Principal risks and uncertainties
Eurasia Mining Plc
14
Annual Report & Accounts 2022
Loss of key personnel
risk
The loss of key personnel
consists of the departure
(voluntary or otherwise) of an
important employee, which
will, in all likelihood, result in
a financial loss or increased
expense to the small or medium
business. The expenses may be
of a temporary or a permanent
nature. These increased
expenses relate to the
search for and hiring of a new
employee, training costs for
the new hire, possible "signing"
bonus and higher remuneration
packages.
Mitigation:
The Group takes measures to
motivate and retain existing
employees and has retained a
significant number of its senior
management for more than ten
years. There is not currently
a shortage of Mining industry
personnel and expertise
and the Group is confident a
suitable replacement could be
found should it be necessary to
replace any key member of staff.
Commodity risk
A potential fall in commodity
prices could result in it
becoming uneconomic for the
Group to mine its assets.
Mitigation:
The Group closely monitors
the markets for platinum
group metals, changes in
their demand and supply,
and the effect these have on
metal prices, with a view to
taking necessary measures
in response to such changes,
including stockpiling
concentrate as has occurred
during 2022. The Group
continues to consider potential
opportunities in other mineral
and energy industries which
can diversify risk.
Demand for platinum group
metals from their principal
use – autocatalysts, which
reduce harmful engine
emissions is perceived by
market commentators to
remain strong as electric
vehicle uptake is offset by
tighter emissions control for
traditional internal combustion
engine vehicles, and as PGM
continue to find application
in emerging transport
technologies such as Fuel Cell
Electric Vehicles. For further
details see the PGM market
summary section at the front
of this report.
The regulatory
environment
The Company and the Group’s
activities are subject to laws
and regulations governing
various matters, including
licensing, production, taxes,
mine safety, labour standards,
occupational health and safety
and environmental protections.
Mitigation:
The Group closely monitors
all regulatory requirements
and changes to the laws,
rules and regulations, taking
steps whenever necessary to
comply with regulation. The
Board considers the regulatory
environment for mining
companies to be transparent,
not more difficult than other
jurisdictions, sufficiently
prescriptive and in general
navigable for a company
employing sufficient expertise
and resources to manage
that aspect of its business.
Sanctions legislation has
presented a new challenge to
the Company which has been
met by the appointment of a
suitably qualified and UK-based
firm.
Financing risk
Historically, the Company has
relied on international equity
and to a lesser extent debt
capital markets to maintain
adequate levels of working
capital.
Mitigation:
The Group maintains tight
financial and budgetary
controls as well as cost controls
which with forward planning
help ensure the Company is
adequately funded to reach its
objectives. The Russian assets’
sale process is in progress.
The Board considers risk
assessment to be important
in achieving its strategic
objectives. Further details
of the Group’s financial risk
management policies can be
found in Note 32.
The Board considers risk
assessment to be important
in achieving its strategic
objectives. Further details
of the Group’s financial risk
management policies can be
found in Note 32.
Research and future
development
The Group’s activities during
the year continued to be
concentrated on advancing
mineral exploration projects
through feasibility to
mine development. While
developing its core projects as
discussed in the Operations
Update the Company will
continue to consider new
directions for the business
in other minerals and energy
markets globally.
15
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Company Background
The Company’s shares are
quoted on AIM, a market
operated by the London
Stock Exchange Group plc.
The principal activities of the
Company and its subsidiaries
(the 'Group') are related to
international new energy metals
and new energy markets.
The purpose of the Strategic Report is to inform
members of the Company and help them to assess
how the Directors have performed their duties
under section 172 of the Companies Act 2006 (duty
to promote the success of the Company).
The Board is ultimately responsible for the
direction, management, performance and long-
term success of the Company. It sets the Group’s
strategy and objectives, considering the interests
of all its stakeholders. A good understanding of
the Company’s stakeholders enables the Board to
factor the potential impact of strategic decisions
on each stakeholder group into a boardroom
discussion. The Board considers the Company’s
purpose, vision and values together with its
strategic priorities in arriving to Board decisions.
Board resolutions are always determined with
reference to the interests of the Company’s
shareholders as well as its employees, its business
relationships with suppliers and customers, and
the impact of its operations on communities and
the environment. This statement serves as an
overview of how the Directors have performed this
duty during 2022 and engaged with the Company’s
key stakeholders to help to inform the Board’s
decision-making.
2022 was an unprecedented year in the Company’s
history. The conflict in Ukraine has presented
many challenges to the Company and the group
of Companies. Despite challenges, the Group’s
overall progress, following from Board decision
making, is demonstrated by progress at each of its
key projects through the year in review to progress
the sale of the Russian assets.
The Board acknowledges that there is a legal
requirement for the Company to report on how
the Board and its Committees have considered
the requirements of s.172 of the Companies Act
2006 in their decision making. These are here
considered under the following headings.
1 https://www.iea.org/data-and-
statistics/charts/global-average-
lead-times-from-discovery-to-
production-2010-2019
2. The interests
and professional
development of the
Company's employees;
Staff are encouraged to
maintain their professional
credentials and the Company
meets annual subscriptions to
professional bodies on behalf
of its employees as well as,
from time to time, tuition fees
for short- and longer-term
studies, and attendance fees
for industry events.
Eurasia Mining Plc ('Eurasia' or the 'Company') is a public limited
company incorporated and domiciled in the United Kingdom with
its registered office at International House, 142 Cromwell Road,
London, SW7 4EF, United Kingdom.
Section 172 statement
1. The likely long-term
consequences of any
corporate action or
decision;
Two of the Group’s key assets
have been progressed from
discovery and early-stage
exploration through feasibility
and the Board recognises the
timescales on which projects
of this type are developed to
return value on investment (The
international Energy Agency
has estimated an average of
16.9 years to take a mining
project from discovery through
feasibility to production1) . The
Board also recognises that a life
of a mine often extends beyond
the tenure of all personnel
and executives and plans
accordingly. Mine plans at West
Kytlim include budgets and
schedules for remediation of
mined out areas.
The Board remains committed
to progressing a sale-of-
assets process as described
elsewhere in this report.
Eurasia Mining Plc
16
Annual Report & Accounts 2022
Annual Report & Accounts 2022
On behalf of the board
Christian Schaffalitzky
Executive Chairman
2 July 2023
3. The need to foster
business relationships
with suppliers,
customers and other
stakeholders;
The commercial reputation
of the Group and each Group
Company is recognised as
critical to the Group’s future
success. The Group employs
local workers, contractors and
suppliers wherever possible
and maintains a network
of contacts in the industry
and values long-standing
commercial relationships with
consultants and contractors.
4. The impact of the
Company's operations
on the communities
adjacent to its projects
and the environment;
Rehabilitation plans are
submitted as a necessary
aspect of all mineral industry
statutory reporting instruments
and these ensure a mine site is
returned to its previous land use
following mining.
5. The desirability of the
Company to maintain
a reputation for high
standards of business
conduct and corporate
governance;
The Company applies the
Quoted Companies Alliance
code and considers its
Corporate Governance
responsibilities under their
10 guiding principles (see
Directors' Responsibilities
section). The Company
also maintains an extensive
internal body of policy and
procedures documentation
which is regularly updated
and strictly adhered to. Where
necessary the Company has
resort to its Nominated Adviser
and Corporate legal advisers
on matters concerning the
UK regulatory environment,
corporate law and top-tier
corporate governance
standards.
6. The need to treat
all members of the
Company fairly and
equitably.
No individual shareholder/
member has greater influence,
rights (excepting voting rights)
or obligations than any other
shareholder.
17
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
17
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Introduction
Environmental, Social and Governance
priorities are a clear focus of the mining
industry generally and increasingly mining
industry investors. The Board welcome
changes to the international mining
landscape particularly with respect to
environmental responsibility, and the
example being set by industry majors in
setting net zero emissions targets, as well
as developments in international reporting
standards to ensure adequate reporting
mechanisms. The Company’s West Kytlim
operation has undergone significant
changes in energy usage which will
determine its future environmental impact.
With the Monchetundra Project on Kola in
pre-mine development, the Board feel it is
premature for the Group to set a net-zero
emissions target but has taken steps to
commence appropriate environmental
reporting going forward.
This section of the report describes how
Directors consider and adopt principles
of corporate governance, as well as
environmental and social governance
and apply them through the group of
Companies while achieving corporate
objectives and ensuring the overall
direction, supervision and accountability
of the organisation. Other key aspects
of Corporate Governance within this
report are:
The Section 172 Statement (Strategic
Report above) describes how Directors
promote the Company for the benefit of
members as a whole;
Financial and non-financial Key
Performance Indicators which are
outlined to measure performance
of the Board year on year; and
Principal Risks and Uncertainties
demonstrate an awareness of potential
obstacles to achieving corporate goals.
The Board has adopted the QCA Corporate
Governance Code (2018) (“QCA Code”)
and strives to follow its 10 principles to the
fullest extent possible. Directors consider
the West Kytlim operation, one of the largest
mines of its type in the world, to be an
opportunity to demonstrate a potential new
style of lower emissions PGM production,
competing with other global sources of
PGM in terms of CO2/oz metal produced
as well as long-term environmental
disturbance.
The Group ensures the land disturbed by
mining activities is returned, post mining, to
a safe and stable landform. Rehabilitation
plans set out land and forestry and are
managed with an equal amount of forest
planted as is removed for mining. Open pits
are infilled with the overburden removed
prior to mining, top-soil is replaced and the
land regenerates over a period of five to ten
growing seasons.
Environmental report
West Kytlim
The area developed at West Kytlim will itself
be replanted with appropriate local species
and will recover to its pre-mine condition
within five to ten years following mining.
Surface mining requires significant
disturbance of the upper layers of top-soil
and river sediment terraces which are
removed to allow access to mineral bearing
gravels. These areas are then scheduled for
remediation following mining.
Water is a key resource in any stable natural
environment. Process water at the mine
site is derived from river water and is fully
recirculated meaning the water used to
disintegrate and beneficiate pay gravels
is continuously recycled in a closed loop
maintained separate to any free-flowing
water course. This hydro infrastructure of
dams, roads and ponds is constructed as
required at washplant sites in the mining
area. There have not as yet been cases of
contamination of rivers or streams in the
areas under development in the year under
review or in previous years. Tails from the
mining operation do not contain hazardous
chemicals but do include large volumes of
sediment and clay, which could damage the
ecosystem in a natural river course if not
correctly managed. Several relatively small
specially protected water environments
are defined within the mine licence and
particular care is taken to not disturb
these areas.
Waste management
The tailings of alluvial mining do not contain
any hazardous substances as no chemicals
are used in the beneficiation process which
is driven by gravity and hydro-mechanical
operations. Measures are taken at site to
ensure mine site water is maintained in a
closed loop separate from river courses.
Air emissions
The switch to electric powered draglines
as the key machine component for
overburden stripping will remove a
significant amount of vehicle emissions
associated with overburden stripping.
Tracked and heavy machinery on-site
complies with the latest accepted
emissions standards having mostly been
purchased new and is specified to the latest
environmental compliance standards.
Social
Relationship with the local
community
Consultation
Giving notice of pre-approved and
permitted work such as the West Kytlim
powerline project, and receiving feedback
from the local community who may
be affected is a key element of good
community relations. No impact on local
communities or their activities has been
identified at the West Kytlim mine which
is situated in an area of unpopulated
wilderness without nearby farming
operations. The Monchetundra operation
adjacent to the town of Monchegorsk is
located in a mining friendly jurisdiction
with mining and metallurgical processing
being the largest employer in the town
and district.
Health and Safety report
During 2022 and in the year to date
there have been no injuries or accidents
on operational sites. Health and safety
protocols have been upgraded at the
West Kytlim mine site following the arrival
of electric draglines and high voltage
electricity. Appropriate HSE is available to
all employees and its use closely monitored.
Signage is a key element of safety
awareness which is maintained by the mine
site Health and Safety Officer. The highest
risk situations are during construction and
assembly of various components of the
washplants and their peripherals as no
on-foot presence is required in pit during
excavation, and no drilling and blasting
required prior to digging.
Maintaining a best-in-class Environmental,
Social and Governance position remains a key focus
Environmental, Social and Governance
Eurasia Mining Plc
18
Annual Report & Accounts 2022
Our mine sites are engaged
with local communities
Consultation – A key aspect of
community involvement for high
impact projects
All mine workers and equipment
operators are local (within 70km area),
project companies registered locally and
taxes are paid locally
The mine has a sustainability focus – for
example, most mine building structures
and interiors are constructed from timber
milled on site and move to electric power
Environmental protection
is front of mind
Minimise impact – Surface mining with
limited remnant waste and tails heaps
Limit use of concrete, steel and asphalt at
the mine site
Rehabilitate – Eurasia is committed to
ensuring the land disturbed by mining is
returned to a safe and stable landform
with no long-term damage to the
environment or ecosystem
Rehabilitation plans envisage works
impacting local climate, geochemistry
of soils, fertility, degree of disturbance,
specific landscape and topography
features
GHG emissions reduction – Installation
of electric draglines powered by mains
hydro-derived electricity
Over 20 years’ experience
Building robust partnerships and
developing industry contacts
Leveraging an in-depth knowledge of
the licensing system in partnership
with support from expert international
technical consultants
Group companies maintain strong
contacts base amongst machinery
suppliers, contractors, industry
consultants, and sub-soil licensing
professionals
Christian Schaffalitzky
Managing Director and Chairman
2 July 2023
19
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Directors’ report
Directors
The Directors who served during the period were:
Christian Schaffalitzky – Executive Chairman
Anthony James Nieuwenhuys – Chief Executive Officer (retired July 2023)
Tamerlan Abdikeev – Non-Executive Director
David Iain Rawlinson – Non-Executive Director
Kotaro Kosaka – Non-Executive Director
Artem Matyushok – Non-Executive Director (appointed May 2022)
Directors' interests
Share interests
The Directors of the Company active at 31 December 2022 held the following beneficial interests (including interests held by spouses and
minor children) in the ordinary shares of the Company:
31 Dec 2022
31 Dec 2021
No. of shares
No. of shares
C. Schaffalitzky
89,569,517
89,569,517
Total
89,569,517
89,569,517
Share options and warrants
31 Dec 2022
31 Dec 2021
Options
No. of shares
No. of shares
C. Schaffalitzky
20,000,000
20,000,000
Total
20,000,000
20,000,000
All options granted to the Directors vested by 31 December 2021.
No share options were exercised by the Directors during 2022 (2021 – nil).
Dividends and profit retention
No dividend is proposed in respect of the year (2021: nil) and the retained loss for the year attributable to the equity holders of the parent of
£5,840,245 (2021: loss of £2,910,479) has been taken to reserves.
Share capital
The issued capital of the Company as at 31 December 2022 was:
Share
Number
Nominal
premium
of shares
value
account
Fully paid ordinary of shares at 0.1 pence each
2,853,559,995
2,853,560
51,343,246
Deferred shares of 4.9 pence each
143,377,203
7,025,483
–
2,996,937,198
9,879,043
51,343,246
Eurasia Mining Plc
20
Annual Report & Accounts 2022
Risk Management
The Directors consider that assessing and monitoring the inherent risks in the exploration and mine development business, as well as
other financial risks, is crucial for the success of the Group. The Board regularly reviews the performance of the Company’s projects
against plans and forecasts. Further details on management of financial risks, which includes foreign currency, interest rate, credit,
liquidity and capital risks are set out in Note 32.
Going Concern
As at 31 December 2022 the Group’s net current assets amounted to £5,883,581 (£23,036,966 in 2021) and includes unsold inventory
of £4,182,382. As at the same date, the Group’s cash balance was £1,009,908 (£22,009,507 in 2021) and investment in US treasuries of
£3,807,925 (2021: nil). The majority of the reduction in year-on-year cash position (2021 to 2022) is attributable to capital investments and
operating costs for the West Kytlim mine.
