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Report & Accounts
2020
An emerging diversified
mining company
focussed on building
production and offering
further value uplift
through development
and exploration
Business Review
Overview of the year ended 30th April 2020
Chairman’s Statement
Strategic Report
Governance
Report of the Directors
Statement of Directors’ responsibilities
Independent Auditors report
Financial Statements
Group statement of comprehensive income
Group statement of changes in equity
Company statement of changes in equity
Group and Company statements of financial position
Group and Company statements of cash flow
Statement of accounting policies
Notes to financial statements
Company Information
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For more information, visit our website:
www.vastplc.com
1
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review
Overview of the year ended 30th April 2020
Vast Resources plc (‘Vast’ or the ‘Group’ or the ‘Company’) is focused on two key mining
opportunities in Romania and Zimbabwe. These opportunities comprise the Baita Plai Polymetallic
Mine (“BPPM”) in Romania, and the Group’s expected diamond concession in Zimbabwe. The
Group continued to hold the Manaila Polymetallic Mine (“MPM”) on care and maintenance with the
expectation of a funding round at a later stage.
The Group has arranged financing which it has prioritised for BPPM in Romania and for the Chiadzwa Community Diamond Concession in
Zimbabwe. On 31st January, the Group drew down on the first tranche of the Atlas Capital Markets facility ($7.1 million principal). The first
tranche has been applied to placing BPPM into production and to the repayment of financial creditors.
Discussions continue regarding the conclusion of the Company’s diamond joint venture with its Zimbabwe stakeholders. These
discussions are in line with previous expectations, save on timing.
Financial
• Comparatives have been drawn up for the thirteen-month period to 30th April 2019 following a change of accounting reference date as
announced on 8th April 2019.
• 5.4% decrease in other administrative and overhead expenses for the twelve-month period ended 30 April 2020 ($4.1 million)
compared to the thirteen-month period ended 30 April 2019 ($4.3 million).
• Foreign exchange losses of $2.0 million for the period compared to $2.8 million for the thirteen-month period ended 30 April 2019.
Included within the $2.0 million of foreign exchange losses is $0.640 million in respect of the Company’s operations in Zimbabwe.
• 16.4% decrease in losses after taxation from continuing operations in the period ($8.3 million) compared to the thirteen-month period
ended 30 April 2019 ($10.0 million).
• Cash balances at the end of the period $0.478 million compared to $0.569 million as at 30 April 2019.
Post reporting date:
In September, the Group received an indicative asset backed debt financing proposal from an international banking institution with
the purpose of refinancing Tranche 1 of the Convertible Bonds issued to Atlas Special Opportunities LLC (“Atlas”). The proposal has
passed through the bank’s initial credit committee approval process following preliminary due diligence covering technical evaluation,
environmental & social impact assessment and KYC analysis. The Group has entered into a formal agreement with the banking institution
to complete due diligence and finalise terms with a view to receiving final credit committee approval.
Operational Development
• Concluded a joint venture with Chiadzwa Mining Resources (Pvt) Ltd, a company designated to represent Chiadzwa Community
interests in the Chiadzwa Community Diamond Concession in the Marange Diamond Fields (the “Concession”).
• Continued discussions to finalise the joint venture agreement with Zimbabwe Consolidated Diamond Company (Pvt) Ltd (“ZCDC”) which
will enable the Concession to procure a special grant for the mining of diamonds. Discussions are in line with expectations, save on
timing.
• Transitioned resources from MPM to BPPM in order to continue the upgrade and development of BPPM.
• Cold commissioning of BPPM and commencement of drilling programme to establish a 2012 JORC compliant resource.estimate.
• Revised an existing agreement with Botswana Diamonds PLC (“BOD”) resulting in BOD acquiring a 2.5% interest in the cashflows
generated from Vast’s share in the Concession. In consideration for this interest BOD will provide know-how for all aspects of
exploration, mining, processing and marketing in relation to the Concession.
Post reporting date:
•
In June, the Company was granted the Manaila Carlibaba Extension Exploitation License which will allow the Company to re-examine
the exploitation of the mineral resources within the larger Manaila Carlibaba license area. The enlarged exploitation license is 138.6
hectares in size, an increase of 410% in surface area from the existing exploitation license at Manaila (27.2 hectares). In October, the
Company has also received a time extension of five years on the entire licence area in accordance with Romanian Mining Legislation.
•
In October, the Company commenced the production of concentrate at BPPM.
• At the end of October 2020, the Company will publish a JORC 2012 compliant Measured and Indicated Mineral Resource for BPPM
which covers the first four years of production. Further drilling will be conducted with the objective of publishing an expanded JORC
2012 Mineral Resource.
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BUSINESS REVIEWVast Resources Plc / Report and Accounts 2020 Funding
Equity:
Fundraising share issues during the year (gross proceeds before cost of issue):
£
3,960,185
97,600
1,407
23,857
$
Shares Issued Issued to
4,909,761
125,355
1,846
29,591
2,666,066,453 Placing with investors
54,000,000 Subscription by institutional investor
281,687 Exercise of open offer warrants
13,703,171 Settle interest costs
4,083,049
5,066,553
2,734,051,311
Post reporting date:
£
$
Shares Issued Issued to
5,777,517
7,348,384
3,613,499,994 Placing with investors
45,000
109,800
4,287
117,006
56,653
136,807
5,410
147,958
30,000,000 Subscription by management
61,000,000 Subscription by investors
857,546 Exercise of open offer warrants
69,989,038 Settle interest costs
6,053,610
7,695,211
3,775,346,578
Debt
• First tranche ($7.1 million) of Atlas Capital Markets $15 million bond facility drawn on 31 January 2020.
• Debt to Sub-Sahara Goldia Investments fully repaid.
• $1 million of prepayment advance repaid to Mercuria Energy Trading.
Post reporting date:
• Repayment of $0.5 million principal of the first tranche of the Atlas Capital Markets facility.
Management
• Appointment of Paul Fletcher as Finance Director on 6 November 2019.
Post reporting date:
• Resignation of Eric Diack as Non-executive Director on 4 May 2020.
• Resignation of Mark Mabhudhu as Executive Director of the Company’s Diamond Division on 22 September 2020 following his
appointment as Chief Executive Officer of Government owned Zimbabwe Consolidated Diamond Company (Pvt) Ltd.
Political and Covid-19
• Covid-19 restrictions caused some inevitable delays to the BPPM start-up, mostly due to implementing health and safety protocols
which reduced productivity and travel restrictions which prevented key managers being on site at certain times. Despite these
headwinds, BPPM produced its first concentrate in October 2020 which is to be sold in early November 2020.
• Continuation of the Covid-19 lock-down in Zimbabwe has significantly slowed business activity in the country.
3
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Chairman’s Statement
We live in unprecedented times. The Covid-19 pandemic has left no community untouched and
created economic, political, and social stresses that we have not witnessed in peacetime. Despite
these challenges, the Group has been able to reach some notable milestones at the Baita Plai
Polymetallic Mine (“BPPM”) and is well on track to realise the potential of this asset.
Romania
The end of January 2020 saw the Company draw down on the
first tranche of the Atlas facility. While the Covid-19 pandemic
brought inevitable restrictions to our operations, the Group was
able to successfully work with our key stakeholders to safely
minimise disruption to the start-up plan. We took delivery of our
last significant pre-production capital items after the reporting
period end in July 2020 and commenced concentrate production
in October of this year, with BPPM scheduled to make the first
deliveries of concentrate to our off-taker Mercuria in early
November. We also completed the first part of a drilling program
to both fine-tune the mining plan and to properly articulate the
potential of the asset through a JORC 2012 compliant resource
estimate which we will publish at the end of October. As stated
in the Strategic Report, the drilling results have been extremely
encouraging and are in line with the Company’s expectations. We
intend to continue the drilling campaign with a view to extending
the resource. We look forward to reporting on the continued
development of BPPM and the positive impact on operating
results for the current financial year.
Zimbabwe
While progress at BPPM is on track, there has been a delay in
finalisation of the joint venture agreement with Government
owned Zimbabwe Consolidated Diamond Company (Pvt) Ltd
(“ZCDC”), which, amongst other matters, will enable the Group and
our other Zimbabwean stakeholders to procure a Special Grant
for the exploration, development, and mining of the Concession.
As stated in the Strategic Report, we remain confident that we will
conclude an agreement and our expectation is that this will occur
once Covid-19 lock-down measures are lifted in Zimbabwe.
Directors and management
Executives
Paul Fletcher was appointed to the Board as Finance Director on 6
November 2019. Paul joined the Company on 8 February 2019 as
Chief Financial Officer.
On 22 September 2020 Mark Mabhudhu, Executive Director of
the Company’s Diamond Division left Vast to take up the role of
CEO at the ZCDC. We were obviously saddened by Mark’s leaving
but we are also excited by the prospect of continuing to work with
him as he carries out his new remit to implement Joint Ventures
between ZCDC and investors in the diamond sector. The Board
would like to thank Mark for all his efforts and wish him all the best
in his new role.
Non-Executives
On 4 May 2020 Eric Diack resigned from his position as a Non-
Executive Director of the Company as a consequence of taking on
a new role which requires his full-time attention. The Board would
like to thank Eric for his contribution over the years and wishes him
well in his new role.
4
Funding
In October 2019 we finalised documentation with Atlas Capital
Markets (“Atlas”) for the funding of both the commissioning of
BPPM and in due course the commencement of diamond mining
at the Chiadzwa Community Diamond Concession. As mentioned
above, we have drawn down on the first tranche of the Atlas facility
in order to bring BPPM into production. We have also entered a
period of due diligence with a banking institution to refinance the
first tranche of the Atlas facility. This will allow us to strengthen
our balance sheet and realise greater long-term returns for
shareholders.
Corporate Governance
As stated in the Strategic Report, last year the Company 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. The Company
maintains a strict anti-corruption and whistle blowing policy
and the Directors are not aware of any event in any jurisdiction
in which it operates that might be considered to be a breach of
this policy. Subsequent to the reporting period the Company
has formally adopted Code of Conduct, Health and Safety,
Environmental, and Human Rights policies which clearly articulate
the Board’s expectations and strengthen the control environment
of the organisation. The Company continues to operate 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 Company is also
committed to maintaining open dialogue with shareholders,
employees and other stakeholders.
Appreciation
The continued support and resolve of shareholders and other
stakeholders through times that have been challenging is
much appreciated. With the funding of BPPM, the Company
has passed a significant milestone, and, with the successful
start of production, the Company expects to become cash flow
positive in a short period of time. 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. Above all we wish all our stakeholders well in these
difficult times and remain committed to safeguarding the safety of
our employees and the communities in which we operate.
Brian Moritz
Chairman
BUSINESS REVIEWVast Resources Plc / Report and Accounts 2020
Strategic Report
Principal activities, review of business and
future developments
Vision
The vision of the Group continues 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 has focused on reopening the Baita Plai
Polymetallic Mine (“BPPM”) where a commissioning schedule from
funding on 31 January 2020 has placed the asset into production
in October 2020, with the first deliveries of concentrate
forecasted for early November 2020. The Manaila Polymetallic
Mine (“MPM”) remained on care and maintenance during the
period pending adoption of a new mine plan and raising the
necessary funding.
In Zimbabwe, the Group continues to focus on finalising a joint
venture agreement that will allow the procurement of a Special
Grant to mine the alluvial Chiadzwa Community Diamond
Concession in 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 the draw-down of the first tranche of the Atlas Capital
Markets (“Atlas”) facility on 31 January 2020, the Company
produced its first copper concentrate in October 2020 which is
to be delivered to Mercuria in early November 2020. This marks a
turning point for the Company and we are delighted that despite
the Covid-19 challenges we were able to reach this milestone.
