256569 Vast Resources R&A Cover spread.qxp 11/10/2019 21:35 Page 1
VADV
AD
V
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ALVA
Y MAR
ANCING PRIM
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INT
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eport & A
Acc
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2019
60 Gracechurch Street
London, EC3V 0HR
United Kingdom
Info@vastplc.com
+44 (0) 1491 615 232
www.vastplc.com
256569 Vast Resources R&A Cover spread.qxp 11/10/2019 21:35 Page 2
Vast Resources has a diversified portfolio encompassing
the mining development curve. It is focused on the
transformation from an exploration company to a mining
company and delivering multiple revenue streams.
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256569 Vast Resources R&A pp01.qxp 11/10/2019 21:35 Page 2
Highlights 23
Chairman’s Report 46
Strategic Report 717
Report of the Directors 1821
Statement of Directors’ Responsibilities 22
Independent Auditors Report 2327
Group statement of Comprehensive Income 28
Group statement of Changes in Equity 29
Company statement of Changes in Equity 30
Group and Company Statements of Financial Position 31
Group and Company Statements of Cash Flow 32
Statement of Accounting Policies 3340
Notes to the Financial Statements 4169
Company Information 70
256569 Vast Resources R&A pp02-pp17.qxp 11/10/2019 21:36 Page 2
Overview of the 13 Months Ended 30th April 2019
Vast Resources plc (‘Vast’ or the ‘Group’) has repositioned the business to focus resources
on two key mining opportunities in Romania and Zimbabwe with the intention of starting
production at these mines in the current financial year. These opportunities comprise the
Baita Plai Polymetallic Mine (‘BPPM’) in Romania, and the Group’s expected diamond
concession in Zimbabwe. This establishes the platform to support Vast’s strategic objective
to expand its footprint in these jurisdictions.
In repositioning the business, the Group has divested its 25.01% stake in its Zimbabwean
gold operations, reduced debt, strengthened its management team, and directed resources
exclusively to placing its key Romania and Zimbabwean assets into production.
The Group was awarded the Baita licence on 15th October 2018 but was unable to draw on
Tranche B of the Mercuria prepayment facility in order to fund capital expenditure programs
at BPPM and the Manaila Polymetallic Mine (‘MPM’). The objective of these programs was
to restart production at BPPM and to improve operational efficiency at MPM. Consequently,
the Group is well advanced in the process of arranging new funding which it is prioritising
for BPPM and its diamond concession given the short lead times expected to generate free
operational cashflow, and has placed MPM on care and maintenance in expectation of a
second funding round at a later stage.
Financial
•
US$ 8.6 million gain on disposal of Zimbabwean gold operations.
•
•
•
•
•
US$ 21.4 million reduction in the carrying amounts of loans and borrowings to US$ 5.5 million
(2018: US$ 27 million)
Total revenue, including operations that were discontinued in April 2019, increased to US$ 34.7 million
(2018: US$ 30.7 million).
Revenue from continuing operations increased to US$ 3.4 million (2018: US$ 3.1 million)
Romanian operations continued to be a net cash absorber given a delay in financing the required capital
expenditure to place BPPM into production and to improve profitability at MPM.
Cash balance at the period end of US$ 0.569 million (2018: US$ 1.3 million).
Operational Development
•
Baita Plai Association Licence executed on 15th October 2018, giving the Group the right to mine at BPPM.
•
•
•
•
1,725 and 242 tonnes of copper and zinc concentrate respectively produced at MPM from April 2018 to
December 2018, at which point MPM was placed on care and maintenance.
29.41% economic interest acquired in the Blueberry Polymetallic Gold project in Romania which has raised
US$ 1 million to meet exploration costs.
Hiring of key management and technical personnel for the Group’s Zimbabwe diamond opportunity.
The Chiadzwa Community Diamond Concession Joint Venture was signed post period end.
2 VAST RESOURCES
256569 Vast Resources R&A pp02-pp17.qxp 11/10/2019 21:36 Page 3
Funding
Equity:
Fundraising share issues during the year (gross proceeds before cost of issue):
US$
124,338
7,804,519
985,929
8,914,786
£
Shares Issued
Issued to
91,351
5,987.332
769,451
6,848,134
18,270,103
2,313,540,750
488,073,476
2,819,884,329
Exercise of warrants
Issued to investors
Issued to convertible security investor
Fundraising share issues post period end (gross proceeds before cost of issue):
Announced
30 May
8 August
Total
US$
1,136,646
795,268
1,931,914
£
Shares Issued
Issued to
900,000
655,000
775,862,068
595,454,545
Issued to investors
Issued to investors
1,555,000
1,371,316,613
Debt
•
US$ 3.1 million was repaid to Sub-Sahara Goldia Investments.
•
US$ 20.6 million was disposed of as part of the sale and restructuring of Vast’s Zimbabwe operations.
Management
•
Appointment of Nick Hatch as Non-executive Director on 9th May 2018.
•
•
•
•
Appointment of Mark Mabhudhu as specialist adviser to and then Executive Director of Vast’s diamond
division on 6th July 2018
Appointment of Andrew Hall as Head of Corporate Development and Investor Relations on 1st December
2018.
Resignation of Carl Kindinger as Group CFO on 10th February 2019.
Appointment of Paul Fletcher as Group CFO on 11th February 2019.
Political
•
Continued improved business environment in Zimbabwe
VAST RESOURCES 3
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Chairman’s Report
The reporting period and the period to date since, has been a testing one for the Board. It has been a period
marked equally by great opportunities and challenges. It has also been one of significant change of direction
for the Company due to the decision to dispose of our Zimbabwe gold interests and instead use our accumulated
in-house knowledge of Zimbabwe by focussing on the Zimbabwe diamond sector.
Romania
In Romania we were delighted in October to acquire the association licence giving the right to mine at Baita
Plai. But we were of course disappointed that the process had proved to have been such a long and exacting
one. We have had to bear monthly dewatering and maintenance costs over a long period. We have forgone the
income that might otherwise have arisen from production. The delay has been costly.
Our financial planning for the Romanian operation – both Baita Plai and Manaila – had been underpinned by
the Mercuria pre-payment facility from which we had expected a second tranche (Tranche B) of US$5.5 million.
The drawdown of the tranche was delayed and eventually, to our great surprise, was withdrawn in January. As
stated in the Strategic Report this withdrawal was unrelated to the Company’s standing or to the viability of
the Company’s Romanian operation. The effect of this has been to further delay the commissioning of Baita
Plai and to force the decision to put Manaila onto care and maintenance while we prioritised Baita Plai.
The process of negotiating and agreeing the detailed documentation necessary for the refinance of Baita Plai
has been time consuming but has, at the time of writing, reached an advanced stage. However, during the
waiting period we have prepared a detailed and costed commissioning and production plan for Baita Plai, and
have moreover ordered, purchased, or are already implementing the long lead items so that the mine can be
commissioned within three months of the drawdown of the finance.
We continue to believe that Baita Plai is a key asset for the Company and that when in production the mine will
be transformational for the Company.
Zimbabwe
During the reporting period we have been steadily appraising the diamond opportunities in Zimbabwe and in
July 2018 appointed as head of our diamond division Mark Mabhudhu who has a lifetime of experience in senior
management roles in the diamond sector including being former CEO of Government owned Zimbabwe
Consolidated Diamond Company (pvt) Ltd (‘ZCDC’). As a result, a number of opportunities have been offered
to us and due diligence, where appropriate, has been undertaken.
Considerable effort has now resulted in a formal joint venture agreement with the Chiadzwa Community and
the prospect very shortly of a joint venture involving both the Community and ourselves with ZCDC under which
the ZCDC joint venture company will be given the right to mine the Chiadzwa Community Concession. This
Concession is in a general area which we had previously referred to as the Marange Diamond Fields.
Indigenisation laws in Zimbabwe, including for diamonds, have now been abolished. Moreover, we understand
that the diamond joint venture with our partners, Chiadzwa Community and ZCDC will, subject to completion
of all agreements, entitle the ZCDC joint venture company to retain sale proceeds from the diamonds, that are
not required in Zimbabwe, offshore. This constitutes a significant advantage compared with the position for
gold operations where all sales have to be made via the in-country refinery owned by the Reserve Bank, and
where remission of proceeds are restricted by the Exchange Control laws.
Although our Zimbabwe gold assets were performing well there were several issues which militated against
our ability to extract cash from their operation in the short or medium term for general corporate purposes.
The operation also carried large debt on our balance sheet which was unhelpful in our fundraising negotiations.
We accordingly took the fundamental decision to dispose of our Zimbabwe gold assets and concentrate our
resources on the diamond sector.
4 VAST RESOURCES
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Directors and management
Executives
Mark Mabhudhu was appointed on 6 July 2018 initially as a specialist advisor to the board of our Zimbabwe
subsidiary, but subsequently as executive head of the Company’s diamond division. Mark, at appointment, had
been involved in diamond mining for more than 22 years, both in Zimbabwe and internationally, including
11 years with Debswana, the joint venture company between De Beers and the government of Botswana. As
already stated he had previously been CEO of ZCDC.
Andrew Hall was appointed Head of Corporate Development and Investor Relations on 1 December 2018. He
has a background in natural resource and finance linked businesses and previously worked at a natural resources
focussed merchant bank where he established and managed the alternative finance distribution business
covering asset managers, private equity, investment banks, family offices and trading houses.
Paul Fletcher was appointed on 8 February 2019 as Chief Financial Officer and has progressed into playing an
integral senior role in the management of the Group’s finances. Paul has formerly held a variety of senior finance
and operational roles in trading, processing, and financial businesses in the US, Europe and Asia.
Non-Executive
As reported in the 2018 Annual Report Nick Hatch was appointed to the Board as a Non-Executive Director on
9 May 2018. Nick has 35 years of experience in mining investment banking, primarily as a mining analyst and in
managing mining and metals research and equities teams, most recently as a Director of Mining Equity Research
at Canaccord Genuity in London.
Funding
During the reporting period US$7.9 million was raised in equity finance (including warrant exercises) and a
further US$1.0 net of payments was raised through the Bergen Facility. US$3.1 million was repaid to Sub-Sahara
Goldia Investments Ltd.
At the time of writing we are near to finalisation of documentation on a funding which will be sufficient to fund
both the commissioning of Baita Plai and the commencement of diamond mining at the Chiadzwa Community
Concession.
Corporate Governance
As stated in the Strategic Report the Company has adopted the Quoted Company Alliance (‘QCA’) code on
Corporate Governance.
The Board strives to promote a corporate culture based on sound ethical values and behaviours. To that end
the Company has adopted a strict anti-corruption and whistle blowing policy, but the Directors are not aware
of any event in either jurisdiction which might be considered to breach this policy. The Company has also adopted
a code for Directors’ and employees’ dealings in securities which is appropriate for a company whose securities
are traded on AIM and is in accordance with the requirements of the Market Abuse Regulation which came into
effect in 2016.
The Board is also aware that the tone and culture it sets will greatly impact all aspects of the Company and the
way that employees behave, as well as the achievement of corporate objectives. A large part of the Company’s
activities is centred upon an open dialogue with shareholders, employees and other stakeholders. Therefore,
the importance of sound ethical values and behaviours is crucial to the ability of the Company to successfully
achieve its corporate objectives.
VAST RESOURCES 5
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Chairman’s Report
continued
Appreciation
The continued support of shareholders through times that have been challenging is much appreciated. Following
the funding of the Baita Plai Mine in Romania, and (subject to completion of agreements) of the Chiadzwa
Community Concession in Zimbabwe, the Group believes that it will become cash positive.
To fellow directors, thank you for your advice and support, and to management and staff both in Romania and
Zimbabwe for their continued effort on behalf of the Company.
Brian Moritz
Chairman
6 VAST RESOURCES
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Strategic Report
Principal activities, review of business and future developments
Vision
The vision of the Group is to become a mid-tier mining group, one of the largest polymetallic (copper, zinc, silver,
and gold) producers in Romania, and a major player in the re-emergence of the mining industry in Zimbabwe,
where the Group now has a major focus on its diamond interests.
Principal activities
In Romania the Group is focussed on reopening the Baita Plai Polymetallic Mine (‘BPPM’) where an accelerated
commissioning schedule (from the time that funding is secured) aimed at delivering cashflow within six months
has been agreed and will be fully implemented following drawdown of full funding now expected to be agreed
shortly. Meanwhile the previously operating Manaila Polymetallic Mine (‘MPM’) remains on care and maintenance
pending adoption of a new effective mine plan that will achieve profitability.
In Zimbabwe, following the divestment of its gold mining interests shortly prior to period end, the Group reached
an advanced stage in the agreement of joint ventures on a substantial diamond concession in the Chiadzwa
Diamond Fields (previously referred to as the Marange Diamond Fields).
In both jurisdictions the Group holds further mining claims or other interests which are under appraisal.
Review of business
Romania
General
Following intensive negotiations between the Romanian Government, related agencies, and Baita SA, as holder
of the head licence, the association licence granting the Group the right to mine at BPPM was approved by the
State Mining Regulatory Body on 15th October 2018. Due to matters unrelated to either Vast’s standing or to the
viability of Vast’s Romanian operations, the Group was unable to draw down on the US$ 5.5 million second tranche
(‘Tranche B’) of the Mercuria prepayment facility. These funds were earmarked for capital expenditure programs
at BPPM and MPM with the objective of recommission at BPPM and improving operational efficiency at MPM.
Consequently, the Group has been in the process of arranging, and is now expected shortly to achieve, new
funding which as far as Romania is concerned will prioritise BPPM given the project’s short lead time to
generating free operational cash flows. MPM will remain on care and maintenance in expectation of a second
funding round at a later stage.
BPPM (80% interest, 10% Directors)
The non-availability of Mercuria Tranche B has negatively impacted the Group’s results in Romania and has
caused the Group to raise supplemental debt and equity funds during the course of the period. Despite these
headwinds, the Group has made progress rehabilitating the BPPM infrastructure and in making improvements
as well as significant inroads into implementing long lead items. Specific accomplishments include the following:
•
•
•
•
•
•
•
•
•
Installation of new, high efficiency pumps
Securing direct electricity supply
Cleaning milling and flotation circuits
Maintained and continued restoration of underground workings and access
Commenced installation of new, independent electricity supply
Advanced work on refurbishment of the flotation plant including installation of a new sediment tank
Commenced installation of the 7 kilometre tailings pipe to the tailings dam
Cleaning railway in preparation for use
Acquired and restored a 300 metre drilling rig
VAST RESOURCES 7
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Strategic Report
continued
Completion is dependent upon obtaining drawdown of funding which is expected to be agreed shortly. The
Group estimates that subject to financing being arranged as hoped in the near future profitable production will
have been achieved during the now current financial year.
MPM (100% interest)
1,720 and 242 tonnes of copper and zinc concentrate respectively were produced at MPM from April 2018 to
December 2018, at which point MPM was then placed on temporary care and maintenance originally due to
adverse winter weather conditions. However, given the absence of funding, the decision was later taken to place
the mine on continued care and maintenance until such time that BPPM was funded, and new funding arranged
for MPM that was better suited to its investment needs and exploration potential. Revenues increased 10.8%
to US$ 3.432 million (2018: US$ 3.098 million).
As highlighted last year, a program of drilling undertaken in 2017 has proven the potential of opening a second
open-pit mine at the Carlibaba section of MPM. A JORC compliant Resource statement confirmed a Measured,
Indicated and Inferred mineral Resource of 4.6 million tonnes suitable for open-pit mining (3.6 million tonnes
Measured and Indicated). Underground mineral Resources in the Measured and Indicated category was
determined at 0.399 million tonnes. The implied open pit life is 11 years based on open pit and underground
Measured and Indicated Resources at a rate of 30,000 tonnes per month. MPM also has significant underground
exploration potential which would be transformative and would require additional investment beyond those
planned for the Carlibaba open pit extension and new plant facility. For these reasons, the commercial
opportunity is potentially much larger and will require a revised funding and investment strategy.
Blueberry Polymetallic Gold Project (‘Blueberry’) (29.41% effective interest).
The Group acquired an effective 29.41% economic interest in Blueberry through EMA Resources Ltd (‘EMA’) in a
brown field perimeter located at Baia de Aries in the ‘Golden Quadrilateral’ of Western Romania on which historic
work has demonstrated prospectivity for gold and polymetallic minerals. The Group is undertaking exploration
on the perimeter with a view to establishing a JORC Resource sufficient to justify an independent IPO.
The following exploration activities were undertaken at the Blueberry prospect:
•
•
•
•
•
•
Surface geological mapping.
Archival data searches for information relating to the Baia de Aries polymetallic mine.
41 surface diamond drill holes completed for a total core length of 6 717 metres.
All 6,717 metres of core split with half sent to an independent laboratory for assay and the remaining half
kept in storage.
300 soil geochemical samples gathered on an approximate 100 metre by 100 metre grid spacing and
analysed at an independent laboratory.
The exploration perimeter divided into eight zones for exploration and preliminary drilling undertaken in
4 of the 8 identified target areas. Drilling successfully intersected mineralised zones containing
predominantly gold and silver with certain localities exhibiting polymetallic copper – lead - zinc
mineralisation.
Follow up drilling is planned for these areas in order to define the orientations and the extent of the mineralised
zones as a number of intersections remain open at depth and along strike.
The soil sampling program encompassed approximately 40% of the exploration area. Further sampling is
required to the southwest and the northeast to complete the soil sampling coverage. The soil sampling
identified previously unknown areas of mineralisation in the southern portion of the exploration area with gold
in soil values of up to 17.7 grams per ton gold.
To date the Group has arranged US$ 1 million third party financing on behalf of the venture.
8 VAST RESOURCES
256569 Vast Resources R&A pp02-pp17.qxp 11/10/2019 21:36 Page 9
Other Romanian prospects
Work has been in progress with the benefit of third party money on extending our footprint in Romania through
our current claims at Magura Neagra and Piciorul Zimbrului (collectively known as ‘Zagra’). The Group has
undertaken a drilling programme targeting sets of polymetallic veins together with areas of disseminated
sulphide mineralization.
The Group continues to believe that exploration of the many mining opportunities that have become dormant
over the last two decades will be an attractive prospect for global mining players seeking to capitalize on the
projected increase in demand globally for copper occasioned by the global transition to clean energy and
electric vehicles.
The Group’s ‘first mover position’ in Romania has attracted interest in resuscitating the large-scale polymetallic
resource projects in Romania. Discussions have been held with global mining players and investors to leverage
their financial strength and expertise to jointly exploit these considerable opportunities.
Zimbabwe
In April 2019, the Group divested its 25.01% stake in its Zimbabwean gold related operations which included
the producing Pickstone-Peerless Gold Mine (‘PPGM’) together with the non-producing Eureka Gold Mine in the
course of restoration(‘Eureka’), and the dormant Giant Gold Mine (‘GGM’). The Group recorded an accounting
gain on disposal of US$ 8.6 million. This divestment was driven in part by need to restructure the Group’s balance
sheet to enable the financing of strategic projects and by the Group’s strategy to focus resources on
opportunities generating high and near term operating free cashflow unrestrained by tight currency controls
as represented by BPPM and the expected diamond concession in Zimbabwe.
During the period, the divested Zimbabwean gold operations recorded profits of US$ 8.4 million (2018:
US$ 2.3 million) on revenue of US$ 31.2 million (2018: US$ 27.6 million). These results have been heavily impacted
by foreign exchange gains arising from a devaluation occasioned by the re-designation of all US dollar balances in
Zimbabwe as RTGS (Real Time Gross Settlement) balances. This has resulted in significant gains of US$ 5.7 million
mainly arising from foreign exchange revaluation gains on local currency denominated borrowings. On a
normalized basis after removing foreign exchange gains, profits from the discontinued Zimbabwean operations
increased by 16.4% to US$ 2.683 million (2018: US$ 2.305 million), largely driven by increased milled volumes (up
30% to 383,838 tonnes) and associated increased gold production (up 14% to 749kgs). Both the gain on disposal
of US$ 8.6 million and the profits of $US 8.4 million from the divested Zimbabwean gold operations are disclosed
as profits from discontinued operations in the consolidated statement of comprehensive income.
