TIDMIRON
RNS Number : 2359L
Ironveld PLC
29 December 2022
The following amendments have been made to the "Final Results
for the year ended 30 June 2022" announcement released by Ironveld
PLC on 29 December 2022 at 7am under RNS No 1287L
In the Chairman's Statement, 4(th) paragraph:
The opening wording "In May 2021 the Company announced" has been
amended to "In May 2022 the Company announced"
All other details remain unchanged.
The full amended text is shown below.
Ironveld Plc
("Ironveld" or the "Company")
Final Results for the year ended 30 June 2022
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 2022 ("the
Period"). Hard copies of these results will be posted to
shareholders by 31 December 2022.
Operational and Financial Highlights
-- Acquisition and refurbishment of Rustenburg smelter, funded
by a GBP4.5 million Placing post Period end, will enable Ironveld
to mine and process ore for the first time;
-- Mining activities commenced December 2022; and
-- First furnace close to production at Rustenburg smelter.
Outlook
-- 2023 expected to see production and sales increase rapidly as
the smelter moves to full capacity production.
For further information, please contact:
Ironveld plc c/o BlytheRay
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 / James Pope +44 20 3657 0050
BlytheRay
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.
In 2022 Ironveld agreed to acquire and refurbish a smelter
facility in Rustenburg, South Africa, in which it can process its
magnetite ore into the marketable products of high purity iron,
titanium slag and vanadium slag.
Ironveld is an AIM traded company. For further information on
Ironveld please refer to www.ironveld.com .
CHAIRMAN'S STATEMENT
Dear Shareholder,
I am pleased to present the Annual Report and the Financial
Statements for the year to 30 June 2022.
During the Period, we continued to undertake various activities
focused on realising the value of the Company's assets, with the
most significant events having taken place post Period end.
In March 2021 the Company had announced that it was in
discussions with a strategic partner seeking to take a substantial
equity stake at the listed company level and this was confirmed in
October 2021 with the announcement of an agreed Subscription by
Grosvenor Resources (Pty) Limited ("Grosvenor") for 561,505,950 new
ordinary shares at 1 pence per share, being a substantial premium
over the prevailing share price. Shareholder approval for the
transaction was granted at a General Meeting in November 2021,
however due to delays in Grosvenor securing its own funding for the
investment the transaction had not closed as at the period end and
as at today's date Grosvenor is still in advanced negotiations to
fund and proceed with an investment in Ironveld, but the Directors
remain hopeful that a meaningful advance will soon be made.
In May 2022 the Company announced that it had agreed terms with
a business rescue practitioner and a sole creditor to acquire an
existing smelter in Rustenburg, South Africa for a total of ZAR 115
million (approximately GBP5.75 million), payable ZAR 15 million
(approximately GBP750,000) on completion with the balance of ZAR
100 million (approximately GBP5.0 million) repayable from smelter
cashflows over 10 years. The Company then completed a Placing to
raise gross proceeds of GBP4.5 million in August 2022.
The acquisition of the Rustenburg smelter is a moment of huge
significance for the Company as it provides the first opportunity
to economically mine and process the Company's magnetite ore into
marketable products: high purity iron, vanadium in slag and
titanium in slag.
Following a rapid and efficient refurbishment project at the
smelter and establishment of all necessary infrastructure at the
mine, the Company was able to announce in early December 2022 that
mining activities had commenced and that the smelter's first
furnace (of three) would be in operation within weeks, materially
ahead of schedule.
We remain committed to operating responsibly, working closely
with stakeholders and local communities at grassroots level to
improve standards of living. Our local communities have been fully
involved in the process to establish the mining area and have
provided all necessary consents. As part of our Social Labour Plan
(approved by the Department of Mineral Resources ("DMR") in South
Africa) we have undertaken to implement water supply schemes,
electrification upgrades and roads and stormwater infrastructure to
the municipalities of our mining communities. In addition Ironveld
has committed to provide training, bursaries and employment to the
members of the various host communities.
Giles Clarke
Chairman
28 December 2022
STRATEGIC REPORT
Financial
The Group recorded a loss before tax of GBP0.8 million (2021:
GBP0.5 million) in the Period. The Company does not plan to pay a
dividend for the year ended 30 June 2022.
Going concern
The Subscription proceeds due from Grosvenor Resources had not
been received as at the date of these Financial Statements, however
the Directors have received reasonable assurances that progress is
being made between Grosvenor and its potential funders and is
hopeful that an investment by Grosvenor will be completed early in
2023. In addition the Company expects to rapidly increase
production and revenues as all three furnaces at the smelter reach
full production in the first half of 2023, which will see the
business operating on a positive cash flow basis.