We also implemented and accelerated a drilling plan at BPPM as a
precursor to the preparation of a JORC 2012 compliant resource
estimate which we will publish at the end of October 2020. This
JORC 2012 compliant resource will cover the first four years of
production and will be expanded by further drilling. The results
of the drilling programme were very encouraging and clearly
articulate the value of the asset. As part of a strategy to focus on
BPPM, we continue to hold MPM on care and maintenance with a
view to attracting investors at a later stage once a new mine plan
has been adopted. The merits of this strategy were confirmed in
June 2020 with the grant of the extension of the Manaila Carlibaba
Exploitation licence and the extension in October 2020 for a
further 5 years which will allow the Company to re-examine the
exploitation of the mineral resources within the larger Manaila
Carlibaba license area.
BPPM (80% interest, 10% Directors)
During the period the Company continued rehabilitating the
mine in preparation for production and invested in new capital
equipment and an accelerated drilling program. Specific
accomplishments during and after the reporting period include
the following:
• Delivery and working installation of locomotives
• Delivery of underground railway cutting and bending
equipment.
• Delivery and installation of railway tracks.
• Delivery of underground wagons, modification as necessary
and installation.
• Delivery of underground rock loaders and mining jackhammers.
• Delivery of underground pneumatic loaders.
• Delivery and installation of ceramic filters and hydrocyclones.
• Delivery and installation of slurry pumps.
• Continued refurbishment of existing plant equipment.
• Rehabilitation of underground mining infrastructure.
• Completion of tailings pipe.
• Metallurgical test work on initial underground working areas to
determine formulas for processing.
• Drilling and assay work as part of preparing a JORC 2012
compliant resource estimate and further defining the mine plan.
• Repair to a railway bridge access point using an alternative steel
structure.
Metalurgical tests have met the Company’s internal expectations,
confirming high recoveries and high grade copper and zinc
concentrates.
JORC 2012 compliant resource estimates will be published by the
end of October 2020.
MPM (100% interest)
The Manaila Carlibaba exploitation perimeter contains a JORC
2012 compliant Measured and Indicated Mineral Resource of
3.6Mt grading 0.93% copper, 0.29% lead, 0.63% zinc, 0.23g/t gold
and 24.9g/t silver with Inferred Mineral Resources of 1.0Mt grading
1.10% copper, 0.40% lead, 0.84% zinc, 0.24g/t gold and 29.2g/t
silver.
In June 2020, the Company was granted the Manaila Carlibaba
Exploitation License which will allow the Company to re-examine
the exploitation of the mineral resources within the larger Manaila
Carlibaba license area. The enlarged exploitation license is 138.6
hectares in size, an increase of 410% in surface area from the
existing exploitation license at Manaila (27.2 hectares).This could
allow for a larger mining and processing facility to be developed
on site and would eliminate the need for costly road transport of
mined ore to the current processing facility located at Iacobeni,
approximately 30 kilometres away. The transportation element
increased the operational cost of the Manaila mine, currently on
care and maintenance, by approximately 25-30%.
Preliminary studies by the Company indicate the potential for
a new open pit mine to exploit mineral resources to a depth of
approximately 125 meters below surface, and to simultaneously
develop a smaller higher-grade underground mine below the open
pit mineral resources. Immediate access for the underground
section can be provided from the existing open pit at Manaila by
developing adits (horizontal mine entrances) from the high wall of
the open pit.
5
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Strategic Report Continued
Blueberry Polymetallic Gold Project (`Blueberry’) (29.41%
effective interest).
The Group has 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 has completed
a drilling programme on the perimeter which has established
sufficient information to support an Inferred JORC resource. The
Group is also currently preparing an independent feasibility study
and environmental reports for submission for the exploitation
licence. The results and net assets of the Blueberry project are
immaterial to the Group and therefore have not been included
in the Group financial statements under the equity method of
accounting.
During the year Vast Resources PLC acquired a short-term
investment in the Convertible Loan Notes of EMA of principal
value US$ 750,000. These Notes have funded EMA’s and
Blueberry’s working capital and capital expenditure requirements
in relation to exploration at the Blueberry mine as a step towards
achieving an IPO for EMA. The conversion feature of the loan
notes allows the holder to convert every US$ 10,000 of principal
into 0.075% of shares at the time of the IPO. These notes are
held for sale and management anticipates they will be on sold to
investors within 12 months of the balance sheet date.
Other Romanian prospects
Work continues to be in progress to extend our footprint in
Romania through our current claims at Magura Neagra and Piciorul
Zimbrului (collectively known as ‘Zagra’). The Group undertook
a prospecting drilling programme and soil sampling campaign
targeting sets of polymetallic veins together with areas of
disseminated sulphide mineralization and is currently awaiting test
results in order to apply for an Exploration Licence.
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
Chiadzwa Community Diamond Concession – Marange
Diamond Fields
The Group has now focused its Zimbabwe strategy on mining its
expected diamond concession in Zimbabwe. This opportunity
potentially offers high and near term positive cashflow and is
unrestrained by tight currency controls. While good progress
was made in concluding a joint venture agreement with the Local
Chiadzwa Community, to date there has been a delay in finalising
the joint venture agreement with ZCDC. This amongst other
matters, will enable the Company and our other Zimbabwean
6
stakeholders to procure a Special Grant under the relevant
Zimbabwean legislation for the exploration, development, and
mining of the Concession.
Discussions with the various Zimbabwe stakeholders remain
in line with previous expectations, other than on timing, and we
remain confident that we will be able to commence our mining
operations once Covid-19 lock down measures are lifted in
Zimbabwe. On 22 September 2020, Mark Mabhudhu, Executive
Director of the Company’s Diamond Division, left the Company
and joined the Government owned ZCDC as Chief Executive
Officer. Mark Mabhudhu’s primary role in that capacity will be to
focus on the Zimbabwe diamond sector’s contribution towards
the Zimbabwean Government’s 2023 $12bn mining vision which
is also driven by the attendant implementation of Joint Ventures
between the ZCDC and investors in the diamond sector. Whilst
we are sad to see Mark Mabhudhu leave Vast Resources PLC,
we are pleased that we will be able to continue to work with him
in his new role within the diamond mining sector in Zimbabwe.
Our diamond operations continue to be supported by our highly
skilled geological and technical team and we have identified a
high-level COO to manage the project who shall be engaged upon
confirmation of the signing of the Joint Venture. The Company is
well placed to move quickly to monetise this opportunity with US$
7.9 million binding and conditional funding available in the form of
tranches 2 to 4 of the Atlas facility.
Corporate
On 31 January the Company drew down on the first tranche of the
Atlas facility totalling $7.1 million. The net proceeds were applied
to fund the capital expenditure programme to put BPPM into
production, as well as repay creditors.
Strategy
The Group’s strategy is to:
• Attract appropriate funding for the Group – including from
institutional investment
• Attract appropriate joint venture partners and public institutions
to invest in the Group and projects of mutual interest
• Grow into a mid-tier mining company both organically and
through acquisitions financed principally by third parties
• Optimise operations to produce positive cashflows
• Add value to operations by increasing resources and reserves
•
If expedient, hold significant minority stakes in new ventures
operationally managed by the Group
• Finance growth, where possible in a non-dilutive manner
• Maintain exposure to Zimbabwe and Romania where the Group
has acquired in-depth country knowledge
• Continue to work with Government and local communities in
Zimbabwe in the diamond sector, and to develop the diamond
business in a transparent way for the benefit of all stake holders
BUSINESS REVIEWVast Resources Plc / Report and Accounts 2020 Key performance indicators
In executing its strategy, the Board considers the Group’s key
performance indicators to be, or will be after recommencement of
mining:
Cash cost per tonne milled
• Cash cost per tonne is derived from aggregate cash costs
divided by tonnes milled and measures productivity.
• There has been no production at MPM this year given the mine
has been on care and maintenance. For the thirteen months
ended 30 April 2019, the cash cost for the period of production
was US$ 70/tonne.
Cash costs per tonne sold of concentrate
• Cash cost per tonne sold is calculated by dividing aggregate
cash cost by concentrate tonnes produced and measures
productivity.
• There has been no production at MPM this year given the mine
has been on care and maintenance. For the thirteen months
ended 30 April 2019, the cash cost was US$ 2,208/tonne.
Plant production volumes as a measure of asset utilisation
• There has been no production at MPM this year. For the thirteen
months ended 30 April 2019, MPM processed mill feed of
62,391 tonnes.
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. At the end
of October 2020, we will be publishing a JORC 2012 compliant
resource estimate for BPPM. Other than this, there have been
no other changes over the previous year. The alluvial diamond
interest in Zimbabwe where there is an 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.
Cash resources
The Group’s year end position was US$ 0.478 million (2019: US$
0.569 million).
During the year cash used in operations were US$ 5.232 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 were US$ 3.647million
mainly driven by additions to mining assets in the Group’s
Romanian operations ($2.756 million) and the purchase of 15%
Loan Notes in EMA resources Ltd funding the investment in the
Blueberry Polymetallic Gold Project
Cash inflows from funding activities were US$ 8.788 million,
comprising loans and borrowings of $6.519 million and the net
of the proceeds from the issuance of shares of US$ 4.625 million
less repayment of loans and borrowings of US$ 2.356 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
In conjunction with equity raises after the reporting period end,
the Company has obtained sufficient funding to place BPPM into
underground and concentrate production in October 2020 and
the Company will begin to generate cash inflows from the sale
of concentrate starting in early November 2020. The continued
ramp up of production and associated revenues are expected to
be net cashflow generative in a short period of time, allowing the
Company to service its creditors without causing undue financial
stress. Additionally, the Company is in the process of refinancing
the balance of the first tranche of the Atlas facility that will provide
increased working capital flexibility and liquidity.
However, despite a start to production, the anticipated production
volumes and resulting revenue could be delayed or less than
expected due to technical and market risk factors. These risk
factors include cost overruns, unforeseen operational mining
issues, and adverse commodity price movements. In the event
these risk factors adversely and materially impact forecasted
cashflows arising from production, the Company would be
required to seek alternative funding to continue as a going
concern.
Mitigation/Comments
The Company is currently undergoing due diligence for a debt
facility from an international banking institution that will refinance
the balance of Tranche 1 of the Atlas facility and provide additional
liquidity. The Board will also continue to 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 Group’s
diamond investments will not be subject to remittance restrictions
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.
7
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review 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, cost of production, and commodity diversity to ensure that
mining output becomes or remains economic. The anticipated
marginal contributions at both BPPM and the Chiadzwa
Community Diamond Concession are high versus fixed costs
which provides a degree of liquidity protection in the event prices
decline significantly.
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 Rights Scheme” for Directors and senior executives
to provide incentives based on the success of the business and
continues to consult third party benchmarks for remuneration. It
has also introduced more specific incentive arrangements for the
Group’s diamond business in Zimbabwe.
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. The risk of Covid-19 infection
may cause the mine to be shut-down temporarily.
8
Mitigation/Comments
The Group takes its responsibilities in these areas seriously
and monitors its performance across these areas on a regular
basis. The Group has adopted and obtained ISO 9001:2015 for
Quality, ISO 45001: 2018 for Safety, and ISO 140001: 2015 for
Environment. The Group adheres to all Covid-19 rules, regulations,
and guidelines in preventing transmission of the infection through
the workforce.
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 on 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 other Executive Directors 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, 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
Role
Appointed
Brian Moritz
Non-executive Chairman
3 October 2016
Andrew Prelea Chief Executive Officer
1 March 2018
Roy Tucker
Business Director
5 April 2005
Paul Fletcher
Finance Director
6 November 2019
Craig Harvey
Chief Operating Officer
1 March 2018
Nick Hatch
Non-executive director
9 May 2018
BUSINESS REVIEWVast Resources Plc / Report and Accounts 2020 Eric Diack who was appointed on 30 May 2014 as a non-executive
director, resigned on 4 May 2020.
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.
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.
