TIDMIRON
RNS Number : 8819J
Ironveld PLC
29 December 2020
Ironveld Plc
("Ironveld" or the "Company")
Final Results for the year ended 30 June 2020
Ironveld plc, the owner of a High Purity Iron ("HPI"), Vanadium
and Titanium project located on the Northern Limb of the Bushveld
Complex in Limpopo Province, South Africa (the "Project") announces
its final results for the 12 months ended 30 June 2020 ("the
Period").
Operational and Financial Highlights
-- Strategic Review launched in July 2019 resulted in
announcement of Option Agreement and intended strategic partnership
with Inclusive Investment Group ("IIG") in March 2020 for up to
US$3.2 million;
-- The Company and IIG worked together for eight months to
secure a complete project financing package, which included a
conditional offer of finance from a South African development
institution, but agreed post period end in November 2020 that the
Option Agreement would lapse;
-- Placing and Broker Option to raise gross proceeds of
GBP1,150,000 completed post period end in December 2020; and
-- Appointment of Martin Eales as CEO in December 2019, with
Peter Cox being appointed Technical Director.
Outlook
-- The Company continues to engage with a range of parties with
a view to an alternative funding transaction or strategic
partnership and expects to conclude this in 2021.
Martin Eales, CEO, said:
"The year to June 2020 was dominated by the Strategic Review
process and led to the announcement of the intended strategic
partnership with IIG in March 2020. Whilst, ultimately, the parties
agreed to allow IIG's Option to lapse in November 2020 discussions
continue with IIG and other parties with a view to concluding a
strategic or project financing transaction.
"The recently completed placing gives us a strengthened
financial base from which to negotiate an alternative project
funding transaction and we are focused on delivering this in 2021.
We thank all our shareholders for their continued support in
Ironveld."
For further information, please contact:
Ironveld plc c/o Blytheweigh
Giles Clarke, Chairman +44 20 7138 3204
Martin Eales, Chief Executive Officer
finnCap (Nomad and Broker)
Christopher Raggett / Charlie Beeson +44 20 7220 0500
Turner Pope (Joint Broker)
Andrew Thacker +44 20 3657 0050
Blytheweigh
Tim Blythe / Megan Ray +44 20 7138 3204
NOTES TO EDITORS
Ironveld (IRON.LN) is the owner of Mining Rights over
approximately 28 kilometres of outcropping Bushveld magnetite with
a SAMREC compliant ore resource of some 56 million tons of ore
grading 1,12% V2O5, 68,6% Fe2O3 and 14,7% TiO2.
The Definitive Feasibility Study published in April 2014
confirms the project's viability to deliver a Vanadium slag product
for which the company has an offtake agreement as well a High
Purity Iron product which commands a premium in the market place
and Titanium slag containing commercial grades of titanium.
Ironveld is an AIM traded company. For further information on
Ironveld please refer to www.ironveld.com .
CHAIRMAN'S STATEMENT
During the Period, we continued to undertake various activities
focused on realising the value of the Company's assets.
In July 2019, we announced that finnCap had been engaged to lead
a review of the strategic alternatives for Ironveld's mining assets
(the "Strategic Review"). These assets include unfettered rights to
56.4 million tonnes of magnetite ore, which the JORC compliant
mineral resources demonstrates holds 1.4 billion pounds weight of
Vanadium - equivalent to four times annual global Vanadium demand;
27 million tons of High Purity Iron in situ; and 8.3 million tonnes
of titanium.
In December 2019 we announced the appointment of Martin Eales as
the new Chief Executive Officer of the Company, with Peter Cox
moving to the position of Technical Director.
The Strategic Review led to a number of engagements with parties
potentially interested in making an offer to fund all or part of
the development of Ironveld's mining assets and led to the
announcement in March 2020 that the Company and Inclusive
Investment Group ("IIG") had signed a conditional Option Agreement
envisaging an investment in the Company by IIG of US$3.2 million
(approximately GBP2.7 million). The Option Agreement was extended
in June 2020 and September 2020, with IIG advancing a total of
US$650,000 in bridge funding to the Company, before ultimately
lapsing post period end in November 2020.
During the period of the Option Agreement the Company and IIG
worked hard to deliver a complete project funding solution,
including IIG obtaining a conditional offer of project finance from
a South African funding institution, and the parties remain in
discussions about a possible future partnership.
Following the announcement of the agreed lapse of the IIG Option
Agreement the Company announced a conditional share placing at 0.30
pence per share to raise gross proceeds of GBP1,150,000, whilst at
the same time capitalising various loans and accrued salary/fees
owed to IIG, Directors and other lenders. The net proceeds of the
placing have been used to strengthen the Company's financial
position and cover its overheads whilst it seeks to conclude an
alternative development funding transaction.
We remain committed to operating responsibly, working closely
with stakeholders and local communities at grassroots level to
improve standards of living. We continue to support our 'Keep a
Girl in School' initiative working alongside our local partners,
The Imbumba Foundation and the Nelson Mandela Foundation, to
provide hygiene support to approximately 600 female students at
school in the local area. Additionally we plan a new scheme in 2021
which will provide facilities and support to children with maths
and science homework outside of school. We were delighted to note
that Ironveld's first sponsored graduate mining engineer from the
local community, Tebogo Mahoai (2018), completed his mine officials
training program and obtained his blasting licence during the
period.
Financial
The Group recorded a loss before tax of GBP1.0m (2019: GBP0.6m)
and had cash balances of GBP0.03m (2019: GBP0.6m) at the end of the
period. The Company does not plan to pay a dividend for the year
ended 30 June 2020.
Going concern
Following approval of the share placing on 14 December 2020 and
further rationalisation of the Company's cost base in both South
Africa and the UK, the Group's present financial resources and
existing facilities are considered sufficient to enable it to
operate until the first half of 2022, by which time, the Board of
Directors anticipates to have secured an alternative transaction
focused on delivering value from the Group's principal assets.
Outlook
Ironveld's Board remains committed to delivering value to our
shareholders. Following the recent lapse of the Option Agreement
with IIG the Company has re-engaged in discussions with a number of
parties which the Board expects to lead to an alternative
transaction.
We would like to thank all of our shareholders for their
continuing support for both the Company and the project and we look
forward to providing further updates in the near future.
