PREMIER AFRICAN MINERALS LIMITED
ANNUAL REPORT
31 DECEMBER 2021
WWW.PREMIERAFRICANMINERALS .COM
(AIM:PREM)
CONTENTS
CEO statement
Strategic report
Management Team
Directors
Directors Report
Corporate governance statement
Independent auditor’s report
Consolidated statement of financial position
Consolidated statement of profit or loss and other
comprehensive income
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
01
03
10
11
12
15
24
29
30
31
32
33
CEO STATEMENT -Mr George Roach
Reflecting on the past eighteen months and having reviewed our 2021 audited
financials and our most recent interims, I can’t help feeling that so much is changing
and so rapidly that this statement is going to be more concerned with events post
year end, than those of the period under review!
Our project at Zulu in Zimbabwe has been front and centre in most of what we have achieved in 2021. Improved
liquidity and escalating interest in spodumene concentrate, whilst allowing Premier to fund the commencement
of a Definitive Feasibility Study, did not necessarily answer the question as to what future deal should be
considered and what may offer the best value in the longer term for shareholders. Whilst this was unfolding, a
number of unforeseen issues did not help progress at Zulu either. The return intermittently of COVID and related
travel restrictions and an abnormally wet summer, added their own complications.
In the latter part of 2021, interest in the Zulu deposit increased dramatically and a series of negotiations
followed. This only increased the difficulty in identifying the best possible deal to extract value for our
shareholders. Ultimately, Premier took the decision to retain ownership of Zulu and to seek to bring the deposit
into production without further dilution to shareholders on the back of a pre-paid sales contract. Step one in
this process was to team up with a company that had those capabilities. At one point, I was involved with eleven
separate negotiations with people all wanting Zulu! At the end of the day Suzhou TA&A agreed to take a
placement into Premier direct at a substantial premium to the then trading price, and this has allowed us to
dramatically improve the exploration activities at Zulu.
In our RNS 13 June 2022, I set out Premier’s intention to commission a high capacity pilot plant and the rationale
therefor; in essence that, the advanced exploration and test work coupled to the shortage of SC6 and the price
for this commodity have all combined to create a unique opportunity for Zulu to be in production with SC6 from
Q1 2023. In our latest RNS OF 24 June 2022, I have been able to confirm that this pilot plant option is now a
reality and Premier is now expected to be fully funded to bring Zulu into production in early 2023.
Sadly, RHA has not progressed but, the control of the Zimbabwe states 51% now resides in the Ministry of Mines
and there have been encouraging negotiations with an expectation that a workable agreement will be reached
and that there is a reasonable prospect that after some additional exploration work, this could return to
production in early 2023 as well. The price of wolframite remains good and there is a window to bring this mine
back into production.
Premier concluded a JV agreement with Li3 Resources Inc to earn in up to 50% of the ownership of the claims
previously acquired in the Mutare greenstone belt. Exploration activities have commenced and we look forward
to results of those efforts in the near future.
_____________________
George Roach
Acting Chairman and Chief Executive Officer
30 June 2022
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STRATEGIC REPORT
The strategic report provides a detailed assessment of the activities of the Company during the period under
review. It also details the main objectives of the Company related to our portfolio of assets. The principal risks
and uncertainties associated with our activities are outlined in a specific principal risks and uncertainties section.
RHA
49% Interest owned by Premier
51% Locally indigenized owned by National Indigenisation and Economic Empowerment Fund (“NIEEF”)
Sadly, little changed once again, although in further reviews of the resource, prompted by improved pricing for
Wolframite, the option of open pit operations being resumed targeting alternative lode structures to those
originally mined some years ago, represented a viable alternative, but something I would only consider after
additional exploration drilling to confirm the on strike extensions of the lodes in question. Coupled to limited
plant modifications indicated from test work concluded during the year, an independent review indicated that
the mine could potentially operate profitably. The stumbling block remains that Premier cannot reasonably be
expected to fund this whilst owning a minority stake.
In subsequent discussions with the Minister of Mines, there are positive signs for a new agreement with the
Government that may still see this mine back in production in 2023. I will be updating on this regularly.
Recoverability of RHA Mine Assets
The RHA mine assets remain fully impaired at this time and are likely to so remain until we are able to conclude
the discussions underway at present.
Zulu Lithium and Tantalum Project
Much was achieved and much changed during the year under review. Exploration activities at site and test work
conducted in Germany by Anzaplan, together with early drill results continued to support our confidence in the
Zulu Project.
After the formal grant of the EPO, Premier was able to self-fund the initial stages associated with this extended
exploration programme and also kickstart DFS related activities. In terms of the DFS, this would be an extension
to the Scoping Study completed in 2017 that had indicated no fatal flaws and recommended further study with
a view to eventual mine development. The rising demand for spodumene concentrates and the escalating price
thereof, drove strong interest from many parties all wanting an interest and/or possible acquisition of the Zulu
Project. After long and hard consideration, we took the view that the best potential return for shareholders
likely lay in retaining ownership and looking to develop the project further before reaching any definitive
agreement with any party.
I have covered above the acceptance of the subscription into the company from Suzhou TA&A and the
substantial boost that has given our activities. Important was the fact that Premier was fully funded and was
able to take a much sounder view of the exploration activities in particular, without persistent pressure to rush
interim results to market. The exploration program had been difficult. Influenced by covid interruptions and
then torrential summer rains that together with further delays in receipt of assays, left us well behind our
original drilling targets. The subscription allowed us to dramatically accelerate the exploration activities and also
allowed time to completely review all assays and other activities undertaken. Shortcomings identified have been
attended to, corrections made to ore body resource models as needed and confirmatory and validation assays
are well advanced. Our internal Competent Person and project manager has indicated that he continues to
target a SAMREC compliant indicated resource of 8 to 10 MT @>1% Li2O from the spodumene bearing
pegmatites, sufficient to support the pilot plant phase producing 5,000 ton per month of SC6. The ore body
extends at depth and on strike in both directions and updates on the overall projected size of this ore body will
follow.
3
In the past few days, Premier announced the funding agreement for the construction of a large-scale pilot plant
to produce SC6 from early 2023. The cost estimate of $34 million will be fully funded from a pre-paid purchase
of SC6, and the projected production can potentially, based upon on current spodumene prices, both fully repay
the pre-paid amount inside of twelve months and place Premier on a sound and profitable basis going forward.
As important is that the pilot plant operation will allow optimisation and completion of detailed further test
work on ancillary revenue streams that will include tantalum concentrate, a technical grade petalite and possibly
a Caesium/Rubidium rich mica/lepidolite concentrate.
The pilot plant project has been launched with an initial payment of 15% of the plant construction cost. At the
same time site construction work is already underway. The full staff and ancillary accommodation, workshops,
service areas and layout are expected to complete by 30 September 2022. Mine dam, water reticulation, pilot
plant base structures, tailings facilities and power generation infrastructure construction commence July 2022
and first equipment is expected to start arriving at site from November 2022. Plant components are pre-
assembled in South Africa before stripping and shipment to site. The plant is modular and this will facilitate both
speed of assembly and provides flexibility in the test phases that will follow installation. The final components
of the plant will be delivered to site late in December 2022 with the construction of the dam to provide water
completed by end of December 2022 and completion of the plant by end of January 2023. On this basis, our
expectation of first shipments will occur by 31 March 2023 is entirely reasonable.
We will be providing regular progress reports and if adequate bandwidth becomes available at the project site,
a periodic live feed will be considered.
As production date approaches, we will provide guidance related to anticipated production levels updated to
prices at that time.
Extended Lithium Portfolio
Potentially, a hidden gem. Whilst considered of little value when Premier acquired a gold prospect in
Mozambique and this portfolio of hard-rock lithium assets located in Zimbabwe from Lithium Consolidated Ltd
("Li3") on the 28 July 2020, present circumstances have changed that perception entirely. Little work was
concluded in the year to December 2021 on these prospects and no work was possible in Mozambique due to
the mass displacement of people south from Cabo del Gardo. In events post year end, Premier concluded a JV
buy-in agreement as announced in our RNS 25 April 2022 and since that date we have deployed an exploration
team to assess and determine where the most prospective regions lie. Early mapping and surface sampling is
encouraging. Drill target identification continues and preliminary results can be expected during Q3 2022.
MN Holdings Limited (“MNH”)
Little has changed in regard to Otjozondu and it remains a disappointment that neither has Premier been able
to advance the present 19% interest in MNH, nor has the mine operation improved. Fundamentally, this remains
a sound prospect with a sound and potentially profitable future when the operation is recapitalised.
In the unaudited management accounts for 6 months ended 31 December 2021, Otjozondu reported revenue
of approximately N$26 million (equivalent to $1.7 million) and an operating loss before tax (and interest charges
to group companies) of approximately N$45.6 million (equivalent to $3.0 million). Total assets as at the same
date amounted to approximately N$130 million (equivalent to $8.5 million).
As further reported in Note 12, Premier has provided Otjozondu and its related party, Ebenezer Farm, with a
small working and expansion capital facility.
Circum Minerals Limited (“Circum”)
The status in Ethiopia has effectively halted operations at Circum during the year to 31 December 2021 and little
was advanced. In events after the period end, much has changed. Our RNS 22 February 2022 set out the terms
under which Premier’s holding in Circum was consolidated into Vortex. Subsequent to this consolidation, the
collective shareholders of Vortex have significant protection from a weak minority position and will enjoy an
equitable distribution in any proceeds from a cash generative event. The moves toward peace in Ethiopia and
the embargoes on potash from Russia and Belarus have strengthened potash prices and there is growing interest
4
in development of the Circum deposit. Apart from this, the major shareholders of Circum, including Vortex have
agreed a final date by when a listing will be sought if no other liquidity event has occurred.
I look forward to further updates during the year
Funding
During the reporting period we raised net proceeds of $3.609 million (2020: $2.343 million).
Principal activities and strategic review of the business
The principal activity of Premier and its subsidiary companies (the Group) during the year under review is the
mining, exploration, evaluation development and investment in natural resource properties on the African
continent.
Premier was incorporated on 21 August 2007 in the British Virgin Islands (BVI) as a BVI business company with
number 1426861. The registered office is Craigmuir Chambers, PO Box 71, Road Town, Tortola, British Virgin
Islands. The Company was admitted to trading on the London Stock Exchange’s AIM Market on 10 December
2012.
Objectives
During the current year, the primary focus will be:
Look to acquire potentially cash generative assets.
To progress the DFS studies at Zulu and implement the pilot plant mining operations.
Continue to engage directly with MNH.
•
•
•
• Definitively settle the status at RHA and either reopen the mine or relocate our plant.
•
Identify and secure high value exploration targets in other jurisdictions.
Principal risks and uncertainties
The Group is subject to a number of risks and uncertainties which could have a material effect on its business,
operations, or future performance, including but not limited to:
Credit Risk
Credit risk is the risk of potential loss to the Company if counterparty to a financial instrument fails to meet its
contractual obligations. The Company’s credit risk is primarily attributable to its liquid financial assets, including
cash, receivables, and balances receivable from the government. The Company limits the exposure to credit risk
in its cash by only investing its cash with high-credit quality financial institutions in business and savings
accounts, guaranteed investment certificates and in government treasury bills which are available on demand
by the Company for its programs. The Company does not invest in money market funds. The Company has no
risk exposure to asset backed commercial paper or auction rate securities.
Refer to note 29 for the company’s exposure to credit risk.
Liquidity Risk
Liquidity risk is the risk that the Company will not have the resources to meet its obligations as they fall due. The
Company manages this risk by closely monitoring cash forecasts and managing resources to ensure that it will
have sufficient liquidity to meet its obligations. Also refer to the going concern section below.
Refer to note 29 for the company’s exposure to liquidity risk.
Operating Risks
The activities of the Group are subject to all of the hazards and risks normally incidental to exploring and
developing natural resource projects. These risks and uncertainties include, but are not limited to environmental
hazards, industrial accidents, labour disputes, geo-political risks, encountering unusual or unexpected geologic
formations or other geological or grade problems, unanticipated changes in rock formation characteristics and
mineral recovery, encountering unanticipated ground or water conditions, land slips, flooding, periodic
5
interruptions due to inclement or hazardous weather conditions and other acts of God or un-favourable
operating conditions and losses.
Should any of these risks and hazards affect the Group’s exploration, development or mining activities, it may
cause the cost of production to increase to a point where it would no longer be economic to extract minerals
from the Group’s properties, require the Group to write-down the carrying value of one or more of its assets,
cause delays or a stoppage of mining and processing, result in the destruction of mineral properties or processing
facilities, cause death or personal injury and related legal liability, any and all of which may have a material
adverse effect on the Group.
Early-stage Business Risk
The Group’s success will depend on its ability to raise capital and generate cash flows from production in the
future at MNH and potentially RHA should NIEEF meet their funding obligations. The board of directors manages
this risk by monitoring cash levels and reviewing cash flow forecasts on a regular basis.
Market Risk (exchange rates, commodity, and equity)
Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign
exchange rates, and commodity and equity prices. These fluctuations may be significant.
Interest Rate Risk: The Company is exposed to interest rate risk to the extent that its cash balances bear variable
rates of interest. The interest rate risks on cash and short-term investments and on the Company’s, obligations
are not considered significant.
Foreign Currency Risk: The Company is exposed to the financial risk related to the fluctuation of foreign exchange
rates against the Company’s functional currency, which is the United States dollar (“USD”). The Company
expects to continue to raise funds in the United Kingdom. The Company conducts its business in Zimbabwe with
a significant portion of expenditures in that country historically denominated in USD and now also in RTGS
Dollars (“RTGS$”). The introduction of the RTGS$ during the 2019 financial year has resulted in the devaluation
of the RTGS$ against the US Dollar. This devaluation has also resulted in the Zimbabwean economy going into
hyperinflationary status. The RTGS$ denominated assets and liabilities are inflation adjusted at each reporting
period yielding foreign exchange gains or losses on conversion to USD. Additionally, a portion of the Company’s
business is conducted in South African Rands (“ZAR”). As such, it is subject to risk due to fluctuations in the
exchange rates between the USD and each of the RTGS$, ZAR and GBP. A significant change in the currency
exchange rates between the USD relative to foreign currencies could have an effect on the Company’s results of
operations, financial position, or cash flows. The Company has not hedged its exposure to currency fluctuations.
Commodity Price Risk - While the value of the Company’s core mineral resource properties, RHA and Zulu are
related to the price of tungsten and lithium and the outlook for these minerals, the Company currently does not
have any substantially owned operating mines and hence does not have any hedging or other commodity-based
risks in respect of its operational activities. The Company minority interest in MNH results in limited control of
how MNH mitigate the risk associated with Manganese price fluctuations.
Refer to note 29 for the company’s exposure to market risk.
Early-stage Project Risk
RHA moved into production during 2017, which was then suspended on 9 January 2018. Zulu is at an early stage
of development. In advancing these projects to the stage where they may be cash generative, many risks are
faced, including the inherent uncertainty of discovering commercially viable reserves, the capital costs of
exploration, competition from other projects seeking financing and operating in remote and often politically
unstable environments. While discovery of a mineral deposit may result in substantial rewards, few properties
that are explored are ultimately developed into economically viable operating mines. Major expenditure may
be required to establish reserves and it is possible that even preliminary due diligence will show adverse results,
leading to the abandonment of projects. Whether a mineral deposit will become commercially viable depends
on a number of factors, some of which are the particular attributes of the deposit, proximity to infrastructure,
financing costs and governmental regulations. The effect of these factors can only be estimated and cannot be
accurately predicted.
Environmental Risks and Hazards
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All phases of the Group’s operations are subject to environmental regulation in the areas in which it operates.
Environmental legislation is evolving in a manner that may require stricter standards and enforcement,
increased fines and penalties for non-compliance, more stringent environmental assessments of proposed
projects and a heightened degree of responsibility for companies and their officers, directors, and employees.
There is no assurance that existing or future environmental regulation will not materially adversely affect the
Group’s business, financial condition, and results of operations. Environmental hazards may exist on the
properties on which the Group holds interests that are unknown to the Group at present. The Board manages
this risk by working with environmental consultants and by engaging with the relevant governmental
departments and other concerned stakeholders.
Licencing Risk
The Company’s exploration and development activities are dependent upon the grant of appropriate licences,
concessions, leases, permits and regulatory consents which may be withdrawn or made subject to limitations or
performance criteria. Such licences and permits are as a practical matter subject to the discretion of the
applicable Government or Government office. The Group must comply with known standards, existing laws and
regulations that may entail greater or lesser costs and delays depending on the nature of the activity to be
permitted. The interpretations, amendments to existing laws and regulations, or more stringent enforcement
of existing laws and regulations could have a material adverse impact on the Group’s results of operations and
financial condition. Whilst the Company continually seeks to do everything within its control to ensure that the
terms of each licence are met and adhered to, third parties may seek to exploit any technical breaches in licence
terms for their own benefit. There is a risk that negotiations with a Government in relation to the grant, renewal
or extension of a licence may not result in the grant, renewal or extension taking effect prior to the expiry of the
previous licence period, and there can be no assurance of the terms of any extension, renewal, or grant.
Political and Regulatory Risk
The Group’s operating activities in Africa, notably in Zimbabwe, are subject to laws and regulations governing
expropriation of property, health and worker safety, employment standards, waste disposal, protection of the
environment, mine development, land and water use, prospecting, mineral production, exports, taxes, labour
standards, occupational health standards, toxic wastes, the protection of endangered and protected species and
other matters. The Group is dependent on the political and economic situation in these countries and may be
adversely impacted by political factors such as expropriation, war, terrorism, insurrection, and changes to laws
governing mineral exploration and operations.
Internal Control and Financial Risk Management
The Board has overall responsibility for the Group’s systems of internal control and for reviewing their
effectiveness. The Group maintains systems which are designed to provide reasonable but not absolute
assurance against material loss and to manage rather than eliminate risk.
The key features of the Group’s systems of internal control are as follows:
➢ Management structure with clearly identified responsibilities.
➢ Production of management information presented to the Board.
➢ Day to day hands on involvement of the Executive Directors and Senior Management.
➢ Regular board meetings and discussions with the non-executive directors.
The Group’s activities expose it to a number of financial risks including cash flow risk, liquidity risk and foreign
currency risk. The Group has identified certain short coming in the financial control systems, which are currently
in the process of being addressed.
Disclosure of management’s objectives, exposure, and policies in relation to these risks can be found in note 29
to these financial statements.
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Environmental Policy
The Group is aware of the potential impact that its subsidiary companies may have on the environment. The
Group ensures that it complies with all local regulatory requirements and seeks to implement a best practice
approach to managing environmental aspects.
The RHA Mine located in Zimbabwe was granted approval of its Environmental Impact Assessment and was
permitted to undertake mining operations by the Environmental Management Agency of Zimbabwe.
Health and Safety
The Group’s aim is to achieve and maintain a high standard of workplace safety. In order to achieve this
objective, the Group provides ongoing training and support to employees and sets demanding standards for
workplace safety.
Covid-19
The Board recognises that the emergence and spread of new coronavirus strains represents a continuing risk to
the Company’s operations. The Board has also received assurances from the Company’s key service providers
and management in respect of their ongoing activities with our operations and steps are being taken to
guarantee the ongoing efficiency of our operations while ensuring the safety and well-being of our employees.
With expanding vaccine programme, the outlook is cautiously positive, but the Board will continue to monitor
developments as they occur.
Going Concern
These consolidated financial statements are prepared on the going concern basis. The going concern basis
assumes that the Group will continue in operation for the foreseeable future and will be able to realise its assets
and discharge its liabilities and commitments in the normal course of business.
The Directors have prepared cash flow forecasts for the period ending 30 June 2023, on the basis of the following
considerations, inter alia:
RHA
•
Zulu
The Company has not funded any of the activities at RHA since 1 July 2019, apart from essential care
and maintenance costs.
• During March 2021, the EPO was granted and subsequently a definitive feasibility study (DFS) has
•
•
commenced.