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 and Paul Fletcher in the UK, and
Craig Harvey in Southern Africa. Of the Non-Executive Directors,
Nick Hatch and Brian Moritz are resident in the UK.
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. The position is also impacted
currently by the Covid-19 situation.
During the year ended 30 April 2020 there were 11 board
meetings of the Company plus a further 8 of a formal nature.
There were also 2 General Meetings in addition to the Annual
General Meeting. Of the Directors holding office during the period
Brian Moritz, Nick Hatch, Andrew Prelea and Roy Tucker attended
all the 11 board meetings, Craig Harvey and Eric Diack 9 board
meetings and Paul Fletcher attended all of such meetings which
took place in the period since his appointment.
Appropriate skills and experience of the Directors
The CVs of the Directors - four executives and two 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 in the mining sector for 8 years and
with Vast since 2013. He 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 27-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 in both Romania and Zimbabwe.
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
Roy Tucker – Business 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.
Paul Fletcher – Finance Director
Paul is a Chartered Accountant and Fellow of the Association of
Corporate Treasurers with 27 years’ experience working in the
commodity and financial services industries. He has held a variety
of senior international finance and operational roles in trading,
processing, and financial businesses in the US, Europe, and Asia.
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.
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 on
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 executive management; Paul
Fletcher is a Chartered Accountant and Fellow of the Association
of Corporate Treasurers with broad international and financial
9
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Strategic Report Continued
management experience in the commodity sector, 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. Nick Hatch is a qualified geologist with experience in
evaluating mining companies and natural resource projects.
Importantly, three 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. In
November 2019, Paul Fletcher was appointed to the Board as
Finance 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. The Company is currently seeking a technical Non-
Executive Director as a replacement for Eric Diack who resigned
on 5 May 2020.
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.
10
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;
•
is primarily responsible for new projects and expansion;
•
in conjunction with the CFO and CCO 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 other
operations and projects;
• provides technical input on new projects.
The Business Director (formerly the Finance Director), Roy Tucker
• deals with executive matters as they arise;
•
is the main point of contact with the Company’s lawyers and
Nomad, and the London Stock Exchange;
•
is responsible for legal and compliance matters;
• works with Finance Director on finance matters through a
period of transition.
The Finance Director, Paul Fletcher :
•
is responsible for the administration of all aspects of the Group;
• oversees the accounting and treasury function of all Group
companies;
•
•
in conjunction with the CEO, is responsible for the financial risk
management of the Company;
is responsible for financial modelling to support fund raising
initiatives and structuring trade related funding;
•
is responsible for financial planning and analysis;
• deals with all matters relating to the independent audit.
The Remuneration Committee is currently chaired by Nick
Hatch and comprises Nick Hatch and Brian Moritz, following
the resignation of Eric Diack. 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.
BUSINESS REVIEWVast Resources Plc / Report and Accounts 2020 The Audit and Compliance Committee is currently chaired by Brain
Moritz following the resignation of Eric Diack and comprises Brian
Moritz and Nick Hatch. 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.
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
• 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.
Section 172 (1) Statement
The Directors of the Company must act in accordance with a set
of general duties. These duties are detailed in section 172 of the
UK Companies Act 2006. This Section 172 statement explains
how the Directors fulfil these duties.
Each Director must act in a way that they consider, in good faith,
would be most likely to promote the Company’s success for the
benefit of its members as a whole, and in doing so have regard
(among other matters) to:
S172(1) (a) “The likely consequences of any decision in the long
term”
Last year the Board refocused its resources on two key mining
opportunities in Romania and Zimbabwe. These opportunities
comprise BPPM in Romania, and the Group’s expected diamond
concession in Zimbabwe. For further details on the Company’s
strategy and the key performance indicators, please see page 5
and 6. The Board has implemented processes to identify, measure,
manage, and mitigate risks and uncertainties arising from the
implementation of its strategy. These risks and uncertainties are
highlighted on pages 7 and 8 and the processes by which they are
managed are highlighted under the Risk Management principles
set out on the Corporate Governance section on page 8.
S172(1) (b) “The interests of the Company’s employees”
The successful achievement of the Group's strategies, business
plans and objectives depend upon its ability to attract, motivate,
and protect the safety of its employees. Health and Safety, and
Human Rights policies clearly articulate the Board’s expectations
and safeguard the interests of the Company’s employees.
The Group’s policy is to foster a management culture where
management is empowered and where innovation and creativity in
the workplace are encouraged and rewarded. This is reflected in
the performance programs that the Company has implemented.
S172(1) (c) “The need to foster the company’s business
relationships with suppliers, customers and others”
The Company has ongoing dialogue with its customers and
suppliers and ensures that a strong relationship is maintained
at the level of senior management. This ensures alignment
with the Company’s business objectives and promotes strong
collaboration. As mentioned on page 11, under Shareholder
Communication, the Board maintains effective communication
with its shareholders and provides updates and information
through public announcements on the regulatory system and on
the Company website.
S172(1) (d) “The impact of the company’s operations on the
community and the environment”
As mentioned on page 8, under Risk – Social, Safety and
Environmental, the Group monitors its performance across these
areas on a regular basis. The Group has adopted and obtained
ISO 9001:2015 for Quality, ISO 45001: 2018 for Safety, and ISO
140001: 2015 for Environment. The Group adheres to all Covid-19
rules, regulations, and guidelines in preventing transmission of the
infection through the workforce. As mentioned in the Chairman’s
Report on page 4, the Company has also implemented formal
policies on these areas.
S172(1) (e) “The desirability of the company maintaining a
reputation for high standards of business conduct”
As more fully explained on page 4 of the Chairman’s Report and
under the Corporate Governance section on page 8 the Board
strives to promote a culture based on high business conduct
standards.
S172(1) (f) “The need to act fairly as between members of the
company”
Having assessed all necessary factors, and as supported by the
processes described above, the Directors consider the best
approach to delivering on the Company’s strategy. This is done
after assessing the impact on all stakeholders and is performed
in such a manner so as to act fairly as between the Company’s
members.
11
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Strategic Report Continued
Outlook
While these are unprecedented times and the year has been
challenging for all, we have successfully brought BPPM into
production. The first phase of our drilling campaign has been
successfully concluded and we will be publishing a JORC 2012
compliant resource by the end of October 2020. We believe that
the Covid-19 pandemic will have very limited impact on the short-
term performance of the mine. BPPM net cashflow generation
is protected by a low cost base and therefore is resilient to
significant decreases in commodity prices. We remain confident
that we will be able to conclude our joint venture agreement once
Covid-19 lock-down measures are finally lifted in Zimbabwe.
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 improve
as the government establishes an attractive base for sustainable
foreign investment, and that the Group, having commenced
production at 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. I
also thank all our stakeholders for their support through these
challenging times.
On behalf of the Board,
Andrew Prelea
Group Chief Executive Officer
12
BUSINESS REVIEWVast Resources Plc / Report and Accounts 2020 Report of the Directors
For the year ended 30 April 2020
The Directors present their report together with the audited financial statements for the twelve-month period ended 30 April 2020.
Results and dividends
The Group statement of comprehensive income is set out on page 20 and shows the profit for the period.
The Directors do not recommend the payment of a dividend (2019: 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:
Name
Roy Tucker
Eric Diack
Brian Moritz
Date of Appointment
5 April 2005
30 May 2014 (resigned 4 May 2020)
3 October 2016
Andrew Prelea
1 March 2018
Craig Harvey
1 March 2018
Nick Hatch
9 May 2018
Paul Fletcher
6 November 2019
Directors’ interests
The interests in the shares of the Company of the Directors who served during the period were as follows:
30 April 2020
30 April 2019
Ordinary Shares
Share Options
Ordinary Shares
Share Options
Eric Diack
Paul Fletcher
Craig Harvey
Nick Hatch
Brian Moritz
Andrew Prelea
Roy Tucker
Total
-
17,381,437
5,650,000
-
10,000,000
43,179,476
69,569,992
145,780,905
-
-
-
-
-
-
-
-
-
-
5,650,000
-
10,000,000
39,179,476
69,569,992
124,399,468
-
-
-
-
-
-
-
-
Subsequent to the period end, Andrew Prelea and Paul Fletcher acquired 38,333,333 and 16,666,667 shares, respectively.
Cash-settled share rights
The following rights are held by Directors in a cash-settled share rights performance programme:
Subscription
price
Outstanding at
30 April 2019
Exercised
during last 12
months
Granted during
last 12 months
Outstanding at
30 April 2020
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
13
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Report of the Directors Continued
Share Appreciation Rights Scheme
The following Directors have been granted rights under the Company’s Share Appreciation Rights Scheme:
In issue at
30 April 2019
Grant date
Awarded
during period
Exercised /
lapsed during
period
In issue at
30 April 2020
Vesting period
Start
Finish
Eric Diack
5,000,000
1 Mar 2018
5,000,000
1 Mar 2018
Paul Fletcher
5,000,000
5,000,000
5,000,000
31 Mar 2019
31 Mar 2022
5,000,000
31 Mar 2020
31 Mar 2023
5,000,000
4 Nov 2019
3 Nov 2022
5,000,000
4 Nov 2019
31 Mar 2023
Craig Harvey
1,250,000
1 Jun 2015
(1,250,000)
-
31 Mar 2017
31 Mar 2020
9,000,000
1 Mar 2018
9,000,000
1 Mar 2018
9,000,000
9,000,000
9,000,000
31 Mar 2019
31 Mar 2022
9,000,000
31 Mar 2020
31 Mar 2023
9,000,000
4 Nov 2019
3 Nov 2022
9,000,000
4 Nov 2019
31 Mar 2023
Andrew Prelea
18,000,000
1 Jun 2015
(18,000,000)
-
31 Mar 2017
31 Mar 2020
18,000,000
1 Mar 2018
18,000,000
1 Mar 2018
18,000,000
18,000,000
18,000,000
31 Mar 2019
31 Mar 2022
18,000,000
31 Mar 2020
31 Mar 2023
18,000,000
4 Nov 2019
3 Nov 2022
18,000,000
4 Nov 2019
31 Mar 2023
Roy Tucker
8,000,000
1 Jun 2015
(8,000,000)
-
31 Mar 2017
31 Mar 2020
9,000,000
1 Mar 2018
9,000,000
1 Mar 2018
9,000,000
9,000,000
9,000,000
31 Mar 2019
31 Mar 2022
9,000,000
31 Mar 2020
31 Mar 2023
9,000,000
4 Nov 2019
3 Nov 2022
9,000,000
4 Nov 2019
31 Mar 2023
109,250,000
82,000,000
(27,250,000)
164,000,000
See note 22 for further details of the SARS.
Directors’ remuneration
Eric Diack
Paul Fletcher
Craig Harvey
Nick Hatch
Brian Moritz
Andrew Prelea
Roy Tucker
2020 (12 months)
2019 (13 months)
Salary/Fees
$’000
30
64
180
28
32
226
150
710
Other
$’000
-
2
-
-
-
-
-
2
Total
$’000
30
66
180
28
32
226
150
712
Salary/Fees
$’000
33
-
196
28
33
244
163
697
Other
$’000
-
-
-
-
-
-
-
-
Total
$’000
33
-
196
28
33
244
163
697
The Company has developed a practice of deferring payment of varying proportions of sums earned by Directors until the Company
liquidity position improves.
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 5 to 12.
14
GOVERNANCEVast Resources Plc / Report and Accounts 2020 Research and development
During the period, the Company began a drilling campaign with the objective of completing a JORC 2012 compliant resource estimate at
Baita Plai Polymetallic Mine (“BPPM”). The JORC will be published by the end of October 2020 and will cover four years of production.
During the period, the Company began a program of metallurgical testing with Grinding Solutions Ltd in order to optimise the
concentrate production process at BPPM upon start-up. The testing was concluded after the period end and met the Company’s internal
expectations, confirming high recoveries and high-grade copper and zinc concentrates.
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.
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 26.
