Premier African Minerals Limited Annual Report 2023

Plain-text annual report

PREMIER AFRICAN MINERALS LIMITED ANNUAL REPORT 31 DECEMBER 2023 WWW.PREMIERAFRICANMINERALS .COM (AIM:PREM) CONTENTS Sec(cid:415)on CEO statement Strategic report Management Team Directors Directors Report Corporate governance statement Independent auditor’s report Consolidated statement of ﬁnancial posi(cid:415)on 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 Page 01 03 10 11 12 15 25 32 33 34 35 36 CEO STATEMENT -Mr George Roach 2023 was a year of extremes. From the excitement of comple(cid:415)ng assembly of the Zulu Lithium and Tantalum Project (“Zulu”) plant to the disappointment when the deﬁciencies in the ore sor(cid:415)ng and comminu(cid:415)on circuit became apparent. From comple(cid:415)on of mine site infrastructures, civils, roads and access, tailings and water storage, in fact from a li(cid:425)le bit of Zimbabwean bush to a complete mine in record (cid:415)me to the disappointment that has been covered in many announcements over the period and into events post December 2023. Whilst many of the issues associated with the plant at Zulu are discussed in the Strategic Report, it is important to note that the fundamental quality of the deposit at Zulu and the original test work on which the plant supplier based their process and design remains valid and with extensive both independent and in house and ongoing test work, nothing fundamental has changed and it is more apparent today that had the plant met the most basic of the design requirements, Zulu would be in produc(cid:415)on. The facts are that the ore sorters are not ﬁt for purpose and the Company has successfully implemented interim mi(cid:415)ga(cid:415)on steps to deal with this, and the milling and screening completely unable to meet the required speciﬁca(cid:415)ons, an issue admi(cid:425)ed by the plant supplier and eventually resolved but only a(cid:332)er Premier agreed to advance the funds needed to eﬀect this repair as the plant supplier was unable to fund this. Reference is made to this in our accounts. The combina(cid:415)on of the pull back in SC6 pricing coupled to the delays with ge(cid:427)ng Zulu into produc(cid:415)on, whilst presen(cid:415)ng short-term diﬃcul(cid:415)es, have not changed the medium and long-term fundamentals of Zulu and the strong future for Premier African Minerals Limited (“Premier” or “Company”). And in this context in par(cid:415)cular we are conscious of the opportuni(cid:415)es that have emerged that include a crushing and milling circuit able to support an increase in ﬂoat plant feed up to 100%, stockpiled crushed ore in the small size frac(cid:415)ons able to support a separate Dense Medium Separa(cid:415)on plant and feed to a new Tantalum recovery circuit under design at present. With our focus on Zulu, li(cid:425)le has been achieved in regard to Premier’s other projects. Once ma(cid:425)ers have been addressed at Zulu, Premier expects that our other projects will see serious a(cid:425)en(cid:415)on in the coming year with a view to realising a return that is closer to our original investments than the value we now have elected to include in our accounts. Current pricing of Tungsten is compelling, and we do expect resolu(cid:415)on of this with the Zimbabwean authority. Similarly, our interests in Manganese represent an equally compelling opportunity. _____________________ George Roach Chief Execu(cid:415)ve Oﬃcer 28 June 2024 1 [INSERT PICTURE – Showcasing a Premier African Minerals Logo] 2 STRATEGIC REPORT The strategic report provides a detailed assessment of the ac(cid:415)vi(cid:415)es of the Company during the period under review. It also details the main objec(cid:415)ves of the Company related to our por(cid:414)olio of assets. The principal risks and uncertain(cid:415)es associated with our ac(cid:415)vi(cid:415)es are outlined in a speciﬁc principal risks and uncertain(cid:415)es sec(cid:415)on. RHA 49% Interest owned by Premier 51% Locally indigenized owned by Na(cid:415)onal Indigenisa(cid:415)on and Economic Empowerment Fund (“NIEEF”) NIEEF is controlled by Ministry of Mines and Mining Development Despite indica(cid:415)ons to the contrary, nothing has changed. The price of wolframite con(cid:415)nues to suggest that RHA should be back into produc(cid:415)on but with our re(cid:415)cence to commit more funds into RHA under the present share ownership structure, we are unable to predict when and if there will be a return to produc(cid:415)on notwithstanding that recent discussions with the Ministry of Mines and Mining Development have been posi(cid:415)ve. What is certain is that with advances in other explora(cid:415)on in Zimbabwe and with a need for addi(cid:415)onal comminu(cid:415)on capacity at Zulu, most of the plant at RHA will be relocated during the la(cid:425)er part of 2024 if we are unable to resolve the present ownership status. Recoverability of RHA Assets The RHA assets remain fully impaired at this (cid:415)me and are likely to so remain un(cid:415)l we are able to conclude the discussions underway at present. Zulu With hindsight the issues associated with the Zulu plant and the deﬁciencies and oversights in the plant design were all avoidable. It was easy to accept the proposal and purported competencies of the supplier, in par(cid:415)cular with the conﬁdence our Company had in the resource and in the test work that had been undertaken by Anzaplan in 2017 and had been updated subsequently. It is worth no(cid:415)ng that the resource es(cid:415)mates at Zulu have been undertaken by Shango Solu(cid:415)ons an independent consultancy with extensive resource es(cid:415)ma(cid:415)on experience, and valida(cid:415)on of the amenability of the Zulu ores to successful recovery of SC6 has been undertaken not only by Anzaplan, but also by Geolabs and by our reagent suppliers quite apart from the many ﬂoat tests undertaken in our laboratory at Zulu. In our view, the ruling SC6 price, our conﬁdence in the resource and test work, coupled to the assurances and proposal from the equipment supplier adequately addressed the risks associated with proceeding to plant construc(cid:415)on. It remains our opinion that construc(cid:415)ng the Zulu mine at that (cid:415)me was correct and in the light of the present price structures for SC6, had the Company not proceeded at that (cid:415)me, it is unlikely this mine would have been ﬁnanced and built today. In terms of the plant, the produc(cid:415)on of SC6 was to be through a ﬂoata(cid:415)on process. The plant was expected to perform the following func(cid:415)ons: • • A(cid:332)er an ini(cid:415)al crushing of Run of Mine (“ROM”) ore, ore sor(cid:415)ng machines were expected to remove waste material that was not pegma(cid:415)te. The plant supplier was fully informed of the required waste to be removed. The ore sorters supplied are not ﬁt for purpose. The primary sorters failed to remove all the iden(cid:415)ﬁed waste. The secondary Ultraviolet sorters failed to iden(cid:415)fy and upgrade spodumene rich ore. The Company has mi(cid:415)gated this by carefully controlled mining and inspec(cid:415)on of ore on the ROM pad. The Plant supplier has been informed that the sorters are not ﬁt for purpose. The Company has reserved its rights in this regard. Sorted ore was to be milled to the correct size frac(cid:415)on in the design tonnage for feed to the ﬂoat plant. The milling and screening system originally supplied was completely deﬁcient in every respect and was required to be replaced. The Company advanced funds to the plant supplier to remedy this situa(cid:415)on and this resulted in the installa(cid:415)on of a new mill and hydro-sizer system. The Equipment supplier was unable to properly commission the new systems and was removed from site in a subsequent event in early 2024. 3 • • • • • During the year under review, it had been impossible to properly evaluate the ﬂoat plant. At no (cid:415)me had the correct feed rate and par(cid:415)cle size been achieved. Accordingly, it was only a(cid:332)er the Company had brought the new milling and sizing circuit into opera(cid:415)on that it was possible to properly assess the performance of the ﬂoat plant and deal with commissioning and op(cid:415)misa(cid:415)on. In subsequent events, issues associated with the pH and reagent dosing control and recovery of spodumene have been iden(cid:415)ﬁed and addressed. Despite these challenges, in con(cid:415)nuous running of the ﬂoat plant, spodumene concentrate was produced and despite the very low recoveries of spodumene, concentrate at saleable grade and at up to 6.2% Li2O has been produced. At this (cid:415)me, we expect an addi(cid:415)onal condi(cid:415)oning cell to be installed during the week commencing 10 July 2024 and therea(cid:332)er it is expected that the plant will operate at design throughput and with adequate recovery to meet the produc(cid:415)on targets originally agreed. The Company has expressed its overall dissa(cid:415)sfac(cid:415)on with the performance of the original plant and equipment suppliers and intends to seek substan(cid:415)al redress in due course. It is important to acknowledge the support that has been provided by our o(cid:335)ake and prepayment partner. Our communica(cid:415)on remains open and frank and the Company remains commi(cid:425)ed to mee(cid:415)ng the long-term interests of our o(cid:335)ake partner that is focussed on the supply of SC6 into the future. At the same (cid:415)me, our o(cid:335)ake and prepayment partner is aware of the challenges that the produc(cid:415)on delays have caused, in par(cid:415)cular in rela(cid:415)on to cash ﬂows and has expressed agreement to the Company seeking other ﬁnance opportuni(cid:415)es provided the long-term interests of our o(cid:335)ake partner are not impinged. The Company was able to release updated resource es(cid:415)mates and at the same (cid:415)me iden(cid:415)fy that the main pegma(cid:415)te at Zulu is Spodumene Quartz Intergrowths dominant and accordingly is primarily a spodumene rich ore body. This resource es(cid:415)mate, coupled to the emerging extent of pegma(cid:415)tes contained within the EPO, is likely to support both a much longer term life of mine for the present mine plant, but also the expecta(cid:415)on of a signiﬁcantly larger overall resource and the likelihood of an increase in plant produc(cid:415)on capacity in the immediate future. Applica(cid:415)on has been made for renewal of the EPO but in the event that this is not forthcoming, the company has registered extensive new mining claims over prospec(cid:415)ve areas within the EPO. In subsequent events associated with the plant, the Company engaged Senet Engineering to conduct a preliminary review of the plant as delivered at the (cid:415)me of removal of the previous plant supplier, as much to assist in remedial ac(cid:415)on required as to set and understand the baseline and other issues associated with the previous plant supplier. Subsequently, the Company intends to further engage similar services to examine and validate the Company’s internal discounted cash ﬂow and projected cash ﬂows with a view to moving the opera(cid:415)on at Zulu to a fully compliant mineral reserve status. The experience to date, based upon internal assessments, and the produc(cid:415)on cost associated with spodumene concentrate produced supports the Company’s internal projec(cid:415)on of a delivered China port all in cost of $828 per tonne for the year ending June 2025. Extended Lithium Por(cid:414)olio We have previously referred to our claims in the eastern part of Zimbabwe and we are pleased to advise that these claims are presently under evalua(cid:415)on by a major Chinese miner who have indicated their inten(cid:415)on to formulate a formal oﬀer to acquire these proper(cid:415)es. Turwi Gold Project Premier had acquired opera(cid:415)onal control and 50% of this gold explora(cid:415)on project in Southeast Zimbabwe. However, at this (cid:415)me, the focus of Premier will be that of Zulu. Premier will explore other alterna(cid:415)ve opportuni(cid:415)es to releasing the poten(cid:415)al value and opportunity of the Turwi Gold Project. 4 MN Holdings Limited (“MNH”) Delays at Zulu have eﬀec(cid:415)vely delayed any further development of this project. It should be noted that the posi(cid:415)ves associated with Manganese make this investment a(cid:425)rac(cid:415)ve and Premier will look to increase our interest and control. In the unaudited management accounts for year ended 30 June 2023, MNH’s wholly owned opera(cid:415)ng subsidiary, Otjozondu reported revenue of approximately N$76 million (equivalent to $4.1 million) and an opera(cid:415)ng proﬁt before tax (and interest charges to group companies) of approximately N$24.1 million (equivalent to $1.3 million). Total assets as at the same date amounted to approximately N$289 million (equivalent to $15.6 million). Vortex Limited (formerly Circum Minerals Limited “Circum”) Although the status in Ethiopia has improved, li(cid:425)le has been achieved. Frustra(cid:415)ons related to coopera(cid:415)ve agreements and diﬀering opinions on development of this outstanding worldclass deposit, allied to the Ethiopian status con(cid:415)nue to frustrate the realisa(cid:415)on of this investment. Funding During the repor(cid:415)ng period we raised net proceeds of $17.542 million (2022: of $14.838 million). Principal ac(cid:415)vi(cid:415)es and strategic review of the business The principal ac(cid:415)vity of Premier and its subsidiary companies (the Group) during the year under review is the mining, explora(cid:415)on, evalua(cid:415)on development and investment in natural resource proper(cid:415)es on the African con(cid:415)nent. Premier was incorporated on 21 August 2007 in the Bri(cid:415)sh Virgin Islands (BVI) as a BVI business company with number 1426861. The registered oﬃce is Craigmuir Chambers, PO Box 71, Road Town, Tortola, Bri(cid:415)sh Virgin Islands. The Company was admi(cid:425)ed to trading on the London Stock Exchange’s AIM Market on 10 December 2012. Objec(cid:415)ves During the current year, the primary focus will be: • • • • • Op(cid:415)mise and stabilise proﬁtable opera(cid:415)ons at Zulu Progress resource development within the Zulu EPO and secure a Mining lease over prospec(cid:415)ve areas therein. Expand produc(cid:415)on at Zulu Seek to resolve the status of RHA, MNH and Vortex Iden(cid:415)fy and secure high value explora(cid:415)on targets in other jurisdic(cid:415)ons. Principal risks and uncertain(cid:415)es The Group is subject to a number of risks and uncertain(cid:415)es which could have a material eﬀect on its business, opera(cid:415)ons, or future performance, including but not limited to: Credit Risk Credit risk is the risk of poten(cid:415)al loss to the Company if counterparty to a ﬁnancial instrument fails to meet its contractual obliga(cid:415)ons. The Company’s credit risk is primarily a(cid:425)ributable 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 inves(cid:415)ng its cash with high-credit quality ﬁnancial ins(cid:415)tu(cid:415)ons in business and savings accounts, guaranteed investment cer(cid:415)ﬁcates 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 auc(cid:415)on rate securi(cid:415)es. 5 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 obliga(cid:415)ons 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 obliga(cid:415)ons. Also refer to the going concern sec(cid:415)on below. Refer to note 29 for the company’s exposure to liquidity risk. Opera(cid:415)ng Risks The ac(cid:415)vi(cid:415)es of the Group are subject to all of the hazards and risks normally incidental to exploring and developing natural resource projects. These risks and uncertain(cid:415)es include, but are not limited to environmental hazards, machinery and plant breakdowns, industrial accidents, labour disputes, geo-poli(cid:415)cal risks, encountering unusual or unexpected geologic forma(cid:415)ons or other geological or grade problems, unan(cid:415)cipated changes in rock forma(cid:415)on characteris(cid:415)cs and mineral recovery, encountering unan(cid:415)cipated ground or water condi(cid:415)ons, land slips, ﬂooding, periodic interrup(cid:415)ons due to inclement or hazardous weather condi(cid:415)ons and other acts of God or un-favourable opera(cid:415)ng condi(cid:415)ons and losses. Should any of these risks and hazards aﬀect the Group’s explora(cid:415)on, development or mining ac(cid:415)vi(cid:415)es, it may cause the cost of produc(cid:415)on to increase to a point where it would no longer be economic to extract minerals from the Group’s proper(cid:415)es, 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 destruc(cid:415)on of mineral proper(cid:415)es or processing facili(cid:415)es, 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 produc(cid:415)on in the future at Zulu. The board of directors manages this risk by monitoring cash levels and reviewing cash ﬂow forecasts on a regular basis. In par(cid:415)cular, the Group’s success will depend on the successful commissioning, modiﬁca(cid:415)on and op(cid:415)misa(cid:415)on of the processing plant at Zulu and there is no certainty that there may not be further unforeseen delays, plant modiﬁca(cid:415)ons or unan(cid:415)cipated costs. 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 ﬂuctua(cid:415)ons 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, obliga(cid:415)ons are not considered signiﬁcant. Foreign Currency Risk - The Company is exposed to the ﬁnancial risk related to the ﬂuctua(cid:415)on of foreign exchange rates against the Company’s func(cid:415)onal currency, which is the United States dollar (“USD”). The Company expects to con(cid:415)nue to raise funds in the United Kingdom. The Company conducts its business in Zimbabwe with a signiﬁcant por(cid:415)on of expenditures in that country historically denominated in USD and now also in RTGS Dollars (“RTGS$”). The introduc(cid:415)on of the RTGS$ during the 2019 ﬁnancial year has resulted in the devalua(cid:415)on of the RTGS$ against the US Dollar. This devalua(cid:415)on has also resulted in the Zimbabwean economy going into hyperinﬂa(cid:415)onary status. As a means to counteract the hyper-inﬂa(cid:415)onary eﬀects and given that the majority of transac(cid:415)ons are denominated in USD, all Zimbabwean companies within the group now record and report their ﬁnancial informa(cid:415)on in USD with eﬀect from 1 January 2023. Addi(cid:415)onally, a por(cid:415)on of the Company’s business is conducted in South African Rands (“ZAR”). As such, it is subject to risk due to ﬂuctua(cid:415)ons in the exchange rates between the USD and each of the ZAR and GBP. A signiﬁcant change in the currency exchange rates between the USD rela(cid:415)ve to foreign currencies could have an eﬀect on the Company’s results of opera(cid:415)ons, ﬁnancial posi(cid:415)on, or cash ﬂows. The Company has not hedged its exposure to currency ﬂuctua(cid:415)ons. 6 Commodity Price Risk – Zulu value is largely related to the price of lithium and the outlook on this mineral. The Company minority interest in MNH results in limited control of how MNH mi(cid:415)gate the risk associated with Manganese price ﬂuctua(cid:415)ons. Refer to note 29 for the company’s exposure to market risk. Early-stage Project Risk Zulu moved into early-stage produc(cid:415)on through the development of a pilot plant without a Deﬁni(cid:415)ve Feasibility Study. In advancing Zulu to the stage where it may be cash genera(cid:415)ve, many risks are faced including without limita(cid:415)on, the inherent uncertainty of mining and con(cid:415)nuity of the mineral resource without a DFS support by a measured category resource statement, the capital costs of explora(cid:415)on and produc(cid:415)on, commodity pricing, opera(cid:415)ng in remote and o(cid:332)en poli(cid:415)cally unstable environment. Environmental Risks and Hazards All phases of the Group’s opera(cid:415)ons are subject to environmental regula(cid:415)on in the areas in which it operates. Environmental legisla(cid:415)on is evolving in a manner that may require stricter standards and enforcement, increased ﬁnes and penal(cid:415)es 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 exis(cid:415)ng or future environmental regula(cid:415)on will not materially adversely aﬀect the Group’s business, ﬁnancial condi(cid:415)on, and results of opera(cid:415)ons. Environmental hazards may exist on the proper(cid:415)es 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 explora(cid:415)on and development ac(cid:415)vi(cid:415)es are dependent upon the grant of appropriate licences, concessions, leases, permits and regulatory consents which may be withdrawn or made subject to limita(cid:415)ons or performance criteria. Such licences and permits are as a prac(cid:415)cal ma(cid:425)er subject to the discre(cid:415)on of the applicable Government or Government oﬃce. The Group must comply with known standards, exis(cid:415)ng laws and regula(cid:415)ons that may entail greater or lesser costs and delays depending on the nature of the ac(cid:415)vity to be permi(cid:425)ed. The interpreta(cid:415)ons, amendments to exis(cid:415)ng laws and regula(cid:415)ons, or more stringent enforcement of exis(cid:415)ng laws and regula(cid:415)ons could have a material adverse impact on the Group’s results of opera(cid:415)ons and ﬁnancial condi(cid:415)on. Whilst the Company con(cid:415)nually seeks to do everything within its control to ensure that the terms of each licence are met and adhered to, third par(cid:415)es may seek to exploit any technical breaches in licence terms for their own beneﬁt. There is a risk that nego(cid:415)a(cid:415)ons with a Government in rela(cid:415)on 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. Poli(cid:415)cal and Regulatory Risk The Group’s opera(cid:415)ng ac(cid:415)vi(cid:415)es in Africa, notably in Zimbabwe, are subject to laws and regula(cid:415)ons governing expropria(cid:415)on of property, health and worker safety, employment standards, waste disposal, protec(cid:415)on of the environment, mine development, land and water use, prospec(cid:415)ng, mineral produc(cid:415)on, exports, taxes, labour standards, occupa(cid:415)onal health standards, toxic wastes, the protec(cid:415)on of endangered and protected species and other ma(cid:425)ers. The Group is dependent on the poli(cid:415)cal and economic situa(cid:415)on in these countries and may be adversely impacted by poli(cid:415)cal factors such as expropria(cid:415)on, war, terrorism, insurrec(cid:415)on, and changes to laws governing mineral explora(cid:415)on and opera(cid:415)ons. 7 Internal Control and Financial Risk Management The Board has overall responsibility for the Group’s systems of internal control and for reviewing their eﬀec(cid:415)veness. 