Final Results, Annual Report & Notice of AGM
15 December 2023
Kazera Global plc ('Kazera' or 'the Company')
Final Results and publication of Annual Report and Notice of AGM
Kazera Global plc, the AIM-quoted investment company, is pleased to announce its Final Results for the year ended 30 June 2023 and the publication of its Annual Report which will be made available on the Company's website.
Highlights
Whale Head Minerals - Heavy Mineral Sands (HMS)
· August 2022: Receipt of mining permit for heavy mineral sands project at Walviskop
· December 2022: Commenced initial production of HMS
· June 2023: Pilot plant showed very promising HMS results with samples and test results:
o forming the basis for informed strategic discussions with potential offtake partners
o indicating presence of higher value minerals including rutile, zircon, and monazite
o identified to have raised levels of radioactivity and the Company submitted the necessary application to the National Nuclear Regulator for the appropriate permit.
Deep Blue Minerals - Diamonds
· July 2022: Diamond mine pan plant installed and commissioned
· March 2023: New plant completed and new mining blocks granted to give access to a further 28,000 carats of diamonds
· June 2023: New heavy equipment on site providing greater flexibility on mining locations
African Tantalum - Tantalum and Lithium
· December 2022: Sale of African Tantalum (Aftan) to Hebei Xinjian Construction ("Xinjian") agreed for cash consideration of US$13m
· June 2023: Aggregate proceeds received of US$4.2 million
Corporate
· March 2023: Strategic shareholder African Mineral Sands Pte Ltd ("AMS") agrees to acquire up to 29.9% of the Company's Ordinary Shares from an existing shareholder at 1.5p per share
· Geoff Eyre, Gerard Kisbey-Green and Peter Wilson appointed to the Board
· Cash at 30 June 2023 of £761k
Post Period:
· July 2023: Received further payment of c. US$650,000 from Xinjian in respect of the sale of Aftan. Aggregate payments received total c.US$4.85 million.
· October 2023: HMS: Manufacture of Trommel screening plant completed. Plant expected to start operating immediately on receival of National Nuclear Regulator permit anticipated Q1 2024.
· November 2023: Diamonds: Pulsating diamond jig with 20 tons per hour processing capacity ordered. Expected to start operating in early 2024
· December 2023: AMS completed purchase of 250,000,000 shares from existing shareholder at 1.5 pence per Ordinary Share, becoming Kazera's largest shareholder
Publication of Annual Report and Notice of AGM
The Company has today published a notice convening an annual general meeting ("AGM") of the Company to be held at 16:30 on 17 January 2024, at 33 St James' Square, London, SW1Y 4JS.
The Company is also pleased to confirm that Kazera's annual report for the year ended 30 June 2023 ("Annual Report") and the notice of AGM will be posted to shareholders on 18 December 2023.
The Annual Report and notice of AGM will be made available on the Company's website www.kazeraglobal.com.
CHAIRMAN'S STATEMENT
For the year ended 30 June 2023
Review of the Period
Such is the activity and progress at Kazera over the last year that it can be easy to forget that I only joined the Group as Non-Executive Chairman in July 2022.
In my first annual report, I commented that it was an exciting prospect to join the Company with its assets on the verge of becoming cash flow positive. Whilst that objective is still a short distance away, I am proud of the progress and changes that Kazera has made during the year, having laid a strong foundation for future success.
It is sometimes overlooked that our two main investments, Whale Head Minerals Pty Ltd ("WHM"), in which we hold 60% of the share capital, and Deep Blue Minerals Pty Ltd ("Deep Blue" or "DBM"), in which we have a 64% beneficial interest (see Note 14), are in their infancy. In fact, in 2020, Deep Blue had a sub-contracting agreement to mine diamonds at Alexander Bay but absolutely no equipment, and it was only in July 2022 that a mining permit was granted at WHM's Walviskop site.
Progress at Deep Blue has been frustrating as we have tried to navigate the challenges posed by the unique operating environment in which we operate. I believe that we are close to having the correct structures and equipment to finally realise the potential of this company.
WHM has seen significant progress during the year, however while work was completed on the processing plant design and the major components of the Wet Processing Plant were ordered, progress on actual production was delayed by the need to apply for authorisation from the National Nuclear Regulator after slightly elevated levels of radioactivity within the gravels were detected. It is not uncommon for heavy mineral sands to contain radioactive elements; we have submitted the necessary application and anticipate that authorisation will be granted during the first quarter of the 2024 calendar year. In the meantime, we have put this time to good use, further optimising the metallurgy and process design to maximise recoveries once production begins.
Whilst there are still a few hurdles to overcome, the hard work, persistence, and investment means the Group is in a much better place than it was a year ago. My confidence in Kazera is multifaceted but fundamentally, the projects have sizeable resources, and the mining, processing and sale of the commodities is neither complex nor costly, and they can quickly become profitable once we have in place the right equipment, infrastructure and partners.
On the investment front, the transaction to sell our African Tantalum project in Namibia has thus far allowed the Group to progress the WHM and Deep Blue projects towards production and profitability without raising additional funds or taking on any debt.
The Board chose to terminate the proposed acquisition of a 71% interest in Great Lakes Graphite (Pty) Ltd in March 2023. Although it would have diversified the Company's portfolio, the Board decided that it was more prudent to focus its energy and the Company's resources on WHM and Deep Blue where the route to production and profitability were well defined. The Board and its advisors continue to seek and evaluate new investments whilst managing capital and cash resources prudently. Both the termination of the Great Lakes Graphite deal as well as the sale of Aftan demonstrates that the Board is flexible in terms of the investment criteria and focused on adding value to shareholders.
We have also been adding to the experience, knowledge and capacity of the team. At board level, we were pleased to welcome Peter Wilson, with 42 years of experience in the international mining and mining contract industry, and Geoffrey Eyre, a finance professional with more than 17 years' experience in senior positions in the mining industry, as Non-Executive Directors.
I am pleased to welcome African Mineral Sands Pte Ltd ("AMS"), which has acquired 26.69% of the Company's Ordinary shares from an existing shareholder. AMS has extensive experience in mining and infrastructure projects in Southern Africa and its knowledge, experience and connections are already providing opportunities for the Company.
In closing, I want to reiterate the progress Kazera has made in the past year. We have made significant strides in bringing both WHM and Deep Blue closer to profitability. Our focus on acquiring the right equipment, developing efficient processes, and forging strategic partnerships has been relentless, funded by the sale of Aftan. This strategic approach has allowed us to avoid raising additional funds or taking on debt, a testament to our commitment to responsible growth. Alongside this, the strengthening of our team and shareholder base is enhancing our capabilities and opening new opportunities.
I am confident that Kazera is poised for a prosperous future, and I am excited about the journey that lies ahead for our Company. I would like to thank the Board, the executive team and all of our advisors for your trust and support during the year, and I look forward to working with all of you as we continue our progress in the current year.
Gerard Kisbey-Green
Chairman
14 December 2023
CHIEF EXECUTIVE OFFICER'S REVIEW
For the year ended 30 June 2023
Overview
I am pleased to provide an overview of activities during the year in which, notwithstanding some developments are taking longer than anticipated, Kazera Global Plc has made excellent progress towards generating cashflow in the near future.
Operations
Whale Head Minerals - Heavy Mineral Sands
Kazera owns 60% of Whale Head Minerals ("WHM"), a heavy mineral sands ("HMS") project in Walviskop, Alexander Bay, South Africa. In 2020, independent consultancy company Creo Design (Pty) Limited ("CREO"), which undertook the initial competent persons report and resource estimate, calculated WHM had a net present value at £150 million based on expected production of circa 6,000 tons of HMS per month and applying a 20% discount rate. It is estimated that the resource, once fully operational, which we expect to achieve during the course of 2024, may generate gross profits of circa US$300,000 per month.
It is easy to forget that it was only in August 2022 that a Mining Permit was granted to WHM enabling the construction of an HMS processing facility at the site to commence. The permit gave WHM the right to mine a 5 hectare beach sand deposit at Walviskop with a JORC Indicated Mineral Resource of 3.11 million tons of Valuable Heavy Minerals at a grade of 61.2%. This was made up of Garnet (30.29% Run of Mine ("ROM")) and Ilmenite (27.54% ROM), with Zircon and Rutile also present but not included in any of the Company's modelling.
In December 2022, WHM commenced initial limited basic production of HMS to help inform the design of a more comprehensive processing facility and, in February 2023, the Company placed an order for the manufacture of equipment including a specially designed centrifugal screen.
Whilst awaiting the build and delivery of the screen, the Company introduced a double-deck 500-micron screen with a view to accelerating production of the separated HMS product and commence building up stockpiles of HMS whilst identifying a site to dry material away from the moisture at the coast. Work also commenced on building a spiral array, reconditioning pumps, building additional scalpers, screens, feed bins and conveyers.
Subsequently, in March 2023, the permit area was moved circa 100 metres to the west due to conflicts identified with the original permit coordinates. This resulted in the updated mine permit being in the surf zone of the bay and not largely on the beach. CREO estimated the resource volume for the updated permit location to be comparable in volume to the initial volume estimate under the original permit but at a grade of 49.9% total heavy minerals compared to the 61.2%. This difference was explained by the wind playing a significant role in removing light sand grains from the beach within the original permit area, and so enriching the heavy mineral deposited there.
However, the Company recognised that a major benefit of the revised permits was that the volumes in situ are largely irrelevant, as was the 5-year Life of Mine under the original permit area, given that wave action constantly replenishes HMS in the updated permit area, whilst also rehabilitating the mine site.
The proposed mining method used at the updated WHM permit area will remain a dredging operation as originally planned. With the entire resource being submerged, mining at the revised permit area is not dependent on, or hindered by, the tidal state and with dredge pumps able to deliver high volumes of raw material than an excavator, it will be possible to achieve higher production levels, at lower unit cost per ton mined. Consequently, the revised permit area has the potential to outperform the HMS production volumes of the original permit area.
Extensive testing revealed very promising results and allowed the Company to determine the make-up of its HMS and further guide refinements in the design of its full processing plant.