The Group’s debt consists of lease liabilities set up to acquire mining machinery for a total amount of £348,269 (at 31 December 2021:
£429,543).
The Group’s current (as at 29 June 2023) cash position is around £40,000 and US treasury Bonds valued at £1,646,255 with the reduction
since December 2022 being accounted for by £150,000 in capital expenditure, £950,000 on development expenditure on its assets
portfolio, and £2,031,578 in costs.
These financial statements have been prepared on a going concern basis, which assumes that the Group will continue in operation
for the foreseeable future. The Directors have prepared detailed bottom-up financial forecasts to address a range of scenarios for the
Group’s operations. The Group’s forecasts and assumptions reflect key assumptions based on information available at the time of review
and include:
1. Sale of inventory of raw platinum concentrate
The Company currently has an inventory of raw platinum concentrate, the product of the 2022 mining season at the Kluchiki and
Bolshaya Sosnovka areas, which has been retained in safe storage for later refining. The concentrate has a total net weight of 199.3 kg
and a realisable value of not less than £4.1 million. The Company is in advanced negotiations with a number of parties to realise this value
in the near future. These funds will be used to support the current mining season (see 2 below) and to continuing operating costs
of the Group.
2. Continuing mining operations of the Group
The Group’s current mining operations in West Kytlim mine have been running at reduced capacity at start-up of the season, as we were
engaged in stripping activity only with a commensurate and very significant reduction in diesel and labour costs. The Board have agreed
a new and extensive mining plan for the remainder of the season, based on electricity powered machinery and equipment. The mining
operations in West Kytlim will contribute significant additional funds to the Group when the value of the extracted concentrate is realised.
3. Expenditure on Monchetundra asset
The Group has spent £900,000 on a development programme for the Monchetundra asset during 2022 leading to approval of the DFS
in 2023. No further significant outgoings have been budgeted for this asset.
4. Management of future cash outflows
In addition to the above, the Group have the ability to manage and where required, reduce expenditure as needed.
As such, the Directors have prepared the financial statements on a going concern basis and consider them to be reasonable.
2022 Events and sanctions compliance
The Company has satisfied itself that its current activities at the West Kytlim Mine and on the Kola Peninsula are not prohibited under
UK or EU sanctions rules. For the avoidance of doubt this includes the sale of West Kytlim mine product. Furthermore, the Group does
not engage and has not engaged with any sanctioned persons/entities or agencies. Two in-depth reviews of the Company and Group’s
activities were tested with appropriate legal advice against EU and UK sanctions legislation in May and December 2022.
The Company has continued to fund Group companies through international disbursements as required and in compliance with
applicable regulation.
Debt and equity capital markets are expected to remain as options for the Company going forward.
Directors have concluded that the combination of the above factors, with account of the current applicable sanctions regimes, support
the Board’s opinion that it has a reasonable expectation that the Group has adequate resources to continue in operational existence for
the foreseeable future, which management has determined to be at least 12 months from the signing of this Annual Report.
The Board therefore believes it is appropriate to adopt a going concern basis in preparing the Annual Report & Accounts.
21
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Directors' responsibilities statement
The Directors are responsible for preparing the Strategic Report and the Directors’ report.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors must prepare
the financial statements in accordance with the UK adopted International Accounting Standards and in accordance with the Companies
Act 2006. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and
fair view of the state of affairs and profit or loss of the Company and Group for that period. In preparing these financial statements, the
Directors are required to:
select suitable accounting policies and apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable accounting standards have been followed, subject to any material departures being disclosed and explained
in the financial statements;
with contributions from advisers, set the Company and Group’s corporate strategy including research and development activities
(detailed in the Strategic Report above); and
prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in
business. 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 Group 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 Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors confirm that: so far as each Director is aware there is no relevant audit information of which the Company’s auditor is
unaware; and the Directors have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any
relevant audit information and to establish that the Company’s auditor is aware of that information. 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.
Revenue
No sale of mine product from the West Kytlim mine occurred in the year under review. Historically, revenues generated by the Group
have been from refining of PGM concentrates. Refinery receipts record the total of metal sales with payments received for platinum and
gold, at the market rate, on average every month throughout the mining season. For reasons related to the nature of metals refining the
revenue for other PGM (rhodium, iridium and palladium) are received when all shipments for that year have been received.
Directors' Indemnity
The Group maintains Directors' and Officers' liability insurance as an indemnity provision renewed annually.
Corporate Governance
Eurasia Mining applies the QCA Code as a Corporate Governance framework to ensure adequate corporate governance standards for
the current business and mindful of how the business will evolve in line with its corporate strategy and business goals. The QCA Code’s
ten principles describe how the Code should be applied to any company.
Eurasia has established a strategy designed to promote long-term value and a return on investment for its shareholders, a strategy which
also aims to build the Company to an increasingly profitable enterprise while maintaining good corporate governance and social and
environmental responsibility standards.
Delivering Growth
Eurasia has established a strategy designed to promote long-term value and a return on investment for its shareholders, a strategy which
also aims to build the Company to an increasingly profitable enterprise while maintaining good corporate governance and social and
environmental responsibility standards.
Principle 1: Strategy
The Company’s strategy is to self-fund exploration and development of marketable resource and energy projects in various commodities,
and to realise a return on investment, either by carrying the project through feasibility to commissioning or by straightforward sale at
any stage of development. The Company recognises that all project development expenditure adds value to a project by increasing its
resource and reserve base. Risk to further investment in development expenditure, or in mine development, is also reduced as resources
are moved to lower risk categories. The Company has adopted a dual strategy of both project development towards mining, while also
investing significant resources in active high-level mergers and acquisitions activity. The Company adapts this strategy in response to
external stimulus such as geopolitical events.
The Company is focused on selling its assets in Russia while maintaining corporate governance principles in line with the QCA Code.
The key commitments and challenges in adhering to the QCA’s 10 principles are set out below.
Directors’ report continued
Eurasia Mining Plc
22
Annual Report & Accounts 2022
Directors' responsibilities statement (continued)
Principle 2: Understanding shareholders
Eurasia seeks to maintain open, direct and two-way communication with its shareholders through various media including press releases,
the Company website, interviews and industry events. The Company employs public relations professionals and maintains third-party
contracts as required to better disseminate Company news-flow. Through shareholder feedback the Company ensures that it remains in
touch with the information requirements of shareholders, their expectations regarding their investment, and the motivation behind their
voting decisions. Directors consider shareholders' expectations to be correlated with that of the Company and the Company’s strategy.
The Company aims to update on key operation and commercial events as appropriate and the Board recognises that shareholders require
complete and timely information as a necessary input to their investment decisions. Working with its Nominated Adviser the Company
maintains strict adherence to the AIM rules for Companies.
Principle 3: Stakeholders and social responsibility
Experienced and knowledgeable long-standing employees and service providers are a recognised key asset within the Company and
our Corporate Governance principles seek to cultivate a productive and fulfilling working environment within the Company and the group
of companies. Our mining and other operations are a further key asset and attention is paid to how these operations engage with society
and the various stakeholders important to the project’s continuous success. Any issue arising from any stakeholder will immediately be
dealt with or communicated to the required level to allow for action to be taken. No material events have occurred in the history of the
mining operation and where an issue may arise it is reported in full to senior management and Directors. Managing relationships within
the Company’s workforce, and its outward interactions with local communities, service providers, and the environment, all have the
potential to impact on the Company’s ability to achieve its medium- to long-term goals – managing these relationships is considered a
fundamental facet of good Corporate Governance operating at project level.
Principle 4: Risk management
The leading risks at operational level relate to the reliability of our resource and reserve estimations and our ability to manage the mining
operation to achieve its goals. These risks are mitigated by ensuring qualified and knowledgeable personnel are employed and that
they are adequately resourced and supported by effective management. Resource exploration involves inherent risks stemming from
the fact that information relating to the mineralisation is not immediately available and is expensive to obtain. Recognising this risk and
then managing it effectively is a critical aspect of a successful resource exploration and development business. The Company’s annual
audit provides an opportunity to reassess the key risks facing the business at both a corporate and operational level (see principal risks
and uncertainties herewith). These are agreed by Directors and delineated and audited on an annual basis, thus ensuring adequate
recognition and articulation of each risk category.
Principle 5: Maintaining a dynamic management framework
The Board consists of a Chairman and Managing Director supported by four Non-Executive Directors. The Board aims to maintain two
independent Non-Executive Director positions at all times. At the date of this revision Iain Rawlinson, Artem Matyushok and Kotaro
Kosaka are considered independent Non-Executive Directors. In addition, the Board maintains appointments made as strategic advisers
with the Mergers and Acquisitions Officer role recognised as pivotal in the current overall strategy.
The Board meets when an executive decision requires Board approval, and in any event no less than once per six-week period. Board
members are regularly consulted on executive decisions which would benefit from specific input relevant to a Board member's area
of expertise. All Board members are aware of and comfortable with the time and resource requirements associated with their position.
Relevant information relating to a Board discussion is prepared and circulated in advance of Board meetings. An attendance record for
each Director is maintained and annualised for distribution within the Board. Separately, the Company Secretary is considered a key
position necessary in preserving a functional and ergonomic management framework within the Company and good communication
across the Group of companies.
Principle 6: Experience and skills
The Board has an effective combination of commercial and technical experience, being led by a Chair with a strong background in
geology, who is supported by Non-Executive Directors with commercial, legal and mergers and acquisitions experience in a range of
markets and jurisdictions. Board members retire on a fixed rota and declare themselves eligible for reappointment by shareholders at the
Company’s AGM.
The Board considers the skill sets within the current Board to be sufficient for the successful running of the business, and the delivery of
the stated corporate strategy and goals through the medium to long term, however further appointments may be made in due course.
In addition, where more specialised skills are required, the Board has access to a network of individuals and organisations with whom it
can consult for further information. This can include input to operational decisions relating to the Company’s operating mine, or advice
of a commercial nature. Each Board member’s long-standing career in the industry is invaluable in this regard. Continuing Professional
Development (‘CPD’) and membership of institutions which promote best practice in industry is encouraged in all Board members,
though not compulsory to Board membership. As an example, the professional accreditations PGeo (‘Professional Geologist’, Institute of
Geologists of Ireland) and EurGeol (‘European Geologist’, European Federation of Geologists), attained by the Executive Chairman, are
maintained by adherence to a programme of CPD activities.
All Board members regularly attend industry events and conferences to keep abreast of developments in their area of expertise. No one
Board member, or group of Board members, dominates decision making within the Board.
23
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Directors' responsibilities statement (continued)
Principle 7: Board performance
The Remuneration Committee, whose membership is considered annually, is responsible for evaluating the performance of the
Executive Directors. As mentioned above Board members retire on a fixed rota, and efforts are made with regard to succession planning
and appointment of new Board members.
The appointment process involves; assessment of suitability based on qualifications and work history, due diligence by the Company and
its Nominated Adviser, a series of meetings with Board members and key personnel, and finally contract negotiation and appointment.
Board evaluations are internal to the Company and on an ad-hoc basis, as befits the small scale of the Company currently, but not
less than once per year at the time of the Company AGM. Adhering to the Company’s strategy, achieving the Company’s goals, and
maintaining good corporate governance standards are the three most prominent identifiers by which Board effectiveness is evaluated.
Board evaluations are not currently made public, and it is the Company’s intention to reconsider this position and ensure continued
compliance with the Code as the Company develops.
Principle 8: Values
The Company is founded on a culture of following and promoting the highest ethical standards with regard to its commercial
transactions, business practices, strategy, internal employee relations and outward-facing stakeholder and community relationships.
The Company is incorporated and domiciled in the UK and governed by the laws of England and Wales and its corporate culture and
values extend from PLC level throughout the organisation irrespective of jurisdiction. An ability to recognise and promote good ethical
values is seen throughout the organisation as an asset to an employee, potential employee or Board member. The current Board
members have been chosen with awareness of the Company’s corporate culture and the Company’s ethical standards in mind – new
Board appointments are also considered in this light. Corporate culture, and high ethical standards with regard to business practices are
considered a critical element in attaining the Company’s strategy and goals and these standards are reinforced through the nominations
and staff appraisal process. High standards of ethics create a competitive advantage for the Company and are a core element of the
Company’s business model, as they ensure the Company’s long-term sustainability. Eurasia is an equal opportunities employer, and the
Board has recognised a lack of Board diversity which it intends to address.
Principle 9: Governance
Maintaining governance structures that are fit for use as the Company evolves in size and complexity is an essential element of good
corporate governance. Maintenance of the corporate governance code is the sole remit of the Chairman, who instigates changes in
policy, and ensures the code is applied throughout the organisation. Non-Executive Directors are appointed and participate in all Board
level decisions and also provide scrutiny and oversight of the Executive Directors' roles. The Board’s Non-Executive Directors are each
skilled in different aspects of commerce, law, finance and the UK regulatory environment, with a combined breadth of experience across
various markets, commodities and jurisdictions. They communicate regularly with the Chairman and Executive Directors and provide
reliable advice in their areas of expertise. The terms and functions of the Audit and Risk, Remuneration and Nomination Committees are
set out below. The Company Secretary is available to Non-Executive Directors to support their information requirements and decision
making and reports directly to the Chairman.
Audit and Risk Committee
The Audit and Risk Committee may examine any matter relating to the financial affairs of the Group and the Group’s audits, this includes
reviews of the Annual Financial Statements and announcements, internal control procedures, accounting procedures, accounting
policies, the appointment, independence, objectivity, terms of reference and fees of external auditors and such other related functions
as the Board may require. The external Auditors have direct access to the members of the Committee, without the presence of the
Executive Directors, for independent discussions. Several Audit and Risk Committee meetings are held during the year, prior to and
during the annual audit; and to approve Interim and Annual Financial Statements. The Audit and Risk Committee opines on whether
accounts are in compliance with International Financial Reporting Standards.
The Chairman of the Audit and Risk Committee is Iain Rawlinson and the Committee comprises Iain Rawlinson and Tamerlan Abdikeev.
The Audit and Risk Committee is guided by Company policy and procedure including the Audit and Risk Committee terms of reference.
Directors’ report continued
Eurasia Mining Plc
24
Annual Report & Accounts 2022
Remuneration Committee
The Remuneration Committee determines the terms and conditions of employment and annual remuneration of the Executive
Directors and senior staff. It consults with the Executive Chairman, takes into consideration external data and comparative third-party
remuneration and has access to professional advice outside the Company.
The Chairman of the Remuneration Committee is Iain Rawlinson and the Committee comprises Iain Rawlinson and Tamerlan Abdikeev.
The key policy objectives of the Remuneration Committee in respect of the Company’s Executive Directors and other senior Executives
are to ensure that individuals are fairly rewarded for their personal contribution to the Company’s overall performance, and to act as
an independent committee ensuring that due regard is given to the interests of the Company’s shareholders and to the financial and
commercial health of the Company. Remuneration of Executive Directors comprises basic salary, discretionary bonuses, participation
in the Company’s Share Option Scheme and other benefits. The Company’s remuneration policy with regard to options is to maintain an
amount of not more than 10% of the issued share capital in options for the Company’s management and employees which may include
the issue of new options in line with any new share issues. The Remuneration Committee is guided by company policy and procedure
including the Remuneration Committee terms of reference.
Nominations Committee
The Chairman of the Nominations Committee is Christian Schaffalitzky and the Committee comprises Christian Schaffalitzky and
Iain Rawlinson. The Committee convenes at a minimum twice annually to consider Board composition, and, if considered necessary,
seek further appointments. The Committee is conscious of a need for Board diversity when considering future appointments. The
Nominations Committee is guided by Company policy and procedure including the Nominations Committee terms of reference.