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 iden(cid:415)ﬁed responsibili(cid:415)es. ➢ Produc(cid:415)on of management informa(cid:415)on presented to the Board. ➢ Day to day hands on involvement of the Execu(cid:415)ve Directors and Senior Management. ➢ Regular board mee(cid:415)ngs and discussions with the non-execu(cid:415)ve directors. The Group’s ac(cid:415)vi(cid:415)es expose it to a number of ﬁnancial risks including cash ﬂow risk, liquidity risk and foreign currency risk. The Group has iden(cid:415)ﬁed certain short coming in the ﬁnancial control systems, which are currently in the process of being addressed. Disclosure of management’s objec(cid:415)ves, exposure, and policies in rela(cid:415)on to these risks can be found in note 29 to these ﬁnancial statements. Environmental Policy The Group is aware of the poten(cid:415)al 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 prac(cid:415)ce approach to managing environmental aspects. Zulu was granted approval of its Environmental Impact Assessment and was permi(cid:425)ed to undertake mining opera(cid:415)ons 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 objec(cid:415)ve, the Group provides ongoing training and support to employees and sets demanding standards for workplace safety. Going Concern These consolidated ﬁnancial statements are prepared on the going concern basis. The going concern basis assumes that the Group will con(cid:415)nue in opera(cid:415)on for the foreseeable future and will be able to realise its assets and discharge its liabili(cid:415)es and commitments in the normal course of business. There remains an ac(cid:415)ve and very liquid market for the Group’s shares. The Directors have prepared a cash ﬂow forecasts for the 18-month period ended 31 December 2025, taking into account the number of shares available to Premier to raise further equity, forecast opera(cid:415)ng cash ﬂow and capital expenditure requirements for the Zulu Mine, available working capital and forecast expenditure for the rest of the Group including overheads and other development costs. These key assump(cid:415)ons of this forecast are, inter alia: The Group During 2023 the Group issued 4,216,446,124 shares at an average price of 0.4455p per share raising a total of $18.786 million. This cash was used to con(cid:415)nue with the commission and development work at Zulu mine. 8 • • RHA • Zulu • •  Premier has obtained support from its o(cid:335)ake and prepayment partner allowing Premier to pursue alterna(cid:415)ve funding avenues. The calling of a Special General Mee(cid:415)ng to increase the number of shares free from pre-emp(cid:415)ve rights by no more than 2 billion. The Company has not funded any of the ac(cid:415)vi(cid:415)es at RHA since 1 July 2019, apart from essen(cid:415)al care and maintenance costs. Zulu will have its new scrubber unit installed and opera(cid:415)onal in the week of the 10th of July. This will enable Zulu to produce and derive revenue from the sale of SC6. Premier has engaged Zimbabwean banks to facilitate the funding of Zulu’s short-term needs as they may arise. The Board also believes that it has a valuable asset in Zulu, with an es(cid:415)mated fair value in accordance with the prepayment and o(cid:335)ake agreement is US$200 million. And, in the event that it elected to stop all group funding of Zulu, the group has suﬃcient share authori(cid:415)es to sustain its reduced holding costs for the period to 31 December 2025. A(cid:332)er careful considera(cid:415)on of those ma(cid:425)ers set out above, the Directors are of the opinion that the Group will be able to obtain adequate resources to enable it to undertake its planned ac(cid:415)vi(cid:415)es for the period to 31 December 2025 either from produc(cid:415)on or from addi(cid:415)onal fund raising and have prepared these consolidated ﬁnancial statements on the going concern basis. In the event that Premier is not able to meet the above considera(cid:415)on, then a material uncertainty exists which may cast signiﬁcant doubt on the ability of the Group to con(cid:415)nue as a going concern and therefore be unable to realise its assets and se(cid:425)le its liabili(cid:415)es in the normal course of business. Refer to note 5 for further informa(cid:415)on. George Roach Chief Execu(cid:415)ve Oﬃcer 28 June 2024 9 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 explora(cid:415)on and exploita(cid:415)on agreements in the en(cid:415)re SADAC region, Ethiopia, and most of CEMAC and ECOWAS regions. Under the auspices of Explora(cid:415)on Services, he has provided consultancy to prospec(cid:415)ve explora(cid:415)on companies and has acted in signiﬁcant capaci(cid:415)es 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 Vasco(cid:425)o Errico is an accomplished and qualiﬁed Mining Engineer with more than 40 years in the mining industry. Errico also has an 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 addi(cid:415)on to direct mining experience, Errico has gained experience in mining construc(cid:415)on, providing strategic project leadership in line with industry best prac(cid:415)ce. CFO – Mr Tomas Apetauer Since qualifying as a C.A. (S.A.), Tomas has gained extensive experience in a diverse range of industries including ﬁnance, engineering consul(cid:415)ng, corporate ﬁnance and as an interna(cid:415)onal trainer. As Premier’s chief ﬁnancial oﬃcer, he brings the skills gained through corporate turnaround strategies, mul(cid:415)-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 interna(cid:415)onal papers on mining and process technology and facilitated at interna(cid:415)onal mining conferences as a speaker. Corporate Secretary – Mr Brendan Roach Brendan holds a B.Com LLB and MA(Law). He manages the full func(cid:415)on of corporate aﬀairs for Premier and acts as our interna(cid:415)onal Legal Counsel. Explora(cid:415)on 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 explora(cid:415)on project management experience and has worked in various capaci(cid:415)es in diverse African countries. He has a long history with Premier African Minerals. 10 Directors CEO – MR GEORGE ROACH George has extensive experience in natural resource business development in Africa. He has held posi(cid:415)ons in and/or ini(cid:415)ated a number of start-up businesses listed on AIM and/or TSX-V. Mr Wolfgang Hempel – Non-execu(cid:415)ve Director Wolfgang has more than 27 years’ experience in the African, American, European, and Asian explora(cid:415)on 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 Federa(cid:415)on of Geologists. Mr Godfrey Manhambara – Chairman A Zimbabwean na(cid:415)onal with extensive experience in business. Godfrey was the former Chief Execu(cid:415)ve of Aﬀretair. In 1999, Godfrey was appointed as CEO of the Civil Avia(cid:415)on Authority in Zimbabwe, a posi(cid:415)on he held un(cid:415)l 2001. Currently Godfrey is the Chief Execu(cid:415)ve of Beta Holding, the largest infrastructure supply manufacturer in Zimbabwe. Dr Luo Wei – Non-Execu(cid:415)ve Director Dr Wei has a PhD in Mineral Prospec(cid:415)ng and Explora(cid:415)on from Central South University. With over a decade of experience in the mining and explora(cid:415)on industry Dr Wei has extensive experience in project management and op(cid:415)misa(cid:415)on with a focus on resource development. 11 DIRECTORS REPORT Results The audited ﬁnancial statements for the year ended 31 December 2023 are set out on pages 32 to 87. The Group reported a loss before and a(cid:332)er tax of $20.813 million for the year ended 31 December 2023 (2022: loss $5.803 million). The loss before and a(cid:332)er tax includes: • • • A gross trading loss before deprecia(cid:415)on and amor(cid:415)sa(cid:415)on is $3.805 million (2022: $nil). Administra(cid:415)on expenses amoun(cid:415)ng to $10.645 million (2022: $4.622 million). Finance costs amoun(cid:415)ng to $5.818 million (2022: $nil). The total comprehensive loss for the year amounted to $21.312 million (2022: Loss $13.646 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 2023 ﬁnancial year net funds of $17.542 million were raised through direct subscrip(cid:415)ons from the issue of new ordinary shares (2022: $14.838 million). There remains an ac(cid:415)ve and very liquid market for the Group’s shares. Borrowings During the ﬁnancial year, no addi(cid:415)onal borrowings were raised. Other key elements of ﬁnancial posi(cid:415)on The Company’s holdings in Vortex Ltd amount to $0.501 million The Company’s holdings in MNH amount to $nil (2022: $nil). The Company’s investment in property, plant and equipment during the year was $53.234 million (2022: $35.997 million). Events a(cid:332)er the repor(cid:415)ng date At the date these ﬁnancial statements were approved, the Directors were not aware of any signiﬁcant events a(cid:332)er the repor(cid:415)ng date other than those set out in note 32 to the ﬁnancial statements. Directors The Directors of Premier who served during the period or subsequently were: • • • • George Roach (appointed on incorpora(cid:415)on April 2007) Godfrey Manhambara (appointed 27 September 2017) Wolfgang Hampel (appointed 10 April 2018) Dr Luo Wei (appointed 30 April 2022) 12 Directors’ Fiduciary Statement The Directors acknowledge their ﬁduciary du(cid:415)es 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 ma(cid:425)ers) to: • • • • • The likely consequences of any decision in the long term. The Group’s long-term strategic objec(cid:415)ves, including progress made during the year and principal risks to these objec(cid:415)ves, 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 objec(cid:415)ves. The impact of the Company’s opera(cid:415)ons on the community and the environment. The Group operates honestly and transparently. We consider the impact on the environment on our day-to-day opera(cid:415)ons and how we can minimise this. The desirability of the Company maintaining a reputa(cid:415)on for high standards of business conduct. Our inten(cid:415)on is to behave in a responsible manner, opera(cid:415)ng within the high standard of business conduct and good corporate governance. The need to act fairly as between members of the Company. Our inten(cid:415)on 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 objec(cid:415)ves. Share capital Premier’s shares are publicly traded on AIM with the stock (cid:415)cker of PREM. As at 31 December 2023, the Company’s issued share capital consists of 26,634,455,000 (note 18) Ordinary Shares of no-par value. The company does not hold any Ordinary Shares in treasury. Major Shareholders As at 28 June 2024 the Company was aware of the following persons who hold, directly or indirectly, vo(cid:415)ng rights represen(cid:415)ng 3% or more of the issued share capital of the Company to which vo(cid:415)ng rights are a(cid:425)ached: Name Number of Ordinary Shares % Issued Share Capital Canmax (formerly Suzhou TA&A Ultra Clean Technology Co. Ltd) 4,428,571,428 George Roach* 1,246,514,207 14.11% 3.9% * George Roach and/or structures associated with G Roach. There are no restric(cid:415)ons on the transfer of the Company’s AIM securi(cid:415)es. 13 _____________________ George Roach Chief Execu(cid:415)ve Oﬃcer 28 June 2024 14 CORPORATE GOVERNANCE STATEMENT Premier is commi(cid:425)ed to maintaining the highest standards in corporate governance throughout its opera(cid:415)ons and to ensure all its prac(cid:415)ces are conducted transparently, morally, and eﬃciently. Therefore, and in accordance with the AIM Rules for Companies (March 2018), Premier seeks to comply with the provisions of The UK Corporate Governance Code 2018 as published by the Financial Repor(cid:415)ng Council Limited, to the extent the Board consider appropriate, given the Company's size, stage of development and resources (the "Code"). The Code was updated in January 2024 and will apply to ﬁnancial years beginning on or a(cid:332)er 1 January 2025. The 2018 code remains in eﬀect at this (cid:415)me. Throughout the Repor(cid:415)ng Period, the Company has con(cid:415)nued 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 iden(cid:415)ﬁed by Premier. Accordingly, the Company has established speciﬁc commi(cid:425)ees and implemented certain policies, to ensure that: • • • • It is led by an experienced Board which is collec(cid:415)vely responsible for the long-term success of the Company. The Board and the commi(cid:425)ees have the appropriate balance of skills, experience, independence, and knowledge of the Company to enable them to discharge their respec(cid:415)ve du(cid:415)es and responsibili(cid:415)es eﬀec(cid:415)vely. The Board establish a formal and transparent arrangement for considering how it applies the corporate repor(cid:415)ng, risk management and internal control principles and for maintaining an appropriate rela(cid:415)onship with the Company's auditors. There is a dialogue with shareholders based on the mutual understanding of objec(cid:415)ves. During the year, the board of directors held one formal board mee(cid:415)ng that was a(cid:425)ended 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 a(cid:425)endance of most of the directors in oﬃce to discuss the opera(cid:415)ons of the Company. Since the year end, the board con(cid:415)nued to implement the policy of holding informal board calls as so required and is also in the process of ac(cid:415)vely looking to strengthen the board of directors. The various commi(cid:425)ees of the Company have con(cid:415)nued to meet from (cid:415)me to (cid:415)me in accordance with the requirements of the Company’s ongoing opera(cid:415)ons. In addi(cid:415)on, the Company has adopted a comprehensive suite of policies including: • • • • • An(cid:415)-corrup(cid:415)on and bribery. Health and safety. Environment and community. IT, communica(cid:415)ons, 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, se(cid:427)ng its strategic direc(cid:415)on and establishing appropriate policies. It is the Directors’ responsibility to oversee the ﬁnancial posi(cid:415)on of the 15 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 rela(cid:415)ng to internal control and risk management. The Non-execu(cid:415)ve Directors bring a wide range of skills and experience to the Company, as well as independent judgment on strategy, risk, and performance. The Non- execu(cid:415)ve Directors are considered by the Board to be independent at the date of this report. To achieve its objec(cid:415)ves, the Board strictly adheres to the Code. The Board meets at least three (cid:415)mes a year with supplementary mee(cid:415)ngs held as required. The agenda for the Board mee(cid:415)ngs is prepared jointly by the Chairman and CEO. The Board maintains annual rolling plan (“Agenda”) of items for discussion to ensure that all ma(cid:425)ers 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 ac(cid:415)vi(cid:415)es and market condi(cid:415)ons. Management Accounts and Financial posi(cid:415)on. Corporate Ma(cid:425)ers. Other business ma(cid:425)ers 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 ma(cid:425)ers are reserved for the Board. • • • • • • • Strategy, Policy, and Management. Group Structure and capital requirements. Financial repor(cid:415)ng and controls. Internal and External controls. Transac(cid:415)ons and Commercial Contracts including delega(cid:415)on authority. Board structure. Corporate governance ma(cid:425)ers. Premier has established varies commi(cid:425)ees to assist the Board in maintain the highest levels of corporate governance. Of these commi(cid:425)ees, the following two strongly assist the decision making of the Board. Audit Commi(cid:425)ee The Audit Commi(cid:425)ee (“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 Commi(cid:425)ee, 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 accoun(cid:415)ng and ﬁnancial repor(cid:415)ng processes, the Company's internal accoun(cid:415)ng controls and the resolu(cid:415)on of issues iden(cid:415)ﬁed by the Company's auditors. Other key aspects of the AC include: • • • • Reviewing the Company's accoun(cid:415)ng policies and reports produced by internal and external audit func(cid:415)ons. Considering whether the Company has followed appropriate accoun(cid:415)ng standards and made appropriate es(cid:415)mates and judgements, considering the views of the external auditor. Repor(cid:415)ng its views to the board of directors if it is not sa(cid:415)sﬁed with any aspect of the proposed ﬁnancial repor(cid:415)ng by the Company. Reviewing the adequacy and eﬀec(cid:415)veness of the Company’s internal ﬁnancial controls and internal control and risk management systems. 16 • • Reviewing the adequacy and eﬀec(cid:415)veness of the Company's an(cid:415)-money laundering systems and controls for the preven(cid:415)on of bribery and receive reports on non-compliance. Overseeing the appointment of and the rela(cid:415)onship with the external auditor. Remunera(cid:415)on Commi(cid:425)ee The Remunera(cid:415)on Commi(cid:425)ee comprises of George Roach and is chaired by Godfrey Manhambara. The Remunera(cid:415)on Commi(cid:425)ee assumes general responsibility for assis(cid:415)ng the Board in respect of remunera(cid:415)on policies for Premier. The Commi(cid:425)ee reviews and recommends remunera(cid:415)on strategies for the Company and proposals rela(cid:415)ng to compensa(cid:415)on for the Company's oﬃcers, directors and consultants and assesses the performance of the oﬃcers of the Company in fulﬁlling their responsibili(cid:415)es and mee(cid:415)ng corporate objec(cid:415)ves. It has the responsibility for, inter alia, administering share and cash incen(cid:415)ve plans and programmes for Directors and employees and for approving (or making recommenda(cid:415)ons to the Board on) share and cash awards for Directors and employees. The Commi(cid:425)ee is sa(cid:415)sﬁed that the advice received has been objec(cid:415)ve 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 Execu(cid:415)ve Oﬃcer (“CEO”) are split and Godfrey Manhambara acts as chairman. There is no one individual or group of individuals on the Board that have unfe(cid:425)ered powers of discre(cid:415)on nor is there any undue inﬂuence in the collec(cid:415)ve decision-making ability of the Board. The responsibili(cid:415)es of the Chairman, CEO and Non-execu(cid:415)ve director are set out in wri(cid:415)ng and are reviewed 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 facilita(cid:415)ng the discussion of the Company’s strategy, as set by the Board. And to eﬀec(cid:415)vely 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 opera(cid:415)onal ac(cid:415)vi(cid:415)es, and for the proper execu(cid:415)on of the stage as set by the Board. The Non-execu(cid:415)ve directors, act as a member of the unitary Board, however, they are required to construc(cid:415)vely challenge performance of management and help develop proposals on strategy, agreeing of goals and the Company key objec(cid:415)ves. 2. Eﬀec(cid:415)veness The Composi(cid:415)on of the Board The Board and its commi(cid:425)ees should have the appropriate balance of skills, experience, independence, and knowledge of the Company to enable them to discharge their respec(cid:415)ve du(cid:415)es and responsibili(cid:415)es eﬀec(cid:415)vely. As such, the Board has been structured to ensure that correct mix of skills and experience are in place to allow it to operate eﬀec(cid:415)vely: • • An independent Chairman (Godfrey Manhambara), 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 separa(cid:415)on from the day-to-day business of the Company which allows him to make independent decisions. a CEO (George Roach), whose primary focus is communica(cid:415)ng, on behalf of the Company, with shareholders, government en(cid:415)(cid:415)es, and the public. Leading the development of the Company's short- and long-term strategy. 