Taking receipt of the funds referred to above and the planned
increase in production into account, these Financial Statements
have been prepared on a Going Concern basis.
Outlook
With the Company seeing increasing production from the smelter
during the first half of 2023 the outlook is extremely
positive.
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.
Principal risks and uncertainties
The Directors consider the following risks to be the most
material or significant for the management of the business. These
issues do not purport to be a complete list or explanation of all
the risks facing the Group. In particular the Group's performance
may be affected by changes in market and/or economic conditions,
changes in legal, regulatory or tax requirement legislation.
The Board of Directors monitors these risks and the Group's
performance on a regular basis
Operational risks - The production of the Company's range of
metals involves a series of processes, from the mining of the ore
at the mine site, to the smelting of material at the Rustenburg
smelter. Mining operations are subject to a number of risks,
including mechanical outages, supply issues (e.g. fuel),
interruptions due to weather and soil conditions, among many
others.
Availability of finance - Expansion of current activities or
further development and production from the ore resources requires
significant further capital expenditure and the Group will need to
raise further finance. The terms on which future funds can be
raised may not be on terms which the Directors consider acceptable.
The Group is listed on the public markets which greatly assists in
the raising of additional finance.
Governance and Compliance - There are multiple governance based
risks which may have an impact on the business. The Group operates
within a complex regulatory environment which focuses on
accountability. Failure to comply with regulations, including
applicable licences required for continuous operations, or failure
to follow expected social and business conduct could cause
potential interruption or stoppage of operations, potential
financial loss and reputational damage.
Health and Safety - Mining and Smelting operations by their very
nature are dangerous working environments which, if not managed,
could lead to serious injuries and a loss of life.
Commodity Markets - A significant decrease in commodity prices
for high purity iron, vanadium or titanium would negatively impact
Group revenues.
STRATEGIC REPORT (continued)
Principal risks and uncertainties (continued)
Inflation - The Group's cost base is highly susceptible to
inflationary pressures. In cycles of high commodity prices, input
costs, such as wages, consumables, diesel and energy often increase
at a rate higher than that of general inflation. Rising costs,
which could be triggered by and therefore offset by higher
commodity prices, have a direct impact on the Group's
profitability. In addition, inflationary pressures have an impact
on capital expenditure.
Political and Country risk - Substantially all of the Groups
business and operations are conducted in South Africa and the
political, economic, legal and social situation in South Africa
introduces a certain degree of risk with respect to the Group's
activities.
s172 Statement - Director's statement in performance of their
statutory duties in accordance with s172 (1) Companies Act 2006
During the year ended 30 June 2022 the Board of Directors
consider that they have acted in a way that would be most likely to
promote the success of the company for the benefit of its members
(having regard to the stakeholders and the matters set out in
s172(1)(a)-(f) of the Companies Act 2006).
The Board has elected to apply the Quoted Company Alliance
Corporate Governance Code as part of its commitment to high
standards of corporate governance in all of its activities and
complies with its requirements as far as is practicable and
appropriate for a company of its nature and size.
The Directors are aware of their responsibilities to take into
consideration the interests of all stakeholders in their decision
making process and to promote the success of the Company in
accordance with s172. The Directors continue to pay full regard to
the interests of the stakeholders.
The requirements of s172 are for the Directors to:
-- Consider the likely consequences of any decision in the long
term,
-- Act fairly between the members of the Company,
-- Maintain a reputation for high standards of business
conduct,
-- Consider the interests of the Company's employees,
-- Foster the Company's relationships with suppliers, customers
and others, and
-- Consider the impact of the Company's operations on the
community and the environment.
The Company is quoted on AIM and its members will be fully
aware, through detailed announcements, shareholder meetings and
financial communications, u pdate d on the website, of the Board's
broad and specific intentions and the rationale for its decisions.
When making decision, the Board of Directors, issues such as the
impact on the community and the environment have actively been
taken into consideration. The Company pays its employees and
creditors promptly and keeps its costs to a minimum to protect
shareholders funds. The Company recognises workers' representation
unions and complies with all local employment legislation.
The key decisions made in the year to promote this success are
explained in the Strategic Report above.