Principle 10: Build trust
The Board seeks to maintain both direct and two-way communication with its shareholders through its public and investor relations
programmes. All shareholders may at their discretion choose to attend the Company's AGM either virtually or in person. The Company
employs Public Relations and Investor Relations professionals and maintains several third-party contracts to better disseminate
Company news-flow. Through shareholder feedback the Company ensures that the Board’s communication of the Company’s progress
is thorough and well understood. A clear statement on the outcomes of Board resolutions is communicated immediately after the
Company’s AGM by RNS and posted to the Company’s website. This includes a summary of votes for and against the resolutions put
before the shareholders, and where a significant number of votes is cast against a resolution this is clearly stated, with an explanation
as to possible remediation regarding that voting. A catalogue of historical Annual Reports and AGM notices is maintained at an
appropriate location on the Company’s website.
Matters which are reserved strictly for the consideration of the Board include, but are not limited to, discussions and decision
on Company strategy, major investment decisions in new business development, commercial arrangements including funding
requirements, high-level decisions on distribution of funds, and recruitment or dismissal of senior personnel and Board members.
The above outline of the Company’s corporate governance framework befits the current scale of the Company but will be subject
to appropriate modifications as the Company grows in line with its stated strategy.
An annual review of the corporate governance framework outlined above is undertaken at the Board meeting preceding or directly
following the Company’s AGM. Changes considered to the current corporate governance framework, to be assessed in due course,
include further appointments to the Board, and establishing independent bodies to review and assess Board performance.
UK Code on Takeovers and Mergers: Eurasia Mining is subject to the UK City code on takeovers and mergers, which was revised and
extended to apply to all companies listed on the AIM market in October 2013.
Auditors Grant Thornton are willing to continue in office and a resolution proposing their reappointment as auditors of the Company
and a resolution authoring the Directors to agree their remuneration will be put to shareholders at the Annual General Meeting.
By order of the Board
K. Byrne
Company Secretary
2 July 2023
25
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Opinion
We have audited the financial statements of Eurasia Mining Plc (the “Company”) and its subsidiaries (collectively the ‘Group’) which
comprise the consolidated statement of profit or loss and other comprehensive income, the consolidated and company statements
of financial position, the consolidated and company statements of changes in equity, the consolidated and company statement of
cash flows for the year ended 31 December 2022 and the related notes to the financial statements, including a summary of significant
accounting policies.
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, Eurasia Mining Plc’s consolidated and company financial statements:
–
give a true and fair view in accordance with UK-adopted international accounting standards of the financial position of the Group
and Company as at 31 December 2022 and of the Group’s financial performance and the Group and Company cash flows for the year
then ended; and
–
have been properly prepared in accordance with the requirements of 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 ‘Responsibilities of the auditor for the audit of the financial statements’ section of
our report. We are independent of the Group and Company in accordance with the ethical requirements that are relevant to our audit of
the financial statements in the United Kingdom, including the FRC’s Ethical Standard and the ethical pronouncements established by
Chartered Accountants Ireland, applied as determined to be appropriate in the circumstances for the entity. We have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of going concern basis of accounting in the preparation
of the financial statements is appropriate. Our evaluation of the validity of the directors’ assessment of the Group’s and Company’s ability
to continue to adopt the going concern basis of accounting included:
Evaluating management’s future cash flow forecasts, understanding the process by which they were prepared, and assessed the
calculations are mathematically accurate.
Challenging the underlying key assumptions such as expected significant cash inflows, outflows, and other operating expenses.
Making inquiries about management’s plans and available written communication with commercial partners for the processing and sale
of raw platinum concentrate from the 2022 mining season to generate significant revenue for the Company and the Group and obtained an
understanding on how the future expenditure at the West Kytlim mine and other assets will be funded.
Making inquiries on management’s plans in relation to mining plan being put in place including the level of operating costs and obtained an
understanding of how the 2023 and 2024 operations at the West Kytlim mine will enable to generate revenue for the Company and Group.
Assessing the completeness and appropriateness of management’s going concern disclosures in the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group’s and Company’s ability to continue as a going concern for a period of at least
twelve months from the date when the financial statements are authorised for issue.
We have nothing material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the
directors considered it appropriate to adopt the going concern basis of accounting in preparing the financial statements.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
Independent auditor’s report
to the members of Eurasia Mining plc
Eurasia Mining Plc
26
Annual Report & Accounts 2022
Emphasis of Matter
We draw attention to the Strategic report, Directors' report and Note 33 to the financial statements, which describe the Group and
Company’s current activities and engagement in Russia, sanctions imposed and the impact thereof. Strict international sanctions are
imposed on certain activities, entities and individuals connected with Russia; additionally sanctions have been introduced by the Russian
Federal government. These expose the Group and Company to legal, political and economic risks. The outcome, length, scale and
extent of these are unknown and as such the impact on the Group cannot be predicted at the time of issuing the audit opinion. The Group
continues to monitor any impact and have to date indicated that there has not been a significant impact on the Group’s activities. In view of
the significance of this matter, we consider that it should be drawn to your attention. The ultimate outcome of this matter cannot presently
be determined and the financial statements do not include any potential adjustment(s) that may be required arising out of alternative
outcomes. Our opinion is not modified in respect of this matter.
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 financial period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we
identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and the
directing of 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 therefore we do not provide a separate opinion on these matters.
Overall audit strategy
We designed our audit by determining materiality and assessing the risks of material misstatement in the financial statements. In
particular, we looked at where the directors made subjective judgements, for example, in respect of significant accounting estimates that
involved making assumptions and considering future events that are inherently uncertain. We also addressed the risk of management
override of internal controls, including evaluating whether there was any evidence of potential bias that could result in a risk of material
misstatement due to fraud.
Based on our considerations as set out below, our areas of focus included:
Going concern;
Existence and valuation of inventory; and
Recoverability of capitalised exploration costs and mining assets
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system of internal
control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override
of internal controls, including assessing whether there was evidence of bias by the directors that may have represented a risk of material
misstatement.
Whilst Eurasia Mining Plc is a company listed on AIM Market of the London Stock Exchange, the Group’s operations principally comprise
an exploration & development of platinum group metals, gold and other minerals located in Russia.
We assessed there to be two components holding exploration & development assets, ZAO Kosvinsky Kamen (operational in West Kytlim)
and the ZAO Terskaya Mining Company (exploring activities in the Monchetundra region). ZAO Kosvinsky Kamen was subject to a
full scope audit and ZAO Terskaya Mining Company was subject to specified audit procedures in relation to the key audit matter,
Recoverability of capitalised exploration costs. The Company, Eurasia Mining Plc was also subject to a full scope audit. The audits
of the significant components were performed in Ireland by Grant Thornton Ireland. The remaining components of the Group were
considered non-significant and these components were subject to analytical review procedures.
27
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Independent auditor’s report continued
to the members of Eurasia Mining plc
Key audit matters (continued)
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider
materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of users that are
taken on the basis of the financial statements. These, together with qualitative considerations, such as our understanding of the entity and
its environment, the history of misstatements, the complexity of the Company and the reliability of the control environment, helped us to
determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements,
both individually and on the financial statements as a whole.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily
be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality
as follows:
Overall Group
Materiality
2022
2021
£260,000
£311,000
Basis for determining
materiality
Group & Company – 1% of total assets
Group & Company – 2% of net assets
Rationale for the
benchmark applied
We determined that an asset-based measure is appropriate as the Group holds significant cash,
inventory and loan balances and its principal activity is the exploration & development of platinum
group metals, gold and other minerals, such that the asset base is considered to be a key financial
metric for users of the financial statements.
We allocated group materiality to significant components dependent on the size and our assessment
of the risk of material misstatement of that component.
Performance materiality
£156,000
£187,000
Basis for determining
performance materiality
We determined performance materiality for the Group and Company to be 60% of materiality,
having considered our review of the assessment of the risk of misstatements, business risks
and fraud risks associated with the entity and its control environment, our expectations about
misstatements and our understanding of the business and processes at the Group and Company.
This is to reduce to an appropriately low level the probability that the aggregate of uncorrected
and undetected misstatements in the financial statements exceeds materiality for the financial
statements as a whole.
The reporting threshold is set as the amount below which identified misstatements are considered as being clearly trivial. We agreed with
the Board and the Audit Committee that we would report to them misstatements identified during our audit of amounts greater than 5% of
materiality as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Eurasia Mining Plc
28
Annual Report & Accounts 2022
Key audit matters (continued)
Key audit matters identified
The risks of material misstatement that had the greatest effect on our audit, including the allocation of our resources and effort, are set out
below as significant matters together with an explanation of how we tailored our audit to address these specific areas in order to provide
an opinion on the financial statements as a whole. This is not a complete list of all risks identified by our audit.
Key audit matter
How the scope of our audit addressed the
key audit matter
Going concern
The Directors have prepared a cash flow forecast which
anticipates the Group and Company being able to continue
on a going concern basis for at least the next twelve months
from the date of this report. In making this assessment, the
Directors have considered potential sources of cash inflows
expected for the next twelve months as disclosed in Note 2
to the financial statements.
We identified management’s going concern assessment as a
key audit matter as the Company and Group’s ability to sell the
raw platinum concentrate to support its operations and future
developments may determine its ability to continue as a going
concern. These considerations require significant auditor
judgment to conclude that the Group and Company will have
the ability to support its operations and future developments.
We performed the following audit procedures:
Evaluating management’s future cash flow forecasts,
understanding the process by which they were prepared, and
assessed the calculations are mathematically accurate.
Challenging the underlying key assumptions such as
expected significant cash inflows, outflows, and other
operating expenses.
Making inquiries about management’s plans and available
written communication with commercial partners for the
processing and sale of raw platinum concentrate from the 2022
mining season to generate significant revenue for the Company
and the Group and obtained an understanding on how the
future expenditure at the West Kytlim mine and other assets
will be funded.
Making inquiries on management’s plans in relation to mining
plan being put in place including the level of operating costs
and obtained an understanding of how the 2023 and 2024
operations at the West Kytlim mine will enable to generate
revenue for the Company and Group.
assessing the completeness and appropriateness of
management’s going concern disclosures in the financial
statements.
We completed our planned audit procedures, with no exceptions
noted.
Existence and valuation of inventory
The carrying value of inventory as at 31 December 2022
is £4,182,382 (2021: £38,673).
Management is required to assess the valuation of inventory at
each reporting date. There is a significant risk that the carrying
value of inventory is inappropriate, that it is not correctly
measured at the lower of cost or net realisable value, and could
require further write-down.
We performed the following audit procedures:
reviewed management’s valuation and write-down assessment
and critically evaluated and challenged the commodity prices or
selling prices and chemically pure grade assumptions that have
been used;
ensured that the cost of inventory is correctly measured based
on the first-in-first-out principle and includes all the expenditure
that is incurred to get it ready for sale;
with assistance from management experts, performed an
inventory count as at 31 December 2022; and
reviewed the disclosures in the Consolidated Financial
Statements regarding the carrying value of inventories and
write-down of inventories recognised as an expense.
Key observations:
We completed our planned audit procedures, with no exceptions
noted. The disclosures in Note 19 are in line with IAS 2.
29
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Independent auditor’s report continued
to the members of Eurasia Mining plc
Key audit matter
How the scope of our audit addressed the
key audit matter
Recoverability of capitalised exploration costs and mining assets
The intangible asset represented by capitalised costs
associated with exploration, evaluation and development of
mineral resources as at 31 December 2022 is £2,859,368 (2021:
£1,389,029). This relates to activities conducted by the ZAO
Terskaya Mining Company component.
The mining asset as at 31 December 2022 is £3,509,217 (2021:
£3,109,632). This relates to activities conducted by ZAO Kosvinsky
Kamen component.
Management is required to assess these assets for impairment
at each reporting period. In addition, the assumptions used to
calculate the value in use requires significant judgement by
management and the inputs to the calculation such as metal
prices are sensitive to change.
The recoverability of these costs is contingent on the success of
the extraction of the identified reserves.
We performed the following audit procedures:
obtained management’s impairment assessment relating to the
mining assets and capitalised exploration costs;
corroborated management’s considerations on the exploration
and evaluation assets where there was no indicator for
impairment by obtaining mining licences, as well as reserve and
resource reports;
for intangible asset represented by capitalised costs associated
with exploration, evaluation and development of mineral
resources:
–
we assessed whether there were indicators of impairment
and concluded that no indicators in terms of IFRS 6 applied
–
reviewed and summarised licence agreements and
confirmed that the terms and requirements are complied
with;
–
reviewed key assumptions underlying the management’s
expert’s calculations and performed procedures to validate
their reasonableness; and
–
evaluated the competence and objectivity of the
management’s expert.
for mining assets where there were indicators of impairment, we
tested the value-in-use calculations performed by management,
which included:
–
performed arithmetical checks on the calculation;
–
challenged the appropriateness of management’s key
assumptions which included discount rate, commodity
price, recovery rate and production levels used in the model
by agreeing to production reports and cash flows, and to
external sources where applicable; and
–
inspected management’s sensitivity analysis on the key
assumptions including commodity prices, production levels,
recovery rates and expected grading of extracted materials.
reviewed the financial statements to verify that the disclosures
were appropriately included per IAS 36 ‘Impairment of
Assets’ and IFRS 6 ‘Exploration for and Evaluation of Mineral
Resources’.
Key observations:
We completed our planned audit procedures, with no exceptions
noted. The disclosures in Note 13 Property, plant and equipment
and Note 14 Intangible assets are in line with IAS 36 and IFRS 6
respectively.
Key audit matters (continued)
Key audit matters identified (continued)
Eurasia Mining Plc
30
Annual Report & Accounts 2022
Other information
Other information comprises information included in the annual report, other than the financial statements and our auditor’s report
thereon, including the Directors’ Report and the Strategic Report.
The Directors are responsible for the other information. 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.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. If we identify such material inconsistencies in the financial statements, we are required to determine
whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
–
the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
–
except for the required disclosures for Streamlined Energy and Carbon reporting omitted in the Directors’ Report, the Strategic Report
and Directors’ Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not
identified any material misstatements in the Strategic Report and 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, or returns adequate for our audit have not been received from branches not visited
by us; or
–
the financial statements are not in agreement with the accounting records and returns; or
–
certain disclosures of directors’ remuneration specified by law are not made; or
–
we have not received all the information and explanations we require for our audit.
Responsibilities of Directors and those charged with governance for the financial
statements
As explained more fully in the Directors’ responsibilities statement, management is responsible for the preparation of the financial
statements which give a true and fair view in accordance with UK-adopted international accounting standards, and for such internal
control as directors determine necessary to enable the preparation of financial statements are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group and 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 management
either intends to liquidate the Group and Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group and Company’s financial reporting process.
Responsibilities of the auditor for the audit of the financial statements
The objectives of an auditor 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 their opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of an auditor’s 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.
31
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
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. Owing to the inherent
limitations of an audit, there is an unavoidable risk that material misstatement in the financial statements may not be detected, even
though the audit is properly planned and performed in accordance with the ISAs (UK). The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and regulations
related to compliance with mining industry regulations and mining licence conditions, and we considered the extent to which non-
compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact
on the preparation of the financial statements such as the Companies Act 2006. The Audit engagement partner considered the experience
and expertise of the engagement team to ensure that the team had appropriate competence and capabilities to identify or recognise
non-compliance with the laws and regulation. We evaluated management’s incentives and opportunities for fraudulent manipulation of the
financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate
journal entries to manipulate financial performance and management bias through judgements and assumptions in significant accounting
estimates, in particular in relation to significant one-off or unusual transactions. We apply professional scepticism through the audit to
consider potential deliberate omission or concealment of significant transactions, or incomplete/inaccurate disclosures in the financial
statements.