Samples and test results also formed the basis for informed strategic discussions with industry experts and off-take partners on the short and long term potential of the Company's HMS. From these discussions, initial findings suggest that the Company's HMS has a heavy mineral content of approximately 62%, with around 55% of the resources classified as "saleable heavy minerals". Indicative pricing for the basic (unseparated) product was $160 per ton, but the Company was able to confirm that by undertaking further separation, it could be expected to achieve a price of approximately double, whilst transport costs would remain the same.
Deep Blue Minerals - Diamonds
Kazera has a 64% beneficial interest (see Note 14) in Deep Blue, which is a diamond project in Alexander Bay, South Africa. The operation is located within the 80km long Alexkor diamond fields, which lies between two historic De Beers operations. The area has been mined for diamonds since 1928 and more than ten million carats of gem quality diamonds have been recovered over the last ninety years or so. It is estimated that there are at least another two million carats left in the tenement.
In 2020, a Feasibility Study was prepared on one of the mining blocks allocated to Deep Blue, which resulted in an ascribed inferred resource of 208,000 carats at a bottom cut-off aperture size of 1.6 mm at a grade of 6.0 ct/100m2. DBM's current focus is on deposits closer to the beach where diamonds tend to be of better quality and the amount of overburden is considerably less.
Mining at Deep Blue is undertaken under contract from Alexkor RMC JV ("Alexkor"), a government owned entity, which has the rights to all the diamonds in the area. In 2020, Deep Blue had a sub-contract to mine diamonds, but none of its own equipment. Since then, the Company has acquired its own mining contract as well as the equipment required to mine and process diamond gravel. This includes a diamond mining plant and new heavy plant, including a front-end Loader and a 75 ton Low-bed transporter, to allow the sharing of equipment between Deep Blue's diamond project, and WHM's HMS project. At Deep Blue, this is specifically used to target areas containing prospective high quantities of diamond gravel, which the Group believes creates a very cost-effective approach by prioritising potentially rich diamond deposits first.
Part of the agreement with Alexkor requires that it processes the diamond gravels and undertakes all diamond sales, but with Alexkor's Muisvlak processing plant operating sporadically during the year, the ability to process diamond gravel and, accordingly, produce diamonds for sale has been greatly constrained.
In June 2022, Deep Blue agreed to take on the task of getting the Muisvlak plant running as, without it, neither Deep Blue or the majority of the other contractors in the area had any way of processing their diamonds. Deep Blue was successful in doing this but was forced to withdraw its assistance due to political and economic factors, and operating difficulties at Muisvlak endure.
The resulting blockage in the diamond mining process for Deep Blue and all other diamond miners in the area because of a forced reliance on Alexkor to process our diamonds and take them to market is hugely frustrating for all. Accordingly, Deep Blue has now commissioned the building of a diamond specific pulsating jig, together with a Flow Sorter, which will enable it to bypass the Muisvlak plant completely and allow it to deliver very small volumes of very high concentrate diamond gravels to Alexkor for final sorting. Deep Blue anticipate that this equipment will be in operation early in 2024 and will allow a quick ramp up in production and positive cash flow.
African Tantalum - Lithium
In July 2022, the Company announced an agreement to secure a non-dilutive US$7.5 million investment in return for a 49% stake in the Company's marketing, sales, and export subsidiary for all lithium production from the Tantalite Valley mine in Namibia. Subsequently, this was improved upon when, in December 2022, it was agreed that Hebei Xinjian Construction ("Xinjian") would acquire the Company's entire interest in African Tantalum (Pty) Ltd ("Aftan") in Namibia to for cash consideration of US$13,000,000, meaning the Company would not have to incur any of the costs related to mining, transport or building a processing plant.
To date, we have received aggregate payments totalling c.US$4.4 million in respect of the sale, which have enabled Kazera to invest in, and advance, its other investment projects, without the need of accessing external funding.
Nonetheless, it has been frustrating for the Board and Shareholders alike that the full cash consideration of the sale is yet to be paid, albeit the transaction still represents a milestone for the Company as it is the first realisation of a return from an investment, which is in line with our stated strategy.
As things currently stand, Xinjian is not in compliance with the sale agreement (as announced on 20 December 2022) and also owes accrued interest of approximately US$260k at 30 June 2023. However, our decision not to exercise our contractual rights to terminate the contract at this time is due to the strong position it is in, given that:
· Kazera retains 100% ownership of Aftan as security until all amounts owed by Xinjian have been paid in full;
· All ongoing operational costs in respect of the Aftan business are being borne by Xinjian and have been since the beginning of 2023;
· Communication between Kazera and Xinjian remains positive and constructive, and there is hope that further payments will be forthcoming; and
· Outstanding and overdue balances are accruing interest at a rate of 8% per annum.
This is a situation we wish to resolve and are actively exploring alternative avenues for the future of Aftan should Xinjian fail to swiftly fulfil its contractual obligations. Options open to the Company include terminating the contract with Xinjian and resuming full control of Aftan, finding an alternative buyer for the project, or selling Xinjian's debt to a third party. Whatever the outcome for the Aftan project, it is important to remember that the Company still owns the underlying asset and will retain all payments received from Xinjian to date. We will, naturally, update shareholders of any development in due course.
Corporate Matters
During the year we made important additions to the Board of Directors in Geoffrey Eyre and Peter Wilson, whilst Giles Clarke, Nick Harrison and Odilon Kasongo Ilunga stepped down.
In December 2022, the Company settled all outstanding debts to former Directors and loan providers, and is now debt-free.
In March 2023, we welcomed a new strategic shareholder to the register, African Mineral Sands Pte Ltd ("AMS"), which has experience in mining and infrastructure projects in Southern Africa. It has since acquired an aggregate of 26.69% of the Company's existing Ordinary shares from an existing shareholder and this relationship is already proving of great value. AMS has introduced a number of potential new deals to the Company and the Board is actively engaged in due diligence and negotiations regarding structuring.
Post year end
Whale Head Minerals - Heavy Mineral Sands
Further test results from the pilot plant in July 2023 indicate the presence of minerals including rutile, zircon, and monazite in much higher quantities than anticipated. These minerals usually have a much higher commercial value than ilmenite, but are typically associated with raised levels of radioactivity. This has required the Company to engage with the National Nuclear Regulator ("NRR") to obtain the appropriate certification to allow it to process and transport radioactive materials.
To guide this discussion, a comprehensive baseline study of radioactivity was conducted across all areas of Walviskop, including areas where the Company's HMS will be stored, processed, and transported. In addition, a third party compiled a Workers Safety Report and Operating Procedures. Subsequently, the Company commenced the application process with the NRR for relevant permits, which it anticipates will be granted in Q1 2024.
In the meantime, further HMS sampling has been undertaken to enable the Company to design the necessary processes to maximise the commercial separation of the component materials. The Company has commissioned a Trommel screening plant, which was completed on schedule at the end of September 2023 and has now been transported to site for installation. The construction of the remainder of the wet concentration plant on site has also commenced, along with the creation of administration, security, storage, and loading facilities within a secure area supplied to the Company by Alexkor RMC JV. In addition, Alexkor RMC JV, which recognises the value of the project in terms of opportunities for the local community, has provided the Company with administration buildings, entrance /exit facilities and a sheltered and secure workshop facility for the repair, maintenance and storage of the Company's plant and machinery.
The Company expects the full HMS plant at Walviskop to be in operation before it receives the NRR permits in Q1 2024 and, once fully operational, this strategically important project is expected to produce circa 6,000t of HMS per month. Given anticipated strong demand for its products, the Company expects to achieve a gross profit of circa US$300,000 per month based on current prices.
Having invested in the appropriate plant and machinery and undertaken a great deal of hard work on the ground, we believe full production at WHM is now just a few months away.
Outlook
Taking the final few steps to positive cashflow and profitability are the Company's immediate focus and, whilst we have experienced some delays, we have used the time constructively utilising funding from the ongoing sale of the Aftan Project to put in place the plant, people and equipment needed to make this a reality in short order.
As we move into positive cashflow, we will continue to deliver growth and value for our shareholders through reinvestment into our WHM and Deep Blue projects to fulfil our organic growth potential, whilst carefully evaluating the potential of M&A opportunities that frequently cross our desk. As demonstrated when we walked away from Buru Hills rare earth project at nil cost, our priority is to ensure that any M&A activity is right for the Company at that point in time and does not risk jeopardising fulfilling the potential of our existing projects, which have real potential to make Kazera a very successful business. It is not our intention to sit on piles of cash, so if a project has not already been identified the Board would always consider returning excess cash to shareholders.
Dennis Edmonds
Chief Executive Officer
14 December 2023
GROUP STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2023
|
|
Notes |
Year ended 30 June 2023 £'000 |
Year ended 30 June 2022 £'000 |
|
|
|
|
|
|
Revenue |
5 |
31 |
107 |
|
Cost of Sales |
|
(155) |
(107) |
|
Gross loss |
|
(124) |
- |
|
|
|
|
|
|
Pre-production expenses |
|
- |
(333) |
|
Administrative expenses |
|
(1,518) |
(474) |
|
Operating loss |
6 |
(1,642) |
(807) |
|
|
|
|
|
|
Finance charges |
7 |
- |
(44) |
|
Net finance income |
7 |
246 |
- |
|
|
|
|
|
|
Loss before taxation from continuing operations |
|
(1,396) |
(851) |
|
|
|
|
|
|
Taxation expense |
10 |
(142) |
- |
|
Loss for the year from continuing operations |
|
(1,538) |
(851) |
|
|
|
|
|
|
Profit/(loss) on discontinued operation, net of tax |
15 |
8,128 |
(1,170) |
|
|
|
|
|
|
Profit/(loss) attributable to owners of the Company |
|
6,706 |
(2,001) |
|
Loss attributable to non-controlling interests |
|
(116) |
(20) |
|
Profit/(loss) for the year |
|
6,590 |
(2,021) |
|
|
|
|
|
|
Other comprehensive income: |
|
|
|
|
Items that may be subsequently reclassified to profit and loss: |
|
|
|
|
Exchange differences on translation of foreign operations |
|
159 |
(17) |
|
|
|
6,749 |
(2,038) |
|
Total comprehensive profit/(loss) for the year attributable to: |
|
|
|
|
The equity holders of the parent |
|
6,865 |
(2,018) |
|
The non-controlling interests |
|
(116) |
(20) |
|
Total comprehensive profit/(loss) for the year |
|
6,749 |
(2,038) |
|
|
|
|
|
|
Basic and diluted Earnings per share in pence attributable to owners of the Company from: |
|
|
|
|
Total operations |
11 |
0.70 p |
(0.26) p |
|
Discontinued operations |
11 |
0.87 p |
(0.15) p |
The accounting policies and notes form an integral part of these financial statements.