By order of the Board
Ben Harber
Secretary
28 October 2020
15
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review 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.
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.
16
GOVERNANCEVast Resources Plc / Report and Accounts 2020 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 year
ended 30 April 2020, which comprise:
• the Group statement of comprehensive income for the year ended 30 April 2020;
• the Group and Parent Company statements of financial position as at 30 April 2020;
• the Group and Parent Company statements of cash flows for the year then ended;
• the Group and Parent Company statements of changes in equity for the year 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, and as regards the Parent Company, as applied in accordance
with the provisions of the Companies Act 2006.
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 2020 and
of the Group’s loss 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.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which ISA’s (UK) require us to report to you when:
• the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
• the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about
the Group’s and the Parent Company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve
months from the date when the financial statements are authorised for issue.
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 $170,000
(2019: $150,000), 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.
17
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Independent Auditor’s report Continued
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
audit procedures to be performed for group reporting purposes, the component is located in Romania. The components within the scope
of our work accounted for 100% of the group’s total assets and 100% of the result for the period. 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.
We have determined the following key audit matters. This is not a complete list of all risks identified by our audit.
Key audit matter
How the scope of our audit addressed the key audit matter
Carrying value of property,
plant and equipment
We agreed a sample of additions during the year to underlying supporting documentation
considering whether they have been appropriately capitalised.
At 30 April 2020 the group had
property, plant and equipment
of $12.7m (2019: $11.2m). The
group did not recognise any
revenue in the year to 30 April
2020 and therefore there could
be evidence that these assets
are impaired.
We reviewed management’s assessment as to whether there is any indication of impairment to
the assets in line with IAS 36 – Impairment of assets. That assessment concluded that there was
no indication of impairment and that the absence of revenue generated was due to the assets
either being under care and maintenance until resources are available to put them into production
or the assets being under development in the period. In particular, we had regard to:
• whether there was any evidence that the estimates of reserves had changed during the year;
• whether metal prices had decreased indicating that the value of those reserves could be less
than the carrying amount of the assets; and
• whether projected future extraction costs might give rise to an impairment
We considered management’s plans for the development of the assets in the current year and
also for commercialisation of the assets in future periods.
We also assessed the adequacy of disclosures made in the financial statements in relation to the
property plant and equipment.
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.
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 strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
18
GOVERNANCEVast Resources Plc / Report and Accounts 2020 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.
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
28 October 2020
19
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Group statement of comprehensive income
for the year ended 30 April 2020
Revenue
Cost of sales
Gross loss
Overhead expenses
Depreciation of property, plant and equipment
Profit / (loss) on sale of property, plant and equipment
Share option and warrant expense
Sundry income
Exchange loss
Other administrative and overhead expenses
Loss from operations
Finance income
Finance expense
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 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
Loss per share – basic and diluted
Loss per share continuing operations – basic and diluted
30 Apr 2020
12 Months
Group
30 Apr 2019
13 Months
Group
Notes
$’000
$’000
-
-
-
(7,243)
(913)
-
(440)
175
(1,977)
(4,088)
(7,243)
30
(1,099)
(8,312)
-
(8,312)
-
(8,312)
-
1,045
(7,267)
(8,000)
(312)
(8,312)
(6,955)
(312)
(7,267)
(0.08)
(0.08)
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)
2
22
4
4
5
12
8
8
The accompanying accounting policies and notes on pages 30 to 53 form an integral part of these financial statements.
20
FINANCIAL STATEMENTSVast Resources Plc / Report and Accounts 2020
Group statement of changes in equity
for the year ended 30 April 2020
Share
capital
Share
premium
Share
option
reserve
Foreign
currency
translation
reserve
Available
for sale
reserve
EBT
reserve
Retained
deficit
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Non-
controlling
interests
$’000
Total
$’000
Total
$’000
At 31 March 2018
20,040
77,237
1,580
(2,663)
3
(3,942)
(97,688)
(5,433)
23,047
17,614
Total comprehensive loss
for the period
Share option and warrant
charges
Share options and
warrants lapsed
Derecognised on
discontinued operations:
- Dallaglio Investments
(Private) Limited
Derecognition of EBT
reserve
-
-
-
-
-
-
-
-
Shares issued for cash:
3,662
4,448
- to settle liabilities
-
1,941
(3)
264
(229)
-
-
-
-
-
-
-
At 30 April 2019
23,702
81,685
1,615
(722)
Total comprehensive loss
for the period
Share option and warrant
charges
Share options and
warrants lapsed
Share warrants issued to
debt provider
Derecognised on
discontinued operations
- Millwall International
Investments Limited
Shares issued for cash
-
-
-
-
-
-
-
-
-
-
- for cash consideration
3,373
1,303
- to settle liabilities
21
9
-
1,045
440
(382)
1,310
-
-
-
-
-
-
(1,178)
-
-
At 30 April 2020
27,096
82,997
2,983
(855)
-
-
-
243
2,181
6,853
9,034
264
-
264
-
-
229
-
-
(29,941)
(29,941)
3,942
(3,721)
-
-
221
8,110
-
-
-
-
221
8,110
-
-
(100,937)
5,343
(41)
5,302
-
-
-
-
-
-
-
(8,000)
(6,955)
(312)
(7,267)
-
440
382
-
-
1,310
1,178
-
-
-
4,676
30
-
-
-
-
4
-
440
-
1,310
-
4,680
30
-
(107,377)
4,844
(349)
4,495
-
-
-
-
-
-
-
-
-
-
-
-
-
The accompanying accounting policies and notes on pages 30 to 53 form an integral part of these financial statements.
21
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Company statement of changes in equity
for the year ended 30 April 2020
Share
capital
Share
premium
Share
option
reserve
Foreign
currency
translation
reserve
Available
for sale
reserve
EBT
reserve
Retained
deficit
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Total
$’000
At 31 March 2018
20,040
77,237
1,580
(4,954)
(2)
(3,942)
(63,213)
26,746
Total comprehensive loss for the year
Share option and warrant charges
Share options and warrants lapsed
Derecognition of EBT reserve
Shares issued for cash
- to settle liabilities (including Directors)
-
-
-
-
-
-
-
-
3,662
4,448
-
-
-
264
(229)
-
-
-
-
-
-
-
-
-
At 30 April 2019
23,702
81,685
1,615
(4,954)
Total comprehensive profit for the period
Share option and warrant charges
Share options and warrants lapsed
Share warrants issued to debt provider
Shares issued:
- for cash consideration
- to settle liabilities
-
-
-
-
-
-
-
-
-
440
(382)
1,310
3,373
1,303
21
9
-
-
-
-
-
-
-
-
At 30 April 2020
27,096
82,997
2,983
(4,954)
2
-
-
-
-
-
-
-
-
-
-
-
-
-
3,942
(3,718)
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,237)
(3,235)
-
229
-
-
264
-
224
8,110
-
(69,939)
32,109
(13,937)
(13,937)
-
382
-
-
-
440
-
1,310
4,676
30
(83,494)
24,628
The accompanying accounting policies and notes on pages 30 to 53 form an integral part of these financial statements.
22
FINANCIAL STATEMENTSVast Resources Plc / Report and Accounts 2020 Group and Company statements of financial position
for the year ended 30 April 2020
Assets
Notes
$’000
$’000
$’000
$’000
30 Apr 2020
Group
30 Apr 2019
Group
30 Apr 2020
Company
30 Apr 2019
Company
Non-current assets
Property, plant and equipment
Investment in subsidiaries
Loans to group companies
Current assets
Inventory
Receivables
Available for sale investments
Cash and cash equivalents
Total current assets
Total Assets
Equity and Liabilities
Capital and reserves attributable to equity holders of the
Parent
Share capital
Share premium
Share option reserve
Foreign currency translation reserve
Retained deficit
Non-controlling interests
Total equity
Non-current liabilities
Loans and borrowings
Provisions
Deferred tax liability
Current liabilities
Loans and borrowings
Trade and other payables
Total current liabilities
Total liabilities
Total Equity and Liabilities
10
11
14
15
16
17
19
17
18
12,735
11,261
-
-
-
-
12,735
11,261
476
2,461
920
478
4,335
17,070
27,096
82,997
2,983
(855)
413
2,537
-
569
3,519
14,780
23,702
81,685
1,615
(722)
(107,377)
(100,937)
4,844
(349)
4,495
8,343
420
-
8,763
392
3,420
3,812
12,575
17,070
5,343
(41)
5,302
4,461
489
-
4,950
1,476
3,052
4,528
9,478
14,780
2
1,297
27,258
28,557
-
298
920
390
1,608
30,165
27,096
82,997
2,983
(4,954)
(83,494)
24,628
-
24,628
4,589
-
-
4,589
-
948
948
5,537
30,165
-
1,674
30,933
32,607
-
361
-
218
579
33,186
23,702
81,685
1,615
(4,954)
(69,939)
32,109
-
32,109
310
-
-
310
-
767
767
1,077
33,186
The accompanying accounting policies and notes on pages 30 to 53 form an integral part of these financial statements. The parent
Company reported a loss after taxation for the year of US$ 13.937 million (2019: US$ 3.235 million). The financial statements on pages 20
to 53 were approved and authorised for issue by the Board of Directors on 28 October 2020 and were signed on its behalf by:
Paul Fletcher
Director
Registered number 5414325
28 October 2020
23
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Group and Company statements of cash flow
for the year ended 30 April 2020
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 on sale of property, plant and equipment
(Gain) / loss on disposal of discontinued operations
Loss on disposal of available for sale investments
Liabilities settled in shares
Share option expense
Changes in working capital:
Decrease (increase) in receivables
Decrease in inventories
Increase (decrease) in payables
Taxation paid
30 Apr 2020
Group
30 Apr 2019
Group
30 Apr 2020
Company
30 Apr 2019
Company
$’000
$’000
$’000
$’000
(8,312)
-
913
-
-
-
30
440
(6,929)
346
131
1,220
1,697
-
(9,951)
17,047
4,554
(76)
(8,649)
10
-
264
3,199
2,141
1,291
(1,277)
2,155
-
(13,937)
(3,235)
-
-
-
418
-
30
440
(13,049)
(50)
84
181
215
-
-
-
(2)
-
-
-
264
(2,973)
(268)
-
452
184
-
Cash generated by / (used in) operations
(5,232)
5,354
(12,834)
(2,789)
Investing activities:
Payments to acquire property, plant and equipment
Payments to acquire new subsidiary
Proceeds on disposal of property, plant and equipment
Payments to acquire available for sale investments
Net cash inflow on disposal of discontinued operations
Proceeds of derecognition of EBT reserve
Payments to acquire additional shares in subsidiary
Decrease (increase) in investment in joint venture
(Increase) decrease in loans to group companies
(2,756)
-
-
(891)
-
-
-
-
-
(11,391)
(4,480)
168
-
1,592
221
-
559
-
Total cash used in investing activities
(3,647)
(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
4,625
6,519
(2,356)
8,788
(91)
569
478
8,110
6,165
(7,029)
7,246
(731)
1,300
569
(2)
-
-
(891)
-
-
(41)
-
3,673
2,739
4,625
5,788
(146)
10,267
172
218
390
(1)
(90)
-
3
-
221
-
-
(5,754)
(5,621)
8,110
310
-
8,420
10
208
218
The accompanying notes and accounting policies on pages 30 to 53 form an integral part of these financial statements.
24
FINANCIAL STATEMENTSVast Resources Plc / Report and Accounts 2020 Statement of accounting policies
for the year ended 30 April 2020
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 previous 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 twelve-month period ended
30 April 2020 and are therefore not entirely comparable to the
previous year’s results for the thirteen-month period ended 30
April 2019.
The financial statements are prepared under the historical cost
convention on a going concern basis.