In response to these principal risks, our audit procedures included but were not limited to:
enquiries of management board, risk and compliance and legal functions and audit committee on the policies and procedures in place
regarding compliance with laws and regulations, including consideration of known or suspected instances of non-compliance and
whether they have knowledge of any actual, suspected or alleged fraud;
inspection of the Group’s regulatory and legal correspondence and review of minutes of board and audit committee meetings during the
year to corroborate inquiries made;
gaining an understanding of the entity’s current activities, the scope of authorisation and the effectiveness of its control environment to
mitigate risks related to fraud;
discussion amongst the engagement team in relation to the identified laws and regulations and regarding the risk of fraud, and remaining
alert to any indications of non-compliance or opportunities for fraudulent manipulation of financial statements throughout the audit;
identifying and testing journal entries to address the risk of inappropriate journals and management override of controls;
designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing;
challenging assumptions and judgements made by management in their significant accounting estimates, including impairment
assessment of capitalised exploration costs and mining assets;
review of the financial statement disclosures to underlying supporting documentation and inquiries of management; and
ensuring the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with
laws and regulations and they were appropriately briefed on where the risk areas are.
The primary responsibility for the prevention and detection of irregularities including fraud rests with those charged with governance and
management. As with any audit, there remains a risk of non-detection or irregularities, as these may involve collusion, forgery, intentional
omissions, misrepresentations or override of internal controls.
The purpose of our audit work and to whom we owe our responsibilities
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.
Cathal Kelly
(Senior Statutory Auditor)
For and on behalf of
Grant Thornton
Chartered Accountants & Statutory Auditors
13-18 City Quay
Dublin 2,
Ireland
2 July 2023
Independent auditor’s report continued
to the members of Eurasia Mining plc
Eurasia Mining Plc
32
Annual Report & Accounts 2022
Year to
Year to
31 December
31 December
2022
2021
Note
£
£
Sales
8
119,525
2,331,225
Cost of sales
9
(30,173)
(2,584,680)
Gross profit/(loss)
89,352
(253,455)
Administrative costs
9
(4,618,351)
(2,717,765)
Investment income
61,325
1,394
Finance cost
10
(107,697)
(103,445)
Other gains
11
187,592
–
Other losses
11
(2,842,309)
(65,250)
Loss before tax
(7,230,088)
(3,138,521)
Income tax expense
12
–
–
Loss for the year
(7,230,088)
(3,138,521)
Other comprehensive income:
Items that will not be reclassified subsequently to profit and loss:
NCI share of foreign exchange differences on translation of foreign operations
16
(61,656)
36,855
Items that will be reclassified subsequently to profit and loss:
Parent’s share of foreign exchange differences on translation of foreign operations
(341,762)
(58,679)
Other comprehensive expense for the year, net of tax
(403,418)
(21,824)
Total comprehensive loss for the year
(7,633,506)
(3,160,345)
Loss for the year attributable to:
Equity holders of the parent
(5,840,245)
(2,910,479)
Non-controlling interest
16
(1,389,843)
(228,042)
(7,230,088)
(3,138,521)
Total comprehensive loss for the year attributable to:
Equity holders of the parent
(6,182,007)
(2,969,158)
Non-controlling interest
16
(1,451,499)
(191,187)
(7,633,506)
(3,160,345)
Loss per share attributable to equity holders of the parent:
Basic and diluted loss (pence per share)
30
(0.22)
(0.10)
The accompanying notes are an integral part of these financial statements.
Consolidated statement of profit or loss and other
comprehensive income
For the year ended 31 December 2022
33
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Eurasia Mining Plc
33
Annual Report & Accounts 2022
31 December
31 December
2022
2021
Note
£
£
ASSETS
Non-current assets
Property, plant and equipment
13
9,600,231
5,061,743
Assets in the course of construction
13
696,026
640,423
Intangible assets
14
2,859,368
1,389,029
Investment in financial assets
17
3,807,925
–
Investment to potential share in joint venture
15
–
367,464
Total non-current assets
16,963,550
7,458,659
Current assets
Inventories
19
4,182,382
38,673
Trade and other receivables
20
3,171,669
1,681,864
Current tax asset
6,050
5,334
Cash and cash equivalents
21
1,009,908
22,009,507
Total current assets
8,370,009
23,735,378
Total assets
25,333,559
31,194,037
EQUITY
Issued capital
22
61,187,111
61,187,111
Other reserves
24
3,580,929
3,922,691
Accumulated losses
(38,954,777)
(33,114,532)
Equity attributable to equity holders of the parent
25,813,263
31,995,270
Non-controlling interest
16
(3,401,548)
(1,950,049)
Total equity
22,411,715
30,045,221
LIABILITIES
Non-current liabilities
Lease liabilities
26
181,198
307,136
Provisions
28
254,218
143,268
Total non-current liabilities
435,416
450,404
Current liabilities
Borrowings
25
–
31,953
Lease liabilities
26
167,071
122,407
Trade and other payables
27
2,230,879
486,558
Provisions
28
88,478
57,494
Total current liabilities
2,486,428
698,412
Total liabilities
2,921,844
1,148,816
Total equity and liabilities
25,333,559
31,194,037
These financial statements were approved by the Board on 2 July 2023 and were signed on its behalf by:
C. Schaffalitzky
Executive Chairman
The accompanying notes are an integral part of these financial statements.
Consolidated statement of financial position
As at 31 December 2022
Eurasia Mining Plc
34
Annual Report & Accounts 2022
31 December
31 December
2022
2021
Note
£
£
ASSETS
Non-current assets
Property, plant and equipment
13
419
804
Investments in financial assets
17
3,807,925
–
Investments in subsidiaries
16
1,132,246
1,132,246
Total non-current assets
4,940,590
1,133,050
Current assets
Trade and other receivables
20
434,040
308,485
Other financial assets
18
28,157,840
12,681,450
Cash and cash equivalents
21
136,733
21,892,793
Total current assets
28,728,613
34,882,728
Total assets
33,669,203
36,015,778
EQUITY
Issued capital
22
61,187,111
61,187,111
Other reserves
24
3,924,026
3,924,026
Accumulated losses
(31,878,477)
(29,371,048)
Total equity
33,232,660
35,740,089
LIABILITIES
Current liabilities
Trade and other payables
27
436,543
275,689
Total current liabilities
436,543
275,689
Total liabilities
436,543
275,689
Total equity and liabilities
33,669,203
36,015,778
In accordance with section 408(3) of the Companies Act 2006, Eurasia Mining Plc is exempt from the requirement to present its own
statement of profit or loss. The amount of loss for the financial year recorded within the financial statements of Eurasia Mining Plc is
£2,507,429 (2021: loss of £2,004,556).
These financial statements were approved by the Board on 2 July 2023 and were signed on its behalf by:
C. Schaffalitzky
Executive Chairman
The accompanying notes are an integral part of these financial statements.
Company statement of financial position
As at 31 December 2022
35
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Attributable
to equity
Non-
Share
Share
Deferred
Other
Translation
Accumulated
holders of
controlling
capital
premium
shares
reserves
reserve
losses
the parent
interest
Total
£
£
£
£
£
£
£
£
£
Balance at 1 January 2021
2,758,702 28,028,671
7,025,483
3,924,026
57,344 (30,204,053) 11,590,173 (1,758,862) 9,831,311
Issue of ordinary share capital
for cash
94,858 24,834,836
–
–
–
– 24,929,694
24,929,694
Share issue cost
– (1,555,439)
–
–
–
–
(1,555,439)
(1,555,439)
Transaction with owners
94,858 23,279,397
–
–
–
– 23,374,255
– 23,374,255
Loss for the year
–
–
–
–
–
(2,910,479) (2,910,479)
(228,042) (3,138,521)
Other comprehensive income
Exchange differences on translation
of foreign operations
–
–
–
–
(58,679)
–
(58,679)
36,855
(21,824)
Total comprehensive loss
for the year ended
31 December 2021
–
–
–
–
(58,679)
(2,910,479) (2,969,158)
(191,187) (3,160,345)
Balance at 31 December 2021
2,853,560 51,308,068
7,025,483
3,924,026
(1,335) (33,114,532) 31,995,270 (1,950,049) 30,045,221
Balance at 1 January 2022
2,853,560 51,308,068
7,025,483
3,924,026
(1,335) (33,114,532) 31,995,270 (1,950,049) 30,045,221
Transaction with owners
–
–
–
–
–
–
–
–
–
Loss for the year
–
–
–
–
–
(5,840,245) (5,840,245) (1,389,843) (7,230,088)
Other comprehensive income
Exchange differences on translation
of foreign operations
–
–
–
–
(341,762)
–
(341,762)
(61,656)
(403,418)
Total comprehensive loss
for the year ended
31 December 2022
–
–
–
–
(341,762)
(5,840,245) (6,182,007) (1,451,499) (7,633,506)
Balance at 31 December 2022
2,853,560 51,308,068
7,025,483
3,924,026
(343,097) (38,954,777) 25,813,263 (3,401,548) 22,411,715
The accompanying notes are an integral part of these financial statements.
Consolidated statement of changes in equity
For the year ended 31 December 2022
Eurasia Mining Plc
36
Annual Report & Accounts 2022
Company statement of changes in equity
For the year ended 31 December 2022
Share
Share
Deferred
Other
Accumulated
capital
premium
shares
reserves
losses
Total
£
£
£
£
£
£
Balance at 1 January 2021
2,758,702
28,028,671
7,025,483
3,924,026
(27,366,492)
14,370,390
Issue of ordinary share capital for cash
94,858
24,834,836
–
24,929,694
Share issue cost
–
(1,555,439)
–
(1,555,439)
Transactions with owners
94,858
23,279,397
–
–
–
23,374,255
Loss and total comprehensive income
–
–
–
–
(2,004,556)
(2,004,556)
Balance at 31 December 2021
2,853,560
51,308,068
7,025,483
3,924,026
(29,371,048)
35,740,089
Balance at 1 January 2022
2,853,560
51,308,068
7,025,483
3,924,026
(29,371,048)
35,740,089
Transactions with owners
–
–
–
–
–
–
Loss and total comprehensive income
–
–
–
–
(2,507,429)
(2,507,429)
Balance at 31 December 2022
2,853,560
51,308,068
7,025,483
3,924,026
(31,878,477)
33,232,660
The accompanying notes are an integral part of these financial statements.
37
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Year to
Year to
31 December
31 December
2022
2021
Note
£
£
Cash flows from operating activities
Loss for the year
(7,230,088)
(3,138,521)
Adjustments for:
Depreciation of non-current assets
13
1,006,210
422,752
Asset value write offs to cost of sales/production
2,365,988
149,882
Finance costs recognised in profit or loss
25
107,697
103,445
Investment income recognised in profit or loss
(61,325)
(1,394)
Loss recognised on disposal of investments
814,158
–
Loss recognised on valuation of inventory
2,028,151
–
Gain on disposal of property, plant and equipment
(4,952)
–
Rehabilitation cost recognised in profit or loss
99,725
145,785
Net foreign exchange (gains)/losses
11
(182,640)
65,250
(1,057,076)
(2,252,801)
Movement in working capital
Increase in inventories
(6,166,681)
(24,862)
Increase in trade and other receivables
(1,300,887)
(1,395,059)
Increase in trade and other payables
1,716,777
197,728
Cash outflow from operations
(6,807,867)
(3,474,994)
Income tax paid
–
–
Net cash used in operating activities
(6,807,867)
(3,474,994)
Cash flows from investing activities
Payments for investment securities
(7,030,548)
–
Proceeds from sale of investment securities
2,835,299
–
Investment income
11,943
1,394
Investment to acquire interest in other entities
(354,769)
(367,464)
Purchase of property, plant and equipment
13
(7,190,406)
(1,910,033)
Proceeds from disposal of property, plant and equipment
4,952
–
Payment for exploration and evaluation assets
14
(1,239,085)
(682,419)
Net cash used in investing activities
(12,962,614)
(2,958,522)
Cash flows from financing activities
Proceeds from issue of equity shares
–
24,929,694
Share issue costs
–
(1,555,439)
Repayment of borrowings
(36,232)
–
Repayment of lease liability
(141,528)
(101,674)
Interest paid
(90,446)
(101,048)
Net cash proceeds (used in) from financing activities
(268,206)
23,171,533
Net (decrease)/increase in cash and cash equivalents
(20,038,687)
16,738,017
Effects of exchange rate changes on the balance of cash held in foreign currencies
(960,912)
(132,611)
Cash and cash equivalents at beginning of year
22,009,507
5,404,101
Cash and cash equivalents at end of year
1,009,908
22,009,507
The accompanying notes are an integral part of these financial statements.
Consolidated statement of cash flows
For the year ended 31 December 2022
Eurasia Mining Plc
38
Annual Report & Accounts 2022
Year to
Year to
31 December
31 December
2022
2021
Note
£
£
Cash flows from operating activities
Loss for the year
(2,507,429)
(2,004,556)
Adjustments for:
Depreciation of non-current assets
385
703
Investment revenue recognised in profit or loss
(49,382)
–
Impairment loss on investments
11
389,292
–
Net foreign exchange loss
64,219
26,576
(2,102,915)
(1,977,277)
Movement in working capital
Increase in trade and other receivables
(124,319)
(202,443)
Increase/(decrease) in trade and other payables
160,854
(66,998)
Cash outflow from operations
(2,066,380)
(2,246,718)
Income tax paid
–
–
Net cash used in operating activities
(2,066,380)
(2,246,718)
Cash flows from investing activities
Payments for investment securities
(7,030,548)
–
Proceeds on sale of investment securities
2,835,299
–
Amounts advanced to related party
(15,476,390)
(4,455,274)
Investments to acquire interest in other entities
(354,769)
–
Net cash used in investing activities
(20,026,408)
(4,455,274)
Cash flows from financing activities
Proceeds from issue of equity shares
–
24,929,694
Share issue costs
–
(1,555,439)
Net cash proceeds from financing activities
–
23,374,255
Net (decrease)/increase in cash and cash equivalents
(22,092,788)
16,672,263
Effects of exchange rate changes on the balance of cash held in foreign currencies
336,728
(26,576)
Cash and cash equivalents at beginning of year
21,892,793
5,247,106
Cash and cash equivalents at end of year
136,733
21,892,793
The accompanying notes are an integral part of these financial statements.
Company statement of cash flows
For the year ended 31 December 2022
39
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
1 General information
Eurasia Mining Plc (the “Company”) is a public limited company incorporated and domiciled in Great Britain with its registered office
at International House, 142 Cromwell Road, London SW7 4EF, United Kingdom and principal place of business at Clubhouse Holborn,
20 St Andrew Street, London EC4A 3AG, United Kingdom. The Company’s shares are listed on the AIM Market of the London Stock
Exchange plc. The principal activities of the Company and its subsidiaries (collectively “Group”) are related to the exploration for and
development
of battery metals, platinum group metals, gold and other minerals as well as green hydrogen projects.
Eurasia Mining Plc’s consolidated financial statements are presented in Pounds Sterling (£), which is also the functional currency of the
parent company.
2 Going concern
As at 31 December 2022 the Group’s net current assets amounted to £5,883,581 (£23,036,966 in 2021) and includes unsold inventory
of £4,182,382. As at the same date, the Group’s cash balance was £1,009,908 (£22,009,507 in 2021) and investment in US treasuries of
£3,807,925 (2021: nil). The majority of the reduction in year-on-year cash position (2021 to 2022) is attributable to capital investments and
operating costs for the West Kytlim Mine.
The Group’s debt consists of lease liabilities set up to acquire mining machinery for a total amount of £348,269 (at 31 December 2021 –
£429,543).
The Group’s current (as at 29 June 2023) cash position is around £40,000 and US Treasury Bonds valued at £1,646,255 with the reduction
since December 2022 being accounted for by £150,000 in capital expenditure, £950,000 on development expenditure on its assets
portfolio, and £2,031,578 in costs.