GROUP AND COMPANY STATEMENTS OF FINANCIAL POSITION
As at 30 June 2023
|
|
|
|
GROUP |
|
COMPANY |
||
|
|
Notes |
|
2023 £'000 |
2022 (as restated) £'000 |
|
2023 £'000 |
2022 £'000 |
|
Non-Current assets |
|
|
|
|
|
|
|
|
Mines under construction |
12 |
|
749 |
2,961 |
|
- |
- |
|
Property, plant and equipment |
13 |
|
531 |
796 |
|
- |
- |
|
Investment in subsidiaries |
14 |
|
- |
- |
|
784 |
3,298 |
|
Long-term loan |
16 |
|
- |
- |
|
1,607 |
8,737 |
|
|
|
|
1,280 |
3,757 |
|
2,391 |
12,035 |
|
Current assets |
|
|
|
|
|
|
|
|
Trade and other receivables |
17 |
|
9,053 |
279 |
|
8,866 |
22 |
|
Cash and cash equivalents |
18 |
|
761 |
637 |
|
758 |
609 |
|
|
|
|
9,814 |
916 |
|
9,624 |
631 |
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Trade and other payables |
19 |
|
191 |
652 |
|
73 |
645 |
|
|
|
|
191 |
652 |
|
73 |
645 |
|
|
|
|
|
|
|
|
|
|
Non-Current liabilities |
|
|
|
|
|
|
|
|
Other payables |
19 |
|
- |
69 |
|
- |
- |
|
Provisions |
|
|
- |
54 |
|
- |
- |
|
|
|
|
- |
123 |
|
- |
- |
|
|
|
|
|
|
|
|
|
|
Net current assets / (liabilities) |
|
|
9,623 |
264 |
|
9,551 |
(14) |
|
|
|
|
|
|
|
|
|
|
Net assets |
|
|
10,903 |
3,898 |
|
11,942 |
12,021 |
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
Share capital |
21 |
|
3,516 |
3,516 |
|
3,516 |
3,516 |
|
Share premium account |
21 |
|
17,556 |
17,556 |
|
17,556 |
17,556 |
|
Capital redemption reserve |
|
|
2,077 |
2,077 |
|
2,077 |
2,077 |
|
Share option reserve |
|
|
574 |
443 |
|
574 |
443 |
|
Currency translation reserve |
|
|
422 |
263 |
|
- |
- |
|
Retained earnings |
|
|
(13,077) |
(19,908) |
|
(11,781) |
(11,571) |
|
Equity attributable to owners of the Company |
|
|
11,068 |
3,947 |
|
11,942 |
12,021 |
|
Non-controlling interests |
|
|
(165) |
(49) |
|
- |
- |
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
10,903 |
3,898 |
|
11,942 |
12,021 |
The accounting policies and notes form an integral part of these financial statements.
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the parent Company profit and loss account. The loss for the Parent Company for the year was £335,670 (2022: £328,095 loss).
These financial statements were approved by the Board of Directors on 14 December 2023.
Signed on behalf of the Board by
Dennis Edmonds
Director
Company number: 05697574
GROUP STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2023
|
|
Share capital £'000 |
Share premium account £'000 |
Capital redemption reserve £'000 |
Share option reserve £'000 |
Currency translation reserve (restated) £'000 |
Retained earnings £'000 |
Equity shareholders' funds £'000 |
Non-controlling interests £'000 |
Total £'000 |
|
Balance at 30 June 2021 |
3,279 |
15,863 |
2,077 |
337 |
(477) |
(17,917) |
3,162 |
(29) |
3,133 |
|
Loss for the year |
- |
- |
- |
- |
- |
(2,001) |
(2,001) |
(20) |
(2,021) |
|
Other comprehensive income |
- |
- |
- |
- |
740 |
- |
740 |
- |
740 |
|
Total comprehensive income |
- |
- |
- |
- |
263 |
(2,001) |
(1,261) |
(20) |
(1,281) |
|
Transactions with owners in their capacity as owners: |
|
|
|
|
|
|
|
|
|
|
Issue of share capital |
237 |
1,693 |
- |
- |
- |
- |
1,930 |
- |
1,930 |
|
Share options/warrants exercised |
- |
- |
- |
(10) |
- |
10 |
- |
- |
- |
|
Share based payment expense |
- |
- |
- |
116 |
- |
- |
116 |
- |
116 |
|
Balance at 30 June 2022 |
3,516 |
17,556 |
2,077 |
443 |
(494) |
(19,908) |
3,947 |
(49) |
3,141 |
|
Prior year adjustment see note 27 |
- |
- |
- |
- |
757 |
- |
- |
- |
757 |
|
Balance at 30 June 2022 (as restated) |
3,516 |
17,556 |
2,077 |
443 |
263 |
(19,908) |
3,947 |
(49) |
3,898 |
|
Profit for the year |
- |
- |
- |
- |
- |
6,706 |
6,706 |
(116) |
6,590 |
|
Other comprehensive income |
- |
- |
- |
- |
159 |
- |
159 |
- |
159 |
|
Total comprehensive income |
- |
- |
- |
- |
159 |
6,706 |
6,865 |
(116) |
6,749 |
|
Transactions with owners in their capacity as owners: |
|
|
|
|
|
|
|
|
|
|
Share options/warrants exercised |
- |
- |
- |
(125) |
- |
125 |
- |
- |
- |
|
Share based payment expense |
- |
- |
- |
256 |
- |
- |
256 |
- |
256 |
|
Balance at 30 June 2023 |
3,516 |
17,556 |
2,077 |
574 |
422 |
(13,077) |
11,068 |
(165) |
10,903 |
The accounting policies and notes form an integral part of these financial statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2023
|
|
Share capital |
Share premium |
Capital redemption reserve |
Share option reserve |
Retained earnings |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Balance at 30 June 2021 |
3,279 |
15,863 |
2,077 |
337 |
(11,253) |
10,303 |
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year |
- |
- |
- |
- |
(328) |
(328) |
|
Issue of share capital, net of share issue costs |
237 |
1,693 |
- |
- |
- |
1,930 |
|
Share options/warrants exercised |
- |
- |
- |
(10) |
10 |
- |
|
Share based payment expense |
- |
- |
- |
116 |
- |
116 |
|
|
|
|
|
|
|
|
|
Balance at 30 June 2022 |
3,516 |
17,556 |
2,077 |
443 |
(11,571) |
12,021 |
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year |
- |
- |
- |
- |
(335) |
(335) |
|
Share options/warrants exercised |
- |
- |
- |
(125) |
125 |
- |
|
Share based payment expense |
- |
- |
- |
256 |
- |
256 |
|
|
|
|
|
|
|
|
|
Balance at 30 June 2023 |
3,516 |
17,556 |
2,077 |
574 |
(11,781) |
11,942 |
The accounting policies and notes form an integral part of these financial statements.
Group and Company Statements of Cash Flows
For the year ended 30 June 2023
|
|
GROUP |
|
COMPANY |
||
|
|
Year ended 30 June 2023 |
Year ended 30 June 2022 |
|
Year ended 30 June 2023 |
Year ended 30 June 2022 |
|
|
£'000 |
£'000 |
|
£'000 |
£'000 |
|
OPERATING ACTIVITIES |
|
|
|
|
|
|
Loss before tax from continuing operations |
(1,396) |
(851) |
|
(335) |
(328) |
|
Profit/loss before tax from discontinued operations |
8,128 |
(1,170) |
|
- |
- |
|
Loss before tax |
6,732 |
(2,021) |
|
(335) |
(328) |
|
Depreciation and amortisation |
40 |
52 |
|
|
- |
|
Share based payment expense |
256 |
116 |
|
256 |
116 |
|
Net finance (income)/charges |
(246) |
44 |
|
(246) |
44 |
|
Foreign exchange |
269 |
121 |
|
75 |
- |
|
Gain on sale of subsidiary |
(8,037) |
- |
|
(476) |
- |
|
Intercompany loan written off |
- |
- |
|
1,308 |
- |
|
Management fees |
- |
- |
|
(1,144) |
- |
|
Intercompany loan interest charged |
- |
- |
|
(106) |
(336) |
|
Operating cash flows before movement in working capital |
(986) |
(1,688) |
|
(668) |
(504) |
|
(Increase)/decrease in receivables |
(531) |
(110) |
|
(343) |
1 |
|
(Decrease)/increase in payables |
(59) |
880 |
|
(66) |
205 |
|
Net cash used in operating activities |
(1,576) |
(918) |
|
(1,077) |
(298) |
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
Purchases of property, plant and equipment |
(69) |
(438) |
|
- |
- |
|
Development costs |
(24) |
(6) |
|
- |
- |
|
Trial diamond mining |
- |
107 |
|
- |
- |
|
Proceeds from disposal of subsidiary |
2,316 |
- |
|
2,316 |
- |
|
Advances to subsidiary undertakings |
- |
- |
|
(569) |
(757) |
|
Purchase/increase in subsidiary undertakings |
- |
- |
|
- |
(184) |
|
Net cash used in investing activities |
2,223 |
(337) |
|
1,747 |
(941) |
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
|
|
Net proceeds from share issues |
- |
1,498 |
|
- |
1,498 |
|
Loans (repaid)/received |
(474) |
347 |
|
(474) |
347 |
|
Interest paid |
(47) |
- |
|
(47) |
- |
|
Net cash from financing activities |
(521) |
1,845 |
|
(521) |
1,845 |
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents |
126 |
590 |
|
149 |
606 |
|
Cash and cash equivalents at beginning of year |
637 |
47 |
|
609 |
3 |
|
Exchange losses on cash and cash equivalents |
(2) |
- |
|
- |
- |
|
Cash and cash equivalents at end of year |
761 |
637 |
|
758 |
609 |
During the year purchases of property, plant and equipment included £180k of non-cash additions.