Giles Clarke
Chairman
CONSOLIDATED INCOME STATEMENT
Note Year Year
ended 2020 ended
GBP000 2019
GBP000
Administrative expenses (695) (629)
------------ --------
Operating loss 4 (695) (629)
Other gains and losses 6 (326) -
Investment revenues 7 4 6
Finance costs 8 (2) (2)
------------ --------
Loss before tax (1,019) (625)
Tax 9 - -
------------ --------
Loss for the year (1,019) (625)
============ ========
Attributable to:
Owners of the Company (1,017) (624)
Non-controlling interests (2) (1)
------------ --------
(1,019) (625)
============ ========
Loss per share- Basic and diluted 10 (0.16p) (0.10p)
============ ========
There is no difference between the results as disclosed above
and the results on a historical cost basis. The income statement
has been prepared on the basis that all operations are continuing
operations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year Year
ended ended
2020 2019
GBP000 GBP000
Loss for the period (1,019) (625)
Exchange difference on translation of foreign
operations (3,654) 211
-------- --------
Total comprehensive income for the year (4,673) (414)
======== ========
Attributable to:
Owners of the Company (4,061) (448)
Non-controlling interests (612) 34
-------- --------
(4,673) (414)
======== ========
CONSOLIDATED BALANCE SHEET
Note 2020 2019
GBP000 GBP000
Non-current assets
Intangible assets 12 23,574 27,423
Property, plant and equipment 13 2 5
Investments 14 - 390
Other receivables 15 2 -
--------- ---------
23,578 27,818
--------- ---------
Current assets
Trade and other receivables 15 76 156
Cash and cash equivalents 28 566
--------- ---------
104 722
--------- ---------
Total assets 23,682 28,540
========= =========
Current liabilities
Trade and other payables 16 (805) (610)
Borrowings 17 (210) -
--------- ---------
(1,015) (610)
--------- ---------
Non-current liabilities
Deferred tax liabilities 18 (4,384) (5,243)
--------- ---------
Total liabilities (5,399) (5,853)
--------- ---------
Net assets 18,283 22,687
========= =========
Equity
Share capital 20 9,774 9,774
Share premium 21 19,691 19,691
Other reserve 21 189 -
Retained earnings 21 (14,480) (10,499)
--------- ---------
Equity attributable to owners
of the Company 15,174 18,966
Non-controlling interests 24 3,109 3,721
--------- ---------
Total equity 18,283 22,687
========= =========
These financial statements were approved by the Board and
authorised for issue on 28 December 2020
Signed on behalf of the Board
M Eales
Director Company Registration No: 04095614
PARENT COMPANY BALANCE SHEET
Note 2020 2019
GBP000 GBP000
Non-current assets
Investments 14 24,654 24,074
-------- --------
Current assets
Trade and other receivables 15 30 25
Cash and cash equivalents 15 523
-------- --------
45 548
-------- --------
Total assets 24,699 24,622
======== ========
Current liabilities
Trade and other payables 16 (219) (70)
Borrowings 17 (210) -
-------- --------
Total liabilities (429) (70)
-------- --------
Net assets 24,270 24,552
======== ========
Equity
Share capital 20 9,774 9,774
Share premium 21 19,691 19,691
Other reserve 21 189 -
Retained earnings 21 (5,384) (4,913)
-------- --------
Total equity 24,270 24,552
======== ========
(Attributable to owners of
the Company)
The loss for the financial year dealt with in the financial
statements of the parent Company was GBP551,000 (2019 - loss
GBP382,000).
These financial statements were approved by the Board and
authorised for issue on 28 December 2020.
Signed on behalf of the Board
M Eales
Director Company Registration No: 04095614
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to owners of the Company:
Share Share Other Retained
Capital Premium Reserve Earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 July 2018 8,903 19,161 - (10,056) 18,008
Exchange difference on
translation of foreign
operations - - - 176 176
Issue of share capital 871 530 - - 1,401
Credit for equity-settled
share based payments - - - 5 5
Loss for the year - - - (624) (624)
--------- --------- --------- ---------- --------
At 30 June 2019 9,774 19,691 - (10,499) 18,966
========= ========= ========= ========== ========
Exchange difference on
translation of foreign
operations - - - (3,044) (3,044)
Issue of share option - - 189 - 189
Credit for equity-settled
share based payments - - - 80 80
Loss for the year - - - (1,017) (1,017)
--------- --------- --------- ---------- --------
At 30 June 2020 9,774 19,691 189 (14,480) 15,174
========= ========= ========= ========== ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
Total equity:
Owners
of the Non-controlling Total
Company Interest Equity
GBP000 GBP000 GBP000
At 1 July 2018 18,008 3,687 21,695
Exchange difference on translation of
foreign operations 176 35 211
Issue of share capital 1,401 - 1,401
Credit for equity-settled share based
payments 5 - 5
Loss for the year (624) (1) (625)
--------- ---------------- --------
At 30 June 2019 18,966 3,721 22,687
========= ================ ========
Exchange difference on translation of
foreign operations (3,044) (610) (3,654)
Issue of share option 189 - 189
Credit for equity-settled share based
payments 80 - 80
Loss for the year (1,017) (2) (1,019)
--------- ---------------- --------
At 30 June 2020 15,174 3,109 18,283
========= ================ ========
COMPANY STATEMENT OF CHANGES IN EQUITY
Equity attributable to the equity holders of the Company:
Share Share Other Retained Total
Capital Premium Reserve Earnings Equity
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 July 2018 8,903 19,161 - (4,536) 23,528
Credit for equity-settled
share based payments - - - 5 5
Issue of share capital 871 530 - - 1,401
Loss for the year - - - (382) (382)
--------- --------- --------- ---------- --------
At 30 June 2019 9,774 19,691 - (4,913) 24,552
========= ========= ========= ========== ========
Credit for equity-settled
share based payments - - - 80 80
Issue of share option - - 189 - 189
Loss for the year - - - (551) (551)
--------- --------- --------- ---------- --------
At 30 June 2020 9,774 19,691 189 (5,384) 24,270
========= ========= ========= ========== ========
CONSOLIDATED CASH FLOW STATEMENT
Year Year
ended ended
2020 2019
Note GBP000 GBP000
Net cash used in operating
activities 22 (397) (420)
-------- --------
Investing activities
Purchases of property, plant
and equipment - (4)
Purchase of exploration and
evaluation assets (555) (1,202)
Contributions to exploration
and evaluation assets - 268
Interest received 4 6
-------- --------
Net cash used in investing
activities (551) (932)
-------- --------
Financing activities
Proceeds on issue of equity
(net of costs) - 1,401
Proceeds on issue of share 189 -
options and warrants
Proceeds from new loans 210 -
-------- --------
Net cash generated by financing
activities 399 1,401
-------- --------
Net (decrease)/increase in
cash and cash equivalents (549) 49
Cash and cash equivalents at
beginning
of year 22 566 517
Effects of foreign exchange
rates 11 517
-------- --------
Cash and cash equivalents at
end of yea 22 28 566
======== ========
COMPANY CASH FLOW STATEMENT
Year Year
ended ended
2020 2019
Note GBP000 GBP000
Net cash from operating activities 22 (350) (381)
-------- --------
Investing activities
Payments to acquire investments (557) (961)
-------- --------
Net cash used in investing
activities (557) (961)
-------- --------
Financing activities
Proceeds on issue of equity
(net of costs) - 1,401
Proceeds on issue of share 189 -
options and warrants
Proceeds from new loans 210 -
-------- --------
Net cash generated by financing
activities 399 1,401
-------- --------
Net (decrease)/increase in
cash and cash equivalents (508) 59
Cash and cash equivalents
at beginning of year 22 523 464
-------- --------
Cash and cash equivalents
at end of year 22 15 523
======== ========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. General information
Ironveld Plc is a public company incorporated and domiciled in
the United Kingdom under the Companies Act 2006 whose shares are
listed on the Alternative Investment Market of the London Stock
Exchange. The address of the registered office is given on page 2.
The nature of the Group's operations and its principal activities
are set out in note 3 and in the Directors report on page 5.
Adoption of new and revised Standards
In the current year, the Group has applied a number of new or
amended standard for the first time which are mandatory for
accounting periods commencing on or after 1 January 2019. None of
the standards adopted had a material impact on the financial
statements. The significant new and amended standards adopted were
as follows:-
IFRS 16 - Leases
Annual Improvements to IFRSs 2015-2017 Cycle
At the date of authorisation of these financial statements, the
following accounting standards, amendments to existing standards
and interpretations are not yet effective and have not been adopted
early by the Group.