17 • • a Technical Director (Wolfgang Hampel), whose is responsible for leading, co-ordina(cid:415)ng, and op(cid:415)mising the performance of both mining and explora(cid:415)on services. With a further responsibility for geological and mine planning ac(cid:415)vi(cid:415)es, his role is cri(cid:415)cal in ensuring the quality and eﬃciency of Premier geology, and A further Non-Execu(cid:415)ve Director (Dr Luo Wei). The Code requires that a smaller company (and which the Company is under the Code) should have at least two independent non-execu(cid:415)ve directors. Godfrey Manhambara is independent under the Code. The Board also regards Wolfgang Hampel as independent, notwithstanding that he par(cid:415)cipates in the Company’s share op(cid:415)on plan and provides some technical advice to the board. The Board is sa(cid:415)sﬁed that Wolfgang Hampel acts independently irrespec(cid:415)ve 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 execu(cid:415)ve management at mee(cid:415)ngs of the Board thereby conﬁrming that the Board is capable of opera(cid:415)ng eﬀec(cid:415)vely. The Board has not appointed a senior Finance Director but is ac(cid:415)vely seeking for the appropriate candidate with ﬁnancial exper(cid:415)se to provide board oversight on all report prepared by the group ﬁnancial manager, Mr Tomas Apetauer who is a chartered accountant with extensive audit and ﬁnancial management experience. Addi(cid:415)onally, the Company has a Company Secretary in the United Kingdom who assists the Chairman and CEO in preparing for and running eﬀec(cid:415)ve board mee(cid:415)ngs, including the (cid:415)mely dissemina(cid:415)on of appropriate informa(cid:415)on. The Company Secretary provides advice and guidance to the extent required by the Board on the legal and regulatory environment. The Nomina(cid:415)on Commi(cid:425)ee (“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 composi(cid:415)on of and succession planning for the Board, and to lead the process of appointments to the Board. The Commi(cid:425)ee 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 composi(cid:415)on (including the skills, knowledge, experience, and diversity) of the board and make recommenda(cid:415)ons to the board about any changes, succession planning and vacancies; and iden(cid:415)fying suitable candidates from a wide range of backgrounds to be considered for posi(cid:415)ons 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 nomina(cid:415)ng 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 (cid:415)me to the Company to discharge their responsibili(cid:415)es in accordance their le(cid:425)er of appointment. The Company maintains records of each le(cid:425)er of appointment, which can be inspected at an agreed (cid:415)me, at the Company’s registered oﬃce. The NC is responsible for considering on an annual basis, whether each director is able to devote suﬃcient (cid:415)me to their du(cid:415)es. 18 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 induc(cid:415)on on the Company. Each induc(cid:415)on is tailored to the speciﬁc background and requirements of the new director. In general, the induc(cid:415)on contains informa(cid:415)on on: • • • • Structures and opera(cid:415)ons. Board procedures. Corporate Governance. Details regarding their du(cid:415)es and responsibili(cid:415)es. Informa(cid:415)on and Support As Premier constantly seeks to maintain the highest levels of corporate governance, it is impera(cid:415)ve that informa(cid:415)on is supplied to the Board in a form and of a quality appropriate to enable the Board to discharge its du(cid:415)es in a (cid:415)mely manner. The supply of the informa(cid:415)on 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 du(cid:415)es. The Board is given suﬃcient opportunity to meet with any manager, consultant, or contractor to gain further insight into Premier. Evalua(cid:415)on The Board recognises that it should undertake a formal and rigorous annual evalua(cid:415)on of its own performance, that of its commi(cid:425)ees and individual directors. The evalua(cid:415)on of the Board’s performance is an assessment of the following key factors: • • • • • • The Board structure. The Board’s performance. The Board business strategy. Financial repor(cid:415)ng and controls. Performance monitoring. Suppor(cid:415)ng and advisory roles. The Board is not in compliance with the Code as the evalua(cid:415)on process is usually conducted internally due to the size and complexity of the opera(cid:415)ons of the Company. Furthermore, the Board believes that internal assessment best help iden(cid:415)fy the key strength and weaknesses to allow for eﬀec(cid:415)ve evalua(cid:415)on. The Board will con(cid:415)nue to assess the internal review process against the growth of the Company as should the Company grow in size it may consider ge(cid:427)ng an independent assessment. Re-elec(cid:415)on The Board believe that all directors should be submi(cid:425)ed for re-elec(cid:415)on at regular intervals, subject to the con(cid:415)nued sa(cid:415)sfactory performance of the Company. The Director longest in oﬃce since their last appointment is required to re(cid:415)re by rota(cid:415)on or stand for reappointment at the Annual General Mee(cid:415)ng (“AGM”). 19 3. Accountability Financial and Business repor(cid:415)ng 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 presen(cid:415)ng a fair, balanced and understandable assessment of the Company’s posi(cid:415)ons that also best provides the informa(cid:415)on 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 sec(cid:415)on of the Company’s Annual Report and Financial Statements for the year ended December 2023, the Board set outs the strategic objec(cid:415)ves 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 expecta(cid:415)on that the Group has adequate resources to con(cid:415)nue in opera(cid:415)ons or existence for the foreseeable future thus con(cid:415)nues 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 objec(cid:415)ves. The Board manages the risk through the implementa(cid:415)on of internal control systems. The Board has iden(cid:415)ﬁed the following as some of the risks and their mi(cid:415)ga(cid:415)on: • • • • • • Credit Risk: Credit risk is the risk of poten(cid:415)al loss to the Company if counterparty to a ﬁnancial instrument fails to meet its contractual obliga(cid:415)ons. The Company’s credit risk is primarily a(cid:425)ributable 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 inves(cid:415)ng its cash with high-credit quality ﬁnancial ins(cid:415)tu(cid:415)ons in business and savings accounts, guaranteed investment cer(cid:415)ﬁcates 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 obliga(cid:415)ons 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 obliga(cid:415)ons. Opera(cid:415)ng Risks: The ac(cid:415)vi(cid:415)es of the Company are subject to all of the hazards and risks normally incidental to exploring and developing natural resource projects. These risks and uncertain(cid:415)es include, but are not limited to environmental hazards, industrial accidents, Covid-19, labour disputes, geo- poli(cid:415)cal risks, encountering unusual or unexpected geologic forma(cid:415)ons or other geological or grade problems, unan(cid:415)cipated changes in rock forma(cid:415)on characteris(cid:415)cs and mineral recovery, encountering unan(cid:415)cipated ground or water condi(cid:415)ons, land slips, ﬂooding, periodic interrup(cid:415)ons due to inclement or hazardous weather condi(cid:415)ons and other acts of God or un-favourable opera(cid:415)ng condi(cid:415)ons and losses. The Company manages the risk by closing monitoring opera(cid:415)ons 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, obliga(cid:415)ons are not considered signiﬁcant and is not mi(cid:415)gated at this (cid:415)me. 20 • • • • • Foreign Currency Risk: The Company is exposed to the ﬁnancial risk related to the ﬂuctua(cid:415)on of foreign exchange rates against the Company’s func(cid:415)onal currency, which is the United States dollar (“USD”). The Company has not hedged its exposure to currency ﬂuctua(cid:415)ons. Environmental Risks and Hazards: All phases of the Company’s opera(cid:415)ons are subject to environmental regula(cid:415)on 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 explora(cid:415)on and development ac(cid:415)vi(cid:415)es are dependent upon the grant of appropriate licences, concessions, leases, permits and regulatory consents which may be withdrawn or made subject to limita(cid:415)ons or performance criteria. Such licences and permits are as a prac(cid:415)cal ma(cid:425)er subject to the discre(cid:415)on of the applicable Government or Government oﬃce. The Group must comply with known standards, exis(cid:415)ng laws and regula(cid:415)ons that may entail greater or lesser costs and delays depending on the nature of the ac(cid:415)vity to be permi(cid:425)ed. The interpreta(cid:415)ons, amendments to exis(cid:415)ng laws and regula(cid:415)ons, or more stringent enforcement of exis(cid:415)ng laws and regula(cid:415)ons could have a material adverse impact on the Group’s results of opera(cid:415)ons and ﬁnancial condi(cid:415)on. Whilst the Company con(cid:415)nually seeks to do everything within its control to ensure that the terms of each licence are met and adhered to, third par(cid:415)es may seek to exploit any technical breaches in licence terms for their own beneﬁt. There is a risk that nego(cid:415)a(cid:415)ons with a Government in rela(cid:415)on 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. Poli(cid:415)cal and Regulatory Risk: The Company opera(cid:415)ng ac(cid:415)vi(cid:415)es in Africa, notably in Zimbabwe, and Namibia, are subject to laws and regula(cid:415)ons governing expropria(cid:415)on of property, health and worker safety, employment standards, waste disposal, protec(cid:415)on of the environment, mine development, land and water use, prospec(cid:415)ng, mineral produc(cid:415)on, exports, taxes, labour standards, occupa(cid:415)onal health standards, toxic wastes, the protec(cid:415)on of endangered and protected species and other ma(cid:425)ers. The Group is dependent on the poli(cid:415)cal and economic situa(cid:415)on in these countries and may be adversely impacted by poli(cid:415)cal factors such as expropria(cid:415)on, war, terrorism, insurrec(cid:415)on, and changes to laws governing mineral explora(cid:415)on and opera(cid:415)ons. Internal Control and Financial Risk Management: The Board has overall responsibility for the Group’s systems of internal control and for reviewing their eﬀec(cid:415)veness. 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 eﬀec(cid:415)ve in enabling risks to be appropriately assessed and managed. Refer to the principal risks and uncertain(cid:415)es as set out in the Strategic Report for addi(cid:415)onal informa(cid:415)on on these risks. On behalf of the Board, the AC conducts an annual review of the eﬀec(cid:415)veness of the systems of internal control including ﬁnancial, opera(cid:415)onal and compliance controls and risk management systems. Audit Commi(cid:425)ee and Auditors The func(cid:415)ons of the AC are clearly described as part of the Leadership func(cid:415)on in this note. Whilst the Board sets the Company risk appe(cid:415)te, it reviews the opera(cid:415)ons and eﬀec(cid:415)veness of the Company’s risk management ac(cid:415)vi(cid:415)es 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 recommenda(cid:415)ons of the Code whereby they monitor and review the eﬀec(cid:415)veness of the internal audit ac(cid:415)vi(cid:415)es. However, at this (cid:415)me, the Board have determined that the appointment of internal auditor is not required due to the size of the Company. 21 4. Remunera(cid:415)on The Level and Components of Remunera(cid:415)on Execu(cid:415)ve directors’ remunera(cid:415)on 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 se(cid:427)ng the appropriate levels of remunera(cid:415)on for its directors to the Remunera(cid:415)on Commi(cid:425)ee. The levels of Remunera(cid:415)on to directors are disclosed to shareholders in Premier Annual Report and Financial Statements. Both the Board and Remunera(cid:415)on Commi(cid:425)ee seek to provide appropriate reward for the skill and (cid:415)me 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 execu(cid:415)ve remunera(cid:415)on and for ﬁxing the remunera(cid:415)on packages of individual directors. As strict policy, no director is involved in deciding their own remunera(cid:415)on. The Remunera(cid:415)on Commi(cid:425)ee consider and approves the remunera(cid:415)on and where applicable, incen(cid:415)ves and beneﬁts, and makes recommenda(cid:415)ons to the Board. The Commi(cid:425)ee will also govern employee share schemes. The Chairman of the Commi(cid:425)ee will be consulted by the CEO in respect of the Company and director’s performance approvals, compensa(cid:415)on and in respect of any appointment/departures from roles. The remunera(cid:415)on of non-execu(cid:415)ve directors shall be a ma(cid:425)er for the execu(cid:415)ve 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 informa(cid:415)on of which they are in possession and to comply with its obliga(cid:415)ons 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 (cid:415)me to (cid:415)me). Under the share dealing code, the Company must: • • • • Disclose all inside informa(cid:415)on to the public as soon as possible by way of market announcement unless certain circumstances exist in which the disclosure of the inside informa(cid:415)on may be delayed. Keep a list of each person who is in possession of inside informa(cid:415)on rela(cid:415)ng to the Company. Procure that all persons discharging managerial responsibili(cid:415)es and certain employees are given clearance by the Company before they are allowed to trade in Company securi(cid:415)es; and Procure that all persons discharging managerial responsibili(cid:415)es and persons closely associated to them no(cid:415)fy both the Company and the Financial Conduct Authority of all trades in Company securi(cid:415)es that they make. Addi(cid:415)onally, under the share dealing code, no person discharging managerial responsibili(cid:415)es is permi(cid:425)ed to deal in Company securi(cid:415)es (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. For details of the directors’ remunera(cid:415)on refer to note 27. 22 5. Rela(cid:415)ons with Shareholders Dialogue with shareholders The Company recognises that maintaining strong communica(cid:415)ons 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 Board has responsibility for approval and monitoring compliance with the Company’s disclosure controls and procedures. It has the responsibility, inter alia, determining whether informa(cid:415)on is inside informa(cid:415)on, deciding whether the inside informa(cid:415)on 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 CEO is contactable via email. Their email address can be obtained at either the Company’s registered oﬃce or by reques(cid:415)ng them at the below address. To con(cid:415)nually improve transparency, the Board would be delighted to to info@premierafricanminerals.com. The CEO has been appointed to manage the rela(cid:415)onship between the Company and its shareholders and will review and report to the Board on any communica(cid:415)ons received. Communica(cid:415)ons shareholders. feedback directed receive should from be Construc(cid:415)ve Use of General Mee(cid:415)ngs The Company holds AGM each year, whereby all of the directors aim to a(cid:425)end the AGM and value the opportunity of welcoming individual shareholders and other investors to communicate directly and address their ques(cid:415)ons. In addi(cid:415)on to the mandatory informa(cid:415)on required and procedures to calling a general mee(cid:415)ng, which can be found under the Company’s cons(cid:415)tu(cid:415)onal documents on the webpage, the Board ensure that a full, fair, and balanced explana(cid:415)on of business of all general mee(cid:415)ngs is sent in advance to shareholders. Statement of directors’ responsibili(cid:415)es The directors are responsible for preparing the annual report and ﬁnancial statements and have prepared the Group ﬁnancial statements in accordance with UK adopted Interna(cid:415)onal Accoun(cid:415)ng 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 securi(cid:415)es on AIM. In preparing these ﬁnancial statements the directors are required to: • • • • select suitable accoun(cid:415)ng policies and then apply them consistently. make judgements and accoun(cid:415)ng es(cid:415)mates that are reasonable and prudent. state whether they have been prepared in accordance with UK adopted Interna(cid:415)onal Accoun(cid:415)ng 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 con(cid:415)nue in business. The directors are responsible for keeping records that are suﬃcient to show and explain the Group and Company’s transac(cid:415)ons and will, at any (cid:415)me, enable the ﬁnancial posi(cid:415)on 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 preven(cid:415)on and detec(cid:415)on of fraud and other irregulari(cid:415)es. All reports and accounts, taken as a whole, is fair, balanced, understandable, and provides the informa(cid:415)on necessary for shareholders to assess the Company’s posi(cid:415)on, performance, business model and strategy. 23 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 informa(cid:415)on 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 informa(cid:415)on 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 2025. and taking account of the Board’s inten(cid:415)ons for future ac(cid:415)vi(cid:415)es a(cid:332)er that date. As explained further in note 5, taking account of the Group’s current posi(cid:415)on and principal risks, over a 12-month period, the Board has a reasonable expecta(cid:415)on that the Group will be able to con(cid:415)nue in opera(cid:415)on and meet its liabili(cid:415)es as they fall due over that period. The Board considers these periods of assessment to be appropriate because they contextualise the Company’s ﬁnancial posi(cid:415)on, business model and strategy. George Roach Chief Execu(cid:415)ve Oﬃcer 28 June 2024 24 NON-STATUTORY INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PREMIER AFRICAN MINERALS LIMITED Opinion on non-statutory ﬁnancial statements We have audited the consolidated non-statutory ﬁnancial statements of Premier African Minerals Ltd (the ‘Group’) for the year ended 31 December 2023 which comprise the consolidated statement of proﬁt or loss and other comprehensive income, the consolidated statement of ﬁnancial posi(cid:415)on, the consolidated statement of cash ﬂows, the consolidated statement of changes in equity and the related notes, including a summary of signiﬁcant accoun(cid:415)ng policies. The ﬁnancial repor(cid:415)ng framework that has been applied in the prepara(cid:415)on of the ﬁnancial statements UK adopted interna(cid:415)onal accoun(cid:415)ng standards. In our opinion, the non-statutory ﬁnancial statements: • • give a true and fair view of the state of the Group’s aﬀairs as at 31 December 2023 and of the Group’s loss for the year then ended; have been properly prepared in accordance with UK adopted interna(cid:415)onal accoun(cid:415)ng standards. Basis for opinion We conducted our audit in accordance with UK adopted interna(cid:415)onal accoun(cid:415)ng standards. Our responsibili(cid:415)es under those standards are further described in the Auditor’s responsibili(cid:415)es for the audit of the ﬁnancial statements sec(cid:415)on 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, including the FRC’s Ethical Standard as applied to listed en(cid:415)(cid:415)es, and we have fulﬁlled our other ethical responsibili(cid:415)es in accordance with these requirements. We believe that the audit evidence we have obtained is suﬃcient and appropriate to provide a basis for our opinion. Material uncertainty rela(cid:415)ng to going concern We draw a(cid:425)en(cid:415)on to the Strategic Report and note 5 in the ﬁnancial statements, which indicates that the Group is loss making and has net current liabili(cid:415)es. As stated in note 5, these events or condi(cid:415)ons, along with the other ma(cid:425)ers as set forth in note 5 and the Strategic Report, indicate that a material uncertainty exists that may cast signiﬁcant doubt on the Group’s ability to con(cid:415)nue as a going concern. Our opinion is not modiﬁed in respect of this ma(cid:425)er. In audi(cid:415)ng the ﬁnancial statements, we have concluded that the directors’ use of the going concern basis of accoun(cid:415)ng in the prepara(cid:415)on of the ﬁnancial statements is appropriate. Our evalua(cid:415)on of the directors’ assessment of the en(cid:415)ty’s ability to con(cid:415)nue to adopt the going concern basis of accoun(cid:415)ng included: • • • Reviewing the cash ﬂow forecasts prepared by management for the period up to December 2025, providing challenge to key assump(cid:415)ons, reviewing for reasonableness and stress tes(cid:415)ng the forecasts. Reviewing post-year period end RNS announcements and holding detailed discussions with management about the current status of the Zulu plant and mine and what ac(cid:415)ons are available to the Group to resolve the issues with produc(cid:415)on, as well as any alterna(cid:415)ve plans if they cannot be resolved; and Assessing the adequacy of going concern disclosures within the ﬁnancial statements. 25 Our responsibili(cid:415)es and the responsibili(cid:415)es of the directors with respect to going concern are described in the relevant sec(cid:415)ons of this report. 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 par(cid:415)cular, we looked at where the directors made subjec(cid:415)ve judgments, for example in respect of signiﬁcant accoun(cid:415)ng es(cid:415)mates that involved making assump(cid:415)ons and considering future events that are inherently uncertain. As in all of our audits we also addressed the risk of management override of internal controls, including evalua(cid:415)ng 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 accoun(cid:415)ng processes and controls, and the industry in which they operate. The Group ﬁnancial statements are a consolida(cid:415)on of repor(cid:415)ng units, comprising the Group’s opera(cid:415)ng businesses and holding companies. We performed full scope audits of the ﬁnancial informa(cid:415)on of the components within the Group which were individually ﬁnancially signiﬁcant and material. We also performed speciﬁed audit procedures over certain account balances and transac(cid:415)on classes that we regarded as material to the Group, as well as analy(cid:415)cal procedures, for components which were not signiﬁcant and not material. The audit work and speciﬁed audit procedures accounted for 100% of the Group’s consolidated expenditures and 100% of the Group’s absolute loss before tax (i.e. the sum of the numerical values without regard to whether they were proﬁts or losses for the relevant repor(cid:415)ng units). Key Audit Ma(cid:425)ers Key audit ma(cid:425)ers are those ma(cid:425)ers 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 iden(cid:415)ﬁed, including those which had the greatest eﬀect on: the overall audit strategy, the alloca(cid:415)on of resources in the audit; and direc(cid:415)ng the eﬀorts of the engagement team. These ma(cid:425)ers 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 ma(cid:425)ers. This is not a complete list of all risks iden(cid:415)ﬁed by our audit. Key audit matter How our audit addressed the key audit matter Valuation of the rehabilitation provision Valuation of the rehabilitation provision The Group has recognised a rehabilita(cid:415)on provision, under IAS 37 – con(cid:415)ngent liabili(cid:415)es and con(cid:415)ngent assets, of $360,000 (2022: $360,000), in rela(cid:415)on to the future costs to rehabilitate the current mines as per regula(cid:415)on. The directors are required to assess the provision at the end of each reporting period and adjust to reflect We have understood and assessed the inputs in calcula(cid:415)on 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 regula(cid:415)ons which would increase the liability and have reviewed calcula(cid:415)ons for the unwinding of the provision. 