These financial statements have been prepared on a going concern basis, which assumes that the Group will continue in operation
for the foreseeable future. The directors have prepared detailed bottom-up financial forecasts to address a range of scenarios for the Group’s
operations. The Group’s forecasts and assumptions reflect key assumptions based on information available at the time of review and include:
1. Sale of inventory of raw platinum concentrate:
The Company currently has an inventory of raw platinum concentrate, the product of the 2022 mining season at the Kluchiki and Bolshaya
Sosnovka areas, which has been retained in safe storage for later refining. The concentrate has a total net weight of 199.3 kg and a
realisable value of not less than £4.1 million. The Company is in advanced negotiations with a number of parties to realise this value in the
near future. These funds will be used to support the current mining season (see 2 below) and to continuing operating costs of the Group.
2. Continuing mining operations of the Group
The Group’s current mining operations in West Kytlim mine has been running at reduced capacity at start-up of the season, as we were
engaged in stripping activity only with a commensurate and very significant reduction in diesel and labour costs. The Board have agreed
a new and extensive mining plan for the remainder of the season, based on electricity powered machinery and equipment. The mining
operations in West Kytlim will contribute significant additional funds to the Group when the value of the extracted concentrate is realised.
3. Expenditure on Monchetundra asset
The Group has spent £900,000 on a development programme for the Monchetundra asset during 2022 leading to approval of the DFS
in 2023. No further significant outgoings have been budgeted for this asset.
4. Management of future cash outflows
In addition to the above, the Group have the ability to manage and where required, reduce expenditure as needed.
As such, the Directors have prepared the financial statements on a going concern basis and consider them to be reasonable.
3 Changes in accounting policies
3.1 New and revised relevant standards that are effective for annual periods commencing on or after
1 January 2022
Reference to the Conceptual Framework – Amendments to IFRS 3
In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations – Reference to the Conceptual Framework. The amendments
are intended to replace a reference to the Framework for the Preparation and Presentation of Financial Statements, issued in 1989, with a
reference to the Conceptual Framework for financial Reporting issued in March 2018 without significantly changing its requirements.
The Board also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential ‘day 2’ gains or losses arising for
liabilities and contingent liabilities that would be within the scope of IAS 37 or IFRIC 21 Levies, if incurred separately.
At the same time, the Board decided to clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the
reference to the Framework for the Preparation and Presentation of Financial Statements.
These amendments are effective for annual periods beginning on or after 1 January 2022 and are applied prospectively.
These amendments did not have an impact on the Group.
Notes to the financial statements
For the year ended 31 December 2022
Eurasia Mining Plc
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Annual Report & Accounts 2022
3 Changes in accounting policies (continued)
3.1 New and revised relevant standards that are effective for annual periods commencing on or after
1 January 2022 (continued)
Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16
In May 2020, the IASB issued Property, Plant and Equipment – Proceeds before Intended Use, which prohibits entities deducting from
the cost of an item of property, plant and equipment, any proceeds from selling items produced while bringing that asset to the location
and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognises the
proceeds from selling such items, and the costs of producing those items, in profit or loss.
These amendments are effective for annual reporting periods beginning on or after 1 January 2022 and must be applied retrospectively
to items of property, plant and equipment made available for use on or after the beginning of the earliest period presented when the
entity first applies these amendments.
These amendments did not have an impact on the Group.
Onerous Contracts – Costs of Fulfilling a Contract – Amendments to IAS 37
In May 2020, the IASB issued amendments to IAS 37 to specify which costs an entity needs to include when assessing whether a
contract is onerous or loss-making.
The amendments apply a “directly related cost approach”. The costs that relate directly to a contract to provide goods or services include
both incremental costs and an allocation of costs directly related to contract activities. General and administrative costs do not relate
directly to a contract and are excluded unless they are explicitly chargeable to the counterparty under the contract.
These amendments are effective for annual periods beginning on or after 1 January 2022. The Group will apply these amendments to
contracts for which it has not yet fulfilled all its obligations at the beginning of the annual reporting period in which it first applies the
amendments.
These amendments did not have an impact on the Group.
IFRS 1 First-time Adoption of International Financial Reporting Standards
First-time Adoption of International Financial Reporting Standards – Subsidiary as a first-time adopter
As part of its 2018-2021 annual improvements to IFRS standards process, the IASB issued an amendment to IFRS 1 First-time Adoption
of International Financial Reporting Standards. The amendment permits a subsidiary that elects to apply paragraph D16(a) of IFRS 1 to
measure cumulative translation differences using the amounts reported by the parent, based on the parent’s date of transition to IFRS.
This amendment is also applied to an associate or joint venture that elects to apply paragraph D16(a) of IFRS 1.
This amendment is effective for annual periods beginning on or after 1 January 2022 with earlier adoption is permitted.
These amendments did not have an impact on the Group.
IFRS 9 Financial Instruments
Financial Instruments – Fees
– Fees in the '10 per cent' test for derecognition of financial liabilities
As part of its 2018-2020 annual improvements to IFRS standards process the IASB issued amendment to IFRS 9. The amendment
clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially
different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the
lender, including fees paid or received by either the borrower or lender on the other’s behalf. An entity applies the amendment to financial
liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the
amendment.
This amendment is effective for annual periods beginning on or after 1 January 2022. Early adoption is permitted. The Company will apply
the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the
Company first applies the amendment.
These amendments did not have an impact on the Group.
Amendment to IAS 41 Agriculture
Agriculture – Taxation in fair value measurements
As part of its 2018-2020 annual improvements to IFRS standards process the IASB issued amendment to IAS 41 Agriculture. The
amendment removes the requirement in paragraph 22 of IAS 41 that entities exclude cash flows for taxation when measuring the fair value
of assets within the scope of IAS 41.
An entity applies the amendment prospectively to fair value measurements on or after the beginning of the first annual reporting period
beginning on or after 1 January 2022. Early adoption is permitted.
These amendments did not have an impact on the Group.
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Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Notes to the financial statements continued
For the year ended 31 December 2022
3 Changes in accounting policies (continued)
3.2 Standards, amendments and interpretations to existing standards that are not yet effective and have not
been adopted early by the Group
IFRS 17 Insurance Contracts
Insurance Contracts
In May 2017, the IASB issued IFRS 17 Insurance Contracts (IFRS 17), a comprehensive new accounting standard for insurance contracts
covering recognition and measurement, presentation and disclosure. Once effective, IFRS 17 replaces IFRS 4 Insurance Contracts (IFRS 4)
that was issued in 2005. IFRS 17 applies to all types of insurance contracts (i.e., life, non-life, direct insurance and reinsurance), regardless
of the type of entities that issue them, as well as to certain guarantees and financial instruments with discretionary participation features.
There are several scope exceptions. The overall objective of IFRS 17 is to provide an accounting model for insurance contracts that is
more useful and consistent for insurers. In contrast to the requirements in IFRS 4, which are largely based on grandfathering previous local
accounting policies, IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects. The core
of IFRS 17 is the general model, supplemented by:
A specific adaptation for insurance contracts with direct participation terms (the variable fee approach).
A simplified approach (the premium allocation approach) is mainly for short-duration contracts.
IFRS 17 is effective for reporting periods starting on or after 1 January 2023, with comparative figures required. Early application is
permitted, provided the entity also applies IFRS 9 and IFRS 15 on or before the date it first applies IFRS 17. This standard is not applicable
to the Group.
Amendments to IAS 1 – Classification of Liabilities as Current or Non-current
In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as
current or non-current. The amendments clarify:
What is meant by a right to defer settlement;
That a right to defer must exist at the end of the reporting period;
That classification is unaffected by the likelihood that an entity will exercise its deferral right;
That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact
its classification.
These amendments are effective for annual periods beginning on or after 1 January 2023 and are applied retrospectively. The Group
is currently assessing the possible impact the amendments will have on current liabilities and whether existing loan agreements may
require renegotiation.
Definition of Accounting Estimates – Amendments to IAS 8
In February 2021, the IASB issued amendments to IAS 8, in which it introduces a definition of accounting estimates. The amendments
clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors. It also
explains how organisations use measurement methods and inputs to develop accounting estimates.
The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and apply to changes in accounting
policies and changes in accounting estimates that occur on or after the start of that period. Early application is permitted and must
be disclosed.
These amendments are not expected to have an impact on the Group.
Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2
In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgments, which provide
guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments should help
entities disclose more useful information about accounting policies by replacing the requirement for entities to disclose “significant
accounting policies” with a requirement to disclose “material accounting policy information”, and by adding guidance on how entities
should apply materiality judgements to disclosure of accounting policies.
The amendments to IAS 1 apply for annual periods beginning on or after 1 January 2023, early application is permitted. Since the
amendments to the Practice Statement 2 provide non-mandatory guidance on the application of the definition of material to accounting
policy information, an effective date for these amendments is not necessary.
The Group is currently assessing the impact of these amendments.
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Annual Report & Accounts 2022
4 Summary of significant accounting policies
4.1 Basis of preparation
The consolidated financial statements of the Group and the Company financial statements have been prepared in accordance with
UK-adopted International Accounting Standards in conformity with the requirements of the Companies Act 2006.
These financial statements have been prepared under the historical cost convention. The accounting policies have been applied
consistently throughout the Group for the purposes of preparation of these consolidated financial statements.
4.2 Presentation of financial statements
The consolidated financial statements are presented in accordance with IAS 1 Presentation of Financial Statements. The Group has
elected to present the “Consolidated Statement of Profit or Loss” in one statement.
4.3 Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company.
Control is achieved where the Company has all of the following:
Power over investee;
Exposure, or rights, to variable returns from its involvement with the investee;
The ability to use its power over the investee to affect the amount of investor’s returns.
The results of subsidiaries acquired or disposed of are included in the Consolidated Statement of Profit or Loss from the effective date
of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those
used by other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity therein.
Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling
party’s share of changes in equity since the date of the combination.
4.4 Business combinations
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to
obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred, and
the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration
arrangement. Acquisition costs are expensed as incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have
been previously recognised in the acquiree’s financial statements prior to the acquisition. Assets acquired and liabilities assumed are
generally measured at their acquisition-date fair values.
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of a) fair value of
consideration transferred, b) the recognised amount of any non-controlling interest in the acquiree and c) acquisition-date fair value of
any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the fair values of identifiable
net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised as a profit or loss
immediately.
In a business combination achieved in stages, the Group remeasure its previously held equity interest in the acquiree at its acquisition-
date fair value and recognise the resulting gain or loss, if any, in profit or loss or other comprehensive income, as appropriate.
4.5 Foreign currencies
Functional and presentation currency
The individual financial statements of each group entity are prepared in the currency of the primary economic environment in which the
entity operates (“the functional currency”). The consolidated financial statements are presented in GBP, which is the functional and the
presentation currency of the Company.
Transaction and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
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Annual Report & Accounts 2022
Strategic Report
Notes to the financial statements continued
For the year ended 31 December 2022
4 Summary of significant accounting policies (continued)
4.5 Foreign currencies (continued)
Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have
a functional currency different from the presentation currency are translated into the presentation currency as follows:
assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement
of financial position;
income and expenses for each Statement of Profit or Loss are translated at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated
at the rate on the dates of the transactions); and
all resulting exchange differences are recognised as a separate component of other comprehensive income.
4.6 Share-based payments
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity
instrument at the grant date. Fair value is measured by use of the Black-Scholes model. The expected life used in the model has
been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural
considerations.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting
period, based on the Group’s estimate of shares that will eventually vest.
Equity-settled share-based payment transactions with other parties are measured at the fair value of the goods and services received,
except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments
granted, measured at the date the entity obtains the goods or the counterparty renders the service.
All equity-settled share-based payments are ultimately recognised as an expense in the profit or loss with a corresponding credit to
“Share-based payments reserve”.
Upon exercise of share options, the proceeds received net of attributable transaction costs are credited to share capital, and where
appropriate share premium. No adjustment is made to any expense recognised in prior periods if share options ultimately exercised are
different to that estimated on vesting or if the share options vest but are not exercised.
When share options lapse or are forfeited the respective amount recognised in the Share-based payment reserve is reversed and credited
to accumulated profit and loss reserve.
4.7 Revenue
To determine whether to recognise revenue, the Group follows a five-step process:
1 Identifying the contract with a customer;
2 Identifying the performance obligations;
3 Determining the transaction price;
4 Allocating the transaction price to the performance obligations;
5 Recognising revenue when/as performance obligation(s) are satisfied.
The Group earns its revenues primarily from the sale of platinum group metals from the West Kytlim mine. The Company enters into
a contract with its main customer to deliver all mined metals extracted from the mine. There is one performance obligation under the sales
contract, and that is the delivery of metals. As such, the entire price under the contract is allocated to the single performance obligation.
Revenue is recognised when control over the metals passes to the customer.
The Group has determined that it is the principal in the sales transactions as the Group holds the mining licence and has the rights to the
underlying resources. The Group controls the sales process, from selecting the customer to determining sales price.
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4 Summary of significant accounting policies (continued)
4.8 Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of comprehensive
income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that
are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively
enacted by the statement of financial position date.
Deferred tax
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it
arises from initial recognition of goodwill, initial recognition of an asset or liability in a transaction other than a business combination that
at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply when the
related deferred income tax asset is realised, or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the
temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing
of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the
foreseeable future.
4.9 Property, plant and equipment
Mining assets
Mining assets are stated at cost less accumulated depreciation. Mining assets include the cost of acquiring and developing mining assets
and mineral rights, buildings, vehicles, plant and machinery and other equipment located on mine sites and used in the mining operations.
Mining assets, where economic benefits from the asset are consumed in a pattern which is linked to the production level, are depreciated
using a unit of production method based on the volume of ore reserves. This results in a depreciation charge proportional to the depletion
of reserves
Stripping activity asset costs
In alluvial mining operations, it is necessary to remove overburden and other waste in order to access or improve access to the ore body.
Associated costs are recognised as a stripping activity asset. A stripping activity asset is initially measured at cost and subsequently
carried at cost or its revalued amount less depreciation or amortisation and impairment losses.
A stripping activity asset is depreciated or amortised on a systematic basis, over the expected useful life of the identified component of the
ore body that becomes more accessible as a result of the stripping activity. The units of production method is used.
Assets under construction
Assets under construction are fixed asset investments that have not been commissioned by the year-end. The expenses associated with
acquisition, building, delivery and other allowed expenses are first capitalised as assets under construction and then, once completed,
depreciated over their useful life.
Other assets
Freehold properties held for administrative purposes, are stated in the statement of financial position at cost.
Fixtures and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is charged to write off the cost or valuation of assets over their estimated useful lives, using the straight-line method.
The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in
estimate accounted for on a prospective basis.
The estimated useful lives are as follows:
Property
30 years
Plant and machinery
3-30 years
Office, fixture and fittings
3-5 years
The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between
the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
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Strategic Report
Notes to the financial statements continued
For the year ended 31 December 2022
4 Summary of significant accounting policies (continued)
4.10 Intangible assets
Exploration and evaluation of mineral resources
Exploration and evaluation expenditure comprise costs that are directly attributable to:
researching and analysing existing exploration data;
conducting geological studies, exploratory drilling and sampling;
examining and testing extraction and treatment methods; and/or
compiling pre-feasibility and feasibility studies.
4.11 Investments in subsidiary undertakings
Investments in subsidiaries are measured at cost less accumulated impairment.
The carrying values of non-financial assets are reviewed annually for impairment when events or changes in circumstances indicate the
carrying value may not be recoverable. The recoverable amount of non-financial assets is the greater of net selling price and value in use.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely
independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs. If such indication
of impairment exists and where the carrying values exceed the estimated recoverable amount, the assets or cash generating units are
written down to their recoverable amount. Impairment losses are recognised within operating loss.
4.12 Impairment testing intangible assets and property, plant and equipment
At each statement of financial position date, the Group reviews the carrying amounts of the assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an
individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable
and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise
they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and
whenever there is an indication that the asset may be impaired.