On 23 October 2019, the Company signed a binding conditional
Bond Issue Deed (the “Deed”) for a facility of up to US$15,000,000
through an issuance of secured convertible bonds (the " Bonds")
to a UK based fund, Atlas Capital Markets (“Atlas”). The Bonds
consist of four tranches, the first tranche of US$7,101,947
earmarked for placing BPPM into production and to repay US$2
million of financial creditors, and the remaining tranches being
earmarked for the planned ZCDC joint venture on the Chiadzwa
Community Diamond Concession once all condition precedents
have been met, including but not limited to the procurement of a
Special Grant to mine alluvial diamonds at the Concession. On 31
January 2020, the Company drew down on the first Atlas tranche.
Subsequent to the reporting period end, the Company has placed
BPPM into underground and concentrate production and will
execute its first sales of concentrate in early November 2020. On
current production projections, taking into account the results
of the BPPM JORC 2012 compliance resource estimate and the
metallurgical test results, management estimates the Company is
now in a position to self- finance its operations and will also be in
a position to refinance the first tranche of the Atlas facility more
cheaply and acquire further liquidity reserves. Upon conclusion
of the ZCDC joint venture agreement, management estimates
the Company will have sufficient financial resources to bring the
Chiadzwa Community Diamond Concession to full production
and to generate positive cashflow. At this stage, 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 that the Company’s financial situation has improved over
previous years and that it has the 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:
a) Impairment of intangibles and mining assets
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. While
the Company has reached production at BPPM and will be
generating sales subsequent to the end of the reporting period,
in the event the Company is unable to continue to self-finance
or to refinance, 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.
b) Going concern and Inter-company loan recoverability
The Group's cash flow projections, which have used
conservative assumptions 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 in the basis of preparation and going concern assessment
25
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Statement of accounting policies Continued
above, the Group would require additional funding in the event
that production forecasts are not met in the near-term. The
Group is confident of its capacity to raise any additional funding
should these short-term projections not be realised given the
quality of the BPPM asset.
The recoverability of inter-Company loans advanced by the
Company to subsidiaries depends also on the subsidiaries
realising their cash flow projections.
c) Estimates of fair value
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 relate 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.
d) Provisions
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.
e) VAT recoverable
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.
26
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
The Group’s principal financial assets are cash and cash
equivalents and receivables. The Group also holds a short-term
investment available for sale.
FINANCIAL STATEMENTSVast Resources Plc / Report and Accounts 2020 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 as they are held within a business
model whose objective is to collect contractual cashflows which
are solely payments of principal and interest. 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 under the expected
loss model with changes in the provision being recorded in the
statement of comprehensive income. 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.
Financial assets held at fair value
Investments available for sale are measured at fair value through
the profit and loss account as their value will be recovered through
sale.
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.
The exchange rates applied at each reporting date were as
follows:
30 April 2020:
$1.2604: £1 and
$1: RON 4.4541 and $1: ZWL 25.0000
30 April 2019:
$1.3036: £1 and
$1: RON 4.2440 and $1: ZWL 3.2641
31 March 2018:
$1.4012: £1 and
$1: RON 3.7779 and $1: ZWL 1.0000
On 22 February 2019 all United States dollar balances in
Zimbabwe were restated as RTGS (Real Time Gross Settlement)
balances, later renamed Zimbabwe Dollar (ZWL), as a separate
and distinct currency tradeable against the US dollar. On 27 March
2020 the Government of Zimbabwe pegged the rate of exchange
at $1: 25. Subsequent to the balance sheet date, the ZWL has
depreciated significantly. This has an immaterial impact on the
balance sheet and profit and loss for the year ended 30 April
2020 and for the ongoing financial position of our operations in
Zimbabwe.
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.
27
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Statement of accounting policies Continued
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 metal concentrates is the Group’s single
performance obligation under its contracts with its customers.
The same policy applies to warranties.
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 loading.
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.
28
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:
2.5% per annum, straight line
Plant and machinery:
15% per annum, reducing balance
Fixtures, fittings & equipment: 20% per annum, reducing balance
Computer assets:
33.33% per annum, straight line
Motor vehicles:
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.
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
FINANCIAL STATEMENTSVast Resources Plc / Report and Accounts 2020 made irrespective of whether the market vesting conditions are
satisfied. The cumulative expense is not adjusted for failure to
achieve a market vesting condition.
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.
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.
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.
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
There are no new IFRS accounting standards having application to
the current reporting period.
29
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Notes to financial statements
for the year ended 30 April 2020
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
Discontinue d operations
Mining, exploration and
development
Admin and
corporate
Total
Mining, exploration and
development
Admin and
corporate
Total
Europe
$’000
Africa
$’000
$’000
$’000
Europe
$’000
Africa
$’000
$’000
$’000
Twelve months to 30 April 2020
Revenue
Production costs
Gross profit (loss)
Impairment of intangible assets
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
Loss for the year from discontinued
operations
30 April 2020
Total assets
Total non-current assets
Additions to non-current assets
Total current assets
Total liabilities
-
-
-
-
(911)
-
-
175
(1,170)
(1,549)
-
(508)
-
-
(3,963)
-
14,831
12,627
2,693
2,716
7,584
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2)
-
(440)
-
-
-
-
-
(913)
-
(440)
175
(807)
(1,977)
(2,539)
(4,088)
30
30
(591)
(1,099)
-
-
-
-
(4,349)
(8,312)
-
-
2,239
17,070
108
63
1,619
4,991
12,735
2,756
4,335
12,575
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30
FINANCIAL STATEMENTSVast Resources Plc / Report and Accounts 2020
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
Gold bullion
Mineral concentrates
Other
Continuing operations
Discontinue d operations
Mining, exploration and
development
Admin and
corporate
Total
Mining, exploration and
development
Admin and
corporate
Total
Europe
$’000
Africa
$’000
$’000
$’000
Europe
$’000
Africa
$’000
$’000
$’000
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
3,432
-
(4,344)
104
(6)
(2)
(264)
-
(912)
(1,206)
84
(264)
311
(515)
(2,798)
(2,806)
(4,322)
1
1
(432)
(845)
-
-
-
-
(3,920)
(9,951)
-
1,169
41
53
1,078
1,044
14,780
11,261
1,737
3,519
9,478
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31,243
(18,527)
12,716
(3,348)
(8)
-
670
6,494
-
-
-
-
-
-
-
(779)
31,243
(18,527)
12,716
(3,348)
(8)
-
670
5,715
(4,894)
(22)
(4,916)
2
(1,014)
8,649
(1,408)
-
-
-
(11)
2
(1,014)
8,649
(1,419)
17,859
(812)
17,047
-
-
-
14,371
-
-
-
-
-
-
-
-
-
-
14,371
-
Romania
Zimbabwe
Romania
Zimbabwe
$’000
$’000
$’000
$’000
-
31,243
-
27,590
3,328
104
-
-
3,098
-
-
-
3,432
31,243
3,098
27,590
There were no sales made during the year.
In 2019 100% of gold bullion and mineral concentrate sales 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 reported for the thirteen month period ended 30 April
2019 form part of discontinued operations.
31
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review
Notes to financial statements Continued
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 (gain)
Loss (gain) on disposal of property, plant and equipment
3. Auditor’s remuneration
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
Auditor’s remuneration from discontinued operations
4. Finance income and expense
Finance income
Interest received on bank deposits
Other interest received
Finance expense
Finance expense on secured borrowings
Finance expense on unsecured borrowings
Finance expense from discontinued operations
5. Taxation
Income tax on profits
Deferred tax charge
Tax charge (credit)
Income tax on profits
Deferred tax charge
Tax charge from discontinued operations
32
2020
Group
$’000
101
913
63
440
1,977
-
2020
Group
$’000
77
24
-
101
-
2020
Group
$’000
3
27
30
2020
Group
$’000
1,079
20
1,099
-
2020
Group
$’000
-
-
-
-
-
-
2019
Group
$’000
105
1,206
43
264
2,798
(84)
2019
Group
$’000
59
46
-
105
33
2019
Group
$’000
1
-
1
2019
Group
$’000
770
75
845
1,014
2019
Group
$’000
-
-
-
485
934
1,419
FINANCIAL STATEMENTSVast Resources Plc / Report and Accounts 2020 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% (2019: 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
2020
Group
$’000
(8,312)
(1,579)
(137)
-
110
(305)
(1,911)
-
2019
Group
$’000
8,515
1,618
2,007
(4,629)
1,308
(1,056)
(1,237)
485
There was no taxation charge for continuing operations during the year (2019: US$ nil).
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.
Tax losses
Accumulated tax losses
2020
Group
$’000
2019
Group
$’000
2020
Company
$’000
2019
Company
$’000
54,658
47,460
31,541
29,407
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
Tax losses
Staff costs (including directors) consist of:
Wages and salaries – management
Wages and salaries – other
Consultancy fees
Social Security costs
Healthcare costs
Pension costs
2020
Group
$’000
723
1,891
2,614
508
31
1
63
2019
Group
$’000
2019
Continuing
Discontinued
$’000
$’000
1,383
6,057
7,440
1,057
257
-
201
753
2,444
3,197
754
165
-
43
The average number of employees (including directors) during the year
was as follows:
Management
Other operations
3,217
8,955
4,159
11
168
179
19
590
609
11
208
219
The comparative figures for 2019 include employees from discontinued operations.
630
3,613
4,243
303
92
-
158
4,796
8
382
390
33
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review
Notes to financial statements Continued
7. Directors’ remuneration
Directors’ emoluments
Company contributions to pension schemes
Healthcare costs
Directors and key management remuneration
Gain on share options exercised by directors (not charged to profit or loss as explained below)
2020
Group
$’000
710
2
-
712
-
2019
Group
$’000
697
-
-
697
-
The Directors are considered to be the key management of the Group and Company.
Five 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 $225,939 (2019 (13 months): $244,166).
Included within the above remuneration are amounts accrued at 30 April 2020.
8. Earnings per share
2020
Group
$’000
2019
Group
$’000
Profit and loss per ordinary share has been calculated using the weighted average number of ordinary shares in
issue during the relevant financial year.
The weighted average number of ordinary shares in issue for the period is:
9,597,112,214
5,887,042,985
Profit / (loss) for the period: ($’000)
Profit / (Loss) per share basic and diluted (cents)
Profit / (loss) for the period from continuing operations: ($’000)
Profit / (loss) per share for the period from continuing operations - basic and diluted
Profit / (loss) for the period from discontinued operations: ($’000)
Profit / (loss) per share for the period from discontinued operations - basic and diluted
The effect of all potentially dilutive share options is anti-dilutive.
(8,000)
(0.08)
(8,000)
(0.08)
-
-
243
0.00
(9,649)
(0.16)
9,892
0.17
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.