This report was approved by the Board on 28 December 2022 and
signed on its behalf by:
Giles Clarke
Chairman
28 December 2022
CONSOLIDATED INCOME STATEMENT
2022 2021
Note GBP000 GBP000
Administrative expenses (798)
(783)
Operating loss 4 (798) (783)
Other gains and losses 6 -
323
Investment revenues 7 4 3
Finance costs 8 (17) (8)
Loss before tax (811) (465)
Tax 9 - -
Loss for the year (811) (465)
Attributable to:
Owners of the Company (806) (460)
Non-controlling interests (5) (5)
(811) (465)
Loss per share - Basic and diluted 10 (0.06p) (0.05p)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2022 2021
GBP000 GBP000
Loss for the period (811) (465)
Exchange difference on translation of foreign operations (199)
1,692
Total comprehensive (loss)/income for the year (1,010) 1,227
Attributable to
Owners of the Company (974) 956
Non-controlling interests (36) 271 (1,010) 1,227 Amounts
charged/credited to other comprehensive income may be reclassified
to the income statement in future periods.
CONSOLIDATED BALANCE SHEET
2022 2021
Note GBP000 GBP000
Non-current assets
Intangible assets 12 26,350 26,191
Property, plant and equipment 13 2 2
Investments 14 - -
Other receivables 15 3 3
26,355 26,196
Current assets
Trade and other receivables 15 198 177
Cash and cash equivalents 22 17 270
215 447
Total assets 26,570 26,643
Current liabilities
Trade and other payables 16 (619) (272)
Borrowings 17 (499) -
(1,118) (272)
Non-current liabilities
Deferred tax liabilities 18 (4,730) (4,774)
Total liabilities (5,848) (5,046)
Net assets 20,722 21,597
Equity
Share capital 20 10,453 10,436
Share premium 21 21,379 21,261
Other reserve 21 12 15
Retained earnings 21 (8,421) (7,618)
Foreign currency translation reserve 21 (6,045) (5,877)
Equity attributable to owners of the Company 17,378 18,217
Non-controlling interests 25 3,344 3,380
Total equity 20,722 21,597
These financial statements were approved by the Board and
authorised for issue on 28 December 2022.
Signed on behalf of the Board
M Eales
Director Company Registration No: 04095614
PARENT COMPANY BALANCE SHEET
2022 2021
Note GBP000 GBP000
Non-current assets
Investments 14 26,017 25,502
Current assets
Trade and other receivables 15 60 49
Cash and cash equivalents 22 12 255
72 304
Total assets 26,089 25,806
Current liabilities
Trade and other payables 16 (606) (264)
Borrowings 17 (499) -
Total liabilities (1,105)
(264)
Net assets 24,984 25,542
Equity
Share capital 20 10,453 10,436
Share premium 21 21,379 21,261
Other reserve 21 12 15
Retained earnings 21 (6,860) (6,170)
Total equity 24,984 25,542
(Attributable to owners of the Company)
The loss for the financial year dealt with in the financial
statements of the parent Company was GBP693,000 (2021 - loss
GBP815,000).
These financial statements were approved by the Board and
authorised for issue on 28 December 2022
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:
Foreign
Share Share Other currency Retained
Capital Premium Reserve translation Earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 July 2020 9,774 19,691 189 (7,293) (7,187) 15,174
Loss for the year - - - - (460) (460)
Exchange difference on
translation of foreign operations - - - 1,416 - 1,416
Reclassification to liability - - (189)
- - (189)
Credit for equity-settled
share based payments - - - - 29 29
Issue of share capital 662 1,570 - - - 2,232
Issue of share options and warrants - - 15 - - 15
At 30 June 2021 10,436 21,261 15 (5,877) (7,618) 18,217
Loss for the year - - - - (806) (806)
Exchange difference on
translation of foreign operations - - - (168) - (168)
Issue of share capital 17 118 - - - 135
Exercise of share warrants - - (3) - 3 -
At 30 June 2022 10,453 21,379 12 (6,045) (8,421) 17,378
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
Total equity:
Owners of Non-controlling Total
the Company Interest Equity
GBP000 GBP000 GBP000
At 1 July 2020 15,174 3,109 18,283
Loss for the year (460) (5) (465)
Exchange difference on
translation of foreign operations 1,416 276 1,692
Reclassification to liability (189) - (189)
Credit for equity-settled share based payments 29
- 29
Issue of share capital 2,232 - 2,232
Issue of share option and warrants 15 - 15
At 30 June 2021 18,217 3,380 21,597
Loss for the year (806) (5) (811)
Exchange difference on
translation of foreign operations (168)
(31) (199)
Issue of share capital 135 - 135
At 30 June 2022 17,378 3,344 20,722
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 2020 9,774 19,691 189 (5,384) 24,270
Loss for the year - - - (815) (815)
Reclassification to liability - - (189) - (189)
Credit for equity-settled
share based payments - - - 29 29
Issue of share capital 662 1,570 - - 2,232
Issue of share options and warrants - - 15 - 15
At 30 June 2021 10,436 21,261 15 (6,170) 25,542
Loss for the year - - - (693) (693)
Issue of share capital 17 118 - - 135
Exercise of share warrants - - (3) 3 -
At 30 June 2022 10,453 21,379 12 (6,860) 24,984
CONSOLIDATED CASH FLOW STATEMENT
2022 2021
Note GBP000 GBP000
Net cash used in operating activities 22 (337)
(642)
Investing activities
Purchases of property, plant and equipment (1)
(1)
Purchase of exploration and evaluation assets (396)
(492)
Interest received
4 3
Net cash used in investing activities (393)
(490)
Financing activities
Proceeds on issue of equity (net of costs) - 1,134
Proceeds from new loans 482 363
Repayment of loans - (109)
Net cash generated by financing activities 482 1,388
Net (decrease)/increase in cash and cash equivalents (248)
256
Cash and cash equivalents at beginning
of year 22 270
28
Effects of foreign exchange rates (5) (14)
Cash and cash equivalents at end of year 22 17
270
COMPANY CASH FLOW STATEMENT
2022 2021
Note GBP000 GBP000
Net cash used in operating activities 22 (230)
(507)
Investing activities