IFRS 17 - Insurance contracts
Amendments to references to the conceptual Framework in IFRS
Standards
Annual Improvements to IFRSs 2018-2020 Cycle.
The adoption of these standards, amendments and interpretations
is not expected to have a material impact on the Group and
Company's results or equity.
2.1 Significant accounting policies
The financial statements are based on the following policies
which have been consistently applied:
Basis of preparation
The financial statements of the Group and Parent Company have
been prepared in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union and the
Companies Act 2006.
Under section 408 of the Companies Act 2006 the Parent Company
is exempt from the requirement to present its own profit and loss
account.
The financial statements have been prepared on the historical
cost basis. The financial statements are presented in pounds
sterling because that is considered to be the currency of the
primary economic environment.
The principal accounting policies are set out below:
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and all entities controlled by the
Company (its subsidiaries) made up to the year-end. Control is
achieved where the Company has power to govern the financial and
operating policies of an investee entity so as to obtain benefits
from its activities.
Subsidiaries are consolidated from the date of their
acquisition, being the date on which the Company obtains control
and ceases when the Company loses control of the subsidiary. Profit
or loss and each component of other comprehensive income are
attributed to the owners of the Company and to the non-controlling
interests. Total comprehensive income of the subsidiaries is
attributed to the owners of the Company and to the non-controlling
interests even if this results in the non-controlling interests
having a deficit balance.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.1 Significant accounting policies (continued)
Basis of consolidation (continued)
Non-controlling interests in subsidiaries are identified
separately from the Group's equity therein. Those interests of
non-controlling shareholders are initially measured at their
proportionate share of the fair value of the acquiree's
identifiable net assets. Subsequent to acquisition, the carrying
value of the non-controlling interests is the amount of initial
recognition plus the non-controlling interests' share of the
subsequent changes in equity.
Changes in the Group's interests in subsidiaries that do not
result in a loss of control are accounted for as equity
transactions. The carrying amount of the Group's interests and the
non-controlling interests are adjusted to reflect the changes in
their relative interests in the subsidiaries. Any difference
between the amount by which the non-controlling interests are
adjusted and the fair value of the consideration paid or received
is recognised directly in equity and attributed to the owners of
the Company.
Business combinations
Acquisitions of subsidiaries are accounted for using acquisition
accounting. The consideration for each acquisition is measured at
the fair value of assets given, liabilities incurred or assumed and
equity instruments issued by the Group in exchange for control in
the acquiree. Acquisition-related costs are recognised in the
income statement as incurred.
Exploration and evaluation
Costs incurred prior to acquiring the rights to explore are
charged directly to the income statement.
Licence acquisition costs and all other costs incurred after the
rights to explore an area have been obtained, such as the direct
costs of exploration and appraisal (including geological, drilling,
trenching, sampling, technical feasibility and commercial viability
activities) are accumulated and capitalised as intangible
exploration and evaluation ("E&E") assets, pending
determination. Amounts charged to project partners in respect of
costs previously capitalised are deducted as contributions received
in determining the accumulated cost of E&E assets.
E&E assets are not amortised prior to the conclusion of the
appraisal activities. At completion of appraisal activities, if
financial and technical feasibility is demonstrated and commercial
reserves are discovered then, following development sanctions, the
carrying value of the relevant E&E asset will be reclassified
as a development and production asset in intangible assets after
the carrying value has been assessed for impairment and, where
appropriate adjusted. If after completion of the appraisal of the
area it is not possible to determine technical and commercial
feasibility or if the legal rights have expired or if the Group
decide to not continue activities in the area, then the cost of
unsuccessful exploration and evaluation are written off to the
income statement in the relevant period.
The Group's definition of commercial reserves for such purposes
is proved and probable reserves on an entitlement basis. Proved and
probable reserves are the estimated quantities of minerals which
geological, geophysical and engineering data demonstrate with a
specified degree of certainty to be recoverable in future years
from the known reserves and which are considered to be commercially
producible.
Such reserves are considered commercially producible if
management has the intention of developing and producing them and
such intention is based upon:
- a reasonable expectation that there is a market for
substantially all of the expected production;
- a reasonable assessment of the future economics of such production;
- evidence that the necessary production, transmission and
transportation facilities are available or can be made available;
and
- agreement of appropriate funding; and
- the making of the final investment decision.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.1 Significant accounting policies (continued)
Exploration and evaluation (continued)
On an annual basis a review for impairment indicators is
performed. If an indicator of impairment exists an impairment
review is performed. The recoverable amount is then considered to
be the higher of the fair value less costs of sale or its value in
use. Any identified impairment is written off to the income
statement in the period identified.
Development and production assets
Development and production assets, classified within property,
plant and equipment, are accumulated generally on a field basis and
represents the cost of developing the commercial reserves
discovered and bringing them into production, together with the
E&E expenditure incurred in finding the commercial reserves
transferred from intangible assets.
Depreciation of producing assets
The net book values of producing assets are depreciated
generally on the field basis using the unit or production method by
reference to the ratio of production in the period and the related
commercial reserves of the field, taking into account the future
development expenditure necessary to bring those reserves to
production.
Research and development
Research expenditure is recognised as an expense in the period
in which it is incurred.
An internally-generated asset arising from any development is
recognised only if all of the following conditions are met:
- an asset is created that can be identified;
- it is probable that the asset created will generate future economic benefits; and
- the development cost of the asset can be measured reliably.
Non-current assets held for sale
Non-current assets (and disposal groups) classified as held for
sale are measured at the lower of carrying amount and the fair
value less costs to sell.
Non-current assets and disposal groups are classified as held
for sale if their carrying amount will be recovered through a sale
transaction rather than through continuing use. This condition is
regarded as met only when the sale is highly probable and the asset
(or disposal group) is available for immediate sale in its present
condition. Management must be committed to the sale which should be
expected to qualify for recognition as a completed sale within one
year from the date of classification.
When the Group is committed to a sale plan involving loss of
control of a subsidiary, all of the asset and liabilities of that
subsidiary are classified as held for sale when the criteria
described above are met, regardless of whether the Group will
retain a non-controlling interest in its former subsidiary after
sale.
Revenue
Revenue is measured based on the consideration to which the
Group expects to be entitled in a contract with a customer and
excludes amounts collected on behalf of third parties. The Group
recognises revenue when it transfers control of a product or
service to a customer. The Group reported no revenue for the
year.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.1 Significant accounting policies (continued)
Taxation
The tax expense represents the sum of the tax payable and
deferred tax.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amount of assets and liabilities
in the financial statements and the corresponding tax base used in
the calculation of the taxable profit and is accounted for using
the balance sheet liability method. Deferred tax liabilities are
generally recognised on all appropriate taxable temporary
differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against
which the deductible timing differences can be utilised. The
carrying amount of deferred tax assets is reviewed at each balance
sheet date.
Deferred tax is calculated at the tax rates that are expected to
be applicable in the period when the liability or asset is realised
and is based on tax laws and rates substantially enacted at the
balance sheet date. Deferred tax is charged in the income statement
except where it relates to items charged/credited in other
comprehensive income, in which case the tax is also dealt with in
other comprehensive income.