26 Key audit matter How our audit addressed the key audit matter their best estimates of the liability. Fair value of investments Fair value of investments The Group has recognised Investments of $501,000 (2022: $501,000) as at the reporting date. Directors are required to assess the fair value of investments at each reporting date under IFRS 9. As Vortex is not 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 respective companies, as well as management’s best estimates of the fair values. the We have clariﬁed that the Vortex shares were valued on the basis of the latest share transac(cid:415)ons and have been recognised accordingly. We reviewed the information available for Vortex and agree with management’s view that the investment is not impaired. Going concern Going Concern The Group has used going concern basis of prepara(cid:415)on in its accoun(cid:415)ng policies. However, there is signiﬁcant judgement required as to whether the company can con(cid:415)nue to operate as a going concern. controls environment, We evaluated management’s assessment about going concern and challenged the judgement made by management, as described in note 5. As part of our procedures we reviewed the and company’s management’s assessment of the company’s ability to continue as a going concern. We also reviewed and cashflow assumptions made and the data sources. Based on our procedures we concluded that the going concern basis of preparation is appropriate, subject to an emphasis of matter. (See also Conclusions relating to going concern above) forecasts the Carrying value of exploration and evaluation assets and mining properties Carrying value of exploration and evaluation assets and mining properties The Group holds intangible assets of $4,686,000 tangible assets of (2022: $4,739,000) and $53,234,000 to (2022: $35,997,000) capitalised costs, primarily in respect of the Zulu Lithium project in Zimbabwe. rela(cid:415)ng There are risks that expenses have been incorrectly capitalized or that impairment indicators exist which would result in an impairment of the year end balances. Our audit work in this area included:  We have understood and assessed the methodology used in the capitalisa(cid:415)on of these assets.  Reviewing a sample of costs capitalised during the year to ensure they meet the recogni(cid:415)on or classiﬁca(cid:415)on criteria under IFRS 6, IAS 38 or IAS 16;   Conﬁrming that the Group has good (cid:415)tle to any applicable licences for the mining proper(cid:415)es. Evalua(cid:415)ng the status of the projects during the year, and subsequent to the year-end, to iden(cid:415)fy impairment indicators; and evidence any  Assessing management’s impairment reviews, including challenging key assump(cid:415)ons and 27 Key audit matter How our audit addressed the key audit matter considera(cid:415)on of sensi(cid:415)vity possible changes. to reasonably Our applica(cid:415)on of materiality The scope of our audit was inﬂuenced by our applica(cid:415)on of materiality. We set certain quan(cid:415)ta(cid:415)ve thresholds for materiality. These, together with qualita(cid:415)ve considera(cid:415)ons, helped us to determine the scope of our audit and the nature, (cid:415)ming and extent of our audit procedures on the individual ﬁnancial statement line items and disclosures and in evalua(cid:415)ng 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: Overall materiality $325,000 Group financial statements How we determined it 0.5% of Gross assets Rationale benchmark applied for 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. Other informa(cid:415)on The other informa(cid:415)on comprises the informa(cid:415)on included in the annual report other than the ﬁnancial statements and our auditor’s report thereon. The directors are responsible for the other informa(cid:415)on contained within the annual report. Our opinion on the ﬁnancial statements does not cover the other informa(cid:415)on 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 informa(cid:415)on and, in doing so, consider whether the other informa(cid:415)on 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 iden(cid:415)fy 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 informa(cid:415)on, we are required to report that fact. We have nothing to report in this regard. Responsibili(cid:415)es of directors As explained more fully in the directors’ responsibili(cid:415)es statement as set out in the Corporate Governance Statement, the directors are responsible for the prepara(cid:415)on of the ﬁnancial statements and for being sa(cid:415)sﬁed that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the prepara(cid:415)on 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 con(cid:415)nue as a going concern, disclosing, as applicable, ma(cid:425)ers related to going concern and using the going concern basis of accoun(cid:415)ng unless the directors either intend to liquidate the Group or the parent company or to cease opera(cid:415)ons, or have no realis(cid:415)c alterna(cid:415)ve but to do so. 28 Auditor’s responsibili(cid:415)es for the audit of the ﬁnancial statements Our objec(cid:415)ves 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. Irregulari(cid:415)es, including fraud, are instances of non-compliance with laws and regula(cid:415)ons. We design procedures in line with our responsibili(cid:415)es, outlined above, to detect material misstatements in respect of irregulari(cid:415)es, including fraud. The extent to which our procedures are capable of detec(cid:415)ng irregulari(cid:415)es, including fraud is detailed below. The extent to which the audit was considered capable of detec(cid:415)ng irregulari(cid:415)es including fraud. Our approach to iden(cid:415)fying and assessing the risks of material misstatement in respect of irregulari(cid:415)es, including fraud and non-compliance with laws and regula(cid:415)ons, was as follows: • • • • the senior auditor ensured the engagement team collec(cid:415)vely had the appropriate competence, capabili(cid:415)es and skills to iden(cid:415)fy or recognise non-compliance with applicable laws and regula(cid:415)ons; we focused on speciﬁc laws and regula(cid:415)ons which we considered may have a direct material eﬀect on the ﬁnancial statements or the opera(cid:415)ons of the Group. we assessed the extent of compliance with the laws and regula(cid:415)ons iden(cid:415)ﬁed above through making enquiries of management and inspec(cid:415)ng legal correspondence; and iden(cid:415)ﬁed laws and regula(cid:415)ons were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. We assessed the suscep(cid:415)bility of the Group’s ﬁnancial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: • • making enquiries of management as to where they considered there was suscep(cid:415)bility to fraud, their knowledge of actual, suspected and alleged fraud; considering the internal controls in place to mi(cid:415)gate risks of fraud and non-compliance with laws and regula(cid:415)ons. To address the risk of fraud through management bias and override of controls, we: • • • • performed analy(cid:415)cal procedures to iden(cid:415)fy any unusual or unexpected rela(cid:415)onships; tested journal entries to iden(cid:415)fy unusual transac(cid:415)ons; assessed whether judgements and assump(cid:415)ons made in determining the accoun(cid:415)ng es(cid:415)mates set out in Note 4 were indica(cid:415)ve of poten(cid:415)al bias; inves(cid:415)gated the ra(cid:415)onale behind signiﬁcant or unusual transac(cid:415)ons. In response to the risk of irregulari(cid:415)es and non-compliance with laws and regula(cid:415)ons, we designed procedures which included, but were not limited to: • • • • agreeing ﬁnancial statement disclosures to underlying suppor(cid:415)ng documenta(cid:415)on; reading the minutes of mee(cid:415)ngs of those charged with governance; enquiring of management as to actual and poten(cid:415)al li(cid:415)ga(cid:415)on and claims; reviewing correspondence with the Group’s legal advisors. There are inherent limita(cid:415)ons in our audit procedures described above. The more removed that laws and regula(cid:415)ons are from ﬁnancial transac(cid:415)ons, the less likely it is that we would become aware of non-compliance. Audi(cid:415)ng standards also limit the audit procedures required to iden(cid:415)fy non-compliance with laws and regula(cid:415)ons 29 to enquiry of the directors and other management and the inspec(cid:415)on 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 descrip(cid:415)on of our responsibili(cid:415)es for the audit of the ﬁnancial statements is located on the Financial Repor(cid:415)ng Council’s website at: www.frc.org.uk/auditorsresponsibili(cid:415)es. This descrip(cid:415)on 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 le(cid:425)er. Our audit work has been undertaken so that we might state to the Company’s members those ma(cid:425)ers we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permi(cid:425)ed 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. MAH, Chartered Accountants 2nd Floor, 154 Bishopsgate, London, EC2M 4LN 28 June 2024 30 [PLACEHOLDER FOR A PHOTOGRAPH] 31 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2023 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 Deferred tax Provisions - rehabilitation Current liabilities Trade and other payables 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 TOTAL EQUITY Notes 8 9 10 11 12 13 14 25 15 16 17 18 19 7 20 2023 $ 000 4,686 501 53,234 232 58,653 936 5,001 542 6,479 65,132 - 360 360 50,063 180 50,243 50,603 2022 $ 000 4,739 501 35,997 - 41,237 11 180 9,627 9,818 51,055 - 360 360 33,725 180 33,905 34,265 14,529 16,790 88,493 3,532 711 (13,150) (51,902) 27,684 (13,155) 70,951 3,708 711 (13,150) (32,713) 29,507 (12,717) 14,529 16,790 32 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME AS AT 31 DECEMBER 2023 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 Impairment of investments 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 Notes 21 22 23 8, 10 21 11 24 25 2023 $ 000 - (3,805) (3,805) (10,645) (14,450) (371) 137 (311) (5,818) (6,363) (20,813) - (20,813) 2022 $ 000 - - - (4,622) (4,622) (54) 34 (1,161) - (1,181) (5,803) - (5,803) (20,813) (5,803) 7 - (499) (499) (21,312) (20,375) (438) (20,813) (2) (7,841) (7,843) (13,646) (5,359) (444) (5,803) (20,874) (438) (13,134) (512) Total comprehensive income for the year (21,312) (13,646) Loss per share attributable to owners of the parent (expressed in US cents) Basic loss per share Diluted loss per share 26 26 (0.09) (0.09) (0.03) (0.03) 33 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 December 2023 EXPRESSED IN US DOLLARS At 1 January 2022 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 2022 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 Share options expired Share based payments At 31 December 2023 Share option and warrant reserve $ 000 2,366 - - - Revaluation reserve $ 000 711 - - - Foreign currency translation reserve $ 000 (13,216) - 66 66 Accumulated loss $ 000 (19,513) (5,359) (7,841) (13,200) Total attributable to owners of parent $ 000 26,461 (5,359) (7,775) (13,134) Non- controlling interest ("NCI") $ 000 (12,205) (444) (68) (512) Total equity $ 000 14,256 (5,803) (7,843) (13,646) - - - 1,342 3,708 - - - - - (1,685) 1,509 3,532 - - - - 711 - - - - - - - 711 - - - - (13,150) - - - - - - - (13,150) - - - - (32,713) (20,375) (499) (20,874) - - 1,685 - (51,902) 15,782 (944) - 1,342 29,507 (20,375) (499) (20,874) 18,786 (1,244) - 1,509 27,684 - - - - (12,717) (438) - (438) - - - - (13,155) 15,782 (944) - 1,342 16,790 (20,813) (499) (21,312) 18,786 (1,244) - 1,509 14,529 Share capital $ 000 56,113 - - - 15,782 (944) - - 70,951 - - - 18,786 (1,244) - - 88,493 34 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 December 2023 EXPRESSED IN US DOLLARS Notes 2023 $ 000 2022 $ 000 Net cash outflow from operating activities Investing activities Acquisition of property plant and equipment Expenditure on intangible assets Loans advanced to investment Net cash used in investing activities Financing activities Proceeds from borrowings granted Net proceeds from issue of share capital Finance charges 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 28 10 8 11 17 18 24 (8,030) 30,116 (17,608) (446) (543) (35,912) (53) (302) (18,597) (36,267) - 17,542 - - 14,838 - 17,542 14,838 (9,085) 9,627 542 8,687 940 9,627 The notes on pages 36 to 87 are an integral part of these consolidated ﬁnancial statements 35 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 1. Repor(cid:415)ng en(cid:415)ty Premier African Minerals Limited (‘Premier’ or ‘the Company’), together with its subsidiaries (the ‘Group’), was incorporated in the Territory of the Bri(cid:415)sh Virgin Islands under the BVI Business Companies Act, 2004. The address of the registered oﬃce is Craigmuir Chambers, PO Box 71, Road Town, Tortola, Bri(cid:415)sh Virgin Islands. The Group’s opera(cid:415)ons and principal ac(cid:415)vi(cid:415)es are the mining and development of mineral reserves on the African con(cid:415)nent. Premier’s shares were admi(cid:425)ed to trading on the London Stock Exchange’s AIM market on 10 December 2012. 2. Basis of accoun(cid:415)ng These consolidated ﬁnancial statements have been prepared in accordance with Interna(cid:415)onal Financial Repor(cid:415)ng Standards (UK adopted Interna(cid:415)onal Accoun(cid:415)ng Standards). They were authorised for issue by the Company’s board of directors on 28 June 2024. Details of the Group’s accoun(cid:415)ng policies are detailed below. The prepara(cid:415)on of ﬁnancial statements in conformity with UK adopted IFRS requires the use of certain cri(cid:415)cal accoun(cid:415)ng es(cid:415)mates. It also requires management to exercise its judgement in the process of applying the Group’s accoun(cid:415)ng policies. The accoun(cid:415)ng policies set out below are applied consistent across the Group and to all periods presented in these consolidated ﬁnancial statements. Func(cid:415)onal and presenta(cid:415)on currency The Group’s presenta(cid:415)on currency and the func(cid:415)onal currency of the majority of the Group’s en(cid:415)(cid:415)es is US dollars. All amounts have been rounded to the nearest thousand, unless otherwise indicated. The Zimbabwean subsidiaries’ func(cid:415)onal currency was changed by the Zimbabwean government from USD to RTGS dollar during the 2019 ﬁnancial year. With eﬀect from 1 January 2023, the group has converted the func(cid:415)onal currency of all Zimbabwean en(cid:415)(cid:415)es to USD, as the majority of transac(cid:415)ons with other Zimbabwean is conducted in USD and therefore it is more representa(cid:415)ve of the ﬂow of economic beneﬁts. Refer to note 7 for detailed informa(cid:415)on. Use of judgements and es(cid:415)mates In preparing these consolidated ﬁnancial statements, management has made judgements, es(cid:415)mates and assump(cid:415)ons that aﬀect the applica(cid:415)on of the Group’s accoun(cid:415)ng policies and the reported amounts of assets, liabili(cid:415)es, income and expenses. Actual results may diﬀer from these es(cid:415)mates. Es(cid:415)mates and underlying assump(cid:415)ons are reviewed on an ongoing basis. Revisions to es(cid:415)mates are recognised prospec(cid:415)vely. For details of the use of judgments and es(cid:415)mates 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 rehabilita(cid:415)on (note 15) and Share based payment and warrant reserve (note 19). 36 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 3. Signiﬁcant accoun(cid:415)ng policies 3.1 Change in signiﬁcant accoun(cid:415)ng policies The following standards, amendments and interpreta(cid:415)ons are new and eﬀec(cid:415)ve for the year ended 31 December 2023 and have been adopted. None of the IFRS standards below had a material impact on the ﬁnancial statements. Reference Title Summary IAS 1 Presenta(cid:415)on of Financial Statements IAS 1 and IAS 8 ‘Presenta(cid:415)on of Financial Statements’ and ‘Accoun(cid:415)ng policies, changes in accoun(cid:415)ng es(cid:415)mates and errors’ IAS 12 Deferred Taxa(cid:415)on IFRS17 Insurance contracts Clariﬁes that liabili(cid:415)es are classiﬁed as either current or noncurrent, depending on the rights that exist at the end of the repor(cid:415)ng period. Classiﬁca(cid:415)on is unaﬀected by the expecta(cid:415)ons of the en(cid:415)ty or events a(cid:332)er the repor(cid:415)ng 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 ‘se(cid:425)lement’ of a liability. Amendments to improve accoun(cid:415)ng policy disclosures and to help users of the ﬁnancial statements to dis(cid:415)nguish between changes in accoun(cid:415)ng es(cid:415)mates and changes in accoun(cid:415)ng policies. These amendments require companies to recognise deferred tax on transac(cid:415)ons that, on ini(cid:415)al recogni(cid:415)on give rise to equal amounts of taxable and deduc(cid:415)ble temporary diﬀerences. This standard replaces IFRS 4, which currently permits a wide variety of prac(cid:415)ces in accoun(cid:415)ng for insurance contracts. IFRS 17 will fundamentally change the accoun(cid:415)ng by all en(cid:415)(cid:415)es that issue insurance contracts and investment contracts with discre(cid:415)onary par(cid:415)cipa(cid:415)on features. Applica(cid:415)on date of standard (Periods commencing on or a(cid:332)er) 1 January 2023 1 January 2023 1 January 2023 1 January 2023 The following new standards, amendments to standards and interpreta(cid:415)ons have been issued, but are not eﬀec(cid:415)ve for the year ended 31 December 2023 and have not been early adopted: 37 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Reference Title Summary IFRS 16 Lease Liability in a Sale and Leaseback Speciﬁes requirements rela(cid:415)ng to measuring the lease liability in a sale and leaseback transac(cid:415)on a(cid:332)er the date of the transac(cid:415)on. Changes requirements from disclosing ‘signiﬁcant’ to ‘material’ accoun(cid:415)ng policies and provides explana(cid:415)ons and guidance on how to iden(cid:415)fy material accoun(cid:415)ng policies. Applica(cid:415)on date of standard (Periods commencing on or a(cid:332)er) 1 January 2024 1 January 2024 IFRS 1 IFRS 1 Presenta(cid:415)on of Financial Statements and IFRS Prac(cid:415)ce Statement 2 – Disclosure of Accoun(cid:415)ng Policies Presenta(cid:415)on of Financial Statements: Classiﬁca(cid:415)on of Liabili(cid:415)es as Current or Non-Current and Non-Current Liabili(cid:415)es with Covenants Date IAS 7 FRS 7 Supplier Finance Arrangements Clariﬁes that only those covenants with which an en(cid:415)ty must comply on or before the end of the repor(cid:415)ng period aﬀect the classiﬁca(cid:415)on of a liability as current or non-current 1 January 2024 The Amendments complement the exis(cid:415)ng disclosure requirements in IFRS Accoun(cid:415)ng Standards and are aimed at providing users of ﬁnancial statements with informa(cid:415)on to assess the eﬀect of supplier ﬁnance arrangements on an en(cid:415)ty’s liabili(cid:415)es, cash ﬂows and exposure to liquidity risk 1 January 2024 The Directors an(cid:415)cipate that the adop(cid:415)on of these standards and the interpreta(cid:415)ons in future periods will not have a material impact on the ﬁnancial statements of the Group. 3.2 Basis of consolida(cid:415)on Subsidiaries are all en(cid:415)(cid:415)es over which the Group has control. The Group controls an en(cid:415)ty when it is exposed to, or has the rights to, variable returns from its involvement with the en(cid:415)ty and has the ability to aﬀect those returns through its power over the en(cid:415)ty. The existence and eﬀect of poten(cid:415)al vo(cid:415)ng rights that are currently exercisable or conver(cid:415)ble are considered when assessing whether the Group controls another en(cid:415)ty. The Group also assesses existence of control where it does not have more than 50% of the vo(cid:415)ng power but is able to govern the ﬁnancial and opera(cid:415)ng 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 acquisi(cid:415)on method, from the date that control is gained and non- controlling interests are appor(cid:415)oned on a propor(cid:415)onal basis. When necessary, amounts reported by subsidiaries have been adjusted to conform to the Group’s accoun(cid:415)ng policies. 38 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 3.3 Business combina(cid:415)ons and goodwill The Group applies the acquisi(cid:415)on method to account for business combina(cid:415)ons. The considera(cid:415)on transferred for the acquisi(cid:415)on of a subsidiary is the fair values of the assets transferred, the liabili(cid:415)es incurred to the former owners of the acquiree, and the equity interests issued by the Group. The considera(cid:415)on transferred includes the fair value of any asset or liability resul(cid:415)ng from a con(cid:415)ngent considera(cid:415)on arrangement. Iden(cid:415)ﬁable assets acquired and liabili(cid:415)es and con(cid:415)ngent liabili(cid:415)es assumed in a business combina(cid:415)on are measured ini(cid:415)ally at their fair values at the acquisi(cid:415)on date. 3.4 Subsidiaries Subsidiaries are en(cid:415)(cid:415)es controlled by the Group. The Group controls an en(cid:415)ty when it is exposed to, or has rights to, variable returns from its involvement with the en(cid:415)ty and has the ability to aﬀect those returns through its power over the en(cid:415)ty. The ﬁnancial statements of subsidiaries are included in the consolidated ﬁnancial statements from the date on which control commences un(cid:415)l the date on which control ceases. 3.5 Non-controlling interests (“NCI”) Non-controlling interests are measured ini(cid:415)ally at their propor(cid:415)onate share of the acquiree’s iden(cid:415)ﬁable net assets at the date of acquisi(cid:415)on. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transac(cid:415)ons. 3.6 Transac(cid:415)ons eliminated on consolida(cid:415)on Intra-group balances and transac(cid:415)ons, and any unrealised income and expenses arising from intra-Group transac(cid:415)ons, are eliminated. Unrealised gains arising from transac(cid:415)ons 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 Transac(cid:415)ons in foreign currencies are translated into the respec(cid:415)ve func(cid:415)onal currencies of Group companies at the exchange rates at the dates of the transac(cid:415)ons. Monetary assets and liabili(cid:415)es denominated in foreign currencies are translated into the func(cid:415)onal currency at the exchange rate at the repor(cid:415)ng date. Non-monetary assets and liabili(cid:415)es that are measured at fair value in a foreign currency are translated into the func(cid:415)onal 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 transac(cid:415)on. Foreign currency diﬀerences are generally recognised in proﬁt or loss. The assets and liabili(cid:415)es of foreign opera(cid:415)ons, including goodwill and fair value adjustments arising on acquisi(cid:415)on, are translated into dollars at the exchange rates at the repor(cid:415)ng date. The income and expenses of foreign opera(cid:415)ons are translated into dollars at the exchange rates at the dates of the transac(cid:415)ons. Foreign currency diﬀerences are recognised in Other Comprehensive Income (“OCI”) and accumulated in the transla(cid:415)on reserve, except to the extent that the transla(cid:415)on diﬀerence is allocated to NCI. Where the func(cid:415)onal currency of a company is in a hyperinﬂa(cid:415)onary economy IAS 29 Financial Repor(cid:415)ng in Hyperinﬂa(cid:415)onary Economies is applied. Under this standard the results are restated to reﬂect the current cost of the various elements of the ﬁnancial statements. For the Statement of comprehensive income the cost of 39 NOTES TO THE ANNUAL FINANCIAL STATEMENTS sales and deprecia(cid:415)on are recorded at current costs at the (cid:415)me of consump(cid:415)on; 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 repor(cid:415)ng period by applying a general price index. Monetary items stated in the Statement of ﬁnancial posi(cid:415)on 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 repor(cid:415)ng period. All non-monetary items in the statement of ﬁnancial posi(cid:415)on are restated by applying an index at the (cid:415)me of their acquisi(cid:415)on to the repor(cid:415)ng date. Any resul(cid:415)ng gain or loss on the net monetary posi(cid:415)on is included in proﬁt or loss reserve. In accordance with IAS29, corresponding ﬁgures for the previous repor(cid:415)ng 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 compara(cid:415)ve ﬁnancial statements are presented in terms of the measuring unit current at the end of the repor(cid:415)ng period. Informa(cid:415)on that is disclosed in respect of earlier periods is also expressed in terms of the measuring unit current at the end of the repor(cid:415)ng period. When a foreign opera(cid:415)on is disposed of in its en(cid:415)rety or par(cid:415)ally such that control, signiﬁcant inﬂuence or joint control is lost, the cumula(cid:415)ve amount in the transla(cid:415)on reserve related to that foreign opera(cid:415)on 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 propor(cid:415)on of the cumula(cid:415)ve amount is rea(cid:425)ributed to NCI. When the Group disposes of only part of an associate or joint venture while retaining signiﬁcant inﬂuence or joint control, the relevant propor(cid:415)on of the cumula(cid:415)ve amount is reclassiﬁed to proﬁt or loss. 3.8 Discon(cid:415)nued opera(cid:415)on A discon(cid:415)nued opera(cid:415)on is a component of the Group’s business, the opera(cid:415)ons and cash ﬂows of which can be clearly dis(cid:415)nguished from the rest of the Group and which: • • • represents a separate major line of business or geographic area of opera(cid:415)ons; is part of a single co-ordinated plan to dispose of a separate major line of business or geographic area of opera(cid:415)ons; or is a subsidiary acquired exclusively with a view to re-sale. Classiﬁca(cid:415)on as a discon(cid:415)nued opera(cid:415)on occurs at the earlier of disposal or when the opera(cid:415)on meets the criteria to be classiﬁed as held-for-sale. When an opera(cid:415)on is classiﬁed as a discon(cid:415)nued opera(cid:415)on, the compara(cid:415)ve statement of proﬁt or loss and OCI is re-presented as if the opera(cid:415)on had been discon(cid:415)nued from the start of the compara(cid:415)ve year. 3.9 Revenue Performance obliga(cid:415)ons and service recogni(cid:415)on policies Revenue is measured based on the considera(cid:415)on 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 informa(cid:415)on about the nature and (cid:415)ming of the sa(cid:415)sfac(cid:415)on of performance obliga(cid:415)ons in contracts with customers, including signiﬁcant payment terms, and the related revenue recogni(cid:415)on policies. 40 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Type of product/ service Nature and (cid:415)ming of sa(cid:415)sfac(cid:415)on of performance obliga(cid:415)ons, including signiﬁcant payment terms Revenue recogni(cid:415)on under IFRS 15 Revenue Wolframite sales Scrap sales Customers obtain control of the wolframite ore when the ore has been delivered to and have been accepted at their premises or the agreed point of delivery. Invoices are generated at that point in (cid:415)me 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. Revenue is recognised when the goods are delivered and 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 (cid:415)me 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 Incen(cid:415)ve The Export Incen(cid:415)ve 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 incen(cid:415)ve when it is received in the Group’s bank accounts. Other Income Government Grants The Group has no control over the (cid:415)ming of the grants nor any payment terms. Prescrip(cid:415)on of debts Management periodically reviews all outstanding payables and iden(cid:415)ﬁes any poten(cid:415)al 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 prescrip(cid:415)on 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 construc(cid:415)ve obliga(cid:415)on to pay this amount as a result of past service provided by the employee and the obliga(cid:415)on can be es(cid:415)mated reliably. 41 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Share-based payment arrangements The Group operates an equity-se(cid:425)led share op(cid:415)on plan and issues warrants from (cid:415)me to (cid:415)me either with direct subscrip(cid:415)ons in equity or as ﬁnance related packages. The fair value of the service received in exchange for the grant of op(cid:415)ons or issue of warrants is recognised as an expense or recognised as a deduc(cid:415)on from equity or an addi(cid:415)on 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-se(cid:425)led share-based payments is expensed on a straight-line basis over the ves(cid:415)ng period, based on the Group’s es(cid:415)mate of shares that will eventually vest. 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 es(cid:415)mate, for the eﬀects of non-transferability, exercise restric(cid:415)ons, and behavioural considera(cid:415)ons. 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 eﬀec(cid:415)ve 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 “eﬀec(cid:415)ve interest rate” is the rate that exactly discounts es(cid:415)mated future cash payments or receipts through the expected life of the ﬁnancial instrument to: • • the gross carrying amount of the ﬁnancial asset; or the amor(cid:415)sed cost of the ﬁnancial liability. In calcula(cid:415)ng interest income and expense, the eﬀec(cid:415)ve interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amor(cid:415)sed cost of the liability. However, for ﬁnancial assets that have become credit-impaired subsequent to ini(cid:415)al recogni(cid:415)on, interest income is calculated by applying the eﬀec(cid:415)ve interest rate to the amor(cid:415)sed cost of the ﬁnancial asset, if the asset is no-longer credit- impaired, then the calcula(cid:415)on 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 combina(cid:415)on, 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 es(cid:415)mate 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 substan(cid:415)vely enacted at the repor(cid:415)ng date. Current tax also includes any tax arising from dividends. Current tax assets and liabili(cid:415)es are oﬀset only if certain criteria are met. 42 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 3.12.2 Deferred tax Deferred tax is recognised in respect of temporary diﬀerences between the carrying amounts of assets and liabili(cid:415)es for ﬁnancial repor(cid:415)ng purposes and the amounts used for taxa(cid:415)on purposes. Deferred tax is not recognised for: • • temporary diﬀerences on the ini(cid:415)al recogni(cid:415)on of assets or liabili(cid:415)es in a transac(cid:415)on that is not a business combina(cid:415)on and that aﬀects neither accoun(cid:415)ng 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 (cid:415)ming 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 ini(cid:415)al recogni(cid:415)on of goodwill. Deferred tax assets are recognised for unused tax losses, unused tax credits and deduc(cid:415)ble 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 exis(cid:415)ng temporary diﬀerences, are considered, based on the business plans for individual subsidiaries in the Group. Deferred tax assets are reviewed at each repor(cid:415)ng date and are reduced to the extent that it is no longer probable that the related tax beneﬁt will be realised; such reduc(cid:415)ons are reversed when the probability of future taxable proﬁts improves. Unrecognised deferred tax assets are reassessed at each repor(cid:415)ng 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 substan(cid:415)vely enacted at the repor(cid:415)ng date. The measurement of deferred tax reﬂects the tax consequences that would follow from the manner in which the Group expects, at the repor(cid:415)ng date, to recover or se(cid:425)le the carrying amount of its assets and liabili(cid:415)es. Deferred tax assets and liabili(cid:415)es are oﬀset only if certain criteria are met. 3.13 Intangible assets and goodwill All costs of Explora(cid:415)on and Evalua(cid:415)on (“E&E”) are ini(cid:415)ally capitalised as intangible assets, such as payments to acquire the legal right to explore, costs of technical services and studies, seismic acquisi(cid:415)on, exploratory drilling and tes(cid:415)ng. The costs include directly a(cid:425)ributable overheads together with the cost of other materials consumed during the explora(cid:415)on and evalua(cid:415)on 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 amor(cid:415)sed. Intangible assets related to each explora(cid:415)on licence or pool of licences are carried forward, un(cid:415)l the existence (or otherwise) of commercial reserves has been determined. Once the technical feasibility and commercial viability of extrac(cid:415)ng 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 situa(cid:415)ons outlined in 43 NOTES TO THE ANNUAL FINANCIAL STATEMENTS paragraph 20 of IFRS 6 Explora(cid:415)on for and Evalua(cid:415)on of Mineral Resources and include the point at which a determina(cid:415)on 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 produc(cid:415)on of commercial reserves. When a licence or pool of licences is abandoned or there is no planned future work, the costs associated with the respec(cid:415)ve licences are wri(cid:425)en 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-deriva(cid:415)ve ﬁnancial assets Credit-impaired ﬁnancial assets At each repor(cid:415)ng date, the Group assesses whether ﬁnancial assets carried at amor(cid:415)sed cost and debt securi(cid:415)es at FVOCI are credit-impaired. A ﬁnancial asset is “credit-impaired” when one or more events that have a detrimental impact on the es(cid:415)mated 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; 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 reorganisa(cid:415)on; or the disappearance of an ac(cid:415)ve market for a security because of ﬁnancial diﬃcul(cid:415)es. A 12 months approach is followed in determining the Expected Credit Loss (“ECL”). Presenta(cid:415)on of allowance for ECL in the statement of ﬁnancial posi(cid:415)on Loss allowances for ﬁnancial assets measured at amor(cid:415)sed cost are deducted from the gross carrying amount of the assets. For debt securi(cid:415)es 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 wri(cid:425)en oﬀ when the Group has no reasonable expecta(cid:415)ons of recovering a ﬁnancial asset in its en(cid:415)rety or a por(cid:415)on thereof. For corporate customers, the Group individually makes an assessment with respect to the (cid:415)ming and amount of write-oﬀ based on whether there is a reasonable expecta(cid:415)on of recovery from the amount wri(cid:425)en oﬀ. However, ﬁnancial assets that are wri(cid:425)en oﬀ could s(cid:415)ll be subject to enforcement ac(cid:415)vi(cid:415)es in order to comply with the Group’s procedures of recovery of the amounts due. 3.14.2 Financial assets measured at amor(cid:415)sed cost The Group considers evidence of impairment for these assets at both an individual asset and a collec(cid:415)ve level. All individually signiﬁcant assets are individually assessed for impairment. Those found not to be impaired are then collec(cid:415)vely assessed for any impairment that has been incurred but not yet individually iden(cid:415)ﬁed. Assets that are not individually signiﬁcant are collec(cid:415)vely assessed for impairment. Collec(cid:415)ve assessment is carried out by grouping together assets with similar risk characteris(cid:415)cs. 44 NOTES TO THE ANNUAL FINANCIAL STATEMENTS In assessing collec(cid:415)ve impairment, the Group uses historical informa(cid:415)on on the (cid:415)ming of recoveries and the amount of loss incurred, and makes an adjustment if current economic and credit condi(cid:415)ons 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 es(cid:415)mated future cash ﬂows discounted at the asset’s original eﬀec(cid:415)ve interest rate. Losses are recognised in proﬁt or loss and reﬂected in an allowance account. When the Group considers that there are no realis(cid:415)c prospects of recovery of the asset, the relevant amounts are wri(cid:425)en oﬀ. If the amount of impairment loss subsequently decreases and the decrease can be related objec(cid:415)vely to an event occurring a(cid:332)er 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 acquisi(cid:415)on cost (net of any principal repayment and amor(cid:415)sa(cid:415)on) and the current fair value, less any impairment loss previously recognised in proﬁt or loss. 3.14.4 Non-ﬁnancial assets At each repor(cid:415)ng date, the Group reviews the carrying amounts of its non-ﬁnancial assets (other than inventories) to determine whether there is any indica(cid:415)on of impairment. If any such indica(cid:415)on exists, then the asset’s recoverable amount is es(cid:415)mated. Goodwill is tested annually for impairment. For impairment tes(cid:415)ng, assets are grouped together into the smallest group of assets that generates cash inﬂows from con(cid:415)nuing use that are largely independent of the cash inﬂows of other assets or CGUs. Goodwill arising from a business combina(cid:415)on is allocated to CGUs or groups of CGUs that are expected to beneﬁt from the synergies of the combina(cid:415)on. 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 es(cid:415)mated future cash ﬂows, discounted to their present value using a pre-tax discount rate that reﬂects current market assessments of the (cid:415)me 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 deprecia(cid:415)on or amor(cid:415)sa(cid:415)on, 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 maturi(cid:415)es. Cash and cash equivalents are measured at amor(cid:415)sed 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 overdra(cid:332)s. 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 produc(cid:415)on. Net realisable value is the es(cid:415)mated selling price in the ordinary course of business, less the es(cid:415)mated costs of comple(cid:415)on and selling expenses. 45 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Inventory consists of mining consumables. 3.17 Property, plant and equipment Recogni(cid:415)on and measurement Items of property, plant and equipment are measured at cost, which includes capitalised borrowing costs, less accumulated deprecia(cid:415)on 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. Deprecia(cid:415)on Deprecia(cid:415)on is calculated to write oﬀ the cost of items of property, plant and equipment less their es(cid:415)mated residual values using the straight-line method over their es(cid:415)mated 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 es(cid:415)mated useful lives of property, plant and equipment for current and compara(cid:415)ve 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 Deprecia(cid:415)on methods, useful lives and residual values are reviewed at each repor(cid:415)ng date and adjusted if appropriate. 3.18 Financial instruments The Group classiﬁes non-deriva(cid:415)ve ﬁnancial assets into the following categories: loans and receivables and FVTPL and FVTOCI ﬁnancial assets. The Group classiﬁes non-deriva(cid:415)ve ﬁnancial liabili(cid:415)es into the following category: other ﬁnancial liabili(cid:415)es. 3.18.1 Non-deriva(cid:415)ve ﬁnancial assets and ﬁnancial liabili(cid:415)es – Recogni(cid:415)on and derecogni(cid:415)on The Group ini(cid:415)ally recognises loans and receivables on the date when they are originated. All other ﬁnancial assets and ﬁnancial liabili(cid:415)es are ini(cid:415)ally recognised on the trade date when the en(cid:415)ty 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 transac(cid:415)on in which substan(cid:415)ally all of the risks and rewards of ownership of the ﬁnancial asset are transferred, or it neither transfers nor retains substan(cid:415)ally 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 obliga(cid:415)ons are discharged or cancelled or expire. Gains or losses on derecogni(cid:415)on of ﬁnancial liabili(cid:415)es are recognised in proﬁt or loss as a ﬁnance charge. 46 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Financial assets and ﬁnancial liabili(cid:415)es are oﬀset, and the net amount presented in the statement of ﬁnancial posi(cid:415)on when, and only when, the Group currently has a legally enforceable right to oﬀset the amounts and intends either to se(cid:425)le them on a net basis or to realise the asset and se(cid:425)le the liability simultaneously. 3.18.2 Loans and receivables- Measurement These assets are ini(cid:415)ally measured at fair value plus any directly a(cid:425)ributable transac(cid:415)on costs. Subsequent to ini(cid:415)al recogni(cid:415)on, they are measured at amor(cid:415)sed cost using the eﬀec(cid:415)ve interest method. 3.18.3 Assets at FVOCI - Measurement These assets are ini(cid:415)ally measured at fair value plus any directly a(cid:425)ributable transac(cid:415)on costs. Subsequent to ini(cid:415)al recogni(cid:415)on, they are measured at fair value and changes therein, other than impairment losses, are recognised in OCI and accumulated in the revalua(cid:415)on reserve. When these assets are derecognised, the gain or loss accumulated in equity is reclassiﬁed to proﬁt or loss. 3.18.4 Non-deriva(cid:415)ve ﬁnancial liabili(cid:415)es – Measurement Other non-deriva(cid:415)ve ﬁnancial liabili(cid:415)es are ini(cid:415)ally measured at fair value less any directly a(cid:425)ributable transac(cid:415)on costs. Subsequent to ini(cid:415)al recogni(cid:415)on, these liabili(cid:415)es are measured at amor(cid:415)sed cost using the eﬀec(cid:415)ve interest method. 3.18.5 Conver(cid:415)ble loan notes and deriva(cid:415)ve ﬁnancial instruments The presenta(cid:415)on and measurement of loan notes for accoun(cid:415)ng purposes is governed by IAS 32 and IAS 39. These standards require the loan notes to be separated into two components: • • A deriva(cid:415)ve liability, and A debt host liability. This is because the loan notes are conver(cid:415)ble into an unknown number of shares, therefore failing the ‘ﬁxed-for- ﬁxed’ criterion under IAS 32. This requires the ‘underlying op(cid:415)on component’ of the loan note to be valued ﬁrst (as an embedded deriva(cid:415)ve), with the residual of the face value being allocated to the debt host liability (refer ﬁnancial liabili(cid:415)es policy above). Compound ﬁnancial instruments issued by the Group comprise conver(cid:415)ble notes denominated in dollars that can be converted to ordinary shares at the op(cid:415)on 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 ini(cid:415)ally recognised at the fair value of a similar liability that does not have an equity conversion op(cid:415)on. The equity component is ini(cid:415)ally 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 a(cid:425)ributable transac(cid:415)on costs are allocated to the liability and equity components in propor(cid:415)on to their ini(cid:415)al carrying amounts. Subsequent to ini(cid:415)al recogni(cid:415)on, the liability component of a compound ﬁnancial instrument is measured at amor(cid:415)sed cost using the eﬀec(cid:415)ve 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 - Rehabilita(cid:415)on Provisions are recognised when the Group has a present obliga(cid:415)on (legal or construc(cid:415)ve) as a result of a past event, it is probable that an ou(cid:414)low of resources embodying economic beneﬁts will be required to se(cid:425)le the obliga(cid:415)on and a reliable es(cid:415)mate can be made of the amount of the obliga(cid:415)on. 47 NOTES TO THE ANNUAL FINANCIAL STATEMENTS An obliga(cid:415)on to incur environmental restora(cid:415)on, rehabilita(cid:415)on and decommissioning costs arises when disturbance is caused by the development or on-going produc(cid:415)on of a mining property. Such costs arising from the decommissioning of plant and other site prepara(cid:415)on work, discounted to their net present value, are provided for and capitalised at the start of each project, as soon as the obliga(cid:415)on to incur such costs arises. These costs are recognised in proﬁt or loss over the life of the opera(cid:415)on, through the deprecia(cid:415)on of the asset and the unwinding of the discount on the provision. Costs for restora(cid:415)on of subsequent site damage which is created on an ongoing basis during produc(cid:415)on are provided for at their net present values and recognised in proﬁt or loss as extrac(cid:415)on progresses. Changes in the measurement of a liability rela(cid:415)ng to the decommissioning of plant or other site prepara(cid:415)on work (that result from changes in the es(cid:415)mated (cid:415)ming 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 indica(cid:415)on that the revised carrying value is not recoverable, an impairment test is performed in accordance with the accoun(cid:415)ng policy above. Provisions are determined by discoun(cid:415)ng the expected future cash ﬂows at a pre-tax rate that reﬂects current market assessments of the (cid:415)me 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 a(cid:425)ributable to the issue of new shares or op(cid:415)ons are shown in equity as a deduc(cid:415)on, net of tax, from the proceeds. Share-op(cid:415)ons and warrant reserve - represents equity-se(cid:425)led share-based payments. Accumulated loss represents retained proﬁts less retained losses. Revalua(cid:415)on 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 transla(cid:415)on reserve represents the other comprehensive income gains or losses arising on the conversion of the func(cid:415)onal currencies of the subsidiaries to the holding company’s func(cid:415)onal currency of USD. 3.21 Leases Determining whether an arrangement contains a lease. At incep(cid:415)on of an arrangement, the Group determines whether the arrangement is or contains a lease. At incep(cid:415)on or on reassessment of an arrangement that contains a lease, the Group separates payments and other considera(cid:415)on required by the arrangement into those for the lease and those for other elements on the basis of their rela(cid:415)ve fair values. If the Group concludes for a ﬁnance lease that it is imprac(cid:415)cable 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 incep(cid:415)on of the lease or, if lower, at the present value of the minimum lease payments. Lease payments are appor(cid:415)oned between interest expense and capital redemp(cid:415)on of the liability. Interest is recognised immediately in the statement of comprehensive income unless a(cid:425)ributable to qualifying assets, in which case they are capitalised to the cost of those assets. 