The Company accepted a direct placement from Suzhou TA&A that fully funds the ongoing DFS and all
Premier activities to postproduction start-up at Zulu that is projected for Q1 2023
The Company has secured funding to complete the establishment of a Pilot Plant at Zulu as
announced on 24 June 2022.
MNH
•
•
The Group is anticipating deriving a return on its current investment in MNH in the latter portion of
2022.
The Company has received the unaudited management accounts as at 31 December which reflects a
loss of N$45.6 million (US$3.0 million) for the 6 months then ended.
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The Group
•
• During 2021 the Group issued 1,625,000,000 shares at an average price of 0.172p per share raising a
total of $2.8 million. This cash is being used to commence the Zulu DFS and additional exploration
required in terms of the EPO.
The Company will seek to diversify its operations and risk profile and limit the funds that need to be
raised through equity placements to provide necessary funding for the Company’s significantly reduced
fixed overhead.
In March 2022 the company issued the balance of its authorised share capital for a total of £12 million.
These funds are being used to complete the DFS at Zulu Lithium.
•
Refer to note 5 for further information.
George Roach
Acting Chairman and Chief Executive Officer
30 June 2022
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Management Team
CEO – MR GEORGE ROACH
George has extensive experience in the natural resources sector in Africa. He
has successfully obtained licenses and concluded mineral exploration and
exploitation agreements in the entire SADAC region, Ethiopia and most of
CEMAC and ECOWAS regions. Under the auspices of Exploration Services, he
has provided consultancy to prospective exploration companies and has acted
in significant capacities for several start-ups that have subsequently listed on
AIM and TSX-V. Prior to founding Premier, George was the Managing Director
Africa, for Uramin Inc.
COO – Mr Errico Vascotto
Errico is an accomplished and qualified Mining Engineer with more than 40
years in the mining industry. Errico also has a MBA from the University of
Southern Queensland, Australia with Project Management as a speciality. He
has worked on both greenfield and brownfield projects globally. In addition
to direct mining experience, Errico has gained experience in mining
construction, providing strategic project leadership in line with industry best
practice.
CFO – Mr Tomas Apetauer
industries
Since qualifying as a C.A. (S.A.), Tomas has gained extensive experience in a
including finance, engineering consulting,
diverse range of
corporate finance and as an international trainer. As Premier’s chief financial
officer, he brings the skills gained through corporate turnaround strategies,
multi-million dollar capital raises and buy-outs primarily focused on the
African market.
Country Manager – Mr Jabulani Chirasha
A qualified Metallurgical Engineer with over 30 years’ experience in mining
and process engineering. Prior to joining Premier, Jabulani was a senior
manager at Anglo American in Zimbabwe. Jabulani has authored a number of
international papers on mining and process technology and facilitated at
international mining conferences as a speaker.
Corporate Secretary – Mr Brendan Roach
Brendan holds a B.Com LLB and MA(Law). He manages the full function of
corporate affairs for Premier and acts as our international Legal Counsel.
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Directors
Exploration Manager – Mr Bruce Cumming
With more than 40 years’ experience Bruce is an accomplished, SACNASP
registered Geologist. Bruce qualified with a BSc Hons degree from the
University of Cape Town and is a member of the GSSA. Bruce has extensive
exploration project management experience and has worked in various
capacities in diverse African countries. He has a long history with Premier
African Minerals.
CEO – MR GEORGE ROACH
resource business
George has extensive experience
development in Africa. He has held positions in and/or initiated a number
of start-up businesses listed on AIM and/or TSX-V.
in natural
Mr Wolfgang Hampel – Non executive Director
Wolfgang has more than 27 years’ experience in the African, American,
European and Asian exploration and mining industry. He holds a Diploma
in Economic Geology from the Technical University of Munich and is a
registered European Geologist (EurGeol) n*1261, with the European
Federation of Geologists.
Mr Godfrey Manhambara – Non Executive Director
A Zimbabwean national with extensive experience in business.
Godfrey was the former Chief Executive of Affretair. In 1999, Godfrey was
appointed as CEO of the Civil Aviation Authority in Zimbabwe, a position
he held until 2001. Currently Godfrey is the Chief Executive of Beta
Holding, the largest infrastructure supply manufacturer in Zimbabwe
Dr Luo Wei – Non Executive Director
Dr Wei has a PhD in Mineral Prospecting and Exploration from Central
South University. With over a decade of experience in the mining and
exploration industry Dr Wei has extensive experience in project
management and optimisation with a focus on resource development.
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DIRECTORS REPORT
Results
The audited financial statements for the year ended 31 December 2021 are set out on pages 29 to 83. The Group
reported a profit before and after tax of $2.298 million for the year ended 31 December 2021 (2020: loss $1.278
million).
The loss before and after tax includes:
• A gross trading profit after depreciation and amortisation is $nil (2020: $nil).
• Administration expenses amounting to $2.366 million (2020: $1.311 million).
• RHA remains under care and maintenance. In 2019 it was decided to impair the carrying value in full
of the RHA assets. This results in an impairment in 2021 of $nil (2020: $0.003 million).
Finance costs amounting to $0.018 million (2020: $0.082 million); and
The reversal of the impairment of the Zulu Lithium’s intangible assets of $4.563 million (2020: $nil).
•
•
The total comprehensive profit for the year amounted to $2.099 million (2020: loss $1.369 million)
Dividends
The Directors do not recommend the payment of a dividend in respect of the year under review.
Fund-raising and capital
During the 2021 financial year net funds of $3.609 million were raised through direct subscriptions from the
issue of new ordinary shares (2020: $2.343 million).
There remains an active and very liquid market for the Group’s shares.
Borrowings
During the financial year, Neil Herbert advanced $0.180 million to Premier African Minerals to facilitate an
additional loan to MN Holdings.
Further information on these transactions is included in note 18 and 32.
Other key elements of financial position
The prior year’s impairment of the Zulu Lithium Exploration and Evaluation costs of $4.566 million were reversed
based upon the current market conditions and requirements for Lithium.
The Company’s holdings in Circum amount to $6.263 million (2020: $6.263 million).
The Company’s holdings in MNH amount to $2.079 million (2020: $2.079 million).
The Company’s investment in property, plant and equipment during the year was $0.154 million (2020: $0.004
million).
Events after the reporting date
At the date these financial statements were approved, the Directors were not aware of any significant events
after the reporting date other than those set out in note 33 to the financial statements.
Directors
The Directors of Premier who served during the period or subsequently were:
• George Roach (appointed on incorporation April 2007)
• Godfrey Manhambara (appointed 27 September 2017)
• Wolfgang Hampel (appointed 10 April 2018)
• Neil Herbert (appointed 28 August 2019, resigned 30 April 2022)
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• Dr Luo Wei (appointed 30 April 2022)
Directors’ Fiduciary Statement
The Directors acknowledge their fiduciary duties and consider that they have, both individually and together,
acted in the way that, in good faith, would be most likely to promote the success of the Company for the benefit
of its members as a whole. In doing so, they have had regard (amongst other matters) to:
•
•
•
•
•
The likely consequences of any decision in the long term. The Group’s long-term strategic objectives,
including progress made during the year and principal risks to these objectives, are shown in the
strategic report and the key performance indicators.
The interests of the Company’s employees. Our employees are fundamental to us achieving our long-
term strategic objectives.
The impact of the Company’s operations on the community and the environment. The Group operates
honestly and transparently. We consider the impact on the environment on our day-to-day operations
and how we can minimise this.
The desirability of the Company maintaining a reputation for high standards of business conduct. Our
intention is to behave in a responsible manner, operating within the high standard of business conduct
and good corporate governance.
The need to act fairly as between members of the Company. Our intention is to behave responsibly
towards our shareholders and treat them fairly and equally so that they may benefit from the successful
delivery of our strategic objectives.
Share capital
Premier’s shares are publicly traded on AIM with the stock ticker of PREM. As at 31 December 2021, the
Company’s issued share capital consists of 19,418,009,831 (note 19) Ordinary Shares of no par value.
The company does not hold any Ordinary Shares in treasury.
Major Shareholders
As at 30 June 2022 the Company was aware of the following persons who hold, directly or indirectly, voting
rights representing 3% or more of the issued share capital of the Company to which voting rights are attached:
Name
Number of Ordinary Shares
% Issued Share Capital
Suzhou TA&A Ultra Clean
Technology Co. Ltd
George Roach*
James Goozee#
3,000,000,000
1,597,514,207
1,219,537,846
13.38%
7.1%
5.4%
* George Roach and/or structures associated with G Roach.
# James Goozee and/or his wife Mrs. Elizabeth Goozee.
There are no restrictions on the transfer of the Company’s AIM securities.
_____________________
George Roach
Acting Chairman and Chief Executive Officer
30 June 2022
13
14
CORPORATE GOVERNANCE STATEMENT
Premier is committed to maintaining the highest standards in corporate governance throughout its operations
and to ensure all its practices are conducted transparently, morally, and efficiently. Therefore, and in accordance
with the AIM Rules for Companies (March 2018), Premier will seek to comply with the provisions of The UK
Corporate Governance Code July 2016, as published by the Financial Reporting Council Limited, to the extent
the Board consider appropriate, given the Company's size, stage of development and resources (the "Code").
Throughout the Reporting Period, the Company has continued to adhere to this Code and the following
statement sets out how the Company complies or otherwise departs from the principles of the Code.
Premier constantly seeks to maintain the highest levels of corporate governance whereby the Company ensures
that a periodic review of the Company’s corporate governance is done. Following this recent review, there have
been no corporate governance issues identified by Premier.
Accordingly, the Company has established specific committees and implemented certain policies, to ensure that:
•
•
•
•
It is led by an experienced Board which is collectively responsible for the long-term success of the
Company.
The Board and the committees have the appropriate balance of skills, experience, independence, and
knowledge of the Company to enable them to discharge their respective duties and responsibilities
effectively.
The Board establish a formal and transparent arrangement for considering how it applies the corporate
reporting, risk management and internal control principles and for maintaining an appropriate
relationship with the Company's auditors.
There is a dialogue with shareholders based on the mutual understanding of objectives.
During the year, the board of directors held one formal board meeting that was attended by all members in
office. Due to the ongoing medical issues pertaining to one of the members of the board of directors, the board
of directors have elected to hold a number of informal virtual board calls with the attendance of most of the
directors in office to discuss the operations of the Company. Since the year end, the board continued to
implement the policy of holding informal board calls as so required and is also in the process of actively looking
to strengthen the board of directors. The various committees of the Company have continued to meet from
time to time in accordance with the requirements of the Company’s ongoing operations.
In addition, the Company has adopted a comprehensive suite of policies including:
• Anti-corruption and bribery.
• Health and safety.
•
•
•
Environment and community.
IT, communications, and systems.
social media.
The Code follows 5 Main Principles, which are herein assessed in accordance with Premier commitment to
maintain the highest levels of corporate governance.
1. Leadership
The Role of the Board of Directors
The Board is responsible for the management of the business of the Company, setting its strategic direction and
establishing appropriate policies. It is the Directors’ responsibility to oversee the financial position of the
Company and monitor its business and affairs on behalf of the Shareholders, to whom they are accountable.
The primary duty of the Board is always to act in the best interests of the Company. The Board also addresses
issues relating to internal control and risk management. The Non-executive Directors bring a wide range of skills
and experience to the Company, as well as independent judgment on strategy, risk, and performance. The Non-
executive Directors are considered by the Board to be independent at the date of this report. To achieve its
objectives, the Board strictly adheres to the Code.
The Board meets at least three times a year with supplementary meetings held as required. The agenda for the
Board meetings is prepared jointly by the Chairman and CEO. The Board maintains annual rolling plan (“Agenda”)
15
of items for discussion to ensure that all matters reserved for the Board, with other items as appropriate, are
addressed. The agenda, with all accompanying documents, generally includes the following:
• Review of previous minutes.
• Discussion on various project activities and market conditions.
• Management Accounts and Financial position.
• Corporate Matters.
• Other business matters that Board members can freely raise beyond the defined Agenda.
The Annual Accounts of Premier best reflects the Board key types of decisions that the Board are required to
take in their pursuant of maintaining the highest levels of corporate governance. The following matters are
reserved for the Board.
Strategy, Policy and Management.
•
• Group Structure and capital requirements.
•
•
•
• Board structure.
• Corporate governance matters.
Financial reporting and controls.
Internal and External controls.
Transactions and Commercial Contracts including delegation authority.
Premier has established varies committees to assist the Board in maintain the highest levels of corporate
governance. Of these committees, the following two strongly assist the decision making of the Board.
Audit Committee
The Audit Committee (“AC”), which comprises of George Roach and is chaired by Godfrey Manhambara, is
responsible for the appointment of auditors and the audit fee, and for ensuring that the financial performance
of the Company is properly monitored and reported. The Audit Committee, inter alia, meets with the Company's
external auditor and its senior financial management to review the annual and interim financial statements of
the Company, oversees the Company's accounting and financial reporting processes, the Company's internal
accounting controls and the resolution of issues identified by the Company's auditors.
Other key aspects of the AC include:
• Reviewing the Company's accounting policies and reports produced by internal and external audit
functions.
• Considering whether the Company has followed appropriate accounting standards and made
appropriate estimates and judgements, considering the views of the external auditor.
• Reporting its views to the board of directors if it is not satisfied with any aspect of the proposed financial
reporting by the Company.
• Reviewing the adequacy and effectiveness of the Company’s internal financial controls and internal
control and risk management systems.
• Reviewing the adequacy and effectiveness of the Company's anti-money laundering systems and
controls for the prevention of bribery and receive reports on non-compliance.
• Overseeing the appointment of and the relationship with the external auditor.
Remuneration Committee
The Remuneration Committee comprises of George Roach and chaired by Godfrey Manhambara. The
Remuneration Committee assumes general responsibility for assisting the Board in respect of remuneration
policies for Premier. The Committee reviews and recommends remuneration strategies for the Company and
proposals relating to compensation for the Company's officers, directors and consultants and assesses the
performance of the officers of the Company in fulfilling their responsibilities and meeting corporate objectives.
It has the responsibility for, inter alia, administering share and cash incentive plans and programmes for
Directors and employees and for approving (or making recommendations to the Board on) share and cash
awards for Directors and employees.
16
The Committee is satisfied that the advice received has been objective and independent as at the date of this
report.
The Division of Responsibility of the Board of Directors
It is important that the Board itself contains the right mix of skills and experience to deliver the strategy of the
Company. The roles of the Chairman and Chief Executive Officer (“CEO”) are currently exercised by the same
person - following the resignation of Neil Herbert in April 2022, George Roach agreed to act, for a limited time,
as interim chairman. There is no one individual or group of individuals on the Board that have unfettered powers
of discretion nor is there any undue influence in the collective decision-making ability of the Board.
The responsibilities of the Chairman, CEO and Non-executive director are set out in writing and are review by
the Board annually to ensure that it remains relevant and accurate. In brief summary, they are responsible as
follows:
•
•
•
The Chairman’s role is to lead and manage the Board and play a role in facilitating the discussion of the
Company’s strategy, as set by the Board. And to effectively promote the success of the Company.
The CEO’s role, including the role of the Technical Director, is the responsibility of the day-to-day
management of the Company’s operational activities, and for the proper execution of the stagey as set
by the Board.
The Non-executive directors, act as a member of the unitary Board, however, they are required to
constructively challenge performance of management and help develop proposals on strategy,
agreeing of goals and the Company key objectives.
2. Effectiveness
The Composition of the Board
The Board and its committees should have the appropriate balance of skills, experience, independence, and
knowledge of the Company to enable them to discharge their respective duties and responsibilities effectively.
As such, the Board has been structured to ensure that correct mix of skills and experience are in place to allow
it to operate effectively:
•
• A Chairman (George Roach on an interim basis), whose primary responsibility to lead and manage the
Board. This remains vital in the delivery of the Company's corporate governance model. The Chairman
has a clear separation from the day-to-day business of the Company which allows him to make
independent decisions.
a CEO (George Roach), whose primary focus is communicating, on behalf of the Company, with
shareholders, government entities, and the public. Leading the development of the Company's short-
and long-term strategy.
a Technical Director (Wolfgang Hampel), whose is responsible for leading, co-ordinating and optimising
the performance of both mining and exploration services. With a further responsibility for geological
and mine planning activities, his role is critical in ensuring the quality and efficiency of Premier geology,
and
•
• one independent Non-Executive Director (Godfrey Manhambara).
The Code requires that a smaller company (and which the Company is under the Code) should have at least two
independent non-executive directors. Godfrey Manhambara is independent under the Code. The Board also
regards Wolfgang Hampel as independent, notwithstanding that he participates in the Company’s share option
plan and provides some technical advice to the board. The Board is satisfied that Wolfgang Hampel acts
independently irrespective of these interests. The Board also notes that no single individual will dominate
decision making and further notes that there has been sufficient challenge of executive management at
meetings of the Board thereby confirming that the Board is capable of operating effectively.
The Board has not appointed a senior Finance Director but is actively seeking for the appropriate candidate.
However, the board does engage the services of Tomas Apetauer who is a chartered accountant with extensive
audit and financial management experience. Additionally, the Company has a Company Secretary in the UK who
assists the Chairman and CEO in preparing for and running effective board meetings, including the timely
dissemination of appropriate information. The Company Secretary provides advice and guidance to the extent
17
required by the Board on the legal and regulatory environment.
The Nomination Committee (“NC”) has been established to regularly review and ensure that the Board has the
appropriate balance of skills, experience, and knowledge of the Company. NC meets as required to consider the
composition of and succession planning for the Board, and to lead the process of appointments to the Board.
The Committee is made up of George Roach and Wolfgang Hampel and is chaired by George Roach.
Other key aspects of the NC include:
•
•
regularly reviewing the structure, size, and composition (including the skills, knowledge, experience,
and diversity) of the board and make recommendations to the board about any changes, succession
planning and vacancies; and
identifying suitable candidates from a wide range of backgrounds to be considered for positions on
the board.
Appointments to the Board
The appointment of new Directors to the Board is led by the NC who has the responsibility for nominating
candidates for appointment. Both the NC and Board considers the need for diversity, including equality, and that
the new directors must exhibit the required skills, experience, knowledge, and independence.
The Board acknowledges that the Company is not in compliance with the Code whereby the NC should comprise
a majority of independent directors. The Board considers that the NC has a strong enough independent
component with Godfrey Manhambara.
Commitment
The Board requires that all directors should be able to allocate sufficient time to the Company to discharge their
responsibilities in accordance their letter of appointment. The Company maintains records of each letter of
appointment, which can be inspected at an agreed time, at the Company’s registered office.
The NC is responsible for considering on an annual basis, whether each director is able to devote sufficient time
to their duties.
Development
All directors are required to familiarise themselves with the Board and should regularly update and refresh their
skills and knowledge. The Company provides each joining director with an induction on the Company. Each
induction is tailored to the specific background and requirements of the new director. In general, the induction
contains information on:
Structures and operations.
•
• Board procedures.
• Corporate Governance.
• Details regarding their duties and responsibilities.
Information and Support
As Premier constantly seeks to maintain the highest levels of corporate governance, it is imperative that
information is supplied to the Board in a form and of a quality appropriate to enable the Board to discharge its
duties in a timely manner. The supply of the information is done by the Chairman with the assistance of the
Company Secretary.
Premier encourage all Board members to seek independent professional advice (at the reasonable expense of
the Company) in the furtherance of their duties. The Board is given sufficient opportunity to meet with any
manager, consultant, or contractor to gain further insight into Premier.
Evaluation
The Board recognises that it should undertake a formal and rigorous annual evaluation of its own performance,
that of its committees and individual directors.
The evaluation of the Board’s performance is an assessment of the following key factors:
•
•
The Board structure.
The Board’s performance.
18
•
•
•
•
The Board business strategy.
Financial reporting and controls.
Performance monitoring.
Supporting and advisory roles.
The Board is not in compliance with the Code as the evaluation process is usually conducted internally due to
the size and complexity of the operations of the Company. Furthermore, the Board believes that internal
assessment best help identify the key strength and weaknesses to allow for effective evaluation. The Board will
continue to assess the internal review process against the growth of the Company as should the Company grow
in size it may consider getting an independent assessment.
