Final Results for the Year Ended 30 June 2018

RNS Number : 6063K

Kazera Global PLC

17 December 2018

 

17 December 2018

Kazera Global plc

Final Results for the Year Ended 30 June 2018

Kazera Global plc ("Kazera Global" or "the Company"), the AIM quoted investment company who, through its stake in African Tantalum (Pty) Limited ("Aftan"), has an interest in the Namibia Tantalite Investment Mine ("NTI" or the "Mine") in Namibia, is pleased to announce its audited final results for the full year ended 30 June 2018 ("the Period").

Highlights

Operational

·     Significant plant upgrades achieved during the Period, successfully increasing production capability and ensuring tantalum purity

·     Supply agreement signed with a global North American leading tantalum consumer and end user of the Mine's tantalum ore ("the Customer")

o  Six shipments of the Company's industry leading high purity tantalum shipped to the Customer during the Period with grades reaching over 40% purity

·     Clearance certificate for abstraction of water from the Orange River to the Mine issued by the Office of the Environmental Commissioner as part of the Ministry of Environment and Tourism, a highly important achievement, allowing optionality and increased efficiencies for water supply at higher volumes to the Mine

·     Initiated a tender process for the laying of the pipework from the Orange River to the Mine

·     Initiated a targeted exploration programme to develop a comprehensive understanding of the mineralisation over the property, which covers 452Ha. The programme focuses on the Homestead, Purple Haze (formerly referred to as Lepidolite), Signalberg Mountain, White City and Snake deposits

·     Exploration campaign begun at the Homestead and Purple Haze locations to delineate tantalum and lithium resource

o  Encouraging initial exploration results confirmed lithium and tantalum mineralization at both locations

·     Reduced staffing numbers at the Mine to reduce operating costs and optimise the operation, using a multi skilled employee base

·     MSA Group commissioned to carry out the targeted exploration programme

Financial

At 30 June 2018:

·     Successfully raised £3.75 million in July 2017 through a placing with the net proceeds being used on further upgrades and execution of drilling programme

·     Cash at bank amounted to approximately £1.125 million, up from 30 June 2017 balance of £364k   

·     Net assets of £4.3 million, up from 30 June 2017 balance of £3.5 million

Post Period

·     Exploration campaign drilling for resource definition continued by MSA Group with 360 cores drilled and assayed to date, showing positive initial results

Outlook

·     Continued focus to unlock the full value of the property through its targeted exploration program. Ore resource reports for the target deposits expected to be produced during calendar year 2019

·     Continued engagement with the Company's customer base and other potential end users on the supply of tantalum

·     Continued assessment of global investment opportunities

Larry Johnson, Chief Executive Officer of Kazera Global, said:

"This year, we have seen significant changes which have reshaped and refocussed the Company's strategic and operational focus. Aftan's focus is on extracting maximum value from the targeted exploration programme which has already yielded exciting results. Aftan, with our help, continue to press forward with the program and I would like to thank all our shareholders for their continued support and we look forward to updating shareholders on the full value of this highly important mine."

Posting of accounts

The Report and Accounts for the period ended 30th June 2018 will shortly be available on the Group's website and will be sent to registered shareholders by post shortly together with notice of the Group's AGM.

For further information on the Company, visit: https://kazeraglobal.com/ 

Kazera Global plc (c/o Camarco)	Tel: [phone]
Larry Johnson (CEO)
finnCap (Nominated Adviser and Joint broker) Christopher Raggett / Scott Mathieson / Anthony Adams (corporate finance)	Tel: [phone]
Shore Capital (Joint broker) Mark Percy / Toby Gibbs (corporate finance) Jerry Keen (corporate broking)	Tel: [phone]
Camarco (PR) Gordon Poole / James Crothers / Monique Perks	Tel: [phone]

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 "Competent Person's Statement

In accordance with the AIM Note for Mining and Oil and Gas Companies, Kazera Global discloses that Michael Cronwright of MSA Group, is the qualified person that has reviewed the technical information contained in this document. Michael Cronwright has a Pr.Sci.Nat with the South African Council for Natural Scientific Professions ("SACNASP") and is a member in good standing with SACNASP. Mr Cronwright has the appropriate relevant qualifications, experience, competence and independence to act as a Competent Person as defined in the 2012 Edition of the "Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Michael Cronwright consents to the inclusion of the information in this announcement in the form and context in which it appears."