In assessing whether an impairment is required, the carrying value of the asset is compared with its recoverable amount. The recoverable
amount is the higher of the fair value less costs of disposal (FVLCD) and value in use (VIU). The FVLCD is estimated based on future
discounted cash flows expected to be generated from the continued use of the asset, including any expansion prospects and eventual
disposal, using market-based commodity prices, exchange assumptions, estimated quantities of recoverable minerals, production levels,
operating costs and capital requirements based on the latest Life of mine plans. These cash flows were discounted using a real post-tax
discount rate that reflects the current market assessments of time value of money.
Value in use is determined as the present value of the estimated cash flows expected to arise from continued use in its current form and
eventual disposal. Value in use cannot take into consideration future development. The assumptions used in the calculation are often
different than those used in a FVLCD and therefore are likely to yield a different result.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the
asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless
the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised
estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years.
A reversal of an impairment loss of the assets is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued
amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
4.13 Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in first-out principle, and
includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to
their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of
production overheads based on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling
expenses.
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4 Summary of significant accounting policies (continued)
4.14 Cash
Cash and cash equivalents comprise cash balances, call deposits and highly liquid investments with maturities of three months or less
from the acquisition date that are subject to insignificant risk of changes in their fair value.
4.15 Financial instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial
instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset
and substantially all the risks and rewards are transferred.
A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in
accordance with IFRS 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable).
Financial instruments, other than those designated and effective as hedging instruments, are classified into the following categories:
amortised cost
fair value through profit or loss (FVTPL)
fair value through other comprehensive income (FVOCI).
The classification is determined by both:
the entity’s business model for managing the financial asset
the contractual cash flow characteristics of the financial asset.
All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, finance income
or other financial items, except for impairment of trade receivables which is presented within other expenses.
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVTPL):
they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount
outstanding After initial recognition, these are measured at amortised cost using the effective interest method.
Discounting is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most other
receivables fall into this category of financial instruments as well as listed bonds.
Financial assets at fair value through profit or loss (FVTPL)
Financial assets that are held within a different business model other than ‘hold to collect’ or ‘hold to collect and sell’ are categorised at
fair value through profit and loss. Further, irrespective of business model financial assets whose contractual cash flows are not solely
payments of principal and interest are accounted for at FVTPL. All derivative financial instruments fall into this category, except for those
designated and effective as hedging instruments, for which the hedge accounting requirements apply. The category also contains an
equity investment. Assets in this category are measured at fair value with gains or losses recognised in profit or loss.
The fair values of financial assets in this category are determined by reference to active market transactions or using a valuation technique
where no active market exists.
Financial assets at fair value through other comprehensive income (FVOCI)
The Group accounts for financial assets at FVOCI if the assets meet the following conditions:
they are held under a business model whose objective it is “hold to collect” the associated cash flows and sell and
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount
outstanding.
Any gains or losses recognised in other comprehensive income (OCI) will be recycled upon derecognition of the asset.
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Annual Report & Accounts 2022
Strategic Report
Notes to the financial statements continued
For the year ended 31 December 2022
4 Summary of significant accounting policies (continued)
4.15 Financial instruments (continued)
Impairment of financial assets
IFRS 9’s impairment requirements use more forward-looking information to recognise expected credit losses – the ‘expected credit loss
(ECL) model’.
Instruments within the scope of the new requirements included loans and other debt-type financial assets measured at amortised cost
and FVOCI, trade receivables, contract assets recognised and measured under IFRS 15 and loan commitments and some financial
guarantee contracts (for the issuer) that are not measured at fair value through profit or loss.
Recognition of credit losses is no longer dependent on the Group first identifying a credit loss event. Instead the Group considers
a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current
conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is made between:
financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit risk (‘Stage 1’)
and
financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date.
’12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised for the
second category.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected life of the
financial instrument.
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting for trade and other receivables as well as contract assets and records the
loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential
for default at any point during the life of the financial instrument. In calculating, the Group uses its historical experience, external indicators
and forward-looking information to calculate the expected credit losses using a provision matrix.
The Group assesses impairment of trade receivables on a collective basis as they possess shared credit risk characteristics they have
been grouped based on the days past due.
Borrowings
Amounts borrowed from third parties are recorded initially at fair value, being the amount received under the agreements less issuance
costs, and subsequently measured at amortised cost using an effective interest rate. There are times when there are conversion options
included in the Group’s borrowing agreements. The conversion options are analysed under IAS 32 – Financial Instruments: presentation
to determine the proper classification. If the option is determined to be equity, the fair value of the conversion option is included in other
reserves, with the fair value of the liability portion being recorded as a liability with interest accruing under the effective interest rate. If the
conversion option is determined to be a liability, it is treated as a derivative financial instrument measured at fair value through profit or loss.
When a conversion option is exercised, the fair value of the shares issued is recorded in share capital and share premium. The amortised
carrying value of the liability portion is extinguished. If the conversion option is an equity instrument, this is closed to retained earnings.
If the conversion option is a liability component, it is extinguished. Any difference between the carrying value of the liability and the
conversion option and the fair value of share issued is taken to the profit and loss as gain or loss on extinguishment.
If debt agreements are modified, any difference between the fair value of the original debt and the modified debt is included as a gain or
loss on modification. If the modification is significant, this is considered an extinguishment of the old debt and recognition of new debt.
Warrants
The Company will issue warrants in association with debt and equity issuances and as compensation to suppliers or vendors in exchange
for services. These are determined to be equity instruments. When warrants are issued with debt or as compensation to suppliers or
vendors, the value of the warrants are included within the share-based payments reserve that sits within the other reserve. When warrants
are issued together with equity issuances any fair value associated with these are recognised when the warrants are exercised within
share premium. On exercise of the warrants, the value of the warrants will be transferred from other reserves to the profit and loss reserve
as applicable.
Eurasia Mining Plc
48
Annual Report & Accounts 2022
4 Summary of significant accounting policies (continued)
4.16 Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated
reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the
risks specific to the liability. The unwinding of the discount is recognised as finance cost.
Environmental protection, rehabilitation and closure costs
Provision is made for close down, restoration and environmental rehabilitation costs (which include the dismantling and demolition of
infrastructure, removal of residual materials and remediation of disturbed areas) in the financial period when the related environmental
disturbance occurs, based on the estimated future costs using information available at the reporting date. The provision is discounted
using a discount rate equal to yield to maturity of relevant state bonds and the unwinding of the discount is included in interest expense.
The provision is reviewed on an annual basis for changes to obligations, legislation or discount rates that impact estimated costs or lives
of operations.
4.17 Leases
The Group as lessee
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.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted
by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;
Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
The amount expected to be payable by the lessee under residual value guarantees;
The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is presented as a separate line in the consolidated statement of financial position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective
interest method) and by reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of
exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised
discount rate.
The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in
which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease
payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
The Group did not make any such adjustments during the periods presented.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the
commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less
accumulated depreciation and impairment losses.
Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore
the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under
IAS 37. To the extent that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset, unless those costs
are incurred to produce inventories.
49
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Notes to the financial statements continued
For the year ended 31 December 2022
4 Summary of significant accounting policies (continued)
4.17 Leases (continued)
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership
of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-
use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets are presented within property, plant and equipment in the consolidated statement of financial position.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as
described in the ‘Impairment testing intangible assets and property, plant and equipment’ policy.
4.18 Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker.
The Chief Operating Decision-Maker, who is responsible for allocating resources and assessing performance of the operating segments,
has been identified as the Executive Directors of the Group that make the operating decisions.
5 Critical accounting judgements and key sources of estimation uncertainty
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances.
5.1 Key sources of estimation uncertainty
The following are the key assumptions/uncertainties at the statement of financial position date, which have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
5.1.1 Provision for environmental rehabilitation
Provision is made for close down, restoration and environmental rehabilitation costs based on the estimated future costs using information
available at the reporting date. Costs are estimated based on the observable local prices, fees and already agreed contract for specific
jobs. The provision is discounted using a risk-free discount rate from 6.99% to 8.31% attributed to the Russian Federal bonds with
corresponding maturity.
5.1.2 Impairment review of the mining assets
The impairment assessment of the West Kytlim mining asset was performed by calculating the higher of fair value less cost of disposal
and value in use and compared against the carrying value of the mining assets. Projected cash flows from 2023 to 2043 were used
to assess the fair value less costs of disposal. The chosen period is consistent with the quantity of the approved reserves and resources
are available for mining operations. No impairment has been recognised.
Assumptions used throughout 2023 to 2043:
Pt grade 0.454g/tonne
Process recovery 89.7%
Platinum/Gold price $1,172-1,381/oz/$1,825/oz
Post-tax discount rate 7.74%
5.1.3 Impairment review of the intangible asset
Intangible asset represents the Monchetundra development and Nittis-Kumuzhya-Travyanaya (the “NKT”) exploration and
evaluation assets. NKT, previously referred to as The Monchetundra Flanks, is a northeast extension of the Monchetundra mineralisation.
Monchetundra has been assessed as an economically viable asset for the purpose of preparing and submitting a Definitive Feasibility Study
for the mines development. Parameters of the assessment have been evaluated by an expert panel of mining industry professionals and are
being regularly evaluated by the Company for signs which can trigger impairment of the asset. The NKT exploration and evaluation asset
falls under the IFRS 6 treatment. There were no indicators of impairment identified during the course of the year ended 31 December 2022.
5.1.4. Impairment of investments in subsidiary and receivables from subsidiaries
The Company’s financial statements, and in particular its investments in and receivables from subsidiaries, are affected by certain of the
critical accounting judgements and key sources of estimation uncertainty.
The critical estimates and judgments referred to application of the expected credit loss model to intercompany receivables (Note 32).
Management determined that the interest free on demand loans were required to be assessed on the lifetime expected credit loss
approach and assessed scenarios considering risks of loss events and the amounts which could be realised on the loans. In doing so,
consideration was given to factors such as the cash held by subsidiaries and the underlying forecasts of the Group’s divisions and their
incorporation of prospective risks and uncertainties.
In relation to impairment of investments in subsidiary please refer to Note 4.11.
Eurasia Mining Plc
50
Annual Report & Accounts 2022
6 Segmental information
During the year under review management identified the Group consisting of separate segments:
Corporate and
West Kytlim
Monchetundra
other segments
Total
Geographical location
Urals Mountains, Russia
Kola Peninsula, Russia
London, UK
Activity
Operating mine and
Licenced
Management
revenue generating unit
mining project
and investment
2022
£
£
£
£
Non-current assets
9,726,366
2,797,496
4,439,688
16,963,550
Total assets
16,948,963
3,237,597
5,146,999
25,333,559
Total liability
2,397,851
51,042
472,951
2,921,844
Revenue
119,525
–
–
119,525
Loss for the year
(4,397,875)
87,385
(2,919,598)
(7,230,088)
2021
£
£
£
£
Non-current assets
5,362,684
1,376,006
719,969
7,458,659
Total assets
6,730,257
1,546,716
22,917,064
31,194,037
Total liability
826,471
15,653
306,692
1,148,816
Revenue
2,331,225
–
–
2,331,225
Loss for the year
(621,695)
(145,502)
(2,371,324)
(3,138,521)
7 Employees
Average number of staff (excluding Non-Executive Directors) employed throughout the year was as follows:
2022
2021
By the Company
4
4
By the Group
116
74
8 Revenue
Disaggregation by primary markets is as follows:
Year to 31 December 2022
Year to 31 December 2021
Group
Company
Group
Company
£
£
£
£
Revenue from sale of platinum and other precious metals
61,075
–
2,331,225
–
Revenue from management services
–
120,000
–
120,000
Revenue from other services
58,450
–
–
–
119,525
120,000
2,331,225
120,000
51
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Notes to the financial statements continued
For the year ended 31 December 2022
8 Revenue (continued)
Disaggregation of revenue from contracts with customers:
Year to 31 December 2022
Year to 31 December 2021
Group
Company
Group
Company
Russia
Cyprus
Russia
Cyprus
£
£
£
£
Revenue from external customers
– Sale of platinum and other precious metals
61,075
–
2,331,225
–
– Other services
58,450
–
–
–
Revenue from related parties
– Management services
–
120,000
–
120,000
119,525
120,000
2,331,225
120,000
Timing of revenue recognition
At a point of time
119,525
–
2,331,225
–
Over time
–
120,000
–
120,000
119,525
120,000
2,331,225
120,000
There was no sale of PGM concentrate from the 2022 mining season at West Kytlim. Revenue recognised in 2021 relates to the sale of
PGM concentrate from the West Kytlim mine to a single customer “Ekaterinburg Non-ferrous Metals Refinery”, being the only regional
refinery, processing platinum group metals and being duly licenced to deal with precious metals.
9 Profit/(loss) for the year
Profit/(loss) for the year has been arrived at after charging:
Year to 31 December 2022
Year to 31 December 2021
Group
Company
Group
Company
£
£
£
£
Cost of sales
(30,173)
–
(2,584,680)
–
Administrative expenses
(4,618,351)
(2,223,300)
(2,717,765)
(2,296,563)
Cost of sales includes:
Staff benefits expenses
–
–
433,872
–
Depreciation*
–
–
421,987
–
Administration expenses include:
Staff benefits expenses
1,174,636
823,106
1,517,088
1,275,474
Depreciation*
8,602
385
765
702
Audit fees payable
145,000
145,000
110,000
110,000
Mineral extraction tax**
1,953,851
–
149,918
–
Staff benefits expense:
Wages, salaries and Directors’ fees (Note 29)
1,073,952
804,174
1,958,156
1,253,471
Social security costs
99,364
17,592
196,319
20,684
Other short-term benefits
1,321
1,321
1,319
1,319
1,174,637
823,087
2,155,794
1,275,474
* Total depreciation for the year ended 31 December 2022 was £1,006,210 (2021: £422,588).
** Mineral extraction tax contains a provision of £1,652,122 reflecting a recent change to mineral tax legislation and its application to the product of the West Kytlim mine. This is made as a
conservative measure as the Group is taking the necessary steps to have the decision reconsidered.
Eurasia Mining Plc
52
Annual Report & Accounts 2022
10 Finance cost
Year to 31 December 2022
Year to 31 December 2021
Group
Company
Group
Company
£
£
£
£
Interest on obligations under finance leases
90,446
–
101,048
–
Unwinding of discounts on provisions
17,251
–
2,397
–
107,697
–
103,445
–
11 Other gains and losses
Year to 31 December 2022
Year to 31 December 2021
Group
Company
Group
Company
£
£
£
£
Gains
Net foreign exchange gain
182,640
–
–
–
Gain on disposal of property, plant and equipment
4,952
–
–
–
187,592
–
–
–
Losses
Net foreign exchange loss
–
(64,219)
(65,250)
(26,576)
Loss on revaluation of stock to net realisable value
(2,028,151)
–
–
–
Impairment loss on investments
(814,158)
(389,292)
–
–
(2,842,309)
(453,511)
(65,250)
(26,576)
The majority of the foreign exchange gains and losses are a result of the revaluation of monetary assets and liabilities in the subsidiary
accounts as a result of movements in the Ruble exchange rates.
In 2022 the Group took a decision to postpone the sale of platinum and other metals due to a strong Ruble and low platinum price. Stock
available at 31 December 2022 represents platinum concentrate ready for refining, which was valued (i) using methodology set in the
refining and sale and purchase agreement made with local refinery in 2021 and (ii) exchange rate and metal prices at 31 December 2022.
The Group recognised an impairment loss on (i) the investment made to build a joint venture with Rosgeo (Note 15) due to uncertainty of
any near-term development in that regard due to limitations enforced by current sanctions legislation (ii) a loss on an investment in to a UK
“waste to electricity” project the Company decided not to immediately carry through to binding agreements.
12 Income taxes
(a) Tax charged in the statement of profit and loss
Year to
Year to
31 December
31 December
2022
2021
Group
Group
£
£
Current tax
–
–
There was no tax payable by the Company for the year ended 31 December 2022 (2021: £nil) due to the Company having taxable losses.