The accounting policies and notes are an integral part of these financial statements.
NOTES TO THE GROUP FINANCIAL STATEMENTS
For the year ended 30 June 2023
1. General Information
Kazera Global Plc is a public limited company which is listed on the Alternative Investment Market (AIM) and incorporated and domiciled in England and Wales, United Kingdom. The nature of the Group's operations and its principal activities are set out in the Strategic Report and the Directors' Report.
2. Accounting Policies
BASIS OF PREPARATION
These consolidated financial statements have been prepared and approved by the Directors in accordance with UK Adopted International Accounting Standards in accordance with the requirements of the Companies Act 2006.
The consolidated financial statements have been prepared under the historical cost convention, except as noted in the accompanying accounting policies.
The preparation of financial statements in conformity with UK Adopted International Accounting Standards ('IAS') requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 3.
The financial statements are presented in pounds sterling (£'000), which is also the functional currency of the Company and Group.
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
PRIOR YEAR ADJUSTMENT
Subsequent to the approval of the 2022 financial statements the Board carried out a review of the prior year 'other payables' balance of £826k shown in non-current liabilities. The Board concluded that £757k of this balance related to amounts due from Deep Blue Minerals (Pty) Ltd to the Company. As DBM is a subsidiary of the Company this amount should have been eliminated against the corresponding receivable amount in the Company, in the consolidated statement of financial position. However, the elimination had instead been allocated to Currency translation reserve. The effect of the adjustment to correct the error increases the Group's net assets by £757k to £3.9m from the previously stated £3.1m. See note 27.
Additionally, a reconciliation of the issued share capital of the Company was carried out and a historical error was identified which had resulted in the 2022 financial statements having overstated the number of Ordinary shares of 0.1p in issue by 565,388. See note 21.
GOING CONCERN
The financial statements have been prepared assuming the Group and Company will continue as a going concern.
The Company prepares and routinely maintains a cash flow forecast; the directors have, with reference to the cash flow forecast considered a number of potential scenarios under which the Company's ability to continue as a going concern is assessed.
In assessing whether the going concern assumption is appropriate, the directors have taken into account all available information for the forseeable future; in particular for the 12 months from the date of approval of these financial statements and performed sensitivity analysis thereon. This assessment includes consideration of the cash receipts arising from the disposal of the Group's operations in Namibia, and in South Africa, the Group's future plans, expenditure commitments, and cost reduction measures that can be implemented and permitting requirements.
The Directors' estimates are dependent principally upon the Group's mining operations coming into operation as planned and funds from the sale of African Tantalum Pty Ltd continuing to be received in the short-term. The Directors are confident that further funds could be raised to meet any shortfall in the event that insufficient funds are received timeously, or operations are delayed or underperform.
in view of the facts that the Group's mining operations are not yet in full operation and the proceeds arising from the sale of the Company's former subsidiary, African Tantalum Pty Ltd have not yet been reveived in full, the Directors consider than a material uncertainty exists as to the Company's ability to continue as a going concern; the auditors have made reference to this material uncertainty in their audit report on page 28 of the Annual Report and Financial Statements.
Following the Company's announcement of 20 December 2022, that Kazera had entered into an agreement for the sale of 100% of its shares in African Tantalum Pty Ltd to Hebei Xinjian Construction for a headline sum of US$13 million (excluding interest at 8% on loans of c.US$9.3 million made by Kazera to Aftan), the Company has received payments amounting to US$4.42m.
NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS ADOPTED BY THE GROUP
The following IFRS or IFRIC interpretations were effective for the first time for the financial year beginning 1 July 2022. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.
|
Standards/interpretations |
Application |
Effective from |
|
IAS 1 amendments |
Presentation of Financial Statements: Classification of Liabilities as Current or Non-current |
1 January 2024 |
|
IAS 1 amendments |
Classification of Liabilities as Current or Non-current |
1 January 2024 |
|
IAS 1 amendments |
Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies |
1 January 2023 |
|
IAS 8 amendments |
Accounting policies, Changes in Accounting Estimates and Errors - Definition of Accounting Estimates |
1 January 2023 |
|
IAS 12 amendments |
Income Taxes - Deferred Tax related to Assets and Liabilities arising from a Single Transaction |
1 January 2023 |
BASIS OF CONSOLIDATION
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the subsidiary and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the subsidiary on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of subsidiary's identifiable net assets.
Acquisition-related costs are expensed as incurred.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.
Disposal of subsidiary undertakings
A disposal of a subsidiary occurs when control is lost, which can happen through the sale, liquidation, or other forms of relinquishment of control. Upon disposal, the subsidiary will be deconsolidated from the date control is lost. All assets, liabilities, and non-controlling interests related to the subsidiary will be removed from the consolidated balance sheet. The consideration received from the disposal of a subsidiary will be measured at fair value on the disposal date; the gain or loss on disposal will be calculated as the difference between:
· The fair value of the consideration received; and
· The carrying amount of the subsidiary's assets and liabilities, and any cumulative translation differences recorded in equity.
The results of the subsidiary up to the date of disposal will be included in the consolidated income statement and shown separately as discontinued operations.
foreign currencies
The individual financial statements of each subsidiary company are presented in South African Rands (and Namibian Dollars for the subsidiary disposed of during the year), which is the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the Group and parent company 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 Group financial statements.
In preparing the financial statement of the individual companies, transactions in currencies other than the entity's functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each year end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the year end date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when 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 arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the income statement. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period, except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.
For the purpose of presenting Group financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the year end date. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are classified as equity and transferred to the Group's translation reserve. Such translation differences are recognised as income or as expenses in the period in which the operation is disposed of.
TAXATION
The tax currently payable is based on taxable profit or loss for the period. Taxable profit or loss differs from net profit or loss as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying value of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realised based on tax laws and rates that have been enacted at the balance sheet date. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
INTANGIBLE ASSETS - EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation activity involve the search for mineral resources, the determination of technical feasibility and the assessment of commercial viability of an identified resource. Research expenditure is written off in the year in which it is incurred. The Group recognises expenditure as exploration and evaluation assets when it determines that the legal rights to said assets have been obtained. Costs incurred which relate wholly to exploration work only, are expensed through the statement of comprehensive income. When a decision is taken that a mining property becomes viable for commercial production, all further pre-production expenditure is capitalised.
Expenditure included in the initial measurement of exploration and evaluation assets and which is classified as intangible assets, relates to the acquisition of rights to undertake topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and other activities to evaluate the technical feasibility and commercial viability of extracting a mineral source.
MINES UNDER CONSTRUCTION
Expenditure is transferred from "Exploration and evaluation" assets to "Mines under construction" once the work completed to date supports the future development of the property and such development receives the requisite approvals. All subsequent expenditure on technically and commercially feasible sites is capitalised within mining rights.
All expenditure on the construction, installation or completion of infrastructure facilities is capitalised as construction in progress within "Mines under construction". Once production starts, all assets included in "Mines under construction" are transferred into "Property, Plant and Equipment" or "Producing Mines. It is at this point that depreciation/amortisation commences over its useful economic life. The asset will be depreciated using the Units of Production method (UOP).
Mines under construction are stated at cost. The initial cost comprises transferred exploration and evaluation assets, construction costs, infrastructure facilities, any costs directly attributable to bringing the asset into operation, the initial estimate of the rehabilitation obligation, and, for qualifying assets, borrowing costs. Costs are capitalised and categorised between mining rights and construction in progress respectively according to whether they are intangible or tangible in nature.
PROPERTY, PLANT AND EQUIPMENT
Property, Plant and equipment are recorded at cost, less depreciation, less any amount of adjustments for impairment, if any.
Significant improvements are capitalised, provided they qualify for recognition as assets. The costs of maintenance, repairs and minor improvements are expensed when incurred.
Tangible assets, retired or withdrawn from service, are removed from the balance sheet together with the related accumulated depreciation. Any profit or loss resulting from such an operation is included in the income statement.
Tangible and intangible assets are depreciated on the straight-line method based on their estimated useful lives from the time they are put into operation, so that their net cost is diminished over the lifetime of consideration to estimated residual value as follows:
|
Buildings |
Over 20 years |
|
Plant and machinery |
Between 5 and 10 years |
|
Furniture and equipment |
Between 5 and 10 years |
IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENT AND INTANGIBLE ASSETS EXCLUDING GOODWILL
Assets that have an indefinite useful life are not subject to amortisation but are reviewed for impairment annually and where there are indications that the carrying value may not be recoverable. An impairment loss is recognised for the amount by which the carrying value exceeds the recoverable amount.
ASSET ACQUISITIONS - land
Acquisitions of mineral exploration licences through the acquisition of non-operational corporate structures that do not represent a business, and therefore do not meet the definition of a business combination, are accounted for as the acquisition of an asset. The consideration for the asset is allocated to the assets based on their relative fair values at the date of acquisition. Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated.
Where the asset was acquired during the period however licensing becomes available post year end this is accounted for as an acquisition of Land.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash at bank and in hand, deposits at call with banks, other short-term highly liquid investments with original maturity at acquisition of three months or less that are readily convertible to cash, net of bank overdrafts. For the purpose of the cash flow statement, cash and cash equivalents consist of the definition outlined above.
EQUITY INSTRUMENTS INCLUDING SHARE CAPITAL
Equity instruments consist of the Company's ordinary share capital and are recorded at the proceeds received, net of direct issue costs.
FINANCIAL INSTRUMENTS - INITIAL RECOGNITION AND SUBSEQUENT MEASUREMENT
Classification
The Group classifies its financial assets into only one category, being those to be measured at amortised cost.
The classification depends on the Group's business model for managing the financial assets and the contractual terms of the cash flows.
Recognition
Purchases and sales of financial assets are recognised on trade date (that is, the date on which the Group commits to purchase or sell the asset). Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus transaction costs that are directly attributable to the acquisition of the financial asset.