48 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Exemp(cid:415)ons are applied for short life leases and low value assets made under opera(cid:415)ng 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 incen(cid:415)ves received are recognised as an integral part of the total lease expense, over the term of the lease. Minimum lease payments made are appor(cid:415)oned between the ﬁnance expense and the reduc(cid:415)on 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 Opera(cid:415)ng segments Segmental informa(cid:415)on is provided for the Group on the basis of informa(cid:415)on reported internally to the chief opera(cid:415)ng decision-maker for decision-making purposes. The Group considers that the role of chief opera(cid:415)ng decision-maker is performed by the Group’s board of directors. 4. Signiﬁcant accoun(cid:415)ng judgements, es(cid:415)mates and assump(cid:415)ons In preparing these consolidated ﬁnancial statements, management has made judgements, es(cid:415)mates and assump(cid:415)ons that aﬀect the applica(cid:415)on of the Group’s accoun(cid:415)ng policies and the reported amounts of assets, liabili(cid:415)es, income and expenses. Actual results may diﬀer from these es(cid:415)mates. Es(cid:415)mates and underlying assump(cid:415)ons are reviewed on an ongoing basis. Revisions to es(cid:415)mates are recognised prospec(cid:415)vely. 4.1. Judgements Informa(cid:415)on about judgements made in applying accoun(cid:415)ng 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 - consolida(cid:415)on: whether the Group has de facto control over an investee; and Note 15 and 16 - leases: whether an arrangement contains a lease. 4.2. Assump(cid:415)ons and es(cid:415)ma(cid:415)on uncertain(cid:415)es Informa(cid:415)on about assump(cid:415)ons and es(cid:415)ma(cid:415)on uncertain(cid:415)es that have a signiﬁcant risk of resul(cid:415)ng in a material adjustment to the carrying amounts of assets and liabili(cid:415)es within the year ended 31 December 2023 is included in the following notes: • • • • • Note 25 - recogni(cid:415)on of deferred tax assets: availability of future taxable proﬁt against which tax losses carried forward can be used; Note 4.4 - Recoverability of explora(cid:415)on and evalua(cid:415)on assets: key assump(cid:415)ons underlying recoverable amounts; Note 4.5 - Recoverability of RHA Cash-Genera(cid:415)ng Unit “CGU”: key assump(cid:415)ons underlying recoverable amounts; Note 15 and 16 – recogni(cid:415)on and measurement of provisions and con(cid:415)ngencies: key assump(cid:415)ons about the likelihood and magnitude of an ou(cid:414)low of resources; and Note 19 – share based payments assump(cid:415)ons regarding the various inputs into the Black Scholes model used to determine the op(cid:415)on value. 4.3. Measurement of fair values A number of the Group’s accoun(cid:415)ng policies and disclosures require the measurement of fair values, for both ﬁnancial and non-ﬁnancial assets and liabili(cid:415)es. 49 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 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 valua(cid:415)on techniques as follows. • • • Level 1: quoted prices (unadjusted) in ac(cid:415)ve markets for iden(cid:415)cal assets or liabili(cid:415)es. 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 en(cid:415)rety in the same level of the fair value hierarchy as the lowest level input that is signiﬁcant to the en(cid:415)re measurement. The Group recognises transfers between levels of the fair value hierarchy at the end of the repor(cid:415)ng period during which the change occurred. Further informa(cid:415)on about the assump(cid:415)ons made in measuring fair values is included in the following notes: • • Note 19 - share-based payment arrangements; Note 29 - ﬁnancial instruments. 4.4 Recoverability of explora(cid:415)on and evalua(cid:415)on assets Determining whether an explora(cid:415)on and evalua(cid:415)on 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 Explora(cid:415)on for and Evalua(cid:415)on of Mineral Resources. If there is any indica(cid:415)on of poten(cid:415)al 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 explora(cid:415)on and evalua(cid:415)on assets at 31 December 2023 amounted to $4.686 million (2022: $4.739 million). Refer to note 8 for the assump(cid:415)ons used. 4.5 Recoverability of RHA Cash-Genera(cid:415)ng 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 indica(cid:415)on of poten(cid:415)al 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 calcula(cid:415)on requires the en(cid:415)ty to es(cid:415)mate the future cash ﬂows expected to arise from the cash-genera(cid:415)ng unit and a suitable discount rate in order to calculate the present value. During 2017 the opera(cid:415)ng losses at RHA were higher than predicted due to opera(cid:415)ons in the open pit and underground failing to deliver both the ore volumes and the an(cid:415)cipated grade. The opera(cid:415)ng losses are an indicator of poten(cid:415)al impairment. In December 2017, due to the lower ore delivery, an(cid:415)cipated grade and opera(cid:415)ng losses, the Board of Directors decided to place the RHA Tungsten mine under care and maintenance. 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 exis(cid:415)ng underground mining of 6 000 tons per month run of mine ore. Concurrently addi(cid:415)onal plant upgrades and a connec(cid:415)on to the na(cid:415)onal grid would result in a 40 000 ton per month run of mine ore opera(cid:415)on. A further op(cid:415)on to construct a new decline vehicle access was not considered during this review. Key assump(cid:415)ons used in calcula(cid:415)ng the ini(cid:415)al impairment included: 50 NOTES TO THE ANNUAL FINANCIAL STATEMENTS • • • • 7 265 mtu concentrate produc(cid:415)on per month; 10 year mine plan; APT price of $275 per metric ton unit (‘mtu’); 20% discount rate; and a zero growth rate in opera(cid:415)ng cash ﬂow a(cid:332)er the plant is fully opera(cid:415)onal, forecast to be for the full year 2019. Other key factors include a(cid:425)ainment of forecast grade as set out in our resource statement and plant opera(cid:415)ng parameters being achieved. The XRT sorter installa(cid:415)on is a signiﬁcant element in increasing conﬁdence in RHA in that 70% of the an(cid:415)cipated 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 mineralisa(cid:415)on in a mass pull of some 5%. The model assumes annual revenues of $13.1m from 2020. Revenue genera(cid:415)on is dependent on a number of inter-linked assump(cid:415)ons and a combina(cid:415)on of nega(cid:415)ve changes in those assump(cid:415)ons would result in further impairment charges. As the mine is not opera(cid:415)ng, these assump(cid:415)ons were not revisited and the mine remains fully impaired. Sensi(cid:415)vity analysis was conducted on the volume, grade, concentrate produc(cid:415)on per month and APT price assump(cid:415)ons in the model. The management of RHA con(cid:415)nue to engage with NIEEF about the future of RHA. 4.6 Es(cid:415)ma(cid:415)on of useful life for mine assets Mine assets are depreciated /amor(cid:415)sed 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 opera(cid:415)ng concern, is based on the ini(cid:415)al Preliminary Economic Assessment (‘PEA’) ﬁrst published in August 2013 that ini(cid:415)ally modelled an 8 year life of mine. The life of mine reassessed annually based on levels of produc(cid:415)on. 4.7 Basis of consolida(cid:415)on 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 ini(cid:415)al 5 year term. On 7 May 2019 ZimDiv were reappointed as the manager for another 5 year term. ZimDiv has marke(cid:415)ng 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 produc(cid:415)on. There has been no opera(cid:415)onal change since the agreements were signed and Premier con(cid:415)nues to fund RHA un(cid:415)l it becomes cash genera(cid:415)ve. 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 s(cid:415)ll retains opera(cid:415)onal 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 con(cid:415)nue to consolidate 100% of RHA and recognise non- controlling interests of 51% in the consolidated ﬁnancial statements. 4.8 Valua(cid:415)ons • Investments – Premier’s investment in Vortex Ltd (formerly Circum Minerals Ltd) is classiﬁed as an FVOCI as such is required to be measured at fair value at the repor(cid:415)ng date. As Vortex is unlisted 51 NOTES TO THE ANNUAL FINANCIAL STATEMENTS there are no quoted market prices. In previous years the fair value of the Vortex shares was derived using the most recent placing price. The Fair value of the Vortex shares as at 31 December 2023 was derived using the most recent placing price in 30 December 2022. Valua(cid:415)on of warrants, share op(cid:415)ons and ordinary shares issued as considera(cid:415)on – judgement is applied in determining appropriate assump(cid:415)ons to be used in calcula(cid:415)ng the fair value of the warrants, shares and share op(cid:415)ons issued. Refer accoun(cid:415)ng policy note and note 19. Provision for Rehabilita(cid:415)on - A provision is recognised for site rehabilita(cid:415)on and decommissioning of current mining ac(cid:415)vi(cid:415)es 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. No mining took place during the year, therefore the remaining life of the mine was not adjusted and resulted in no movement in the rehabilita(cid:415)on provision. The life of mine has subsequently been reassessed to a total of 10 years. The corresponding rehabilita(cid:415)on 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 con(cid:415)nue in opera(cid:415)on for the foreseeable future and will be able to realise its assets and discharge its liabili(cid:415)es and commitments in the normal course of business. The Group has an opera(cid:415)ng loss from con(cid:415)nuing opera(cid:415)ons amoun(cid:415)ng to $14.450 million (2022: $4.622 million) and nega(cid:415)ve cash ﬂows from opera(cid:415)on amoun(cid:415)ng to $8.030 million for the year ended 31 December 2023 (2022: posi(cid:415)ve cash ﬂows from opera(cid:415)ons amoun(cid:415)ng to $30.116 million). As at 31 December 2023, current liabili(cid:415)es exceeded current assets by $43.764 million (2022: $24.087 million). The Group raised $17.542 million (2022: $14.838 million) in net funding through share subscrip(cid:415)ons to fund the commissioning of the Zulu plant and development work at the Zulu mine, general group maintenance and preserva(cid:415)on of assets and to inves(cid:415)gate and assess poten(cid:415)al diversiﬁca(cid:415)on, through poten(cid:415)al investments in cash genera(cid:415)ng assets, as discussed above. There remains an ac(cid:415)ve and very liquid market for the Group's shares. The Directors have prepared a cash ﬂow forecasts for the 18-month period ended 31 December 2025. These key assump(cid:415)ons of this forecast are as follows: RHA • Zulu • • The Company has not funded any of the ac(cid:415)vi(cid:415)es at RHA since 1 July 2019, apart from essen(cid:415)al care and maintenance costs. Zulu will have its new scrubber unit installed and opera(cid:415)onal in the week of 10 July. This will enable Zulu to produce and derive revenue from the sale of SC6. Premier has engaged Zimbabwean banks to facilitate the funding of Zulu's short-term needs as they may arise. The Group • • • During 2023 the Group issued 4,216,446,124 shares at an average price of 0.4455p per share raising a total of $18.786 million. This cash was used to con(cid:415)nue with the commission and development work at Zulu mine. In May 2023 the op(cid:415)ons issued in 2017 were exercised raising £550,382 for the Group. Premier has obtained support from its o(cid:335)ake and prepayment partner allowing Premier to pursue alterna(cid:415)ve funding avenues. 52 NOTES TO THE ANNUAL FINANCIAL STATEMENTS • The calling of a Special General Mee(cid:415)ng to increase the number of shares free from pre-emp(cid:415)ve rights by no more than 2 billion In the event that the Group is unable meet its obliga(cid:415)ons or have Zulu commence opera(cid:415)ons, then a material uncertainty exists which may cast signiﬁcant doubt on the ability of the Company to con(cid:415)nue as a going concern and therefore be unable to realise its assets and se(cid:425)le its liabili(cid:415)es in the normal course of business. 6. Opera(cid:415)ng segments The Group has the following three reportable segments that are managed separately due to the diﬀerent jurisdic(cid:415)ons. Segmental results, assets and liabili(cid:415)es include items directly a(cid:425)ributable to a segment as well as those that can be allocated on a reasonable basis. Reportable segments RHA and RHA Mauri(cid:415)us Zulu and Zulu Mauri(cid:415)us Head oﬃce Opera(cid:415)ons Development and mining of Wolframite Development of Lithium and Tantalite General administra(cid:415)on and control 53 NOTES TO THE ANNUAL FINANCIAL STATEMENTS By operating segment 2023 Result Revenue Operating loss / (income) Other income Fair value movement on investment Finance charges Impairment of investments and loans receivable Loss before taxation Assets Exploration and evaluation assets Investments Property, plant and equipment Loans receivable 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* Exploration Zulu Lithium Zimbabwe and Zulu Mauritius Total continuing operations Unallocated Corporate $ 000 $ 000 $ 000 $ 000 - 64 - - - - 64 - - - - - 8 23 31 - - - - (360) (360) (329) - 7,639 (137) - - - 7,501 4,563 - 53,157 - 936 1,346 12 60,014 - - - - 14,821 (137) - 5,818 311 20,813 4,686 501 53,234 232 936 5,001 542 65,132 - (180) - (2,171) (50,063) - (2,171) 57,843 (360) (50,603) 14,529 - - - 352 17,573 - 371 17,608 446 - 7,118 - - 5,818 311 13,248 123 501 77 232 - 3,647 507 5,087 - (180) - (47,892) - (48,072) (42,985) 19 35 446 54 NOTES TO THE ANNUAL FINANCIAL STATEMENTS By operating segment 2022 Result Revenue Operating loss / (income) Other income Finance charges Impairment of investments and loans receivable Loss before taxation Assets Exploration and evaluation assets Investments Property, plant and equipment Loans receivable Inventories Trade and other receivables Cash Total assets Liabilities Borrowings 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* Exploration Zulu Lithium Zimbabwe and Zulu Mauritius Total continued operations Unallocated Corporate $ 000 $ 000 $ 000 $ 000 - 3,774 - - 1,161 4,935 176 501 63 - - 65 9,238 10,043 (180) (33,792) - (33,972) (23,929) 7 70 53 - 213 - - - 213 - - - - - 3 12 15 - - (360) (360) (345) - - - - 689 (34) - - 655 4,563 - 35,934 - 11 112 377 40,997 - 67 - 67 41,064 47 35,981 - - 4,676 (34) - 1,161 5,803 4,739 501 35,997 - 11 180 9,627 51,055 (180) (33,725) (360) (34,265) 16,790 54 36,051 53 *Represents 100% of the results and ﬁnancial posi(cid:415)on of RHA Tungsten (Private) Limited (“RHA”) whereas the Group owns 49%. Non-controlling interests are disclosed in note 20. 55 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 7. Hyper-inﬂa(cid:415)onary accoun(cid:415)ng In terms of IAS29, Hyperinﬂa(cid:415)on is indicated by characteris(cid:415)cs of the economic environment of a country which include, but are not limited to, the following: a. b. c. d. e. the general popula(cid:415)on prefers to keep its wealth in non-monetary assets or in a rela(cid:415)vely stable foreign currency. Amounts of local currency held are immediately invested to maintain purchasing power; the general popula(cid:415)on regards monetary amounts not in terms of the local currency but in terms of a rela(cid:415)vely 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 cumula(cid:415)ve inﬂa(cid:415)on 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 Se(cid:425)lement of US Dollars (“RTGS”) at an oﬃcial exchange rate of 1:1. At that (cid:415)me the oﬃcial inﬂa(cid:415)on rate was 0%. At the year end the oﬃcial exchange rate has moved to RTGS 6,104.72: $1 (2022: RTGS 684.3339: $1) whilst the oﬃcial inﬂa(cid:415)on rate has moved to 26.5% (2022: 105.50%) on a year on year basis. The table below details the exchange rates and inﬂa(cid:415)on rates, as published by h(cid:425)ps://tradingeconomics.com/zimbabwe/inﬂa(cid:415)on-cpi, on a monthly basis for the year ended 31 December 2023. Inflation Rate 2023 Exchange Rate RTGS : US$ 1.00 2023 Inflation Rate 2022 Exchange Rate RTGS : US$ 1.00 2022 34.80% 44.10% 40.80% 33.50% 30.70% 30.90% 22.70% 17.70% 18.40% 17.80% 21.60% 26.50% 796.5215 889.1325 929.3618 1,047.4449 2,577.0564 5,739.7961 4,516.8025 4,606.6233 5,466.7466 6,007.9622 6,102.7435 6,104.7226 60.60% 66.10% 72.70% 96.40% 131.70% 70.00% 96.10% 106.30% 107.50% 108.70% 107.10% 105.50% 115.4223 124.0189 142.4237 159.3482 301.4994 370.9646 443.8823 546.8254 621.8922 632.7703 654.9284 684.3339 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. The compara(cid:415)ve ﬁnancial statements have been restated to comply with IAS29. The ﬁnancial statements reﬂect the reduc(cid:415)on in the purchasing power of RTGS which have been remeasured, in terms of IAS 29, as at 31 December 2022. With eﬀect from 1 January 2023, all companies in the group prepare and present their ﬁnancial informa(cid:415)on in US Dollars. Any local repor(cid:415)ng requirements will be managed by conver(cid:415)ng the USD values to the respec(cid:415)ve local currency. 56 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 8. Intangible assets Exploration and evaluations assets Total intangible assets Opening carrying value Expenditure on Exploration and evaluation Impairment of Exploration and evaluation assets Closing carrying value 2023 $ 000 4,686 4,686 4,739 446 (499) 4,686 2022 $ 000 4,739 4,739 4,686 53 - 4,739 During 2021, the market condi(cid:415)ons for lithium improved substan(cid:415)ally. This improvement enabled management to revisit the assump(cid:415)ons surrounding the impairment of the Zulu Lithium Explora(cid:415)on and Evalua(cid:415)on assets. Based upon the current market condi(cid:415)ons and associated assump(cid:415)ons, management reversed the impairment of the Zulu Lithium’s Explora(cid:415)on and Evalua(cid:415)on assets. During 2020, the company acquired a por(cid:414)olio of hard-rock lithium assets located in Zimbabwe and Mozambique from Lithium Consolidated Ltd ("Li3"). During 2023, $0.446 million (2022: $0.053 million) was expended to purchase an op(cid:415)on to conduct explora(cid:415)on on Turwi Gold. Zulu Lithium and Tantalite Project During the year $nil (2022: $nil) explora(cid:415)on costs were incurred and capitalised to Zulu. The Group views this project as strategic and explora(cid:415)on work will be con(cid:415)nued in the future, cash ﬂow permi(cid:427)ng. Key assump(cid:415)ons applied in calcula(cid:415)ng the discounted cash ﬂow analysis included: • • • • • • • • Targeted annual produc(cid:415)on of spodumene concentrate Targeted annual produc(cid:415)on of petalite concentrate Price of spodumene concentrate Price of petalite concentrate Discount rate Opera(cid:415)ng costs per combined tonnage of concentrate Es(cid:415)mated 15 year life of mine Average strip ra(cid:415)o of 84 000 tonnes 32 500 tonnes $975/t $400/t 25% $486/t 5.5:1 During March 2021, the EPO was granted and a DFS commenced. Subsequently, the iden(cid:415)ﬁed resource and the economics of the project indicated that the project was viable and The Group commenced developing the Zulu mine. For addi(cid:415)onal informa(cid:415)on on events a(cid:332)er the repor(cid:415)ng date, refer to note 32. 57 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 9. Investments Opening carrying value 2022 Shares acquired Fair value adjustment Closing carrying value 2022 Shares acquired Fair value adjustment Closing carrying value 2023 Reconciliation of movements in investments Opening carrying value 2022 (1) (2) (3) Acquisition at fair value 2022 Fair value adjustment Opening carrying value 2023 Acquisition of shares Fair value adjustment Closing carrying value 2023 Vortex (formerly Circum Minerals) Manganese Namibian Holdings Total $ 000 6,263 - (5,762) 501 - - 501 6,263 - (5,762) 501 - - 501 $ 000 2,079 - (2,079) - - - - 2,079 - (2,079) - - - - $ 000 8,342 - (7,841) 501 - - 501 8,342 - (7,841) 501 - - 501 (1) Represents 5 million shares in unlisted en(cid:415)ty 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 valida(cid:415)ng it against the most recent placing price on 30 December 2022 of $0.10 per share. In March 2022, the shares were sold at book value to Vortex Limited in exchange for shares in Vortex Limited. (3) Represents a purchase of 19.9% interest in MNH. The shares are considered to be level 3 ﬁnancial assets under the IFRS 13 categorisa(cid:415)on of fair value measurements. Premier con(cid:415)nues to have an indirect interest in 5,010,333 shares in Circum held by Vortex and is currently valued in total at $0.501 million (2022: $0.501 million). The fair value of these investments on 31 December 2023 amounted to $0.501 million (2022: $0.501 million). Premier’s investment in Vortex is classiﬁed as FVOCI and as such is required to be measured at fair value at each repor(cid:415)ng date. As Vortex is unlisted there are no quoted market prices. The fair value of the Circum shares held by Vortex was derived using the previous issue price and valida(cid:415)ng it against the most recent placing price on 30 December 2022. Premier’s investment in MNH is classiﬁed as FVOCI and as such is required to be measured at fair value at each repor(cid:415)ng date. As MNH is unlisted there are no quoted market prices. The fair value of the MNH shares was fully impaired based on their most recently available ﬁnancial informa(cid:415)on. 58 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Sensi(cid:415)vity analysis The investments are subject to changes in market prices. A 10% reduc(cid:415)on in market prices would result in a $0.050 million (2022: $0.050 million) charge to Other Comprehensive Income. 