Payments to acquire investments - loans (495)
(384)
Investments repaid - loans -
81
Net cash used in investing activities (495)
(303)
Financing activities
Proceeds on issue of equity (net of costs) - 1,134
Proceeds from new loans 482 25
Repayment of loans - (109)
Net cash generated by financing activities 482 1,050
Net (decrease)/increase in cash and cash equivalents (243)
240
Cash and cash equivalents at
beginning of year 22 255 15
Cash and cash equivalents at end of year 22 12 255
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. General information
Ironveld Plc is a public company incorporated and domiciled in
England and Wales 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 6.
Adoption of new and revised Standards
In the current year, the Group has applied new or amended
standard for the first time which are mandatory for accounting
periods commencing on or after 1 July 2021. None of the standards
adopted had a material impact on the financial statements. The
significant new and amended standards adopted were as follows:-
Amendments to IFRS 4, IFRS 7, IFRS 9 and IFRS 16 in respect of
the IBOR reform.
At the date of authorisation of these financial statements,
amendments to existing standards and interpretations, applicable to
the group, are not yet effective and have not been adopted early by
the Group. 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 UK-adopted international
accounting standards (IFRSs) in conformity with the requirements of
the Companies Act 2006.
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.
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.1 Significant accounting policies (continued)
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.
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.
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.
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 impairment.
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.
Operating segments
The Group considers itself to have one operating segment in the
year and further information is provided in note 3.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.1 Significant accounting policies (continued)
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 4 to 5. 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.
Going concern
As at the date of approval of these Financial Statements the
Company has now commenced mining activities and the newly acquired
smelter will shortly be processing ore following refurbishment of
the first of what will be three operating furnaces. The majority of
the capital expenditure for the entire Rustenburg smelter project
has now been spent, however there is still further work to complete
before the smelter is operating at planned full capacity in
mid-2023 and the Group will need to carefully balance its cashflow
consumed in operations against sales revenues received in order to
complete this planned work.
In particular, should a decision be made to invest in equipment
necessary for production of higher value iron powder products, the
Group will need to secure further funding of approximately GBP1.5 -
2.0 million. At present the Group has no commitments or obligations
to purchase this equipment.
First revenues for the Group's products are expected in early
2023 and these revenues are expected to increase during 2023 as the
smelter approaches full capacity.
As at the date of approval of these financial statements the
Company had not received the agreed subscription proceeds from
Grosvenor due to delays in Grosvenor finalising its own facilities
with lenders. The Company is in regular contact with Grosvenor and
has received reasonable assurances that it has made good progress
with a funding entity and will remit the subscription funds as soon
as possible.
Taking into account existing cash resources, and the assumed
receipts of funding detailed above 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.
For this reason, the Board continues to adopt the going concern
basis in the preparation of these financial statements.
Should the agreed subscription proceeds be further delayed the
Company will seek alternative funding arrangements and those
arrangements are not yet committed. This represents a material
uncertainty in relation to the Company's funding arrangements.
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 as at the Period
end the Group remained 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.2 Critical accounting estimates and judgements (continued)
Investment impairment indicators
The Company balance sheet includes an investment in subsidiary
companies of GBP26,017,000 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
2022 2021
Operating loss for the year is shown after charging: GBP000
GBP000
Depreciation on tangible assets 1 2
Short term payments under leases 14 26
Share based payment charge - 29
Foreign exchange gain (2) (54)
Auditors' remuneration
Fees payable to the auditors for the audit of the Company's
accounts 38
35
5. Staff costs
Group
2022 2021
GBP000 GBP000
Wages and salaries 377 355
Social security costs 22 34
Pension costs 14 14
Share based payments - 29
Directors other fees 74 169
487 601
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5. Staff costs (continued)
The average monthly number of employees, including Directors, during 2022 2021
the period was as follows: Number Number
Administration and management 12 11
2022 2021
GBP000 GBP000
Directors remuneration and other fees
339 434
Pension
14 14
Share based payments
- 29
353 477
2022 2021
GBP000 GBP000
The aggregate remuneration and fees paid to the highest paid
Director was 175
175
Pension 14 14
Share based payments
- 29
189 218
Further details of the Directors' remuneration are given in the
Directors' Remuneration Report on page 11.