(b) Reconciliation of the total tax charge
Year to
Year to
31 December
31 December
2022
2021
Group
Group
£
£
Loss before tax
(7,230,088)
(3,182,199)
Current tax at 19% (2021: 19%)
(1,373,717)
(604,618)
Adjusted for the effect of:
Expenses not deductible for tax purposes
–
–
Profits not subject to tax
–
–
Tax losses utilised
–
–
Unrecognised tax losses carried forward
1,373,717
604,618
Actual tax expense
–
–
53
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Notes to the financial statements continued
For the year ended 31 December 2022
12 Income taxes (continued)
(b) Reconciliation of the total tax charge (continued)
The Group operates in the following jurisdictions with the following applicable tax rates:
Year to
Year to
31 December
31 December
Jurisdiction
2022
2021
United Kingdom
19%
19%
Russia
20%
20%
Cyprus
12.5%
12.5%
No tax is payable for the year ended 31 December 2022 (2021: nil) due to the Group and the Company having taxable losses.
13 Property, plant and equipment
(a) Group property, plant and equipment
Mining
Stripping
Plant and
Right of
Office fixture
asset
asset
Property
machinery
use assets
and fittings
Total
£
£
£
£
£
£
£
Cost
Balance at 1 January 2021
3,704,511
148,618
23,037
483,147
682,691
10,142
5,052,146
Additions
64,371
609,968
–
622,745
–
1,729
1,298,813
Disposals
–
–
–
(2,834)
–
(868)
(3,702)
Transferred to inventory
–
(149,882)
–
–
–
–
(149,882)
Exchange differences
35,380
1,264
56
4,106
5,802
66
46,674
Balance at 31 December 2021
3,804,262
609,968
23,093
1,107,164
688,493
11,069
6,244,049
Additions
49,950
2,391,500
–
–
2,477
2,443,927
Transfer from assets under construction
–
–
–
4,776,644
–
–
4,776,644
Disposals
–
–
–
(61,910)
–
(2,389)
(64,299)
Transferred to inventory
–
(2,365,988)
–
–
–
–
(2,365,988)
Exchange differences
527,350
81,689
883
148,276
92,206
1,175
851,579
Balance at 31 December 2022
4,381,562
717,169
23,976
5,970,174
780,699
12,332
11,885,912
Depreciation
Balance at 1 January 2021
(561,978)
–
(1,048)
(92,612)
(92,277)
(8,323)
(756,238)
Disposals
–
2,834
–
868
3,702
Depreciation expense
(127,280)
–
(87)
(156,536)
(137,699)
(1,150)
(422,752)
Exchange differences
(5,372)
–
(10)
(787)
(784)
(65)
(7,018)
Balance at 31 December 2021
(694,630)
–
(1,145)
(247,101)
(230,760)
(8,670)
(1,182,306)
Disposals
–
–
–
61,910
–
2,389
64,299
Depreciation expense
(81,361)
–
(99)
(766,873)
(156,139)
(1,738)
(1,006,210)
Exchange differences
(96,354)
–
(153)
(33,093)
(30,904)
(960)
(161,464)
Balance at 31 December 2022
(872,345)
–
(1,397)
(985,157)
(417,803)
(8,979)
(2,285,681)
Carrying amount:
at 31 December 2022
3,509,217
717,169
22,579
4,985,017
362,896
3,353
9,600,231
at 31 December 2021
3,109,632
609,968
21,948
860,063
457,733
2,399
5,061,743
The Group’s right of use assets represents plant and machinery type assets acquired under lease terms (Note 26).
The stripping asset is also a component of the mining assets; however, this is being shown separate from the mining assets for
presentational purposes. There was no depreciation of the stripping asset in the current period.
Eurasia Mining Plc
54
Annual Report & Accounts 2022
13 Property, plant and equipment (continued)
(b) Assets in the course of construction
2022
2021
£
£
Cost
Balance at 1 January
640,423
28,957
Additions
4,746,479
611,220
Commissioned assets
(4,776,644)
–
Exchange differences
85,768
246
Balance at 31 December
696,026
640,423
Assets in the course of construction represent the Group’s investment in the asset taken time to construct and bring into operation. Such
items include powerline, dragline and field workers’ camp structures.
(c) Company’s office fixture and fittings
2022
2021
£
£
Cost
Balance at 1 January
2,298
2,298
Additions
–
–
Disposal
–
–
Balance at 31 December
2,298
2,298
Depreciation
Balance at 1 January
(1,494)
(791)
Depreciation expense
(385)
(703)
Disposals
–
–
Balance at 31 December
(1,879)
(1,494)
Carrying amount
419
804
The Company’s property, plant and equipment are free from any mortgage or charge.
14 Intangible assets
In 2022 intangible assets represented only capitalised costs associated with the Group’s exploration, evaluation and development
of mineral resources.
2022
2021
£
£
Cost
Balance at 1 January
1,389,029
696,504
Additions
1,239,085
682,420
Exchange differences
231,254
10,105
Balance at 31 December
2,859,368
1,389,029
At 31 December 2022 and 31 December 2021, the Group’s intangible assets consisted of the Monchetundra development and
Nittis-Kumuzhya-Travyanaya (the “NKT”) exploration and evaluation assets.
The Company did not directly own any intangible assets at 31 December 2022 (2021: nil).
No impairment loss has been recognised in 2022 (2021: £nil).
55
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Notes to the financial statements continued
For the year ended 31 December 2022
15 Investment to potential share in joint venture
In 2021 the Group entered into an agreement with Rosgeo, a Russian registered and state funded exploration company, to set up a series
of joint ventures. The Rosgeo agreement allowed the Group to gain a 75% equity stake in several new assets with the remaining 25%
equity stakes to be held by Rosgeo.
In 2021 the Company invested RUB37,180,000 (£367,464 at a prevailing exchange rate at the transaction date). Owing to the uncertainty
of any near-term development in that regard due principally to limitations enforced by current sanctions legislation the Group had made
provision for impairment loss on this investment in full.
16 Subsidiaries
Details of the Company’s subsidiaries at 31 December 2022 are as follows:
Proportion of
Name of subsidiary
Place of incorporation
ordinary shares held
Principal activity
Urals Alluvial Platinum Limited
Cyprus
100%
Holding Company
ZAO Eurasia Mining Service
Russia
100%
Holding Company
ZAO Kosvinsky Kamen
Russia
68%
Mineral Evaluation
ZAO Terskaya Mining Company
Russia
80%
Mineral Evaluation
ZAO Yuksporskaya Mining Company
Russia
100%
Mineral Evaluation
OOO Kola Mining
Russia
100%
Mineral Evaluation
OOO Kola Nickel
Russia
100%
Mineral Evaluation
Eurasia Mining (UK) Limited
UK
100%
Dormant company
The Company’s investments in subsidiaries presented on the basis of direct equity interest and represent the following:
2022
2021
£
£
Investment in subsidiaries (i)
1,132,246
1,132,246
1,132,246
1,132,246
Investment in subsidiaries represents the Company investments made into its 100% subsidiary Urals Alluvial Platinum Limited (the “UAP”),
which in turn controls other subsidiaries within the Group.
Subsidiaries with material non-controlling interests (“NCI”)
Summary of non-controlling interest
2022
2021
£
£
As at 1 January
(1,950,049)
(1,758,862)
Loss attributable to NCI
(1,389,843)
(228,042)
Exchange differences
(61,656)
36,856
As at 31 December
(3,401,548)
(1,950,049)
Non-controlling interest on subsidiary basis
2022
2021
£
£
ZAO Kosvinsky Kamen
(2,702,482)
(1,218,383)
ZAO Terskaya Mining Company
(699,066)
(731,666)
(3,401,548)
(1,950,049)
Eurasia Mining Plc
56
Annual Report & Accounts 2022
16 Subsidiaries (continued)
ZAO Kosvinsky Kamen
2022
2021
£
£
Non-current assets
9,726,366
5,362,684
Current assets
7,222,597
1,367,573
Total assets
16,948,963
6,730,257
Non-current liabilities
21,083,191
7,874,026
Current liabilities
2,184,055
570,275
Total liabilities
23,267,246
8,444,301
Net assets
(6,318,283)
(1,714,044)
Equity attributable to owners of the parent
(3,615,801)
(495,661)
Non-controlling interests
(2,702,482)
(1,218,383)
Loss for the year attributable to owners of the parent
(3,053,367)
(449,647)
Loss for the year attributable to NCI
(1,407,320)
(198,942)
Loss for the year
(4,460,687)
(648,589)
Total comprehensive expense for the year attributable to owners of the parent
(3,120,140)
(367,601)
Total comprehensive expense for the year attributable to NCI
(1,484,099)
(163,234)
Total comprehensive expense for the year
(4,604,239)
(530,835)
ZAO Terskaya Mining Company
2022
2021
£
£
Non-current assets
2,797,496
1,376,006
Current assets
440,101
170,710
Total assets
3,237,597
1,546,716
Non-current liabilities
3,073,744
2,097,248
Current liabilities
776,399
66,434
Total liabilities
3,850,143
2,163,682
Net assets
(612,546)
(616,966)
Equity attributable to owners of the parent
86,520
114,700
Non-controlling interests
(699,066)
(731,666)
Profit/(loss) for the year attributable to owners of the parent
69,908
(116,402)
Profit/(loss) for the year attributable to NCI
17,477
(29,100)
Profit/(loss) for the year
87,385
(145,502)
Total comprehensive expense for the year attributable to owners of the parent
(28,180)
(121,793)
Total comprehensive income (expense) for the year attributable to NCI
32,600
(27,953)
Total comprehensive income (expense) for the year
4,420
(149,746)
57
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Notes to the financial statements continued
For the year ended 31 December 2022
17 Financial assets
2022
2021
Group
Company
Group
Company
£
£
£
£
Non-current
Financial assets at amortised cost:
US treasury notes
3,807,925
3,807,925
–
–
3,807,925
3,807,925
–
–
US treasury notes return interest of 1.25% to 2.125% per annum payable semi-annually, and mature between August and October 2024.
18 Other financial assets
2022
2021
Group
Company
Group
Company
£
£
£
£
Current
Advances to related parties
–
28,157,840
–
12,681,450
–
28,157,840
–
12,681,450
The maximum exposure to credit risk at the reporting date is the carrying value of each class of assets mentioned above.
The Group has assessed the estimated credit losses of these loans and given the effective interest rate of the loans is 0%, there would be
an immaterial loss expected on these loans.
Amounts due from related parties are non-interest bearing and are repayable on demand. Advances made in 2022 were used to acquire
earth moving machinery, fund mine operating cost and exploration programme.
19 Inventories
2022
2021
Group
Company
Group
Company
£
£
£
£
Platinum concentrate
4,131,104
–
–
–
Stores
51,278
–
38,673
–
4,182,382
–
38,673
–
Platinum Concentrate is the PGM and gold bearing concentrate produced at the West Kytlim mine for full year 2022 which was held in
stock at 31 December 2022 ready for later refining. Inventories held by the Group are stated at the lower of cost and net realisable value.
20 Trade and other receivables
2022
2021
Group
Company
Group
Company
£
£
£
£
Trade receivables
–
–
480,588
–
Advances made*
822,280
–
520,385
–
Prepayments
135,447
128,425
140,335
134,661
VAT recoverable
1,942,410
97,817
361,906
25,796
Other receivables
271,532
171,529
178,652
120,000
Due from related parties
–
36,269
–
28,028
3,171,669
434,040
1,681,864
308,485
* The Group had made several advances to and down payments to secure new earth moving machinery to be acquired for the West Kytlim mine.
The fair value of trade and other receivables is not materially different to the carrying values presented. None of the receivables are
provided as security or past due.
Eurasia Mining Plc
58
Annual Report & Accounts 2022
21 Cash and cash equivalents
2022
2021
Group
Company
Group
Company
£
£
£
£
Cash at bank
1,009,908
136,733
22,009,507
21,892,793
1,009,908
136,733
22,009,507
21,892,793
All amounts are short term. The carrying value of cash and cash equivalents is considered a reasonable approximation of fair value.
22 Issued capital
2022
2021
Issued and fully paid ordinary shares with a nominal value of 0.1p
Number
2,853,559,995 2,853,559,995
Nominal value (£)
2,853,560
2,853,560
Issued and fully paid deferred shares with a nominal value of 4.9p
Number
143,377,203
143,377,203
Nominal value (£)
7,025,483
7,025,483
Share premium
Value (£)
51,308,068
51,308,068
Total issued capital (£)
61,187,111
61,187,111
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Deferred shares have attached to them the following rights and restrictions:
they do not entitle the holders to receive any dividends and distributions;
they do not entitle the holders to receive notice or to attend or vote at General Meetings of the Company;
on return of capital on a winding up the holders of the deferred shares are only entitled to receive the amount paid up on such shares after
the holders of the ordinary shares have received the sum of 0.1 pence for each ordinary share held by them and do not have any other right
to participate in the assets of the Company.
No shares were issued in 2022.
Issue of ordinary share capital in 2021:
Price in pence
Nominal value
per share
Number
£
As at 1 January 2021
2,758,701,681
2,758,702
20-May-2021 – Share placing for cash
26.5
53,306,751
53,307
20-September-2021 – Share placing for cash
26.0
41,551,563
41,551
94,858,314
94,858
As at 31 December 2021
2,853,559,995
2,853,560
59
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Notes to the financial statements continued
For the year ended 31 December 2022
23 Share-based payments
Share options and warrants outstanding at the end of the year have the following expiry date and exercise prices:
Number of
Number of
Exercise price
options as at
options as at
in pence
31 December
31 December
Expiry date
per share
2022
2021
Share options
2 November 2023
0.42
55,000,000
55,000,000
2 November 2023
0.60
40,000,000
40,000,000
2 November 2023
0.90
35,000,000
35,000,000
Weighted average exercise price
0.60
130,000,000
130,000,000
Warrants
20 May 2024
26.5
53,306,751
53,306,751
23 September 2024
26.0
41,551,563
41,551,563
Weighted average exercise price
26.28
94,858,314
94,858,314
Total contingently issuable shares at 31 December
224,858,314
224,858,314
All the listed options and warrants were exercisable as at 31 December 2022 (2021: all).
Share options
Movement in number of share options outstanding and their related weighted average exercise prices are as follows:
2022
2021
Average
No. of
Average
No. of
(Price expressed in pence per share)
exercise price
share options
exercise price
share options
Share options
At 1 January
0.60
130,000,000
0.60
130,000,000
At 31 December
0.60
130,000,000
0.60
130,000,000
No options were granted by the Group in 2022 (2021: nil) to the Directors, Group employees and consultants to the Group. 21,000,000
options have been authorised in 2018 to be granted at a later date. No amounts are paid or payable by the recipient on receipt of the option.
The options carry neither right to dividends nor voting rights. Options may be exercised at any time from the vesting date to the date of their
expiry. The Group has no legal or constructive obligation to repurchase or settle the options in cash.
Out of 173,000,000 options granted by the Group in 2018:
72,000,000 options issued with an exercise price of 0.42 pence and vested on the issue date.
53,000,000 options issued with an exercise price of 0.6 pence and were due to vest at the date when VWAP has been 0.6 pence or above for
10 consecutive days, or at the latest 31 December 2018. Options vested on 22 November 2018.
48,000,000 options issued with an exercise price of 0.9 pence vesting at the date when VWAP has been 0.9 pence or above for 10
consecutive days, or at the latest 30 June 2019. Options vested on 30 June 2019.
All options granted in 2018 were due to expire on 2 November 2022 and were extended to 2 November 2023.
Warrants
No warrants were granted by the Group in 2022 (94,838,314 warrants were granted by the Group in 2021).