Re-election
The Board believe that all directors should be submitted for re-election at regular intervals, subject to the
continued satisfactory performance of the Company.
The Director longest in office since their last appointment is required to retire by rotation or stand for
reappointment at the Annual General Meeting (“AGM”).
3. Accountability
Financial and Business reporting
A key duty of the Board is to oversee the financial affairs of the Company. The Financial Statements is the Board’s
primary means of presenting a fair, balanced and understandable assessment of the Company’s positions that
also best provides the information necessary to allow shareholders to assess the Company’s performance,
business model and strategy for that period.
You can view Premier Annual Report and Financial Statements on the Company’s webpage at the following
address, www.premierafricanminerals.com. Under the Strategic Review section of the Company’s Annual
Report and Financial Statements for the year ended December 2021, the Board set outs the strategic objectives
of the Company, how these will be delivered, Premier business model and how the Company will generate and
preserve value over the longer term for shareholders.
The Board have a reasonable expectation that the Group has adequate resources to continue in operations or
existence for the foreseeable future thus continues to adopt the going concern basis in preparing its Annual
Report and Financial Statements. Refer to note 5 to the financial statements.
Risk Management and Internal Control
The Board is responsible for determining the nature and extent of the significant risks it is willing to take in
achieving its strategic objectives. The Board manages the risk through the implementation of internal control
systems.
The Board has identified the following as some of the risks and their mitigation:
• Credit Risk: Credit risk is the risk of potential loss to the Company if counterparty to a financial
instrument fails to meet its contractual obligations. The Company’s credit risk is primarily attributable
to its liquid financial assets, including cash, receivables, and balances receivable from the government.
The Company limits the exposure to credit risk in its cash by only investing its cash with high-credit
quality financial institutions in business and savings accounts, guaranteed investment certificates and
in government treasury bills which are available on demand by the Company for its programs.
Liquidity Risk: Liquidity risk is the risk that the Company will not have the resources to meet its
obligations as they fall due. The Company manages this risk by closely monitoring cash forecasts and
managing resources to ensure that it will have enough liquidity to meet its obligations.
•
• Operating Risks: The activities of the Company are subject to all of the hazards and risks normally
incidental to exploring and developing natural resource projects. These risks and uncertainties include,
but are not limited to environmental hazards, industrial accidents, Covid-19, labour disputes, geo-
political risks, encountering unusual or unexpected geologic formations or other geological or grade
problems, unanticipated changes in rock formation characteristics and mineral recovery, encountering
unanticipated ground or water conditions, land slips, flooding, periodic interruptions due to inclement
19
or hazardous weather conditions and other acts of God or un-favourable operating conditions and
losses. The Company manages the risk by closing monitoring operations and maintaining adequate
insurance cover.
Early-stage Business Risk: The Board manages this risk by monitoring cash levels and reviewing cash
flow forecasts on a regular basis.
•
•
•
•
•
• Market Risk (exchange rates, commodity, and equity): Market risk is the risk of loss that may arise from
changes in market factors such as interest rates, foreign exchange rates, and commodity and equity
prices. The Company manages the risk by closing monitoring exchange rates, commodity, and equity
markets. The Company further engages consultants to undertake commodity forecasts.
Interest Rate Risk: The Company is exposed to interest rate risk to the extent that its cash balances bear
variable rates of interest. The interest rate risks on cash and short-term investments and on the
Company’s, obligations are not considered significant and is not mitigated at this time.
Foreign Currency Risk: The Company is exposed to the financial risk related to the fluctuation of foreign
exchange rates against the Company’s functional currency, which is the United States dollar (“USD”).
The Company has not hedged its exposure to currency fluctuations.
Environmental Risks and Hazards: All phases of the Company’s operations are subject to environmental
regulation in the areas in which it operates. The Board manages this risk by working with environmental
consultants and by engaging with the relevant governmental departments and other concerned
stakeholders.
Licencing Risk: The Company’s exploration and development activities are dependent upon the grant
of appropriate licences, concessions, leases, permits and regulatory consents which may be withdrawn
or made subject to limitations or performance criteria. Such licences and permits are as a practical
matter subject to the discretion of the applicable Government or Government office. The Group must
comply with known standards, existing laws and regulations that may entail greater or lesser costs and
delays depending on the nature of the activity to be permitted. The interpretations, amendments to
existing laws and regulations, or more stringent enforcement of existing laws and regulations could
have a material adverse impact on the Group’s results of operations and financial condition. Whilst the
Company continually seeks to do everything within its control to ensure that the terms of each licence
are met and adhered to, third parties may seek to exploit any technical breaches in licence terms for
their own benefit. There is a risk that negotiations with a Government in relation to the grant, renewal
or extension of a licence may not result in the grant, renewal or extension taking effect prior to the
expiry of the previous licence period, and there can be no assurance of the terms of any extension,
renewal, or grant.
Political and Regulatory Risk: The Company operating activities in Africa, notably in Zimbabwe, and
Namibia, are subject to laws and regulations governing expropriation of property, health and worker
safety, employment standards, waste disposal, protection of the environment, mine development, land
and water use, prospecting, mineral production, exports, taxes, labour standards, occupational health
standards, toxic wastes, the protection of endangered and protected species and other matters. The
Group is dependent on the political and economic situation in these countries and may be adversely
impacted by political factors such as expropriation, war, terrorism, insurrection, and changes to laws
governing mineral exploration and operations.
Internal Control and Financial Risk Management: The Board has overall responsibility for the Group’s
systems of internal control and for reviewing their effectiveness. The Group maintains systems which
are designed to provide reasonable but not absolute assurance against material loss and to manage
rather than eliminate risk.
•
•
The Board has overall responsibility for maintaining and reviewing the Group’s system of internal control and
ensuring that the controls are robust and effective in enabling risks to be appropriately assessed and managed.
Refer to the principal risks and uncertainties as set out in the Strategic Report for additional information on
these risks.
On behalf of the Board, the AC conducts an annual review of the effectiveness of the systems of internal control
including financial, operational and compliance controls and risk management systems.
20
Audit Committee and Auditors
The functions of the AC are clearly described as part of the Leadership function in this note.
Whilst the Board sets the Company risk appetite, it reviews the operations and effectiveness of the Company’s
risk management activities through the AC, which undertake the day-to-day oversight of the risk management
framework on behalf of the Board. The Chairman of the AC regularly provides an update on the work carried out
by the AC to the board.
It is noted that the AC follow the recommendations of the Code whereby they monitor and review the
effectiveness of the internal audit activities. However, at this time, the Board have determined that the
appointment of internal auditor is not required due to the size of the Company.
4. Remuneration
The Level and Components of Remuneration
Executive directors’ remuneration should be designed to promote the long-term success of the Company.
Performance-related elements should be transparent, stretching and rigorously applied. The Board delegates
the responsibility for setting the appropriate levels of remuneration for its directors to the Remuneration
Committee.
The levels of Remuneration to directors are disclosed to shareholders in Premier Annual Report and Financial
Statements. Both the Board and Remuneration Committee seek to provide appropriate reward for the skill and
time commitment required so at to retain the right calibre of director at a cost to the Company and which
reflects the current market rates.
Procedure
The Board have a formal and transparent procedure for developing policy on the executive remuneration and
for fixing the remuneration packages of individual directors. As strict policy, no director is involved in deciding
their own remuneration.
The Remuneration Committee consider and approves the remuneration and where applicable, incentives and
benefits, and makes recommendations to the Board. The Committee will also govern employee share schemes.
The Chairman of the Committee will be consulted by the CEO in respect of the Company and director’s
performance approvals, compensation and in respect of any appointment/departures from roles.
The remuneration of non-executive directors shall be a matter for the executive members of the Board.
The Company has adopted a share dealing code to ensure directors and certain employees do not abuse, and
do not place themselves under suspicion of abusing inside information of which they are in possession and to
comply with its obligations under MAR which applies to the Company by virtue of its shares being traded on
AIM. Furthermore, the Company's share dealing code is compliant with the AIM Rules for Companies published
by the London Stock Exchange (as amended from time to time).
Under the share dealing code, the Company must:
• Disclose all inside information to the public as soon as possible by way of market announcement unless
•
•
•
certain circumstances exist in which the disclosure of the inside information may be delayed.
Keep a list of each person who is in possession of inside information relating to the Company.
Procure that all persons discharging managerial responsibilities and certain employees are given
clearance by the Company before they are allowed to trade in Company securities; and
Procure that all persons discharging managerial responsibilities and persons closely associated to them
notify both the Company and the Financial Conduct Authority of all trades in Company securities that
they make.
Additionally, under the share dealing code, no person discharging managerial responsibilities is permitted to
deal in Company securities (whether directly or through an investment manager) during a closed period; being
the period either: from the end of the relevant financial year up to the release of the preliminary announcement
of the Company’s annual results; from the end of the relevant financial period up to the release of the Company’s
half-yearly financial report or; 30 calendar days before the release of each of the Company’s first quarter report
and third quarter report.
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For details of the directors’ remuneration refer to note 28.
5. Relations with Shareholders
Dialogue with shareholders
The Company recognises that maintaining strong communications with its shareholders promotes transparency
and will drive value in the medium to long-term. Accordingly, the Company has an established programme to
communicate with shareholders. This done by providing regular updates on the progress of the Company,
detailing recent business and strategy developments, in news releases which will be posted on the Company's
website and through certain social media channels.
The Disclosure Committee which comprises of George Roach and Wolfgang Hampel and is chaired by Wolfgang
Hampel is in place to assist the Board with the dialogue between the Company and its shareholders. The
Disclosure Committee assumes general responsibility for approval and monitoring compliance with the
Company’s disclosure controls and procedures. It has the responsibility, inter alia, determining whether
information is inside information, deciding whether the inside information is to be announced as soon as
possible and reviewing the scope, content, and accuracy of disclosure. The Company has adopted a share dealing
code governing the share dealings of the Directors and applicable employees during close periods and is in
accordance with Rule 21 of the AIM Rules.
The Chairman and CEO are contactable via email. Their email address can be obtained at either the Company’s
registered office or by requesting them at the below address. To continually improve transparency, the Board
would be delighted to receive feedback from shareholders. Communications should be directed to
info@premierafricanminerals.com. The CEO has been appointed to manage the relationship between the
Company and its shareholders and will review and report to the Board on any communications received.
Constructive Use of General Meetings
The Company holds AGM each year, whereby all of the directors aim to attend the AGM and value the
opportunity of welcoming individual shareholders and other investors to communicate directly and address
their questions.
In addition to the mandatory information required and procedures to calling a general meeting, which can be
found under the Company’s constitutional documents on the webpage, the Board ensure that a full, fair, and
balanced explanation of business of all general meetings is sent in advance to shareholders.
Statement of directors’ responsibilities
The directors are responsible for preparing the annual report and financial statements and have prepared the
Group financial statements in accordance with UK adopted International Accounting Standards in order to give
a true and fair view of the state of affairs of the Group and of its profit or loss for that period, in accordance with
the rules of the London Stock Exchange for companies trading securities on AIM.
In preparing these financial statements the directors are required to:
select suitable accounting policies and then apply them consistently.
•
• make judgements and accounting estimates that are reasonable and prudent.
•
state whether they have been prepared in accordance with UK adopted International Accounting
Standards, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the Company and the Group will continue in business.
•
The directors are responsible for keeping records that are sufficient to show and explain the Group and
Company’s transactions and will, at any time, enable the financial position of the Group and Company to be
determined with reasonable accuracy. They are also responsible for safeguarding the assets of the Company
and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
22
The directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company's website. Legislation in the British Virgin Islands governing the preparation and
dissemination of the Company’s financial statements and other information included in the annual reports may
differ from legislation in other jurisdictions.
The directors consider this Annual report and accounts, taken as a whole, is fair, balanced, understandable, and
provides the information necessary for shareholders to assess the Company’s position, performance, business
model and strategy.
Statement of disclosure to auditor
The directors who were in office at the date of approval of these financial statements have confirmed that, as far
as they are aware, there is no relevant audit information of which the auditor is unaware. Each of the directors has
confirmed that they 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 it has been communicated to the auditor.
Viability statement and going concern
The Board has assessed the prospects of the Group over a period of 12 months from the date of approval of these
financial statements, involving a review of the Group’s forecast prepared for the 12 months ending 30 June 2023.
and taking account of the Board’s intentions for future activities after that date. As explained further in note 5,
taking account of the Group’s current position and principal risks, over a 12 month period, the Board has a
reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due
over that period.
The Board considers these periods of assessment to be appropriate because they contextualise the Company’s
financial position, business model and strategy.
George Roach
Acting Chairman and Chief Executive Officer
30 June 2022
23
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PREMIER AFRICAN MINERALS LIMITED
Opinion
We have audited the consolidated financial statements of Premier African Minerals Ltd (the ‘Group’) for the
year ended 31 December 2021 which comprise the consolidated income statement, the consolidated statement
of comprehensive income, the consolidated statement of financial position, the consolidated statements of cash
flows, the consolidated statements of changes in equity and 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 the financial statements,
•
•
•
•
give a true and fair view of the state of the group’s affairs as at 31 December 2021 and of the group’s
performance for the year then ended;
have been properly prepared in accordance with UK adopted international accounting standards; and
the group’s financial statements have been properly prepared in accordance with UK adopted
international accounting standards;
the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
Basis for opinion
We conducted our audit in accordance with UK adopted international accounting standards and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the financial statements section of our report. We are independent of the Group in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors ’
assessment of the entity’s ability to continue to adopt the going concern basis of accounting included:
•
•
•
•
a review of management’s budgets and cashflow forecasts for the 12 months from proposed sign off
date;
a review of the inputs and assumptions utilised in the budgets and cashflow forecasts taking into
account our knowledge of the group and its levels of operating cashflows;
stress testing of the forecasted cashflows;
a review of the cash balances held by the group at year end date and at sign-off date.
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 ability to continue as a
going concern for a period of at least twelve months from when the financial statements are authorised for
issue.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
financial statements. In particular, we looked at where the directors made subjective judgments, for example in
respect of significant accounting estimates that involved making assumptions and considering future events that
24
are inherently uncertain. As in all of our audits we also addressed the risk of management override of internal
controls, including evaluating whether there was evidence of bias by the directors that represented a risk of
material misstatement due to fraud.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on
the financial statements as a whole, taking into account the structure of the Group, the accounting processes
and controls, and the industry in which they operate.
The Group financial statements are a consolidation of 3 reporting units, comprising the Group’s operating
businesses. The Group comprises the parent undertaking, incorporated in the British Virgin Islands, its
principal operating subsidiaries, RHA Tungsten (Private) Limited and Zulu Lithium (Private) Limited, and eleven
non-trading or intermediate holding companies, of which seven are registered in Mauritius, seven in
Zimbabwe and three in Australia. A full scope audit to Group materiality levels was performed on the parent
undertaking and the trading companies as well as their immediate holding companies. This resulted in 100%
coverage of consolidated expenditures and 100% of the Group’s gross assets.
We performed audits of the complete financial information of the Group reporting units, which were
individually financially significant and accounted for 100% of the Group’s absolute profit before tax (i.e. the
sum of the numerical values without regard to whether they were profits or losses for the relevant reporting
units). We also performed specified audit procedures over certain account balances and transaction classes
that we regarded as material to the Group at the 3 reporting units.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete list of
all risks identified by our audit.
Key audit matters
How our audit addressed the key audit matter
Valuation of the rehabilitation provision
Valuation of the rehabilitation provision
We have understood and assessed the inputs in
calculation of the liability. These were based on the
original environmental impact assessment as carried
out in 2015. We have also verified that there were
no applicable changes to the regulations which
would increase the liability and have reviewed
calculations for the unwinding of the provision.
The Group has recognised a rehabilitation provision,
under IAS 37 – contingent liabilities and contingent
assets, of $362,000 (2020: $153,000), in relation to
the future costs to rehabilitate the current mines as
per regulation.
The directors are required to assess the provision at
the end of each reporting period and adjust to
reflect their best estimates of the liability.
The directors consider the liability to be sufficient
due to the value of the RGTS (Zimbabwe currency)
against the Dollar.
25
How our audit addressed the key audit matter
Fair value of investments
We have clarified that the MNH shares were valued
at the basis of the latest share transactions
Key audit matters
Fair value of investments
The Group has recognised Investments of
$8,342,000 (2020: $8,342,000) as at the reporting
date.
Directors are required to assess the fair value of
investments at each reporting date under IFRS 9.
As neither Circum nor MNH are traded on an active
market a level 3 valuation technique was used. The
shareholding was based on the most recent placing
of the shares in the respective companies, as well as
management’s best estimates of the fair values.
Our application of materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds
for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit
and the nature, timing and extent of our audit procedures on the individual financial statement line items and
disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial
statements as a whole.
Based on our professional judgment, we determined materiality for the financial statements as a whole as
follows:
Group financial statements
Overall materiality
$90,000 (2020: $75,000)
How we determined it
1% of Gross assets
Rationale for
benchmark applied
We believe that the gross assets is a
primary measure used by shareholders
in assessing the performance of the
Group, as the group is at a pre-revenue
stage and is asset heavy.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit
above $4,500 (2020: $3,750) as well as misstatements below those amounts that, in our view, warranted
reporting for qualitative reasons.
Other information
The other information comprises the information included in the annual report other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information contained
within the annual report. Our opinion on the financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we do not express any form of assurance
conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial statements or our knowledge obtained in the
course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact.
26
We have nothing to report in this regard.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and its environment obtained in the course of the
audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters that we are required to report to you if, in our
opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
• the financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement as set out on page 23, the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the group or the parent company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is
detailed below.
The extent to which the audit was considered capable of detecting irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities,
including fraud and non-compliance with laws and regulations, was as follows:
•
the senior statutory auditor ensured the engagement team collectively had the appropriate
competence, capabilities and skills to identify or recognise non-compliance with applicable laws and
regulations;
• we focused on specific laws and regulations which we considered may have a direct material effect on
the financial statements or the operations of the Group.
• we assessed the extent of compliance with the laws and regulations identified above through making
•
enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team
remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the Group’s financial statements to material misstatement, including
27
obtaining an understanding of how fraud might occur, by:
• making enquiries of management as to where they considered there was susceptibility to fraud, their
•
knowledge of actual, suspected and alleged fraud;
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and
regulations.
To address the risk of fraud through management bias and override of controls, we:
•
•
•
•
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates set
out in Note 2 were indicative of potential bias;
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures
which included, but were not limited to:
•
agreeing financial statement disclosures to underlying supporting documentation;
•
reading the minutes of meetings of those charged with governance;
•
enquiring of management as to actual and potential litigation and claims;
• Obtaining confirmation of compliance from the Company’s legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and
regulations are from financial transactions, the less likely it is that we would become aware of non-
compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws
and regulations to enquiry of the directors and other management and the inspection of regulatory and legal
correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they
may involve deliberate concealment or collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Use of this report
This report is made solely to the Company's members, as a body, in accordance with our engagement letter. 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.
Sanjay Parmar
Senior Statutory Auditor
For and on behalf of
Jeffreys Henry LLP, Statutory Auditor
Finsgate, 5-7 Cranwood Street,
London EC1V 9EE
30 June 2022
28
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
EXPRESSED IN US DOLLARS
ASSETS
Non-current assets
Intangible assets
Investments
Property, plant and equipment
Loans Receivable
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
TOTAL ASSETS
LIABILITIES
Non-current liabilities
Financial lease liabilities
Deferred tax
Provisions - rehabilitation
Current liabilities
Trade and other payables
Financial lease liabilities
Borrowings
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Share based payment and warrant reserve
Revaluation reserve
Foreign currency translation reserve
Accumulated loss
Total equity attributed to the owners of the parent
company
Non-controlling interest
Notes
8
9
10
11
12
13
14
15
26
16
17
15
18
19
20
7
21
2021
$ 000
4 686
8 342
139
859
14 026
-
386
963
1 349
15 375
-
-
362
362
586
-
180
766
1 128
2020
$ 000
120
8 342
-
-
8 462
1
7
727
735
9 197
-
-
153
153
505
-
-
505
658
14 247
8 539
56 113
2 366
711
(13 235)
(19 399)
26 556
(12 309)
52 504
2 366
711
(13 181)
(22 135)
20 265
(11 726)
TOTAL EQUITY
14 247
8 539
These financial statements were approved and authorised for issue by the Board on 30 June 2022 and are
signed on its behalf.