CHAIRMAN'S STATEMENT

Year to 30 June 2018

2018 has been an important year for Kazera Global on a number of fronts and, as I write this, I am very pleased with the position the Company is in and excited for what the future holds.

It is important to remember what the fundamental purpose of the Company is and to reflect on this against what we, as a company, are trying to achieve from our investment in African Tantalum (Pty) Limited ("Aftan"), the owner of the Namibia Tantalite Investment Mine ("NTI" or "the Mine"). During the year, we adopted a new investing policy that is aligned with the Company's strategy to achieve shareholder return primarily via capital appreciation through the purchase and sale of securities and other direct investments in companies and projects. This gives us the flexibility to pursue different opportunities however our primary focus and where we see so much future value is in NTI.

Together with the adoption of the new policy, we rebranded to Kazera Global to align the Company's purpose with its strategic focus. The successful upgrade of the processing plant and the securing of an offtake partner has positioned the mine in a very strong position. Coupling this with the approval of a clearance certificate for the abstraction of water from the Orange River, a highly material development for the Company, also ensures that future production can be well supplied with water - a very valuable resource for the Mine. 

Earlier in the year, Kazera, together with Aftan, engaged in a deliberate strategic shift towards exploration and resource definition across the NTI Licence. This is designed to fully understand the total mineralisation and to ascertain the quantum of high grade Tantalum and Lithium that we know exists.

Aftan, together with world class drilling consultants, continue to conduct its drilling campaign with 360 cores drilled and assayed to date from targets Homestead and Purple Haze. It is the Company's intention for an ore resource report to be generated for Homestead and Purple Haze by the end of Q1 2019 before moving further afield to our other targets, the Signaalberg and White City pegmatites, and for an ore resource report for all those areas to be produced during calendar year 2019.

With the drilling campaign in full swing and early results endorsing our belief in the quality of NTI, I expect 2019 to be not only enlightening but also value accretive for the Company. On behalf of the Board, I thank our fellow employees for their unwavering hard work and all the staff of Aftan and our shareholders for their continued support.

Giles Clarke

Chairman

13 December 2018

CHIEF EXECUTIVE OFFICER'S REVIEW

Year to 30 June 2018

Overview

The year have seen significant changes which have reshaped and refocussed the Company's strategic and operational focus.

This has had a significant impact on the ongoing operations at the NTI Mine, as Aftan and the Company shifts from a strategy of increasing production of world class grade product, to a targeted exploration programme. This decision has enabled Aftan, the Company, and interested global offtake parties, to fully assess the fundamental and future value of this high value operation.

Operations

During the year, the Aftan group was granted a newly approved water licence by the Office of the Environmental Commissioner to acquire water from the Orange River. This is highly important, as it will deliver increased efficiencies for water at higher volumes to NTI. It also represented a significant milestone for Aftan and the Company as it signified a major endorsement by the Namibian Government for the project. Following on from the approval of the water licence, Aftan and the Company initiated a tender process for laying the pipework from the Orange River to the mine, with the intention of utilising solar power to drive the system.

During the year, NTI successfully passed multiple site audits by leading end users to meet stringent quality requirements by the global community. In April, Aftan began the application process for the certification of the installation of a larger tailings dam as part of plant upgrades to be able to focus on delivering industry leading quality tantalum shipments from the Mine to our Customer base. This will be important as it will allow for increased production capacity in the future.

In May 2018, the Company announced the decision to pursue a targeted exploration programme to further develop a comprehensive understanding of the mineralisation across the property, which covers 452 Ha. In June 2018, and months following to date, Kazera begun this exploration drilling programme with the drilling of approximately 3000 metres across, initially focussing on the Homestead and Purple Haze, and later the Signaalberg mountain and White City, pegmatite deposits. The MSA Group is commissioned to carry out this targeted exploration programme.

In line with the change in strategic focus, Aftan and Kazera have significantly reduced staffing numbers at the Mine. The Company made this decision to reduce mining costs and optimise the operation using a multi skilled employee base.