Company
2022 2021
GBP000 GBP000
Wages and salaries - directors
265 265
Social security costs 21 33
Share based payments - 28
Pension costs 14 14
300 340
The average monthly number of employees, including Directors, during 2022 2021
the period was as follows: Number Number
Directors 4 4
6. Other gains and losses
2022 2021
GBP000 GBP000
Gain on settlement of financial liabilities with equity -
335
Fair value loss on derivative instruments - (12)
- 323
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7. Investment revenues
2022 2021
GBP000 GBP000
Interest on financial deposits 4 3
8. Finance costs
2022 2021
GBP000 GBP000
Loan interest and similar charges 17 8
9. Tax
2022 2021
a) Tax charge for the period GBP000 GBP000
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
(811) (465)
Loss on ordinary activities for the period before taxation
multiplied by
effective rate of corporation tax in the UK of 19% (2021 - 19%)
(154)
(88)
Effects of:
Expenses not deductible for tax purposes
5 -
Tax losses not recognised
149 88
Tax expense for the period - -
c) Factors that may affect future tax charges - The Group has
estimated unutilised tax losses amounting to GBP5,148,658 (2021 -
GBP4,455,087) the values of which are not recognised in the balance
sheet. The losses represent a potential deferred taxation asset of
GBP1,287,000 (2021 - GBP847,000) based on the enacted future tax
rate of 25%, 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
GBP8,901,000 (2021 - GBP8,578,000) which are expected to be
deductible against future trading profits of the Group.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. Loss per share (continued)
2022 2021
GBP000 GBP000
Loss attributable to the owners of the Company (811)
(465)
Loss per share - Basic and diluted
Continuing operations (0.06p) (0.05p)
The calculation of basic earnings per share is based on
1,322,831,729 (2021 - 1,008,492,369) 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 GBP693,000 (2021 - GBP815,000).
12. Intangible assets
Exploration
and
evaluation
assets
GBP000
Group
Cost:
At 1 July 2020 23,574
Additions 492
Exchange differences 2,125 At 30 June 2021 26,191
Additions 396
Exchange differences (237) At 30 June 2022 26,350 Impairment and
amortisation:
At 1 July 2020, 30 June 2021 and at 30 June 2022 -
Net book value at 30 June 2022
26,350
Net book value at 30 June 2021 26,191
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13. Property, plant and equipment
Plant and
machinery
Group
GBP000
Cost:
At 1 July 2021 39
Additions 1
At 30 June 2022 40 Depreciation:
At 1 July 2021 37
Charge for the period 1
At 30 June 2022 38 Net book value at 30 June 2022 2
Net book value at 30 June 2021
2
Plant and machinery
GBP000
Cost:
At 1 July 2020 34
Additions 1
Exchange differences 4
At 30 June 2021 39 Depreciation:
At 1 July 2020 32
Charge for the period 2
Exchange differences 3
At 30 June 2021 37 Net book value at 30 June 2021 2
Net book value at 30 June 2020 2
All non-current assets in 2022, 2021 and 2020 were located in
South Africa.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. Investments
Group - Loans to other entities
2022 2021
GBP000 GBP000
Cost:
At 1 July 355 326
Exchange differences
(3) 29
At 30 June 352 355
Impairment:
At 1 July 355 326
Exchange differences
(3) 29
At 30 June 352 355
Book value at 30 June - -
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 period of exclusivity
expired in 2017. The deposit is interest free and becomes
refundable should the acquisition not proceed. The investment was
fully impaired as at 30 June 2022 whilst the directors pursued
other alternative opportunities.
Company - Subsidiary undertakings
Loans Equity Total
GBP000 GBP000 GBP000
Cost:
At 1 July 2020 4,320 20,334 24,654
Additions 848
- 848
At 30 June 2021 5,168
20,334 25,502
Additions 515 - 515
At 30 June 2022 5,683 20,334 26,017
Net book value at 30 June 2022 5,683 20,334 26,017
Net book value at 30 June 2021 5,168 20,334 25,502
The loans represent loans to Ironveld Holdings (Propriety)
Limited of GBP5,525,000 (2021 - GBP5,031,000) 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 has extended the loan period until
project finance is agreed. Also included in loans are working
capital loans to Ironveld Mauritius Limited of GBP158,000 (2021 -
GBP137,000) which are interest free.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. Investments (continued)
The Company has investments in the following 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) 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.