George Roach
Chief Executive Officer
The notes on pages 33 to 83 are an integral part of these consolidated financial statements.
29
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
AS AT 31 DECEMBER 2021
Continuing operations
EXPRESSED IN US DOLLARS
Revenue
Cost of sales excluding depreciation and amortisation
Gross profit / (loss)
Administrative expenses
Operating profit / (loss)
Depreciation and amortisation
Other Income
Reversal of Impairment of Intangible assets - Zulu Lithium
Impairment of intangible assets - RHA Tungsten
Finance charges
Profit / (Loss) before income tax
Income tax expense
Profit / (Loss) from continuing operations
Loss for the year
Other comprehensive income:
Items that are or may be reclassified subsequently to profit or loss:
Foreign exchange loss on translation
Fair value movement on available-for-sale investment
Total comprehensive income for the year
Loss attributable to:
Owners of the Company
Non-controlling interests
Total comprehensive income attributable to:
Owners of the Company
Non-controlling interests
Total comprehensive income for the year
2021
$ 000
2020
$ 000
Notes
22
23
24
-
-
-
-
-
(2 366)
-
(1 274)
8, 10
22
(2 366)
(14)
133
4 563
(1 274)
-
81
-
10
10
25
26
7
-
(18)
4 664
2 298
-
2 298
(3)
(82)
(4)
(1 278)
-
(1 278)
2 298
(1 278)
(199)
-
(199)
2 099
(55)
-
(55)
(1 333)
2 736
(438)
2 298
(854)
(424)
(1 278)
2 682
(583)
(886)
(447)
2 099
(1 333)
Loss per share attributable to owners of the parent (expressed in US cents)
Basic loss per share
Diluted loss per share
27
27
0.01
0.01
(0.01)
(0.01)
The notes on pages 33 to 83 are an integral part of these consolidated financial statements.
30
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
EXPRESSED IN US DOLLARS
At 1 January 2020
Loss for the period
Other comprehensive income for the period
Total comprehensive income for the period
Transactions with Owners
Issue of equity shares
Share issue costs
Warrant options cancelled
Share based payments
At 31 December 2020
Loss for the period
Other comprehensive income for the period
Total comprehensive income for the period
Transactions with Owners
Issue of equity shares
Share issue costs
Warrant options cancelled
Share based payments
At 31 December 2021
Share
capital
$ 000
48 042
-
-
-
4 558
(96)
-
-
52 504
-
-
-
3 839
(230)
-
-
56 113
Share option
and warrant
reserve
$ 000
2 366
-
-
-
Revaluation
reserve
$ 000
711
-
-
-
Foreign
currency
translation
reserve
$ 000
(13 149)
-
(32)
(32)
Accumulated
loss
$ 000
(21 281)
(854)
-
(854)
Total
attributable
to owners of
parent
$ 000
16 689
(854)
(32)
(886)
Non-
controlling
interest
("NCI")
$ 000
(11 279)
(424)
(23)
(447)
Total equity
$ 000
5 410
(1 278)
(55)
(1 333)
-
-
-
-
2 366
-
-
-
-
-
-
-
2 366
-
-
-
-
711
-
-
-
-
-
-
-
711
-
-
-
-
(13 181)
-
(54)
(54)
-
-
-
-
(13 235)
-
-
-
-
(22 135)
2 736
-
2 736
-
-
-
-
(19 399)
4 558
(96)
-
-
20 265
2 736
(54)
2 682
3 839
(230)
-
-
26 556
-
-
-
-
(11 726)
(438)
(145)
(583)
-
-
-
-
(12 309)
The notes on pages 33 to 83 are an integral part of these consolidated financial statements.
4 558
(96)
-
-
8 539
2 298
(199)
2 099
3 839
(230)
-
-
14 247
31
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
EXPRESSED IN US DOLLARS
Notes
2021
$ 000
2020
$ 000
Net cash outflow from operating activities
Investing activities
Acquisition of property plant and equipment
Loans advanced to investment
Acquisition of subsidiaries, net of cash acquired
Acquisition of investment
Net cash used in investing activities
Financing activities
Proceeds from borrowings granted
Net proceeds from issue of share capital
Finance charges
Repayment of finance lease
Net cash from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Net cash and cash equivalents at end of year
29
10
13
31
9
18
19
15
15
(2 540)
(783)
(154)
(859)
-
-
(4)
-
(120)
(898)
(1 013)
(1 022)
180
3 609
-
-
3 789
236
727
963
200
2 343
(1)
(34)
2 508
703
24
727
The notes on pages 33 to 83 are an integral part of these consolidated financial statements.
32
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
1.
Reporting entity
Premier African Minerals Limited (‘Premier’ or ‘the Company’), together with its subsidiaries (the ‘Group’), was
incorporated in the Territory of the British Virgin Islands under the BVI Business Companies Act, 2004. The
address of the registered office is Craigmuir Chambers, PO Box 71, Road Town, Tortola, British Virgin Islands.
The Group’s operations and principal activities are the mining and development of mineral reserves on the
African continent.
Premier’s shares were admitted to trading on the London Stock Exchange’s AIM market on 10 December 2012.
2.
Basis of accounting
These consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (UK adopted International Accounting Standards). They were authorised for issue by the
Company’s board of directors on 30 June 2022.
Details of the Group’s accounting policies are detailed below.
The preparation of financial statements in conformity with EU adopted IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying the
Group’s accounting policies.
The accounting policies set out below are applied consistent across the Group and to all periods presented in
these consolidated financial statements.
Functional and presentation currency
The Group’s presentation currency and the functional currency of the majority of the group’s entities is
US dollars. All amounts have been rounded to the nearest thousand, unless otherwise indicated. The
Zimbabwean subsidiaries’ functional currency was changed by the Zimbabwean government from USD to RTGS
dollar during the 2019 financial year. Refer to note 7 for detailed information.
Use of judgements and estimates
In preparing these consolidated financial statements, management has made judgements, estimates and
assumptions that affect the application of the Group’s accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised
prospectively.
For details of the use of judgments and estimates refer to note 4 and detailed notes on the Intangible assets and
goodwill (note 8), Investments (note 9), Property, plant and equipment (note 10), Inventories (note 12), Trade
and other receivables (note 13), Provision for rehabilitation (note 16) and Share based payment and warrant
reserve (note 20).
3.
Significant accounting policies
3.1
Change in significant accounting policies
The group have implemented IFRS as adopted by UK. At the point of transition from IFRS as adopted by EU the
underlying requirements were identical. The following standards, amendments and interpretations are new and
effective for the year ended 31 December 2021 and have been adopted. None of the IFRS standards below had
a material impact on the financial statements.
33
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
Reference
Title
Summary
IFRS 3
Business
combinations
Amends the definition of a business and whether a
transaction is accounted for a business combination or
an asset acquisition.
‘Presentation of
Financial
Statements’ and
‘Accounting
policies, changes
in accounting
estimates and
errors’
i) Use a consistent definition of materiality throughout
IFRSs and the Conceptual Framework for Financial
Reporting;
ii) Clarify the explanation of the definition of material;
and
iii) Incorporate some of the guidance in IAS 1 about
immaterial information.
IAS 1 and
IAS 8
IFRS 9,
IAS 39 and
IFRS 7
Application date of
standard (Periods
commencing on or
after)
1 October 2020
1 October 2020
rate benchmark
Interest
reform – Phase 1.
The phase 1 amendments provide certain reliefs in
connection with interest rate benchmark. The reliefs
relate to hedge accounting and have the effect that
IBOR reform should not generally cause hedge
accounting to terminate.
1 October 2020
The following new standards, amendments to standards and interpretations have been issued, but are not
effective for the financial year beginning 1 January 2022 and have not been early adopted:
Reference
Title
Summary
Application date of
standard (Periods
commencing on or
after)
IFRS 16
Leases
COVID-19 related rent concessions Extension of the
practical expedient
1 April 2021
IFRS 4,
IAS 7 and
IFRS 16
IFRS 3
Business
Combinations
rate benchmark
reform – Phase 2.
Interest
The Phase 2 amendments address issues that arise from
the implementation of the reforms, including the
replacement of one benchmark with an alternative one.
The Phase 2 amendments provide additional temporary
reliefs from applying specific IAS 39 and IFRS 9 hedge
accounting requirements to hedging relationships
directly affected by IBOR reform.
Updating a reference in IFRS 3 to the Conceptual
Framework for Financial Reporting without changing
the
business
combinations.
requirements
accounting
for
1 January 2021
1 January 2022
34
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
Reference
Title
Summary
IAS 16
Property, Plant
and Equipment
Prohibits a company from deducting from the cost of
property, plant and equipment amounts received from
selling items produced while the company is preparing
the asset for its intended use. Instead, a company will
recognise such sales proceeds and related cost in profit
or loss.
Application date of
standard (Periods
commencing on or
after)
1 January 2022
IAS 37
IAS 1
Provisions,
contingent
liabilities and
contingent assets
Presentation of
Financial
Statements
IAS 1 and
IAS 8
‘Presentation of
Financial
Statements’ and
‘Accounting
policies, changes
in accounting
estimates and
errors’
IAS 12
Deferred
Taxation
IFRS17
Insurance
contracts
Specifies which costs a company
assessing whether a contract will be loss-making.
includes when
1 January 2022
Clarifies that liabilities are classified as either current or
noncurrent, depending on the rights that exist at the
end of the reporting period. Classification is unaffected
by the expectations of the entity or events after the
reporting date (for example, the receipt of a waiver or a
breach of covenant). The amendment also clarifies what
IAS 1 means when it refers to the ‘settlement’ of a
liability.
Amendments to improve accounting policy disclosures
and to help users of the financial statements to
distinguish between changes in accounting estimates
and changes in accounting policies.
These amendments require companies to recognise
deferred tax on transactions that, on initial recognition
give rise to equal amounts of taxable and deductible
temporary differences.
This standard replaces IFRS 4, which currently permits a
wide variety of practices in accounting for insurance
contracts. IFRS 17 will fundamentally change the
accounting by all entities that issue insurance contracts
discretionary
and
participation features.
contracts with
investment
1 January 2023
1 January 2023
1 January 2023
1 January 2023
The Directors anticipate that the adoption of these standards and the interpretations in future periods will not
have a material impact on the financial statements of the Group.
3.2
Basis of consolidation
Subsidiaries are all entities over which the Group has control. The Group controls an entity when it is exposed
to, or has the rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. The existence and effect of potential voting rights that are currently
35
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
exercisable or convertible are considered when assessing whether the Group controls another entity. The Group
also assesses existence of control where it does not have more than 50% of the voting power but is able to
govern the financial and operating policies by virtue of de-facto control. This is evidenced with RHA Tungsten
(Private) Limited which the Group owns 49% of but is consolidated into the Group (note 4.7).
Subsidiaries are consolidated, using the acquisition method, from the date that control is gained and non-
controlling interests are apportioned on a proportional basis.
When necessary, amounts reported by subsidiaries have been adjusted to conform to the Group’s accounting
policies.
3.3
Business combinations and goodwill
The Group applies the acquisition method to account for business combinations. The consideration transferred
for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former
owners of the acquiree, and the equity interests issued by the Group. The consideration transferred includes
the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at
their fair values at the acquisition date.
3.4
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through
its power over the entity. The financial statements of subsidiaries are included in the consolidated financial
statements from the date on which control commences until the date on which control ceases.
3.5
Non-controlling interests (“NCI”)
Non-controlling interests are measured initially at their proportionate share of the acquiree’s identifiable net
assets at the date of acquisition.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity
transactions.
3.6
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated. Unrealised gains arising from transactions with equity accounted investees are
eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are
eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
3.7
Foreign currency
Transactions in foreign currencies are translated into the respective functional currencies of Group companies
at the exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at
the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a
foreign currency are translated into the functional currency at the exchange rate when the fair value was
determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated
at the exchange rate at the date of the transaction. Foreign currency differences are generally recognised in
profit or loss.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
acquisition, are translated into dollars at the exchange rates at the reporting date. The income and expenses of
foreign operations are translated into dollars at the exchange rates at the dates of the transactions.
Foreign currency differences are recognised in Other Comprehensive Income (“OCI”) and accumulated in the
translation reserve, except to the extent that the translation difference is allocated to NCI.
Where the functional currency of a company is in a hyperinflationary economy IAS 29 Financial Reporting in
Hyperinflationary Economies is applied. Under this standard the results are restated to reflect the current cost
36
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
of the various elements of the financial statements. For the Statement of comprehensive income the cost of
sales and depreciation are recorded at current costs at the time of consumption; sales and other expenses are
recorded at their money amounts when they occurred. Therefore all amounts need to be restated into the
measuring unit current at the end of the reporting period by applying a general price index.
Monetary items stated in the Statement of financial position that are stated at current cost are not restated
because they are already expressed in terms of the measuring unit current at the end of the reporting period.
All non-monetary items in the statement of financial position are restated by applying an index at the time of
their acquisition to the reporting date. Any resulting gain or loss on the net monetary position is included in
profit or loss reserve.
In accordance with IAS29, corresponding figures for the previous reporting period, whether they were based on
a historical cost approach or a current cost approach, are restated by applying a general price index so that the
comparative financial statements are presented in terms of the measuring unit current at the end of the
reporting period. Information that is disclosed in respect of earlier periods is also expressed in terms of the
measuring unit current at the end of the reporting period.
When a foreign operation is disposed of in its entirety or partially such that control, significant influence or joint
control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified
to profit or loss as part of the gain or loss on disposal. If the Group disposes of part of its interest in a subsidiary
but retains control, then the relevant proportion of the cumulative amount is reattributed to NCI. When the
Group disposes of only part of an associate or joint venture while retaining significant influence or joint control,
the relevant proportion of the cumulative amount is reclassified to profit or loss.
3.8
Discontinued operation
A discontinued operation is a component of the Group’s business, the operations and cash flows of which can
be clearly distinguished from the rest of the Group and which:
• represents a separate major line of business or geographic area of operations;
•
is part of a single co-ordinated plan to dispose of a separate major line of business or geographic area of
operations; or
is a subsidiary acquired exclusively with a view to re-sale.
•
Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the
criteria to be classified as held-for-sale.
When an operation is classified as a discontinued operation, the comparative statement of profit or loss and OCI
is re-presented as if the operation had been discontinued from the start of the comparative year.
3.9
Revenue
Performance obligations and service recognition policies
Revenue is measured based on the consideration specified in a contract with a customer in line with IFRS 15.
The Group recognises revenue when it transfers control over of goods or services to a customer.
The following table provides information about the nature and timing of the satisfaction of performance
obligations in contracts with customers, including significant payment terms, and the related revenue
recognition policies.
Type of product/
service
Nature and timing of satisfaction of performance
obligations, including significant payment terms
Revenue recognition under
IFRS 15
Revenue
Wolframite sales
Customers obtain control of the wolframite ore when
the ore has been delivered to and have been accepted
Revenue is recognised when
the goods are delivered and
37
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
Type of product/
service
Nature and timing of satisfaction of performance
obligations, including significant payment terms
Revenue recognition under
IFRS 15
Scrap sales
at their premises or the agreed point of delivery.
Invoices are generated at that point in time based on
the agreed upon weight of the ore. Invoices are
generally payable within 30 days. No discounts are
provided for.
The sale of the ore is not subject to a return policy.
have been accepted by the
customers at their premises
or the agreed point of
delivery.
Customers obtain control of the scrap when the scrap
has been delivered to and have been accepted at their
premises or the agreed point of delivery. Invoices are
generated at that point in time based upon the agreed
upon weight of the scrap. Invoices are generally
payable within 30 days. No discounts are provided for.
Revenue is recognised when
the goods are delivered and
have been accepted by the
customers at their premises
or the agreed point of
delivery.
The sale of the scrap is not subject to a return policy.
Reserve Bank of
Zimbabwe Export
Incentive
The Export Incentive is provided on an individual basis
and has to be applied for. It is based on the export
sales of the company. As such the revenue from the
RBZ is not guaranteed.
The Group gains control
over the export incentive
when it is received in the
Group’s bank accounts.
Other Income
Government Grants
The Group has no control over the timing of the grants
nor any payment terms.
Prescription of debts Management periodically reviews all outstanding
payables and identifies any potential debts that may
have prescribed.
The Group gains control
over the Government grant
when it is received in the
Group’s bank accounts.
Debts are considered
prescribed if the creditor
has not claimed payment for
a period in excess of the
relevant prescription period.
3.10
Employee benefits
Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the
amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a
result of past service provided by the employee and the obligation can be estimated reliably.
Share-based payment arrangements
The Group operates an equity-settled share option plan and issues warrants from time to time either with direct
subscriptions in equity or as finance related packages. The fair value of the service received in exchange for the
grant of options or issue of warrants is recognised as an expense or recognised as a deduction from equity or an
addition to intangible assets depending on the nature of the services received.
Share-based payments are measured at fair value at the date of grant. The fair value determined at the grant
date of 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.
38
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
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.
Any adjustments are recognised through the profit and loss. The fair value is reassessed annually.
3.11
Finance income and finance costs
The Group’s finance income and finance costs include:
•
•
•
interest income;
Interest expense;
dividend income;
Interest income and expense is recognised using the effective interest method. Dividend income is recognised
in profit or loss on the date on which the Group’s right to receive payment is established.
The “effective interest rate” is the rate that exactly discounts estimated future cash payments or receipts
through the expected life of the financial instrument to:
•
•
the gross carrying amount of the financial asset; or
the amortised cost of the financial liability.
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of
the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial
assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by
applying the effective interest rate to the amortised cost of the financial asset, if the asset is no-longer credit-
impaired, then the calculation of interest income reverts to the gross basis.
3.12
Income tax
Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent
that it relates to a business combination, or items recognised directly in equity or in OCI.
3.12.1 Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any
adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or
receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty
related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting
date. Current tax also includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
3.12.2 Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised for:
• temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss;
• temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent
that the Group is able to control the timing of the reversal of the temporary differences and it is probable
that they will not reverse in the foreseeable future; and –– taxable temporary differences arising on the
initial recognition of goodwill.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary
differences to the extent that it is probable that future taxable profits will be available against which they can
be used. Future taxable profits are determined based on the reversal of relevant taxable temporary differences.
If the amount of taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future
taxable profits, adjusted for reversals of existing temporary differences, are considered, based on the business
39
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
plans for individual subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions
are reversed when the probability of future taxable profits improves.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has
become probable that future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they
reverse, using tax rates enacted or substantively enacted at the reporting date.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which
the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if certain criteria are met.
3.13
Intangible assets and goodwill
All costs of Exploration and Evaluation (“E&E”) are initially capitalised as intangible assets, such as payments to
acquire the legal right to explore, costs of technical services and studies, seismic acquisition, exploratory drilling
and testing. The costs include directly attributable overheads together with the cost of other materials
consumed during the exploration and evaluation phases.
Costs incurred prior to having obtained the legal rights to explore an area are expensed directly to profit or loss
as they are incurred.
E&E assets are not amortised.
Intangible assets related to each exploration licence or pool of licences are carried forward, until the existence
(or otherwise) of commercial reserves has been determined. Once the technical feasibility and commercial
viability of extracting a mineral resource is demonstrable, the related E&E assets are assessed for impairment
on an individual licence or cost pool basis, as appropriate, as set out below and any impairment loss is recognised
in profit or loss.
The Group considers each licence, or where appropriate, a pool of licences, separately, for the purposes of
determining whether impairment of E&E assets has occurred.