Diamond Concession – Chiadzwa Diamond Fields
The Group has completed due diligence on the diamond concession on which it expects to get the full right to
mine shortly and has prepared a full operating plan.
Corporate
The Group has repositioned its business, disposing of its Zimbabwean gold operations in order to focus on BPPM
and its expected diamond interests. This restructuring has enabled the Group to repay $2.5 million of its loan
from Sub-Sahara Goldia Investments (‘Sub-Sahara’) and to reduce its borrowings by an additional $18.6 million
thereby significantly reducing the Group’s gearing, simplifying the balance sheet, and creating a financial
platform for growth and refinancing. The Group has been actively seeking substantive financing following the
withdrawal of Mercuria’s US$ 5.5 million Tranche B to finance BBPM and the diamond opportunity in Zimbabwe.
At the time of writing this report the Group is near to concluding agreed documentation with an institution
which will provide funding for the Group’s operations both at BBPM and in Zimbabwe.
During the year the Group strengthened its management team through the hiring of industry experts in the
diamond sector.
VAST RESOURCES 9
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Strategic Report
continued
Strategy
The Group’s strategy is to:
•
•
•
•
•
•
•
•
•
Attract appropriate funding for the Group – including from institutional investment
Attract appropriate joint venture partners and public institutions to invest in the Group and projects of
mutual interest
Grow into a mid-tier mining company both organically and through acquisitions financed principally by
third parties
Optimise operations to produce positive cashflows
Add value to operations by increasing resources and reserves
If expedient, hold significant minority stakes in new ventures operationally managed by the Group
Finance growth, where possible in a non-dilutive manner
Maintain exposure to Zimbabwe and Romania where the Group has acquired in-depth country knowledge
Continue to work with Government and local communities in Zimbabwe in the diamond sector, and to
develop the diamond business in a transparent way for the benefit of all stake holders
Key performance indicators
In executing its strategy, the Board considers the Group’s key performance indicators to be, or will be after
recommencement of mining:
•
Cash cost per tonne milled
–
–
–
Cash cost per tonne is derived from aggregate cash costs divided by tonnes milled and measures
productivity.
For PPGM the cash cost for the period until discontinuance was US$ 48/tonne (2018: US$ 62/tonne),
23% lower than the 2018 result.
For MPM the cash cost for the period of production was US$ 70/tonne (2018: US$ 42/tonne),
60% higher than the 2018 result reflecting reduced volumes.
•
Cash costs per ounce sold for gold and per tonne for concentrate
–
–
–
Cash cost per ounce sold is calculated by dividing aggregate cash cost by gold ounces produced or
concentrate tonnes produced and measures productivity.
For PPGM the cash cost was US$ 770/ounce (2018: US$ 880/ounce), 12.5% lower than the 2018 result.
For MPM the cash cost was US$ 2,208/tonne (2018: US$ 1,471/tonne), 50% higher than the 2018
result reflecting reduced volumes.
•
Plant production volumes as a measure of asset utilisation
–
–
PPGM processed a mill feed of 383,838 tonnes for the period till divestment (2018: 295,424 tonnes),
30% higher than the 2018 level.
MPM processed mill feed of 62,391 tonnes for the period of production (2018: 106,488 tonnes), 41%
lower than the 2018 level.
•
Total resources and reserves
–
These indicators measure our ability to discover and develop new ore bodies, including through
acquisition of new mines, and to replace and extend the life of our operating mines. There have been
no changes over the previous year other than as a result of the disposal of the Group’s gold interest
in Zimbabwe. The alluvial diamond interest in Zimbabwe where there is an imminent expectation of
a right to mine is considered very prospective, but by its nature is not susceptible to the estimation
of a JORC Resource.
•
The rate of utilization of the Group’s cash resources. This is discussed further below.
10 VAST RESOURCES
256569 Vast Resources R&A pp02-pp17.qxp 11/10/2019 21:36 Page 11
Cash resources
The Group’s year end position was US$ 0.569 million (2018: US$ 1.3 million).
During the year cash inflows from operating activities (including discontinued activities) were US$ 5.3 million.
Excluding discontinued activities, cash outflows from operating activities were US$ 7.9 million. A significant
portion of these outflows are directly related to developing, supporting and maintaining our mining assets,
allowing the Group to quickly start production and generate significant revenue at both BPPM and the diamond
concession once funding is in place and the diamond special grant is procured.
Cash outflows from investing activities (including discontinued activities) were US$ 13.3 million. Excluding
discontinued activities, cash outflows from investing activities were US$ 1.3 million mainly driven by additions
to mining assets in the Group’s Romanian operations.
Cash inflows from funding activities (including discontinued activities) were US$ 7.2 million. Excluding
discontinued activities, cash inflows from funding activities were $5.2 million, comprising the net of the proceeds
from the issuance of shares of US$ 8.1 million less net repayment of loans and borrowings of US$ 2.9 million.
The Directors monitor the cash position of the Group closely to plan sufficient funds within the business to allow
the Group to meet is commitments and continue the development of assets. As part of this process, the
Directors closely monitor capital expenditure and the regulatory requirements of the licences to ensure they
continue in good standing.
Principal risks and uncertainties
•
Risk – Going concern
The Group is in an advanced stage of agreeing documentation on a substantial funding.
However, if this funding should fail it may cast doubt about the Group’s ability to continue as a going
concern. Other material uncertainties constituting this risk include unseasonal severe climatic conditions,
unforeseen delays in permits and licences for new mining or plant investments, cost overruns and adverse
commodity price movements.
Mitigation/Comments
The Board will continue to engage, or after recommencement of mining will engage, with providers of
commodity trade finance, potential joint venture and other investors in order for them to understand the
fundamental strength of the Group’s business and attract additional funding when required. The Board
also will, whenever possible, retain sufficient cash margin to offset contingencies. The remittance
restrictions for the Zimbabwean gold operations will not apply to the Group’s diamond investments as the
Group is advised that foreign currency regulations will allow export proceeds not required to meet costs
in Zimbabwe to be retained offshore.
•
Risk – Mining
Mining of natural resources involves significant risk. Drilling and operating risks include geological,
geotechnical, seismic factors, industrial and mechanical incidents, technical failures, labour disputes and
environmental hazards.
Mitigation/Comments
Use of strong technical management together with modern technology and electronic tools assist in
reducing risk in this area. Good employee relations are also key in reducing the exposure to labour disputes.
The Group is committed to following sound environmental guidelines and is keenly aware of the issues
surrounding each individual project.
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Strategic Report
continued
•
•
•
•
Risk - Commodity prices
Commodity prices are subject to fluctuation in world markets and are dependent on such factors as mineral
output and demand, global economic trends and geo-political stability.
Mitigation/Comments
The Group’s management constantly monitors mineral grades mined and cost of production to ensure
that mining output becomes or remains economic. As highlighted earlier, due to matters unrelated to both
Vast’s standing and the viability of Vast’s Romanian operations, the Group was unable to draw down on
the US$ 5.5 million second tranche (‘Tranche B’) of the Mercuria prepayment facility. These funds were
earmarked for capital expenditure programs at BPPM and the Manaila Polymetallic Mine (‘MPM’) with the
objective of restarting production at BPPM and to improve operational efficiency at MPM. Consequently,
the Group is well advanced in the process of arranging new funding which it is prioritising for BPPM and
its diamond concession given the short lead times expected to generate free operational cash flows, and
has placed MPM on care and maintenance in expectation of a second funding round at a later stage.
Risk – Management and Retention of Key Personnel
The successful achievement of the Group's strategies, business plans and objectives depend upon its ability
to attract and retain certain key personnel.
Mitigation/Comments
The Group’s policy is to foster a management culture where management is empowered and where
innovation and creativity in the workplace are encouraged. The Group has in place a “Share Appreciation
Right Scheme” for Directors and senior executives to provide incentives based on the success of the
business. It is also introducing more specific incentive arrangements for the Group’s diamond business in
Zimbabwe.
During the period the Group has been successful in attracting new talent across its businesses.
Risk - Country and Political
The Group’s operations are based in Romania and Zimbabwe. Emerging market economies could be subject
to greater risks, including legal, regulatory, economic, bribery and political risks, and are potentially subject
to rapid change. In addition, there are risks particular to Zimbabwe arising from a scarcity of foreign
exchange, difficulty with foreign remittances of funds and the, now albeit very substantially mitigated,
risk of indigenisation.
Mitigation/Comments
The Group’s management team is experienced in its areas of operation and skilled at operating within the
framework of the local culture in Romania and Zimbabwe to progress its objectives. The Group routinely
monitors political and regulatory developments in each of its countries of operation. In addition, the Group
actively engages in dialogue with relevant government representatives to keep abreast of all key legal and
regulatory developments applicable to its operations. The Group has several internal processes and checks
in place to ensure that it is wholly compliant with all relevant regulations to maintain its mining or
exploration licences within each country of operation.
Risk - Social, Safety and Environmental
The Group's success may depend upon its social, safety and environmental performance, as failures can
lead to delays or suspension of its mining activities.
Mitigation/Comments
The Group takes its responsibilities in these areas seriously and monitors its performance across these
areas on a regular basis.
12 VAST RESOURCES
256569 Vast Resources R&A pp02-pp17.qxp 11/10/2019 21:36 Page 13
Corporate Governance
The Company has adopted the QCA (Quoted Company Alliance) Code on corporate governance. Details of how
the Company complies with this are set out in the Company’s website. Principles which are required to be dealt
with under the Code in the Company’s Annual Report are set out below.
Business model and strategy
This is described above under Strategy and elsewhere in this Report.
Risk Management
In addition to its other roles and responsibilities, the Audit and Compliance Committee is responsible to the
Board for ensuring that procedures are in place and are being implemented effectively to identify, evaluate and
manage the significant risks faced by the Company.
The Directors have established procedures, as represented by this statement, for the purpose of providing a
system of internal control. An internal audit function is not considered necessary or practical due to the size of
the Company and the close day to day control exercised by the Executive Directors. The Board works closely
with and has regular ongoing dialogue with the Company Financial Director and financial controller and has
established appropriate reporting and control mechanisms to ensure the effectiveness of its control systems.
The risks facing the Company are detailed above. The Board seeks to mitigate such risks so far as it is able to do,
as explained above, but certain important risks cannot be controlled. The CEO is primarily responsible to the
Board for risk management.
In particular, the products the Company mines and is seeking to identify are traded globally at prices reflecting
supply and demand rather than the cost of production. In Romania, the Company seeks to protect its cash flow
by means of a long term offtake agreement, but it does not hedge future production.
Maintenance of a well functioning Board of Directors led by the Chairman
Current membership of the Board is as follows:
Name
Brian Moritz
Andrew Prelea
Roy Tucker
Craig Harvey
Eric Diack
Nick Hatch
Role
Non-executive Chairman
Chief Executive Officer
Finance Director
Chief Operating Officer
Non-executive director
Non-executive director
Appointed
6 October 2016
1 March 2018
5 April 2005
1 March 2018
30 May 2014
9 May 2018
All the Non-executive Directors are considered to be independent.
All the Directors are subject to re-election at intervals of no more than three years.
The table illustrates the success of the Board in refreshing its membership.
The Board is well balanced both in its skill sets and in the domicile of its members. Of the Executive Directors,
Andrew Prelea is resident in Romania, Roy Tucker in the UK, and Craig Harvey in Southern Africa. Of the Non-
Executive Directors, Nick Hatch and Brian Moritz are resident in the UK, whilst Eric Diack resides in Southern
Africa.
All of the current Non-executive Directors are considered to be independent. None of them have been a Director
for a sufficient length of time to prejudice such independence.
Non-executive Directors are committed to devote 3 days per month to the Company. Executive Directors devote
substantially the whole of their time to the Company.
Where possible Directors are physically present at board meetings, but, due to the wide divergence of locations,
Directors may be present by telephone.
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Strategic Report
continued
During the thirteen month period ended 30 April 2019 there were six full board meetings in addition to twelve
meetings on specific issues. Of the Directors holding office throughout the period, Brian Moritz, Andrew Prelea,
Roy Tucker and Eric Diack, attended all the full meetings either in person or by telephone.
Appropriate skills and experience of the Directors
The CVs of the Directors - three executives and three Non executives - as disclosed on the website, are set out
below. In addition, the Company has employed the outsourced services of Ben Harber of Shakespeare Martineau
as company secretary.
Andrew Prelea – Chief Executive Officer
Andrew has been involved with Vast since 2013 and has spearheaded the development of the Company’s
Romanian portfolio. Beginning his career in the early 1990s as a bulk iron ore and steel trader in Romania, he
then went on to develop his career in the property and earthmoving sector in Australia before returning to
Romania in 2003, initially to focus on the development of properties for the Romanian Ministry of Defence and
latterly, private sector developments. Throughout his 26-year career, Andrew has developed extensive investor
and public relations experience and has advised the Romanian government on wide ranging high-level topics
including social housing and economic policy. He has built a strong network of contacts across the mining and
metals industries and Europe and southern Africa, in addition to policy makers and governmental authorities.
Brian Moritz - Chairman
Brian is a Chartered Accountant and former Senior Partner of Grant Thornton UK LLP, London; he formed Grant
Thornton’s Capital Markets Team which floated over 100 companies on AIM under his chairmanship. In December
2004, he retired from Grant Thornton UK LLP to concentrate on bringing new companies to the market. He
specialises in natural resources companies, primarily in Africa, and was formerly chairman of Metal Bulletin plc,
African Platinum plc and Chromex Mining plc as well as currently being chairman of several junior mining companies.
Roy Tucker – Finance Director
Roy is a Chartered Accountant with 43 years of high level and broad spectrum professional and business
experience. He has been the founder of a London banking group, served on bank boards and had a position as
a major shareholder of a substantial London commodity house. He is also the founder of Legend Golf and Safari
Resort in South Africa. He has substantial investment in the Romanian property sector.
Craig Harvey – Chief Operating Officer
Craig began his career with Gold Fields of SA in 1988 as a bursary student in Economic Geology where he worked
on various gold, platinum, coal and exploration projects. At Harmony Gold he managed the mineral resources
on various operations and was involved in due diligence on acquisitions. He joined Simmer and Jack with a focus
on shallow hydro-thermal gold deposits in the Eastern Transvaal and later moved into a corporate role managing
and auditing the mineral resource process across all gold and uranium operations. Craig spent 3 years in a
Principal Consultant role for Ravensgate based in Perth, Australia, where he conducted numerous resource
estimations, valuations and technical reports mainly in gold, uranium, copper and iron ore. Craig joined Vast
Resources as a consultant in 2013 and became Chief Operating Officer in March 2017. During his tenure with
Vast Resources, he has been heavily involved in both Zimbabwe and Romania.
Eric Diack – Non-Executive Officer
Eric is a Chartered Accountant with many years’ experience in the mining and industrial landscape. Eric is the
former CEO of Anglo American Ferrous Metals Divisions, and has served on numerous major listed and unlisted
company boards, mainly associated with Anglo American. He is currently a member of the Bidvest Group and
Aveng boards which are large South African listed companies with extensive international operations.
14 VAST RESOURCES
256569 Vast Resources R&A pp02-pp17.qxp 11/10/2019 21:36 Page 15
Nick Hatch – Non-Executive Director
Nick has 35 years’ experience in mining investment banking, primarily as a mining analyst and in managing mining
& metals research and equities teams. He was most recently Director of Mining Equity Research at Canaccord
Genuity in London. Nick’s experience includes researching and advising on mining companies and projects across
the globe and across the commodity spectrum and includes companies of all sizes. Nick left investment banking
in 2017, and has recently set up his own company, Nick Hatch Mining Advisory Ltd, to provide mining research,
business development and financing advice. He holds a degree in Mining Geology and is a Chartered Engineer.
The Company believes that the current balance of skills in the Board as a whole reflects the broad range of
commercial and professional skills that the Company requires. Among the Executive Directors, Andrew Prelea
is experienced in general management, including identifying and negotiating new business opportunities; Roy
Tucker is a Chartered Accountant with many years experience in general financial management; and Craig Harvey
is a qualified geologist experienced in constructing and operating mines.
Among the Non-executives Brian Moritz is a Chartered Accountant with senior experience. In addition to his
financial skills he has former experience as a Registered Nominated Adviser. Eric Diack is also a Chartered
Accountant with experience in operational as well as financial management. Nick Hatch is a qualified geologist
with experience in evaluating mining companies and natural resource projects.
Importantly, Directors without geological qualifications have significant experience with junior companies in
the natural resources sector.
Evaluation of Board Performance
The Group is in the process of fast evolution and at this stage in the Company’s development it is not deemed
necessary to adopt formal procedures for evaluation of the Board or of the individual Directors. There is
frequent informal communication between members of the Board and peer appraisal takes place on an ongoing
basis in the normal course of events however the Board will keep this under review and may consider formalised
independent evaluation reviews at a later stage in the Company’s development
Given the size of the Company, the whole Board is involved in the identification and appointment of new
Directors and as a result, a Nominations Committee is not considered necessary at this stage. The importance
of refreshing membership of the Board is recognised and has been implemented. In 2018 Andrew Prelea was
appointed to replace Roy Pitchford as CEO, and Nick Hatch replaced Brian Basham as a Non-executive Director.
The Directors believe that the Board operates efficiently and cost effectively for the benefit of all stakeholders.
Nevertheless, it is envisaged that the Board will be strengthened in due course as and when new projects are
operated by the Company.
Maintenance of Governance Structures and Processes
The corporate governance structures which the Company is able to operate are limited by the size of the Board,
which is itself dictated by the current size and geographical spread of the Company’s operations, with Directors
resident in the UK, Romania and Southern Africa. With this limitation, the Board is dedicated to upholding the
highest possible standards of governance and probity.
The Chairman, Brian Moritz:
•
•
•
leads the Board and is primarily responsible for the effective working of the Board;
in consultation with the Board ensures good corporate governance and sets clear expectations with
regards to Company culture, values and behaviour;
sets the Board’s agenda and ensures that all Directors are encouraged to participate fully in the activities
and decision-making process of the Board.
The CEO, Andrew Prelea:
•
is primarily responsible for developing Vast’s strategy in consultation with the Board, for its
implementation and for the operational management of the business;
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256569 Vast Resources R&A pp02-pp17.qxp 11/10/2019 21:36 Page 16
Strategic Report
continued
•
•
•
•
•
•
is primarily responsible for new projects and expansion;
is responsible for attracting finance and equity for the Company;
runs the Company on a day-to-day basis;
implements the decisions of the Board;
monitors, reviews and manages key risks;
is the Company’s primary spokesperson, communicating with external audiences, such as investors,
analysts and the media.
The Chief Operating Officer, Craig Harvey:
•
•
•
•
•
is responsible for operational improvements and efficiency of mining operations in Romania;
is responsible for expansion and exploration of projects at the mine level;
is responsible for the re-opening of the Baita Plai mine;
assists and advises on the operation and expansion of the Zimbabwe operations and projects;
provides technical input on new projects.
The Finance Director, Roy Tucker:
•
•
•
•
•
is responsible for the administration of all aspects of the Group;
assisted by the Chief Financial Officer oversees the accounting function of all group companies;
runs the UK head office as the only UK based Executive Director;
assisted by the Chief Financial Officer deals with all matters relating to the independent audit;
is the main point of contact with the Company’s lawyers and Nomad, and the London Stock Exchange.