Although the Company has redirected resources in the latter part of the financial year towards obtaining mineralisation definition across the property, mining continued at Homestead throughout the Period, producing Tantalite and Lithium bearing ore for future processing. During the Period, Aftan shipped its fifth and sixth shipment of high grade tantalum to the customer. Post Period, in August 2018, Aftan ceased ore processing to free up resources for the exploration campaign.

Financials

The Group has cash and cash equivalents of £1,125,000 at 30 June 2018 compared to £364,000 in 2017 and has net assets of £4,300,000 compared to £3,537,000 in 2017. The group's loss before tax was £2,538,000 including pre-production costs of £1,308,000. These were capitalised in the previous year when the loss before tax was £1,098,000. The Company does not plan to pay a dividend for the twelve months to 30 June 2018.

Outlook

As the Group looks to the future, the Group will continue to focus on its new strategic vision to unlock significant near-term and long-term value through its targeted exploration programme over the next several months across the whole property. The Group will continue to engage in discussions with our Customer base and other potential end users on the supply of tantalum but remains steadfast in bringing the Mine to achieve a JORC compliant resource.

Larry Johnson

Chief Executive Officer

13 December 2018

GROUP INCOME STATEMENT

For the year ended 30 June 2018

		Notes	Year ended 30 June 2018 £'000	Year ended 30 June 2017 £'000
Pre-production expenses			(1,308)	-
Administrative expenses			(1,230)	(1,098)
Operating loss and loss before tax		6	(2,538)	(1,098)
Taxation		9	-	-
Loss for the year and total comprehensive loss			(2,538)	(1,098)
Loss attributable to owners of the Company			(1,977)	(901)
Loss attributable to non-controlling interests			(561)	(197)
			(2,538)	(1,098)
Earnings per share attributable to owners of the Company
From continuing operations:
Basic and diluted (pence)		10	(0.81)p	(0.51)p

The accounting policies and notes form an integral part of these financial statements.

GROUP STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30 June 2018

		Year ended 30 June 2018 £'000	Year ended 30 June 2017 £'000
Loss for the year attributable to owners of the Company		(1,977)	(901)
Other comprehensive income:
Items that may be subsequently reclassified to profit and loss:
Exchange differences on translation of foreign operations		(342)	235
Other comprehensive (expense)/income for the year		(342)	235
Total comprehensive loss for the year attributable to equity holders of the parent		(2,319)	(666)

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 £295,000 (2017: £308,000).

The accounting policies and notes are an integral part of these financial statements.

GROUP AND COMPANY STATEMENTS OF FINANCIAL POSITION

As at 30 June 2018

		GROUP			COMPANY
	Notes	2018 £'000	2017 £'000		2018 £'000	2017 £'000
Non-Current assets
Goodwill	11	586	588		-	-
Other intangible assets	12	1,813	1,891		-	-
Property, plant and equipment	13	771	655		-	-
Investment in subsidiaries	14	-	-		7,026	4,434
		3,170	3,134		7,026	4,434
Current assets
Trade and other receivables	15	213	174		37	19
Cash and cash equivalents	16	1,125	364		907	249
		1,338	538		944	268
Current liabilities
Trade and other payables	17	208	135		48	128
		208	135		48	128
Net assets		4,300	3,537		7,922	4,574
Equity
Share capital	18	2,568	1,890		2,568	1,890
Share premium account	18	14,131	11,314		14,131	11,314
Capital redemption reserve		2,077	2,077		2,077	2,077
Currency translation reserve		(90)	252		-	-
Retained earnings		(13,503)	(11,674)		(10,854)	(10,707)
Equity attributable to owners of the Company		5,183	3,859		7,922	4,574
Non-controlling interests		(883)	(322)		-	-
Total equity		4,300	3,537		7,922	4,574

These financial statements were approved by the Board of Directors on 13 December 2018.

Signed on behalf of the Board by:

Larry Johnson                                         

Director                                                              

Company number: 005697574

The accounting policies and notes form an integral part of these financial statements.