Debt instruments
Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the statement of profit or loss.
Impairment
The Group assesses, on a forward-looking basis, the expected credit losses associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
FINANCIAL LIABILITIES
All non-derivative financial liabilities are classified as other financial liabilities and are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Other financial liabilities consist of borrowings and trade and other payables.
Financial liabilities are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.
OTHER FINANCIAL LIABILITIES, BANK AND SHORT-TERM BORROWINGS
Other financial liabilities, as categorised above, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. Other financial liabilities are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.
TRIAL PRODUCTION REVENUE AND COSTS
Revenue
IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. These steps are as follows: identification of the customer contract; identification of the contract performance obligations; determination of the transaction price; allocation of the transaction price to the performance obligations; and revenue recognition as performance obligations are satisfied.
Under IFRS 15, revenue is recognised when performance obligations are met. This is the point of delivery of goods to the customer. Revenue is measured at the fair value of consideration received or receivable from sales of diamonds and tantalite to an end user, net of buyer's discount, treatment charges, freight costs and value added tax. The application of the standard including the five-step approach has not resulted in any changes to the timing of recognition of revenue in the current or any prior period.
Cost of revenue
These are the costs directly associated with the extraction and processing of diamonds from mining operations.
Costs to be included in cost of sales are as follows:
· Extraction costs: These include labour and overhead costs directly related to the extraction of diamonds from the mine.
· Processing Costs: Costs incurred in the crushing, sorting, and other processing required to prepare the diamonds for sale.
· Inventory Costs: Costs related to the storage and security of diamonds until they are sold. This includes warehousing and insurance costs.
· Depreciation and Amortization: The systematic allocation of the depreciable amount of assets (e.g., machinery, equipment) used in the extraction and processing of diamonds.
Exclusion of costs: General administrative expenses, marketing, and distribution costs are not included in the cost of sales but are recognized as separate expense categories in the income statement.
Cost of sales is recognized in the income statement when the related revenue is recognized.
EARNINGS PER SHARE
Basic earnings per share (EPS) is calculated by dividing: the profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares; by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares (note 11).
Diluted EPS adjusts the figures used in the determination of basic EPS to take into account the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and the weighted average number of additional ordinary shares that would have been outstanding, assuming the conversion of all dilutive potential ordinary shares.
Discontinued operations
Basic EPS for discontinued operations is calculated by dividing the net profit or loss attributable to ordinary shareholders from discontinued operations by the weighted average number of ordinary shares outstanding during the period.
Diluted EPS considers the potential dilution that would occur if convertible instruments or contracts to issue shares were converted into ordinary shares.
SEGMENTAL ANALYSIS
Under IFRS 8 operating segments are considered to be components of an entity about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. The Company's chief operating decision maker is the Board of Directors. At present, and for the period under review, the Company's reporting segments are the holding company, tantalite and lithium mining operation in Namibia and the diamond mining operations in South Africa.
3. Critical Accounting Judgements
In the application of the Group's accounting policies, which are described in Note 2, the Directors are required to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
Valuation of options
The valuation of the options involves making a number of critical estimates relating to price volatility, future dividend yields, expected life of the options and forfeiture rates. These assumptions and valuation methodology adopted have been described in more detail in Note 22. The estimates and assumptions could materially affect the Income Statement.
Carrying value of mines under construction (Note 12)
The Group tests annually whether its mines under construction have suffered any impairment and management make judgements in this respect. The judgements are based on the recoverable amounts of cash generating units ("CGUs") which are determined based on value in use calculations which require the use estimates and assumptions such as long-term commodity prices and recovery rates, discount rates, operating costs and therefore expected margins and future capital requirements. These estimates and assumptions are subject to risk and uncertainty and therefore there is a possibility that changes in circumstances will impact the recoverable amount.
During the year, progress on production at the Walviskop site held by Whale Head Minerals, the parent company's 60% owned subsidiary, was delayed by the need to apply for authorisation from the National Nuclear Regulator after slightly elevated levels of radioactivity within the gravels were detected. The necessary application has been submitted and it is expected that authorisation will be granted during Q1 2024. Should this authorisation be denied or the process be further delayed, this would impact the Company's cash flow projections and potentially also the carrying values of the 'investment in subsidiary' and 'mines under construction'.
The Group continually monitors and updates its cash flow forecast on both Group and legal entity bases, applying the latest available information as regards operations and key inputs such as commodity prices or sales forecasts, production rates, transport costs. In reviewing the carrying value of mines under construction, the Board has considered the present value of expected future cash flows, discounted at a rate of 10%, and has ensured these exceed the present carrying value.
Investment in subsidiaries
The investments in subsidiaries are recognised at cost less accumulated impairments. Details of the investments are listed in Note 14.
Upon acquisition, the excess of the sum of the consideration transferred over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed, is recognised under mines under construction.
Any potential impairments to the investments in subsidiaries are measured in line with the impairment of mines under construction in the paragraph above.
The Directors are confident that the future operational cashflows forecast to be generated from the sale of diamonds and HMS will be sufficient to repay the intragroup loans.
Loss of Control of African Tantalum Pty Ltd
In December 2022, the Company agreed to dispose of its interest in 100% of the issued share capital of subsidiary African Tantalum Pty Ltd ("Aftan") to Hebei Xinjian Construction CC ("Xinjian"). On 4 January 2023, Dennis Edmonds resigned as a director of Aftan and each of its subsidiaries, following which Kazera has no control of the board, operations or finances of Aftan and there is no shareholder or relationship agreement in place through which Kazera can exert control. Kazera is unable to compel the provision of such detailed financial information from Aftan to enable it to consolidate Aftan's financial information as it has no operational control and no right to receive operational accounting information. Furthermore, (without prejudice, and notwithstanding its ongoing contractual breach) Xinjian has the power to compel the final transfer of the issued share capital by making the final payment and the remaining completion elements under the terms of the sale and purchase agreement ("SPA") between the parties.
Whilst the ongoing fixed-rate royalty leads to a variable absolute return, the Directors consider this to be consistent with other forms of debt financing, and the SPA includes a negative covenant restricting the payment of dividends by Aftan to Kazera.
As a result of the loss of control of Aftan, that Company's financial statements have been deconsolidated from the Group, as further detailed in Note 15.
Recoverability of proceeds from disposal of Aftan
The directors acknowledge that:
· There are uncertainties surrounding final amounts to be received from Xinjian
· There are uncertainties surrounding timing of receipts
· If the transaction is terminated due to non-payment of the disposal proceeds the loan to Aftan may need to be reinstated; the amounts received to date would be treated as repayment of this loan and the deferred consideration would need to be written off
As at the date of this financial statements the directors consider that the amounts due from Xinjian are recoverable, however, if Xinjian remains in breach of contract and the parties cease to progress the transaction in good faith, Kazera could attempt to exercise its powers as a shareholder to eject Xinjian's representatives from the board and retake operational control of Aftan.
The Directors consider that the Company's potential economic benefit from Aftan post-signing of the SPA is capped at the amount of the outstanding intercompany loan and the remaining consideration payable in respect of the equity sold.
Recoverability of intragroup loans
Significant judgment has been exercised by the directors in assessing the recoverability of intragroup loans. The Company has provided financial assistance to its subsidiaries in the form of loans. These loans are assessed for recoverability annually.
The determination of recoverability involves estimating the future cash flows expected to be received from the subsidiaries, considering their financial position, profit projections, and external market conditions. Based on these assessments, management has concluded that the loans are recoverable and has recognised them at their carrying amount in the financial statements.
Given the inherent uncertainties in predicting future events and behaviours, this judgment is subject to estimation uncertainty. Any changes in the financial condition of the subsidiaries, or in the economic conditions under which they operate, could impact the estimated recoverability of these loans, which may require adjustments to their carrying values in future periods.
4. Segmental Reporting
The Directors are of the opinion that under IFRS 8 - Operating Segments the Group operates in three primary business segments; being holding company expenses, tantalite mining and diamond mining activities. The secondary segment is geographic. The Group's profit/(losses) and net assets by primary business segments are shown below.
Segmentation by continuing business
|
Profit/ (loss) before income tax |
Year ended 30 June 2023 £'000 |
Year ended 30 June 2022 £'000 |
|
Holding company |
(1,060) |
(620) |
|
Diamond mining activity |
(453) |
(187) |
|
Mineral sands mining activity |
(129) |
- |
|
Operating loss |
(1,642) |
(807) |
|
Net finance income/(charge) |
246 |
(44) |
|
Taxation expense |
(142) |
- |
|
Loss from continuing activities |
(1,538) |
(851) |
|
Profit/(loss) on discontinued operation, net of tax |
8,128 |
(1,170) |
|
Group profit/(loss) for the year |
6,590 |
(2,021) |
|
Net assets /(liabilities) |
Year ended 30 June 2023 £'000 |
Year ended 30 June 2022 £'000 |
|
Holding company |
12,027 |
11,124 |
|
Diamond mining activity |
(1,009) |
(504) |
|
Mineral sands mining activity |
(115) |
- |
|
Tantalite mining activity |
- |
(6,722) |
|
Group net assets |
10,903 |
3,898 |
Segmentation by geographical area
|
Operating loss |
Year ended 30 June 2023 £'000 |
Year ended 30 June 2022 £'000 |
|
United Kingdom |
(1,060) |
(620) |
|
South Africa |
(582) |
(187) |
|
|
(1,642) |
(807) |
|
Net assets /(liabilities) |
Year ended 30 June 2023 £'000 |
Year ended 30 June 2022 £'000 |
|
United Kingdom |
12,027 |
11,124 |
|
Namibia |
- |
(6,722) |
|
South Africa |
(1,124) |
(504) |
|
|
10,903 |
3,898 |
5. Revenue
|
|
Year ended 30 June 2023 £'000 |
Year ended 30 June 2022 £'000 |
|
Revenue from external customers |
31 |
107 |
Revenues of £31k (2022: £107k) were derived for the sale of the by-products of testing and evaluation activities. Additionally, there were £24k of revenues also from testing and evaluation activities incurred in the disposal group (see note 15). For the prior year the revenues derived from pre-production activities were considered against the Mines Under Construction intangible asset recognised in the Group. This amount was not deemed to be material to the financial statements. (see note 12).