The Remuneration Committee is chaired by Nick Hatch and comprises Eric Diack and Nick Hatch. It meets on an
ad hoc basis when required. The Remuneration Committee is responsible for establishing a formal and
transparent procedure for developing policy on executive remuneration and to set the remuneration packages
of individual Directors. The Committee’s policy is to provide a remuneration package which will attract and retain
Directors and management with the ability and experience required to manage the Company and to provide
superior long-term performance.
The Audit and Compliance Committee is chaired by Eric Diack and comprises Nick Hatch and Eric Diack. It normally
meets twice per annum to inter alia, consider the interim and final results. In the latter case the auditors are
present and the meeting considers and takes action on any matters raised by the auditors arising from their audit.
The chairman, Brian Moritz, attends the meetings of these committees when requested to do so.
Matters reserved for the Board include:
•
•
•
•
•
•
Vision and strategy
Production and trading results
Financial statements and reporting
Financing strategy, including debt and other external financing sources
Budgets, acquisitions and expansion projects, divestments and capital expenditure and business plans
Corporate governance and compliance
16 VAST RESOURCES
256569 Vast Resources R&A pp02-pp17.qxp 11/10/2019 21:36 Page 17
•
•
•
Risk management and internal controls
Appointments and succession plans
Directors’ remuneration
Shareholder Communication
The Board is committed to maintaining effective communication and having constructive dialogue with its
shareholders. The Company has close ongoing relationships with its private shareholders as explained above
under Principle Two. The Company is desirous of obtaining an institutional shareholder base, and institutional
shareholders and analysts will have the opportunity to discuss issues and provide feedback at meetings with
the Company.
The Investors section of the Company’s website provides all required regulatory information as well as additional
information shareholders may find helpful including: information on Board members, advisors and significant
shareholdings, a historical list of the Company’s Announcements, its corporate governance information, the
Company’s publications including historic annual reports and notices of annual general meetings, together with
share price information.
The results of shareholder meetings will be publicly announced through the regulatory system and displayed
on the Company’s website with suitable explanations of any actions undertaken as a result of any significant
votes against resolutions.
Outlook
While the period has been challenging the Group has completed a successful divestment of its Zimbabwean
gold operations and is in the last stages of arranging finance to focus on its key assets, BPPM and the
Zimbabwean diamond concession. These projects which by industry standards offer low cost entry, are expected
to generate high returns and strong operational free cashflow generation, providing the platform for Vast’s
expansion.
As stated last year, the forecast global growth in electric vehicles remains likely to create, over the next decade,
a shortage of copper. Whereas global supply and demand for copper is currently broadly balanced, worldwide
there is a decline in ore grades, while community resistance and water supply issues are holding back discovery
and exploitation such that management continues to believe that current supply will be overtaken by demand
in a few years placing upward pressure on copper prices and spurring investment in new copper mining capacity.
Management also believes that the business environment in Zimbabwe will continue to improve as the
government establishes an attractive base for sustainable foreign investment, and that the Group, having
obtained the licence for BPPM and having established significant first mover know-how, will begin to see traction
on its other Romanian opportunities. Management believes that a combination of a bullish outlook on
polymetallics together with a reduction in Romanian and Zimbabwean country risk premiums will provide
significant medium-term growth in the share price and bode well for the financial performance of these
businesses.
Many thanks to fellow Board members and management for the commitment and hard work that has been put
into the Group.
On behalf of the Board,
Andrew Prelea
Group Chief Executive Officer
VAST RESOURCES 17
256569 Vast Resources R&A pp18-pp32.qxp 11/10/2019 21:36 Page 18
Report of the Directors
for the period ended 30 April 2019
The Directors present their report together with the audited financial statements for the thirteen-month period
ended 30 April 2019.
Results and dividends
The Group statement of comprehensive income is set out on page 28 and shows the profit for the period.
The Directors do not recommend the payment of a dividend (2018: nil).
Financial instruments
Details of the use of financial instruments by the Company and its subsidiary undertakings are contained in note
20 of the financial statements.
Directors
The Directors who served during the period and up to the date hereof were as follows: -
Roy Tucker
Eric Diack
Brian Moritz
Andrew Prelea
Craig Harvey
Nick Hatch
Date of Appointment
5 April 2005
30 May 2014
3 October 2016
1 March 2018
1 March 2018
9 May 2018
Directors’ interests
The interests in the shares of the Company of the Directors who served during the period were as follows:
Eric Diack
Craig Harvey
Nick Hatch
Brian Moritz
Andrew Prelea
Roy Tucker
Total
30 April 2019
31 March 2018
Ordinary shares
–
5,650,000
–
10,000,000
39,179,476
69,569,992
124,399,468
Share options Ordinary shares
–
5,650,000
–
–
18,438,736
31,607,029
–
–
–
–
–
–
Share options
–
–
–
–
–
–
–
55,695,765
–
18 VAST RESOURCES
256569 Vast Resources R&A pp18-pp32.qxp 11/10/2019 21:36 Page 19
Cash-settled share rights
The following rights are held by Directors in a cash-settled share rights performance programme:
Subscription
price
Outstanding at
31 March 2018
Exercised
during last
13 months
Granted
during last Outstanding at
30 April 2019
13 months
Roy Tucker
8.75p
1,500,000
9.00p
750,000
6.00p
2,750,000
Total
5,000,000
See note 22 for further details of this programme.
–
–
–
–
–
–
–
–
1,500,000
750,000
2,750,000
5,000,000
Exercise date
50% Jul 2010
50% Jul 2011
50% Aug 2011
50% Aug 2012
50% Aug 2012
50% Aug 2013
Share Appreciation Rights Scheme
The following Directors have been granted rights under the Company’s Share Appreciation Rights Scheme:
Eric Diack
Craig Harvey
Andrew Prelea
Roy Tucker
In issue at
31 March 2018
Awarded
Grant during
date period
Exercised /
lapsed
during period
In issue at
30 April 2019
12,000,000 1 Jun 2015
5,000,000 1 Mar 2018
5,000,000 1 Mar 2018
1,250,000 1 Jun 2015
1,250,000 1 Jun 2015
9,000,000 1 Mar 2018
9,000,000 1 Mar 2018
18,000,000 1 Jun 2015
18,000,000 1 Mar 2018
18,000,000 1 Mar 2018
10,000,000 1 Jun 2015
8,000,000 1 Jun 2015
9,000,000 1 Mar 2018
9,000,000 1 Mar 2018
– (12,000,000)
– –
– –
– (1,250,000)
– –
– –
– –
–
– –
– –
– (10,000,000)
– –
–
–
–
–
–
5,000,000
5,000,000
–
1,250,000
9,000,000
9,000,000
18,000,000
18,000,000
18,000,000
–
8,000,000
9,000,000
9,000,000
132,500,000
–
(23,250,000)
109,250,000
Vesting period
Start
Finish
31 Mar 2016
31 Mar 2019
31 Mar 2020
31 Mar 2016
31 Mar 2017
31 Mar 2019
31 Mar 2020
31 Mar 2017
31 Mar 2019
31 Mar 2020
31 Mar 2016
31 Mar 2017
31 Mar 2019
31 Mar 2020
31 Mar 2019
31 Mar 2022
31 Mar 2023
31 Mar 2019
31 Mar 2020
31 Mar 2022
31 Mar 2023
31 Mar 2020
31 Mar 2022
31 Mar 2023
31 Mar 2019
31 Mar 2020
31 Mar 2022
31 Mar 2023
See note 22 for further details of the SARS.
VAST RESOURCES 19
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Report of the Directors
continued
Directors’ remuneration
2019 (13 months)
Eric Diack
Craig Harvey
Nick Hatch
Brian Moritz
Andrew Prelea
Roy Tucker
2018 (12 months)
Eric Diack
Craig Harvey
Brian Moritz
Andrew Prelea
Roy Tucker
Roy Pitchford
Brian Basham
Salary/Fees
earned *
$’000
33
196
28
33
244
163
697
30
15
26
18
145
173
9
416
* The Company has developed a practice of deferring payment of varying proportions of sums earned by Directors until the Company
liquidity position improves.
$13,062 of Andrew Prelea’s remuneration last year was settled by issuing 7,407,407 shares.
The Company has qualifying third party indemnity provisions for the benefit of the Directors.
Future developments
The Company’s plans for future developments are more fully set down in the Strategic Report, on pages 8 to 17.
Research and development
Detailed business and financing plans were prepared to bring Baita Plai Polymetallic Mine into production.
The Group is well advanced in the process of arranging a funding facility that will allow it to meet these production
objectives. Independent geological reports were commissioned for the diamond concession area in Zimbabwe
as a means of preliminary identification of potentially economic areas. Preliminary processing plant layouts and
designs were evaluated incorporating various technological methods of separation and recovery.
Exploration drilling at Blueberry successfully intersected mineralised zones containing predominantly gold and
silver with certain localities exhibiting polymetallic copper – lead - zinc mineralisation. Follow up drilling is planned
for these areas in order to define the orientations and the extent of the mineralised zones. The soil sampling
program encompassed approximately 40% of the exploration area. Further sampling is required to the southwest
and the northeast to complete the soil sampling coverage. The soil sampling identified previously unknown areas
of mineralisation in the southern portion of the exploration area with gold in soil values of up to 17.7 grams per
ton gold.
Disabled employees
The Group gives full consideration to applications for employment from disabled persons where the candidate’s
particular aptitudes and abilities are consistent with adequately meeting the requirements of the job.
Opportunities are available to disabled employees for training, career development and promotion.
Where existing employees become disabled, it is the Company’s policy to provide continuing employment
wherever practicable in the same or an alternative position and to provide appropriate training to achieve this aim.
20 VAST RESOURCES
256569 Vast Resources R&A pp18-pp32.qxp 11/10/2019 21:36 Page 21
Auditors
All of the current Directors have taken all the steps that they ought to have taken to make themselves aware of
any information needed by the Group's auditors for the purposes of their audit and to establish that the auditors
are aware of that information. The Directors are not aware of any relevant audit information of which the
auditors are unaware. Vast’s auditor, Crowe U.K. LLP, was initially appointed on 25 April 2016 and it is proposed
by the Board that they be reappointed as auditors at the forthcoming AGM.
Events after the reporting date
These are more fully disclosed in Note 27.
By order of the Board
Ben Harber
Secretary
29 September 2019
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Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the
Directors have elected to prepare the financial statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the EU and applicable law.
Under company law the Directors must not approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the
group for that period. In preparing these financial statements, the Directors are required to:
•
•
•
•
select suitable accounting policies and then apply them consistently;
make judgments and accounting estimates that are reasonable and prudent;
state whether applicable accounting standards have been followed, subject to any material departures
disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Group’s transactions and disclose with reasonable accuracy at any time the financial position of the Group
and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
They are further responsible for ensuring that the Strategic Report and the Report of the Directors and other
information included in the Annual Report and Financial Statements is prepared in accordance with applicable
law in the United Kingdom.
The maintenance and integrity of the Group’s website is the responsibility of the Directors; the work carried
out by the auditors does not involve the consideration of these matters and, accordingly, the auditors accept
no responsibility for any changes that may have occurred in the accounts since they were initially presented on
the website.
Legislation in the United Kingdom governing the preparation and dissemination of the accounts and the other
information included in annual reports may differ from legislation in other jurisdictions.
22 VAST RESOURCES
256569 Vast Resources R&A pp18-pp32.qxp 11/10/2019 21:36 Page 23
Independent Auditor’s Report to the Members of Vast
Resources Plc
Opinion
We have audited the financial statements of Vast Resources plc (the “Parent Company”) and its subsidiaries (the
“Group”) for the thirteen month period ended 30 April 2019, which comprise:
•
•
•
•
•
the Group statement of comprehensive income for the period ended 30 April 2019;
the Group and Parent Company statements of financial position as at 30 April 2019;
the Group and Parent Company statements of cash flows for the period then ended;
the Group and Parent Company statements of changes in equity for the period then ended; and
the notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation of the financial statements is
applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s
affairs as at 30 April 2019 and of the Group’s profit for the period then ended;
the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
the Parent Company financial statements have been properly prepared in accordance with IFRSs as
adopted by the European Union as applied in accordance with the provisions of the Companies Act 2006;
and
the financial statements have been prepared in accordance with the requirements of the Companies Act
2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We are independent of the Group in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of
the disclosures made in ‘Basis of preparation and going concern assessment’ and ‘Areas of estimates and
judgement’ in the financial statements concerning the Group’s and Parent Company’s ability to continue as a
going concern. Further funds will be required to finance the Group’s and Parent Company’s working capital
requirements and the development of the Group’s Romanian and Zimbabwean assets. The Group is at an
advanced stage of agreeing documentation for a substantial funding and the Directors are confident that funds
will be available to meet the Group’s commitments. However, binding agreements are not yet in place and this
funding could fail. These conditions indicate the existence of a material uncertainty which may cast significant
doubt about the Group’s and Parent Company’s ability to continue as a going concern. The financial statements
do not include the adjustments that would result if the Group and Parent Company were unable to continue as
a going concern.
VAST RESOURCES 23
256569 Vast Resources R&A pp18-pp32.qxp 11/10/2019 21:36 Page 24
Independent Auditor’s Report to the Members of Vast
Resources Plc
continued
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An item is considered material if it
could reasonably be expected to change the economic decisions of a user of the financial statements. We used
the concept of materiality to both focus our testing and to evaluate the impact of misstatements identified.
Based on our professional judgement, we determined overall materiality for the Group financial statements as
a whole to be $155,000, based on approximately 1% of the Group’s assets.
We use a different level of materiality (‘performance materiality’) to determine the extent of our testing for
the audit of the financial statements. Performance materiality is set based on the audit materiality as adjusted
for the judgements made as to the entity risk and our evaluation of the specific risk of each audit area having
regard to the internal control environment.
Where considered appropriate performance materiality may be reduced to a lower level, such as, for related
party transactions and directors’ remuneration.
We agreed with the Audit Committee to report to it all identified errors in excess of $5,000. Errors below that
threshold would also be reported to it if, in our opinion as auditor, disclosure was required on qualitative
grounds.
Overview of the scope of our audit
Of the Group’s reporting components, in addition to the Parent Company, we identified two entities comprising
one component requiring full scope audits for group purposes located in Romania. Of the Group’s reporting
components, in addition to the Parent Company, we identified two entities comprising one component requiring
full scope audits for group purposes located in Romania. The components within the scope of our work
accounted for 100% of total assets and continuing revenue. The work on these components was performed by
component auditors.
We issued instructions to the component auditors which included details of the significant areas to be covered,
including the key audit matters detailed below, and the information required to be reported back. We reviewed
the audit work performed by the component auditors, communicated our findings therefrom and any further
work required by us was then performed by the component auditor.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified. These matters included those which had the
greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts
of the engagement team. These matters were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the ‘Material uncertainty related to going concern section, we have
determined the following key audit matters. This is not a complete list of all risks identified by our audit.
24 VAST RESOURCES
256569 Vast Resources R&A pp18-pp32.qxp 11/10/2019 21:36 Page 25
Key audit matter
How the scope of our audit addressed the key audit matter
We reviewed management’s process for considering going
concern. We obtained management’s assessment of going
concern, comprising cash flow and profit and loss forecasts
for at least 12 months from the date at which the financial
statements were approved and a summary of the funding
available to the Group to cover that period.
Our procedures included, but were not limited to:
•
•
•
identifying the key assumptions included within the
forecasts which we discussed with management and,
where appropriate, challenging the appropriateness
thereof;
considering sensitivity within the projections and
considering available mitigation of expenditure; and
reviewing relevant documentation in relation to funds
raised by the Parent Company after the reporting date
We also assessed the adequacy of disclosures made in the
financial statements in relation to going concern
Our procedures included, but were not limited to:
•
•
agreeing the disposal to legal agreements documenting
the transaction; and
recalculating the profit or loss on disposal to ensure the
accounting entries are appropriate.
We also assessed the adequacy of disclosures made in the
financial statements
in relation to disclosures of the
transaction and ensured adequate weighting has been
included in the surround information.
Going concern
The Group recorded a loss from continuing
operation of $9.95 million and at 30 April
2019 held cash and cash equivalents of
$569,000 which was not sufficient to
support the production, development and
administrative costs of the Group for
12 months.
The going concern basis of preparation of
the financial statements may not be
appropriate
interest
Disposal of the Group’s Zimbabwe gold
interests
In April 2019 the group sold its 50.01%
interest in Ronquil Enterprises (pvt) Ltd
through which it held its remaining 25.01%
economic
in the Pickstone
Peerless Gold Mine and associated assets.
This had a significant impact on the
reported revenue and profitability of the
Group, resulted in the derecognition of
substantial assets, liabilities and Non-
Controlling Interest in the Group and the
recognition of a substantial gain on
disposal.
The accounting for the disposal may be
materially misstated.
Our audit procedures in relation to these matters were designed in the context of our audit opinion as a whole.
They were not designed to enable us to express an opinion on these matters individually and we express no
such opinion.
VAST RESOURCES 25
256569 Vast Resources R&A pp18-pp32.qxp 11/10/2019 21:36 Page 26
Independent Auditor’s Report to the Members of Vast
Resources Plc
continued
Other information
The directors are responsible for the other information. The other information comprises the information
included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion
on the financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the other information. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion based on the work undertaken in the course of our audit
•
•
the information given in the strategic report and the directors' report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the directors’ report and strategic report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the group and the parent company and their environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or
the directors’ report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
•
•
•
•
adequate accounting records have not been kept by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of the directors for the financial statements
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate the group or the
parent company or to cease operations, or have no realistic alternative but to do so.
26 VAST RESOURCES
256569 Vast Resources R&A pp18-pp32.qxp 11/10/2019 21:36 Page 27
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members
those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the
company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Stephen Bullock
(Senior Statutory Auditor)
for and on behalf of Crowe U.K. LLP
Statutory Auditor
London
29 September 2019
VAST RESOURCES 27
256569 Vast Resources R&A pp18-pp32.qxp 11/10/2019 21:36 Page 28
Group Statement of Comprehensive Income
for the period ended 30 April 2019
30 Apr 2019
Group
$’000
31 Mar 2018
Group
$’000
Note
2
22
4
5
13
Revenue
Cost of sales
Gross loss
Overhead expenses
Depreciation and impairment of property, plant and equipment
Profit / (loss) on sale of property, plant and equipment
Share option and warrant expense
Sundry income
Exchange (loss) / gain
Other administrative and overhead expenses
Loss from operations
Finance income
Finance expense
Loss on disposal of interest in subsidiary loans
Loss before taxation from continuing operations
Taxation charge
Total loss after taxation from continuing operations
Profit after taxation from discontinued operations
Total profit (loss) after taxation for the period
Other comprehensive income
Items that may be subsequently reclassified to either profit or loss
(Loss) / gain on available for sale financial assets
Exchange gain / (loss) on translation of foreign operations
Total comprehensive profit / (loss) for the period
Total profit / (loss) attributable to:
– the equity holders of the parent company
– non-controlling interests
Total comprehensive profit / (loss) attributable to:
– the equity holders of the parent company
– non-controlling interests
Profit / (loss) per share – basic and diluted
Loss per share continuing operations – basic and diluted
8
8
3,432
(4,344)
(912)
(8,195)
(1,206)
84
(264)
311
(2,798)
(4,322)
(9,107)
1
(845)
–
(9,951)
–
(9,951)
17,047
7,096
(3)
1,941
9,034
243
6,853
7,096
2,181
6,853
9,034
0.00
(0.16)
3,098
(4,298)
(1,200)
(3,334)
(1,401)
(23)
(27)
129
2,301
(4,313)
(4,534)
–
(708)
(12,538)
(17,780)
–
(17,780)
2,305
(15,475)
3
(1,435)
(16,907)
(17,295)
1,820
(15,475)
(18,727)
1,820
(16,907)
(0.36)
(0.37)
The accompanying accounting policies and notes on pages 33 to 69 form an integral part of these financial
statements.