GROUP STATEMENT OF CHANGES IN EQUITY

Year to 30 June 2018

	Share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Currency translation reserve £'000	Retained earnings £'000	Equity shareholders funds £'000	Non-controlling interests £'000	Total £'000
Balance at 1 July 2016	1,084	9,125	2,077	17	(10,773)	1,530	(125)	1,405
Comprehensive income Loss for the year	-	-	-	-	(901)	(901)	(197)	(1,098)
Other comprehensive income	-	-	-	235	-	235	-	235
Total comprehensive income			-	235	(901)	(666)	(197)	(863)
Issue of share capital	806	2,189	-	-	-	2,995	-	2,995
Balance at 30 June 2017	1,890	11,314	2,077	252	(11,674)	3,859	(322)	3,537
Comprehensive income Loss for the year	-	-	-	-	(1,977)	(1,977)	(561)	(2,538)
Other comprehensive expense	-	-	-	(342)	-	(342)	-	(342)
Total comprehensive expense			-	(342)	(1,977)	(2,319)	(561)	(2,880)
Issue of share capital	678	2,817	-	-	-	3,495	-	3,495
Share based payment expense	-	-	-	-	148	148	-	148
Balance at 30 June 2018	2,568	14,131	2,077	(90)	(13,503)	5,183	(883)	4,300

The accounting policies and notes form an integral part of these financial statements.

COMPANY STATEMENT OF CHANGES IN EQUITY

Year to 30 June 2018

	Share  capital	Share  Premium	Capital redemption reserve	Retained earnings	Total
	£'000	£'000	£'000	£'000	£'000
Balance at 1 July 2016	1,084	9,125	2,077	(10,399)	1,887
Total comprehensive expense for the year	-	-	-	(308)	(308)
Issue of share capital	806	2,189	-	-	2,995
Balance at 30 June 2017	1,890	11,314	2,077	(10,707)	4,574
Total comprehensive expense for the year	-	-	-	(295)	(295)
Issue of share capital	678	2,817	-	-	3,495
Share based payment expense	-	-	-	148	148
Balance at 30 June 2018	2,568	14,131	2,077	(10,854)	7,922

The accounting policies and notes form an integral part of these financial statements.

GROUP AND COMPANY STATEMENTS OF CASH FLOWS

Year to 30 June 2018

		GROUP			COMPANY
		Year ended 30 June 2018	Year ended 30 June 2017		Year ended 30 June 2018	Year ended 30 June 2017
	Notes	£'000	£'000		£'000	£'000
OPERATING ACTIVITIES
Net cash used in operating activities	22	(2,237)	(1,291)		(715)	(615)
INVESTING ACTIVITIES
Purchases of property, plant and equipment		(275)	(251)		-	-
Development costs		(41)	(1,217)		-	-
Advances to subsidiary undertakings		-	-		(2,122)	(2,008)
Net cash used in investing activities		(316)	(1,468)		(2,122)	(2,008)
FINANCING ACTIVITIES
Net proceeds from share issues		3,495	2,995		3,495	2,995
Repayment of loans		-	(150)		-	(150)
Net cash from financing activities		3,495	2,845		3,495	2,845
Net increase in cash and cash equivalents		942	86		658	222
Exchange rate translation adjustment		(181)	218		-	-
Cash and cash equivalents at beginning of year		364	60		249	27
Cash and cash equivalents at end of year	16	1,125	364		907	249