34
FINANCIAL STATEMENTSVast Resources Plc / Report and Accounts 2020
10. Property, plant and equipment
Group
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Plant and
machinery
Fixtures,
fittings and
equipment
Computer
assets
Motor
vehicles
Buildings and
Improvements
Mining
assets
Capital
Work in
progress
Cost at 1 April 2018
Additions during the period
Acquired through business combination
Reclassification
Disposals during the period
19,247
1,392
2,812
246
(14)
170
103
21
-
-
291
118
102
-
-
699
313
2
-
-
3,740
27,431
176
1,790
134
(82)
5,428
-
-
-
Discontinued operations
(20,142)
(243)
(382)
(707)
(2,240)
(26,188)
(2,830)
(52,732)
Impairment
Foreign exchange movements
Cost at 30 April 2019
Additions during the year
Foreign exchange movements
Cost at 30 April 2020
Depreciation at 1 April 2018
Charge for the year
Acquired through business combination
Disposals during the year
Discontinued operations
Foreign exchange movements
Depreciation at 30 April 2019
Charge for the year
Foreign exchange movements
Depreciation at 30 April 2020
Net book value at 31 March 2018
Net book value at 30 April 2019
Net book value at 30 April 2020
(338)
3,203
2
(141)
3,064
4,798
2,816
52
(4)
(5)
46
3
(1)
48
83
44
-
-
(11)
118
36
(4)
150
140
162
9
-
(62)
245
37
(17)
265
405
100
-
-
(5,402)
(84)
(238)
(319)
(201)
2,059
455
(117)
2,397
14,449
1,144
667
(8)
35
12
-
47
87
11
1
(7)
66
14
(2)
78
151
52
72
(54)
132
26
(7)
151
294
113
114
(306)
3,212
-
(119)
3,093
538
210
-
-
(68)
(95)
585
342
(52)
875
3,202
2,627
2,218
(497)
6,174
143
(190)
6,127
1,719
1,222
-
-
(1,828)
(73)
1,040
64
(38)
1,066
25,712
5,134
5,061
604
-
-
-
-
-
604
-
-
604
1,639
2,180
4,602
Company
Cost at 31 March 2018
Additions during the period
Disposals during the period
Cost at 30 April 2019
Additions during the year
Disposals during the year
Cost at 30 April 2020
Depreciation at 31 March 2018
Charge for the period
Disposals during the period
Depreciation at 30 April 2019
Charge for the year
Disposals during the year
Depreciation at 30 April 2020
Net book value at 30 April 2019
Net book value at 30 April 2020
Plant and
machinery
Fixtures,
fittings and
equipment
Computer
assets
Motor
vehicles
Buildings and
Improvements
$’000
$’000
$’000
$’000
$’000
30
-
-
30
-
-
30
30
-
-
30
-
-
30
-
-
5
-
-
5
-
-
5
5
-
-
5
-
-
5
-
-
23
-
-
23
2
-
25
23
-
-
23
-
-
23
-
2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$’000
53,821
11,391
2,243
3,861
-
4,727
(380)
-
-
(96)
(110)
(1,329)
2,784
15,782
2,535
(113)
2,756
(585)
5,206
17,953
8,287
4,554
61
(4)
(7,939)
(438)
4,521
913
(216)
5,218
45,534
11,261
12,735
Total
$’000
58
-
-
58
2
-
60
58
-
-
58
-
-
58
-
2
35
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Notes to financial statements Continued
11. Investments in subsidiaries
Cost at the beginning of the year
Additions during the year
Derecognise Millwall Ltd - cessation of activities
Cost at the end of the year
2020
Company
$’000
1,674
-
(377)
1,297
2019
Company
$’000
1,584
90
-
1,674
The principal subsidiaries of Vast Resources plc, all of which are included in these consolidated Annual Financial Statements, are as
follows:
Company
Country of
registration
Vast Baita Plai SA (formerly African
Romania
Consolidated Resources SRL)
Proportion held by group
Class
Ordinary
2020
80%
2019
80%
Nature of business
Mining exploration and
development
Sinarom Mining Group SRL
Romania
Ordinary
100%
100%
Mining exploration and
Vast Resources Romania Ltd
United Kingdom
Ordinary
Vast Resources Zimbabwe
Zimbabwe
Ordinary
100%
100%
100%
100%
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 27, at the end of this
report.
12. Discontinued operations
There were no operations discontinued during the current year.
In the previous period to 30 April 2019, 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.
Included in the comparative figures for the thirteen months ended 30 April 2019 are amounts in respect of the profit after taxation from
discontinued activities, the gain on disposal of operations, and the cash generated by the discontinued operations. The breakdown of
these amounts is as follows:
Profit after taxation from discontinued operations
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
Gain on disposal of operations
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
Total gain on disposal of operations
36
30 Apr 2019
Group
$’000
8,649
2,683
5,715
17,047
30 Apr 2019
Group
$’000
3,500
(24,792)
29,941
-
-
-
8,649
FINANCIAL STATEMENTSVast Resources Plc / Report and Accounts 2020 Components of profit after tax from discontinued operations
Revenue
Cost of sales
Gross profit
Overhead expenses
Depreciation
(Loss) profit on disposal of fixed assets
Sundry income
Exchange gains
Other administrative expenses
Profit from operations
Finance income
Finance expense
Loss on disposal of interest in subsidiary loans
Profit before taxation from continuing operations
Taxation charge
Total profit after taxation for the year
Other comprehensive income
Total comprehensive profit for the period
Total comprehensive profit attributable to:
The equity holders of the parent company
Non-controlling interest
30 Apr 2019
Group
$’000
31,243
(18,527)
12,716
(1,887)
(3,348)
(8)
670
5,715
(4,916)
10,829
2
(1,014)
-
9,817
(1,419)
8,398
(3)
8,395
1,249
7,146
8,395
Cash generated from continuing and discontinued activities
Operating activities
Investing activities
Financing activities
2019
Continuing
operations
Discontinued
operations
(7,872)
(1,348)
5,262
13,226
(11,983)
1,985
13. 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.
14. Inventory
Minerals held for sale
Production stockpiles
Consumable stores
Apr 2020
Group
$’000
Apr 2019
Group
$’000
Apr 2020
Company
$’000
Apr 2019
Company
$’000
58
46
372
476
61
48
304
413
-
-
-
-
-
-
-
-
37
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review
Notes to financial statements Continued
15. Receivables
Trade receivables
Other receivables
Short term loans
Prepayments
VAT
Apr 2020
Group
$’000
Apr 2019
Group
$’000
Apr 2020
Company
$’000
Apr 2019
Company
$’000
359
801
212
81
1,008
2,461
-
1,502
174
74
787
2,537
-
86
212
-
-
298
-
137
224
-
-
361
Carrying
amount before
deducting any
impairment loss
Related
Impairment loss
Net carrying
amount
Neither impaired
nor past due on
30 April 2020
Not more than
three months
More than
three months
and not more
than six months
More than six
months
Of which: not impaired as at 30 April 2020 and past
Of which:
due in the following periods:
Trade receivables
Other receivables
1,133
1,069
2,202
774
268
1,042
359
801
1,160
352
801
1,153
-
-
-
7
-
7
-
-
-
At the reporting date, included within VAT receivable is an amount in respect of VAT owed to Vast Baita Plai SA (formerly African
Consolidated Resources SRL) of US$ 1,001,900 (RON 4,462,563) The amount represents VAT paid on the Baita Plai Mine’s care
operations. As reported previously, ANAF, the Romanian revenue authority had refused to accept amounts included in this balance 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 instructed an independent VAT audit which has been completed satisfactorily and supported the Group’s
claim for repayment. Accordingly, the Court ruled in favour of Vast Baita Plai SA. The tax authorities have appealed against the decision
and the Company continues to maintain that the case has no merit.
16. Available for sale investments
During the year Vast Resources PLC acquired a short-term investment in the Convertible 15% Loan Notes of EMA of principal value US$
750,000. These notes fund EMA’s and Blueberry’s working capital and capital expenditure requirements in relation to exploration at the
Blueberry mine and other matters necessary for the purpose of achieving an IPO. The conversion feature of the loan notes allows the
holder to convert every US$ 10,000 of principal into 0.075% of shares at the time of the IPO. These notes are held for sale and are carried
at fair value through the profit and loss account as their value will be recovered through sale.
17. Loans and borrowings
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 - secured
- unsecured
Total loans and borrowings
38
Apr 2020
Group
$’000
Apr 2019
Group
$’000
Apr 2020
Company
$’000
Apr 2019
Company
$’000
8,361
179
(197)
8,343
-
195
-
18
179
392
8,735
4,461
-
-
4,410
179
4,461
4,589
978
498
-
-
1,476
5,937
-
-
-
-
-
-
-
310
-
310
-
-
-
4,589
310
FINANCIAL STATEMENTSVast Resources Plc / Report and Accounts 2020 Non-current secured borrowings consist of:
• US$ 4,410,477 (2019: US$ nil) first tranche of $15,000,000 Convertible Bond facility issued to Atlas Special Opportunities LLC. The
Bonds are secured by a charge on the assets held by Vast Baita Plai SA (formerly African Consolidated Resources SRL) which is the
holder of the rights to the Baita Plai Mine and by a pledge on both Vast Resources PLC and AP Mining Group’s shares in Vast Baita Plai
SA. The loan bears interest at 5%, and a 10% redemption premium (calculated on the principal amount). The bonds are repayable in
two years from the issue of each tranche. The principal amount of the first tranche due on maturity is US$ 7,101,947. The difference
between the carrying value of US$4,410,477 and the amount due at maturity will be recognised in the statement of comprehensive
income using the amortised cost approach over the term of the tranche. This includes the cost of warrants issued to Atlas Special
Opportunities LLC at draw down which amounted to US$ 1.310 million and other facility related costs.
• US$ 3,925,465 (2019: US$ 4,417,010) secured offtake finance from Mercuria Energy Trading SA. The loan is secured by a charge on the
assets held by Sinarom Mining Group SRL which is the holder of the rights to the Manaila Mine and by a pledge on the shares of Vast
Resources PLC 100% holding. The loan bore interest during the period of 9.5%.
• US$ 25,738 (2019: US$ 43,449) asset financing loans secured on the underlying movable assets belonging to Vast Baita Plai SA.
Current unsecured borrowing consists of:
• US$ 194,663 (2019: US$ 189,072) loans from the non-controlling interests in Vast Baita Plai SA, 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$ 179,402 (2019: 309,635) loan from M Semere bearing an interest rate of 6%. There is no expectation that this loan will be called.
Reconciliation of liabilities arising from financing activities
2020 Group
Long-term borrowings
Short-term borrowings
1 May 2019
Cash -flows
Amortised
finance
charges
Loans repaid
in shares
Issuance of
warrants
Exchange
adjustments
30 Apr 2020
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Non-cash changes
4,461
1,476
4,357
(1,311)
865
234
(30)
-
(30)
(1,310)
-
(1,310)
8,343
392
8,735
(7)
(7)
Total liabilities from financing activities
5,937
3,046
1,099
2019 Group
Long-term borrowings
Short-term borrowings
1 Apr 2018
Cash -flows
Amortised
finance
charges
Loans repaid
in shares
Issuance of
warrants
Exchange
adjustments
30 Apr 2019
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Non-cash changes
22,635
4,331
(3,754)
7,896
412
1,435
-
(14,873)
41
(900)
(5,743)
(5,543)
4,461
1,476
Total liabilities from financing activities
26,966
4,142
1,847
(900)
(20,616)
(5,502)
5,937
2020 Company
Long-term borrowings
Short-term borrowings
Total liabilities from financing activities
2019 Company
Long-term borrowings
Short-term borrowings
Total liabilities from financing activities
1 May 2019
Cash -flows
Amortised
finance
charges
Loans repaid
in shares
Issuance of
warrants
Exchange
adjustments
30 Apr 2020
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Non-cash changes
310
-
310
5,259
-
5,259
367
-
367
(30)
-
(30)
(1,310)
-
(1,310)
(7)
-
(7)
4,589
-
4,589
1 Apr 2018
Cash -flows
Amortised
finance
charges
Loans repaid
in shares
Issuance of
warrants
Exchange
adjustments
30 Apr 2019
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Non-cash changes
-
-
-
310
-
310
-
-
-
-
-
-
-
-
-
-
-
-
310
-
310
39
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Notes to financial statements Continued
18. Trade and other payables
Trade payables
Other payables
Other taxes and social security taxes
Accrued expenses
Trade payables
Other payables
19. Provisions
Apr 2020
Group
$’000
Apr 2019
Group
$’000
Apr 2020
Company
$’000
1,645
864
672
239
3,420
1,193
615
1,027
217
3,052
332
544
2
70
948
Apr 2019
Company
$’000
288
470
9
-
767
Amount
30 days
60 days
90 days
120 days
121 days or more
Maturity profile for trade and other payables
1,645
864
902
384
45
0
101
0
140
0
457
480
Provision for rehabilitation of mining properties
- Provision brought forward from previous periods
- Liability recognised during period
- Adjustment to provision during year
- Derecognised on disposal of subsidiary
Apr 2020
Group
$’000
Apr 2019
Group
$’000
Apr 2020
Company
$’000
Apr 2019
Company
$’000
489
-
(69)
420
1,397
-
(908)
489
-
-
-
-
-
-
-
-
As more fully set out in the Statement of Accounting Policies on page 26, 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.