28 VAST RESOURCES
256569 Vast Resources R&A pp18-pp32.qxp 11/10/2019 21:36 Page 29
Group Statement of Changes in Equity
for the period ended 30 April 2019
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The accompanying accounting policies and notes on pages 33 to 69 form an integral part of these financial
statements.
VAST RESOURCES 29
256569 Vast Resources R&A pp18-pp32.qxp 11/10/2019 21:36 Page 30
Company Statement of Changes in Equity
for the period ended 30 April 2019
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The accompanying accounting policies and notes on pages 33 to 69 form an integral part of these financial
statements.
30 VAST RESOURCES
256569 Vast Resources R&A pp18-pp32.qxp 11/10/2019 21:36 Page 31
Group and Company Statements of Financial Position
As at 30 April 2019
30 Apr 2019
Group
$’000
31 Mar 2018
Group
$’000
30 Apr 2019
Company
$’000
31 Mar 2018
Company
$’000
Note
Assets
Non-current assets
Property, plant and equipment
Investment in subsidiaries
Investment in joint ventures
Loans to group companies
Current assets
Inventory
Receivables
Available for sale investments
Cash and cash equivalents
Total current assets
Total Assets
Equity and Liabilities
Capital and reserves attributable to
equity holders of the Parent
Share capital
Share premium
Share option reserve
Foreign currency translation reserve
Available for sale reserve
EBT reserve
Retained deficit
Non-controlling interests
Total equity
Non-current liabilities
Loans and borrowings
Provisions
Deferred tax liability
Current liabilities
Loans and borrowings
Trade and other payables
Total current liabilities
Total liabilities
Total Equity and Liabilities
10
12
14
15
16
17
19
17
18
11,261
–
–
–
11,261
413
2,537
–
569
3,519
14,780
23,702
81,685
1,615
(722)
–
–
(100,937)
5,343
(41)
5,302
4,043
489
–
4,532
1,476
3,470
4,946
9,478
14,780
45,534
559
–
46,093
4,054
5,406
13
1,300
10,773
56,866
20,040
77,237
1,580
(2,663)
3
(3,942)
(97,688)
(5,433)
23,047
17,614
22,635
1,397
3,330
27,362
4,331
7,559
11,890
39,252
56,866
1
1,673
–
34,568
36,242
–
361
–
218
579
–
1,583
–
25,179
26,762
–
93
3
208
304
36,821
27,066
23,702
81,685
1,615
(4,954)
–
–
(66,304)
35,744
–
35,744
–
–
–
–
309
768
1,077
1,077
36,821
20,040
77,237
1,580
(4,954)
(2)
(3,942)
(63,213)
26,746
–
26,746
–
–
–
–
–
320
320
320
27,066
The accompanying accounting policies and notes on pages 33 to 69 form an integral part of these financial
statements. The parent Company reported a loss after taxation for the year of US$ 3.237 million
(2018: US$ 2.378 million). The financial statements on pages 28 to 69 were approved and authorised for issue
by the Board of Directors on 29 September and were signed on its behalf by:
Roy C. Tucker Registered number 5414325
Director
29 September 2019
VAST RESOURCES 31
256569 Vast Resources R&A pp18-pp32.qxp 11/10/2019 21:36 Page 32
Group and Company Statements of Cash Flow
for the period ended 30 April 2019
30 Apr 2019
Group
$’000
31 Mar 2018
Group
$’000
30 Apr 2019
Company
$’000
31 Mar 2018
Company
$’000
(9,951)
17,047
(17,780)
6,099
(3,237)
–
(14,917)
–
CASH FLOW FROM OPERATING ACTIVITIES
Profit (loss) before taxation for the period
– from continuing operations
– from discontinued operations
Adjustments for:
Depreciation and impairment charges
(Profit) loss on sale of property, plant and equipment
Gain on disposal of discontinued operations
Loss on disposal of available for sale investments
Loss on disposal of interest in loans
Share option expense
Changes in working capital:
Decrease (increase) in receivables
Decrease (increase) in inventories
Increase (decrease) in payables
Cash generated by / (used in) operations
4,554
(76)
(8,649)
10
–
264
3,199
2,140
1,290
(1,275)
2,155
5,354
Investing activities:
(11,391)
Payments to acquire property, plant and equipment
(4,480)
Payments to acquire new subsidiary
–
Payments for investment in subsidiary
168
Proceeds on disposal of property, plant and equipment
–
Proceeds of third-party investment in subsidiary
Proceeds of disposal of available for sale investments
–
Net cash inflow on disposal of discontinued operations 1,592
221
Proceeds of derecognition of EBT reserve
–
Payments to acquire controlling interest in subsidiary
–
Proceeds of loan assignment
559
Decrease (increase) in investment in joint venture
–
(Increase) decrease in loans to group companies
Total cash used in investing activities
(13,331)
Financing Activities:
Proceeds from the issue of ordinary shares
Proceeds from loans and borrowings granted
Repayment of loans and borrowings
Total proceeds from financing activities
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
8,110
6,165
(7,029)
7,246
(731)
1,300
569
2,862
22
–
–
12,538
27
3,768
8
(2,392)
(1,998)
(4,382)
(614)
(9,197)
–
–
107
1,700
–
–
–
(2,303)
2,300
(102)
–
(7,495)
3,055
9,177
(4,149)
8,083
(26)
1,326
1,300
–
(2)
–
–
–
264
–
–
–
–
12,538
27
(2,975)
(2,352)
(268)
–
452
184
(2,791)
(1)
–
(90)
–
–
3
–
221
–
–
–
(5,752)
(5,619)
8,110
310
–
8,420
10
208
218
1,513
–
(127)
1,386
(966)
–
–
–
–
–
–
–
–
(2,303)
2,300
–
(3,117)
(3,120)
3,055
–
–
3,055
(1,031)
1,239
208
The accompanying notes and accounting policies on pages 33 to 69 form an integral part of these financial
statements.
32 VAST RESOURCES
256569 Vast Resources R&A pp33-pp40.qxp 11/10/2019 21:36 Page 33
Statement of Accounting Policies
for the period ended 30 April 2019
General information
Vast Resources plc and its subsidiaries (together “the Group”) are engaged principally in the exploration for and
development of mineral projects in Sub-Saharan Africa and Eastern Europe. Since incorporation the Group has
built an extensive and interesting portfolio of projects in these jurisdictions. The Company’s ordinary shares are
listed on the AIM market of the London Stock Exchange.
Vast Resources plc was incorporated as a public limited company under UK Company Law with registered
number 05414325. It is domiciled and registered at 60 Gracechurch Street, London EC3V 0HR.
Basis of preparation and going concern assessment
The principal accounting policies adopted in the preparation of the financial information are set out below. The
policies have been consistently applied throughout the current year and prior year, unless otherwise stated.
These financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRSs and IFRIC interpretations) issued by the International Accounting Standards Board (IASB) as adopted by
the European Union and with those parts of the Companies Act 2006 applicable to companies preparing their
accounts under IFRS.
During the period, the Group changed its year end from 31 March 2019 to 30 April 2019. The consolidated
financial statements incorporate the results of Vast Resources plc and its subsidiary undertakings for the
thirteen-month period ended 30 April 2019 and are therefore not entirely comparable to the previous year’s
results for the twelve-month period ended 31 March 2018.
The financial statements are prepared under the historical cost convention on a going concern basis.
In April 2019 the Group disposed of its Zimbabwean gold operations to focus on its mining assets in Romania
and its Marange diamond concession in Zimbabwe. The Group will require further funding in order to put these
assets into production and to meet United Kingdom entity overheads and Romanian and Zimbabwean working
capital needs. The Directors are confident that the Company will be able to raise such funds as it considers
appropriate to meet such requirements over the course of the next 24 months, in cash. While no binding
financing agreement is in place at the date of this Report, the Group is well advanced in the process of arranging
new funding that will allow Vast to place the Baita Plai Polymetallic Mine (`BPPM’) into production and will
enable the commencement of operations at the Group’s diamond concession, upon the imminent issuance of
a special grant. Upon successfully funding these key assets, the Group would then be in a position to focus
resources to secure the necessary investment to upgrade the Manaila Polymetallic Mine (`MPM’) which is
currently on care and maintenance. These conditions indicate the existence of material uncertainty which may
cast significant doubt about the Group’s and Company’s ability to continue as a going concern. The financial
statements do not include the adjustment that would result if the Group and Company were unable to continue
as a going concern.
Changes in Accounting Policies
At the date of authorisation of these financial statements, a number of Standards and Interpretations were in
issue but were not yet effective. The Directors do not anticipate that the adoption of these standards and
interpretations, or any of the amendments made to existing standards as a result of the annual improvements
cycle, will have a material effect on the financial statements in the year of initial application.
Areas of estimates and judgement
The preparation of the Group financial statements in conformity with generally accepted accounting principles
requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Although these estimates are based on management’s
best knowledge of current events and actions, actual results may ultimately differ from those estimates. The
estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities in the next financial year are discussed below:
VAST RESOURCES 33
256569 Vast Resources R&A pp33-pp40.qxp 11/10/2019 21:36 Page 34
Statement of Accounting Policies
continued
Impairment of intangibles and mining assets
a)
The Group reviews, on an annual basis, whether deferred exploration costs, acquired either as intangible assets,
as property, plant and equipment, or as mining options or licence acquisition costs, have suffered any
impairment. The recoverable amounts are determined based on an assessment of the economically recoverable
mineral reserves, the ability of the Group to obtain the necessary financing to complete the development of
the reserves and future profitable production or proceeds from the disposition of recoverable reserves. Actual
outcomes may vary. In the event that the Group is unable to secure financing for developing its Romanian assets,
US$ 5.1 million of mining assets would be impaired. The disposal value of the remaining fixed assets held by
the Group’s Romanian operations is not easily quantifiable
Going concern and Inter-company loan recoverability
b)
The Group's cash flow projections, which have used conservative assumptions on forward commodity prices,
indicate that the Group should have sufficient resources to continue as a going concern, although, as stated in
the Principal Risks section of the Strategic Report and the basis of preparation and going concern assessment
above, the Group will require additional funding for its near-term investment plans. While the Group is confident
of its capacity to raise this funding, should it not materialise, or if the projections not be realised, the Group's
going concern would depend on the success of future fund-raising initiatives. These conditions indicate the
existence of material uncertainty which may cast significant doubt about the Group’s and Company’s ability to
continue as a going concern.
The recoverability of inter-Company loans advanced by the Company to subsidiaries depends also on the
subsidiaries realising their cash flow projections.
Estimates of fair value
c)
The Group may enter into financial instruments, which are required by IFRS to be recorded at fair value within the
financial statements. In determining the fair value of such instruments, the Directors are required to apply
judgement in selecting the inputs used in valuation models such as the Black Scholes or Monte Carlo models. Inputs
over which the Directors may be required to form judgements related to volatility, vesting periods, risk free interest
rates, commodity price assumptions and discount rates. In addition, where a valuation requires more complex fair
value considerations the Directors may appoint third party advisers to assist in the determination of fair value.
The fair value measurement of the Group’s financial and non-financial assets and liabilities utilises market observable
inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into different
levels based on how observable the inputs used in the valuation technique utilised are (the ‘fair value hierarchy’):
Level 1: Quoted prices in active markets for identical items (unadjusted).
Level 2: Observable direct or indirect inputs other than Level 1 inputs.
Level 3: Unobservable inputs (i.e. not derived from market data).
The classification of an item into the above levels is based on the lowest level of the inputs used that has a
significant effect on the fair value measurement of the item.
Provisions
d)
The Group is required to estimate the cost of its obligations to realise and rehabilitate its mining properties.
The estimation of the cost of complying with the Group’s obligations at future dates and in economically
unpredictable regions, and the application of appropriate discount rates thereto, gives rise to significant
estimation uncertainties.
VAT recoverable
e)
In countries where the Group has productive mining operations carried out by its subsidiaries those subsidiaries
are registered for Value Added Tax (VAT) with their respective local taxation authorities and, as their outputs
are predominantly zero-rated for VAT, receive net refunds of VAT in respect of input tax borne on their inputs.
This amount is carried as a receivable until refunded by the State
The amount carried as a receivable is determined in accordance with the returns submitted to the taxation
authorities.
34 VAST RESOURCES
256569 Vast Resources R&A pp33-pp40.qxp 11/10/2019 21:36 Page 35
Basis of consolidation
Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an
investee if all three of the following elements are present: power over the investee, exposure to variable returns
from the investee, and the ability of the investor to use its power to affect those variable returns. Control is
reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of
control.
De-facto control exists in situations where the Company has the practical ability to direct the relevant activities
of the investee without holding the majority of the voting rights. In determining whether de-facto control exists
the Company considers all relevant facts and circumstances, including:
•
•
•
•
The size of the Company’s voting rights relative to both the size and dispersion of other parties who also
hold voting rights.
Substantive potential voting rights held by the Company and by other parties.
Other contractual arrangements.
Historic patterns in voting attendance.
The consolidated financial statements present the results of the Company and its subsidiaries ("the Group") as
if they formed a single entity. Inter-company transactions and balances between Group companies are therefore
eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the acquisition
method. In the statement of financial position, the acquiree's identifiable assets, liabilities and contingent
liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations
are included in the consolidated statement of comprehensive income from the date on which control is
obtained. They are deconsolidated from the date on which control ceases.
Business combinations
The financial information incorporates the results of business combinations using the purchase method. In the
statement of changes in equity, the acquirer’s identifiable assets, liabilities and contingent liabilities are initially
recognised at their fair values at the acquisition date. The results of acquired operations are included in the
Group statement of comprehensive income from the date on which control is obtained. The assets acquired
have been valued at their fair value. Any excess of consideration paid over the fair value of the net assets
acquired is allocated to goodwill. Any excess fair value over the consideration paid is considered to be negative
goodwill and is immediately recorded within the income statement.
Where business combinations are discontinued, whether by closure or disposal to third parties, any resultant
gain or loss on the discontinued operation is identified separately and dealt with in the Group’s consolidated
income statement as a separate item.
Financial instruments
IFRS 9 supersedes IAS 39 Financial Instruments: Recognition and Measurement with new requirements for the
classification and measurement of financial assets and liabilities, impairment of financial assets and hedge
accounting.
IFRS 9 introduces a new forward-looking impairment model based on expected credit losses to replace the
incurred loss model in IAS 39. This determines the recognition of impairment provisions as well as interest
revenue.
The Group adopted IFRS 9 from 1 April 2018 with retrospective effect in accordance with the transitional
provisions.
The Group’s principal financial assets are cash and cash equivalents and receivables.
VAST RESOURCES 35
256569 Vast Resources R&A pp33-pp40.qxp 11/10/2019 21:36 Page 36
Statement of Accounting Policies
continued
The Group has assessed the impact of IFRS 9 on the impairment of its financial assets and has concluded that
the change in the impairment is immaterial.
While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified
impairment loss was immaterial.
The Group's financial assets consist of cash and cash equivalents and other receivables. The Group's accounting
policy for each category of financial asset is as follows:
Financial assets held at amortised cost
Trade receivables and other receivables are classified as financial assets held at amortised cost. They are initially
recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are
subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.
Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties
on the part of the counterparty or default or significant delay in payment) that the Group will be unable to
collect all of the amounts due under the terms receivable, the amount of such a provision being the difference
between the net carrying amount and the present value of the future expected cash flows associated with the
impaired receivable. For receivables, which are reported net, such provisions are recorded in a separate
allowance account with the loss being recognised within administrative expenses in the statement of
comprehensive income. On confirmation that the receivable will not be collectable, the gross carrying value of
the asset is written off against the associated provision.
The Group’s financial assets held at amortised cost comprise other receivables and cash and cash equivalents in
the statement of financial position.
Cash and cash equivalents
These amounts comprise cash on hand and balances with banks. Cash equivalents are short term, highly liquid
accounts that are readily converted to known amounts of cash. They include short-term bank deposits and short-
term investments.
Any cash or bank balances that are subject to any restrictive conditions, such as cash held in escrow pending
the conclusion of conditions precedent to completion of a contract, are disclosed separately as “Restricted
cash”.
There is no significant difference between the carrying value and fair value of receivables.
Financial liabilities
The Group’s financial liabilities consist of trade and other payables (including short terms loans) and long term
secured borrowings. These are initially recognised at fair value and subsequently carried at amortised cost, using
the effective interest method. Where any liability carries a right to convertibility into shares in the Group, the
fair value of the equity and liability portions of the liability is determined at the date that the convertible
instrument is issued, by use of appropriate discount factors.
Foreign currency
The functional currency of the Company and all of its subsidiaries outside Romania is the United States Dollar,
while the functional currency of the Company’s Romanian subsidiaries is the Romanian Lei (RON), these are the
currencies of the primary economic environment in which the Company and its subsidiaries operate.
Transactions entered into by the Group entities in a currency other than the currency of the primary economic
environment in which it operates (the “functional currency”) are recorded at the rates ruling when the
transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the date
of the statement of financial position. Exchange differences arising on the retranslation of unsettled monetary
assets and liabilities are similarly recognised immediately in profit or loss, except for foreign currency borrowings
qualifying as a hedge of a net investment in a foreign operation.
36 VAST RESOURCES
256569 Vast Resources R&A pp33-pp40.qxp 11/10/2019 21:36 Page 37
The exchange rates applied at each reporting date were as follows:
•
•
•
30 April 2019
$1.3036: £1 and $1: RON 4.2440 and $1: RTGS 3.2641
31 March 2018
$1.4012: £1 and $1: RON 3.7779 and $1: RTGS 1
31 March 2017
$1.2253: £1 and $1: RON 4.2615 and $1: RTGS 1
On 22 February 2019 all US dollar balances in Zimbabwe were restated as RTGS (Real Time Gross Settlement)
balances, as a separate and distinct currency tradeable against the US dollar. The initial inter-bank trading rate
with the US dollar was US$ 1: RTGS 2.5.
Intangible assets - Mining rights
Mineral rights are recorded at cost less amortisation and provision for diminution in value. Amortisation will be
over the estimated life of the commercial ore reserves on a unit of production basis.
Licences for the exploration of natural resources will be amortised over the lower of the life of the licence and
the estimated life of the commercial ore reserves on a unit of production basis.
Inventories
Inventories are initially recognised at cost, and subsequently at the lower of cost and net realisable value. Cost
comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their
present location and condition. Weighted average cost is used to determine the cost of ordinarily inter-
changeable items.
Mining inventory includes run of mine stockpiles, minerals in circuit, finished goods and consumables. Stockpiles,
minerals in circuit and finished goods are valued at their cost of production to their point in process using a
weighted average cost of production, or net realisable value, whichever is the lower. Low grade stockpiles are
only recognised as an asset when there is evidence to support the fact that some economic benefit will flow to
the Company on the sale of such inventory. Consumables are valued at their cost of acquisition, or net realisable
value, whichever is the lower.
Investment in subsidiaries
The Company’s investment in its subsidiaries is recorded at cost less any impairment.
Non-controlling interests
For business combinations completed on or after 1 January 2010 the Group has the choice, on a transaction by
transaction basis, to initially recognise any non-controlling interest in the acquiree which is a present ownership
interest and entitles its holders to a proportionate share of the entity's net assets in the event of liquidation at
either acquisition date fair value or, at the present ownership instruments' proportionate share in the recognised
amounts of the acquiree's identifiable net assets. Other components of non-controlling interest such as
outstanding share options are generally measured at fair value.