Intangible assets are assessed for impairment when facts and circumstances suggest that the carrying amount
may exceed its recoverable amount. Such indicators include, but are not limited to, those situations outlined in
paragraph 20 of IFRS 6 Exploration for and Evaluation of Mineral Resources and include the point at which a
determination is made as to whether or not commercial reserves exist.
When impairment indicators exist, the aggregate carrying value is compared against the expected recoverable
amount, generally by reference to the present value of the future net cash flows expected to be derived from
production of commercial reserves.
When a licence or pool of licences is abandoned or there is no planned future work, the costs associated with
the respective licences are written off in full and recognised in profit or loss.
Any impairment loss is recognised in profit or loss and separately disclosed.
3.14
Impairment
3.14.1 Non-derivative financial assets
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt securities
at FVOCI are credit-impaired. A financial asset is “credit-impaired” when one or more events that have a
detrimental impact on the estimated future cash flows of the financial assets have occurred.
Evidence that a financial asset is credit-impaired includes the following observable data:
•
significant financial difficulty of the borrower or issuer;
40
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
•
•
•
•
a breach of contract such as a default or being more than 90 days past due;
the restructuring of a loan or advance by the Group on terms that the Group would not consider
otherwise;
it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
the disappearance of an active market for a security because of financial difficulties.
A 12 months approach is followed in determining the Expected Credit Loss (“ECL”).
Presentation of allowance for ECL in the statement of financial position
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount
of the assets.
For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognised in OCI.
Write-off
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of
recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Group individually
makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable
expectation of recovery from the amount written off. However, financial assets that are written off could still
be subject to enforcement activities in order to comply with the Group’s procedures of recovery of the amounts
due.
3.14.2 Financial assets measured at amortised cost
The Group considers evidence of impairment for these assets at both an individual asset and a collective level.
All individually significant assets are individually assessed for impairment. Those found not to be impaired are
then collectively assessed for any impairment that has been incurred but not yet individually identified. Assets
that are not individually significant are collectively assessed for impairment. Collective assessment is carried out
by grouping together assets with similar risk characteristics.
In assessing collective impairment, the Group uses historical information on the timing of recoveries and the
amount of loss incurred, and makes an adjustment if current economic and credit conditions are such that the
actual losses are likely to be greater or lesser than suggested by historical trends.
An impairment loss is calculated as the difference between an asset’s carrying amount and the present value of
the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognised
in profit or loss and reflected in an allowance account. When the Group considers that there are no realistic
prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss
subsequently decreases and the decrease can be related objectively to an event occurring after the impairment
was recognised, then the previously recognised impairment loss is reversed through profit or loss.
3.14.3 Available for sale financial asset
Impairment losses on available-for-sale financial assets are recognised, only when fair value is less than carrying
value and this is significant over a prolonged period, by reclassifying the losses accumulated in the fair value
reserve to profit or loss. The amount reclassified is the difference between the acquisition cost (net of any
principal repayment and amortisation) and the current fair value, less any impairment loss previously recognised
in profit or loss.
3.14.4 Non-financial assets
At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than
inventories) to determine whether there is any indication of impairment. If any such indication exists, then the
asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill
arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from
the synergies of the combination.
41
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less cost of disposal.
Value in use is based on the estimated future cash flows, 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 or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
Impairment losses are recognised in profit or loss. They are allocated first to reduce the carrying amount of any
goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro
rata basis.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only
to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
3.15
Cash and cash equivalents
The Cash and cash equivalents comprises of cash at bank, cash on hand and other highly liquid investments with
short term maturities. Cash and cash equivalents are measured at amortised cost. For the purposes of the
Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net
of outstanding bank overdrafts.
3.16
Inventory
Inventory is measured at the lower of cost and net realisable value. The cost of inventories is based on the first-
in, first-out principle. The cost of inventories includes the cost of consumables and cost of production. Net
realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and selling expenses.
Inventory consists of mining consumables.
3.17
Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost, which includes capitalised borrowing costs, less
accumulated depreciation and any accumulated impairment losses.
If significant parts of an item of property, plant and equipment have different useful lives, then they are
accounted for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with
the expenditure will flow to the Group.
Depreciation
Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated
residual values using the straight-line method over their estimated useful lives, and is generally recognised in
profit or loss. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is
reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated.
The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:
•
Land – indefinite useful life
• Buildings – 10 years
•
Plant & equipment – 4/6 years
• Mine development - depreciated over the life of the mine, currently assessed at 10 years
42
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate.
3.18
Financial instruments
The Group classifies non-derivative financial assets into the following categories: loans and receivables and
FVTPL and FVTOCI financial assets.
The Group classifies non-derivative financial liabilities into the following category: other financial liabilities.
3.18.1 Non-derivative financial assets and financial liabilities – Recognition and derecognition
The Group initially recognises loans and receivables on the date when they are originated. All other financial
assets and financial liabilities are initially recognised on the trade date when the entity becomes a party to the
contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or
it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks
and rewards of ownership of the financial asset are transferred, or it neither transfers nor retains substantially
all of the risks and rewards of ownership and does not retain control over the transferred asset. Any interest in
such derecognised financial assets that is created or retained by the Group is recognised as a separate asset or
liability.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or
expire. Gains or losses on derecognition of financial liabilities are recognised in profit or loss as a finance charge.
Financial assets and financial liabilities are offset, and the net amount presented in the statement of financial
position when, and only when, the Group currently has a legally enforceable right to offset the amounts and
intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
3.18.2
Loans and receivables- Measurement
These assets are initially measured at fair value plus any directly attributable transaction costs. Subsequent to
initial recognition, they are measured at amortised cost using the effective interest method.
3.18.3 Assets at FVOCI - Measurement
These assets are initially measured at fair value plus any directly attributable transaction costs. Subsequent to
initial recognition, they are measured at fair value and changes therein, other than impairment losses, are
recognised in OCI and accumulated in the revaluation reserve.
When these assets are derecognised, the gain or loss accumulated in equity is reclassified to profit or loss.
3.18.4 Non-derivative financial liabilities – Measurement
Other non-derivative financial liabilities are initially measured at fair value less any directly attributable
transaction costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using the
effective interest method.
3.18.5 Convertible loan notes and derivative financial instruments
The presentation and measurement of loan notes for accounting purposes is governed by IAS 32 and IAS 39.
These standards require the loan notes to be separated into two components:
• A derivative liability, and
• A debt host liability.
This is because the loan notes are convertible into an unknown number of shares, therefore failing the ‘fixed-
for-fixed’ criterion under IAS 32. This requires the ‘underlying option component’ of the loan note to be valued
first (as an embedded derivative), with the residual of the face value being allocated to the debt host liability
(refer financial liabilities policy above).
43
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
Compound financial instruments issued by the Group comprise convertible notes denominated in dollars that
can be converted to ordinary shares at the option of the holder, when the number of shares to be issued is fixed
and does not vary with changes in fair value.
The liability component of compound financial instruments is initially recognised at the fair value of a similar
liability that does not have an equity conversion option. The equity component is initially recognised at the
difference between the fair value of the compound financial instrument as a whole and the fair value of the
liability component. Any directly attributable transaction costs are allocated to the liability and equity
components in proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at
amortised cost using the effective interest method. The equity component of a compound financial instrument
is not remeasured.
Interest related to the financial liability is recognised in profit or loss. On conversion at maturity, the financial
liability is reclassified to equity and no gain or loss is recognised.
3.19
Provisions - Rehabilitation
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
An obligation to incur environmental restoration, rehabilitation and decommissioning costs arises when
disturbance is caused by the development or on-going production of a mining property. Such costs arising from
the decommissioning of plant and other site preparation work, discounted to their net present value, are
provided for and capitalised at the start of each project, as soon as the obligation to incur such costs arises.
These costs are recognised in profit or loss over the life of the operation, through the depreciation of the asset
and the unwinding of the discount on the provision. Costs for restoration of subsequent site damage which is
created on an ongoing basis during production are provided for at their net present values and recognised in
profit or loss as extraction progresses.
Changes in the measurement of a liability relating to the decommissioning of plant or other site preparation
work (that result from changes in the estimated timing or amount of the cash flow, or a change in the discount
rate) are added to or deducted from the cost of the related asset in the current period. If a decrease in the
liability exceeds the carrying amount of the asset, the excess is recognised immediately in profit or loss. If the
asset value is increased and there is an indication that the revised carrying value is not recoverable, an
impairment test is performed in accordance with the accounting policy above.
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 in profit or loss.
3.20
Equity
Equity comprises the following:
• Share capital - ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
• Share-options and warrant reserve - represents equity-settled share-based payments.
• Accumulated loss represents retained profits less retained losses.
• Revaluation reserve represents the difference between the nominal value of shares issued by the
Company to the shareholders of ZimDiv Holdings Limited (“Zimdiv”) and the nominal value of the
ZimDiv shares taken in exchange.
• Non-controlling interests represents the share of retained profits less retained losses of the non -
controlling interests.
• Foreign currency translation reserve represents the other comprehensive income gains or losses
arising on the conversion of the functional currencies of the subsidiaries to the holding company’s
functional currency of USD.
44
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
3.21
Leases
Determining whether an arrangement contains a lease.
At inception of an arrangement, the Group determines whether the arrangement is or contains a lease.
At inception or on reassessment of an arrangement that contains a lease, the Group separates payments and
other consideration required by the arrangement into those for the lease and those for other elements on the
basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate
the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the
underlying asset; subsequently, the liability is reduced as payments are made and an imputed finance cost on
the liability is recognised using the Group’s incremental borrowing rate.
Assets held under leases are recognised as assets of the Group at the fair value at the inception of the lease or,
if lower, at the present value of the minimum lease payments. Lease payments are apportioned between
interest expense and capital redemption of the liability. Interest is recognised immediately in the statement of
comprehensive income unless attributable to qualifying assets, in which case they are capitalised to the cost of
those assets.
Exemptions are applied for short life leases and low value assets made under operating leases charged to the
statement of comprehensive income on a straight line basis over the period of the lease.
Payments made under non-capitalised leases are recognised in profit or loss on a straight-line basis over the
term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over
the term of the lease.
Minimum lease payments made are apportioned between the finance expense and the reduction of the
outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a
constant periodic rate of interest on the remaining balance of the liability.
3.22
Operating segments
Segmental information is provided for the Group on the basis of information reported internally to the chief
operating decision-maker for decision-making purposes. The Group considers that the role of chief operating
decision-maker is performed by the Group’s board of directors.
4.
Significant accounting judgements, estimates and assumptions
In preparing these consolidated financial statements, management has made judgements, estimates and
assumptions that affect the application of the Group’s accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised
prospectively.
4.1.
Judgements
Information about judgements made in applying accounting policies that have the most significant effects on
the amounts recognised in the consolidated financial statements is included in the following notes:
- Note 4.7 - consolidation: whether the Group has de facto control over an investee; and
- Note 15 - leases: whether an arrangement contains a lease.
4.2.
Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material
adjustment to the carrying amounts of assets and liabilities within the year ended 31 December 2021 is included
in the following notes:
• Note 26 - recognition of deferred tax assets: availability of future taxable profit against which tax losses
carried forward can be used;
45
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
• Note 4.4 - Recoverability of exploration and evaluation assets: key assumptions underlying recoverable
amounts;
• Note 4.5 - Recoverability of RHA Cash-Generating Unit “CGU”: key assumptions underlying recoverable
amounts;
• Note 16 – recognition and measurement of provisions and contingencies: key assumptions about the
likelihood and magnitude of an outflow of resources; and
• Note 20 – share based payments assumptions regarding the various inputs into the Black Scholes model used
to determine the option value.
•
4.3. Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both
financial and non-financial assets and liabilities.
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation
techniques as follows.
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value
hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value
hierarchy as the lowest level input that is significant to the entire measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period
during which the change occurred.
Further information about the assumptions made in measuring fair values is included in the following notes:
• Note 20 - share-based payment arrangements;
• Note 30 - financial instruments.
4.4
Recoverability of exploration and evaluation assets
Determining whether an exploration and evaluation asset is impaired requires an assessment of whether there
are any indicators of impairment, including by reference to specific impairment indicators prescribed in IFRS 6
Exploration for and Evaluation of Mineral Resources. If there is any indication of potential impairment, an
impairment test is required based on value in use of the asset or fair value less cost to sell.
The carrying amount of exploration and evaluation assets at 31 December 2021 amounted to $4.566 million
(2020: $nil). Refer to note 8 for the assumptions used.
4.5
Recoverability of RHA Cash-Generating Unit “CGU”
Determining whether a CGU is impaired requires an assessment of whether there are any indicators of
impairment, including by reference to specific impairment indicators prescribed in IAS36 Impairment of Assets.
If there is any indication of potential impairment, an impairment test is required based on the greater of fair
value less cost of disposal, and, value in use of the asset. The value in use calculation requires the entity to
estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in
order to calculate the present value.
During 2017 the operating losses at RHA were higher than predicted due to operations in the open pit and
underground failing to deliver both the ore volumes and the anticipated grade. The operating losses are an
indicator of potential impairment. In December 2017, due to the lower ore delivery, anticipated grade and
operating losses, the Board of Directors decided to place the RHA Tungsten mine under care and maintenance.
46
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
As a result, management completed an impairment review.
The impairment review concluded that four months further capex will be required in order to open the existing
underground mining of 6 000 tons per month run of mine ore. Concurrently additional plant upgrades and a
connection to the national grid would result in a 40 000 ton per month run of mine ore operation. A further
option to construct a new decline vehicle access was not considered during this review.
Key assumptions used in calculating the initial impairment included:
• 7 265 mtu concentrate production per month; 10 year mine plan; APT price of $275 per metric ton unit
(‘mtu’);
• 20% discount rate; and a zero growth rate in operating cash flow after the plant is fully operational, forecast
to be for the full year 2019. Other key factors include attainment of forecast grade as set out in our resource
statement and plant operating parameters being achieved.
• The XRT sorter installation is a significant element in increasing confidence in RHA in that 70% of the
anticipated run of mine feed target of 40 000 ton per month is passed through the sorter, which is able to
recover approximately 90% of the mineralisation in a mass pull of some 5%.
• The model assumes annual revenues of $13.1m from 2020. Revenue generation is dependent on a number
of inter-linked assumptions and a combination of negative changes in those assumptions would result in
further impairment charges.
As the mine is not operating, these assumptions were not revisited and the mine remains fully impaired.
Sensitivity analysis was conducted on the volume, grade, concentrate production per month and APT price
assumptions in the model.
The management of RHA continue to engage with NIEEF about the future of RHA.
4.6
Estimation of useful life for mine assets
Mine assets are depreciated /amortised on a straight-line basis over the life of the mine concerned. Judgement
is applied in assessing the mine’s useful life and in the case of RHA, the Group’s only operating concern, is based
on the initial Preliminary Economic Assessment (‘PEA’) first published in August 2013 that initially modelled an
8 year life of mine. The life of mine reassessed annually based on levels of production.
4.7
Basis of consolidation
RHA
During 2013, Premier concluded a shareholders’ agreement with NIEEF whereby NIEEF acquired 51% of the
shares of RHA. The principal terms of the agreement are as follows:
• ZimDiv Holdings Limited (‘ZimDiv’), a wholly owned subsidiary, is appointed as the Manager of the project
for an initial 5 year term.
• On 7 May 2019 ZimDiv were reappointed as the manager for another 5 year term.
• ZimDiv has marketing rights to the product.
• Each shareholder can appoint up to two directors each, with a 5th director who is rotated between each
shareholder. The 5th director will not have a vote.
• Although the local Zimbabwean company is responsible for financing and repayment of such. Premier has
secured the funding to advance RHA to production.
• There has been no operational change since the agreements were signed and Premier continues to fund RHA
until it becomes cash generative.
At the financial year-end, two directors of RHA were from the Premier Group and three directors from NIEEF.
There is no majority vote at board level and Premier still retains operational and management control through
its shareholders’ agreement. Following the assessment, the Directors concluded that Premier, through its wholly
owned subsidiary ZimDiv, retained control and should continue to consolidate 100% of RHA and recognise non-
controlling interests of 51% in the consolidated financial statements.
47
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
4.8
Valuations
•
•
Investments – Premier’s investment in Circum is classified as an FVOCI as such is required to be measured
at fair value at the reporting date. As Circum is unlisted there are no quoted market prices. In previous years
the fair value of the Circum shares was derived using the most recent placing price. The Fair value of the
Circum shares as at 31 December 2021 was derived using the most recent placing price in May 2021.
Subsequent to the year end 100% of Premier’s investment in Circum was sold to Vortex Limited at book value
in exchange for shares in Vortex Limited.
Investments – Premier’s investment in MNH is classified as an FVOCI as such is required to be measured at
fair value at the reporting date. As MNH is unlisted there are no quoted market prices. The Fair value of the
MNH shares as at 31 December 2021 was derived using the purchase price in July 2019.
• Valuation of warrants, share options and ordinary shares issued as consideration – judgement is applied in
determining appropriate assumptions to be used in calculating the fair value of the warrants, shares and
share options issued. Refer accounting policy note and note 20.
• Provision for Rehabilitation - A provision is recognised for site rehabilitation and decommissioning of current
mining activities based on current environmental and regulatory requirements. The net present value of the
provision is calculated at a discount rate of 10% over an 8 year life of mine.
• The life of mine has subsequently been reassessed to a total of 10 years. The corresponding rehabilitation
assets were capitalised to property, plant and equipment and is depreciated over the life of the mine.
5.
Going Concern
These consolidated financial statements are prepared on the going concern basis. The going concern basis
assumes that the Group will continue in operation for the foreseeable future and will be able to realise its assets
and discharge its liabilities and commitments in the normal course of business.
The Group has an operating profit from continuing operations amounting to $2.366 million (2020: loss of $1.311
million) and negative cash flows from operations amounting to $2.540 million for the year ended 31 December
2021 (2020: $0.783 million) as the Group continued to maintain RHA in care and maintenance, attempted to
advance Zulu through the EPO and the commencement of a Definitive Feasibility Study and external partners
joint venture processes described above in this report and explored new opportunities to diversify and mitigate
general risks associated with its Zimbabwe based projects.
As at 31 December 2021, current assets exceeded current liabilities by $0.583 million (2020: current assets
exceeded current liabilities by $0.230 million). The Group raised $3.609 million (2020: $2.343 million) in net
funding through share subscriptions to fund holding costs at RHA, general group maintenance and preservation
of assets and to investigate and assess potential diversification, through potential investments in cash
generating assets, as discussed above.
The Directors have prepared cash flow forecasts for the period ending 31 December 2022, on the basis of the
following considerations.
RHA
•
Zulu
The Company has not funded any of the activities at RHA since 1 July 2019, apart from essential care
and maintenance costs.
• During March 2021, the EPO was granted and subsequently a DFS has commenced, which is still
ongoing.
The Company has fully funded the DFS through capital raises.
•
MNH
•
•
The Group is anticipating deriving a return on its current investment in MNH in the latter portion of
2022.
The Company has received the June 2020 audited financial statements which reflects a profit of N$4.4
million for the year. The December 2021 management accounts reflects a loss of N$45.6 million ($3
million).
48
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
The Group
•
• During the course of the year ended 31 December 2021 the Company issued 1,625,000,000 shares with
a total value of $3.839 million. These funds were used to fund continuing operations and acquire the
investments as listed in note 8 and 9.
In March 2022 the Group issued 30,000,000 shares at a price of 0.40p per share raising a total of
£12 million. This cash is being used to complete the Zulu DFS. No additional capital raises are planned
at this stage.
The Company will seek to diversify its operations and risk profile and limit the funds that need to be
raised through equity placements to provide necessary funding for the Company’s significantly reduced
fixed overhead.
•
6.
Operating segments
The group has the following three reportable segments that are managed separately due to the different
jurisdictions.
Segmental results, assets and liabilities include items directly attributable to a segment as well as those that can
be allocated on a reasonable basis.