Movement in number of warrants outstanding and their related weighted average exercise prices are as follows:
2022
2021
Average
No. of
Average
No. of
(Price expressed in pence per share)
exercise price
warrants
exercise price
warrants
Warrants
At 1 January
26.28
94,858,314
–
–
Granted
–
–
26.5
53,306,751
Granted
–
–
26.0
41,551,563
At 31 December
26.28
94,858,314
26.28
94,858,314
Eurasia Mining Plc
60
Annual Report & Accounts 2022
24 Other reserves
2022
2021
Group
Company
Group
Company
£
£
£
£
Capital redemption reserve
3,539,906
3,539,906
3,539,906
3,539,906
Foreign currency translation reserve:
At 1 January
(1,335)
–
57,344
–
Recognised in the period
(341,762)
–
(58,679)
–
At 31 December
(343,097)
–
(1,335)
–
Share-based payments reserve:
At 1 January
384,120
384,120
384,120
418,181
Recognised in the period
–
–
–
(18,483)
Utilised on exercise of warrants
–
–
–
(15,578)
At 31 December
384,120
384,120
384,120
384,120
3,580,929
3,924,026
3,922,691
3,924,026
The capital redemption reserve was created as a result of a share capital restructure in earlier years.
The foreign currency translation reserve represents exchange differences relating to the translation from the functional currencies of the
Group’s foreign subsidiaries into GBP.
The share-based payments reserve represents (i) reserve arisen on the grant of share options to employees under the employee share
option plan and (ii) reserve arisen on the grant of warrants under terms of professional service agreements and/or issued under terms of
financing arrangements.
25 Borrowings
2022
2021
Group
Company
Group
Company
£
£
£
£
Current borrowings
Unsecured loan
–
–
31,953
–
–
–
31,953
–
In 2017 the Group entered into an unsecured loan facility to borrow up to RR57 million at 14% per annum, from Region Metal, the then
contractor and the West Kytlim mine operator. The Group had drawn RR4.18 million and repaid RR0.9 million by 31 December 2021.
As the contractor’s arrangements have been discontinued the Group has no intention to utilise any more funds from this facility. The loan
was due for repayment in 2021 but the Group received a court order not to repay the loan due to ongoing court arbitrage between the
lender and its creditors.
The Group is not a party of this arbitrage and/or not linked to any party. The loan was repaid in full in 2022.
61
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Notes to the financial statements continued
For the year ended 31 December 2022
26 Lease liabilities
Leases
The Group leases certain of its plant and equipment. The average lease term is 2.5 years (2021: 3.5 years). The Group has the option to
purchase the equipment for a nominal amount at the maturity of the finance lease. The Group’s obligation under finance leases is secured
by the lessor’s title to the leased assets.
Interest rates underlying all obligations under finance leases are fixed at respective contract dates ranging from 21.9% to 23.5% per
annum.
Present value of
Minimum lease payments
minimum lease payments
2022
2021
2022
2021
£
£
£
£
Less than one year
224,700
200,633
167,071
122,407
Between one and five years
202,820
377,027
181,198
307,136
More than five years
–
–
–
–
427,520
577,660
348,269
429,543
Less future finance charges
(79,251)
(148,117)
–
–
Present value of minimum lease payments
348,269
429,543
348,269
429,543
Reconciliation of movements in lease liabilities
2022
2021
Group
Company
Group
Company
£
£
£
£
At 1 January
429,543
–
526,929
–
Interest accrued
90,446
–
101,048
–
Interest paid in cash
(90,446)
–
(101,048)
–
Principal paid in cash
(141,528)
–
(101,674)
–
Exchange differences
60,254
–
4,288
–
At 31 December
348,269
–
429,543
–
27 Trade and other payables
2022
2021
Group
Company
Group
Company
£
£
£
£
Trade payables
270,214
–
210,665
–
Accruals
1,825,269
159,583
161,035
121,565
Social security and other taxes
46,460
7,998
18,751
4,965
Other payables
88,936
268,962
96,107
149,159
2,230,879
436,543
486,558
275,689
The fair value of trade and other payables is not materially different to the carrying values presented. The above listed payables were
all unsecured.
Eurasia Mining Plc
62
Annual Report & Accounts 2022
28 Provisions
2022
2021
£
£
Long term provision:
Environment rehabilitation
254,218
143,268
Short term provision:
Environment rehabilitation
88,478
57,494
342,696
200,762
Movement in provision is as follows:
2022
2021
£
£
At 1 January
200,762
52,137
Recognised in the period
54.612
138,020
Results of remeasurement or settlement without cost
45,446
7,487
Unwinding of discount and effect of changes in the discount rate
17,251
2,397
Exchange differences
24,625
721
At 31 December
342,696
200,762
Provision is made for the cost of restoration and environmental rehabilitation of the land disturbed by the West Kytlim mining operations,
based on the estimated future costs using information available at the reporting date.
The provision is discounted using a risk-free discount rate of from 6.99% to 8.31% (2021: 8.39% to 8.66%) depending on the commitment
terms, attributed to the Russian Federal Bonds.
Provision is estimated based on the sub-areas within general West Kytlim mining licence the Company has carried down its operations
by the end of the reporting period. Timing is stipulated by the forestry permits issued at the pre-mining stage for each of sub-areas. Short-
term provision relates to technical and biological recultivation and forest compensation to be completed by the end of financial year 2023.
29 Related party transactions
Transactions with subsidiaries
In the normal course of business, the Company provides funding to its subsidiaries for reinvestment into exploration projects.
2022
2021
£
£
Receivables from subsidiaries
36,269
28,028
Loans provided to subsidiaries
28,157,840
12,681,450
Service charges to subsidiary
120,000
120,000
The amounts owed by subsidiaries are unsecured and receivable on demand.
63
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Notes to the financial statements continued
For the year ended 31 December 2022
29 Related party transactions (continued)
Transactions with key management personnel
The Group considers that the key management personnel are the Directors of the Company.
The following amounts were paid and/or accrued to the Directors of the Company who held office at 31 December 2022:
2022
2021
£
£
Short-term benefits
580,194
638,288
580,194
638,288
The remuneration of the Directors is determined by the Remuneration Committee having regard to the performance of individuals and
market trends. No pension contribution has been made for the Directors in 2022 (2021: nil).
An analysis of remuneration for each Director of the Company during 2022:
Payment
Salaries,
to entity
bonuses and
Directors
controlled
allowances
fees
by Director
Total
Name
Position
£
£
£
£
C. Schaffalitzky
Executive Chairman
120,000
–
–
120,000
J. Nieuwenhuys
Executive Director
180,000
–
–
180,000
T. Abdikeev
Non-Executive Director
90,000
26,250
–
116,250
I. Rawlinson
Non-Executive Director
–
55,000
–
55,000
K. Kosaka
Non-Executive Director
15,000
45,000
–
60,000
A. Matyushok
Non-Executive Director
–
27,944
21,000
48,944
405,000
154,194
21,000
580,194
30 Loss per share
Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of
ordinary shares in issue during the year.
2022
2021
£
£
Loss attributable to equity holders of the Company
(6,045,421)
(2,910,479)
Weighted average number of ordinary shares in issue
2,853,559,995 2,803,433,563
Basic loss per share (pence)
(0.22)
(0.10)
Potential number of shares that could be issued following exercise of share options or warrants:
Number of exercisable instruments:
2022
2021
£
£
Share options
130,000,000
130,000,000
Warrants
94,858,314
94,858,314
224,858,314
224,858,314
There is no dilutive effect of share options or warrants (2021: nil) as the Group was in a loss position.
31 Commitments
At the time of the award of the Monchetundra mining licence a royalty payment was calculated by the Russian Federal Reserves
Commission. 20% of this payment was paid in December 2018 and the remaining 80%, or RR16.68 million (approximately £187,000) to be
paid by November 2023.
During 2020 the Group entered into several lease agreements to lease mining plant and equipment. As at 31 December 2022 the average
lease term was 2.5 years and present value of minimum lease payments £348,269 (2021: £429,543).
The Group has no other material commitments.
Eurasia Mining Plc
64
Annual Report & Accounts 2022
32 Risk management objectives and policies
Financial risk management objectives
The Group’s operations are limited at present to investing in entities that undertake mineral exploration. All investments in exploration
are capitalised on a project basis, which are funded by shareholders funds and fixed rate borrowings. The Group’s activities expose it
to a variety of financial risks including currency, fair value and liquidity risk. The Group seeks to minimise the effect of these risks on a
daily basis, though due to its limited activities the Group has not applied a policy of using any financial instruments to hedge these risks
exposures.
Risk management is carried out by the Company under close board supervision.
Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect
to US Dollars and Russian Rubles. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and
net investments in foreign operations. The Group’s policy is not to enter into currency hedging transactions.
The following significant exchange rates have been applied during the year:
GBP
Average rate Reporting date spot rate
2022
2021
2022
2021
USD
1.238
1.376
1.204
1.348
RUB
87.51
101.37
89.23
101.18
Sensitivity analysis
A reasonably possible strengthening (weakening) of the USD and RR, as indicated below, against GBP at 31 December would have
affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss before taxes
by the amounts shown below. The analysis assumes that all other variables, in particular interest rates, remain constant and ignores any
impact of forecast sales and purchases.
Strengthening
Weakening
Equity
Profit or loss
Equity
Profit or loss
£
£
£
£
31 December 2022
USD (5% movement)
89,077
(22,834)
(80,597)
20,660
RUB (5% movement)
387,517
266,807
(350,616)
(241,394)
31 December 2021
USD (5% movement)
100,534
69,642
(90,957)
(63,013)
RUB (5% movement)
111,281
43,678
(100,700)
(39,523)
Interest rate risk
The Group has investment into US treasury notes returning fixed interest of 1.25% to 2.125% per cent per annum payable biannually, and
mature between August and October 2024. The Group’s operating cash flows are dependent on changes in note price prevailing on the
time of selling the notes for cash prior to maturity date.
The Group has lease liabilities disclosed in Note 26. All lease liabilities are at a fixed rate of interest.
Fair values
In the opinion of the Directors, there is no significant difference between the fair values of the Group’s and the Company’s assets and
liabilities and their carrying values.
65
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Notes to the financial statements continued
For the year ended 31 December 2022
32 Risk management objectives and policies (continued)
Credit risk
The Group’s exposure to credit risk is limited to the carrying amount of financial assets recognised at the consolidated statement of
financial position date, as summarised below:
2022
2021
Group
Company
Group
Company
£
£
£
£
Non-current financial assets
3,807,925
–
–
–
Current loans and advances
–
28,157,840
–
12,681,450
Trade and other receivables
3,171,669
434,040
1,681,864
275,689
Cash and cash equivalents
1,009,908
136,733
22,009,507
21,892,793
7,989,502
28,728,613
23,691,371
34,849,932
The Group’s risk on cash at bank is mitigated by holding of the majority of funds at “A” rated bank.
No significant amounts are held at banks rated less than “B”. Cash is held either on current account or on short-term deposit at floating
rate. Interest is determined by the relevant prevailing base rate. The fair value of cash and cash equivalents at 31 December 2022 are not
materially different from its carrying value.
Recoverability of the loans is dependent on the borrower’s ability to transform them into cash generating units through discovery of
economically recoverable reserves and their development into profitable production.
The Company continuously monitors defaults by the counterparties, identified either individually or by group, and incorporates this
information into its credit risk control. Management considers that all of the above financial assets that are not impaired are of good
credit quality.
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk
management framework for the management of the Group’s short-, medium- and long-term funding and liquidity management
requirements. The Group manages liquidity risk by maintaining adequate reserves, borrowing facilities, cash and cash equivalent by
continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities.
Current
Non-current
within
1 to 2
Later than
12 months
years
2 years
£
£
£
2022
Lease liabilities
224,700
202,820
–
Trade and other payables
2,230,879
–
–
2,455,579
202,820
–
2021
Borrowings
31,953
–
–
Lease liabilities
200,633
377,027
–
Trade and other payables
486,558
–
–
719,144
377,027
–
Eurasia Mining Plc
66
Annual Report & Accounts 2022
32 Risk management objectives and policies (continued)
Liquidity risk (continued)
The following table details the Company’s remaining contractual maturity for its non-derivative financial liabilities.
Current
Non-current
within
1 to 2
Later than
12 months
years
2 years
£
£
£
2022
Trade and other payables
436,543
–
–
436,543
–
–
2021
Trade and other payables
275,689
–
–
275,689
–
–
The tables above have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
Group can be required to pay. The table includes both interest and principal cash flows.
The contractual maturities reflect the gross cash flows, which may differ to the carrying values of the liabilities at the statement of financial
position date.
Capital risk
At present the Group’s capital management objective is to ensure the Group’s ability to continue as a going concern.
Capital is monitored on the basis of its carrying amount and summarised as follows:
2022
2021
Group
Company
Group
Company
£
£
£
£
Total borrowings
348,269
–
461,496
–
Less cash and cash equivalents
(1,009,908)
(136,733)
(22,009,507)
(21,892,793)
Net debt
–
–
–
–
Total equity
25,813,263
33,232,660
31,995,270
35,740,089
Total capital
25,813,263
33,232,660
31,995,270
35,740,089
Gearing
0%
0%
0%
0%
Capital structure is managed depending on economic conditions and risk characteristics of underlying assets. In order to maintain or
adjust capital structure, the Group may issue new shares and debt financial instruments or sell assets to reduce debt.
33 Events after the statement of financial position date
The Group’s assets are located in Russia. In 2022 additional sanctions to those which had existed since 2014 were imposed on certain
activities, entities and individuals connected with Russia, which continue to evolve and which are being carefully monitored by the Group
in accordance with the Group’s sanctions compliance policy, and with the assistance of its external legal advisers. The Company has
satisfied itself that neither of its current activities at the West Kytlim Mine or on the Kola Peninsula are prohibited under UK or EU sanctions
rules. Furthermore, the Group does not engage and has not engaged with any sanctioned persons/entities or agencies.
To date there has been no significant impact on the Group’s activities as a result of recent updates to the UK and EU sanctions legislation.
Sanctions introduced by the Russian Federal government have also not affected the Group, although this is being closely monitored. The
Group closely monitors all regulatory requirements and changes to the laws, rules and regulations, taking steps whenever necessary to
ensure compliance with new legislation.
There have been no further adjusting events after the statement of financial position.
67
Corporate Governance
Financial Statements
Eurasia Mining Plc
Annual Report & Accounts 2022
Strategic Report
Company information
Head office
Clubhouse Holborn,
20 St Andrew Street,
London, EC4A 3AG
UK
Telephone: +44 (0)20 7932 0418
E-mail: info@eurasiamining.co.uk
www.eurasiamining.co.uk
Registered office
International House,
142 Cromwell Road,
London, SW7 4EF
UK
Russian office
Office 219/4,
36 Engels Street,
Ekaterinburg, 620075
Russia
Telephone: +7 (343) 304 61 53
Japan rep office
EURASIA MINING PLC,
4F, 35 Kowa Bldg. Annex 1-14-15,
Akasaka, Minato-ku, Tokyo 107-0052
Japan
Company Number: 3010091
Advisers
Registrars
Link Asset Services,
The Registry,
34 Beckenham Road
Beckenham,
Kent, BR3 4TU
UK
Auditors
Grant Thornton,
12-18 City Quay,
Dublin 2
Ireland
Solicitors
Gowling WLG (UK) LLP,
4 More London Riverside,
London, SE1 2AU
UK
Nominated Adviser and
Stockbrokers
SP Angel,
35 Maddox Street,
Mayfair,
London, W1S 2PP
UK
Eurasia Mining Plc
68
Annual Report & Accounts 2022
Eurasia Mining
Registered Office
(Company Number 3010091)
International House,
142 Cromwell Road,
London SW7 4EF
+44 (0)20 7932 0418
info@eurasiamining.co.uk
Head Office
Clubhouse Holborn,
20 St Andrew Street,
London EC4A 3AG