Leases
The Group assesses whether a contract is or contains a lease, at
inception of the contract. The Group recognises a right-of-use
asset and a corresponding lease liability with respect to all lease
arrangements in which it is the lessee, except for short-term
leases (defined as leases with a lease term of 12 months or less)
and leases of low value assets (such as tablets and personal
computers, small items of office furniture and telephones). For
these leases, the Group recognises the lease payments as an
operating expense on a straight-line basis over the term of the
lease unless another systematic basis is more representative of the
time pattern in which economic benefits from the leased assets are
consumed. All of the Groups leases has a lease term of 12 months or
less.
Property, plant and equipment
Tangible fixed assets are stated at cost less depreciation.
Depreciation is provided at rates calculated to write off the cost
less the estimated residual value of each asset over its expected
useful life, as follows:
Plant and machinery 10% - 25% straight line basis or reducing
balance basis
Foreign currencies
The individual financial statements of each group company are
presented in the currency of the primary economic environment in
which it operates (its functional currency). For the purposes of
the consolidated financial statements, the results and financial
position of each group company are expressed in pounds sterling,
which is the functional currency of the Company, and the
presentation currency for the consolidated financial
statements.
In preparing the financial statements of the individual
companies, transactions in currencies other than the entity's
functional currency are recognised at the rates of exchange
prevailing on the dates of the transactions. At each balance sheet
date, monetary assets and liabilities that are denominated in
foreign currencies are retranslated at the rates prevailing at that
date. Non-monetary items carried at fair value that are denominated
in foreign currencies are translated at the rates prevailing at the
date the fair value was determined. Non-monetary items that are
measured in terms of historical cost in a foreign currency are not
retranslated. Exchange differences are recognised in the income
statement in the period in which they arise.
When presenting the consolidated financial statements, the
assets and liabilities of the Group's foreign operations are
translated at the exchange rates prevailing at the balance sheet
date. Income and expense items are translated at average exchange
rates for the period, unless exchange rates have fluctuated
significantly in which case the rates at the date of the
transactions are used. Exchange differences arising are recognised
in other comprehensive income and accumulated in equity (attributed
to non-controlling interests where appropriate).
Goodwill and fair value adjustments arising on the acquisition
of a foreign entity are treated as assets and liabilities of the
foreign entity and translated using the closing rate.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.1 Significant accounting policies (continued)
Financial instruments
Financial assets and financial liabilities are recognised in the
Group's balance sheet when the Group becomes a party to the
contractual provisions of the instrument.
Other receivables
Other receivables are measured at initial recognition at fair
value, and are subsequently measured at amortised cost using the
effective interest rate method except for short-term receivables
when recognition of interest would be immaterial. The Group
recognises appropriate allowances for expected credit losses in the
income statement based on a historical credit loss experience,
adjusted for factors that are specific to the debtors and general
economic conditions.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits, and other short term highly liquid investments that are
readily convertible to a known amount of cash and are subject to an
insignificant risk of change in value.
Financial liability and equity
Interest bearing bank and other loans and bank overdrafts are
recorded at the proceeds received, net of direct issue costs.
Finance charges, including premiums payable on settlement or
redemption and direct issue costs, are accounted for on an accrual
basis in the income statement using the effective interest rate
method and are added to the carrying amount of the instrument to
the extent that they are not settled in the period in which they
arise.
The Group classifies financial instruments, or their component
parts, on initial recognition as a financial asset, financial
liability or an equity instrument in accordance with the substance
of the contractual arrangement. Financial instruments are initially
recognised at fair value and are subsequently amortised using the
effective interest method. Fair value is estimated from available
market data and reference to other instruments considered to be
substantially the same.
Trade and other payables
Trade payables and other financial liabilities are initially
measured at fair value, and are subsequently measured at amortised
cost, using the effective interest rate method.
The Group's activities expose it primarily to the financial
risks of changes in interest rates on borrowings and foreign
exchange risk.
Investments
Investments in subsidiaries are stated at cost less any
provision for the permanent diminution in value.
Share-based payments
The Group issues equity-settled share-based payments to certain
employees and other parties. Equity settled share-based payments
are measured at fair value at the date of grant. In respect of
employee related share based payments, the fair value determined at
the grant date is expensed on a straight-line basis over the
vesting period, based on the Group's estimate of shares that will
eventually vest. In respect of other share based payments, the fair
value is determined at the date of grant and recognised when the
associated goods or services are received.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.1 Significant accounting policies (continued)
Operating segments
The Group considers itself to have one operating segment in the
year and further information is provided in note 3.
Going concern
The Directors have, at the time of approving the financial
statements, a reasonable expectation that the Company and the Group
has adequate resources to continue in operating existence for the
foreseeable future. Thus they continue to adopt the going concern
basis of accounting in preparing the financial statements. Further
details are provided in the note 2.2 and in the Strategic Report on
pages 3 to 4. The financial statements therefore do not include the
adjustments that would result if the Group and Company were unable
to continue as a going concern.
2.2 Critical accounting estimates and judgements
The Group makes estimates and assumptions regarding the future.
Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. In the future, actual experience may differ from
these estimates and assumptions. The estimates and assumptions that
have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year are discussed below.
Fair value of acquisition
On acquisition of a subsidiary, the Company is required to
estimate the fair value of the assets and liabilities acquired and
the consideration paid. The estimate in respect of exploration and
evaluation assets is affected by many factors including the future
viability of commercial reserves which have been based on the
judgement of Directors supported by third party technical
reports.
Going concern
As announced on 12 November 2020, the Company and IIG agreed
that the Option Agreement originally announced on 30 March would be
allowed to lapse on 30 November 2020. On 26 November 2020,
alongside the announcement of a share placing to raise up to
GBP1,150,000, the Company agreed that the majority of the bridging
funds provided by IIG (US$650,000 plus interest) would be
capitalised at a price of 0.42 pence per share alongside a cash
repayment of approximately GBP112,000.
Discussions with alternative financial and development funding
institutions to secure the project funding required continue.
Following shareholder approval of the of the share placing on 14
December 2020, the Group's present financial facilities are
considered sufficient to enable the Company to operate at present
levels until the first half of 2022, by which time, the Board of
Directors anticipates to have secured the further finance to
develop the Project.
Whilst the impact of the global COVID-19 pandemic including the
associated travel restrictions has hampered the Company's attempts
to secure project development funding to some extent, as the Group
is presently not currently undertaking any operations at the
project then no significant impact is anticipated over the next 12
months.
Therefore, whilst the existing resources are not sufficient to
develop the mining asset, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future, being twelve
months from the date of the approval of the financial statements.
The Group is committed to developing its Project and is actively
engaged with interested parties. For this reason, the Board
continues to adopt the going concern basis in the preparation of
these financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.2 Critical accounting estimates and judgements (continued)
Exploration and evaluation assets
The Group has adopted a policy of capitalising the costs of
exploration and evaluation and carrying the amount without
impairment assessment until impairment indicators exist (as
permitted by IFRS 6). The Directors consider that the Group remains
in the exploration and evaluation phase and therefore, under IFRS
6, the Directors have to make judgements as to whether any
indicators of impairment exist and the future activities of the
Group. No such indicators of impairment were identified and
therefore, in accordance with IFRS 6, no impairment review has been
carried out. The Directors remain committed to development of the
asset.