Reportable segments
RHA and RHA Mauritius
Zulu and Zulu Mauritius
Head office
Operations
Development and mining of Wolframite
Development of Lithium and Tantalite
General administration and control
49
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
By operating segment
2021
Result
Revenue
Operating loss / (income)
Other income
Fair value movement on investment
Impairment of RHA
Finance charges
Reversal of Impairment of Zulu
Loss before taxation
Assets
Exploration and evaluation assets
Investments
Inventories
Trade and other receivables
Cash
Total assets
Liabilities
Other financial liabilities
Borrowings
Bank overdraft
Trade and other payables
Provisions
Total liabilities
Net assets
Other information
Depreciation and amortisation
Property plant and equipment
additions
Costs capitalised to intangible assets
RHA Tungsten
Mine
Zimbabwe and
RHA
Mauritius*
$ 000
Exploration
Zulu Lithium
Zimbabwe and
Zulu Mauritius
$ 000
Unallocated
Corporate
$ 000
Total
continued
operations
$ 000
-
1 543
-
-
-
-
-
1 421
123
8 342
-
11
919
10 254
-
(180)
-
(557)
-
(737)
9 517
-
-
3
-
107
-
-
-
18
-
114
-
-
1
5
2
8
-
-
-
(28)
(362)
(390)
(382)
-
-
-
-
730
-
-
-
-
(4 563)
(3 833)
4 563
-
-
370
41
5 113
-
-
-
-
-
-
5 113
14
154
-
-
2 380
-
-
-
18
(4 563)
(2 298)
4 686
8 342
1
386
962
15 375
-
(180)
-
(585)
(362)
(1 127)
14 248
14
154
3
50
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
By operating segment
2020
Result
Revenue
Operating loss / (income)
Other income
Fair value movement on investment
Impairment of RHA
Finance charges
Impairment of Zulu
Loss before taxation
Assets
Exploration and evaluation assets
Investments
Inventories
Trade and other receivables
Cash
Total assets
Liabilities
Other financial liabilities
Borrowings
Bank overdraft
Trade and other payables
Provisions
Total liabilities
Net assets
Other information
Depreciation and amortisation
Property plant and equipment
additions
Costs capitalised to intangible assets
RHA Tungsten
Mine
Zimbabwe and
RHA
Mauritius*
$ 000
Exploration
Zulu Lithium
Zimbabwe and
Zulu Mauritius
$ 000
Unallocated
Corporate
$ 000
Total
continued
operations
$ 000
-
1 087
-
-
-
60
-
1 147
120
8 342
-
2
722
9 186
-
-
-
(356)
-
(356)
8 830
-
-
120
-
93
(81)
-
3
22
-
118
-
-
-
5
5
10
-
-
-
(147)
(153)
(300)
(290)
-
4
-
-
11
-
-
-
-
-
11
-
-
-
-
-
-
-
-
-
(2)
-
(2)
(2)
-
-
-
-
1 191
(81)
-
3
82
-
1 276
120
8 342
-
7
727
9 196
-
-
-
(505)
(153)
(658)
8 538
-
4
120
*Represents 100% of the results and financial position of RHA Tungsten (Private) Limited (“RHA”) whereas the
Group owns 49%. Non-controlling interests are disclosed in note 21.
RHA Revenue is generated from sales to Noble Minerals, in line with RHA’s off-take agreement.
51
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
7.
Hyper-inflationary accounting
In terms of IAS29, Hyperinflation is indicated by characteristics of the economic environment of a country which
include, but are not limited to, the following:
a)
b)
c)
d)
e)
the general population prefers to keep its wealth in non‑monetary assets or in a relatively stable foreign
currency. Amounts of local currency held are immediately invested to maintain purchasing power;
the general population regards monetary amounts not in terms of the local currency but in terms of a
relatively stable foreign currency. Prices may be quoted in that currency;
sales and purchases on credit take place at prices that compensate for the expected loss of purchasing
power during the credit period, even if the period is short;
interest rates, wages and prices are linked to a price index; and
the cumulative inflation rate over three years is approaching, or exceeds, 100%.
As stated in the 2018 annual financial statements, with effect of the 21st of February 2019 Zimbabwe
implemented the Real Time Gross Settlement of US Dollars (“RTGS”) at an official exchange rate of 1:1. At that
time the official inflation rate was 0%. At the year end the official exchange rate has moved to
RTGS 105.6684 : $1 (2020: RTGS 81,8151 : $1) whilst the official inflation rate has moved to 58,40% (2020:
401.66%) on a year on year basis. The table below details the exchange rates and inflation rates, as published
by https://tradingeconomics.com/zimbabwe/inflation-cpi, on a monthly basis for the year ended 31 December
2021.
Inflation Rate
2021
Exchange Rate
RTGS : US$
2021
Inflation Rate
2020
Exchange Rate
RTGS : US$
2020
362.63%
321.59%
240.55%
194.07%
161.91%
106.60%
56.37%
50.24%
51.55%
54.50%
58.40%
60.70%
82.6756
83.8868
84.4001
84.5032
84.7259
85.4234
85.6402
85.9084
87.6653
97.1361
105.6684
108.6660
175.66%
540.16%
676.39%
765.57%
785.55%
737.26%
837.53%
761.02%
659.40%
471.25%
401.66%
348.59%
17.3531
17.9594
25.0000
25.0000
25.0000
57.3582
76.7596
83.3994
81.4439
81.3531
81.8151
81.7866
January
February
March
April
May
June
July
August
September
October
November
December
Two of the group’s subsidiaries, namely RHA and Zulu, operate in Zimbabwe.
In accordance with IAS29 the group has implemented the Historical Cost approach in restating the subsidiary
accounts as at the 31 December 2021 and the corresponding comparative figures for the year ended 31
December 2020.
The financial statements reflect the reduction in the purchasing power of RTGS which have been remeasured,
in terms of IAS 29, as at 31 December 2021.
52
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
8.
Intangible assets
Exploration and evaluations assets
Total intangible assets
Opening carrying value 2020
Expenditure on Exploration and evaluation
Impairment of Exploration and evaluation assets
Closing carrying value 2020
Reversal of impairment of Zulu Lithium's E&E assets
Additional costs capitalised to the Li3 assets
Closing carrying value 2021
2021
$ 000
4 686
4 686
120
-
-
120
4 563
3
4 686
2020
$ 000
120
120
-
120
-
120
-
-
-
During the year, the market conditions for lithium improved substantially. This improvement enabled
management to revisit the assumptions surrounding the impairment of the Zulu Lithium Exploration and
Evaluation assets. Based upon the current market conditions and associated assumptions, management has
reversed the impairment of the Zulu Lithium’s Exploration and Evaluation assets.
During the 2020 year the company acquired a portfolio of hard-rock lithium assets located in Zimbabwe and
Mozambique from Lithium Consolidated Ltd ("Li3").
Zulu Lithium and Tantalite Project
During the year $nil (2020: $nil) exploration costs were incurred and capitalised to Zulu. The Group views this
project as strategic and exploration work will be continued in the future, cash flow permitting.
Key assumptions applied in calculating the discounted cash flow analysis included:
Targeted annual production of spodumene concentrate
Targeted annual production of petalite concentrate
Price of spodumene concentrate
Price of petalite concentrate
•
•
•
•
• Discount rate
• Operating costs per combined tonnage of concentrate
•
• Average strip ratio of
Estimated 15 year life of mine
During March 2021, the EPO was granted and a DFS is being undertaken.
For additional information on events after the reporting date, refer to note 33.
84 000 tonnes
32 500 tonnes
$975/t
$400/t
25%
$486/t
5.5:1
53
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
9.
Investments
Opening carrying value 2020
Shares acquired
Fair value adjustment
Closing carrying value 2020
Shares acquired
Fair value adjustment
Closing carrying value 2021
Reconciliation of movements in investments
Opening carrying value 2020 (1) (2)
Acquisition at fair value 2020 (3)
Opening carrying value 2021
Acquisition of shares
Acquisition at fair value
Closing carrying value 2021
Circum
Minerals
Manganese
Namibian
Holdings
Total
$ 000
6 263
-
-
6 263
-
-
6 263
6 263
-
6 263
-
-
6 263
$ 000
-
2 079
-
2 079
-
-
2 079
-
2 079
2 079
-
-
2 079
$ 000
6 263
2 079
-
8 342
-
-
8 342
6263
2 079
8 342
-
-
8 342
(1) Represents 2 million shares in unlisted entity Circum.
(2) As Circum is unlisted there are no quoted markets. The fair value of the Circum shares was derived using the
previous issue price and validating it against the most recent placing price on 11 May 2021 of $1.25 per share.
In March 2022, the shares were sold at book value to Vortex Limited in exchange for shares in Vortex Limited,
see note 32 for additional information.
(3) Represents a purchase of 11% interest in MNH.
(4) Represents the purchase of 8.9% interest in MNH.
The shares are considered to be level 3 financial assets under the IFRS 13 categorisation of fair value
measurements.
Premier continues to hold 5,010,333 shares in Circum currently valued in total at $6.263 million. Circum has
published a general update to shareholders in May 2021 and the major shareholders and directors are now fully
coordinated in their intention to generate a liquidity event for shareholders. Novopro has been appointed to
complete a DFS for an initial production of ± 375ktpa of Sulphate of Potash which will be scaled up to 750Ktpa
over time. To this effect a fully subscribed rights issue raised $12.5 million.
The fair value of these investments on 31 December 2021 amounted to $8.342 million (2020: $8.342 million).
Premier’s investment in Circum is classified as FVOCI and as such is required to be measured at fair value at each
reporting date. As Circum is unlisted there are no quoted market prices. The fair value of the Circum shares was
derived using the previous issue price and validating it against the most recent placing price on 11 May 2021.
Premier’s investment in MNH is classified as FVOCI and as such is required to be measured at fair value at each
reporting date. As MNH is unlisted there are no quoted market prices. The fair value of the MNH shares was
based on the latest transactions and supported by an external evaluation conducted by Bara Consulting.
Sensitivity analysis
The investments are subject to changes in market prices. A 10% reduction in market prices would result in a
$0.834 million (2020: $0.834 million) charge to Other Comprehensive Income.
54
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
10.
Property, plant and equipment
Mine
Development
$ 000
Plant and
Equipment
$ 000
Land and
Buildings
$ 000
Cost
At 1 January 2020
Exchange differences (1)
Additions
Disposals
At 31 December 2020
Exchange differences (1)
Additions
Disposals
At 31 December 2021
Accumulated Depreciation and Impairment Losses
At 1 January 2020
Charge for the period
Exchange differences (1)
Charge for the year
Impairment of RHA
At 31 December 2020
Exchange differences (1)
Charge for the year
Impairment
At 31 December 2021
Net Book Value
At 31 December 2020
At 31 December 2021
1 465
(565)
-
-
900
(4)
-
-
896
1 465
-
(565)
-
-
900
(4)
-
-
896
-
-
2 898
(227)
4
-
2 675
(3)
140
-
2 812
2 898
-
(227)
-
4
2 675
(2)
14
-
2 687
-
125
79
(51)
-
-
28
(1)
14
-
41
79
-
(51)
-
-
28
(1)
-
-
27
-
14
Total
$ 000
4 442
(843)
4
-
3 603
(8)
154
-
3 749
4 442
-
(843)
-
4
3 603
(7)
14
-
3 610
-
139
Refer to note 7 Hyperinflationary Accounting.
The impairment assessment is detailed in note 4, Significant accounting judgements, estimates and assumptions.
Refer note 15, Other financial liabilities for capitalised lease assets.
11.
Loans receivable
Outback Investments Pty Ltd
Otjozondu Mining (Pty) Ltd
2021
$ 000
414
445
859
2020
$ 000
-
-
-
The above loans are made to a subsidiary and a related party of MN Holdings (Pty) Ltd and are held at amortised
cost.
55
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
The purpose of the Outback Investments Pty Ltd loan was to enable MNH to lease and acquire the remaining
extent of the Ebenezer No 377 Farm which contains untreated tailings facilities from the Purity Mining Project
as announced on the 8th of July 2019. The loan will be forgiven following the uninterrupted use of the farm land
for the treatment of the tailing facilities for a period of up to 10 years. During this period Premier has rights to
these tailings facilities. The loan is interest free. The loan is only repayable upon default by Outback Investments.
The loan to Otjozondu Mining is to assist with funding the day to day operations and is in accordance with the
RNS of 31st August 2021. Premier has provided a loan of $265,000 which bear interest of 20% and is repayable
in instalments of $25,000 per shipment of manganese shipped from Namibia. The balance of $180,000 has been
provided interest free as it is linked to the loan from Neil Herbert, see note 18 for additional information.
12.
Inventories
Mine consumables
13.
Trade and other receivables
The exposure to credit risk for trade receivables
by geographic region was as follows:
Zimbabwe
Other
The exposure to credit risk for trade receivables
by counterparty was as follows:
Zimbabwe Revenue Authority
Other
The exposure to credit risk for trade receivables
by credit rating was as follows:
External credit ratings
Other
2021
$ 000
-
-
2020
$ 000
1
1
2021
$ 000
2020
$ 000
-
-
-
-
-
-
-
-
-
8
-
8
3
2
5
-
8
8
The receivables are considered to be held within a held-to-collect business model consistent with the Group’s
continuing recognition of the receivables.
As at 31 December 2021 the Group does not have any contract assets nor any contract liabilities arising out of
contracts with customers relating to the Group’s right to receive consideration for work completed but not
billed.
Credit and market risks, and impairment losses
The Group did not impair any of its trade receivables as at 31 December 2021, as all trade receivables generated
during the financial year were settled in full prior to the year-end.
56
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
Information about the Group’s exposure to credit and market risks and impairment losses for trade receivables
is included in Note 30.
The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
14.
Cash and cash equivalents
Bank balances
Cash and cash equivalents per the statement of cash flows
15.
Finance lease liabilities
Finance lease
2021
$ 000
963
963
2020
$ 000
727
727
During 2015, the Group entered into a finance lease with Board Market Trading 258 (Pty) Ltd for the purchase
of two generators with a net book value of $0.124 million to be used at RHA. The finance lease is for a term of
48 months with interest charged at 19.5% per annum with monthly repayments of $0.006 million beginning
from 1 August 2016. Depreciation of leased assets amounted to nil (2019: $nil) due to the assets being fully
impaired in a prior period.
The agreement is classified as a finance lease as the rental period equal the estimated useful life of the assets
concerned and the Group has the right to purchase the assets outright at the end of the minimum lease term by
paying a nominal amount.
In terms of IFRS 16 Leases, short term lease agreements which are less than one month or with total present
value of lease payments not exceeding $0.005 million are excluded from capitalisation.
Future lease payments are due as follows:
2021
Not later than one year
Between one year and five years
2020
Not later than one year
Between one year and five years
Reconciliation
Balance as at 31 December 2019
Payments made during the year
Balance as at 31 December 2020
Payments made during the year
Balance as at 31 December 2021
Minimum lease
payments
$ 000
-
-
-
Minimum lease
payments
$ 000
-
-
-
Minimum lease
payments
36
36
-
-
-
Interest
$ 000
-
-
-
Present value
of minimum
lease payments
$ 000
-
-
-
Present value
of minimum
lease payments
$ 000
-
-
-
Present value
of minimum
lease payments
35
35
-
-
-
Interest
$ 000
-
-
-
Interest
1
1
-
-
-
57
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
16.
Provisions – rehabilitation
As at 1 January
Foreign Exchange variation on translation
Unwinding of discount
As at 31 December
2021
$ 000
153
191
18
362
2020
$ 000
388
(255)
20
153
A provision is recognised for site rehabilitation and decommissioning of current mining activities based on
current environmental and regulatory requirements. The gross provision was based upon an environmental
impact assessment (“EIA”) conducted and calculated in 2014 and discounted to a net present value using a
discount rate of 10% over a life of mine of 8 years. The corresponding rehabilitation assets was capitalised to
property, plant and equipment and is depreciated over the life of the mine. The initial provision for rehabilitation
was performed in the then functional currency of USD. With the implementation of RTGS this provision was
restated in terms of note 7 on Hyperinflationary accounting. With RHA currently under care and maintenance
the directors reassessed the final provision based upon actual volumes extracted versus projected volumes. This
reassessment will be done annually taking into consideration the remaining volume of ore to be extracted, the
current level of mining that has already been conducted and the estimated costs involved in rehabilitating the
land.
17.
Trade and other payables
Trade payables
Accrued expenses
Payroll liabilities
2021
$ 000
280
298
8
586
2020
$ 000
238
253
14
505
All trade and other payables at 31 December 2021 are due within one year, non-interest bearing, and comprise
amounts outstanding for mine purchases and on-going costs, except as described further below. The Directors
consider that the carrying amount of trade and other payables approximates their fair value.
18.
Borrowings
Loan Neil Herbert
2021
$ 000
180
180
2020
$ 000
-
-
58
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
Reconciliation of movement in borrowings
As at 1 January
Loans received (1) (2)
Loans repaid through conversion to equity (1) (3) (4)
Implementation fee
Accrued interest
As at 31 December
Current
Non-current
2021
$ 000
-
180
-
-
-
180
180
-
180
2020
$ 000
715
200
(965)
15
35
-
-
-
-
Borrowings comprise loans from a related party and a non-related party. Loans from a related party are further
disclosed in Note 32, Related Party Transactions.
(1) Neil Herbert made available a loan of US$180,000 to the Company. Under the terms of the Director Loan,
the loan is both unsecured and will not attract any interest and is repayable in full by the Company on the
signing of a new off-take agreement at Otjozondu. The purpose of the Director Loan is to provide funding
to Premier to allow an amendment to the Otjozondu Loan while Premier, acting collectively with
Otjozondu, looks to secure the best possible off-take funding package.
At 31 December 2021 the off-take funding had not been secured and Mr Herbert has agreed to the
deferment of the repayment of the loan until such off-take agreement has been secured.
(2) As at 31 December 2021 nil was outstanding to George Roach. In March 2020 the Company entered into a
secured $0.200 million Loan Agreement and related Subscription Agreement with a company owned by a
Trust of which George Roach is a beneficiary at 10% interest per annum. In July 2020 $0.206 million was
settled by issue of 232,647,763 ordinary shares and in October 2020 the balance of $0.237 million was
settled by issue of 456,291,154 ordinary shares.
(3) As at 31 December 2021 nil was outstanding to Brendan Roach. In October 2020 $0.132 million including
interest was settled by issue of 241,117,500 ordinary shares.
(4) As at 31 December 2021 nil was outstanding to Regent Mercantile Holdings Limited. In July 2020 $0.0.390
million including interest was settled by issue of 431,241,920 ordinary shares.
19.
Share capital
Authorised share capital
19.42 billion (2020: 17.79 billion) ordinary shares of no par value.
59
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
Issued share capital
As at 1 January 2020
Shares issued on conversion of loan (1)
Shares issued on conversion of loan (2)
Shares issued on conversion of loan (3)
Shares issued on conversion of loan (4)
Shares issued under subscription agreement (5)
Shares issued on conversion of loan (6)
Shares issued on conversion of loan (7)
Shares issued on conversion for fees (8)
Shares issued on conversion of loan (9)
Shares issued on conversion of loan (10)
Shares issued on conversion of loan (11)
Shares issued under subscription agreement (12)
Shares issued on conversion for fees (13)
Number of
Shares
‘000
11 266 071
171 074
498 230
431 242
70 427
124 513
232 648
64 470
374 921
62 450
125 905
120 915
2 750 000
1 500 143
Value
$ 000
51 035
199
699
390
56
120
206
51
437
50
76
65
1421
787
As at 31 December 2020
17 793 009
55 592
Shares issued for direct Investment (14)
Shares issued for direct Investment (15)
Shares issued for direct Investment (16)
As at 31 December 2021
Less cumulative share costs
Net share capital as at 31 December 2021
625 000
500 000
500 000
1 417
1 364
1 059
19 418 009
59 432
(3 319)
56 113
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
On the 06 February 2020, the Company issued 171 074 444 shares under a subscription
agreement at a price of 0.9p per share.