6. Operating Loss
|
|
Year ended 30 June 2023 £'000 |
Year ended 30 June 2022 £'000 |
|
Loss for the period has been arrived at after charging: |
|
|
|
Staff costs as per Note 9 below |
790 |
520 |
|
Auditors' remuneration |
61 |
50 |
|
Depreciation of property, plant and equipment |
40 |
52 |
|
Share-based payment expense |
256 |
116 |
|
|
|
|
7. Finance Charges/INCOME
|
|
Year ended 30 June 2023 £'000 |
Year ended 30 June 2022 £'000 |
|
Loan interest payable |
(15) |
(44) |
|
Interest income on deferred consideration |
261 |
- |
|
|
246 |
(44) |
8. Auditors' Remuneration
|
|
Year ended 30 June 2023 £'000 |
Year ended 30 June 2022 £'000 |
|
|
|
|
|
Fees payable to the Group's auditors for the audit of the Group's annual accounts |
61 |
50 |
|
Total audit fees |
61 |
50 |
9. Staff Costs
The average monthly number of employees (including executive directors) for the continuing operations was:
|
|
Year ended 30 June 2023 Number |
Year ended 30 June 2022 Number |
|
Group total staff |
29 |
16 |
|
|
|
|
|
|
£'000 |
£'000 |
|
|
|
|
|
Wages and salaries |
507 |
400 |
|
Share based payment in respect of exercise of options |
256 |
118 |
|
Other benefits |
- |
1 |
|
Social security costs |
27 |
1 |
|
|
790 |
520 |
Directors' emoluments
An analysis of the directors' emoluments and pension entitlements and their interest in the share capital of the Company is contained in the Directors' Remuneration report on page 24 in the Annual Report and Financial Statements. All emoluments are short term in nature and the Directors are considered to be key management personnel.
10. Taxation
The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax applied to profits for the year are as follows:
|
|
Year ended 30 June 2023 £'000 |
Year ended 30 June 2022 £'000 |
|
Analysis of income tax expense: |
|
|
|
Current tax |
- |
- |
|
Deferred tax |
142 |
- |
|
Total income tax expense |
142 |
- |
|
|
|
|
|
Loss before tax from continuing operations |
(1,396) |
(851) |
|
Profit/(loss) before tax from discontinued operations |
8,128 |
(1,170) |
|
Profit/(loss) before tax for the year |
6,732 |
(2,021) |
|
Tax using the Company's domestic tax rate of 20.50% (2022:19%) |
1,380 |
(571) |
|
Effects of: |
|
|
|
Expenses not deductible for tax purposes |
52 |
33 |
|
Unutilised tax losses carried forward |
664 |
538 |
|
Substantial shareholder relief |
(1,832) |
- |
|
Local deferred tax derecognised |
142 |
- |
|
Effect of difference between local and UK tax rate |
(264) |
- |
|
|
|
|
|
Tax charge for period |
142 |
- |
The taxation charge in future periods will be affected by any changes to the corporation tax rates in force in the countries in which the Group operates. Losses from the previous period have been carried forward. A deferred tax asset has not been recognised in the financial statements due to the uncertainty of the recoverability of the amount.
At the balance sheet date the Group had unused tax losses of £5,288k (2022: £7,401k).
11. Earnings Per Share
The calculation of basic earnings per share is based on the following data:
|
|
Year ended 30 June 2023 |
Year ended 30 June 2022 |
|
|
£'000 |
£'000 |
|
Profit/(loss) for the year attributable to owners of the Company |
|
|
|
Continuing operations |
(1,538) |
(851) |
|
Discontinued operations |
8,128 |
(1,170) |
|
Weighted average number of ordinary shares in issue for basic and fully diluted earnings |
936,599,523 |
770,895,360 |
|
EARNINGS PER SHARE (PENCE PER SHARE) |
|
|
|
BASIC AND FULLY DILUTED: |
|
|
|
- from continuing operations |
(0.17) |
(0.11) |
|
- from discontinued operations |
0.87 |
(0.15) |
|
|
0.70 |
(0.26) |
The Company has outstanding warrants and options as disclosed under Note 22 which may be dilutive in future periods. As all options and warrants had fully vested they had no-dilutive effect on the basic earnings per share.
12. Mines under Construction
|
|
Construction in progress |
Mining licences |
Total |
|
GROUP |
£'000 |
£'000 |
£'000 |
|
At 1 July 2021 |
2,861 |
36 |
2,897 |
|
Additions |
- |
6 |
6 |
|
Sale of by-products |
(107) |
- |
(107) |
|
Exchange translation difference |
161 |
4 |
165 |
|
At 30 June 2022 |
2,915 |
46 |
2,961 |
|
Additions |
27 |
- |
27 |
|
Exchange translation difference |
(92) |
- |
(92) |
|
Disposal of subsidiary |
(2,147) |
- |
(2,147) |
|
At 30 June 2023 |
703 |
46 |
749 |
13. Property, Plant and Equipment
|
|
Land & buildings |
Plant & machinery |
Total |
|
GROUP |
£'000 |
£'000 |
£'000 |
|
Cost |
|
|
|
|
At 1 July 2021 |
125 |
1,224 |
1,349 |
|
Exchange translation difference |
- |
(350) |
(350) |
|
Additions |
184 |
254 |
438 |
|
Cost at 30 June 2022 |
309 |
1,128 |
1,437 |
|
Exchange translation difference |
- |
(169) |
(169) |
|
Additions |
- |
279 |
279 |
|
Disposal of subsidiary |
(125) |
(778) |
(903) |
|
Cost at 30 June 2023 |
184 |
460 |
644 |
|
|
|
|
|
|
Depreciation |
|
|
|
|
At 1 July 2021 |
35 |
598 |
633 |
|
Exchange translation difference |
- |
(44) |
(44) |
|
Charge for the year |
5 |
47 |
52 |
|
Depreciation at 30 June 2022 |
40 |
601 |
641 |
|
Exchange translation difference |
- |
(103) |
(103) |
|
Charge for the year |
- |
40 |
40 |
|
Disposal of subsidiary |
(40) |
(425) |
(465) |
|
Depreciation at 30 June 2023 |
- |
113 |
113 |
|
|
|
|
|
|
Net book value at 30 June 2023 |
184 |
347 |
531 |
|
Net book value at 30 June 2022 |
269 |
528 |
796 |
14. Investment in Subsidiary Undertakings
|
The Company's investments in its subsidiary and associated undertakings |
|||||
|
COMPANY |
Total £'000 |
||||
|
Cost and net book value |
|
||||
|
As at 1 July 2021 |
3,114 |
||||
|
Acquisition: 60% of Whale Head Minerals (Pty) Ltd (Note 15) |
184 |
||||
|
As at 30 June 2022 |
3,298 |
||||
|
Disposal of African Tantalum |
(2,514) |
||||
|
As at 30 June 2023 |
784 |
||||
|
All principal subsidiaries of the Group are consolidated into the financial statements.
At 30 June 2023 the subsidiaries were as follows: |
|||||
|
Subsidiary undertakings |
Country of registration |
Principal activity |
Holding |
% |
|
|
Whale Head Minerals (Pty) Ltd (1) 6 Reier Avenue Alexander Bay Northern Cape 8290 South Africa |
South Africa |
Mining License holder |
Ordinary shares |
60% |
|
|
Deep Blue Minerals (Pty) Ltd (1)(2) 6 Reier Avenue Alexander Bay Northern Cape 8290 South Africa |
South Africa |
Mining License holder |
Ordinary shares |
90% |
|
|
Kazera Trading Limited Unit D, De Clare House, Sir Alfred Owen Way, Pontygwindy Industrial Estate Caerphilly Wales, CF83 3HU |
UK |
Dormant |
Ordinary shares |
100% |
|
(1) Companies incorporated in South Africa are required to comply with Broad-Based Black Economic Empowerment (B-BBEE) regulations.
(2) 26% of the shares in Deep Blue Minerals (Pty) Ltd are reserved for Black Economic Empowerment partners, and therefore Kazera's ultimate beneficial interest in Deep Blue Minerals (Pty) Ltd is 64%.
African Tantalum (Pty) Ltd and subsidiaries ("Aftan")
On 20 December 2022 the Company announced the 100% sale of Aftan to Hebei Xinjian Construction for cash consideration of US$13m (details provided in note 15).
15. Disposal of Subsidiary
On 20 December 2022, the Company announced the 100% sale of Aftan to Hebei Xinjian Construction for cash consideration of US$13m. Comprised of purchase consideration for the sale of the shares in Aftan of USD3,642,207 and the repayment of the intercompany loan to Kazera of USD9,357,793. Total consideration in GBP is £10,673k.
On 4 January 2023, Dennis Edmonds resigned as a director of Aftan and each of its subsidiaries, and from that date, the accounts of Aftan ceased to be consolidated as a group company. See note 3 for further information.
The post-tax gain on disposal of Aftan was determined as follows:
|
Group |
£'000 |
|
Cash consideration |
2,990 |
|
Repayment of existing loan |
7,863 |
|
Total consideration |
10,673 |
|
|
|
|
Cash disposed of |
615 |
|
Net inflow on disposal of discontinued operations |
10,059 |
|
|
|
|
Net assets disposed (other than cash) |
|
|
Mines under construction |
(2,147) |
|
Property, plant and equipment |
(438) |
|
Trade and other receivables |
(92) |
|
Trade and other payables |
655 |
|
Pre-tax gain on disposal of subsidiary undertaking |
8,037 |
|
|
|
The post tax gain on disposal of discontinued operations was determined as follows:
|
|
2023 |
2022 |
|
|
£'000 |
£'000 |
|
Revenue |
24 |
- |
|
Administration and other costs |
67 |
(1,170) |
|
Gain from selling discontinued operations after tax |
8,037 |
- |
|
Profit/(loss) on discontinued operations after tax |
8,128 |
(1,170) |
The statement of cash flows included £73k in relation to outflow from operating activities relating to discontinued operations.