10. Property, plant and equipment Cost At 1 January 2022 Exchange differences (1) Transfer from Capital Work in Progress Additions Disposals At 31 December 2022 Exchange differences (1) Additions Disposals At 31 December 2023 895 (122) - - - 773 7,649 490 - 8,912 Accumulated Depreciation and Impairment Losses At 1 January 2022 Charge for the period Exchange differences (1) Impairment of RHA 895 (122) - - 773 7,649 - - 8,422 At 31 December 2022 Exchange differences (1) Charge for the year Impairment At 31 December 2023 Net Book Value At 31 December 2022 At 31 December 2023 Mine Development $ 000 Plant and Equipment $ 000 Land and Buildings $ 000 Capital Work-in- Progress - - 34,956 - 34,956 - 16,307 - 51,263 - - - - - - - - - Total $ 000 3,748 (198) - 35,911 - 39,461 16,971 17,608 - 74,040 3,609 (199) 54 - 3,464 16,971 371 - 20,806 2,812 (54) - 700 - 3,458 7,918 643 - 12,019 2,687 (54) 44 - 2,677 7,918 303 - 10,898 41 (22) - 255 - 274 1,404 168 - 1,846 27 (23) 10 - 14 1,404 68 - 1,486 - 490 781 1,121 260 360 34,956 51,263 35,997 53,234 59 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 11. Loans receivable Vortex Ltd Li3 Lithium Corp 2023 $ 000 - 232 232 2022 $ 000 - - - During the year the Group advanced $0.311 million (2022: $0.243 million) to Vortex Ltd to enable Vortex Ltd to par(cid:415)cipate in rights issues conducted by Circum Minerals Ltd. The most recent rights issue on 30 December 2022 for $0.10 per Circum share. Due to the price of the rights issue, the Group fully impaired the loan advanced. During the year, the Group entered into a 50:50 joint venture explora(cid:415)on agreement with Li3 Lithium Corp to develop the Licomex claims. The loan value represents the amount due by Li3 Lithium Corp’s in excess of their share of the expenses incurred on this project. 12. Inventories 2023 $ 000 21 652 263 936 2023 $ 000 1,094 8 3,899 5,001 5,001 - 5,001 2021 $ 000 - - 11 11 2022 $ 000 3 52 125 180 180 - 180 Diesel Spares and plant consumables Plant Chemicals 13. Trade and other receivables Indirect tax receivable Other receivables Prepayments Current Non-current 60 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 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 2023 $ 000 2022 $ 000 1,354 3,647 5,001 1,094 3,907 5,001 - 5,001 5,001 3 52 55 3 52 55 - 55 55 The receivables are considered to be held within a held-to-collect business model consistent with the Group’s con(cid:415)nuing recogni(cid:415)on of the receivables. As at 31 December 2023 the Group does not have any contract assets arising out of contracts with customers rela(cid:415)ng to the Group’s right to receive considera(cid:415)on 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 2023, as all trade receivables generated during the ﬁnancial year were se(cid:425)led in full prior to the year-end. Informa(cid:415)on about the Group’s exposure to credit and market risks and impairment losses for trade receivables is included in Note 29. 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 2023 $ 000 542 542 2022 $ 000 9,627 9,627 61 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 15. Provisions – rehabilita(cid:415)on As at 1 January Foreign Exchange variation on translation Unwinding of discount As at 31 December 2023 $ 000 360 - - 360 2022 $ 000 360 - - 360 A provision is recognised for site rehabilita(cid:415)on and decommissioning of current mining ac(cid:415)vi(cid:415)es 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 rehabilita(cid:415)on assets was capitalised to property, plant and equipment and is depreciated over the life of the mine. The ini(cid:415)al provision for rehabilita(cid:415)on was performed in the then func(cid:415)onal currency of USD. With the implementa(cid:415)on of RTGS this provision was restated in terms of note 7 on Hyperinﬂa(cid:415)onary accoun(cid:415)ng. 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 considera(cid:415)on the remaining volume of ore to be extracted, the current level of mining that has already been conducted and the es(cid:415)mated costs involved in rehabilita(cid:415)ng the land. 16. Trade and other payables Trade payables Accrued expenses Advance receipt by Suzhou TA&A Ultra Clean Short term loan from a director - G. Roach Payroll liabilities 2023 $ 000 4,611 2,682 40,376 2,269 125 50,063 2022 $ 000 984 273 32,464 - 4 33,725 During the 2022 ﬁnancial year the Group entered into an O(cid:335)ake and Marke(cid:415)ng agreement with Canmax, whereby Canmax would prepurchase 143,000 tonnes of spodumene concentrate that will be produced by the Group’s Zulu mine. During 2023, this advance receipt accrued interest of $5.732 million. Premier engaged China Zenith Capital Ltd to facilitate the placement of 3,000,000,000 shares with Canmax. Subsequently the Group entered into an O(cid:335)ake and Marke(cid:415)ng agreement with Canmax, whereby Canmax would prepurchase 143,000 tonnes of spodumene concentrate that will be produced by the Group’s Zulu mine. In 2024 China Zenith Capital Ltd was awarded their success fee of $1,350,000 plus interest and costs. Accordingly an amount of $2.078 million has been accrued. During the year, a director, Mr. G. Roach advanced the Group $2.269 million including interest. This loan is to be se(cid:425)led in shares by 31 December 2024. All trade and other payables at 31 December 2023 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. 62 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 17. Borrowings Loan Neil Herbert Reconciliation of movement in borrowings As at 1 January Loans received (1) Accrued interest As at 31 December Current Non-current 2023 $ 000 180 180 2022 $ 000 180 180 2023 $ 000 2022 $ 000 180 - - 180 180 - 180 180 - - 180 180 - 180 Borrowings comprise loans from a related party and a non-related party. Loans from a related party are further disclosed in Note 31, Related Party Transac(cid:415)ons. (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 a(cid:425)ract 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, ac(cid:415)ng collec(cid:415)vely with Otjozondu, looks to secure the best possible oﬀ-take funding package. At 31 December 2023 the oﬀ-take funding had not been secured and Mr Herbert agreed to the deferment of the repayment of the loan un(cid:415)l such oﬀ-take agreement has been secured. 18. Share capital Authorised share capital 26.63 billion (2022: 22.42 billion) ordinary shares of no par value. 63 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Issued share capital As at 1 January 2022 Number of Shares ‘000 Value $ 000 19,418,009 59,432 Shares issued for direct Investment (1) 3,000,000 15,782 As at 31 December 2022 22,418,009 75,214 Shares issued for direct Investment (2) Shares issued on conversion of fees (3) Shares issued on conversion of fees (4) Shares issued on conversion of fees (5) Shares issued for direct Investment (6) Shares issued on conversion of loan (7) Shares issued under subscription agreement (8) Shares issued on conversion for fees (9) Shares issued on conversion for fees (10) Shares issued on conversion for fees (11) Shares issued on conversion for fees (12) Shares issued on conversion for fees (13) Shares issued under subscription agreement (14) Shares issued under subscription agreement (15) Shares issued under subscription agreement (16) As at 31 December 2023 Less cumulative share costs Net share capital as at 31 December 2023 190,216 161,877 11,892 54,054 1,106,286 36,571 1,428,571 90,000 15,000 11,000 45,000 22,500 518,696 518,696 6,087 2,194 688 136 753 4,847 153 6,251 397 57 40 165 82 1,498 1,507 18 26,634,455 94,000 (5,507) 88,493 (1) (2) (3) (4) (5) (6) (7) (8) On 30 March 2022 the Company issued 3 000 000 000 shares under a subscrip(cid:415)on agreement at a price of 0.4p for a total value of $15.782 million. On 22 May 2023 the Company issued 190 216 216 shares under a subscrip(cid:415)on agreement at a price of 0.092p for a total value of $ 2.194 million. On 26 May 2023 the Company issued 161 877 130 shares for a total value of $ 0.688 million for conversion of fees to a contractor. On 26 May 2023 the Company issued 11 891 892 shares for a total value of $ 0.136 million for conversion of fees. On 26 May 2023 the Company issued 54 054 054 shares for a total value of $ 0.753 million for conversion of fees. On 1 September 2023 the Company issued 1 106 285 713 shares under a subscrip(cid:415)on agreement at a price of 0.035p for a total value of $ 4.847 million. On 4 September 2023 the Company issued 36 571 430 shares for a total value of $ 0.153 million for conversion of loan. On 14 September 2023 the Company issued 1 428 571 428 shares under a subscrip(cid:415)on agreement at a price of 0.035p for a total value of $ 6.251 million. 64 NOTES TO THE ANNUAL FINANCIAL STATEMENTS (9) On 15 November 2023 the Company issued 90 000 000 shares for a total value of $ 0.397 million for conversion of fees. (10) On 4 December 2023 the Company issued 15 000 000 shares for a total value of $ 0.040 million for conversion of fees. (11) On 4 December 2023 the Company issued 11 000 000 shares for a total value of $ 0.057 million for conversion of fees. (12) On 12 December 2023 the Company issued 45 000 000 shares for a total value of $ 0.165 million for conversion of fees. (13) On 13 December 2023 the Company issued 22 500 000 shares for a total value of $ 0.081 million for conversion of fees. (14) On 13 December 2023 the Company issued 518 695 652 shares under a subscrip(cid:415)on agreement at a price of 0.023p for a total value of $ 1.498 million. (15) On 14 December 2023 the Company issued 518 695 652 shares under a subscrip(cid:415)on agreement at a price of 0.023p for a total value of $1.507 million. (16) On 31 December 2023 the Company issued 6 086 957 shares under a subscrip(cid:415)on agreement at a price of 0.023p for a total value of $0.018 million. Reconcilia(cid:415)on to balance as stated in the consolidated statement of ﬁnancial posi(cid:415)on 2023 $ 000 70,951 9,274 2,318 153 - - (1,244) 7,041 88,493 2023 $ 000 3,708 - 1,509 (1,685) - 3,532 2022 $ 000 56,113 - - - - (944) 15,782 70,951 2022 $ 000 2,366 - 1,342 - - 3,708 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 above) - non-cash Shares issued on exercise of warrants – cash flow Shares issued to purchase Investment in MNH Share issue costs – cash flow Shares issued for direct Investment As at 31 December 19. Share based payment and warrant reserve Share options and warrants reserve beginning of year Warrants granted Share options granted Share options exercised Warrants cancelled Share options and warrants reserve end of year Share op(cid:415)ons and warrant arrangements are set out below. 65 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Equity-se(cid:425)led Share base payment arrangement The Company adopted an incen(cid:415)ve share op(cid:415)on plan (the ‘Plan’) during 2012. The essen(cid:415)al elements of the Plan provide that the aggregate number of common shares of the Company’s capital stock issuable pursuant to op(cid:415)ons granted under the Plan may not exceed 15% of the issued and outstanding Ordinary Shares at the (cid:415)me of any grant of op(cid:415)ons. Op(cid:415)ons granted under the Plan will have a maximum term of 10 years. All op(cid:415)ons granted to Directors and management are subject to ves(cid:415)ng provisions of one to two years. All op(cid:415)ons are to be se(cid:425)led by the physical delivery of shares. The fair value of all the share op(cid:415)ons has been measured using the Black-Scholes Model. Number of Options Granted ‘000 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 50,439 122,500 202,500 65,000 202,500 65,000 202,500 65,000 202,500 1,373,436 Exercise Price Expiry Date Estimated Fair Value 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 Nil 31/05/2032 Nil 31/05/2032 0.4p 31/05/2032 0.4p 31/05/2032 0.5p 31/05/2032 0.5p 31/05/2032 0.5p 31/05/2032 0.5p 31/05/2032 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 0.32p 0.32p 0.18p 0.18p 0.19p 0.19p 0.19p 0.19p Issued to Employees and consultants Directors Directors Employees and associates Directors Directors Management Management Directors Directors Management Management Directors Consultants Directors Consultants Directors Consultants Directors Consultants Directors Consultants Directors Consultants Total number of options Date Granted Vesting Term 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 30/05/2022 See 6 below 30/05/2022 See 6 below 30/05/2022 See 6 below 30/05/2022 See 6 below 30/05/2022 See 6 below 30/05/2022 See 6 below 30/05/2022 See 6 below 30/05/2022 See 6 below 66 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Issued to: - Directors - Employees and consultants - Management Less: - Options exercised in prior years - Options exercised in the current year - Options cancelled in prior years - Options cancelled in the current year Total options in issue at 31 December 2023 429,272 924,664 19,500 1,373,436 27,257 161,877 32,802 - 1,151,500 Expected vola(cid:415)lity has been based on an evalua(cid:415)on of the historical vola(cid:415)lity of the Company’s share price, par(cid:415)cularly over the historical period commensurate with the expected term. The expected term of the instruments has been based on historical experience and general op(cid:415)on holder behaviour. The Company has granted the following share op(cid:415)ons during the years up to 31 December 2023: 1. 2. 3. 4. 5. 6. 7. These share op(cid:415)ons vest on the two-year anniversary of the grant date. The op(cid:415)ons are exercisable at any (cid:415)me a(cid:332)er ves(cid:415)ng during the grantee’s period as an eligible op(cid:415)on holder, and must be exercised no later than 10 years a(cid:332)er the date of grant, a(cid:332)er which the op(cid:415)ons will lapse. These share op(cid:415)ons vest in equal instalments annually on the anniversary of the grant date over a two year period. The op(cid:415)ons are exercisable at any (cid:415)me a(cid:332)er ves(cid:415)ng during the grantee’s period as an eligible op(cid:415)on holder, and must be exercised no later than 10 years a(cid:332)er the date of grant, a(cid:332)er which the op(cid:415)ons will lapse. These share op(cid:415)ons vested on the grant date. The op(cid:415)ons are exercisable at any (cid:415)me a(cid:332)er ves(cid:415)ng during the grantee’s period as an eligible op(cid:415)on holder, and must be exercised no later than 10 years a(cid:332)er the date of grant, a(cid:332)er which the op(cid:415)ons will lapse. These share op(cid:415)ons vest on the one-year anniversary of the grant date. The op(cid:415)ons are exercisable at any (cid:415)me a(cid:332)er ves(cid:415)ng during the grantee’s period as an eligible op(cid:415)on holder, and must be exercised no later than 10 years a(cid:332)er the date of grant, a(cid:332)er which the op(cid:415)ons will lapse. These share op(cid:415)ons vest on the two-year anniversary of the grant date. The op(cid:415)ons are exercisable at any (cid:415)me a(cid:332)er ves(cid:415)ng during the grantee’s period as an eligible op(cid:415)on holder, and must be exercised no later than 10 years a(cid:332)er the date of grant, a(cid:332)er which the op(cid:415)ons will lapse. These share op(cid:415)ons vest on the 18 month anniversary of the grant date. The op(cid:415)ons are exercisable at any (cid:415)me a(cid:332)er ves(cid:415)ng during the grantee’s period as an eligible op(cid:415)on holder, and must be exercised no later than 10 years a(cid:332)er the date of grant, a(cid:332)er which the op(cid:415)ons will lapse. These share op(cid:415)ons vest on the 30 month anniversary of the grant date. The op(cid:415)ons are exercisable at any (cid:415)me a(cid:332)er ves(cid:415)ng during the grantee’s period as an eligible op(cid:415)on holder, and must be exercised no later than 10 years a(cid:332)er the date of grant, a(cid:332)er which the op(cid:415)ons will lapse. No share op(cid:415)ons were granted during the year ended 31 December 2023. The expense for the year for the fair value of the op(cid:415)ons previously granted was $1.509 million (2022: $1.342 million). The assessed fair value of op(cid:415)ons granted to directors and management was determined using the Black-Scholes Model that takes into account the exercise price, the term of the op(cid:415)on, the share price at grant date, the expected price vola(cid:415)lity of the underlying share, the expected dividend yield and the risk-free rate interest rate for the term of the op(cid:415)on. 67 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Directors: - G. Roach - W. Hampel - G. Manhambara - Resigned directors Other option holders In issue prior to 1 January 2022 Exercised during the year Cancelled / Lapsed during the year Granted during the year In issue as at 31 December 2023 279,000 25,500 40,000 53,000 915,877 1,313,377 (19,000) (5,500) - (42,000) (95,377) (161,877) - - - - - - - - - - - - 260,000 20,000 40,000 11,000 820,500 1,151,500 The Group has the following share op(cid:415)ons outstanding: Grant Date Expiry Date Exercise Price 29/07/2014 29/07/2014 13/03/2015 13/03/2015 30/05/2022 30/05/2022 30/05/2022 30/05/2022 28/07/2024 28/07/2024 12/03/2025 12/03/2025 31/05/2032 31/05/2032 31/05/2032 31/05/2032 1.15p 1.50p 0.9p 1.17p Nil 0.4p 0.5p 0.5p Number of options outstanding '000 3,000 10,500 5,250 5,250 325,000 267,500 267,500 267,500 1,151,500 Number of options vested and exercisable '000 6,500 6,500 5,250 5,250 325,000 267,500 211,801 169,295 997,096 The following table lists the inputs into the valua(cid:415)on model. Dividend Yield (%) Expected Volatility (%) Risk- free interest rate (%) Share price at grant date Exercise price - - - - - - - - 148 148 100 100 70 70 70 70 1.71 1.71 1.71 1.71 3.02 3.02 3.02 3.02 1.15p 1.15p 0.9p 0.9p 0.32p 0.32p 0.32p 0.32p 1.15p 1.50p 0.9p 1.17p Nil 0.4p 0.5p 0.5p Issue - 29 July 2014 Issue - 29 July 2014 Issue - 13 March 2015 Issue - 13 March 2015 Issue - 30 May 2022 Issue - 30 May 2022 Issue - 30 May 2022 Issue - 30 May 2022 The shares that the op(cid:415)ons are based on are quoted in GBP and so the op(cid:415)on agreement is stated in GBP. As such they are presented in GBP despite the presenta(cid:415)onal currency of the Group being USD. The number and weighted-average exercise prices of share op(cid:415)ons under the share op(cid:415)on programmes and replacement awards were as follows: 2023 68 2022 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Options outstanding, beginning of year Exercised Expired Granted Options outstanding, end of year Shares ‘000 Weighted Average Exercise Price 1,313,377 (161,877) - - 1,151,500 0.35p 0.46p 0p 0p 0.33p Shares ‘000 200,349 - (14,472) 1,127,500 1,313,377 Weighted Average Exercise Price 0.55p 0p 0p 0.33p 0.35p The weighted-average life of the op(cid:415)ons in issue as at 31 December 2023 is 8 years and 96 days (2022 – 8 years and 2 days.) Warrants The Company did not grant warrant op(cid:415)ons during the year (2022: nil) A summary of the status of the Company’s share warrants as of 31 December 2023 and changes during the year are as follows: Warrants outstanding, beginning of year Granted Expired Exercised Cancelled * Warrants outstanding, end of year 2023 ‘000 2022 ‘000 - - - - - - - - - - - - There are no warrants outstanding in favour of the Directors. Premier’s share price opened at 0.510p in January 2022, traded at an average of 0.566p, with a high of 1.040p and low of 0.200p during the year and closed at 0.220p on 31 December 2023. 20. 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 2023 $ 000 (12,717) - - (438) (13,155) 2022 $ 000 (12,205) - (68) (444) (12,717) The following table summarises the informa(cid:415)on rela(cid:415)ng to each of the Group’s subsidiaries that has material Non-controlling interest, before any intra-group elimina(cid:415)ons. 69 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Non-controlling Interest percentage Non-current assets Current assets Non-current liabilities Current liabilities Net assets 2023 RHA 51% - 32 (18,582) (7,244) (25,794) 2022 RHA 51% - 15 (18,516) (6,434) (24,935) Net assets attributed to Non-controlling Interest (13,155) (12,717) Revenue Profit / (Loss) Other Comprehensive Income /(Loss) Total comprehensive income Loss allocated to NCI - (859) - (859) (438) - (870) (134) (1,004) (512) The share of losses in the year represents the losses a(cid:425)ributable to non-controlling interests in RHA for the year. 21. Revenue Major product/service lines Sale of Wolframite Sale of scrap Reserve Bank of Zimbabwe Export Incentive Total revenue Prescription of debts Total other income Gross revenue Primary Geographical Markets Africa Timing of revenue recognition Products transferred at a point in time 2023 $ 000 2022 $ 000 - - - - 137 137 137 137 137 - - - - - - 34 34 34 34 34 - - 70 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 22. Cost of sales excluding deprecia(cid:415)on and amor(cid:415)sa(cid:415)on Mining contractor Staff costs Consumables Equipment hire and maintenance Mining services Plant services Selling costs Inventory write-down / (write-up) 23. Administra(cid:415)ve 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 Foreign exchange losses Share based payment (note 19) Exploration costs 71 2023 $ 000 2,312 506 266 - - 58 663 - 3,805 2023 $ 000 44 - (16) 1,946 3,931 126 792 131 715 117 112 59 862 124 193 1,509 - 10,645 2022 $ 000 - - - - - - - - - 2022 $ 000 42 7 - 53 1,369 116 230 22 380 33 47 53 306 126 480 1,342 16 4,622 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Number of staff 2023 2022 Directors of the Holding Company Administrative staff Total Holding Company staff Directors of subsidiaries Subsidiary administrative and operating staff Total staff 24. 