Investment impairment indicators
The Company balance sheet includes an investment in subsidiary
companies of GBP24,654,000 which is underpinned and reflects the
underlying subsidiary exploration and evaluation assets discussed
above. As no indicators of impairment have been identified in the
exploration and evaluation asset then subsequently no indicators or
impairment in the investment in subsidiary have been identified and
as is consistent with the exploration and evaluation assets, no
impairment review has been carried out in the period.
Deferred tax assets
The Directors must judge whether the future profitability of the
Group is likely in making the decision whether or not to recognise
a deferred tax asset in respect of taxation losses. No deferred tax
assets have been recognised in the year.
3. Business and geographical segments
Information reported to the Group Directors for the purposes of
resource allocation and assessment of segment performance is
focused on the activity of each segment and its geographical
location. The Directors consider that there is only one business
segment, which is the activity of prospecting, exploration and
mining based in South Africa.
4. Operating loss
Year ended Year
2020 ended
GBP000 2019
GBP000
Operating loss for the year is shown after charging:
Depreciation on tangible assets 2 3
Short term lease payments under operating leases 26 53
Impairment of receivables - -
Share based payment charge 80 -
=========== ========
Auditors' remuneration
Fees payable to the auditors for the audit of the
Company's accounts 37 37
Fees payable to the Company's auditors and its associates
for other services:-
The audit of the Company's subsidiaries 13 14
Tax compliance services 7 7
Other assurance services 10 12
Other non-audit services 3 3
=========== ========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5. Staff costs
Group
Year ended Year
2020 ended
GBP000 2019
GBP000
Wages and salaries 350 438
Social security costs 28 15
Pension costs 8 -
Share based payments 80 5
Directors other fees 305 382
------------ --------
771 840
============ ========
The average monthly number of employees, including 2020 Number 2019
Directors, during the period was as follows: Number
Administration and management 12 20
============ ========
2020 2019
GBP000 GBP000
Directors remuneration and other fees 594 517
============ ========
The aggregate remuneration and fees paid to the highest
paid Director was 185 251
============ ========
Further details of the Directors' remuneration are given in the
Directors' Remuneration Report on pages 10 and 11.
Company
Year ended Year
2020 ended
GBP000 2019
GBP000
Wages and salaries - Directors 202 135
Social security costs 26 12
Share based payments 80 -
Pension costs 7 -
------------ --------
315 147
============ ========
The average monthly number of employees, including 2020 Number 2019
Directors, during the period was as follows: Number
Directors 5 5
============ ========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. Other gains and losses
Year ended Year
2020 ended
GBP000 2019
GBP000
Impairment of other investments 326 -
=========== ========
7. Investment revenues
Year ended Year
2020 ended
GBP000 2019
GBP000
Interest on financial deposits 4 6
=========== ========
8. Finance costs
Year ended Year
2020 ended
GBP000 2019
GBP000
Loan interest and similar charges 2 2
=========== ========
9. Tax
Year ended Year
2020 ended
GBP000 2019
GBP000
a) Tax charge for the period
Corporation tax:
Current period - -
Deferred tax (note 18) - -
----------- --------
- -
----------- --------
b) Factors affecting the tax charge for the period
Loss on ordinary activities for the period before
taxation (1,019) (625)
=========== ========
Loss on ordinary activities for the period before
taxation multiplied by
effective rate of corporation tax in the UK of 19%
(2019 - 19%) (194) (119)
Effects of:
Unused tax losses not recognised 194 119
----------- --------
Tax expense for the period - -
=========== ========
c) Factors that may affect future tax charges - The Group has
estimated unutilised tax losses amounting to GBP5,194,000 (2019 -
GBP4,235,000) the values of which are not recognised in the balance
sheet. The losses represent a potential deferred taxation asset of
GBP1,123,000 (2019 - GBP831,000) which would be recoverable should
the Group make sufficient suitable taxable profits in the
future.
In addition, the Group has pooled exploration costs incurred of
GBP7,445,000 (2019 - GBP8,082,000) which are expected to be
deductible against future trading profits of the Group.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. (Loss)/earnings per share
2020 2019
GBP000 GBP000
Loss attributable to the owners of the Company (1,019) (625)
======== ========
Loss per share - Basic and diluted
Continuing operations (0.16p) (0.10p)
======== ========
The calculation of basic earnings per share is based on
654,990,841 (2019 - 602,782,339) ordinary shares, being the
weighted average number of ordinary shares in issue during the
year. Where the Group reports a loss for the current period, then
in accordance with IAS 33, the share options are not considered
dilutive. Details of such instruments which could potentially
dilute basic earnings per share in the future are included in note
20.
11. Loss attributable to owners of the parent Company
As permitted by Section 408 of the Companies Act 2006, the
profit and loss account of the parent Company is not presented as
part of these accounts. The parent Company's loss for the financial
year amounted to GBP551,000 (2019 - GBP382,000).
12. Intangible assets
Exploration
and evaluation
assets
GBP000
Group
Cost:
At 1 July 2018 26,218
Additions 1,225
Contributions received (268)
Exchange differences 248
----------------
At 30 June 2019 27,423
----------------
Additions 645
Exchange differences (4,494)
----------------
At 30 June 2020 23,574
================
Amortisation:
At 1 July 2018, 30 June 2019 and at 30 June 2020 -
================
Net book value at 30 June 2020 23,574
================
Net book value at 30 June 2019 27,423
================
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12. Intangible assets (continued)
The Group's exploration and evaluation assets all relate to
South Africa.
In respect of the exploration and evaluation assets which remain
in the appraisal phase, the Group has performed a review for
impairment indicators, as required by IFRS 6 and in the absence of
such indicators no impairment review was carried out. During the
period contributions of GBPNil (2019 - GBP268,000) were received
from the project partner in respect of the mineral ore testing.
13. Property, plant and equipment
Plant
and machinery
GBP000
Group
Cost:
At 1 July 2019 41
Exchange differences (7)
---------------
At 30 June 2020 34
---------------
Depreciation:
At 1 July 2019 36
Charge for the period 2
Exchange differences (6)
---------------
At 30 June 2020 32
---------------
Net book value at 30 June 2020 2
===============
Net book value at 30 June 2019 5
===============
Plant
and machinery
GBP000
Cost:
At 1 July 2018 37
Additions 4
---------------
At 30 June 2019 41
---------------
Depreciation:
At 1 July 2018 33
Charge for the period 3
---------------
At 30 June 2019 36
---------------
Net book value at 30 June 2019 5
===============
Net book value at 30 June 2018 4
===============
All non-current assets in 2020 and 2019 were located in South
Africa.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. Investments
Group - Loans to other entities
2020 2019
GBP000 GBP000
Cost:
At 1 July 390 386
Exchange differences (64) 4
-------- --------
At 30 June 326 390
-------- --------
Impairment:
At 1 July - -
Recognised in the year 326 -
-------- --------
At 30 June 326 -
-------- --------
Book value at 30 June - 390
======== ========
The investment represented the Rand 7million refundable deposit
to Siyanda Smelting and Refining Proprietary Limited which the
Group paid in exchange for a period of exclusivity to conclude a
potential acquisition of the company. The deposit is interest free
and becomes refundable should the acquisition not proceed. The
investment was considered to be fully impaired as at 30 June 2020
whilst the Directors pursued other alternatives and GBP326,000 was
charged to the income statement.