16. Long Term Loan (Company)
|
Company |
Loan to Aftan Tantalum £'000 |
Loan to Deep Blue Minerals £'000 |
Loan to Whale Head Minerals £'000 |
Total £'000 |
|
As at 1 July 2021 |
7,145 |
499 |
- |
7,644 |
|
As at 30 June 2022 |
7,985 |
733 |
19 |
8,737 |
|
Increase in loan |
361 |
338 |
517 |
1,216 |
|
Disposal of subsidiary |
(8,346) |
- |
- |
(8,346) |
|
As at 30 June 2023 |
- |
1,071 |
536 |
1,607 |
17. Trade and Other Receivables
|
|
GROUP |
COMPANY |
||
|
|
2023 |
2022 |
2023 |
2022 |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Other receivables |
8,520 |
262 |
8,500 |
5 |
|
Prepayments and accrued income |
533 |
17 |
366 |
17 |
|
|
9,053 |
279 |
8,866 |
22 |
Included in other receivables is £8,501k (2022: nil) with respect to amounts due on the sale of Aftan.
18. Cash and Cash Equivalents
|
|
GROUP |
COMPANY |
||
|
|
2023 |
2022 |
2023 |
2022 |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Cash and cash equivalents |
761 |
637 |
758 |
609 |
Cash and cash equivalents (which are presented as a single class of asset on the face of the balance sheet) comprise cash at bank and other short term, highly liquid investments with a maturity of three months or less.
The Directors consider the carrying amount of cash and cash equivalents approximates to their fair value.
19. Trade and Other Payables
|
|
GROUP |
COMPANY |
||
|
|
2023 |
2022 (as restated) |
2023 |
2022 |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Current Liabilities |
|
|
|
|
|
Trade payables |
17 |
12 |
11 |
12 |
|
Other payables |
124 |
482 |
12 |
480 |
|
Accruals |
50 |
158 |
50 |
153 |
|
|
191 |
652 |
73 |
645 |
|
|
|
|
|
|
|
Non-Current Liabilities |
|
|
|
|
|
Other payables |
- |
123 |
- |
- |
|
|
- |
123 |
- |
- |
The Directors consider the carrying amount of trade payables approximates to their fair value.
The 'other payables' non-current liability for the year ended 30 June 2022 has been re-stated as it had incorrectly included amounts due from subsidiary, Deep Blue Minerals (Pty) Limited to the Company. For further details see note 27 - prior year adjustment.
20. Provisions
|
|
GROUP |
COMPANY |
||
|
|
2023 |
2022 |
2023 |
2022 |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Mine rehabilitation provision |
- |
44 |
- |
- |
|
Mine decommissioning provision |
- |
10 |
- |
- |
|
|
- |
54 |
- |
- |
The provisions for mine rehabilitation and decommissioning in 2022 related to Aftan. Following the disposal of Aftan during the year these provisions are no longer required. For further info on the disposal of Aftan see note 15.
Each of Deep Blue and WHM carry out continuous rehabilitation as an embedded part of the mining process. Consequently, any rehabilitation costs are incurred on an ongoing basis and no provision is required.
21. Share Capital and Share Premium
|
|
No. Ordinary shares of 0.1p each |
Deferred shares of 0.9p each |
Share Capital £'000 |
Share Premium £'000
|
|
Total as at 30 June 2022 (restated) |
936,599,523 |
286,561,208 |
3,516 |
17,556 |
|
Share issues |
- |
- |
- |
- |
|
Total as at 30 June 2023 |
936,599,523 |
286,561,208 |
3,516 |
17,556 |
The number of Ordinary shares of 0.1p each in the capital of the Company as at 30 June 2022 has been restated as the number of such Ordinary shares had previously been overstated by 565,388 Ordinary shares of 0.1p each.
Reserves
The Group's reserves are made up as follows:
Share capital: Represents the nominal value of the issued share capital.
Share premium account: Represents amounts received in excess of the nominal value on the issue of share capital less any costs associated with the issue of shares.
Capital redemption reserve: Reserve created on the redemption of the Company's shares
Share option reserve: Reserve created for the equity settled share option scheme (see note 22).
Currency translation reserve: Reserve arising from the translation of foreign subsidiaries at consolidation. The total movement in the foreign currency translation reserve was presented in both the Statement of Changes in Equity and in Other Comprehensive Income in the current year. During the prior year, this movement was presented in the Statement of Changes in Equity.
Retained earnings: Represents accumulated comprehensive income for the year and prior periods.
22. Share-Based Payments
Equity-settled share option scheme and share warrants
The Company operates share-based payment arrangements to incentivise directors by the grant of share options.
Equity-settled share-based payments within the scope of IFRS 2 are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company's estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions.
The fair value of the share-based payments issued during the year has been calculated using the Black-Scholes valuation model. The assumptions used in the fair value calculation were as follows:
|
Date of grant |
8 July 2022 |
18 July 2022 |
3 November 2022 |
16 May 2023 |
|
Number of options/warrants |
3,000,000 |
4,000,000 |
16,500,000 |
4,000,000 |
|
Weighted average share price |
£0.00725 |
£0.008 |
£0.00925 |
£0.00875 |
|
Exercise price (pence) |
£0.01 |
£0.01 |
£0.01 |
£0.01 |
|
Risk free interest (%) |
1.91% |
1.87% |
3.345% |
3,628% |
|
Expected volatility (%) |
80% |
80% |
78% |
76% |
|
Expected life (years) |
5 |
5 |
5 |
5 |
|
Fair value per option/warrant (pence) |
0.42p |
0.48p |
0.59p |
0.54p |
The expected volatility is calculated by obtaining daily closing prices over period of measure, computing the daily returns, determining their standard deviation, and then annualizing this figure by multiplying by the square root of the number of trading days which is usually 252 days.
The total share-based payment expense recognised in the income statement for the year ended 30 June 2023 in respect of the share options granted was £256k (2022: £116k).
The total number of share options and share warrants in issue as at 30 June 2023 are as follows:
|
|
||||||
|
Share Warrants |
||||||
|
Exercise Price |
Expiry Date |
At 1 July 2022 |
Issued |
Exercised |
Lapsed |
At 30 June 2023 |
|
£0.02 |
27/12/2022 |
10,000,000 |
- |
- |
(10,000,000) |
- |
|
£0.02 |
04/01/2023 |
2,500,000 |
- |
- |
(2,500,000) |
- |
|
£0.02 |
04/01/2023 |
5,000,000 |
- |
- |
(5,000,000) |
- |
|
£0.01 |
30/10/2023 |
39,937,643 |
- |
- |
- |
39,937,643 |
|
£0.02 |
01/02/2023 |
2,500,000 |
- |
- |
(2,500,000) |
- |
|
£0.02 |
31/01/2023 |
10,000,000 |
- |
- |
(10,000,000) |
- |
|
£0.01 |
31/05/2023 |
116,131,500 |
- |
- |
(116,131,500) |
- |
|
£0.02 |
01/02/2023 |
3,500,000 |
- |
- |
(3,500,000) |
- |
|
|
|
189,354,143 |
- |
- |
(149,631,500) |
39,397,643 |
As at 30 June 2023 the weighted average contractual life of the warrants in issue was 4 months (2022: 11.3 months).
|
Share options |
||||||
|
Exercise Price (p) |
Expiry Date |
At 1 July 2022 |
Issued |
Exercised |
Lapsed |
At 30 June 2023 |
|
£0.0175 |
20/12/2022 |
3,300,000 |
- |
- |
(3,300,000) |
- |
|
£0.0175 |
20/12/2023 |
3,300,000 |
- |
- |
- |
3,300,000 |
|
£0.0175 |
20/12/2024 |
3,400,000 |
- |
- |
- |
3,400,000 |
|
£0.0100 |
03/06/2025 |
5,000,000 |
- |
- |
- |
5,000,000 |
|
£0.0100 |
03/06/2025 |
5,000,000 |
- |
- |
- |
5,000,000 |
|
£0.0100 |
03/06/2025 |
5,000,000 |
- |
- |
- |
5,000,000 |
|
£0.0100 |
03/06/2025 |
10,000,000 |
- |
- |
- |
10,000,000 |
|
£0.0100 |
08/07/2027 |
- |
3,000,000 |
- |
- |
3,000,000 |
|
£0.0100 |
18/07/2027 |
- |
4,000,000 |
- |
- |
4,000,000 |
|
£0.0100 |
06/05/2027 |
- |
15,000,000 |
- |
- |
15,000,000 |
|
£0.0200 |
12/01/2023 |
1,500,000 |
- |
- |
(1,500,000) |
- |
|
£0.0100 |
06/05/2027 |
- |
1,500,000 |
- |
- |
1,500,000 |
|
£0.0100 |
11/05/2028 |
- |
3,000,000 |
- |
- |
3,000,000 |
|
£0.0100 |
11/05/2028 |
- |
1,000,000 |
- |
- |
1,000,000 |
|
|
|
36,500,000 |
27,500,000 |
- |
(4,800,000) |
59,200,000 |
As at 30 June 2023 the weighted average contractual life of the share options in issue was 2.8 years (2022: 2.4 years).
23. Financial Instruments
The Group's financial instruments comprise borrowings, cash and various items, such as trade receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Group's operations.
