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
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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]
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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