The registered office of all subsidiaries with the exception of
Ironveld (Mauritius) was Gartner House, 33 Wessel Road, Rivonia
2128, South Africa.
The registered office of Ironveld (Mauritius) is - C/o Rogers
Capital Corporate Services Limited, 3(rd) Floor, Rogers House, No.
5 President John Kennedy Street, Port Louis, Republic of
Mauritius.
Further details of non-wholly owned subsidiaries of the Group
are provided in note 25.
15. Trade and other receivables Group Company
2022 2021 2022 2021
GBP000 GBP000 GBP000 GBP000
Other receivables 134 128 2 -
Amounts owed by related parties 3 3 - 4
Prepayments 64 49 58 45
201 180 60 49
Due within 12 months (198) (177) (60) (49)
Due after more than 12 months 3 3 - -
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 GBP107,000
(2021 - GBP105,000) 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
2022 2021 2022 2021
GBP000 GBP000 GBP000 GBP000
Trade payables 132 25 132 25
Taxation and social security costs 4 5 3 5
Other payables 5 5 5 5
Accruals 478 237 466 229
619 272 606 264
Due within 12 months (619) (272) (606) (264)
Due after more than 12 months - - - -
17. Borrowings Group Company
2022 2021 2022 2021
GBP000 GBP000 GBP000 GBP000
Other loans 499 - 499 -
Due within 12 months 499 - 499 -
Due after more than 12 months - - - -
Further details on loans is provided in note 19.
18. Deferred tax
Group
2022 2021
GBP000 GBP000
Balance at 1 July 4,774 4,384
Exchange differences
(44) 390
Balance at 30 June 4,730 4,774
The Group has unrelieved tax losses carried forward which
represent a deferred tax asset of GBP1,287,000 (2021 - GBP847,000)
based on current tax rates. This asset is not recognised in these
financial statements.
The deferred tax liability is made up as follows:
Group
2022 2021
GBP000 GBP000
Fair value adjustments 4,730 4,774
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
2021.
The capital structure of the Group consist of 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 GBP17,000 (2021 - GBP270,000). The
cash deposits attract variable rates of interest. At the year end
the effective rate was 0.35% (2021 - 0.08%). The cash deposits held
were as follows:-
2022 2021
GBP000 GBP000
Sterling - United Kingdom banks 12 251
USD - United Kingdom banks - 3
USD - Mauritius banks 1 3
South African Rand - United Kingdom banks - 1
South African Rand - South African banks 4 12
17 270
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 GBP500,000 were agreed. The loans mature 6 months
after draw down and attract a fixed interest rate of between 7% and
8% per annum. The loan agreements required share warrants over
13,000,000 shares with a subscription price of 1p per share to the
certain lenders, adjustable to the placing price (if lower) for any
placing undertaken during the loan term. These warrants have a
three year life and the lenders may use the outstanding balances
under the loan facilities to exercise the warrants.
At 30 June 2022, the Group had undrawn loan facilities of
GBP1,500.
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:-
As at 30 June 2022
Assets Liabilities
GBP000 GBP000
British Pound Sterling (GBP) 12 1,102
USD ($) 1 10
South African Rand (R) 119 2
132 1,114
As at 30 June 2021 Assets Liabilities
GBP000 GBP000
British Pound Sterling (GBP) 251 265
USD ($) 6 8
South African Rand (R) 124 2
381 275
Financial commitments and guarantee
Rehabilitation guarantees of GBP2,012,000 (R 40,043,396) 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 2022 GBP107,000 (R 2,123,000) (2021 -
GBP105,000 (R 2,068,000)) had been deposited in respect of this
agreement and is included in other receivables. This receivable
represents a concentration of credit risk and the Group is exposed
to currency risk on these amounts. As the project had 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
2022 2021
GBP000 GBP000
Allotted, called up and fully paid
1,333,668,130 (2021 - 1,316,440,372) Ordinary shares of 0.1p
each 1,333
1,316
322,447,158 (2021 - 322,447,158) deferred shares of 1p each
3,224
3,224
5,894,917,569 (2021 - 5,894,917,569) deferred shares of 0.1p
each 5,896
5,896
10,453 10,436
On 9 February 2022, a further 10,351,405 shares were issued and
admitted to trading in exchange for professional services. Further,
on 23 February 2022, a further 6,876,353 shares were issued and
admitted to trading to settle in exchange for professional
services.