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 25. Taxa(cid:415)on Deferred tax As at 1 January As at 31 December Income Tax Taxation charge for the year 4 0 4 3 220 227 2023 $ 000 - 5,818 - - - - 5,818 4 0 4 3 12 19 2022 $ 000 - - - - - - - 2023 $ 000 2022 $ 000 - - - - - - There is no taxa(cid:415)on charge for the year ended 31 December 2023 (2022: Nil) because the Group is registered in the Bri(cid:415)sh Virgin Islands where no corporate taxes or capital gains tax are charged. However, the Group may be liable for taxes in the jurisdic(cid:415)ons of the underlying opera(cid:415)ons. 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 15,862.422 million (2022: 15,862.422 million). 72 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Reconciliation of effective tax rate 2023 Loss before tax from continuing operations Tax using the Zimbabwean company tax rate Tax effect of: Effects of tax rates in foreign jurisdictions Con(cid:415)ngent liability 2023 $ 000 (20,813) 5,203 2022 - 25% 2022 $ 000 (5,803) 1,451 25% (25%) (5,203) (25%) (1,451) The Group operates across diﬀerent geographical regions and is required to comply with tax legisla(cid:415)on in various jurisdic(cid:415)ons. The determina(cid:415)on of the Group’s tax is based on interpreta(cid:415)ons applied in terms of the respec(cid:415)ve tax legisla(cid:415)ons and may be subject to periodic challenges by tax authori(cid:415)es which may give rise to tax exposures. 26. Loss per share The calcula(cid:415)on of loss per share is based on the loss a(cid:332)er taxa(cid:415)on a(cid:425)ributable to shareholders, divided by the weighted average number of shares in issue during the year: 2023 $ 000 2022 $ 000 Net loss attributable to owners of the Company ($ 000) (20,375) (5,359) Weighted average number of Ordinary Shares in calculating basic earnings per share (‘000) 23,538,638 21,686,502 Basic loss per share (US cents) Diluted loss per share (US cents) (0.09) (0.09) (0.03) (0.03) 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) 22,418,009 1,120,629 23,538,638 19,418,009 2,268,493 21,686,502 The 2022 Net loss attributable to owners of the Company has been restated slightly to agree to the statement of proﬁt or loss and other comprehensive income, but doesn’t change the loss per share ﬁgures, due to rounding. As the Group incurred a loss for the year, there is no dilutive e(cid:431)ect 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 2023 2022 1,151,500 - - 1,151,500 1,327,849 - - 1,327,849 73 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Refer to note 32 Post balance sheet events for addi(cid:415)onal poten(cid:415)ally dilu(cid:415)ve transac(cid:415)ons. 27. Directors’ remunera(cid:415)on 2023 Executive Directors George Roach Non-Executive Directors Godfrey Manhambara Wolfgang Hampel Dr Wei Lou 2022 Executive Directors George Roach Non-Executive Directors Godfrey Manhambara Wolfgang Hampel Neil Herbert Dr Wei Lou Directors’ fees $ 000 Consultancy Fees $ 000 Share Options $ 000 - 275 42 42 42 126 - - 275 - - - - Directors’ fees $ 000 Consultancy Fees $ 000 Share Options $ 000 - 42 42 - 31 115 275 - 11 - 286 - - - - - Total $ 000 275 42 42 42 401 Total $ 000 275 42 42 11 31 401 The Directors’ fees disclosed in note 23 include nil (2022: nil) being the fees paid to Directors of RHA, who are not directors of the parent company. 28. Notes to the statement of cash ﬂows Cash and cash equivalents comprise cash at bank, bank overdra(cid:332)s 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. 74 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Profit / (Loss) before tax Adjustments for: Finance charges unpaid Foreign exchange variations Settlement agreement on Finance lease Impairment of Investments and loans receivable Share based payments charge 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 2023 $ 000 2022 $ 000 (20,813) (5,803) 5,818 - - 311 1,509 371 (12,804) (925) (4,821) 10,520 (8,030) 2023 $ 000 18,786 (1,244) - 17,542 (5,818) - - (5,818) - 1,342 - 1,161 - 54 (3,246) (11) 206 33,167 30,116 2022 $ 000 15,782 (944) - 14,838 - - - - Net debt as at 31 December 2021 Cash flows Foreign exchange adjustments Net debt as at 31 December 2022 Cash flows Foreign exchange adjustments Net debt as at 31 December 2023 Cash and cash equivalents £ 940 7,345 1,342 9,627 (9,085) - 542 Borrowings £ Total debt £ Net debt £ (180) - - (180) - - (180) (180) - - (180) - - (180) 760 7,345 1,342 9,447 (9,085) - 362 75 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 29. Financial Instruments – Fair values and risk management The following table shows the carrying amounts and fair values of ﬁnancial assets and ﬁnancial liabili(cid:415)es, including their levels in the fair value hierarchy. It does not include fair value informa(cid:415)on for ﬁnancial assets and ﬁnancial liabili(cid:415)es not measured at fair value if the carrying amount is a reasonable approxima(cid:415)on 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 2023 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 approxima(cid:415)on of their fair value. 76 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Carrying value FVOCI - equity instruments $ 000 Financial assets at amortised cost $ 000 Other financial liabilities $ 000 31 December 2023 Note Fair value Total $ 000 Level 1 Level 2 Level 3 Total $ 000 $ 000 $ 000 $ 000 - - 501 501 Financial assets measured at fair value FVOCI 501 501 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 - - - - - - - - - - - - 232 - 232 - - - - - - - - - - - - - - - 501 501 232 - 232 - - - - - (50,063) (50,063) - - (50,063) (50,063) 77 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Carrying value FVOCI - equity instruments $ 000 Financial assets at amortised cost $ 000 Other financial liabilities $ 000 31 December 2022 Note Fair value Total $ 000 Level 1 Level 2 Level 3 Total $ 000 $ 000 $ 000 $ 000 - - 501 501 Financial assets measured at fair value FVOCI 501 501 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 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 501 501 - - - - - - - - (33,725) (33,725) - - (33,725) (33,725) 78 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Financial instruments – Fair values and risk management B. i. Measurement of fair values Valua(cid:415)on techniques and signiﬁcant unobservable inputs The following tables show the valua(cid:415)on techniques used in measuring Level 3 fair values for ﬁnancial instruments measured at fair value in the statement of ﬁnancial posi(cid:415)on, as well as the signiﬁcant unobservable inputs used. Related valua(cid:415)on processes are described in Note 4.8. Financial instruments measured at fair value Signiﬁcant unobservable inputs None Inter-rela(cid:415)onship between signiﬁcant unobservable inputs and fair value measurement None Type Unlisted Equity investments Valua(cid:415)on technique Current market value technique: The valua(cid:415)on model is based upon the latest price at which the unlisted en(cid:415)ty 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 iden(cid:415)fy 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 condi(cid:415)ons and the Group’s ac(cid:415)vi(cid:415)es. The Group’s audit commi(cid:425)ee oversees how management monitors compliance with the Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in rela(cid:415)on to the risks faced by the Group. The Group’s audit commi(cid:425)ee undertake ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit commi(cid:425)ee. 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 obliga(cid:415)ons and arises principally from the Group’s receivables from customers and investments in debt securi(cid:415)es. The carrying amounts of ﬁnancial assets represent the maximum credit exposure. In the current year there was no impairment loss, nor 2022, for unrecoverable sundry debtors. 79 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Trade receivables The Group’s exposure to credit risk is inﬂuenced mainly by the individual characteris(cid:415)cs 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 concentra(cid:415)on of revenue are included in Note 21. 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 condi(cid:415)ons are oﬀered. The Group’s review includes external ra(cid:415)ngs, if they are available, ﬁnancial statements, credit agency informa(cid:415)on, industry informa(cid:415)on 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 explora(cid:415)on and mining opera(cid:415)ons 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 2023 $ 000 2022 $ 000 1,354 3,647 5,001 1,094 3,907 5,001 - 5,001 5,001 3 52 55 3 52 55 - 55 55 Expected credit loss assessment for corporate customers as at 31 December 2023 and 31 December 2022 The Group allocates each exposure to a credit risk grade based on data that is determined to be predic(cid:415)ve of the risk of loss (including but not limited to external ra(cid:415)ngs, audited ﬁnancial statements, management accounts and cash ﬂow projec(cid:415)ons and available press informa(cid:415)on about customers) and applying experienced credit judgement. Credit risk grades are deﬁned using qualita(cid:415)ve and quan(cid:415)ta(cid:415)ve factors that are indica(cid:415)ve of the risk of default. The Company had no exposure to credit risk for the year ended 31 December 2023 (2022 - nil) 80 NOTES TO THE 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 (2022 – nil). Cash and cash equivalents As at 31 December 2023, the Group held $0.542 million cash and cash equivalents (2022: $9.627 million). The cash and cash equivalents are held with bank and ﬁnancial ins(cid:415)tu(cid:415)on counterpar(cid:415)es 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 maturi(cid:415)es of the exposures. The Group considers that its cash and cash equivalents have low credit risk based on the external credit ra(cid:415)ngs of the counterpar(cid:415)es. On the implementa(cid:415)on 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 mee(cid:415)ng the obliga(cid:415)ons associated with its ﬁnancial liabili(cid:415)es that are se(cid:425)led 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 liabili(cid:415)es when they are due, under both normal and stressed condi(cid:415)ons, without incurring unacceptable losses or risking damage to the Group’s reputa(cid:415)on. Exposure to liquidity risk The following table presents the remaining contractual maturi(cid:415)es of ﬁnancial liabili(cid:415)es at the repor(cid:415)ng date. The amounts are gross and undiscounted and include contractual interest payments and exclude the impact of ne(cid:427)ng agreements. 31 December 2023 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 - - - - - - (50,063) (50,063) - - - (50,063) (50,063) - - - (50,063) (50,063) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Contractual cash flows 81 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 31 December 2022 Non- derivative financial liabilities Bank overdrafts Unsecured shareholder's loan Unsecured loans Secured loans Trade payables Derivative financial liabilities 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 - - - - - - (33,725) (33,725) - - - (33,725) (33,725) - - - (33,725) (33,725) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - The interest payments on the ﬁnancial liabili(cid:415)es represent the ﬁxed interest rates as per the respec(cid:415)ve 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 ou(cid:414)lows on ﬁnancial liabili(cid:415)es other than trade payables. The Group also monitors the level of expected cash inﬂows on trade and other receivables together with expected cash ou(cid:414)lows 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 objec(cid:415)ve of market risk management is to manage and control market risk exposures within acceptable parameters, while op(cid:415)mising the return. Currency risk The Group is exposed to transac(cid:415)onal 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 respec(cid:415)ve func(cid:415)onal currencies of Group companies. The func(cid:415)onal currencies of Group companies are primarily Pound Sterling and the US Dollar. The Zimbabwean trading companies func(cid:415)onal currency is USD (2022: RTGS). The func(cid:415)onal currency of the Zimbabwean en(cid:415)(cid:415)es was changed to USD as the majority of transac(cid:415)ons are done in USD. The currencies in which these transac(cid:415)ons are primarily denominated are Euro, US Dollar, South African Rand, RTGS and Pound Sterling. The Company conducts its business in Zimbabwe with a signiﬁcant por(cid:415)on of expenditures in that country currently and historically denominated in USD and now also in RTGS. The introduc(cid:415)on of the RTGS$ during the 2019 ﬁnancial year has resulted in the devalua(cid:415)on of the RTGS$ against the US Dollar. This devalua(cid:415)on has also resulted in the Zimbabwean economy going into hyperinﬂa(cid:415)onary status. As a means of neutralising the eﬀects of repor(cid:415)ng in RTGS, with eﬀect of 1 January 2023 all Zimbabwean companies in the group present and report in USD. The decision for this change was primarily due to the majority transac(cid:415)ons in Zimbabwe are s(cid:415)ll denominated in USD. All transac(cid:415)ons are subject to spot rates and with no hedging transac(cid:415)ons taking place. 82 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 31 December 2023 GBP EUR USD '000 '000 '000 ZAR RTGS '000 000 '000 31 December 2022 GBP EUR USD ZAR '000 '000 '000 '000 RTGS '000 000 - 186 - - - (461) - - (5,627) - - (9,448) - - - - - (13) - - (28) - - (15) - - (523) - - (231) 186 (461) (5,627) (9,448) - (13) (28) (15) (523) (231) - - - - - - - - - - (26) (437) (12,485) (15,627) - (129) (596) (7,029) (23,997) (4,883) (26) (437) (12,485) (15,627) - (129) (596) (7,029) (23,997) (4,883) 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 160 (898) (18,112) (25,075) - (142) (624) (7,044) (24,520) (5,114) The summary quan(cid:415)ta(cid:415)ve 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 rela(cid:415)on to the repor(cid:415)ng currency are applicable: Euro GBP ZAR RTGS Average rate for the year Year end spot rate 2023 2022 2023 2022 1.0816 1.2466 0.05412 3692.126 1.0540 1.2355 0.0589 399.859 1.1055 1.2622 0.05461 6112.78 1.0702 1.2097 0.0591 684.334 The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabili(cid:415)es at the repor(cid:415)ng date are as follows: Sterling (£) Euro (€) South African Rand (ZAR) Real Time Gross Settlement of USD (RTGS) Liabilities Assets 2023 ‘000 461 - 9,448 - 2022 ‘000 28 13 523 231 2023 ‘000 - 186 - - 2022 ‘000 - - - - The presenta(cid:415)on currency of the Group is US dollars. 83 NOTES TO THE ANNUAL FINANCIAL STATEMENTS The Group is exposed primarily to movements in USD for trade, RTGS for the Zimbabwean companies and GBP for all fund raising ac(cid:415)vi(cid:415)es. Sensi(cid:415)vity 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 conver(cid:415)ble loan notes. The following analysis is intended to illustrate the sensi(cid:415)vity of the Group’s ﬁnancial instruments (at year end) to changes in market variables, being exchange rates. The following assump(cid:415)ons were made in calcula(cid:415)ng the sensi(cid:415)vity analysis: All income statement sensi(cid:415)vi(cid:415)es also impact equity. Transla(cid:415)on of foreign subsidiaries and opera(cid:415)ons into the Group’s presenta(cid:415)on currency have been excluded from this sensi(cid:415)vity as they have no monetary eﬀect on the results. Income Statement / Equity Exchange rates: +10% $ Sterling (GBP) -10% $ Sterling (GBP) +10% $ RTGS -10% $ RTGS 2023 $ 000 (42) 42 (0) 0 2022 $ 000 (3) 3 (23) 23 The above sensi(cid:415)vi(cid:415)es are calculated with reference to a single moment in (cid:415)me and will change due to a number of factors including: • • • Fluctua(cid:415)ng other receivable and trade payable balances Fluctua(cid:415)ng 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 liabili(cid:415)es Fair value sensi(cid:415)vity analysis for ﬁxed-rate instruments 84 2023 $ 000 2022 $ 000 - - - - - - NOTES TO THE ANNUAL FINANCIAL STATEMENTS The Group does not account for any ﬁxed-rate ﬁnancial assets of ﬁnancial liabili(cid:415)es at FVTPL. Therefore, a change in interest rates at the repor(cid:415)ng date would not aﬀect proﬁt or loss. Other market price risk The Group is exposed to equity price risk, which arises from equity securi(cid:415)es at FVOCI are held as a long-term investment. The Group’s investments in equity securi(cid:415)es comprise small shareholdings in unlisted companies. The shares are not readily tradable and any mone(cid:415)sa(cid:415)on of the shares is dependent on ﬁnding a willing buyer. Valua(cid:415)on techniques and assump(cid:415)ons applied for the purposes of measuring fair value Due to the short term nature, the fair value of cash and receivables and liabili(cid:415)es approximates the carrying values disclosed in the ﬁnancial statements. Due to the short term nature, the fair value of cash and receivables and liabili(cid:415)es approximates the carrying values disclosed in the ﬁnancial statements. The fair value of ﬁnancial assets is es(cid:415)mated by using other readily available informa(cid:415)on. As the Vortex (formerly Circum) and MNH shares are in privately held explora(cid:415)on companies, the fair values were es(cid:415)mated using observable placing prices where available. Vortex and MNH are unlisted and there are no quoted market prices. The fair value of the Vortex shares was derived using the previous issue price and valida(cid:415)ng it against the most recent placing price on 30 December 2022. The fair value of MNH shares was derived from the latest ﬁnancial informa(cid:415)on and was fully impaired. Capital management The Group manages its capital resources to ensure that en(cid:415)(cid:415)es in the Group will be able to con(cid:415)nue as a going concern, while maximising shareholder return. The capital structure of the Group consists of equity a(cid:425)ributable to shareholders, comprising issued share capital and reserves. The availability of new capital will depend on many factors including a posi(cid:415)ve mineral explora(cid:415)on environment, posi(cid:415)ve stock market condi(cid:415)ons, 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 opera(cid:415)ons but controls over expenditure are carefully managed. 30. Subsidiaries Premier had investments in the following subsidiary undertakings as at 31 December 2023, which principally aﬀected the losses and net assets of the Group: 30.1 Subsidiaries held during the year 85 Country of incorpora(cid:415)on and opera(cid:415)on Propor(cid:415)on of vo(cid:415)ng interest % Ac(cid:415)vity 2023 2022 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Name Zulu Lithium Mauri(cid:415)us Holdings Limited RHA Tungsten Mauri(cid:415)us 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 & Explora(cid:415)on (Private) Limited Licomex (Pty) Ltd Li3 Mozambique (Pty) Ltd Mauri(cid:415)us Mauri(cid:415)us Mauri(cid:415)us Mauri(cid:415)us Mauri(cid:415)us Mauri(cid:415)us Zimbabwe Zimbabwe Zimbabwe Zimbabwe Zimbabwe Zimbabwe Zimbabwe Australia 100 100 100 100 100 100 100 49* 100 100 100 100 100 100 100 100 100 100 100 100 100 49* 100 100 100 100 100 100 100 100 Holding Company Holding Company Holding Company Holding Company Holding Company Holding Company Explora(cid:415)on Care and maintenance Explora(cid:415)on Explora(cid:415)on Explora(cid:415)on Explora(cid:415)on Explora(cid:415)on Holding Companies Holding Companies Holding Companies Li3B Mozambique (Pty) Ltd Australia 100 Li3C Mozambique (Pty) Ltd Australia 100 Lithium B S.A. Premier African Minerals (South Africa) (Pty) Ltd Mozambique South Africa 100 100 100 Explora(cid:415)on 100% Procurement assistance * Accounted as a controlled subsidiary, refer note 4 - Signiﬁcant accoun(cid:415)ng policies, es(cid:415)mates and assump(cid:415)ons and note 4.7 - Basis of consolida(cid:415)on. 30.2 Acquisi(cid:415)on of subsidiaries During the year ended 31 December 2023 the Group did not acquire any companies. 31. Related party transac(cid:415)ons Ul(cid:415)mate controlling party There is no single ul(cid:415)mate controlling party. Transac(cid:415)ons with key management personnel Borrowings During the 2021 ﬁnancial year, Neil Herbert advanced $0.180 million to Premier African Minerals to facilitate an addi(cid:415)onal loan to MN Holdings. At 31 December 2023 the loan was s(cid:415)ll owing. 86 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Remunera(cid:415)on of key management personnel The remunera(cid:415)on 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. Staff costs Consulting and advisory fees Directors' fees 32. Events a(cid:332)er the repor(cid:415)ng date 32.1 Corporate ma(cid:425)ers 2023 $ 000 - 1,210 126 1,336 2022 $ 000 53 286 116 455 In accordance with the terms of Restated and Amended O(cid:335)ake and Prepayment Agreement ("Agreement") entered between Premier and Canmax the interest rate for the outstanding balance of the prepayment amount was increased to 12% per annum with eﬀect from the 1 December 2023. In February 2024, Premier concluded a direct equity raise of £2.475 million before expenses at an issue price of 0.275 pence per new ordinary share for the Zulu Lithium and Tantalum Project. On 11 April 2024, Premier concluded a direct equity raise of £2.060 million before expenses at an issue price of 0.17 pence per new ordinary share for the Zulu Lithium and Tantalum Project. Following strong ins(cid:415)tu(cid:415)onal interest following this raise, Premier concluded an addi(cid:415)on raise two days later by way of a direct equity raise of £1 million before expenses at an issue price of 0.17 pence per new ordinary share for the Zulu Lithium and Tantalum Project In May 2024, Premier concluded a direct equity raise of £1.250 million before expenses at an issue price of 0.16 pence per new ordinary share for the Zulu Lithium and Tantalum Project. In May 2024, Premier concluded a se(cid:425)lement of contractor invoices amoun(cid:415)ng to £1.57 million through the issue of 983,500,000 shares at an issue price of 0.16 pence per new ordinary share. 33 Ul(cid:415)mate Controlling Company There is no single ul(cid:415)mate controlling company for Premier. 87 NOTES TO THE ANNUAL FINANCIAL STATEMENTS [PLACEHOLDER FOR PHOTO] 88

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