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 2018

1	GENERAL INFORMATION
	Kazera Global Plc is a company incorporated in the United Kingdom under the Companies Act 2006. The nature of the Group's operations and its principal activities are set out in the Strategic Report and the Directors' Report.
2	STATEMENT OF COMPLIANCE
	The financial statements have been prepared and approved by the Directors in accordance with all relevant IFRSs as issued by the International Accounting Standards Board ("IASB"), and interpretations issued by the IFRS Interpretations Committee, endorsed by the European Union ("EU").
	At the date of authorisation of this document, the following Standards and Interpretations, which have not been applied in these financial statements, were in issue, but not yet effective: ·           IFRS 9 Financial Instruments ·           IFRS 15 Revenue from Contracts with Customers ·           IFRS 2 Amendments - Classification and measurement of share-based payments transactions ·           IFRIC 22 Foreign currency transactions and advanced consideration ·           IFRS 16 Leases The Directors anticipate that the adoption of the above Standards and Interpretations in future periods will have little or no impact on the financial statements of the Company when the relevant Standards come into effect for future reporting periods, although they have yet to complete their full assessment in relation to the impact of IFRS 9 and IFRS 15.
3	Accounting Policies
	The principal accounting policies adopted and applied in the preparation of the Group and Company Financial statements are set out below. These have been consistently applied to all the years presented unless otherwise stated:
	BASIS OF ACCOUNTING The consolidated financial statements have been prepared in accordance with applicable International Financial Reporting Standards ("IFRS") including standards and interpretations issued by both the International Accounting Standards Board ("IASB") and the International Financial Reporting Interpretation Committee ("IFRIC") as adopted and endorsed by the European Union ("EU"), further to IAS Regulation (EC 1606/2002). The consolidated financial statements have been prepared on the basis of historical cost.  Cost is based on the fair values of the consideration given in exchange for assets.
	GOING CONCERN The financial statements have been prepared on the going concern basis. The Directors have prepared cash flow forecasts to 31 March 2019, which show that the Group and Company will have sufficient available cash resources to provide for its future requirements.  In preparing their forecasts the Directors have given due regard to the risks and uncertainties affecting the business as set out in the Strategic report. On this basis, the Directors have a reasonable expectation that the Group and Company have adequate resources to continue operating for the foreseeable future.  For this reason, they continue to adopt the going concern basis in preparing the Group and Company's financial statements.
	BASIS OF CONSOLIDATION The Group's consolidated financial statements incorporate the financial statements of Kazera Global Plc (the "Company") and entities controlled by the Company (its subsidiaries). Subsidiaries are entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights.  The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.  Subsidiaries are fully consolidated from the date on which control is transferred to the Group.  They are de-consolidated from the date that control ceases. Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated.  Profits and losses resulting from inter-company transactions that are recognised in assets are also eliminated.  Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.
	BUSINESS COMBINATIONS The acquisition of subsidiaries is accounted for using the acquisition method under IFRS 3.  The acquisition method involves the recognition at fair value of all identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date, regardless of whether or not they were recorded in the financial statements of the subsidiary prior to acquisition.  On initial recognition the assets and liabilities of the subsidiary are included in the consolidated statement of financial position at their fair values, which are also used as the bases for subsequent measurement in accordance with the Group accounting policies.  Goodwill is stated after separating out identifiable intangible assets.  Goodwill represents the excess of the fair value of the consideration transferred over the fair value of the Group's share of the identifiable net assets of the acquired subsidiary at the date of acquisition.  Acquisition costs are expensed as incurred.
	GOODWILL Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary, associate or jointly controlled entity at the date of acquisition and is included as a non-current asset. Goodwill is tested annually, or more regularly should the need arise, for impairment and is carried at cost less accumulated impairment losses. Any impairment is recognised immediately in the income statement and is not subsequently reversed. Goodwill is allocated to cash generating units for the purpose of impairment testing. On disposal of a subsidiary the attributable amount of goodwill is included in the determination of the profit or loss on disposal. In accordance with IAS 36 the Group values Goodwill at the lower of its carrying value or its recoverable amount, where the recoverable amount is the higher of the value if sold and its value in use.

 

FOREIGN CURRENCIES The individual financial statements of each group company are presented in the currency of the primary economic environment in which it operates (its functional currency).  For the purpose of the Group 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.

	DEVELOPMENT COSTS Development costs relate to expenditure incurred on the development and evaluation of mineral resources. These costs are recorded as intangible assets until the mineral resource reaches the production stage. Upon completion of development and commencement of production, capitalised development costs as well as evaluation expenditures are transferred to mining assets in property, plant and equipment and depreciated over the expected life of the mineral resource. Development costs incurred on specific projects are capitalised when all the following conditions are satisfied: ·           completion of the intangible asset is technically feasible so that it will be available for use or sale ·           the Group intends to complete the intangible asset and use or sell it ·           the Group has the ability to use or sell the intangible asset ·           the intangible asset will generate probable future economic benefits ·           there are adequate technical, financial and other resources to complete the development and to use or sell the intangible asset, and ·           the expenditure attributable to the intangible asset during its development can be measured reliably. Other development expenditure that does not meet these criteria is recognised as an expense as incurred.  Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
	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: Land and buildings - Over 20 years Plant 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.