On the 11 June 2020, the Company issued 498 229 730 shares under a subscription
agreement at a price of 0.111p per share.
On 24 July 2020, the Company issued 431 241 920 shares at an issue price of 0.07092p per
share for a total value of $0.390 million for conversion of loan.
On 27 July 2020, the Company issued 70 426 740 shares at an issue price of 0.06264p per
share for a total value of $0.056 million for conversion of loan.
On the 28 July 2020, the Company issued 124 512 702 shares under a subscription
agreement at a price of 0,0744p for a total value of $0.120 million
On the 30 July 2020, the company issued 232 647 763 shares for a total value of $ 0.206
million for conversion of fees.
On the 11 August 2020, the company issued 64 470 222 shares for a total value of $ 0.051
million for conversion of fees.
On the 11 August 2020, the company issued 374 920 533 shares for a total value of $ 0.437
million for conversion of fees.
On the 18 August 2020, the company issued 62 450 479 shares for a total value of $ 0.050
million for conversion of fees.
60
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
(10)
(11)
(12)
(13)
(14)
(15)
(16)
On the 21 September 2020, the company issued 125 905 202 shares for a total value of $
0.076 million for conversion of fees.
On the 02 October 2020, the company issued 120 915 045 shares for a total value of $
0.065 million for conversion of fees.
On the 21 October 2020, the Company issued 2 750 000 000 shares under a subscription
agreement at a price of 0,04p for a total value of $1.421 million
On the 22 October 2020, the Company issued 1 500 143 471 shares at an issue price of
0.04p per share for a total value of $0.787 million for conversion of fees.
On the 03 June 2021, the Company issued 625 000 000 shares under a subscription
agreement at a price of 0,16p for a total value of $1.501 million
On the 17 August 2021 the Company issued 500 000 000 shares under a subscription
agreement at a price of 0,02p for a total value of $1.446 million
On the 14 December 2021 the Company issued 500 000 000 shares under a subscription
agreement at a price of 0,16p for a total value of $1.122 million
Reconciliation to balance as stated in the consolidated statement of financial position
As at 1 January
Shares issued under subscription agreements – cash flow
Shares issued to settle trade payables
Shares issued on conversion of loans and loan notes (note 12) - non-cash
Shares issued to purchase Investment in MNH
Share issue costs – cash flow
Shares issued for direct Investment
As at 31 December
20.
Share based payment and warrant reserve
Share options and warrants reserve beginning of year
Warrants granted
Share options
Warrants cancelled
Share options and warrants reserve end of year
Share options and warrant arrangements are set out below.
Equity-settled Share base payment arrangement
2021
$ 000
52 504
-
-
-
-
(230)
3 839
56 113
2021
$ 000
2 366
-
-
-
2 366
2020
$ 000
48 042
1 541
1 225
894
898
(96)
-
52 504
2020
$ 000
2 366
-
-
-
2 366
The Company adopted an incentive share option plan (the ‘Plan’) during 2012. The essential elements of the
Plan provide that the aggregate number of common shares of the Company’s capital stock issuable pursuant to
options granted under the Plan may not exceed 15% of the issued and outstanding Ordinary Shares at the time
of any grant of options. Options granted under the Plan will have a maximum term of 10 years. All options
granted to Directors and management are subject to vesting provisions of one to two years.
All options are to be settled by the physical delivery of shares.
61
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
The fair value of all the share options has been measured using the Black-Scholes Model.
Number of
Options
Granted
‘000
Vesting Term
Exercise
Price
Expiry Date
Estimated
Fair Value
Date
Granted
Issued to
Employees and
consultants
Directors
Directors
Employees and
associates
Directors
Directors
Management
Management
Directors
Directors
Management
Management
Directors
Consultants
Directors
Consultants
Total number of options
10/02/2011 1 year
04/12/2012 See 1 below
04/12/2012 See 2 below
04/12/2012 See 3 below
29/07/2014 See 4 below
29/07/2014 See 5 below
29/07/2014 See 4 below
29/07/2014 See 5 below
13/03/2015 See 4 below
13/03/2015 See 5 below
13/03/2015 See 4 below
13/03/2015 See 5 below
19/01/2017 See 5 below
19/01/2017 See 5 below
19/01/2017 See 5 below
19/01/2017 See 5 below
Issued to:
- Directors
- Employees and consultants
- Management
Less:
- Options exercised in prior years
- Options cancelled in prior years
Total options in issue at 31 December 2021
1.135p 09/02/2014
Nil 03/12/2022
2p 03/12/2022
Nil 03/12/2022
1.15p 28/07/2024
1.50p 28/07/2024
1.15p 28/07/2024
1.50p 28/07/2024
0.9p 12/03/2025
1.17p 12/03/2025
0.9p 12/03/2025
1.17p 12/03/2025
0.28p 18/01/2027
0.28p 18/01/2027
0.40p 18/01/2027
0.40p 18/01/2027
0.87p
1.11p
1.85p
1.85p
1.15p
1.15p
1.15p
1.15p
0.67p
0.64p
0.67p
0.64p
0.278p
0.278p
0.28p
0. 28p
2 250
20 386
20 386
5 536
6 000
6 000
6 500
6 500
2 000
2 000
3 250
3 250
30 500
50 439
30 500
50 439
245 936
111 772
114 664
19 500
245 936
27 257
18 330
200 349
Expected volatility has been based on an evaluation of the historical volatility of the Company’s share price,
particularly over the historical period commensurate with the expected term. The expected term of the
instruments has been based on historical experience and general option holder behaviour
The Company has granted the following share options during the years up to 31 December 2021:
1. These share options vest on the two-year anniversary of the grant date. The options are exercisable at any
time after vesting during the grantee’s period as an eligible option holder, and must be exercised no later
than 10 years after the date of grant, after which the options will lapse.
2. These share options vest in equal instalments annually on the anniversary of the grant date over a two year
period. The options are exercisable at any time after vesting during the grantee’s period as an eligible option
holder, and must be exercised no later than 10 years after the date of grant, after which the options will
lapse.
62
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
3. These share options vested on the grant date. The options are exercisable at any time after vesting during
the grantee’s period as an eligible option holder, and must be exercised no later than 10 years after the
date of grant, after which the options will lapse.
4. These share options vest on the one-year anniversary of the grant date. The options are exercisable at any
time after vesting during the grantee’s period as an eligible option holder, and must be exercised no later
than 10 years after the date of grant, after which the options will lapse.
5. These share options vest on the two-year anniversary of the grant date. The options are exercisable at any
time after vesting during the grantee’s period as an eligible option holder, and must be exercised no later
than 10 years after the date of grant, after which the options will lapse.
No share options were granted during the year ended 31 December 2021 (2020 – none issued).
The fair value of the options granted during the year ended 31 December 2021 was $nil (2020: $nil). The assessed
fair value of options granted to directors and management was determined using the Black-Scholes Model that
takes into account the exercise price, the term of the option, the share price at grant date, the expected price
volatility of the underlying share, the expected dividend yield and the risk-free rate interest rate for the term of
the option.
Directors:
- G. Roach
- N. Herbert
- W. Hampel
- M. Foster (resigned)
- Resigned directors
Other option holders
In issue prior to
1 January 2021
Exercised
during the
year
Cancelled /
Lapsed during
the year
Granted
during the
year
In issue as at 31
December 2021
21 517
4 000
8 000
18 000
40 941
107 891
200 349
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21 517
4 000
8 000
18 000
40 941
107 891
200 349
The Group has the following share options outstanding:
Grant Date
Expiry Date
Exercise Price Number of options
outstanding
‘000
04/12/2012
04/12/2012
29/07/2014
29/07/2014
13/03/2015
13/03/2015
19/01/2017
19/01/2017
03/12/2022
03/12/2022
28/07/2024
28/07/2024
12/03/2025
12/03/2025
18/01/2027
18/01/2027
Nil
2p
1.15p
1.50p
0.9p
1.17p
0.28p
0.40p
2 013
12 458
3 000
10 500
5 250
5 250
80 939
80 939
200 349
Number of options
vested and
exercisable
‘000
2 013
12 458
3 000
10 500
5 250
5 250
80 939
80 939
200 349
63
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
The following table lists the inputs into the valuation model.
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Share price at grant date
19 Jan
2017
Issue
-
236.0
1.43
0.28p
19 Jan
2017
Issue
-
236.0
1.43
0.28p
13 Mar
2015
Issue
-
100.0
1.71
0.9p
13 Mar
2015
Issue
-
100.0
1.71
0.9p
29 Jul
2014
Issue
-
148.0
1.71
1.15p
29 Jul
2014
Issue
-
148.0
1.71
1.15p
Exercise price
0.28p
0.40p
0.9p
1.17p
1.15p
1.5p
4 Dec
2012
Issue
-
75.0
1.81
1.85p
2p and
nil
The shares that the options are based on are quoted in GBP and so the option agreement is stated in GBP. As
such they are presented in GBP despite the presentational currency of the Group being USD.
The number and weighted-average exercise prices of share options under the share option programmes and
replacement awards were as follows:
Options outstanding, beginning of
year
Granted
Options outstanding, end of year
2021
2020
Shares
‘000
200 349
-
200 349
Weighted
Average
Exercise Price
0.55p
-
0.55p
Shares
‘000
200 349
-
200 349
Weighted
Average
Exercise Price
0.55p
-
0.55p
The weighted-average life of the options in issue as at 31 December 2021 is 3 years and 27 days (2020 – 4 years
and 27 days.)
Warrants
The Company did not grant warrant options during the year (2020: nil)
A summary of the status of the Company’s share warrants as of 31 December 2020 and changes during the year
are as follows:
2021
‘000
2020
‘000
Warrants outstanding, beginning of
year
Granted
Expired
Exercised
Cancelled *
Warrants outstanding, end of year
-
-
-
-
-
-
During the year ending 31 December 2021 nil (2020 - nil) warrants granted to an advisor expired.
There are no warrants outstanding in favour of the Directors.
Premier’s share price opened at 0.052p in January 2021, traded at an average of 0.175p, with a high of 0.495
and low of 0.043p during the year and closed at 0.19p on 31 December 2021.
-
-
-
-
-
-
64
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
21.
Non-controlling interest
RHA Tungsten Limited (51% Non-controlling interest)
At 1 January
Foreign exchange and hyper-inflationary adjustments
Non-controlling interest in share of profit / (losses) for the year - RHA
Non-controlling interest in share of other comprehensive income for
the period
At 31 December
2021
$ 000
(11 726)
-
(145)
(438)
(12 309)
2020
$ 000
(11 499)
220
(23)
(424)
(11 726)
The following table summarises the information relating to each of the Group’s subsidiaries that has material
Non-controlling interest, before any intra-group eliminations.
Non-controlling Interest percentage
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
2021
RHA
51%
-
8
(18 493)
(5 651)
(24 136)
2020
RHA
51%
-
10
(18 041)
(4 961)
(22 992)
Net assets attributed to Non-controlling Interest
(12 310)
(11 726)
Revenue
Profit / (Loss)
Other Comprehensive Income /(Loss)
Total comprehensive income
Loss allocated to NCI
-
(858)
(286)
(1 144)
(584)
13
(832)
(43)
(875)
(447)
The share of losses in the year represents the losses attributable to non-controlling interests in RHA for the year.
65
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
22.
Revenue
Major product/service lines
Sale of Wolframite
Sale of scrap
Reserve Bank of Zimbabwe Export Incentive
Total revenue
NIEEF refund of expenses
Prescription of debts
Total other income
Gross revenue
Primary Geographical Markets
Africa
Timing of revenue recognition
Products transferred at a point in time
23.
Cost of sales excluding depreciation and amortisation
2021
$ 000
2020
$ 000
-
-
-
-
-
133
133
133
133
133
133
133
-
-
-
-
6
75
81
81
81
81
81
81
2021
$ 000
2020
$ 000
Mining contractor
Staff costs
Consumables
Equipment hire and maintenance
Mining services
Plant services
Selling costs
Net realisable value adjustment of cost of inventory sold
Inventory write-down / (write-up)
RHA mine is under care and maintenance and accordingly there are no cost of sales.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
66
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
24.
Administrative expenses
Audit fees - Holding company
- Under provision prior year
- Over provision prior year
Staff costs
Consulting and advisory fees
Directors’ fees
Accounting and legal fees
Marketing and public relations
Travel
Security costs
Vehicle operating costs
Insurance
Office and administration
Short term non-capitalised lease payments (note 15)
Foreign exchange losses
Share based payment (note 21)
Exploration costs
2021
$ 000
44
3
-
31
1 199
118
143
3
50
7
9
8
88
114
12
-
537
2 366
2020
$ 000
22
-
(6)
19
793
35
142
17
40
2
9
8
32
114
47
-
-
1 274
Number of staff
2021
2020
Directors of the Holding Company
Administrative staff
Total Holding Company staff
Directors of subsidiaries
Subsidiary administrative and operating staff
Total staff
25.
Finance charges
Interest charged by suppliers
Interest on borrowings
Derivative financial liability transaction costs
Unwinding of discount on provisions
Loss on extinguishment of debt
Interest on finance lease
4
0
4
1
6
11
4
0
4
1
6
11
2021
$ 000
2020
$ 000
-
-
-
18
-
-
18
-
61
-
20
-
1
82
67
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
26.
Taxation
Deferred tax
As at 1 January
As at 31 December
Income Tax
Taxation charge for the year
2021
$ 000
2020
$ 000
-
-
-
-
-
-
There is no taxation charge for the year ended 31 December 2021 (2020: Nil) because the Group is registered in
the British Virgin Islands where no corporate taxes or capital gains tax are charged. However, the Group may be
liable for taxes in the jurisdictions of the underlying operations.
The Group has incurred tax losses in West Africa and Zimbabwe; however a deferred tax asset has not been
recognised in the accounts due to the unpredictability of future profit streams. The accumulated tax losses not
recognised at RHA amount to RTGS 1,615.272 million (2020: RTGS 52.342 million).
Reconciliation of effective tax rate
Loss before tax from continuing operations
Tax using the Zimbabwean company tax rate
Tax effect of:
Effects of tax rates in foreign jurisdictions
2021
2 099
25%
(25%)
2021
$ 000
-
(525)
2020
(1 333)
25%
2020
$ 000
-
333
525
(25%)
(333)
Contingent liability
The Group operates across different geographical regions and is required to comply with tax legislation in various
jurisdictions. The determination of the Group’s tax is based on interpretations applied in terms of the respective
tax legislations and may be subject to periodic challenges by tax authorities which may give rise to tax exposures.
27.
Loss per share
The calculation of loss per share is based on the loss after taxation attributable to shareholders, divided by the
weighted average number of shares in issue during the year:
Net loss attributable to owners of the company ($ 000)
Weighted average number of Ordinary Shares in calculating basic
earnings per share (‘000)
Basic loss per share (US cents)
Diluted loss per share (US cents)
2021
$ 000
2 099
2020
$ 000
(1 333)
18 337 187
13 167 281
0.01
0.01
(0.01)
(0.01)
Weighted average number of ordinary shares
Issued ordinary shares at 1 January ('000)
Weighted average of shares issued during the year ('000)
Weighted average number of ordinary shares at 31 December ('000)
17 793 009
544 178
18 337 187
11 266 071
1 901 210
13 167 281
68
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
As the Group incurred a loss for the year, there is no dilutive effect from share options and warrants in issue or
the shares issued after the reporting date.
Potential dilutive effect on earnings per share
Options issued
Warrants issued
Convertible loan notes
Total potentially dilutive shares
2021
$ 000
2020
$ 000
200 349
200 349
-
-
-
-
200 349
200 349
Refer to note 33 Post balance sheet events for additional potentially dilutive transactions.
28.
Directors’ remuneration
2021
Executive Directors
George Roach - current
- backdated increase
Non-Executive Directors
Godfrey Manhambara - current
- backdated increase
Wolfgang Hampel
Neil Herbert
2020
Executive Directors
George Roach
Non-Executive Directors
Godfrey Manhambara
Wolfgang Hampel
Neil Herbert (*)
Directors’ fees
$ 000
Consultancy
Fees
$ 000
Share Options
$ 000
-
42
45
31
-
118
275
70
-
-
36
381
-
-
-
-
-
Directors’ fees
$ 000
Consultancy
Fees
$ 000
Share Options
$ 000
-
19
16
-
35
240
-
-
33
273
-
-
-
-
-
Total
$ 000
275
42
31
36
384
Total
$ 000
240
19
16
33
308
(*) These directors were not employed during the full financial year.
The Directors’ fees disclosed in note 24 include nil (2020: nil) being the fees paid to Directors of RHA, who are
not directors of the parent company.
69
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
29. Notes to the statement of cash flows
Cash and cash equivalents comprise cash at bank, bank overdrafts and short-term bank deposits with an original
maturity of three months or less. The carrying value of these assets is approximately equal to their fair value.
Profit / (Loss) before tax
Adjustments for:
Finance charges
Foreign exchange variations
Settlement agreement on Finance lease
Impairment of PPE - RHA
Reversal of Impairment of intangible assets - Zulu
Depreciation and amortisation
Operating cash flows before movements in working capital
(Increase)/decrease in inventories
(Increase)/decrease in receivables
Increase/(decrease) in payables
Net cash (outflow) from operating activities
Reconciliation of Non-Cash Transactions
Share Capital
Shares issued
Less: Share issue costs
Less: Settlement of payables
Finance Charges
Finance charge expense
Less: Unwinding of discount on the Provision for rehabilitation
Less: Interest accrued on loans and other payables
2021
$ 000
2020
$ 000
2 099
(1 333)
18
192
-
-
(4 566)
14
(2 243)
1
(379)
81
(2 540)
2021
$ 000
3 839
(230)
-
3 609
(18)
18
-
-
82
51
(74)
4
-
-
(1 270)
-
9
478
(783)
2020
$ 000
4 558
(96)
(2 119)
2 343
(82)
20
61
(1)
70
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
Net Debt Reconciliation for the Group
Cash and
cash
equivalents
£
Right of use
lease
liability
£
Total
debt
£
Borrowings
£
Net debt
£
24
753
(51)
726
44
192
(715)
715
-
-
(120)
-
962
(120)
(34)
34
-
-
-
-
-
(749)
749
-
-
(120)
-
(725)
1 502
(51)
726
(76)
192
(120)
842
Net debt as at 31 December
2019
Cash flows
Foreign exchange
adjustments
Net debt as at 31 December
2020
Cash flows
Foreign exchange
adjustments
Net debt as at 31 December
2021
30.
Financial Instruments – Fair values and risk management
The following table shows the carrying amounts and fair values of financial assets and financial liabilities,
including their levels in the fair value hierarchy. It does not include fair value information for financial assets and
financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
Trade and other receivables and trade and other payables classified as held-for-sale are not included in the table
below. As at 31 December 2021 the Group did not have any trade and other receivables nor any trade and other
payables that were classified as held-for-sale.
The Group has not disclosed the fair values of financial instruments such as short-term trade receivables and
payables, because their carrying amounts are a reasonable approximation of their fair value.
71
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
Carrying
value
FVOCI -
equity
instruments
$ 000
Financial
assets at
amortised
cost
$ 000
Other
financial
liabilities
$ 000
31 December 2021
Note
Fair value
Total
$ 000
Level 1
Level 2
Level 3
Total
$ 000
$ 000
$ 000
$ 000
-
-
8 342
8 342
Financial assets measured at fair value
FVOCI
8 342
8 342
Financial assets not measured at fair value
Trade and other receivables
Cash and cash equivalents
Financial liabilities measured at fair value
Financial liabilities not measured at fair value
Bank overdrafts
Unsecured loans from
shareholders
Secured loan
Trade and other payables
-
-
-
-
-
-
-
-
-
-
-
-
859
-
859
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8 342
8 342
859
-
859
-
-
-
-
-
(586)
(586)
-
-
(586)
(586)
72
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
Carrying
value
FVOCI -
equity
instruments
$ 000
Financial
assets at
amortised
cost
$ 000
Other
financial
liabilities
$ 000
31 December 2020
Note
Fair value
Total
$ 000
Level 1
Level 2
Level 3
Total
$ 000
$ 000
$ 000
$ 000
-
-
8 342
8 342
Financial assets measured at fair value
FVOCI
8 342
8 342
Financial assets not measured at fair value
Trade and other receivables
Cash and cash equivalents
Financial liabilities measured at fair value
Financial liabilities not measured at fair value
Bank overdrafts
Unsecured loans from
shareholders
Secured loan
Trade and other payables
-
-
-
-
-
-
-
-
-
-
-
-
8
-
8
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8 342
8 342
8
-
8
-
-
-
-
-
(505)
(505)
-
-
(505)
(505)
73
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
Financial instruments – Fair values and risk management
B.