Company - Subsidiary undertakings
Loans Equity Total
GBP000 GBP000 GBP000
Cost:
At 1 July 2018 2,762 20,329 23,091
Additions 978 5 983
-------- -------- --------
At 30 June 2019 3,740 20,334 24,074
-------- -------- --------
Additions 580 - 580
-------- -------- --------
At 30 June 2020 4,320 20,334 24,654
-------- -------- --------
Net book value at 30 June 2020 4,320 20,334 24,654
======== ======== ========
Net book value at 30 June 2019 3,740 20,334 24,074
======== ======== ========
The loans represent loans to Ironveld Holdings (Propriety)
Limited of GBP4,215,000 which incur interest at a rate not
exceeding the base lending rate applicable in England and Wales.
Under the initial terms of the loan, GBP2,500,000 is repayable 31
December 2019 with the remainder due 31 December 2020 however
further agreement in the year has extended the loan period when
project finance is agreed. Also included in loans are working
capital loans to Ironveld Mauritius Limited of GBP105,000 which are
interest free.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. Investments (continued)
The Company has investments in the following principal
subsidiaries. To avoid a statement of excessive length, details of
the investments which are not significant have been omitted:
Proportion of Nature of
Name of company Shares voting rights business
and shares held
Subsidiary undertakings
Ironveld Mauritius Limited Ordinary *100% Holding Company
Ironveld Holdings (Proprietary) Limited Ordinary 100% Holding Company
Ironveld Mining (Proprietary) Limited Ordinary 100% Mining and
exploration
Ironveld Middelburg (Proprietary) Limited Ordinary 100% Ore
processing and smelting
Ironveld Smelting (Proprietary) Limited Ordinary 74% Ore
processing and smelting
HW Iron (Proprietary) Limited Ordinary 68% Prospecting and mining
Lapon Mining (Proprietary) Limited Ordinary 74% Prospecting and
mining
Luge Prospecting and
Mining (Proprietary) Limited Ordinary 74% Prospecting and mining
* Held directly by Ironveld Plc all other holdings are
indirect.
All subsidiary undertakings are incorporated and domiciled in
South Africa, other than Ironveld Mauritius Limited, which is
incorporated and domiciled in Mauritius.
Further details of non-wholly owned subsidiaries of the Group
are provided in note 24.
15. Trade and other receivables
Group Company
2020 2019 2020 2019
GBP000 GBP000 GBP000 GBP000
Other receivables 58 138 16 11
Amounts owed by related parties 2 - - -
Prepayments and accrued income 18 18 14 14
-------- -------- -------- --------
78 156 30 25
Due within 12 months (76) (156) (30) (25)
-------- -------- -------- --------
Due after more than 12 months 2 - - -
======== ======== ======== ========
Amounts owed by related parties represent expenses paid on
behalf of the non-controlling interest shareholders by the company
and are expected to be recovered in more than 12 months. The
amounts are unsecured and interest free.
Credit risk
The Group's principal financial assets are bank balances, cash
balances, and other receivables. The Group's credit risk is
primarily attributable to its other receivables of which GBP27,000
(2019 - GBP109,000) is due from a third party financial institution
and further information is provided in note 19. The remaining
receivable relates to recoverable VAT. The amounts presented in the
balance sheet are net of allowances for doubtful receivables.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16. Trade and other payables
Group Company
2020 2019 2020 2019
GBP000 GBP000 GBP000 GBP000
Trade payables 48 8 48 8
Taxation and social security costs 13 18 13 14
Other payables 6 10 5 5
Accruals and deferred income 738 574 153 43
-------- -------- -------- --------
805 610 219 70
Due within 12 months (805) (610) (219) (70)
-------- -------- -------- --------
Due after more than 12 months - - - -
======== ======== ======== ========
17. Borrowings
Group Company
2020 2019 2020 2019
GBP000 GBP000 GBP000 GBP000
Other loans 210 - 210 -
======== ======== ======== ========
Due within 12 months (210) - (210) -
-------- -------- -------- --------
Due after more than 12 months - - - -
======== ======== ======== ========
Further details on loans is provided in note 19.
18. Deferred tax
Group
2020 2019
GBP000 GBP000
Balance at 1 July 5,243 5,194
Exchange differences (859) (49)
-------- --------
Balance at 30 June 4,384 5,243
======== ========
The Group has unrelieved tax losses carried forward which
represent a deferred tax asset of GBP1,122,000 (2019 - GBP831,000).
This asset is not recognised in these financial statements.
The deferred tax liability is made up as follows:
Group
2020 2019
GBP000 GBP000
Fair value adjustments 4,384 5,243
======== ========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19. Financial instruments
The Group's policies as regards derivatives and financial
instruments are set out in the accounting policies in note 2. The
Group does not trade in financial instruments.
Capital risk management
The Group manages its capital to ensure that they will be able
to continue as a going concern whilst maximising the return to
stakeholders through the optimisation of the debt and equity
balance. The Group's overall strategy remains unchanged from
2019.
The capital structure of the Group consist of cash and cash
equivalents and equity attributable to equity holders of the parent
Company.
The Group is not subject to any externally imposed capital
requirements.
Interest rate risk profile
The Group is exposed to interest rate risk because the Group
borrows funds for working capital at fixed and variable rates. The
Group exposure to interest rates on financial assets and
liabilities are detailed in the liquidity risk management section
of this note.
Credit risk management
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Company. The Group has adopted a policy of only dealing with
creditworthy counterparties as a means of mitigating the risk of
financial loss from defaults. The Group's exposure and the credit
ratings of its counterparties are continuously monitored and the
aggregate value of the transactions concluded is spread where
possible.
Liquidity Risk Management
Ultimate responsibility for liquidity risk management rests with
the Board of Directors, which has established an appropriate
liquidity risk management framework for the management of the
Group's short, medium and long term funding and liquidity
management requirements. The Group manages liquidity risk by
assessing required reserves and banking facilities by continuously
monitoring forecast and actual cash flows, and by matching the
maturity profiles of financial assets and liabilities. Details of
additional undrawn bank facilities that the Group has at its
disposal to manage liquidity are set out below.
Financial facilities
The Group did not have any secured bank loan or overdraft
facilities during the current or comparative period.
Financial assets
The Group has no financial assets, other than short-term
receivables and cash deposits of GBP28,000 (2019 - GBP566,000). The
cash deposits attract variable rates of interest. At the year end
the effective rate was 0.8% (2019 - 0.7%). The cash deposits held
were as follows:-
2020 2019
GBP000 GBP000
Sterling - United Kingdom banks 10 518
USD - United Kingdom banks 4 2
South African Rand - United Kingdom banks 1 5
South African Rand - South African banks 13 41
-------- --------
28 566
======== ========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19. Financial instruments (continued)
Financial liabilities
Other loans
Other loans represents the Group's interest bearing financial
liabilities. The others loans are due to a consortium of high net
worth investors and existing shareholders with whom facilities of
GBP260,000 were agreed on 3 February 2020. The loans mature six
months after draw down and attract a fixed interest rate of 8% per
annum. The Company issued 26,000,000 share warrants with a
subscription price of 1p per share to the lenders, pro rata to the
amount of each loan. These warrants have a two year life and the
lenders may use the outstanding balances under the loan facilities
to exercise the warrants.