 

	TRADE RECEIVABLES, loans and other receivables Trade and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the balance sheet date, which are classified as non-current assets and are measured at amortised cost less an allowance for any uncollectible amounts. The net of these balances are classified as "trade and other receivables" in the balance sheet. Trade and other receivables are assessed for indicators of impairment at each balance sheet date and are impaired where there is objective evidence that the recovery of the receivable is in doubt. Objective evidence of impairment could include significant financial difficulty of the customer, default on payment terms or the customer going into liquidation. The carrying amount of trade and other receivables is reduced through the use of an allowance account. When a trade or other receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in the income statement. Loans and receivables, as categorised above, are measured at amortised cost using the effective interest method less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
	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.
	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 LIABILTIES, 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.
	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.
	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 sole reporting segment is the tantalite mining operation in Namibia.

 

4

CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATIONS

In the application of the Group's accounting policies, which are described in Note 3, 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. 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 have been described in more detail in Note 19.  The estimates and assumptions could materially affect the Income Statement.

5	SEGMENTAL REPORTING
	The business consists of a single investment activity being the tantalite mining operation in Namibia.  As a result the segmental financial information is the same as that set out in the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and the Statement of Cash Flows.

6	OPERATING LOSS
		Year ended 30 June 2018  £'000	Year ended  30 June 2017  £'000
	Loss for the period has been arrived at after charging:
	Staff costs as per Note 8 below	1,067	311
	Auditors remuneration	21	21
	Depreciation of property, plant and equipment	119	62

7	auditors' remuneration
	The analysis of auditors' remuneration is as follows:
		Year ended 30 June 2018 £'000	Year ended 30 June 2017 £'000
	Fees payable to the Group's auditors for the audit of the Group's annual accounts	20	20
	Total audit fees	20	20
	Fees payable to the Group auditor and their associates for other services to the Group:
	Tax services	1	1
		21	21

 

8	staff costs
	The average monthly number of employees (including executive directors) for the continuing operations was:
		Year ended 30 June 2018 Number	Year ended 30 June 2017 Number
	Group total staff	115	100
		£'000	£'000
	Wages and salaries	822	277
	Share based payment in respect of exercise of options	148	-
	Other benefits	4	-
	Social security costs	93	34
		1,067	311
	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 Report of the Board on remuneration accompanying these financial statements.

9	taxation
		Year ended 30 June 2018 £'000	Year ended 30 June 2017 £'000
	Loss on continuing operations before tax	(2,538)	(1,098)
	Tax at the UK corporation tax rate of 19% (2017: 19.75%)	(482)	(217)
	Effects of:
	Expenses not deductible for tax purposes	22	5
	Unutilised tax losses carried forward	460	212
	Tax charge for period	-	-
	The total 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.

 

10	LOSS PER SHARE
	The calculation of basic loss per share is based on the following data:
		Year ended  30 June 2018	Year ended  30 June 2017
		£'000	£'000
	Loss for the year attributable to owners of the Company	(1,977)	(901)
	Weighted average number of ordinary shares in issue for basic and fully diluted earnings	245,076,157	177,144,947
	LOSS PER SHARE (PENCE PER SHARE)
	BASIC AND FULLY DILUTED:
	- from continuing and total operations	(0.81)	(0.51)

The Company has outstanding warrants and options as disclosed under Note 20 which may be dilutive in future periods.  The effect in respect of the current year would have been anti-dilutive (reducing the loss per share) and accordingly is not presented.

In addition the effect of the issue of ordinary shares shortly after year end, would also have been anti-dilutive, and accordingly is not considered. The issue however, may be dilutive in future periods.

11	GOODWILL
			2018	2017
	GROUP		£'000	£'000
	Balance brought forward		588	571
	Exchange translation difference		(2)	17
	Balance carried forward		586	588

The Directors have reviewed the carrying value of Goodwill at 30 June 2018 and consider that no impairment provision is required. The Impairment review involved calculating the NPV of the Group's cash generating assets. The NPV calculation involved using the discounted cash flow forecast model based on current and expected production results. As a result of carrying out this impairment testing review the Directors considered that there was no need for any impairment of the carrying value of the goodwill.

The Directors continue to review goodwill on an on-going basis and where necessary in future periods will request external valuations to further support the valuation basis.