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.
Further information on the issue of shares after the period end
is provided in note 27.
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:
As at As at
Date Exercise 1 July Granted Exercised Lapsed/ 30 June
granted price 2021 in year in year Cancelled 2022
No. No. No. No. No.
16 August 2012 1p 4,283,682 - - - 4,283,682
14 November 2012 1p 6,663,505 - - - 6,663,505
16 April 2013 1p 33,334 - - - 33,334
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
10 January 2020 1p 27,400,000 - -
- 27,400,000
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20. Share capital (continued)
At the year-end, 42,167,188 options were exercisable (2021 -
42,167,188) as follows.
As at As at
Date Exercise 30 June Granted Exercised Lapsed/ 30 June
granted price 2021 in year in year Cancelled 2022
No. No. No. No. No.
16 August 2012 1p 4,283,682 - - - 4,283,682
14 November 2012 1p 6,663,505 - - - 6,663,505
16 April 2013 1p 33,334 - - - 33,334
7 November 2013 1p 2,086,667 - - - 2,086,667
1 May 2014 1p 200,000 - - - 200,000 1 October 2015 1p 1,500,000
- - - 1,500,000
10 January 2020 1p 27,400,000 - -
- 27,400,000
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.
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 GBPnil
(2021 - GBP29,000) in the year. No options were exercised in the
year.
Share warrants
Pursuant to the share placing on 14 December 2020 Turner Pope
were appointed as joint broker to the Placing and in addition to
3,333,333 ordinary shares were issued with 95,833,333 broker
warrants, exercisable at 0.3p (the placing price) for a period of
36 months from the date of admission. The broker warrants were
transferrable and on 4 March 2021 17,500,000 warrants were
exercised for GBP52,500. At the year-end, there were 78,333,333
broker warrants in issue.
Pursuant to the loan facilities agreement, dated 19 May 2022,
the Company issued share warrants to the lenders over 13,000,000
shares at 1 pence per share. The warrants had a 3 years life and
the lender was able to use the outstanding balances under the loan
facilities to exercise the warrants. The loans were repaid after
the year end and at the year-end and in accordance with the
agreement, the price was adjusted downwards to the subsequent
placing price of 0.3p per share. At the year end, there were
13,000,000 lender warrants in issue.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21. Reserves
Group and Company
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, less any costs of
issuing the shares.
The foreign currency translation reserve accumulates the foreign
currency gains and losses on the translation of foreign
operations.
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.
22. Cash generated from operations
Group 2022 2021
GBP000 GBP000
Operating loss (798) (783)
Depreciation on property, plant and equipment 1 2
Share based payment charge 100 90
Foreign exchange - (54)
Operating cash flows before movements in working capital (697)
(745)
Movement in receivables (8) (59)
Movement in payables
368 162
Net cash used in operations (337) (642)
Cash and cash equivalents 2022 2021 GBP000 GBP000
Cash and bank balances 17 270
Company 2022 2021
GBP000 GBP000
Operating loss (696) (745)
Share based payment charge 100 90
Foreign exchange adjustments - (5)
Operating cash flows before movements in working capital
(596)
(660)
Movement in receivables (1) 17
Movement in payables
367 136
Net cash used in operations (230) (507)
Cash and cash equivalents 2022 2021
GBP000 GBP000
Cash and bank balances 12 255
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. Significant non-cash transactions
The company settled liabilities and paid for services by the
issue of shares. The value of the shares issued was as
follows:-
2022 2021 GBP000 GBP000
Loan repayments - 785,211
Accrued directors fees - 229,569
Services provided 135,000 97,000
24. Related party transactions
Group
During the year the Group incurred GBP74,000 (2021 - GBP101,000)
for consultancy services to Goldline Global Consulting (Pty)
Limited, a company in which P Cox is materially interested. At 30
June 2022, GBPNil (2021 - GBPNil) remained unpaid in accruals.
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 (2021 - GBP48,000)
for accounting services to Westleigh Investments Limited, a company
in which G Clarke and N Harrison are materially interested.
Included in other loans at 30 June 2022 was a short term loan
due to G Clarke of GBP100,000 and accrued interest of GBP2,827. The
loan attracted interest at 7% per annum and a loan arrangement fee
of 2.5% of the facility amount.
Included in other loans at 30 June 2022 was a short term loan
due to N Harrison of GBP100,000 and accrued interest of GBP2,827.
The loan attracted interest at 7% per annum and a loan arrangement
fee of 2.5% of the facility amount.
Included in other loans at 30 June 2022 was a short term loan
due to M Eales of GBP38,500 and accrued interest of GBP667. The
loan attracted interest at 7% per annum and a loan arrangement fee
of 2.5% of the facility amount.