The total comprehensive income of non-wholly owned subsidiaries is attributed to owners of the parent and to
the non-controlling interests in proportion to their relative ownership interests.
Revenue
Revenue from the sales of goods is recognised when the Group has transferred the significant risks and rewards of
ownership to the buyer and it is probable that the Group will receive the previously agreed upon payment. These
criteria are considered to be met when the goods are delivered to the buyer. Where the buyer has a right of return,
the Group defers recognition of revenue until the right to return has lapsed. However, where high volumes of sales
are made to established wholesale customers, revenue is recognised in the period where the goods are delivered
less an appropriate provision for returns based on past experience. Delivery of gold and metal concentrates is the
Group’s single performance obligation under its contracts with its customers. The same policy applies to warranties.
VAST RESOURCES 37
256569 Vast Resources R&A pp33-pp40.qxp 11/10/2019 21:36 Page 38
Statement of Accounting Policies
continued
Under IFRS 15, the freight service on export commodity contracts with CIF/CFR terms represents a separate
performance obligation, and a portion of the revenue earned under these contracts, representing the obligation
to perform the freight service, is deferred and recognised over time as this obligation is fulfilled, along with the
associated costs for which the point of recognition is dependent on the contract sales terms. The Group’s agreed
terms with Mercuria, currently its sole buyer of concentrates, require that the seller must contract for and pay
the costs and freight necessary to bring the goods to the named port of destination. The impact of applying
this methodology versus that currently adopted by the Group during the year ended 30th April 2019 is not
material as the transfer of risks and rewards generally coincides with the transfer of control at a point in time.
The timing and amount of revenue recognised by the Group for the sale of commodities is therefore not
materially affected. The Group’s gold sales, which form part of discontinued operations, were also not affected
by this standard.
Provided the amount of revenue can be measured reliably and it is probable that the Group will receive any
consideration, revenue for services is recognised in the period in which they are rendered.
Pension costs
Contributions to defined contribution pension schemes are charged to profit or loss in the year to which they
relate.
Production expenses
Production expenses include all direct costs of production but exclude depreciation of property plant and
equipment involved in the mining process, and mine and Company overhead.
Property, plant and equipment
Land is not depreciated. Items of property, plant and equipment are initially recognised at cost and are
subsequently carried at depreciated cost. As well as the purchase price, cost includes directly attributable costs
and the estimated present value of any future costs of dismantling and removing items. The corresponding
liability is recognised within provisions.
Depreciation is provided on all other items of property and equipment so as to write off the carrying value of
items over their expected useful economic lives. It is applied at the following rates:
Buildings
Plant and machinery
Fixtures, fittings & equipment
Computer assets
Motor vehicles
–
–
–
–
–
2.5% per annum, straight line
15% per annum, reducing balance
20% per annum, reducing balance
33.33% per annum, straight line
15% per annum, reducing balance
Development costs associated with the development of the Zimbabwean diamond project have been expensed
as the concession has yet to receive a Special Grant.
Capital works in progress: Property, plant and equipment under construction are carried at its accumulated cost
of construction and not depreciated until such time as construction is completed or the asset put into use,
whichever is the earlier.
Proved mining properties
Depletion and amortisation of the full-cost pools is computed using the units-of-production method based on
proved reserves as determined annually by management.
38 VAST RESOURCES
256569 Vast Resources R&A pp33-pp40.qxp 11/10/2019 21:36 Page 39
Provision for rehabilitation of mining assets
Provision for the rehabilitation of a mining property on the cessation of mining is recognised from the
commencement of mining activities. This provision accounts for the full cost to rehabilitate the mine according
to good practice guidelines in the country where the mine is located, which may involve more than the stipulated
minimum legal commitment.
When accounting for the provision the Company recognises a provision for the full cost to rehabilitate the mine
and a matching asset accounted for within the non-current mining asset. The rehabilitation provision is
discounted using a risk-free rate, which is linked to the currency in which the costs are expected to be incurred,
and the applicable inflation rate applied to the cash flows. The unwinding of the discounting effect is recognised
within finance expenses in the income statement.
Share based payments
Equity-settled share-based payments
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to
profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the
number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative
amount recognised over the vesting period is based on the number of options that eventually vest. Market
vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions
are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The
cumulative expense is not adjusted for failure to achieve a market vesting condition.
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the
options, measured immediately before and after the modification, is also charged to profit or loss over the
remaining vesting period.
Where equity instruments are granted to persons other than employees, the fair value of goods and services
received is charged to profit or loss, except where it is in respect to costs associated with the issue of shares, in
which case, it is charged to the share premium account.
Cash-settled share-based payments
The Company also has cash-settled share-based payments arising in respect of a performance programme (see
Note 22). A liability is recognised in respect of the fair-value of the benefit received under the programme and
charged to profit or loss over the vesting period. The fair-value is re-measured at each reporting date with any
changes taken to profit or loss.
Remuneration shares
Where remuneration shares are issued to settle liabilities to employees and consultants, any difference between
the fair value of the shares on the date of issue and the carrying amount of the liability is charged to profit or
loss.
Stripping costs
Costs incurred in stripping the overburden to gain access to mineral ore deposits are accounted for as follows:
Stripping costs incurred during the development phase of the mine (before production begins) are capitalised
as part of the depreciable cost of building, developing and constructing the mine. Capitalised costs are amortised
using the units of production method, once production begins.
VAST RESOURCES 39
256569 Vast Resources R&A pp33-pp40.qxp 11/10/2019 21:36 Page 40
Statement of Accounting Policies
continued
Stripping costs incurred during the production phase of the mine which give rise to the production of usable
inventory are accounted for in accordance with the principles contained in the Group’s policy on Inventories.
Stripping costs incurred in the production phase of the mine which result in improved access to ore are
capitalized and recognized as additions to non-current assets provided that it is probable that the future
economic benefit from improved access to the ore body associated with the stripping activity will flow to the
Company, that it is possible to identify the component of the ore body to which access has been improved and
that the costs relating to the stripping activity associated with that component of the ore body can be measured
reliably.
Tax
The major components of income tax on the profit or loss include current and deferred tax.
Current tax
Current tax is based on the profit or loss adjusted for items that are non-assessable or disallowed and is
calculated using tax rates that have been enacted or substantively enacted by the reporting date.
Tax is charged or credited to the statement of comprehensive income, except when the tax relates to items
credited or charged directly to equity, in which case the tax is also dealt with in equity.
Deferred tax
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the
statement of financial position differs to its tax base, except for differences arising on:
•
•
•
The initial recognition of goodwill;
The initial recognition of an asset or liability in a transaction which is not a business combination and at
the time of the transaction affects neither accounting or taxable profit; and
Investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of
the reversal of the difference and it is probable that the differences will not reverse in the foreseeable
future.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will
be available against which the difference can be utilised.
The amount of the asset or liability is determined using tax rates that have been enacted or substantively
enacted by the reporting date and are expected to apply when deferred tax liabilities/(assets) are
settled/(recovered). Deferred tax balances are not discounted.
New IFRS accounting standards
The following are the major new IFRS accounting standards in issue and effective from 1 January 2019
IFRS 16 Leases
The principal impact of IFRS 16 will be to change the accounting treatment by lessees of leases currently
classified as operating leases. Lease agreements will give rise to the recognition by the lessee of an asset,
representing the right to use the leased item, and a related liability for future lease payments. Lease costs will
be recognised in the income statement in the form of depreciation of the right of use asset over the lease term,
and finance charges representing the unwind of the discount on the lease liability. The adoption of IFRS 16 does
not materially impact the carrying value of lease liabilities given the Group’s negligible leasing exposure.
40 VAST RESOURCES
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Notes to Financial Statements
for the period ended 30 April 2019
1. Segmental analysis
The Group operates in one business segment, the development and mining of mineral assets. The Group has
interests in two geographical segments being Southern Africa (primarily Zimbabwe) and Europe (primarily
Romania).
The Group’s operations are reviewed by the Board (which is considered to be the Chief Operating Decision Maker
(‘CODM’)) and split between mining exploration and development and administration and corporate costs.
Exploration and development is reported to the CODM only on the basis of those costs incurred directly on
projects. All costs incurred on the projects are capitalised in accordance with IFRS 6, including depreciation
charges in respect of tangible assets used on the projects.
Administration and corporate costs are further reviewed on the basis of spend across the Group.
Decisions are made about where to allocate cash resources based on the status of each project and according
to the Group’s strategy to develop the projects. Each project, if taken into commercial development, has the
potential to be a separate operating segment. Operating segments are disclosed below on the basis of the split
between exploration and development and administration and corporate.
Continuing operations
Discontinued operations
Mining, exploration Mining, exploration
and development Admin and and development Admin and
Europe Africa corporate Total Europe Africa corporate Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Thirteen months to
30 April 2019
Revenue
Production costs
Gross profit (loss)
Depreciation
Profit (loss) on sale of
property, plant and
equipment
Share option and
warrant expense
Sundry income
Exchange (loss) gain
Other administrative
and overhead expenses
Finance income
Finance expense
Profit on disposal of
discontinued operations
Taxation (charge)
Profit (loss) for the
year from continuing
operations
30 April 2019
Total assets
Total non-current assets
Additions to non-current
assets
Total current assets
Total liabilities
3,328
(4,344)
(1,016)
(1,200)
86
–
311
(2,283)
(1,516)
–
(413)
–
–
(6,031)
13,611
11,220
1,684
2,441
8,434
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
104
–
104
(6)
3,432 –
(4,344) –
(912) –
(1,206) –
31,243
(18,527)
12,716
(3,348)
(2)
84 –
(8)
(264)
–
(515)
(264) –
311 –
(2,798) –
(2,806)
1
(432)
(4,322) –
1 –
(845) –
–
670
6,494
(4,894)
2
(1,014)
–
–
– –
– –
8,649
(1,408)
–
–
–
–
–
–
–
(779)
(22)
–
–
–
(11)
31,243
(18,527)
12,716
(3,348)
(8)
–
670
5,715
(4,916)
2
(1,014)
8,649
(1,419)
(3,920)
(9,951) –
17,859
(812)
17,047
1,169
41
53
1,078
1,044
14,780 –
11,261 –
–
–
1,737 –
3,519 –
9,478 –
14,371
–
–
–
–
–
–
–
–
14,371
–
VAST RESOURCES 41
256569 Vast Resources R&A pp41-pp50.qxp 11/10/2019 21:36 Page 42
Notes to Financial Statements
continued
1. Segmental analysis continued
Continuing operations
Discontinued operations
Mining, exploration Mining, exploration
and development Admin and and development Admin and
Europe Africa corporate Total Europe Africa corporate Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
12 Months to
31 March 2018
Revenue
Production costs
Gross profit (loss)
Depreciation
Profit (loss) on sale of
property, plant and
equipment
Share option and
warrant expense
Sundry income
Exchange (loss) gain
Other administrative
and overhead expenses
Finance income
Finance expense
Loss on disposal of
subsidiary company loans
Taxation (charge)
Profit (loss) for the year
from continuing
operations
31 March 2018
Total assets
Total non-current assets
Additions to non-current
assets
Total current assets
Total liabilities
3,098
(4,298)
(1,200)
(1,398)
(23)
–
129
1,451
(1,700)
–
(708)
–
–
(3,449)
14,976
11,669
3,134
3,186
9,686
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(3)
3,098 –
(4,298) –
(1,200) –
(1,401) –
27,590
(19,114)
8,476
(1,460)
–
(23) –
(27)
850
(27) –
129 –
2,301 –
(2,613)
–
–
(4,313) –
– –
(708) –
1
–
342
–
(741)
42
(462)
–
–
–
–
–
–
–
–
(67)
–
(32)
27,590
(19,114)
8,476
(1,460)
1
–
342
–
(808)
42
(494)
(12,538)
–
(12,538) –
– –
–
(3,794)
–
–
–
(3,794)
(14,331)
(17,780)
2,404
(99)
2,305
320
16
–
425
327
15,296 –
11,685 –
41,306
34,409
264
(1)
41,570
34,408
3,134 –
3,611 –
10,013 –
6,063
6,898
14,379
–
264
14,860
6,063
7,162
29,239
There are no non-current assets held in the Company’s country of domicile, being the United Kingdom (2018: $nil).
Revenue analysis by geographical location, product and customer
Gold bullion
Mineral concentrates
Other
2019
2018
Group
$’000
Romania
–
3,328
104
3,432
Group
$’000
Zimbabwe
31,243
–
–
31,243
Group
$’000
Romania
–
3,098
–
3,098
Group
$’000
Zimbabwe
27,590
–
–
27,590
100% of gold bullion and mineral concentrate sales (2018: 100%) in both Romania and Zimbabwe were made
to a single customer in each respective country.
Romanian revenues form part of continuing operations. All Zimbabwean revenues form part of discontinued
operations.
42 VAST RESOURCES
256569 Vast Resources R&A pp41-pp50.qxp 11/10/2019 21:36 Page 43
2. Group loss from operations
Operating loss is stated after charging/(crediting):
Auditors’ remuneration (note 3)
Depreciation
Employee pension costs
Share option expense
Foreign exchange loss/(gain)
(Gain)/loss on disposal of property, plant and equipment
3. Auditor’s remuneration from continuing operations
Fees payable to the Company’s auditor for the audit of the Company’s
annual accounts
Fees payable to the Company’s auditor for other services:
– Audit of the accounts of subsidiaries
– Other services
Auditors remuneration from discontinued operations
4. Finance expense from continuing operations
Interest paid on secured borrowings
Interest paid on unsecured borrowings
Interest paid on convertible loan
Finance expense from discontinued operations
2019
Group
$’000
105
1,206
43
264
2,798
(84)
2019
Group
$’000
59
46
–
105
33
2019
Group
$’000
770
–
75
845
1,014
5. Taxation
There was no taxation charge for continuing operations during the year (2018: US$ nil).
Taxation from discontinued activities was as follows:
Income tax on profits
Deferred tax charge
Tax charge (credit)
2019
Group
$’000
485
934
1,419
2018
Group
$’000
129
1,401
61
27
(2,301)
23
2018
Group
$’000
83
46
–
129
22
2018
Group
$’000
698
10
–
708
494
2018
Group
$’000
–
3,794
3,794
VAST RESOURCES 43
256569 Vast Resources R&A pp41-pp50.qxp 11/10/2019 21:36 Page 44
Notes to Financial Statements
continued
5. Taxation continued
Deferred tax assets are only recognised in the Group where the company concerned has a reasonable
expectation of future profits against which the deferred tax asset may be recovered.
The tax assessed for the year is lower than the standard rate of corporation tax in
the UK. The differences are explained as follows:
Profit/(loss) before taxation
Profit/(loss) before taxation at the standard rate of corporation tax in the
UK of 19% (2018: 19%)
Difference in tax rates in foreign jurisdictions
Income not chargeable to tax
Expenses not allowed for tax
Short term timing differences
Loss carried forward
Income tax charge on profits
Factors that may affect future tax charges:
2019
Group
$’000
2018
Group
$’000
8,515
(11,681)
1,618
2,007
(4,629)
1,308
(1,056)
(1,237)
485
(2,219)
690
(227)
350
(1,795)
(3,201)
–
Tax losses
Accumulated tax losses
2019
Group
$’000
49,558
2018
Group
$’000
61,423
2019
Company
$’000
31,152
2018
Company
$’000
28,903
However, these losses will only be recoverable against future profits, the timing of which is uncertain, and a
deferred tax asset has not been recognised in respect of these losses. A deferred tax asset has not been
recognised in respect of accumulated tax losses for the Company.
6. Employees from both continuing and discontinued operations
Dis- Dis-
Group Continuing continued Group Continuing continued
$’000 $’000 $’000 $’000 $’000 $’000
2019
2018
Staff costs (including directors)
consist of:
Wages and salaries – management 1,383 753 630 987 513
Wages and salaries – other 6,057 2,444 3,613 4,224 2,523
7,440 3,197 4,243 5,211 3,036
Consultancy fees 1,057 754 303 1,419 912
Social Security costs 257 165 92 229 162
Healthcare costs – – – – –
Pension costs 201 43 158 213 61
8,955 4,159 4,796 7,072 4,171
The average number of employees (including directors) during the year was as follows:
Management 19 11 8 15 9
Other operations 590 208 382 371 213
609 219 390 386 222
474
1,701
2,175
507
67
152
2,901
6
158
164
44 VAST RESOURCES
256569 Vast Resources R&A pp41-pp50.qxp 11/10/2019 21:36 Page 45
7. Directors’ remuneration
Directors’ emoluments
Company contributions to pension schemes
Directors and key management remuneration
2019
Group
$’000
697
–
697
2018
Group
$’000
402
14
416
The Directors are considered to be the key management of the Group and Company.
Four of the Directors at the end of the period have share options receivable under long term incentive schemes.
The highest paid Director received an amount of $244,166 over the thirteen-month period (2018: $196,359).
Included within the above remuneration are amounts accrued at 30 April 2019.
8. Earnings per share
Profit and loss per ordinary share has been calculated using the weighted average number of ordinary shares
in issue during the relevant financial year.
The weighted average number of ordinary shares in issue for the period is:
Profit/(loss) for the period ($’000)
Profit/(loss) per share basic and diluted (cents)
Profit/(loss) from continuing operations for the period ($’000)
Profit/(loss) per share basic and diluted continuing operations (cents)
Profit/(loss) from discontinued operations for the period ($’000)
Profit/(loss) per share basic and diluted discontinued operations (cents)
The effect of all potentially dilutive share options is anti-dilutive.
30 Apr 2019
Group
31 Mar 2018
Group
5,887,042,985
243
0.00
(9,649)
(0.16)
9,892
0.17
4,821,870,747
(17,295)
(0.36)
(17,898)
(0.37)
603
0.01
9. Loss for the financial year
The Company has adopted the exemption allowed under Section 408(1b) of the Companies Act 2006 and has
not presented its own income statement in these financial statements.