12	OTHER INTANGIBLE ASSETS
		Development costs	Mining licences	Total
	GROUP	£'000	£'000	£'000
	At 1 July 2017	1,881	10	1,891
	Net additions in year	41	-	41
	Exchange translation difference	(119)	-	(119)
	At 30 June 2018	1,803	10	1,813

 

13	PROPERTY, PLANT AND EQUIPMENT
		Land & buildings	Plant & machinery	Furniture & equipment	Total
	GROUP	£'000	£'000	£'000	£'000
	Cost
	At 1 July 2016	125	321	37	483
	Adjustment	-	64	(4)	60
	Additions	-	251	-	251
	Cost at 30 June 2017	125	636	33	794
	Exchange translation difference	-	(48)	(3)	(51)
	Additions	-	270	5	275
	Cost at 30 June 2018	125	858	35	1,018
	Depreciation
	At 1 July 2016	6	7	4	17
	Adjustment	-	63	(3)	60
	Charge for the year	9	49	4	62
	Depreciation at 30 June 2017	15	119	5	139
	Exchange translation difference	-	(10)	(1)	(11)
	Charge for the year	5	102	12	119
	Depreciation at 30 June 2018	20	211	16	247
	Net book value at 30 June 2018	105	647	19	771
	Net book value at 30 June 2017	110	517	28	655

 

14	INVESTMENT IN subsidiarY UNDERTAKINGS
	The Company's investments in its subsidiary and associated undertakings
	COMPANY					2018 £'000		2017 £'000
	Cost and net book value
	At 1 July					4,434		2,184
	Additional advances to African Tantalum (Pty) Ltd					2,122		2,008
	Intercompany loan interest					470		242
	As at 30 June					7,026		4,434
	The intercompany loan to Aftan bears interest at 12% p.a. All principal subsidiaries of the Group are consolidated into the financial statements.  At 30 June 2018 the subsidiaries were as follows:
	Subsidiary undertakings		Country of registration	Principal activity			Holding		%
	African Tantalum (Pty) Ltd		Namibia	Intermediate holding company			Ordinary shares		75
	Namibia Tantalite Investments (Pty) Ltd	Namibia		Tantalite mining			Ordinary shares		100
	Tameka Shelf Company Four (Pty) Ltd	Namibia		Mining licence holder			Ordinary shares		100

The following table summarises the movement in the investments made by the Company in subsidiary undertakings, as above:

	COMPANY		2018 £'000	2017 £'000
	At 1 July		4,434	2,184
	Part capitalisation of loan to Aftan		600	550
	Increase in loan to Aftan		1,992	1,700
	As at 30 June		7,026	4,434

During the year approximately 25% of the intercompany loan was converted into shares in Aftan.

15	TRADE AND OTHER RECEIVABLES
		GROUP		COMPANY
		2018	2017	2018	2017
		£'000	£'000	£'000	£'000
	Other receivables	206	166	30	11
	Prepayments and accrued income	7	8	7	8
		213	174	37	19

The Directors consider the carrying amount of intercompany loans and other receivables approximates to their fair value.

 

16	CASH AND CASH EQUIVALENTS
		GROUP		COMPANY
		2018	2017	2018	2017
		£'000	£'000	£'000	£'000
	Cash and cash equivalents	1,125	364	907	249

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.

17	TRADE AND OTHER PAYABLES
		GROUP		COMPANY
		2018	2017	2018	2017
		£'000	£'000	£'000	£'000
	Trade payables	59	33	8	33
	Other payables	4	-	4	-
	Accruals	145	102	36	95
		208	135	48	128
	The Directors consider the carrying amount of trade payables approximates to their fair value.

18	share capital AND SHARE PREMIUM
		Number of shares	Nominal value £'000	Share premium £'000
	ISSUED AND FULLY PAID:
	At 30 June 2016, shares of 1p each	108,461,539	1,084	9,125
	Share issue	80,555,554	806	2,444
	Share issue expenses	-	-	(255)
	At 30 June 2017, shares of 1p each	189,017,093	1,890	11,314
	Share issues	67,832,350	678	3,138
	Share issue expenses	-	-	(321)
	At 30 June 2018	256,849,443	2,568	14,131
	Share issues On 16 August 2017, the Company issued 62,500,000 ordinary shares of 1p at 6p per share for cash in respect of a private placing. On 12 March 2018, the Company issued 3,199,410 ordinary shares of 1p at 1.25p per share for cash in respect in respect of options exercised by directors of the Company. On 29 March 2018, the Company issued 2,132,940 ordinary shares of 1p at 1.25p per share for cash in respect in respect of options exercised by ex-directors of the Company.