Further directors' remuneration of GBP344,936 (2021 -
GBP151,804) was unpaid at the year-end along with GBPNil (2021 -
GBP7,536) pension cost and is included in accruals. During the year
GBPnil (2021 - GBP90,000) of director's fees were settled by the
issue of shares.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25. Financial commitments
At the year end the Group had no financial commitments under
operating leases (2021 - GBPNil).
On 24 May 2022, the Group announced that it had signed Heads of
Terms to acquired 100% of the share capital of Ferrochrome Furnaces
(Pty) Limited ("FCF") which will provide the Group with an existing
smelting facility and the opportunity to commence mining and
processing in the short term. The share capital was to be acquired
for a nominal fee but debt was to be acquired of R115m
(approximately GBP5.75m) repayable over a 10 year period. At the
year end the acquisition remained subject to contract. The Group
had indicated plans to refurbish the smelter costing between R40m
to R65m (GBP2m to GBP3.2m).
26. Non-controlling interest
2022 2021
GBP000 GBP000
At 1 July 3,380 3,109
Exchange adjustments (31) 276
Share of loss for the period (5) (5)
At 30 June
3,344 3,380
The table below shows details of non-wholly owned subsidiaries
of the Group that have material non-controlling interests:
Profit/ (loss)
Proportion of allocated to Accumulated
voting rights non-controlling non-controlling
and shares held interests interests
2022 (2021) 2022 2021 2022 2021
GBP000 GBP000 GBP000 GBP000
HW Iron (Proprietary) Limited (32%) (32%) - (3) 1,067 1,077
Lapon Mining (Proprietary) Limited (26%) (26%) - (1) 2,291
2,313
Other non-controlling interests (5) (1) (14) (10)
(5) (5) 3,344 3,380
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
26. 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 2022 of 19.896 (2021 - 19.711).
HW Iron (Proprietary) Limited
2022 2021
GBP000 GBP000
Non-current assets 6,913 6,765
Current assets - 3
Current liabilities - -
Non-current liabilities (3,579) (3,402)
3,334 3,366
Equity attributable to owners of the Company 2,267 2,289
Non-controlling interest 1,067 1,077
Revenue - -
Expenses (1) (10)
Loss for the year
(1) (10)
Attributable to the owners of the Company
(1) (7)
Attributable to the non-controlling interests
- (3)
Net cash inflow from operating activities 2 -
Net cash outflow from investing activities (99) (13)
Net cash inflow from financing activities 97 13
Net cash inflow - -
Net cash flow - Attributable to the non-controlling interests -
-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
26. Non-controlling interest (continued)
Lapon Mining (Proprietary) Limited
2022 2021
GBP000 GBP000
Non-current assets 14,158 14,093
Current assets - 4
Current liabilities - -
Non-current liabilities (5,347) (5,202)
8,811 8,895
Equity attributable to owners of the Company 6,520 6,582
Non-controlling interest 2,291 2,313
Revenue - -
Expenses (1) (2)
Loss for the year (1) (2)
Attributable to the owners of the Company
(1) (1)
Attributable to the non-controlling interests
- (1)
Net cash inflow from operating activities 3 (6)
Net cash outflow from investing activities
(85) (10)
Net cash inflow from financing activities 82 13
Net cash flow - (3)
Net cash flow - Attributable to the non-controlling interests -
(1)
27. Events arising after the reporting period
On 15 July 2022, the Company announced an equity fund raising of
GBP4m representing a placing of 1,333,333,333 ordinary shares at a
price of 0.3 pence. In addition a Broker option raised an
additional GBP0.5m by the issue of 166,666,666 shares at the
placing price of 0.3 pence. Net of expenses, the shares issues
raised approximately GBP4.2m. Under the fee arrangements with the
broker (Turner Pope), the Company issued Broker Warrants to
subscribe for 375,000,000 ordinary shares at the placing price for
a period of 36 months from Admission. The share proceeds were
raised to allow the acquisition and refurbishment of the smelter
referred to in note 26.
Along with the placing, a further 59,460,725 ordinary shares
were issued to Giles Clarke, Nick Harrison and Martin Eales in lieu
of loans, deferred salary and deferred fees.
On 11 August 2022 the Group announced that contractors had
commenced work on the refurbishment of the FCF smelter site whilst
contract negotiations progressed. The Share purchase agreement to
acquire 100% of the share capital of FCF for approximately GBP50
was subsequently signed on 31 August 2022 and the Debt Purchase
Agreement was signed 1 November 2022.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27. Control
The Directors consider that there is no overall controlling
party.
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