VAST RESOURCES 45
256569 Vast Resources R&A pp41-pp50.qxp 11/10/2019 21:36 Page 46
Notes to Financial Statements
continued
10. Property, plant and equipment
Group Buildings
Fixtures, and Capital
Plant and fittings and Computer Motor Improve- Mining Work in
machinery equipment assets vehicles ments assets progress Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Cost at
1 April 2017 8,401
Additions during the year 811
Reclassification 9,942
Disposals during the year (131)
Impairment –
Foreign exchange
movements 224
202 227 605 3,231
53 109 94 33
(30) 30 – 242
(62) (78) (60) (28)
– – – (34)
24,946 6,382
1,908 6,189
194 (10,378)
(2) –
– –
43,994
9,197
–
(361)
(34)
7 3 60 296
385 50
1,025
Cost at 31 March 2018 19,247
170 291 699 3,740
27,431 2,243
53,821
Additions during the
period 1,392
Acquired through
business combination 2,812
Reclassification 246
Disposals during
the period (14)
Discontinued operations (20,142)
Foreign exchange
movements (338)
103 118 313 176
5,428 3,861
11,391
21 102 2 1,790
– – – 134
– –
– (380)
4,727
–
– – – (82)
(243) (382) (707) (2,240)
– –
(26,188) (2,830)
(96)
(52,732)
(5) (11) (62) (306)
(497) (110)
(1,329)
Cost at 30 April 2019 3,203
46 118 245 3,212
6,174 2,784
15,782
Depreciation at
1 April 2017 2,963
Charge for the year 1,826
Disposals during the year (91)
Foreign exchange
movements 100
Depreciation
at 31 March 2018 4,798
Charge for the year 2,710
Acquired through
business combination 52
Disposals during the
period (4)
Discontinued operations (5,402)
Foreign exchange
movements (201)
Depreciation at
30 April 2019 1,953
Net book value
at 31 March 2018 14,449
Net book value
at 31 April 2019 1,250
119 139 283 345
21 79 114 152
(62) (78) (34) (1)
978 604
670 –
– –
5,431
2,862
(266)
5 – 42 42
71 –
260
83 140 405 538
1,719 604
44 162 100 210
1,222 106
8,287
4,554
– 9 – –
– –
61
– – – –
(84) (238) (319) (68)
– –
(1,828) –
(4)
(7,939)
(8) (7) (54) (95)
(73) –
(438)
35 66 132 585
1,040 710
4,521
87 151 294 3,202
25,712 1,639
45,534
11 52 113 2,627
5,134 2,074
11,261
46 VAST RESOURCES
256569 Vast Resources R&A pp41-pp50.qxp 11/10/2019 21:36 Page 47
Company
Plant and
machinery
$’000
Fixtures,
fittings and
equipment
$’000
Computer
assets
$’000
Motor
vehicles
$’000
Buildings
and
Improve-
ments
$’000
Cost at 31 March 2017
Additions during the year
Disposals during the year
Cost at 31 March 2018
Additions during the period
Disposals during the period
Cost at 30 April 2019
Depreciation at 31 March 2017
Charge for the year
Disposals during the year
Depreciation at 31 March 2018
Charge for the period
Disposals during the period
Depreciation at 30 April 2019
Net book value at 31 March 2018
Net book value at 30 April 2019
30
–
–
30
–
–
30
30
–
–
30
–
–
30
–
–
11. Investments in subsidiaries
Cost at the beginning of the year
Additions during the year
Cost at the end of the year
5
–
–
5
–
–
5
5
–
–
5
–
–
5
–
–
23
–
–
23
1
–
24
23
–
–
23
–
–
23
–
1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
$’000
58
–
–
58
1
–
59
58
–
–
58
–
–
58
–
1
2019
Company
$’000
1,583
90
1,673
2018
Company
$’000
218
1,365
1,583
The principal subsidiaries of Vast Resources plc, all of which are included in these consolidated Annual Financial
Statements, are as follows:
Country of
registration
Class
Proportion
held
by group
2019
Proportion
held by
group
2018
Nature of
business
Company
African Consolidated Resources
SRL
Millwall International
Investments Limited
Moorestown Limited
Romania
Ordinary
80%
80%
BVI
BVI
Ordinary
100%
100%
Ordinary
100%
100%
Sinarom Mining Group SRL
Romania
Ordinary
100%
100%
Vast Resources Romania Ltd
Vast Resources Zimbabwe
(Private) Limited
United
Kingdom
Zimbabwe
Ordinary
100%
100%
Ordinary
100%
100%
Mining exploration and
development
Holding company
Mining exploration and
development
Mining exploration and
development
Holding company
Mining exploration and
development
The table above shows the principal subsidiaries of the Company. A full list of all group subsidiaries is given in
Note 28, at the end of this report.
VAST RESOURCES 47
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Notes to Financial Statements
continued
12. Investment in joint venture and subsidiary company
On 1 April 2018 the Group acquired a 25.01% interest in Delta Gold (Private) Limited (“Delta”) for US$ 4.5 million
which was held indirectly through the Group’s interest in Dallaglio Investments (Private) Limited (“Dallaglio”).
Delta is incorporated in Zimbabwe and is the owner of the Eureka Gold Mine which at the time of the acquisition
was on care and maintenance. The goodwill arising on this transaction was US$ 0.6 million
The Group previously held a 25.01% interest in a Joint venture, Cordillera (Private) Limited (Cordillera), which
was indirectly held through the Group’s interest in Breckridge Investments (Private) Limited, the operating
company for the Pickstone Peerless mine in Zimbabwe. Cordillera is incorporated in Zimbabwe and its main
interest is the provision of custom milling services to artisanal miners operating in the vicinity of the Pickstone
Peerless Gold Mine. On 1 April 2018 the Joint Venture was fully absorbed into the operations of Breckridge
Investments (Private) Limited.
Both of these investments have been disposed of as part of the Group’s disposal of its gold operations in
Zimbabwe. The associated fixed asset additions associated with these investments are disclosed within the fixed
asset note.
No detailed disclosures have been made of these transactions as, in the opinion of the Directors, they are not
material to the financial statements.
13. Profit after taxation from discontinued operations
On 23rd April 2019, the Group disposed of its remaining 25.01% interest in Dallaglio Investments (Private)
Limited, the holding company for the Pickstone Peerless and Eureka Gold mines in Zimbabwe. On 24th April
2019, the group disposed of its 100% interest in Canape Investments (Private) Limited, the holding company
for its gold investments in Zimbabwe. The aggregate consideration received for these disposals was $3.5 million.
The amounts included within the profit (loss) after taxation from discontinued operations are as follows:
Gain on disposal of operations
Profit after tax from discontinued operations before Zimbabwe dollar devaluation
Profit after tax from discontinued operations - devaluation gains
Total profit after taxation from discontinued operations
30 Apr 2019
Group
$’000
31 Mar 2018
Group
$’000
8,649
2,683
5,715
17,047
–
2,305
–
2,305
48 VAST RESOURCES
256569 Vast Resources R&A pp41-pp50.qxp 11/10/2019 21:36 Page 49
The net assets and non-controlling interests derecognised in arriving at the gain on disposal are as follows:
Non current assets
Property, plant and equipment
Joint venture investments
Total non-current assets
Current assets
Inventories
Trade receivables
Available for sale investments
Cash and cash equivalents
Total current assets
Non Current liabilities
Loans and borrowings
Provisions
Deferred tax liability
Total non-current liabilities
Current liabilities
Trade payables
Loans and borrowings
Total current liabilities
Attributable goodwill
Net assets de-recognised
Consideration received:
Cash
Total consideration received
Gain on disposal
Consideration received
Net assets derecognised
Non-controlling interest de-recognised
Fair value of retained interest
Cumulative gain/loss on financial assets at FVTOCI reclassified on loss of control of subsidiaries
Cumulative exchange differences in respect of net assets of the subsidiaries reclassified from
equity on loss of control of subsidiaries
Gain on disposal
$’000
44,793
–
44,793
3,045
1,276
1,908
6,229
14,873
240
4,386
19,499
1,554
5,743
7,297
566
24,792
3,500
3,500
3,500
(24,792)
29,941
–
–
–
8,649
VAST RESOURCES 49
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Notes to Financial Statements
continued
13. Profit after taxation from discontinued operations continued
The breakdown of the components of profit after tax from discontinued operations in the period is as follows:
30 Apr 2019 31 Mar 2018
Group Group
$’000 $’000
Revenue 31,243 27,590
Cost of sales (18,527) (19,114)
Gross profit 12,716 8,476
Overhead expenses (1,887) (1,925)
Depreciation (3,348) (1,460)
(Loss) profit on disposal of fixed assets (8) 1
Sundry income 670 342
Exchange gains 5,715 –
Other administrative expenses (4,916) (808)
Profit from operations 10,829 6,551
Finance income 2 42
Finance expense (1,014) (494)
Loss on disposal of interest in subsidiary loans – –
Profit before taxation from continuing operations 9,817 6,099
Taxation charge (1,419) (3,794)
Total profit after taxation for the year 8,398 2,305
Other comprehensive income (3) –
Total comprehensive profit for the period 8,395 2,305
Total comprehensive profit attributable to:
The equity holders of the parent company 1,249 613
Non-controlling interest 7,146 1,692
8,395 2,305
Cash generated by/absorbed in:
Operating activities
Investing activities
Financing activities
2019
2018
Continuing
operations
Discontinued
operations
Continuing
operations
Discontinued
operations
(7,872)
(1,348)
5,262
13,226
(11,983)
1,985
(5,131)
(5,437)
7,989
4,517
(2,059)
92
50 VAST RESOURCES
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14. Loans to group companies
Loans to Group companies are repayable on demand. The treatment of this balance as non-current reflects the
Company’s expectation of the timing of receipt.
15. Inventory
Minerals held for sale
Production stockpiles
Consumable stores
16. Receivables
Trade receivables
Other receivables
Short term loans
Prepayments
VAT
Apr 2019
Group
$’000
61
48
304
413
Mar 2018
Group
$’000
1,484
1,425
1,145
4,054
Apr 2019
Company
$’000
Mar 2018
Company
$’000
–
–
–
–
–
–
–
–
Apr 2019
Group
$’000
Mar 2018
Group
$’000
Apr 2019
Company
$’000
Mar 2018
Company
$’000
–
1,502
174
74
787
2,537
94
1,145
789
1,366
2,012
5,406
–
137
224
–
–
361
–
29
50
14
–
93
Of which:
Of which: not impaired as at
30 April 2019 and past due
in the following periods:
Carrying
amount
before
deducting
any
impairment
loss
707
1,704
2,411
Related
impairment
loss
Neither
impaired
Net nor past due
on 30 April
2019
carrying
amount
Not
more than
three
months
More than
three
months
and not
more than More than
six months
six months
707
202
909
–
1,502
1,502
–
1,502
1,539
–
–
–
–
–
–
–
–
–
Trade receivables
Other receivables
At the reporting date, included within VAT receivable is an amount in respect of VAT owed to African
Consolidated Resources SRL of US$ 710,362 (RON 3,014,349) The amount represents VAT paid on the Baita Plai
Mine’s care and maintenance operations. As reported last year, ANAF, the Romanian revenue authority had
refused to accept aforesaid amount as a legitimate VAT receivable as a mining licence was not then in place for
Baita Plai Mine. On 15th October 2018, the mining licence was granted. The Romanian Court has instructed an
independent VAT audit and, subsequent to the reporting date, the audit has been completed satisfactorily and
supports the Group’s claim for repayment.
VAST RESOURCES 51
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Notes to Financial Statements
continued
17. Loans and borrowings
Non-current secured borrowings consist of:
Non-current
Secured borrowings
Unsecured borrowings
less amounts payable in less than 12 months
Current
Secured borrowings
Unsecured borrowings
Bank overdrafts
Current portion of long-term borrowings
Total loans and borrowings
Non-current secured borrowings consist of:
Apr 2019
Group
$’000
Mar 2018
Group
$’000
Apr 2019
Company
$’000
Mar 2018
Company
$’000
4,043
–
–
4,043
978
498
–
–
1,476
5,519
8,149
14,838
(352)
22,635
–
2,664
1,315
352
4,331
26,966
–
–
–
–
309
–
–
–
309
–
–
–
–
–
–
–
–
•
•
US$ 4,000,000 (2018: US$ 4,000,000) secured offtake finance from Mercuria Energy Trading SA. The loan
is secured by a pledge on 49.9% of the shares of the Group’s subsidiary Sinarom Mining Group SRL and
bore annual interest of 9.4%.
US$ 43,449 (2018: US$ 69,131) asset financing loans secured on the underlying movable assets belonging
to ACR SRL.
Current secured borrowing consists of:
•
US$ 978,453 (2018: US$ 4,080,000) loan from Sub-Sahara Goldia Investments Ltd secured by a pledge over
50.1% of the shares of the Group’s subsidiary Sinarom Mining Group SRL. The loan bears interest at 12%
per annum and is repayable within the year.
Current unsecured borrowing consists of:
•
•
US$ 189,072 (2018: US$ 220,156) loans from the non-controlling interests in African Consolidated
Resources SRL, the holder of the rights to the Baita Plai Mine. The loans from the non-controlling interests
are interest free and have no fixed terms of repayment. There is no expectation that this loan will be called.
US$ 309,635 (2018: nil) loan from M Semere bearing an interest rate of 6%. There is no expectation that
this loan will be called.
52 VAST RESOURCES
256569 Vast Resources R&A pp51-pp63.qxp 11/10/2019 21:37 Page 53
Reconciliation of liabilities arising from financing activities
Non cash changes
Amortised
1 Apr Cash - finance
2018 flows charges
2019 Group $’000s $’000s $’000s
Long-term borrowings 22,635 (3,754) 412
Short-term borrowings 4,331 7,896 1,435
Total liabilities from financing
activities 26,966 4,142 1,847
Loans Disposal
repaid of
Accrued
interest
Exchange in other
in shares liabilities adjustments payables
$’000s $’000s
35 (412)
(5,543) –
$’000s $’000s
– (14,873)
(900) (5,743)
30 Apr
2019
$’000s
4,043
1,476
(900) (20,616)
(5,508) (412)
5,519
Non cash changes
Amortised
1 Apr
finance
2017 Cashflows charges
$’000s $’000s
2018 Group $’000s
3,923 708
Long-term borrowings 3,166
(98) 494
Short-term borrowings 3,935
Loss Loan
on loan disposal
disposal Cashflows*
$’000s $’000s
12,538 2,300
–
31 Mar
2018
$’000s
22,635
4,331
Total liabilities from financing
activities 7,101
3,825 1,202
12,538 2,300
26,966
* Loan disposal cashflows are included in investing activities
Reconciliation of external interest costs
Amortised finance charges – short-term borrowings
Amortised finance charges – long-term borrowings
Total external interest for the period
18. Trade and other payables
Trade payables
Other payables
Other taxes and social security taxes
Accrued expenses
Apr 2019
Group
$’000
1,193
1,033
1,027
217
3,470
Mar 2018
Group
$’000
5,719
769
980
91
7,559
Trade payables
Other payables
Amount
30 days
60 days
90 days
120 days
1,193
1,033
365
709
57
171
170
8
105
4
Maturity profile for trade and other payables
2019
Group
$’000s
1,435
412
1,847
2018
Group
$’000s
494
708
1,202
Apr 2019
Company
$’000
Mar 2018
Company
$’000
288
470
10
–
768
186
106
28
–
320
150 days
or more
496
141
VAST RESOURCES 53
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Notes to Financial Statements
continued
19. Provisions
Provision for rehabilitation of mining properties
– Provision brought forward from previous periods
– Derecognised on disposal of subsidiary
Apr 2019
Group
$’000
Mar 2018
Group
$’000
Apr 2019
Company
$’000
Mar 2018
Company
$’000
1,397
(908)
489
1,095
302
1,397
–
–
–
–
–
–
As more fully set out in the Statement of Accounting Policies on page 39, the Group provides for the cost of
the rehabilitation of a mining property on the cessation of mining. Provision for this cost is recognised from the
commencement of mining activities.
This provision accounts for the estimated full cost to rehabilitate the mine at Manaila according to good practice
guidelines in the country where the mine is located, which may involve more than the stipulated minimum legal
commitment. The comparative figures include provisions in respect of Pickstone Peerless which was divested
in April 2019.
When accounting for the provision the Group recognises a provision for the full cost to rehabilitate the mine
and a matching asset accounted for within the non-current mining asset.
20. Financial instruments – risk management
Significant accounting policies
Details of the significant accounting policies in respect of financial instruments are disclosed on page 35. The
Group’s financial instruments comprise available for sale investments, cash and items arising directly from its
operations such as other receivables, trade payables and loans.
Financial risk management
The Board seeks to minimise its exposure to financial risk by reviewing and agreeing policies for managing each
financial risk and monitoring them on a regular basis. No formal policies have been put in place in order to hedge
the Group and Company’s activities to the exposure to currency risk or interest risk; however, the Board will
consider this periodically. No derivatives or hedges were entered into during the year.
The Group and Company is exposed through its operations to the following financial risks:
•
•
•
Credit risk
Market risk (includes cash flow interest rate risk and foreign currency risk)
Liquidity risk
The policy for each of the above risks is described in more detail below.
The principal financial instruments used by the Group, from which financial instruments risk arises are as follow:
•
•
•
•
Receivables
Cash and cash equivalents
Trade and other payables (excluding other taxes and social security) and loans
Available for sale investments
The table below sets out the carrying value of all financial instruments by category and where applicable shows
the valuation level used to determine the fair value at each reporting date. The fair value of all financial assets and
financial liabilities is not materially different to the book value.
54 VAST RESOURCES
256569 Vast Resources R&A pp51-pp63.qxp 11/10/2019 21:37 Page 55
Loans and receivables
Cash and cash equivalents
Receivables
Loans to Group Companies
Available for sale financial assets
Available for sale investments (valuation level 1)
Other liabilities
Trade and other payables (excl. short term loans)
Loans and borrowings
2019
Group
$’000
569
2,537
–
–
3,470
5,519
2018
Group
$’000
1,300
5,406
–
13
7,559
26,966
2019
Company
$’000
218
361
34,568
–
768
309
2018
Company
$’000
208
93
25,179
3
320
–
Credit risk
Financial assets, which potentially subject the Group and the Company to concentrations of credit risk, consist
principally of cash, short-term deposits and other receivables. Cash balances are all held at recognised financial
institutions. Other receivables are presented net of allowances for doubtful receivables. Other receivables
currently form an insignificant part of the Group’s and the Company’s business and therefore the credit risks
associated with them are also insignificant to the Group and the Company as a whole.
The Company has a credit risk in respect of inter-company loans to subsidiaries. The recoverability of these
balances is dependent on the commercial viability of the exploration activities undertaken by the respective
subsidiary companies. The credit risk of these loans is managed as the directors constantly monitor and assess
the viability and quality of the respective subsidiary’s investments in intangible mining assets.
Maximum exposure to credit risk
The Group’s maximum exposure to credit risk by category of financial instrument is shown in the table below:
Cash and cash equivalents
Receivables
2019
Carrying
value
$’000
569
2,537
2019
Maximum
exposure
$’000
1,620
10,454
2018
Carrying
value
$’000
1,300
5,406
2018
Maximum
exposure
$’000
1,817
6,941
The Company’s maximum exposure to credit risk by class of financial instrument is shown in the table below:
Cash and cash equivalents
Receivables
Loans to Group Companies
Market risk
2019
Carrying
value
$’000
218
361
34,568
2019
Maximum
exposure
$’000
8,964
342
36,237
2018
Carrying
value
$’000
208
93
25,179
2018
Maximum
exposure
$’000
1,663
1,540
40,132
Cash flow interest rate risk
The Group has adopted a non-speculative policy on managing interest rate risk. Only approved financial
institutions with sound capital bases are used to borrow funds and for the investments of surplus funds.
VAST RESOURCES 55
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Notes to Financial Statements
continued
20. Financial instruments – risk management continued
The Group and the Company seeks to obtain a favourable interest rate on its cash balances through the use of
bank deposits. At the reporting date, the Group had a cash balance of $0.569 million (2018: $1.300 million)
which was made up as follows:
Sterling
United States Dollar
Euro
Lei (Romania)
Zimbabwe Dollar
2019
Group
$’000
218
205
–
31
115
569
2018
Group
$’000
106
1,131
1
62
–
1,300
At the reporting date, the Company had a cash balance of $0.218 million (2018: $0.208 million) which was made
up as follows:
Sterling
United States Dollar
Euro
Lei (Romania)
2019
Company
$’000
2018
Company
$’000
218
–
–
–
218
106
102
–
–
208
The Group had interest bearing debts at the current year end of US$ 5.330 million (2018: US$ 9.464 million).
These are made up as follows:
Interest
rate
9.4%
12%
6%
12%
Secured long-term loans
Secured short-term loans
Unsecured loans
Bank overdraft
These loans are repayable as follows:
– Within 1 year
– Between 1 and 2 years
– In more than 2 years
2019
Group
$’000
4,043
978
309
–
5,330
1,287
4,043
–
2018
Group
$’000
8,149
1,315
9,464
2,000
3,667
3,797
2019
Company
$’000
2018
Company
$’000
–
309
–
309
309
–
–
–
–
–
–
–
–
Borrowings of US$ 4 million carry a floating interest rate with the remainder having fixed rates. An increase in
interest rates of 1% would increase the annual finance expense by US$ 40,000.