FINANCIAL ASSETS BY CATEGORY
Financial assets included in the Statement of financial position and the headings in which they are included are as follows:
|
|
GROUP |
COMPANY |
||
|
|
2023 |
2022 |
2023 |
2022 |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Financial assets at amortised cost: |
|
|
|
|
|
Cash and cash equivalents |
761 |
637 |
758 |
609 |
|
Loans and receivables |
9,053 |
279 |
8,866 |
22 |
|
|
9,814 |
916 |
9,624 |
631 |
FINANCIAL LIABILITIES BY CATEGORY
Financial liabilities included in the Statement of financial position and the headings in which they are included are as follows:
|
|
GROUP |
COMPANY |
||
|
|
2023 |
2022 |
2023 |
2022 |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Financial liabilities at amortised cost: |
|
|
|
|
|
Trade and other payables |
191 |
652 |
73 |
645 |
|
|
191 |
652 |
73 |
645 |
The following table details the Group's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest repayment date on which the Group can be required to pay. The table includes both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from the interest rate curves at the balance sheet date. The contractual maturity is based on the earliest date on which the Group may be required to pay.
|
|
Less than 1 month |
1-3 months |
3 months to 1 year |
1-5 years |
Over 5 years |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
30 June 2022 Non-interest bearing: |
|
|
|
|
|
|
Trade and other payables |
- |
652 |
- |
- |
- |
|
Short term borrowings |
- |
- |
- |
- |
- |
|
30 June 2023 |
|
|
|
|
|
|
Non-interest bearing: |
|
|
|
|
|
|
Trade and other payables |
- |
191 |
- |
- |
- |
|
Short term borrowings |
- |
- |
- |
- |
- |
24. Risk Management Objectives and Policies
The Group is exposed to a variety of financial risks which result from both its operating and investing activities. The Group's risk management is coordinated by the Board of Directors and focuses on actively securing the Group's short to medium term cash flows by minimising the exposure to financial markets.
The main risks the Group are exposed to through its financial instruments and the operations of the Group are credit risk, foreign currency risk, liquidity risk and market price risk. These risks are managed by the Group's finance function together with the Board of Directors.
Capital risk management
The Group's objectives when managing capital are:
· to safeguard the Group's ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders;
· to support the Group's growth; and
· to provide capital for the purpose of strengthening the Group's risk management capability.
The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. Management regards total equity as capital and reserves, for capital management purposes.
Credit risk
The Company's principal financial assets are bank balances and cash and other receivables, which represent the Company's maximum exposure to credit risk in relation to financial assets. The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.
As at 30 June 2023, the Group's maximum exposure to credit risk was £760,576 (2022: £636,854) comprising cash and cash equivalents.
Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through maintaining a positive cash balance and controlling expenses and commitments. The Directors are confident that adequate resources exist to finance current operations.
Foreign Currency risk
The Group undertakes transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. Following the acquisition of African Tantalum (Pty) Ltd, the Group's major activity has been in Namibia, bringing exposure to the exchange rate fluctuations of GBP/£ Sterling with the Namibian Dollar and South African Rand, the currencies in which most of the operating costs are denominated. It is expected that the Group's future exposure will principally be to GBP South African Rand foreign exchange fluctuations following the Company's disposal of African Tantalum (Pty) Ltd. At the year end the value of assets denominated in these currencies was such that the resulting exposure to exchange rate fluctuations was not material to the Group's operations.
Exchange rate exposures are managed within approved policy parameters. The Group has not entered into forward exchange contracts to mitigate the exposure to foreign currency risk.
The Directors consider the assets most susceptible to foreign currency movements to be the Investment in Subsidiaries. Although these investments are denominated in South African Rands their value is dependent on the global market value of the available Tantalite resources.
The table below details the split of the cash held as at 30 June 2023 between the various currencies. The impact due to movements in the exchange rates is considered to be immaterial.
|
Currency |
|
2023 |
2022 |
|
Namibian Dollar |
|
- |
NAD 173,234 |
|
South African Rand |
|
ZAR 233,109 |
ZAR 220,360 |
|
Great British Pounds |
|
GBP 366,884 |
GBP 608,504 |
|
US Dollars |
|
USD 480,289 |
- |
|
Euros |
|
EUR 6,031 |
- |
|
|
|
|
|
|
Total in GBP |
|
GBP 761,000 |
GBP 637,000 |
Market Price risk
Going forwards the Group's exposure to market price risk mainly arises from potential movements in the market price of Tantalite. The Group is managing this price risk by completing a fixed price off-take agreement in respect of the major part of its planned production.
25. Events After the Reporting Period
In respect of the disposal of Aftan, the Company received £795k in August 2023 and £264k in November 2023.
On 30 October, warrants over 39,397,643 Ordinary shares exercisable at a price of £0.01 per share, lapsed unexercised.
26. Related Party Transactions
The remuneration of the Directors, who are the key management personnel of the Company, is set out in the report of the Board on remuneration accompanying these financial statements.
During the year, Westleigh Investment Holdings Ltd ("WIHL") received £55,000 (2022: £49,000) in respect of accounting, administration and office accommodation services provided to the Company. WIHL is a substantial shareholder in the Company and is controlled by Giles Clarke and Nick Harrison (each of whom resigned as directors on 8 July 2022).
As at 30 June 2022, the Company had an outstanding loan of £199,000 with WIHL. This loan was repaid in January 2023.
As at 30 June 2022, £71,000 and £57,000 was owed to Giles Clarke and Nick Harrison (each of whom was a director until 8 July 2022) respectively in unpaid salaries. These amounts were settled in full in December 2022.
There have been no other material transactions with related parties.
27. PRIOR YEAR ADJUSTMENT
The prior year comparatives for the Group have been restated from those previously reported by the Company as shown below:
|
|
As previously stated 2022 £'000 |
Adjustment £'000 |
As restated 2022 £'000 |
|
Non-Current assets |
|
|
|
|
Mines under construction |
2,961 |
- |
2,961 |
|
Property, plant and equipment |
796 |
- |
796 |
|
|
3,757 |
- |
3,757 |
|
Current assets |
|
|
|
|
Trade and other receivables |
279 |
- |
279 |
|
Cash and cash equivalents |
637 |
- |
637 |
|
|
916 |
- |
916 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
652 |
- |
652 |
|
|
652 |
- |
652 |
|
|
|
|
|
|
Non-Current liabilities |
|
|
|
|
Other payables |
826 |
(757) |
69 |
|
Provisions |
54 |
|
54 |
|
|
880 |
(757) |
123 |
|
|
|
|
|
|
Net current assets / (liabilities) |
264 |
- |
264 |
|
|
|
|
|
|
Net assets |
3,141 |
(757) |
3,898 |
|
|
|
|
|
|
Equity |
|
|
|
|
Share capital |
3,516 |
- |
3,516 |
|
Share premium account |
17,556 |
- |
17,556 |
|
Capital redemption reserve |
2,077 |
- |
2,077 |
|
Share option reserve |
443 |
- |
443 |
|
Currency translation reserve |
(494) |
757 |
263 |
|
Retained earnings |
(19,908) |
- |
(19,908) |
|
Equity attributable to owners of the Company |
3,190 |
757 |
3,947 |
|
Non-controlling interests |
(49) |
- |
(49) |
|
|
|
|
|
|
Total equity |
3,141 |
757 |
3,898 |
Subsequent to the approval of the 2022 financial statements the Board carried out a review of the prior year Other payables balance of £826k shown in non-current liabilities. The Board concluded that £757k of this balance related to amounts due from Deep Blue Minerals (Pty) Ltd (DBM) to the Company. As DBM is a subsidiary of the Company this amount should have been eliminated against the corresponding receivable amount in the Company, in the consolidated statement of financial position. However, the elimination had instead been allocated to Currency translation reserve. The effect of the adjustment to correct the error increases the Group's net assets by £757k to £3.9m from the previously stated £3.1m. There was no resulting impact on profit or loss.
28. Notes supporting statement of cashflows
Significant non-cash transactions from investing activities are as follows:
|
|
|
2023 |
2022 |
|
|
|
£'000 |
£'000 |
|
Consideration for the disposal of subsidiary |
|
10,673 |
- |
See note 15
Reconciliation of net cash flow to movement in net debt
|
Group |
2023 £000 |
2022 £000 |
|
Cash and cash equivalents |
761 |
637 |
|
Borrowings |
- |
(474) |
|
Net debt |
761 |
163 |
|
Net increase in cash and cash equivalents in the period |
126 |
590 |
|
Cash flows from decrease/(increase) in borrowings |
474 |
(347) |
|
Other non-cash changes |
(2) |
16 |
|
Change in net debt resulting from cashflows |
598 |
259 |
|
Net debt at the start of the year |
163 |
(96) |
|
Net debt at the end of the year |
761 |
163 |
29. Ultimate Controlling Party
The Directors do not consider there to be one single ultimate controlling party.
**ENDS**
For further information on the Company, visit: www.kazeraglobal.com.
|
Kazera Global plc Dennis Edmonds, CEO
|
kazera@stbridespartners.co.uk
|
|
Cavendish Capital Markets Ltd (Nominated Adviser and Broker) Derrick Lee / Neil McDonald / Fergus Sullivan (Corporate Finance)
|
Tel: +44 (0)207 220 0500 |
|
St Brides Partners (Financial PR) Paul Dulieu / Isabel de Salis |
|
About Kazera Global plc
Kazera is a global investment company focused on leveraging the skills and expertise of its Board of Directors to develop early-stage mineral exploration & development assets towards meaningful cashflow and production.
Its three principal investments are as follows:
(1) Alluvial diamond mining through Deep Blue Minerals (Pty) Ltd, Alexander Bay, South Africa. Kazera currently has a 90% direct interest in Deep Blue Minerals, of which 64% is held beneficially by Kazera and 26% is held on behalf of Black Economic Empowerment partners.
(2) Heavy Mineral Sands mining (including ilmenite, monazite, rutile, and zircon) through Whale Head Minerals (Pty) Ltd, Alexander Bay, South Africa. Kazera currently has a 60% direct beneficial interest in Whale Head Minerals.
(3) Tantalite mining in South-East Namibia (divestment in progress)
As announced on 20 December 2022, Kazera has agreed to dispose of African Tantalum (Pty) Ltd ("Aftan") for a cash consideration of US$13 million plus a debenture payment of 2.5% of the gross sales of produced lithium and tantalum for life-of-mine. Completion of the sale is subject to receipt of full consideration proceeds. Aftan has been deconsolidated from the Company's financial statements with effect from 4 January 2023 because in accordance with the terms of the sale agreement, it has relinquished control of the Aftan in favour of the purchaser, Hebei Xinjian Construction Close Corp with effect from that date. Kazera retains the right to cancel the transaction and retain all amounts paid to date in the event of default by Hebei Xinjian.
The Company will consider additional investment opportunities as appropriate, having regard to the Group's future cash flow requirements.TER WILSON HAHA) LSON HAHA
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