Measurement of fair values
i.
Valuation techniques and significant unobservable inputs
The following tables show the valuation techniques used in measuring Level 3 fair values for financial
instruments measured at fair value in the statement of financial position, as well as the significant unobservable
inputs used. Related valuation processes are described in Note 4.8.
Financial instruments measured at fair value
Type
Valuation technique
Significant unobservable
inputs
Inter-relationship between
significant unobservable
inputs and fair value
measurement
None
None
Unlisted
Equity
investments
Current market value
technique:
The valuation model is based
upon the latest price at which
the unlisted entity
raised
capital.
ii.
Transfers between Levels 1 and 2
There were no transfers between Levels 1 and 2 in either the current financial year or in the prior financial year.
C.
Financial Risk Management
The Group has exposure to the following risks arising from financial instruments:
– credit risk;
– liquidity risk; and
– market risk.
Risk management framework
The Company’s board of directors has overall responsibility for the establishment and oversight of the Group’s
risk management framework.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to
set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies
and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.
The Group’s audit committee oversees how management monitors compliance with the Group’s risk
management policies and procedures, and reviews the adequacy of the risk management framework in relation
to the risks faced by the Group. The Group’s audit committee undertake ad hoc reviews of risk management
controls and procedures, the results of which are reported to the audit committee.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations and arises principally from the Group’s receivables from customers and
investments in debt securities.
The carrying amounts of financial assets represent the maximum credit exposure.
In the current year there was no impairment loss, nor 2019, for unrecoverable sundry debtors.
74
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
Trade receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
However, management also considers the factors that may influence the credit risk of its customer base,
including the default risk associated with the industry and country in which its customers operate. Details of
concentration of revenue are included in Note 22.
The Group has established a credit policy under which each new customer is analysed individually for
creditworthiness before the Group’s standard payment terms and conditions are offered. The Group’s review
includes external ratings, if they are available, financial statements, credit agency information, industry
information and in some cases bank references. Sales limits are established for each customer and are reviewed
regularly.
The Group limits its exposure to credit risk from trade receivables by establishing a maximum payment period
of one month.
The Group is monitoring the economic environment in Zimbabwe, where its exploration and mining operations
are based.
The Group does not require collateral in respect of trade and other receivables. The Group does not have trade
receivables for which a no allowance is recognised because of collateral.
The exposure to credit risk for trade receivables
by geographic region was as follows:
Zimbabwe
Other
The exposure to credit risk for trade receivables
by counterparty was as follows:
Zimbabwe Revenue Authority
Other
The exposure to credit risk for trade receivables
by credit rating was as follows:
External credit ratings
Other
2021
$ 000
2020
$ 000
-
-
-
5
-
5
-
5
5
6
-
6
3
2
5
-
5
5
Expected credit loss assessment for corporate customers as at 1 January 2021 and 31 December 2021
The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of
the risk of loss (including but not limited to external ratings, audited financial statements, management accounts
and cash flow projections and available press information about customers) and applying experienced credit
judgement. Credit risk grades are defined using qualitative and quantitative factors that are indicative of the risk
of default.
The company had no exposure to credit risk for the year ended 31 December 2021 (2020 - nil)
75
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
Movements in the allowance for impairment in respect of trade receivables
The movement in the allowance for impairment in respect of trade receivables during the year amounted to nil
(2020 – nil).
Cash and cash equivalents
As at 31 December 2021, the Group held $0.963 million in cash and cash equivalents (2020: $0.727 million). The
cash and cash equivalents are held with bank and financial institution counterparties which are rated BB to BAA
(according to Standard and Poor’s).
Impairment on cash and cash equivalents has been measured on a 12-month expected loss basis and reflects
the short maturities of the exposures. The Group considers that its cash and cash equivalents have low credit
risk based on the external credit ratings of the counterparties. On the implementation of IFRS 9 the Group did
not impair any of its cash and cash equivalents.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its
financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to
managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when
they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Group’s reputation.
Exposure to liquidity risk
The following table presents the remaining contractual maturities of financial liabilities at the reporting date.
The amounts are gross and undiscounted and include contractual interest payments and exclude the impact of
netting agreements.
31 December 2021
Non- derivative financial
liabilities
Bank overdrafts
Unsecured shareholder's
loan
Unsecured loans
Secured loans
Trade payables
Derivative financial
liabilities
Contractual cash flows
Carrying
value
$ 000
Total
$ 000
2
Months
or less
$ 000
2 to 12
Months
$ 000
1 to 2
Years
$ 000
2 to 5
Years
$ 000
More
than 5
years
$ 000
-
-
-
-
-
-
(586)
(586)
-
-
-
-
-
-
(586)
(586)
-
-
-
-
-
-
(586)
(586)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
76
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
31 December 2020
Non- derivative financial
liabilities
Bank overdrafts
Unsecured shareholder's
loan
Unsecured loans
Secured loans
Trade payables
Derivative financial
liabilities
Contractual cash flows
Carrying
value
$ 000
Total
$ 000
2
Months
or less
$ 000
2 to 12
Months
$ 000
1 to 2
Years
$ 000
2 to 5
Years
$ 000
More
than 5
years
$ 000
-
-
-
-
-
-
(505)
(505)
-
-
-
-
-
-
(505)
(505)
-
-
-
-
-
-
(505)
(505)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The interest payments on the financial liabilities represent the fixed interest rates as per the respective
contracts.
The Group aims to maintain the level of its cash and cash equivalents and other highly marketable debt
investments at an amount in excess of expected cash outflows on financial liabilities other than trade payables.
The Group also monitors the level of expected cash inflows on trade and other receivables together with
expected cash outflows on trade and other payables.
Market risk
Market risk is the risk that changes in market prices – such as foreign exchange rates, interest rates and equity
prices – will affect the Group’s income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within acceptable parameters, while
optimising the return.
Currency risk
The Group is exposed to transactional foreign currency risk to the extent that there is a mismatch between the
currencies in which sales, purchases, receivables and borrowings are denominated and the respective functional
currencies of Group companies. The functional currencies of Group companies are primarily Pound Sterling and
the US Dollar. The Zimbabwean trading companies functional currency is RTGS. The currencies in which these
transactions are primarily denominated are Euro, US Dollar, South African Rand, RTGS and Pound Sterling.
The Company conducts its business in Zimbabwe with a significant portion of expenditures in that country
historically denominated in USD and now also in RTGS. The introduction of the RTGS$ during the financial year
has resulted in the devaluation of the RTGS$ against the US Dollar. This devaluation has also resulted in the
Zimbabwean economy going into hyperinflationary status. To a large extent this is beneficial to Premier as its
Zimbabwean assets are fully impaired. The remaining liabilities are inflation adjusted at each reporting period
yielding foreign exchange gains on conversion to USD.
All transactions are subject to spot rates and with no hedging transactions taking place.
77
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
Exposure to currency risk
31 December 2021
GBP
EUR
USD
ZAR
'000
'000
'000
'000
31 December 2020
EUR
GBP
USD
ZAR
'000
'000
'000
'000
RTGS
'000
000
RTGS
'000
000
-
-
-
-
-
(98)
-
-
(189)
-
-
(87)
-
-
(3 143)
-
-
(77)
-
-
(11)
-
-
(205)
-
-
(540)
-
-
(13)
-
(98)
(189)
(87)
(3 143)
(77)
(11)
(205)
(540)
(13)
-
-
-
-
-
-
-
-
-
-
(379)
(392)
(2 391)
(3 048)
(1 327)
-
(126)
(1 186)
-
(2 988)
(379)
(392)
(2 391)
(3 048)
(1 327)
-
(126)
(1 186)
-
(2 988)
Trade receivables
Unsecured loans
Trade payables
Net statement of
financial position
exposure
Next 6 months
forecast
sales
Next 6 months
forecast purchases
Net forecast
transaction
exposure
Net exposure
(379)
(490)
(2 580)
(3 135)
(4 470)
(77)
(137)
(1 391)
(540)
(3 001)
The summary quantitative data about the Group’s exposure to currency risk as reported to the management of
the Group is as follows:
The following significant exchange rates in relation to the reporting currency are applicable:
Euro
GBP
ZAR
RTGS
Average rate for the year 2021
2020
2021
Year end spot rate
2021
2020
1.1921
1.3867
0.0682
87.9503
1.1751
1.335
0.0699
50.4253
1.2281
1.421
0.0741
108.666
1.2282
1.3577
0.0682
81.787
The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities
at the reporting date are as follows:
Sterling (£)
Euro (€)
South African Rand (ZAR)
Real Time Gross Settlement
of USD (RTGS)
Liabilities
2021
‘000
98
-
87
2020
‘000
11
77
540
3 143
12 707
Assets
2021
‘000
2020
‘000
-
-
-
-
-
-
-
429
78
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
The presentation currency of the Group is US dollars.
The Group is exposed primarily to movements in USD for trade, RTGS for the Zimbabwean companies and GBP
for all fund raising activities.
Sensitivity analysis
Financial instruments affected by foreign currency risk include financial investments (see note 9) cash and cash
equivalents, other receivables, trade and other payables and convertible loan notes. The following analysis,
required by IFRS 7 Financial Instruments: Disclosures, is intended to illustrate the sensitivity of the Group’s
financial instruments (at year end) to changes in market variables, being exchange rates.
The following assumptions were made in calculating the sensitivity analysis:
All income statement sensitivities also impact equity
Translation of foreign subsidiaries and operations into the Group’s presentation currency have been excluded
from this sensitivity as they have no monetary effect on the results.
Income Statement / Equity
Exchange rates:
+10% $ Sterling (GBP)
-10% $ Sterling (GBP)
+10% $ RTGS
-10% $ RTGS
2021
$ 000
(9)
9
(314)
314
2020
$ 000
(1)
1
(1 253)
1 253
The above sensitivities are calculated with reference to a single moment in time and will change due to a number
of factors including:
•
•
•
Fluctuating other receivable and trade payable balances
Fluctuating cash balances
Changes in currency mix
Interest rate risk
The Group has entered into fixed rate agreements for its finance leases and shareholders loans. The Group does
not hedge its interest rate exposure by entering into variable interest rate swaps.
Exposure to interest rate risk
The interest rate profile of the Group’s interest-bearing financial instruments as reported to the management
of the Group is as per the table below.
Fixed rate instruments
Financial assets
Financial liabilities
Fair value sensitivity analysis for fixed-rate instruments
2021
$ 000
2020
$ 000
-
-
-
-
-
-
79
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
The Group does not account for any fixed-rate financial assets of financial liabilities at FVTPL. Therefore, a change
in interest rates at the reporting date would not affect profit or loss.
Other market price risk
The Group is exposed to equity price risk, which arises from equity securities at FVOCI are held as a long-term
investment.
The Group’s investments in equity securities comprise small shareholdings in unlisted companies. The shares
are not readily tradable and any monetisation of the shares is dependent on finding a willing buyer.
Valuation techniques and assumptions applied for the purposes of measuring fair value
Due to the short term nature, the fair value of cash and receivables and liabilities approximates the carrying
values disclosed in the financial statements.
The fair value of financial assets is estimated by using other readily available information. As the Circum and
MNH shares are in privately held exploration companies, the fair values were estimated using observable placing
prices where available.
Circum and MNH are unlisted and there are no quoted market prices. The fair value of the Circum shares was
derived using the previous issue price and validating it against the most recent placing price on 11 May 2021.
The fair value of MNH shares was derived from the latest placing and supported by an external valuation
conducted by Bara Consulting.
Capital management
The Group manages its capital resources to ensure that entities in the Group will be able to continue as a going
concern, while maximising shareholder return.
The capital structure of the Group consists of equity attributable to shareholders, comprising issued share capital
and reserves. The availability of new capital will depend on many factors including a positive mineral exploration
environment, positive stock market conditions, the Group’s track record, and the experience of management.
There are no externally imposed capital requirements. The Directors are confident that adequate cash resources
exist or will be made available to finance operations but controls over expenditure are carefully managed.
31.
Subsidiaries
Premier had investments in the following subsidiary undertakings as at 31 December 2021, which principally
affected the losses and net assets of the Group:
31.1 Subsidiaries held during the year
80
Country of
incorporation and
operation
Proportion of voting
interest %
Activity
2021 2020
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
Name
Zulu Lithium Mauritius Holdings Limited
RHA Tungsten Mauritius Limited
Kavira Minerals Holdings Limited
Tinde Fluorspar Holdings Limited
Lubimbi Minerals Holdings Limited
Gwaaii River Minerals Limited
Zulu Lithium (Private) Limited
RHA Tungsten (Private) Limited
Katete Mining (Private) Limited
Tinde Fluorspar (Private) Limited
LM Minerals (Private) Limited
BM Mining & Exploration (Private) Limited
Licomex (Pty) Ltd
Li3 Mozambique (Pty) Ltd
Mauritius
Mauritius
Mauritius
Mauritius
Mauritius
Mauritius
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Australia
100
100
100
100
100
100
100
49*
100
100
100
100
100
100
Li3B Mozambique (Pty) Ltd
Australia
100
Li3C Mozambique (Pty) Ltd
Australia
100
100
100
100
100
100
100
100
49*
100
100
100
100
100
100
100
100
Holding Company
Holding Company
Holding Company
Holding Company
Holding Company
Holding Company
Exploration
Care and
maintenance
Exploration
Exploration
Exploration
Exploration
Exploration
Holding
Companies
Holding
Companies
Holding
Companies
Lithium B S.A.
Mozambique
100
100
Exploration
* Accounted as a controlled subsidiary, refer note 4 - Significant accounting policies, estimates and assumptions
and note 4.7 - Basis of consolidation.
31.2 Acquisition of subsidiaries
During the year ended 31 December 2020 the Group acquired 100% of the following companies:
Company Name
LiComex (Pty) Ltd,
Li3 Mozambique (Pty) Ltd
Number of
shares
purchased
100
10,000
Purchase
Consideration
$99,864
$6,634
Li3B (Mozambique) (Pty) Ltd
10,000
$6,633
Li3C (Mozambique) (Pty) Ltd
10,000
$6,633
Country of
Incorporation Main Activity
Zimbabwe Exploration
Australia Holding company
– Owning 33.33%
of Lithium B S.A.
Australia Holding company
– Owning 33.33%
of Lithium B S.A.
Australia Holding company
– Owning 33.33%
of Lithium B S.A.
Lithium B S.A.
30,000
$nil
Mozambique Exploration
Total purchase consideration
$119,764
81
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
32.
Related party transactions
Ultimate controlling party
There is no single ultimate controlling party.
Transactions with key management personnel
Loans from directors
During 2020 all loans to directors were settled by the issue of shares. The amount outstanding at year end is nil
(2020: nil). Refer to note 18 for detailed information.
Supplies and Services
During 2021, administration fees of $0.114 (2020: $0.114 million) were paid by Premier to a trading business in
which George Roach, Director, is the beneficial owner. Administration fees comprised allocated rental costs and
administrative support services. At the financial year-end the amount outstanding is nil (2020: nil).
The amount outstanding at 31 December 2021 for Brendan Roach for directors fees of RHA is nil (2020 : nil).
The amount outstanding at 31 December 2021 for Godfrey Manhambara for directors fees of is $0.092 (2020:
nil).
The amount outstanding at 31 December 2021 for Wolfgang Hampel for directors fees of is $0.011 million (2020
- $0.002 million).
The amount outstanding at 31 December 2021 for Neil Herbert for directors fees of is nil (2020: nil).
Borrowings
In April 2018 Brendan Roach loaned the company GBP 0.084 million. The outstanding loan balance as at 31
December 2019 is $0.128 million. During 2020 the loan was settled by the issue of shares. The amount
outstanding at year end is nil. Refer to note 18 for detailed information.
During the financial year, Neil Herbert advanced $0.180 million to Premier African Minerals to facilitate an
additional loan to MN Holdings.
Remuneration of key management personnel
The remuneration of the Directors and other key management personnel of the Group are set out below for
each of the categories specified in IAS 24 Related Party Disclosures.
Consulting Fees (Note 28)
Staff costs
Directors' fees (Note 28)
33.
Events after the reporting date
33.1
Corporate matters
2021
$ 000
381
114
118
613
2020
$ 000
273
160
35
468
On the 10 January 2022, Premier appointed of Mr. Errico Vascotto as a non-board Chief Operating Officer.
During February 2022, the Company accepted a share offer by Vortex Limited ("Vortex") for the exchange of
Premier's entire 4.8% interest in Circum Minerals Limited ("Circum") for 5,010,333 new shares in the capital of
Vortex representing an interest of approximately 13.1% of the enlarged share capital of Vortex. As part this
transaction, Vortex agreed to provide Premier with observer rights to its day-to-day operations, including
82
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
without limitation, access to any information updates from Circum. Premier will also have certain pre-emptive
rights to ensure that Premier is able to protect and maintain its interest in Vortex.
In March 2022, Premier concluded a direct subscription with Suzhou TA&A Ultra Clean Technology Co., Ltd
("Suzhou TA&A") to raise £12 million before expenses at an issue price of 0.4 pence per new ordinary share for
the ongoing DFS at Premier's Zulu Lithium and Tantalum Project (“Transaction”). In accordance with this
Transaction, Suzhou TA&A were also award the following:
i.
ii.
iii.
iv.
exclusive offtake rights on commercial terms to the marketing and sale of 50 per cent of all
spodumene produced at Zulu ("Offtake Rights");
an irrevocable right of first refusal for 180 days from the date of the Subscription to match any
further equity or loan related funding that is contemplated by Premier, in particular any deal
relating to Zulu, on terms no worse than those offered by another potential investor;
A right of participation in any future funding so as to maintain Suzhou TA&A's shareholding of
13.38 per cent in Premier at all times; and
A right to appoint one director to serve on the boards of Premier, Zulu Lithium Mauritius Limited,
and Zulu Lithium (Private) Limited ("Board Appointment"). To this extent, Dr Luo Wei was
appointed as Non-Executive Director of the Company on the 14 April 2022.
In April 2022, Premier entered into a binding Joint Venture Agreement ("JV Agreement") with Li3 Resources Inc.
("Li3 Resources") whereby Li3 Resources will acquire a 50% interest in Premier's hard-rock lithium assets located
in the Mutare Greenstone Belt in Zimbabwe. This JV Agreement facilitates is intended to facilitate exploration
activities that are funded independently of Premier's. To date, Premier is yet to receive the funding, however
Li3 Resources has until 31 December 2022 to acquire the 50% interest in the Li3 Project by spending US$250,000
in further exploration works.
On the 27 April 2022, Neil Herbert elected to resign from the board of Premier to pursue his other business
interests including his recent appointment as executive Chairman of Atlantic Lithium. George Roach agreed to
act as the interim Chairman for a limited period.
In May 2022, the Company awarded 1,127,500,000 share options to both directors and management
("Options"). Options for up to 317,500,000 ordinary shares of no-par value in the Company (the "Director
Options") were awarded to Directors. In addition, the Company has also issued a further 810,000,000 options
to a non-board members and management on similar terms ("Management Options").
In June, the Company entered into a binding heads of terms with Suzhou TA&A to provide a pre-funding amount
US$34,644,385 to enable the construction and commissioning of a large-scale pilot plant at the Zulu Lithium
Project.
34
Ultimate Controlling Company
There is no single ultimate controlling company for Premier.
83
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
84