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 26. 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.
40
FINANCIAL STATEMENTSVast Resources Plc / Report and Accounts 2020 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.
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
Credit risk
Apr 2020
Group
$’000
Apr 2019
Group
$’000
Apr 2020
Company
$’000
Apr 2019
Company
$’000
478
2,461
-
920
3,420
8,735
569
2,537
-
-
3,052
5,937
390
298
218
361
27,258
30,933
920
948
4,589
-
767
310
Financial assets, which potentially subject the Group and the Company to concentrations of credit risk, consist principally of cash, short-
term deposits, an available for sale investment in 15% loan notes funding the Blueberry project, and other receivables. Cash balances
are all held at recognised financial institutions. The 15% loan notes are considered fully recoverable given the project prospects and are
currently being marketed. 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
Available for sale investments
2020
Carrying value
$’000
478
2,461
920
2020
Maximum
exposure
$’000
478
2,461
920
2019
Carrying value
$’000
569
2,537
-
The Company’s maximum exposure to credit risk by category of financial instrument is shown in the table below:
2019
Maximum
exposure
$’000
569
10,454
-
2019
Maximum
exposure
$’000
218
361
-
2020
Carrying value
$’000
390
298
920
2020
Maximum
exposure
$’000
390
329
920
2019
Carrying value
$’000
218
361
-
27,258
27,258
30,933
36,237
41
Cash and cash equivalents
Receivables
Available for sale investments
Loans to Group Companies
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Notes to financial statements Continued
Market risk
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.
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 $0.478 million (2019: $0.569 million) which was made up as follows:
Sterling
United States Dollar
Euro
Lei (Romania)
Zimbabwe Dollar
2020
Group
$’000
385
77
-
12
4
478
2019
Group
$’000
218
205
-
31
115
569
At the reporting date, the Company had a cash balance of $0.390 million (2019: $0.218 million) which was made up as follows:
Sterling
United States Dollar
Euro
Lei (Romania)
2020
Company
2019
Company
$’000
385
4
-
1
$’000
218
-
-
-
390
218
The Group had interest bearing debts at the current year end of US$ 8.540 million (2019: US$ 5.749 million). These are made up as follows:
Interest rate
5 -9.5%
12%
6%
Secured long-term loans
Secured short-term loans
Unsecured loans
These loans are repayable as follows:
- Within 1 year
- Between 1 and 2 years
- In more than 2 years
2020
Group
$’000
8,361
-
179
8,540
179
8,361
-
2019
Group
$’000
4,461
978
310
5,749
1,288
4,461
-
2020
Company
$’000
2019
Company
$’000
-
179
179
179
-
-
-
310
310
310
-
-
Borrowings of US$ 3.9 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$ 39,000.
42
FINANCIAL STATEMENTSVast Resources Plc / Report and Accounts 2020 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 2020 and 30 April 2019, the currency exposure of the Group was
as follows:
At 30 April 2020
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Available for sale investments
At 30 April 2019
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Available for sale investments
Sterling
$’000
US Dollar
$’000
Euro
$’000
Other
$’000
Total
$’000
385
-
(443)
-
218
162
(320)
-
77
550
(1,184)
920
205
387
(461)
-
-
-
-
-
-
-
-
-
16
1,911
(1,793)
-
146
1,988
(2,271)
-
478
2,461
(3,420)
920
569
2,537
(3,052)
-
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 increasing post tax losses by $5,800 (2019: $5,952 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 decreasing post tax losses by $5,800 (2019:
$5,952 decrease)
At 30 April 2020 and 30 April 2019, the currency exposure of the Company was as follows:
At 30 April 2020
Cash and cash equivalents
Trade and other receivables
Loans to Group companies
Trade and other payables
Available for sale investments
At 30 April 2019
Cash and cash equivalents
Other receivables
Loans to Group companies
Trade and other payables
Available for sale investments
Liquidity risk
Sterling
$’000
US Dollar
$’000
Euro
$’000
Other
$’000
Total
$’000
385
-
(443)
-
218
137
(320)
-
4
298
27,258
(505)
920
-
224
30,933
(447)
-
-
-
-
-
-
-
-
1
-
-
-
-
-
-
-
-
-
390
298
27,258
(948)
920
218
361
30,933
(767)
-
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 7.
The Group’s maximum loan and borrowing balances are shown in the table below:
Loans and borrowings
2020
Carrying value
2020
Total Contractual
Future Cashflows
2019
Carrying value
2019
Total Contractual
Future Cashflows
$’000
8,735
$’000
12,711
$’000
5,937
$’000
6,912
The Company’s maximum loan and borrowing balances are shown in the table below:
43
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Notes to financial statements Continued
Loans and borrowings
2020
Carrying value
2020
Total Contractual
Future Cashflows
2019
Carrying value
2019
Total Contractual
Future Cashflows
$’000
4,589
$’000
7,912
$’000
310
$’000
329
Estimated future interest charges for the Group are $0.739 million within one year, and $1.256 million between one and two years.
Estimated future interest charges for the Company are $0.366 million within one year, and $0.976 million between one and two years.
As set out in Note 18 of the consolidated trade and other payables balance of $2.509 million, $1.331 million is due for payment within 60
days of the reporting date. The maturity profile of interest-bearing debts are highlighted above.
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.
Loans and borrowings
Less: cash and cash equivalents
Net debt
Total equity
Debt to capital ratio (%)
21. Share capital
As at 31 March 2018
Issued during the period *
As at 30 April 2019
Issued during the year *
As at 30 April 2020
Apr 2020
$’000
Apr 2019
$’000
8,735
(478)
8,257
4,495
5,937
(569)
5,368
5,302
183.7%
101.2%
Ordinary 0.1p
Deferred 0.9p
No of shares
Nominal value
No of shares
Nominal value
Share premium
5,125,286,982
2,819,884,329
7,945,171,311
2,734,051,311
10,679,222,622
7,190
3,662
10,852
3,394
14,246
863,562,664
-
863,562,664
-
863,562,664
12,850
-
12,850
-
12,850
77,237
4,448
81,685
1,312
82,997
* 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 21-22.
There were no shares reserved for issue under share options at 30 April 2020 (2019: 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 26 on page 52 for details of share issues after the reporting date.
44
FINANCIAL STATEMENTSVast Resources Plc / Report and Accounts 2020 No of shares
775,862,068
1,221
244
595,454,545
902,592,977
17,000,000
17,000,000
20,000,000
18,318
72,629
188,000
1,275
13,703,171
98,047,386
294,109,477
2,734,051,311
Issue price (p)
Purpose of issue
0.116
Placing
0.5
0.5
0.11
0.2
0.13
0.15
0.25
0.5
0.5
0.5
0.5
0.174
0.153
0.153
Exercise of open offer warrants
Exercise of open offer warrants
Placing
Placing
Subscription
Subscription
Subscription
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
Exercise of open offer warrants
To settle liabilities
Subscription
Placing
No of shares
Issue price (p)
Purpose of issue
8,200,000
244,240
513,456
300,000
539,280
78,701
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
238,095,238
0.525
Placing
2,426,640
400,000
1,384,087
3,000,000
14,043
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
133,914,127
0.645
Subscription
Date of issue
2020
4 Jun 2019
27 Jun 2019
8 Aug 2019
23 Aug 2019
7 Oct 2019
31 Oct 2019
31 Oct 2019
13 Nov 2019
2 Jan 2020
7 Jan 2020
7 Jan 2020
8 Jan 2020
03 Apr 2020
22 Apr 2020
30 Apr 2020
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
354,006
13,920
57,331
70,847,785
16,666,666
188,679,245
153,810
576,835
18 Dec 2018
68,000,000
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
13,754
164,469,356
255,604,120
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
0.5
0.5
0.5
0.6
0.6
0.53
0.5
0.5
0.1
0.5
0.24
0.12
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
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
45
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Notes to financial statements Continued
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 30 April 2019, 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 2020. The last date for exercise is 3 January 2021.
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 30 April 2019 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 2020. The last date for exercise is 3 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:
Exercise price
Options
In issue at
30 April 2019
Issued
during year
Lapsed
during year
Exercised
during year
In issue at
30 April 2020
Final exercise date
0.3p
0.25p
0.25p
0.45p
0.5p
0.5p
0.7p
20,000,000
-
-
72,000,000
62,000,000
5,000,000
48,000,000
48,000,000
28,500,000
-
-
-
-
-
(1,000,000)
(1,000,000)
(28,500,000)
-
(20,000,000)
-
-
-
-
20,000,000
52,000,000
62,000,000
5,000,000
47,000,000
47,000,000
-
149,500,000
134,000,000
(30,500,000)
(20,000,000)
233,000,000
March 2022
Nov 2022
Mar 2023
June 2020
March 2022
March 2023
Exercise price
Options
In issue at
31 March 2018
Issued
during year
Lapsed
during year
Exercised
during year
In issue at
30 April 2019
Final exercise date
-
20,000,000
5,000,000
50,500,000
50,500,000
24,500,000
28,500,000
-
-
-
-
-
-
-
(2,500,000)
(2,500,000)
(24,500,000)
-
159,000,000
20,000,000
(29,500,000)
-
-
-
-
-
-
-
20,000,000
March 2022
5,000,000
48,000,000
48,000,000
-
28,500,000
149,500,000
June 2020
March 2022
March 2023
March 2019
March 2020
0.3p
0.45p
0.5p
0.5p
0.7p
0.7p
46
FINANCIAL STATEMENTSVast Resources Plc / Report and Accounts 2020 The tables below reconcile the opening and closing number of share options and warrants in issue at each reporting date:
Exercise price
In issue at
30 April 2019
Issued
during year
Lapsed
during year
Exercised
during year
In issue at
30 April 2020
Final exercise date
0.13p
0.15p
0.26p
0.4p
0.5p
variable
variable
-
-
-
17,000,000
17,000,000
517,604,804
5,425,000
529,004,140
14,583,250
6,613,756
-
-
-
-
-
-
-
(5,425,000)
(7,807,017)
-
-
(17,000,000)
-
-
-
17,000,000
Aug 2022
517,604,804
31 Jan 2023
-
(281,687)
520,915,436
Dec 2020 *
-
-
14,583,250
6,613,756
Jan 2021
Mar 2021
555,626,146
551,604,804
(13,232,017)
(17,281,687)
1,076,717,246
variable
565,000,000
1,750,000,000
-
-
2,315,000,000
See Note
1,120,626,146
2,301,604,804
(13,232,017)
(17,281,687)
3,391,717,246
Exercise price
In issue at
31 March 2018
Issued
during year
Lapsed
during year
Exercised
during year
In issue at
30 April 2019
Final exercise date
0.4p
0.5p
variable
variable
variable
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
Note:
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,425,000
(18,270,103)
529,004,140
-
-
14,583,250
6,613,756
(18,270,103)
555,626,146
Oct 2019
Dec 2019
Jan 2021
Mar 2021
-
565,000,000
See Note
(18,270,103)
1,120,626,146
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$3,925,465 (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
2020
Weighted average
exercise price
(pence)
0.44
0.25
0.62
0.20
0.34
0.34
2019
Weighted average
exercise price
(pence)
0.44
0.30
0.44
0.50
0.44
0.43
Number
705,126,146
685,604,804
(43,732,017)
(37,281,687)
1,309,717,246
1,309,717,246
Number
732,896,249
20,000,000
(29,500,000)
(18,270,103)
705,126,146
657,126,146
The weighted average remaining lives of the SARs, share options or warrants outstanding at the end of the period is 21 months (2019:
34 months). Of the 1,309,717,246 SARs, options and warrants outstanding at 30 April 2020 (2019: 705,126,146), 1,039,717,246 (2019:
657,126,146) are fully vested in the holders and are exercisable at that date.