At 30 June 2020, GBP210,000 had been drawn against this facility
and therefore GBP50,000 remained undrawn.
On 11 June 2020, the Company arranged a bridging loan facility
with Inclusive Investment Group Propriety Limited ("IIG") of ZAR
3,700,000 (approximately GBP170,000). At 30 June 2020 no amount had
been drawn under this facility. On 3 September 2020, a further
extension of these facilities of ZAR 3,300,000 (approximately
GBP154,000) was agreed.
On 30 March 2020, the Company arranged a potential US$1 million
facility with IIG which could be drawn down if IIG completed its
share subscription under the outstanding option agreement and
therefore no amounts were available to draw on this facility at the
year-end and the facility lapsed on 30 November 2020.
Currency exposures
The Group undertakes transactions denominated in foreign
currencies and is consequently exposed to fluctuations in exchange
rates. The carrying amounts of the Group's foreign currency
denominated monetary assets and monetary liabilities were as
follows:-
Assets Liabilities
GBP000 GBP000
As at 30 June 2020
British Pound Sterling (GBP) 31 417
USD ($) 1 21
South African Rand (R) 56 564
-------- ------------
88 1,002
======== ============
Assets Liabilities
GBP000 GBP000
As at 30 June 2019
British Pound Sterling (GBP) 528 70
USD ($) 2 13
South African Rand (R) 564 527
-------- ------------
1,094 610
======== ============
Financial commitments and guarantee
Rehabilitation guarantees of GBP1,340,000 (R 24,278,412) have
been issued to the Department of Mineral Resources for three
subsidiaries, HW Iron Proprietary Limited, Lapon Mining Proprietary
Limited and Luge Prospecting and Mining Company Proprietary Limited
in order to comply with Section 41 of the Mineral and Petroleum
Resources Development Act, 2002 (Act 28 of 2002). Under this
agreement the Group will pay deposits to a third party financial
institution to be held pending discharge of any potential claim on
this guarantee. At 30 June 2020 GBP27,000 (R 577,000) (2019 -
GBP109,000 (R 1,962,000)) had been deposited in respect of this
agreement and is included in other receivables. As no significant
activity had taken place on the Group's mineral resources then R
1,500,000 was withdrawn from the bond in the year. This receivable
represents a concentration of credit risk and the Group is exposed
to currency risk on these amounts. As the project has not yet
commenced then no liability is considered to have arisen under this
guarantee at the reporting date.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20. Share capital
Group and Company
2020 2019
GBP000 GBP000
Allotted, called up and fully paid
654,990,841 (2019 - 654,990,841) ordinary shares
of 1p each 6,550 6,550
322,447,158 (2019 - 322,447,158) deferred shares
of 1p each 3,224 3,224
-------- --------
9,774 9,774
======== ========
As announced on 26 November 2020 and subsequently approved on 14
December 2020, the Company agreed to carry out a subdivision of the
existing ordinary shares whereby each existing ordinary share of 1
pence each will be subdivided into one New Ordinary share of 0.1
pence each and nine deferred shares of 0.1 pence each to enable the
placing at 0.30 pence per share to become unconditional. The New
Ordinary shares will continue to carry the same rights as attached
to the existing ordinary shares, save for the reduction in nominal
value.
Unlike ordinary shares, the deferred shares have no voting
rights, no dividend rights and on a return of capital or winding up
are entitled to a return of amounts credited as paid. The deferred
shares are not transferrable and beneficial interests in the
deferred shares can be transferred to such persons as the Directors
may determine as custodian for no consideration without sanction of
the holder. For this reason the deferred shares are excluded from
any Earnings per share calculations.
Share options
The Company has a share option scheme for certain employees and
former employees of the Group. The share options in issue during
the year were as follows:
Date Exercise As at Granted Exercised Lapsed/ As at 30
granted price 1 July in year in year Cancelled June 2020
2019 No. No. No. No.
No.
21 May 2010 10p 1,600,000 - - (1,600,000) -
16 August
2012 1p 5,949,558 - - - 5,949,558
14 November
2012 1p 6,663,505 - - - 6,663,505
16 April 2013 1p 1,033,334 - - - 1,033,334
7 November
2013 1p 2,086,667 - - - 2,086,667
1 May 2014 1p 200,000 - - - 200,000
1 October
2015 1p 2,500,000 - - - 2,500,000
27 January
2016 1p 445,545 - - - 445,545
10 January
2020 1p - 27,400,000 - - 27,400,000
30 March 2020 0.42p - 440,176,070 - - 440,176,070
========== ============ ========== ============ ============
The exercise period of the options is as follows:
Date
granted Expiry date Exercise period
16 August 2012 16 August 2022
14 November 2012 14 November 2022 The options are exercisable 1/3 on the first anniversary
16 April 2013 16 April 2023 of grant, 1/3 on the second
anniversary of grant and the
7 November 2013 7 November 2023 final 1/3 on the third anniversary of grant
1 May 2014 1 May 2024
1 October 2015 1 October 2025
27 January 2016 27 January 2026
10 January 2020 9 January 2030 1/2 on grant and the remaining
1/2 one year after the grant date.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20. Share capital (continued)
Of the options granted on 1 October 2015, 1,000,000 are
exercisable following first commercial production from the proposed
15 MW smelter.
The Group recognised a share based payment expense of GBP80,000
(2019 - GBP5,000) in the year. No options were exercised in the
year.
The aggregate of the estimated fair value of the employee
related share options granted in the period amounted to GBP108,000
(2019 - GBPNil). The inputs to the Black Scholes Model were as
follows:-
Weighted average share price (pence) 0.75
Weighted average share price (pence) 1.00
Expected volatility 82%
Weighted average period to exercise 5 years
Risk free rate 0.7%
Expected volatility was determined by calculating the historical
volatility of the Group's share price over the three years prior to
the grant date. The expected period to exercise is based on
management's best estimate.
Share options (continued)
On 30 March 2020, the Company announced that it had entered in a
share Option Agreement with IIG pursuant to which IIG could
subscribe for 440,176,070 new Ordinary shares in the capital of the
Company at a price of 0.42 pence per share. The option agreement
was issued in exchange for US$250,000.
The Option agreement had an initial expiry date of 17 June 2020
but in order to bring the timetable for the potential Option
exercise in line with the proposed project financing application,
the Company entered into an extension of the Agreement to 30
September 2020. In consideration of this extension IIG agreed to
provide the Company with a bridging funding facility of up to
ZAR3.7 million (approximately GBP170,000) which was intended to
provide the Company with the requisite funds to continue in
operations until such time as the funding application is
reviewed.
Further to the above, on 3 September 2020, the exercise period
Option Agreement was once again extended to 30 November 2020 in
exchange for further bridging funding of ZAR 3.3 million
(approximately GBP150,000). The option lapsed on 30 November
2020.
Share warrants
Pursuant to the loan facilities agreement, dated 3 February 2020
for GBP260,000 and referred to in note 19, the Company issued share
warrants to the lenders over 26,000,000 shares at 1 pence per
share. The warrants had a two years life and the lender was able to
use the outstanding balances under the loan facilities to exercise
the warrants. Following the approval of the conditional placing on
14 December 2020 and the repayment of the associated loans, these
share warrants lapsed.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21. Reserves
Other Share Retained
reserve premium earnings
GBP000 account GBP000
GBP000
Group
At 1 July 2019 - 19,691 (10,499)
Loss for the year - - (1,017)
Exchange difference on translation of foreign
operations - - (3,044)
Issue of share options and warrants 189 -
Credit for equity settled share based payments - - 80
--------- --------- ----------
At 30 June 2020 189 19,691 (14,480)
========= ========= ==========
Other reserves represent the equity component of share options
and share warrants issued in the year.