56 VAST RESOURCES
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Foreign currency risk
Foreign exchange risk is inherent in the Group’s and the Company’s activities and is accepted as such. The
majority of the Group’s expenses are denominated in United States Dollars and therefore foreign currency
exchange risk arises where any balance is held, or costs incurred, in currencies other than United States Dollars.
At 30 April 2019 and 31 March 2018, the currency exposure of the Group was as follows:
At 30 April 2019
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Available for sale investments
At 31 March 2018
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Available for sale investments
Sterling
$’000
US Dollar
$’000
Euro
$’000
218
162
(320)
–
106
14
(258)
–
205
387
(902)
–
1,131
4,026
(3,246)
13
–
–
–
–
1
–
(42)
–
Other
$’000
146
1,989
(2,271)
–
62
1,366
(4,013)
–
Total
$’000
569
2,537
(3,493)
–
1,326
5,960
(7,559)
13
The effect of a 10% strengthening of Sterling against the US dollar at the reporting date, all other variables
held constant, would have resulted in decreasing post tax losses by $5,952 (2018: $13,527 decrease). Conversely
the effect of a 10% weakening of Sterling against the US dollar at the reporting date, all other variables held
constant, would have resulted in increasing post tax losses by $5,952 (2018: $13,527 decrease).
At 30 April 2019 and 31 March 2018, the currency exposure of the Company was as follows:
Sterling
$’000
US Dollar
$’000
Euro
$’000
Other
$’000
At 30 April 2019
Cash and cash equivalents
Trade and other receivables
Loans to Group companies
Trade and other payables
Available for sale investments
At 31 March 2018
Cash and cash equivalents
Other receivables
Loans to Group companies
Trade and other payables
Available for sale investments
218
137
(320)
–
106
14
1,286
(258)
–
–
943
34,568
(470)
102
79
22,686
(82)
3
–
–
–
–
–
–
1,207
–
–
–
–
–
–
–
–
–
–
–
–
Total
$’000
218
1,080
34,568
(790)
–
208
93
25,179
(340)
3
Liquidity risk
Any borrowing facilities are negotiated with approved financial institutions at acceptable interest rates. All
assets and liabilities are at fixed and floating interest rate. The Group and the Company seeks to manage its
financial risk to ensure that sufficient liquidity is available to meet the foreseeable needs both in the short and
long term. See also references to Going Concern disclosures in the Strategic Report on page 11.
As set out in Note 18, of the consolidated trade and other payables balance of $2.226 million, $1,302 million is
due for payment within 60 days of the reporting date. The maturity profile of interest bearing debts are
highlighted above.
VAST RESOURCES 57
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Notes to Financial Statements
continued
20. Financial instruments – risk management continued
Capital
The objective of the Directors is to maximise shareholder returns and minimise risks by keeping a reasonable
balance between debt and equity. In previous years the Company and Group has minimised risk by being purely
equity financed. In the current year, the Group has assumed debt risk but has kept the net debt amount as low
as possible.
The Group’s debt to equity ratio is 93.4% (2018: 145.7%), calculated as follows:
Loans and borrowings
Less: cash and cash equivalents
Net debt
Total equity
Debt to capital ratio (%)
21. Share capital
As at 31 March 2017
Issued during the year *
As at 31 March 2018
Issued during the year *
As at 30 April 2019
Apr 2019
$000’s
5,519
(569)
4,950
5,302
93.4%
Ordinary 0.1p
No of
shares
Nominal
value
Deferred 0.9p
No of
shares
Nominal
value
4,663,404,459
461,882,523
5,125,286,982
2,819,884,329
6,570 863,562,664
–
620
7,190 863,562,664
–
3,662
7,945,171,311
10,852 863.,562,664
12,850
–
12,850
–
12,850
Mar 2018
$’000
26,966
(1,300)
25,666
17,614
145.7%
Share
premium
74,802
2,435
77,237
4,448
81,685
* Details of the shares issued during the year are as shown in the table below and in the Statement of Changes of Equity on pages 25-26.
There were no shares reserved for issue under share options at 30 April 2019 (2018: nil).
The deferred shares carry no rights to dividends or to participate in any way in the income or profits of the
Company. They may receive a return of capital equal to the amount paid up on each deferred share after the
ordinary shares have received a return of capital equal to the amount paid up on each ordinary share plus
£10,000,000 on each ordinary share, but no further right to participate in the assets of the Company. The
Company may, subject to the Statutes, acquire all or any of the deferred shares at any time for no consideration.
The deferred shares carry no votes.
The ordinary shares carry all the rights normally attributed to ordinary shares in a company subject to the rights
of the deferred shares.
See also Note 27 on page 67 for details of share issues after the reporting date.
58 VAST RESOURCES
256569 Vast Resources R&A pp51-pp63.qxp 11/10/2019 21:37 Page 59
Date of issue
No of shares
Issue
price
(pence)
Purpose of issue
2018
4 Apr 17
1 Jun 17
14 Jun 17
26 Jul 17
9 Oct 17
17 Oct 17
27 Oct 17
30 Oct 17
1 Nov 17
3 Nov 17
21 Nov 17
21 Nov 17
27 Nov 17
6 Dec 17
11 Dec 17
13 Dec 17
22 Dec 17
29 Dec 17
30 Jan 18
1 Feb 18
22 Feb 18
9 Mar 18
23 Mar 18
6,116
20,000,000
51,386
225,017
2,228
2,112
1,061,060
183,180
265,161
36,794
190,476,190
1,000,000
807,018
382,062
234,261,876
123,553
1,250,956
163,147
541,204
5,799
8,000,000
37,664
3,000,000
461,882,523
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.525
0.5
0.5
0.5
0.525
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Issued for cash to investors
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Open offer to existing shareholders
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
VAST RESOURCES 59
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Notes to Financial Statements
continued
21. Share capital continued
Date of issue
2019
5 Apr 2018
10 May 2018
15 May 2018
23 May 2018
31 May 2018
22 Jun 2018
27 Jun 2018
24 Jul 2018
2 Aug 2018
7 Aug 2018
28 Aug 2018
29 Aug 2018
29 Aug 2018
29 Sep 2018
12 Oct 2018
16 Oct 2018
18 Oct 2018
18 Oct 2018
2 Nov 2018
5 Dec 2018
7 Dec 2018
18 Dec 2018
4 Jan 2019
18 Jan 2019
4 Feb 2019
13 Feb 2019
13 Feb 2019
13 Feb 2019
13 Feb 2019
4 Mar 2019
4 Mar 2019
12 Apr 2019
12 Apr 2019
12 Apr 2019
Issue
price
(pence)
Purpose of issue
No of shares
8,200,000
244,240
513,456
300,000
539,280
78,701
238,095,238
2,426,640
400,000
1,384,087
3,000,000
14,043
133,914,127
354,006
13,920
57,331
70,847,785
16,666,666
188,679,245
153,810
576,835
68,000,000
13,754
164,469,356
0.5
0.5
0.5
0.5
0.5
0.5
0.525
0.5
0.5
0.5
0.5
0.5
0.645
0.5
0.5
0.5
0.6
0.6
0.53
0.5
0.5
0.1
0.5
0.24
255,604,120
0.12
550,000,000
74,074,074
29,629,629
10,000,000
550,000,000
7,189,542
407,407,407
7,407,407
29,629,630
2,819,884,329
0.135
0.135
0.135
0.135
0.153
0.153
0.135
0.135
0.135
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Placing
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Subscription
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Placing
Exercise of open offer warrants
Placing
Exercise of open offer warrants
Exercise of open offer warrants
Subscription (Bergen convertible security)
Exercise of open offer warrants
Exercise of conversion rights
(Bergen convertible security)
Exercise of conversion rights
(Bergen convertible security)
Placing
Subscription
Subscription
Subscription
Placing
Subscription
Placing
Subscription
Subscription
Directors and Management financing agreement
As previously reported, on 6 January 2016 the Directors of the Company, together with certain senior managers,
subscribed an aggregate amount of £0.5 million for new ordinary shares of 0.1p each in the Company, together
with one warrant for each share issued; these warrants carry an entitlement either to one share at a price of
130 per cent of the issue price of the shares to which the warrant related or to a number of shares to be
determined by a calculation based on a Black Scholes valuation of the shares at the time of exercise. 62,500,000
new Ordinary Shares were issued by the Company together with 62,500,000 warrants.
As at 31 March 2018, the Directors and senior managers held 5,208,313 unexercised warrants. None of these
have been exercised in the current year and all remain unexercised at 30 April 2019. The last date for exercise
is 31 March 2021.
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Existing shareholders financing agreement
As reported in the report for the year to 31 March 2016, on 4 March 2016 the Company entered into an
agreement with a number of existing shareholders (the “Investors“) for their subscription for up to £0.8 million,
on similar terms as those agreed with the Directors and Management, detailed above. A total of 190,211,632
shares were subscribed for; in addition, 190,211,632 warrants were issued.
At 31 March 2018 there remained 6,613,756 warrants unexercised by these investors. None of these have been
exercised in the current year and all remain unexercised at 30 April 2019. The last date for exercise is 31 March
2021.
22. Share based payments
Equity – settled share based payments
The Company has granted share options and warrants to Directors, staff and consultants.
In June 2015, the Company also established a Share Appreciation Scheme to incentivise Directors and senior
executives. The basis of the Scheme is to grant a fixed number of ‘share appreciation rights’ (SARs) to
participants. Each SAR is credited rights to receive at the discretion of the Company ordinary shares in the
Company or cash to a value of the difference in the value of a share at the date of exercise of rights and the
value at date of grant. The SARS are subject to various performance conditions.
The tables below reconcile the opening and closing number of SAR’s in issue at each reporting date:
Issued during Lapsed during
year
year
Exercised
during year
Exercise
price
Options
0.3p
0.45p
0.5p
0.5p
0.7p
0.7p
In issue
at 31 March
2018
–
5,000,000
50,500,000
50,500,000
24,500,000
28,500,000
20,000,000
–
–
–
–
–
–
–
(2,500,000)
(2,500,000)
(24,500,000)
–
159,000,000
20,000,000
(29,500,000)
Exercise
price
Options
In issue
at 31 March
2017
Issued during Lapsed during
year
year
Exercised
during year
0.45p
0.5p
0.5p
0.7p
0.7p
–
–
56,500,000
40,500,000
5,000,000
50,500,000
50,500,000
–
–
(32,000,000)
(12,000,000)
97,000,000
106,000,000
(44,000,000)
–
–
–
–
–
–
–
–
–
–
–
–
–
In issue
at 30 April
2019
20,000,000
5,000,000
48,000,000
48,000,000
–
28,500,000
149,500,000
In issue
at 31 March
2018
5,000,000
50,500,000
50,500,000
24,500,000
28,500,000
159,000,000
Final exercise date
March 2022
June 2020
March 2022
March 2023
March 2019
March 2020
Final exercise date
June 2020
March 2022
March 2023
March 2019
March 2020
VAST RESOURCES 61
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Notes to Financial Statements
continued
22. Share based payments continued
The tables below reconcile the opening and closing number of share options and warrants in issue at each
reporting date:
Exercise
price
Warrants
0.4p
0.5p
variable
variable
variable
In issue
at 31 March
2018
5,425,000
547,274,243
14,583,250
6,613,756
573,896,249
565,000,000
1,138,986,249
* Extended from June 2019
Exercise
price
Warrants
0.4p
0.5p
0.5p
0.5p
variable
variable
In issue
at 31 March
2017
5,425,000
6,659,903
564,418,700
13,340,097
14,583,250
6,613,756
Issued during Lapsed during
year
year
Exercised
during year
In issue
at 30 April
2019
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5,425,000
(18,270,103) 529,004,140
14,583,250
6,613,756
–
–
(18,270,103) 555.626.146
565,000,000
–
(18,270,103) 1,120,626,146
Issued during Lapsed during
year
year
Exercised
during year
In issue
at 31 March
2018
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(6,659,903)
5,425,000
–
(17,144,457) 547,274,243
(13,340,097)
–
14,583,250
–
6,613,756
–
(37,144,457) 573,896,249
565,000,000
–
(37,144,457) 1,138,896,249
Final exercise date
October 2019
December 2019*
January 2021
March 2021
See note*
Final exercise date
October 2019
December 2017
June 2019
December 2017
January 2021
March 2021
See note
variable
611,040,706
–
–
565,000,000
611,040,706
565,000,000
Note: These warrants are only exercisable in the event of a default in repayment of the Mercuria Tranche A pre-payment off-take facility
of US$ 4,500,000 (Mercuria Warrants).
Outstanding at the beginning of the year
Granted during the year
Lapsed during the year
Exercised during the year
Outstanding at the end of the year
Exercisable at the end of the year
2019
2018
Weighted
average
exercise price
(pence)
0.44
0.30
0.44
–
0.45
0.43
Weighted
average
exercise price
(pence)
0.43
0.50
0.75
–
0.44
0.41
Number
732,896,249
20,000,000
(47,770,103)
(18,270,103)
686,856,043
613,856,043
Number
708,040,706
106,000,000
(44,000,000)
37,114,457
732,896,249
701,040,706
The weighted average remaining lives of the SARs, share options or warrants outstanding at the end of the
period is 34 months (2018: 22 months). Of the 686,856,043 SARs, options and warrants outstanding at 30 April
2019 (2018: 732,896,249), 613,856,043 (2018: 701,040,706) are fully vested in the holders and are exercisable
at that date.
62 VAST RESOURCES
256569 Vast Resources R&A pp51-pp63.qxp 11/10/2019 21:37 Page 63
Fair value of share options
The fair values of share options and warrants granted have been calculated using the Black Scholes pricing
model which takes into account factors specific-to-share incentive plans such as the vesting periods of the plan,
the expected dividend yield of the Company’s shares and the estimated volatility of those shares. Based on the
above assumptions, the fair values of the options granted are estimated to be:
Share
Option or
Warrant
Value
variable
variable
0.5p
0.5p
0.5p
variable
0.4p
Grant
date
Apr 16
Jul-16
Jul-16
Aug-16
Aug-16
Oct-16
Oct-16
Share
price
at date
of grant
0.240p
0.360p
0.315p
0.265p
0.290p
0.280p
0.320p
Vesting
periods
Mar-21
Mar-21
Jun-19
Jun-19
Jun-19
Mar-21
Oct-19
Volatility
Life
(years)
Dividend
yield
135%
135%
76%
76%
76%
135%
76%
5.00
5.00
4.11
4.01
3.97
5.00
3.97
nil
nil
nil
nil
nil
nil
nil
Risk free
interest
rate
1.5%
1.5%
0.63%
0.34%
0.34%
1.5%
0.18%
Fair value
.2055p
.3082p
0.5670p
0.0522p
0.0664p
0.2397p
0.1012p
Volatility has been based on historical share price information. A higher rate of volatility is used when
determining the fair value of certain options in order to reflect the special conditions attached thereto.
Based on the above fair values the expense arising from equity-settled share options and warrants made was
$263,967 (2018: $26,747).
Cash-settled share-based payments
The Directors of the Company had set up an Employee Benefit Trust (EBT) in which a number of employees and
directors were participants (the ‘Participants’). The EBT held shares on behalf of Participants until such time as
those Participants exercised their right to require the EBT to sell the shares. On the sale of the shares the
Participants would have received the appreciation of the value in the shares above the market price on the date
that the shares were purchased by the EBT, subject to the first 5% in growth in the share price, on an annual
compound basis, being retained by the EBT. The Participants were to pay 0.01p per share to acquire their rights.
In view of the large reduction in the Company’s share price since the EBT was set up, the value of the rights of
the Participants under the EBT has become negligible, and accordingly the EBT has been terminated by the sale
of the shares and the application of the sale proceeds in repayment of the loan by The Company to the EBT.
In the event of an increase in the Company’s share price to a figure substantially in excess of 6p, the Company
would have a liability to Participants equal to the rights that the Participants would have had under the EBT.
The EBT rights of Participants are set out in the table below.
Exercise
price
Outstanding
at 31 March
2018
Exercised
during last
13 months
Lapsed
during last
13 months
Granted
during last
13 months
Outstanding
at 30 April
2019
Date exercisable from
8.75p
8.75p
9.00p
9.00p
6.00p
6.00p
6,000,000
6,000,000
2,500,000
2,500,000
7,750,000
7,750,000
32,500,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6,000,000
6,000,000
2,500,000
2,500,000
7,750,000
7,750,000
32,500,000
July 2010
July 2011
August 2011
August 2012
August 2012
August 2013
As at 30 April 2019 a total of 32,500,000 of the EBT participation rights were exercisable.
VAST RESOURCES 63
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Notes to Financial Statements
Notes to Financial Statements
continued
22. Share based payments continued
Exercise
price
Outstanding
at 31 March
2017
Exercised
during last
12 months
Lapsed
during Last
12 months
Granted
during last
12 months
Outstanding
at 31 March
2018
Date exercisable from
8.75p
8.75p
9.00p
9.00p
6.00p
6.00p
6,000,000
6,000,000
2,500,000
2,500,000
7,750,000
7,750,000
32,500,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6,000,000
6,000,000
2,500,000
2,500,000
7,750,000
7,750,000
32,500,000
July 2010
July 2011
August 2011
August 2012
August 2012
August 2013
As at 31 March 2018 a total of 32,500,000 of the EBT participation rights were exercisable.
Fair value of Participants’ rights
The fair values of the rights granted to participants under the EBT have been calculated using a Black Scholes
valuation model. Based on the assumptions set out in the table below, as well as the limitation on the growth
in share price attributable to the participants (as set out in the table above) the fair-values are estimated to be:
Rights exercisable from:
Jul 2010
Jul 2011
Aug 2011
Aug 2012
Aug 2012
Aug 2013
Grant date
Validity of grant
Vesting periods
Share price at date of grant
Volatility
Dividend yield
Risk free investment rate
Fair value
Oct 2010
10 years
Aug 2009
10 years
Aug 2009
10 years
Oct 2010
10 years
Aug 2009 – Aug 2009 – Oct 2010 – Oct 2010 –
Aug 2012
9.00p
51%
Nil
0.65%
Nil
Aug 2011
9.00p
51%
Nil
0.65%
Nil
Jul 2010
8.75p
51%
Nil
0.65%
Nil
Jul 2011
8.75p
51%
Nil
0.65%
Nil
Sep 2011
10 years
Sep 2011–
Aug 2012
6.00p
51%
Nil
0.65%
Nil
Sep 2011
10 years
Sep 2011–
Aug 2013
6.00p
51%
Nil
0.65%
Nil
The Group has recorded liabilities in respect of the Participants’ rights of $nil and $nil in 2018 and 2019. Fair
value is determined by using the Black Scholes model using the assumptions noted in the above table. The Group
recorded total expenses of $nil and $nil in 2018 and 2019, respectively. The total intrinsic value at 31 December
2018 and 2019 was $nil and $nil, respectively.
Volatility has been calculated by reference to historical share price information.
Warrant and Share option expense
Warrant and share option expense:
– In respect of remuneration contracts
– In respect of financing arrangements
Total expense / (credit)
2019
Group
$’000
264
–
264
2018
Group
$’000
27
–
27
23. Reserves
Details of the nature and purpose of each reserve within owners’ equity are provided below:
•
•
•
Share capital represents the nominal value at 0.1p each of the shares in issue.
Share premium represents the balance of consideration received net of fund raising costs in excess of the
par value of the shares.