47
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Notes to financial statements Continued
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:
Grant date
Share Option
or Warrant
Value
Vesting
periods
Share price at
date of grant
Volatility
Life (years)
Dividend
yield
Risk free
interest rate
Fair value
Apr 16
Jul 16
Jul 16
Aug 16
Aug 16
Oct 16
Oct 16
Oct 19
Oct 19
Nov 19
Nov 19
Jan 20
variable
variable
0.5p
0.5p
0.5p
variable
0.4p
0.13p
0.15p
0.25p
0.25p
0.26p
Mar-21
Mar-21
Jun-19
Jun-19
Jun-19
Mar-21
Oct-19
Oct-19
Oct-19
Nov 19
Mar 20
Jan 20
0.240p
0.360p
0.315p
0.265p
0.290p
0.280p
0.320p
0.120p
0.120p
0.290p
0.290p
0.325p
135%
135%
76%
76%
76%
135%
76%
90%
90%
90%
90%
93%
5.00
5.00
4.11
4.01
3.97
5.00
3.97
2.79
2.79
3.00
4.00
3.00
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
1.5%
1.5%
0.63%
0.34%
0.34%
1.5%
0.18%
0.75%
0.75%
0.71%
0.71%
0.71%
0.21p
0.31p
0.57p
0.05p
0.06p
0.24p
0.10p
0.07p
0.06p
0.17p
0.19p
0.20p
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 $439,925 (2019: $263,967).
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
30 April 2019
Exercised during
last 12 months
Lapsed during Last
12 months
Granted during last
12 months
Outstanding at
30 April 2020
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 2020 a total of 32,500,000 of the EBT participation rights were exercisable.
48
FINANCIAL STATEMENTSVast Resources Plc / Report and Accounts 2020 Exercise price
Outstanding at
31 March 2018
Exercised during
last 12 months
Lapsed during Last
12 months
Granted during last
12 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.
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:
Grant date
Validity of grant
Vesting periods
Share price at date of grant
Volatility
Dividend yield
Risk free investment rate
Fair value
Jul 2010
Aug 2009
10 years
Jul 2011
Aug 2009
10 years
Aug 2009 -
Jul 2010
Aug 2009 -
Jul 2011
8.75p
51%
Nil
0.65%
Nil
8.75p
51%
Nil
0.65%
Nil
Aug 2011
Oct 2010
10 years
Oct 2010 -
Aug 2011
9.00p
51%
Nil
0.65%
Nil
Aug 2012
Oct 2010
10 years
Oct 2010 -
Aug 2012
9.00p
51%
Nil
0.65%
Nil
Aug 2012
Sep 2011
10 years
Sep 2011-
Aug 2012
6.00p
51%
Nil
0.65%
Nil
Aug 2013
Sep 2011
10 years
Sep 2011-
Aug 2013
6.00p
51%
Nil
0.65%
Nil
Fair value is determined by using the Black Scholes model using the assumptions noted in the above table. Volatility has been calculated
by reference to historical share price information.
The Group has no recorded liabilities in respect of the Participants’ rights (2019: $nil).
The Group has no recorded expenses in respect of these rights. (2019: $nil)
The total intrinsic value at both 30 April 2020 and 20 April 2019 was zero.
Warrant and Share option expense
Warrant and share option expense:
- In respect of remuneration contracts
- In respect of financing arrangements
Total expense / (credit)
2020
Group
$’000
440
-
440
2019
Group
$’000
264
-
264
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.
• 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 27, 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 retained deficit reserve represents the cumulative net gains and losses recognised in the Group statement of comprehensive income.
49
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Notes to financial statements Continued
24. Non-controlling Interests
Vast Baita Plai SA (formerly 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.
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 in the year to 30 April 2019,
as previously reported.
Summarised financial information for these three entities is presented below together with amounts attributable to NCI:
Vast Baita Plai SA
$’000
Total NCI
$’000
(77)
-
(77)
(1,548)
(1,625)
(2)
(1,627)
-
(1,627)
(313)
(1,889)
(1,655)
3,570
16
-
8,696
99
1,568
28
768
1,425
(349)
(77)
-
(77)
(1,548)
(1,625)
(2)
(1,627)
-
(1,627)
(313)
-
8,696
99
1,568
28
768
1,425
(349)
For the year ended 30 April 2020
Revenue
Cost of sales
Gross Profit (loss)
Overhead expenses
Operating profit (loss)
Finance expense
Loss before tax
Tax expense / credit
Profit (loss) after tax
Total comprehensive profit (loss) allocated to NCI
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net cash inflows/(outflows)
As at 30 April 2020
Assets:
Intangible assets
Property plant and equipment
Inventory
Receivables
Cash and cash equivalents
Liabilities:
Loans and other borrowings
Trade and other payables
Accumulated non-controlling interests
50
FINANCIAL STATEMENTSVast Resources Plc / Report and Accounts 2020
For the period ended 30 April 2019
Revenue
Cost of sales
Gross Profit (loss)
Overhead expenses
Operating profit (loss)
Finance expense
Loss before tax
Tax expense / credit
Profit (loss) after tax
Total comprehensive profit (loss) allocated to NCI
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net cash inflows/(outflows)
As at 30 April 2019
Assets:
Property plant and equipment
Inventory
Receivables
Liabilities:
Loans and other borrowings
Trade and other payables
Accumulated non-controlling interests
Dallaglio
Investments &
subsidiaries
Vast Baita Plai SA
Ronquil
Enterprises
(Private) Limited
$’000
$’000
$’000
31,243
(18,527)
12,716
(750)
11,966
(1,012)
10,954
(1,408)
9,546
7,155
13,226
(13,575)
1,985
1,636
-
-
-
-
-
-
418
(219)
199
(1,764)
(1,565)
(3)
(1,568)
-
(1,568)
(293)
(574)
(1,690)
2,264
-
7,125
8
830
700
1,479
(41)
-
-
-
(17)
(17)
-
(17)
-
(17)
(9)
-
-
-
-
-
-
-
-
-
-
Total NCI
$’000
31,661
(18,746)
12,915
(2,531)
10,384
(1,015)
9,369
(1,408)
7,961
6,853
12,652
(15,265)
4,249
1,636
7,125
8
830
700
1,479
(41)
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 Vast Baita Plai SA (formerly 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 (Director)
Andrew Prelea (Director)
Senior Romanian management
Non-related party
2%
8%
2%
8%
At the reporting date, there was an amount owing by Vast Baita Plai SA (formerly African Consolidated Resources SRL) to the AP Group of
$NIL (2019: $91,656). At the reporting date, there was an amount owing by Vast Baita Plai SA (formerly African Consolidated Resources
SRL) to the individual related members of the AP Group, totalling $169,596 (2019: $65,606).
At the reporting date, there was an amount owing by Vast Baita Plai SA (formerly African Consolidated Resources SRL) to Ozone Homes
SRL (Ozone) of US$ 4,659 (2019: US$9,568) 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$22,794 including VAT (2019: US$25,420).
51
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Notes to financial statements Continued
26. Events after the reporting date
Shares issued and warrants exercised
£
5,777,517
45,000
109,800
4,287
117,006
6,053,610
$
Shares Issued
Date exercisable from
7,348,384
56,653
136,807
5,410
147,957
7,695,211
3,613,499,994
Placing with investors
30,000,000
Subscription by management
61,000,000
Subscription by investors
857,546
Exercise of open offer warrants
69,989,038
To Settle liabilities
3,775,346,578
Subsequent to the period end, Andrew Prelea and Paul Fletcher acquired 38,333,333 and 16,666,667 shares, respectively.
Debt
Repayment of $0.5 million principal of the first tranche of the Atlas facility.
Management
Eric Diack resigned as a Director on 4 May 2020.
Mark Mabhudhu resigned as Executive Director of Vast’s Diamond Division on 22 September 2020.
27. Group subsidiaries
A full list of all subsidiary companies and their registered offices is given below:
Company
Country of
registration
Reg. office
Group Interest
Nature of business
Cadex Investments (Private) Limited
Conneire Mining (Private) Limited
Dashaloo Investments (Private) Limited
Exchequer Mining Services (Private) Limited
Heavystuff Investment Company (Private) Limited
Lafton Investments (Private) Limited
Lomite Investments (Private) Limited
Mystical Mining (Private) Limited
Naxten Investments (Private) Limited
Olebile Investments (Private) Limited
Perkinson Investments (Private) Limited
Possession Investment Services (Private) Limited
Sackler Investments (Private) Limited
Schont Mining Services (Private) Limited
Sinarom Mining Group SRL
Vast Baita Plai SA (formerly AFCR SRL)
Vast Resources Enterprises Limited
Vast Resources Nominees Limited *
Vast Resources Romania Limited
Vast Resources Zimbabwe (Private) Limited
Accufin Investments (Private) Limited
Aeromags (Private) Limited
Campstar Mining (Private) Limited
Chaperon Manufacturing (Private) Limited
Charmed Technical Mining (Private) Limited
Chianty Mining Services (Private) Limited
Corampian Technical Mining (Private) Limited
Deep Burg Mining Services (Private) Limited
52
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Romania
Romania
UK
UK
UK
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Note
4
5
5
5
5
4
4
5
5
5
5
5
5
5
2
1
3
3
3
5
5
5
5
5
5
5
5
5
2020
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
80%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2019
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
80%
nil
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Claim holding
Claim holding
Claim holding
Claim holding
Claim holding
Claim holding
Claim holding
Claim holding
Asset holding
Claim holding
Claim holding
Claim holding
Claim holding
Claim holding
Mining production
Mining development
Mining investment
Nominee company
Mining investment
Mining investment
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
FINANCIAL STATEMENTSVast Resources Plc / Report and Accounts 2020 Deft Mining Services (Private) Limited
Febrim Investments (Private) Limited
Hemihelp Investments (Private) Limited
Isiyala Mining (Private) Limited
Katanga Mining (Private) Limited
Kengen Trading (Private) Limited
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
* Formerly ACR Nominees Ltd
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
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%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Notes - Addresses of Registered offices:
1
2
3
4
5
Sat Iacobeni,Str.Minelor Nr.20, Jud. Suceava, Romania
Str.9 Mai, Nr.20, Baia Mare, Jud.Maramures, 430274 Romania
Nettlestead Place, Nettlestead, Maidstone, Kent ME18 6HE, United Kingdom
121 Borrowdale Road, Gun Hill, Harare, Zimbabwe
6, John Plagis Avenue, Alexandra Park, Harare, Zimbabwe
53
Vast Resources Plc / Report and Accounts 2020Financial StatementsGovernanceBusiness Review Company information
Directors
Brian Moritz, Non-Executive Chairman
Andrew Prelea, Chief Executive Officer
Roy Tucker, Business Director
Paul Fletcher, Finance Director
Craig Harvey, Chief Operations Officer
Nicholas Hatch, Non-Executive Director
Secretary and registered office
Ben Harber
60 Gracechurch Street,
London,
EC3V 0HR
Country of incorporation
United Kingdom
Legal form
Public Limited Company
Website
Auditors
www.vastplc.com
Crowe UK LLP
55 Ludgate Hill
London
EC4M ZJW
Nominated & Financial Adviser
Beaumont Cornish Limited
Building 3566 Chiswick High Road
London
W4 5YA
Joint Corporate Brokers
SP Angel Corporate Finance LLP
Axis Capital Markets Ltd
Registrars
Princes Court
7, Princes Street
London
EC2R 8AQ
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
54
FINANCIAL STATEMENTSVast Resources Plc / Report and Accounts 2020 Designed & produced by
stbridespartners.co.uk
www.vastplc.com
+44 (0) 207 846 0974
info@vastplc.com
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