The balance classified as share premium is the premium on the
issue of the Group's equity share capital, comprising 1p ordinary
shares and 1p deferred shares less any costs of issuing the
shares.
Retained earnings is made up of cumulative profits and losses to
date, share based payments, adjustments arising from changes in
non-controlling interests and exchange differences on translation
of foreign operations.
Other Share Retained
reserve premium earnings
GBP000 account GBP000
GBP000
Company
At 1 July 2019 - 19,691 (4,913)
Loss for the period - - (551)
Issue of share options and warrants 189 - -
Credit for equity settled share based payments - - 80
--------- --------- ----------
At 30 June 2020 189 19,691 (5,384)
========= ========= ==========
Other reserves represent the equity component of share options
and share warrants issued in the year.
The balance classified as share premium is the premium on the
issue of the Group's equity share capital, comprising 1p ordinary
shares and 1p deferred shares less any costs of issuing the
shares.
Retained earnings is made up of cumulative profits and losses to
date, share based payments, adjustments arising from changes in
non-controlling interests and exchange differences on translation
of foreign operations.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22. Cash generated from operations
2020 2019
GBP000 GBP000
Group
Operating loss (695) (629)
Depreciation on property, plant and equipment 2 3
Share based payment charge 80 -
-------- --------
Operating cash flows before movements in working
capital (613) (626)
Movement in receivables 61 22
Movement in payables 155 185
-------- --------
Cash used in operations (397) (419)
Interest paid - (1)
-------- --------
Net cash used in operations (397) (420)
======== ========
Cash and cash equivalents
2020 2019
GBP000 GBP000
Cash and bank balances 28 566
======== ========
2020 2019
GBP000 GBP000
Company
Operating loss (571) (404)
Share based payment charge 80 -
-------- --------
Operating cash flows before movements in working
capital (491) (404)
Movement in receivables (6) 13
Movement in payables 147 10
-------- --------
Net cash used in operations (350) (381)
======== ========
Cash and cash equivalents
2020 2019
GBP000 GBP000
Cash and bank balances 15 523
======== ========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. Related party transactions
Group
During the year the Group incurred GBP185,000 (2019 -
GBP251,000) for consultancy services to Goldline Global Consulting
(Pty) Limited, a company in which P Cox is materially interested.
At 30 June 2020, GBP392,000 (2019 - GBP365,000) remained unpaid in
accruals. Following the year end the accrued fees were settled by
the issue of shares in the Company.
During the year the Group incurred GBP120,000 (2019 -
GBP131,000) for consultancy services to Novem Consulting, a private
company in which V von Ketelhodt is materially interested. At 30
June 2020, GBP171,000 (2019 - GBP145,000) remained unpaid in
accruals. Following the year end the accrued fees were settled by
the issue of shares in the Company.
Group and Company
The key management personnel of the Group are the Directors.
Directors' remuneration is disclosed in Note 5.
During the year the Company paid GBP48,000 (2019 - GBP48,000)
for accounting services to Westleigh Investments Limited, a company
in which G Clarke and N Harrison are materially interested. During
the year the Company paid GBPNil (2019 - GBP20,000) for consultancy
services to Merlin Partnership LLP, a company in which G Clarke is
materially interested.
Included in other loans is a short term loan due to G Clarke of
GBP10,000 (2019- GBPNil). The loan attracts interest at 8% per
annum and was repaid after the year-end by the issue of 3,333,333
shares and the interest waived.
Further Directors' remuneration of GBP96,805 (2019 - GBPNil) was
unpaid at the year-end and is included in accruals. Following the
year end GBP60,000 of the accrued fees were settled by the issue of
shares in the Company.
24. Non-controlling interest
2020 2019
GBP000 GBP000
At 1 July 3,721 3,687
Exchange adjustments (610) 35
Share of loss for the period (2) (1)
-------- --------
At 30 June 3,109 3,721
======== ========
The table below shows details of non-wholly owned subsidiaries
of the Group that have material non-controlling interests:
Proportion of Profit/(loss) Accumulated
voting rights allocated to non-controlling
and shares held non-controlling interests
interests
2020 (2019) 2020 2019 2020 2019
GBP000 GBP000 GBP000 GBP000
HW Iron (Proprietary)
Limited 32% (32%) - - 989 1,184
Lapon Mining (Proprietary)
Limited 26% (26%) - - 2,124 2,540
Other non-controlling
interests (2) (1) (4) (3)
--------- -------- --------- --------
(2) (1) 3,109 3,721
========= ======== ========= ========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24. Non-controlling interest (continued)
Summarised financial information in respect of each of the
Group's subsidiaries that have material non-controlling interests
is set out below. The summarised financial information below
represents amounts before intragroup eliminations. The accounts of
the subsidiaries have been translated from their presentational
currency of South African Rand (R) using the R: GBP exchange rate
prevailing at 30 June 2020 of 21.4676 (2019 - 17.9497).
HW Iron (Proprietary) Limited
2020 2019
GBP000 GBP000
Non-current assets 6,261 7,261
Current assets 3 -
Current liabilities (1,970) (2,122)
Non-current liabilities (1,205) (1,441)
-------- --------
3,090 3,698
======== ========
Equity attributable to owners of the Company 2,101 2,514
Non-controlling interest 989 1,184
======== ========
Revenue - -
Expenses (1) -
-------- --------
Loss for the year (1) -
======== ========
Attributable to the owners of the Company (1) -
Attributable to the non-controlling interests - -
======== ========
Net cash outflow from operating activities - -
Net cash outflow from investing activities (157) (188)
Net cash inflow from financing activities 157 188
-------- --------
Net cash inflow - -
======== ========
Net cash flow - Attributable to the non-controlling - -
interests
======== ========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24. Non-controlling interest (continued)
Lapon Mining (Proprietary) Limited
2020 2019
GBP000 GBP000
Non-current assets 12,992 15,300
Current assets 2 -
Current liabilities (1,647) (1,728)
Non-current liabilities (3,179) (3,802)
-------- --------
8,168 9,770
======== ========
Equity attributable to owners of the Company 6,044 7,230
Non-controlling interest 2,124 2,540
======== ========
Revenue - -
Expenses (1) (1)
-------- --------
Loss for the year (1) (1)
======== ========
Attributable to the owners of the Company (1) (1)
Attributable to the non-controlling interests - -
======== ========
Net cash outflow from operating activities (1) (1)
Net cash outflow from investing activities (153) (183)
Net cash inflow from financing activities 153 184
-------- --------
Net cash inflow (1) -
======== ========
Net cash flow - Attributable to the non-controlling - -
interests
======== ========
25. Financial commitments
At the year end the Group had no financial commitments under
operating leases (2019 - GBPNil).
26. Control
The Directors consider that there is no overall controlling
party.
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END
FR ZZMZZRDNGGZM
(END) Dow Jones Newswires
December 29, 2020 02:00 ET (07:00 GMT)
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