The share options reserve represents the accumulated balance of share benefit charges recognised in
respect of share options granted by the Company, less transfers to retained losses in respect of options
exercised or lapsed.
64 VAST RESOURCES
256569 Vast Resources R&A pp64-end.qxp 11/10/2019 21:37 Page 65
•
•
•
The foreign currency translation reserve represents amounts arising on the translation of the Group and
Company financial statements from Sterling to United States Dollars, as set out in the Statement of
Accounting Policies on page 36, prior to the change in functional currency to United States Dollars,
together with cumulative foreign exchange differences arising from the translation of the Financial
Statements of foreign subsidiaries; this reserve is not distributable by way of dividends.
The available for sale reserve represents the gains/(losses) arising on recognising financial assets classified
as available for sale at fair value.
The retained deficit reserve represents the cumulative net gains and losses recognised in the Group
statement of comprehensive income.
24. Non-controlling Interests
The non-controlling interests (NCI) in Dallaglio Investments (Private) Limited and its subsidiaries, together with
the NCI in Ronquil Enterprises (Private) Limited, were de-recognised on the disposal of the Group’s interests in
both Companies, as more fully set out in Note 13.
African Consolidated Resources SRL is an 80% owned subsidiary of the Company which also has an NCI. This
follows the merger of this company with Mineral Mining in February 2016.
Summarised financial information for these three entities, before intra-group eliminations, is presented below
together with amounts attributable to NCI:
Investments &
subsidiaries
$000’s
For the period ended 30 April 2019
African
Dallaglio Consolidated
Resources
SRL
$000’s
Ronquil
Enterprises
(Private)
Limited Total NCI
$000’s $000’s
Revenue 31,243 418 – 31,661
Cost of sales (18,527) (219) – (18,746)
Gross Profit (loss) 12,716 199 – 12,915
Overhead expenses (750) (1,764) (17) (2,531)
Operating profit (loss) 11,966 (1,565) (17) 10,384
Finance expense (1,012) (3) – (1,015)
Loss before tax 10,954 (1,568) (17) 9,369
Tax expense / credit (1,408) – – (1,408)
Profit (loss) after tax 9,546 (1,568) (17) 7,961
Total comprehensive profit (loss) allocated to NCI 7,155 (293) (9) 6,853
Cash flows from operating activities 13,226 (574) – 12,652
Cash flows from investing activities (13,575) (1,690) – (15,265)
Cash flows from financing activities 1,985 2,264 – 4,249
Net cash inflows/(outflows) 1,636 – – 1,636
As at 30 April 2019
Assets:
Property plant and equipment – 7,125 – 7,125
Inventory – 8 – 8
Receivables – 830 – 830
Liabilities:
$000’s $000’s $000’s
$000’s
Loans and other borrowings – 700 – 700
Trade and other payables – 1,479 – 1,479
Accumulated non-controlling interests – (41) – (41)
VAST RESOURCES 65
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Notes to Financial Statements
continued
24. Non-controlling Interests continued
African
Consolidated
Resources
Dallaglio and
subsidiaries
SRL
$000’s
For the year ended 31 March 2018 $000’s
Ronquil
Sinarom Enterprises
Mining (Private)
Group SA Limited Total NCI
$000’s $000’s $000’s
Revenue 27,590 664 3,098 – 31,352
Cost of sales (19,114) – (4,298) – (23,412)
Gross Profit (loss) 8,475 664 (1,200) – 7,939
Administrative expenses (1,567) (653) (1,514) – (3,734)
Operating profit (loss) 6,908 11 (2,714) – 4,205
Finance expense (419) (1) (10) (21) (451)
Loss before tax 6,489 10 (2,724) (21) 3,754
Tax expense/credit (3,794) – – – (3,794)
Profit (loss) after tax 2,695 10 (2,724) (21) (40)
Total comprehensive profit (loss)
allocated to NCI 1,702 3 125 (10) 1,820
Cash flows from operating activities 5,984 (1,720) 1,105 – 5,369
Cash flows from investing activities (6,190) (1,023) (2,036) – (9,249)
Cash flows from financing activities – 2,745 1,663 – 4,408
Net cash inflows/(outflows) (206) 2 732 – 528
As at 31 March 2018 $000’s
Assets:
$000’s
$000’s $000’s $000’s
Intangible assets – (1) – – (1)
Property plant and equipment 15,905 6,501 5,184 – 27,590
Investment in joint venture 559 – – – 559
Inventory 2,883 12 1,094 – 3,989
Receivables 4,302 845 521 25 5,693
Cash and cash equivalents 272 3 763 – 1,038
Liabilities: – –
Loans and other borrowings 4,730 8,719 12,487 – 25,936
Trade and other payables 2,336 835 2,572 – 5,743
Deferred tax liability 3,330 – – – 3,330
Provisions 877 – 521 – 1,398
Accumulated non-controlling interests 20,348 252 – 2,447 23,047
25. Related party transactions
Company and group
Directors and key management emoluments are disclosed in notes 6 and 7.
Group
The non-controlling interest in African Consolidated Resources SRL, where 20% of the shareholding of the
subsidiary is held by third parties (the “AP Group”), consisting as to a majority of a director and senior executives
of the group, namely:
Roy Tucker
Andrew Prelea
Senior Romanian management
Non-related party
(Director)
(Director)
2%
8%
2%
8%
At the reporting date, there was an amount owing by African Consolidated Resources SRL to the AP Group of
$91,656 (2018: $165,399). At the reporting date, there was an amount owing by African Consolidated Resources
SRL to the individual related members of the AP Group, totalling $65,606 (2018: $78,348).
66 VAST RESOURCES
256569 Vast Resources R&A pp64-end.qxp 11/10/2019 21:37 Page 67
At the reporting date, there was an amount owing by African Consolidated Resources SRL to Ozone Homes SRL (Ozone)
of US$ 9,568 (2018: US$16,727) in respect of transactions undertaken by Ozone in 2014. Ozone is a company controlled
by Andrew Prelea, the Group CEO and senior Group executive in Romania.
During the year, the company had a service contract with Roy Tucker to provide office premises and associated services
totalling US$ 25,420 including VAT.
26. Contingent liabilities and capital commitments
Capital commitments
The Group acquired an effective 29.41% economic interest through EMA Resources Ltd (`EMA’) in a brown field
perimeter in the `Golden Quadrilateral’ of Western Romania on which historic work has demonstrated
prospectivity for gold and polymetallic minerals. The Group is undertaking exploration on behalf of the
perimeter owners with a view to establishing a JORC resource sufficient to justify an independent IPO. To date
the Group has arranged US$ 1 million third party financing on behalf of the venture in the form of convertible
debt to fund a drilling and assay programme. This programme is underway and is anticipated to deliver sufficient
information to support an Inferred JORC Mineral Resource for gold and other polymetallic minerals including
silver, copper, lead and zinc in one or more of several distinct breccia pipes.
Of the US$ 1 million convertible funding, the Company has committed to repay US$ 750,000 to a convertible
debt investor in EMA Resources Limited (‘EMA’) (the owner of the Blueberry Project) on 31st December 2019
in the event the investor elects not to convert into shares in EMA. Such an event might arise if the assay results
are unsatisfactory and / or the planned IPO of EMA has not taken place. As explained in more detail in the
Strategic Report, current indications are that the assays are encouraging and it is anticipated that the project
will continue to support the necessary third-party financing beyond 31 December 2019 and to the conclusion
of the drilling and assay programme.
27. Events after the reporting date
Exercise of warrants
Warrants were exercised, and shares issued, as follows:
Date
21 June 2019
7 August 2019
Warrants exercised
Shares issued
1,221
244
1,221
244
Warrant security to Mercuria
Pursuant to the terms of the Warrant Instrument between the Company and Mercuria dated 13 March 2018,
warrants were issued to Mercuria to subscribe for shares in the Company up to a further aggregate nominal
amount of £1,750,000 (in addition to the existing warrants to subscribe for shares in the Company for a nominal
amount of £565,000 already granted in connection with the Warrant Instrument). These warrants have been
issued to Mercuria as security for the Tranche A advance of US$4,500,000 under the Mercuria Pre-payment
Agreement and are only exercisable in the event of a default thereunder.
Share placings and subscriptions
On 30 May the Company announced that it had raised, in aggregate, £900,000 before costs through a placing
of 775,862,068 ordinary shares of 0.1p in the Company at a price of 0.116p per share.
On 8 August the Company announced that it had raised, in aggregate, £655,000 (£625,000 after costs) through
a placing of 595,454,545 ordinary shares of 0.1p in the Company at a price of 0.11p per share. The Subscription
was undertaken by a new institutional investor, to whom it has been agreed to issue 17,000,000 warrants to
subscribe for Ordinary Shares in the Company at an exercise price of 0.13p per share and 17,000,000 warrants
at an exercise price of 0.15p per share. All warrants will expire on 8 August 2022.
VAST RESOURCES 67
256569 Vast Resources R&A pp64-end.qxp 11/10/2019 21:37 Page 68
Notes to Financial Statements
continued
27. Events after the reporting date continued
Historical diamond claims
The Company announced on 26 September that it had settled its historical claims by mutual consent and that
the Company would update the matter further as this matter progressed.
Chiadzwa Community joint venture
The Company announced on 26 September that it had signed a Joint Venture Agreement with a company
designated to represent the Chiadzwa Community in relation to the Chiadzwa Diamond Concession in Zimbabwe.
Corporate broker
On 5 August 2019 the Company was informed that one of its joint corporate brokers, SVS Securities plc, had
been placed into Special Administration.
28. Group subsidiaries
A full list of all subsidiary companies and their registered offices is given below:
Company
African Consolidated Resources SRL
African Consolidated Resources PTC Ltd *
Breckridge Investments (Private) Limited
Cadex Investments (Private) Limited
Canape Investments (Private) Limited
Conneire Mining (Private) Limited
Dallaglio Investments (Private) Limited
Country of
registration
Romania
BVI
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Dashaloo Investments (Private) Limited
Exchequer Mining Services (Private) Limited
Fisherman Mining Limited
Zimbabwe
Zimbabwe
Zambia
Heavystuff Investment Company
(Private) Limited
Kleton Investments (Private) Limited
Lafton Investments (Private) Limited
Lescaut Investments (Private) Limited
Lomite Investments (Private) Limited
Lotaven Investments (Private) Limited
Mayback Investments (Private) Limited
Millwall International Investments Limited
Moorestown Limited
Mystical Mining (Private) Limited
Naxten Investments (Private) Limited
Nivola Mining (Private) Limited
Olebile Investments (Private) Limited
Perkinson Investments (Private) Limited
Possession Investment Services
(Private) Limited
Rabame Investments (Private) Limited
Ronquil Enterprises (Private) Limited
Sackler Investments (Private) Limited
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
BVI
BVI
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
68 VAST RESOURCES
Reg.
office Group Interest
2018
note
2017
Nature of business
1
3
5
5
6
6
5
6
6
7
6
5
5
5
5
5
5
3
3
6
6
6
6
6
6
6
6
6
Mining development
nil
Nominee company
25.05% Mining Production
Claim holding
Mining investment
Claim holding
80% 80%
nil
–
100% 100%
–
100%
100% 100%
–
25.05% Holding Company for
100% 100%
100% 100%
49.6% 100%
Breckridge Investments
(Private) Limited
Claim holding
Claim holding
Mining exploration and
development
Claim holding
25.05% Claim holding
Claim holding
25.05% Claim holding
Claim holding
25.05% Claim holding
25.05% Claim holding
100% 100%
–
100% 100%
–
100% 100%
–
–
100% 100%
100% 100%
Holding company
Mining exploration and
development
Claim holding
Asset holding
25.05% Claim holding
Claim holding
Claim holding
100% 100%
100% 100%
–
100% 100%
100% 100%
Claim holding
25.05% Claim holding
50.01% Holding company
100% 100%
–
–
100% 100%
Claim holding
256569 Vast Resources R&A pp64-end.qxp 11/10/2019 21:37 Page 69
Company
Country of
registration
Reg.
office Group Interest
2018
note
2017
Zimbabwe
Schont Mining Services (Private) Limited
Romania
Sinarom Mining Group SRL
UK
Vast Resources Nominees Limited **
UK
Vast Resources Romania Limited
Zimbabwe
Vast Resources Zimbabwe (Private) Limited
Zimbabwe
Accufin Investments (Private) Limited
Zimbabwe
Aeromags (Private) Limited
Zimbabwe
Campstar Mining (Private) Limited
Chaperon Manufacturing (Private) Limited
Zimbabwe
Charmed Technical Mining (Private) Limited Zimbabwe
Chianty Mining Services (Private) Limited
Zimbabwe
Corampian Technical Mining (Private) Limited Zimbabwe
Zimbabwe
Deep Burg Mining Services (Private) Limited
Zimbabwe
Deft Mining Services (Private) Limited
Zimbabwe
Febrim Investments (Private) Limited
Zimbabwe
Hemihelp Investments (Private) Limited
Zimbabwe
Isiyala Mining (Private) Limited
Zimbabwe
Katanga Mining (Private) Limited
Zimbabwe
Kengen Trading (Private) Limited
Zimbabwe
Kielty Investments (Private) Limited
Lucciola Investment Services
(Private) Limited
Malaghan Investments (Private) Limited
Methven Investment Company
(Private) Limited
Mimic Mining (Private) Limited
Monteiro Investments (Private) Limited
Nedziwe Mining (Private) Limited
Notebridge Investments (Private) Limited
Pickstone-Peerless Mining (Private) Limited
Prudent Mining (Private) Limited
Rania Haulage (Private) Limited
Regsite Mining Services (Private) Limited
Riberio Mining Services (Private) Limited
Swadini Miners (Private) Limited
Tamahine Investments (Private) Limited
The Salon Investments (Private) Limited
Vono Trading (Private) Limited
Wynton Investment Company
(Private) Limited
Zimchew Investments (Private) Limited
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
6
2
4
4
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
Nature of business
Claim holding
Mining production
Nominee company
Mining investment
Mining investment
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
100% 100%
100% 100%
Dormant
Dormant
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
100% 100%
100% 100%
Dormant
Dormant
*
**
Notes
1
2
3
4
5
6
7
The company has effective control of this entity
Formerly ACR Nominees Ltd
Addresses of Registered offices:
Sat Iacobeni,Str.Minelor Nr.20, Jud. Suceava, Romania
Str.9 Mai, Nr.20, Baia Mare, Jud.Maramures, 430274 Romania
Nerine Chambers, PO Box 906, Road Town, Tortola, British Virgin Islands
Nettlestead Place, Nettlestead, Maidstone, Kent ME18 6HE, United Kingdom
121 Borrowdale Road, Gun Hill, Harare, Zimbabwe
6, John Plagis Avenue, Alexandra Park, Harare, Zimbabwe
Suite 2, Diplomatic Centre, Mass Media, Off Alick Nkhata Road, Lusaka, Zambia
VAST RESOURCES 69
256569 Vast Resources R&A pp64-end.qxp 11/10/2019 21:37 Page 70
Company information
Directors
Secretary and registered office
Non-Executive Chairman
Chief Executive Officer
Finance Director
Chief Operations Officer
Non-Executive Director
Non-Executive Director
Brian Moritz
Richard Andrew Prelea
Roy Clifford Tucker
Craig Harvey
Eric Kevin Diack
Nick Hatch
Ben Harber
60 Gracechurch Street
London EC3V 0HR
Country of incorporation
United Kingdom
Legal form
Website
Auditors
Nominated & Financial Adviser
Corporate Broker
Registrars
Public Limited Company
www.vastplc.com
Crowe UK LLP
St Bride’s House
10 Salisbury Square
London EC4Y 8EH
Beaumont Cornish Limited
10th Floor
30, Crown Place
London EC2A 4EB
SP Angel Corporate Finance LLP
Price Frederick House
35-39 Maddox Street
London W1S 2PP
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Registered number
5414325
70 VAST RESOURCES
256569 Vast Resources R&A Cover spread.qxp 11/10/2019 21:35 Page 2
Vast Resources has a diversified portfolio encompassing
the mining development curve. It is focused on the
transformation from an exploration company to a mining
company and delivering multiple revenue streams.
Piciourul
Zimbrului
Carlibaba
Manaila P
me
olyme
t lli M
allic Mine
Bait
a Plai
allic Mine
P
oolyme
P
t
Blueberr
Gold Pr
y
oject
a
Magur
Neagr
a
obeni
ocessing
Iac
(Pr
Plan
t)
R
OMANIA
BUCHARE
TS
HARARE
ZIMB
AB
WE
w
a Community
Chiadz
Diamond Concession
V
t RasVa
esour
(cid:3)
(cid:3)
ces has a long-s
t
anding pr
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:286)(cid:448)(cid:415)(cid:272)(cid:437)(cid:282)(cid:381)(cid:396)(cid:393)(cid:296)(cid:381)(cid:381)(cid:349)(cid:367)(cid:381)(cid:414)(cid:396)(cid:381)(cid:393)(cid:258)(cid:336)(cid:374)(cid:349)(cid:346)(cid:400)(cid:349)(cid:367)(cid:271)(cid:258)(cid:410)(cid:400)(cid:286)(cid:374)(cid:381)(cid:282)(cid:286)(cid:400)(cid:437)(cid:272)(cid:381)(cid:296)(cid:400)(cid:349)(cid:410)(cid:47)(cid:856)(cid:286)(cid:449)(cid:271)(cid:258)(cid:271)(cid:373)(cid:349)(cid:127)(cid:374)(cid:349)(cid:282)(cid:374)(cid:258)
(cid:296)(cid:381)(cid:286)(cid:374)(cid:349)(cid:367)(cid:286)(cid:393)(cid:349)(cid:393)(cid:400)(cid:410)(cid:349)(cid:336)(cid:374)(cid:349)(cid:448)(cid:381)(cid:373)(cid:282)(cid:374)(cid:258)(cid:373)(cid:396)(cid:286)(cid:410)(cid:396)(cid:258)(cid:286)(cid:374)(cid:286)(cid:346)(cid:410)(cid:374)(cid:349)(cid:400)(cid:286)(cid:349)(cid:396)(cid:410)(cid:374)(cid:437)(cid:381)(cid:272)(cid:381)(cid:449)(cid:410)(cid:286)(cid:400)(cid:286)(cid:346)(cid:410)(cid:374)(cid:349)(cid:400)(cid:410)(cid:286)(cid:400)(cid:400)(cid:258)
(cid:3)
(cid:856)(cid:286)(cid:448)(cid:396)(cid:437)(cid:272)(cid:410)(cid:374)(cid:286)(cid:373)(cid:393)(cid:381)(cid:367)(cid:286)(cid:448)(cid:286)(cid:282)(cid:286)(cid:346)(cid:410)(cid:393)(cid:437)(cid:400)(cid:286)(cid:415)(cid:349)(cid:374)(cid:437)(cid:410)(cid:396)(cid:381)(cid:393)(cid:393)(cid:381)(cid:367)(cid:258)(cid:400)(cid:349)(cid:258)(cid:396)(cid:393)(cid:393)(cid:258)(cid:282)(cid:374)(cid:258)(cid:282)(cid:367)(cid:286)(cid:302)(cid:374)(cid:449)(cid:381)(cid:396)(cid:271)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
ound in both R
(cid:3)
esence on the gr
h
(cid:3)
omania
256569 Vast Resources R&A Cover spread.qxp 11/10/2019 21:35 Page 1
VADV
AD
V
V
ALVA
Y MAR
ANCING PRIM
S
INT
O
UE DRIVER
T
TION
PR
ODUC
R
eport & A
Acc
oun
ts
2019
60 Gracechurch Street
London, EC3V 0HR
United Kingdom
Info@vastplc.com
+44 (0) 1491 615 232
www.vastplc.com