19	Share-based payments
	Equity-settled share option scheme The Company operates share-based payment arrangements to incentivise directors by the grant of share options. Equity-settled share-based payments 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. On 25 March 2014, the Board resolved to grant options over up to 8,531,760 new ordinary shares exercisable at 1.25p per share and granted 1,599,705 such options each to G Clarke and N Harrison.  On 16 July 2015, a further 1,599,705 such options were granted each to G Clarke and N Harrison, and 2,132,940 options were granted to former directors on the same terms.  The options are exercisable at any time up to 25 March 2018.   On 17 August 2017, 10,000,000 options were granted to L Johnson, vesting in 3 tranches, 3,300,000 options on the first anniversary, 3,300,000 options on the second anniversary, and 3,400,000 options on the third anniversary of the date of grant and exercisable at 6p per share for 3 years from the vesting date.  The options are subject to certain performance related conditions.
	The significant inputs to the model in respect of the share options granted in August 2017 were as follows:
	Share price at date of grant Exercise price No. of share options Expected volatility Average option life Risk free rate Calculated average fair value per share				6.3 pence 6.0 pence 10,000,000 50% 5 years 1.5% 2.89 pence
	The total share-based payment expense recognised in the income statement for the year ended 30 June 2018 in respect of the share options granted was £148,000 (2017: Nil).
	Number of options at 1 July 2017	Granted in  the year	Exercised in the year	Number of options at 30 June 2018		Exercise price	Vesting Date	Expiry date
	5,332,350	-	5,332,350	-		-	-	-
		3,300,000	-	3,300,000		6.00p	17.08.2018	17.08.21
		3,300,000	-	3,300,000		6.00p	17.08.2019	17.08.22
		3,400,000	-	3,400,000		6.00p	17.08.2020	17.08.23
	5,332,350	10,000,000	5,332,350	10,000,000		6.00p

 

20	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 The IAS 39 categories of financial assets included in the Statement of financial position and the headings in which they are included are as follows:
			2018	2017
			£'000	£'000
	Financial assets:
	Cash and cash equivalents		1,125	364
	Loans and receivables		206	166
			1,331	530

	FINANCIAL LIABILITIES BY CATEGORY The IAS 39 categories of financial liability included in the Statement of financial position and the headings in which they are included are as follows:
						2018		2017
						£'000		£'000
	Financial liabilities at amortised cost:
	Trade and other payables					63		33
						63		33
	The following table details the Company'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 Company 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 Company 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 2018 Non-interest bearing:
	Trade and other payables	-	63	-			-	-
	Short term borrowings	-	-	-			-	-
	30 June 2017
	Non-interest bearing:
	Trade and other payables	-	33	-			-	-
	Short term borrowings	-	-	-			-	-

 

21	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. The Group's maximum exposure to credit risk is £1,125,000 (2017: £364,000) 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. Ltd, the Group's major activity is now 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.  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.  Going forwards the Group is exposed to the US$ as it has entered into an off-take agreement for the major part of its production, priced in US$.  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 Namibian Dollars their value is dependent on the global market value of the available Tantalite resources. 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.

 

22	NOTES TO THE CASHFLOW STATEMENT
		GROUP		COMPANY
		2018	2017	2018	2017
		£'000	£'000	£'000	£'000
	Operating loss	(2,538)	(1,098)	(295)	(308)
	Depreciation and amortisation	119	62	-	-
	Share based payment expense	148	-	148	-
	Shares issued in settlement of fees	-	-	-	-
	Intercompany loan interest	-	-	(470)	(242)
	Operating cash flows before movement in working capital	(2,271)	(1,036)	(617)	(550)
	(Increase)/decrease in receivables	(39)	(104)	(18)	19
	(Decrease)/increase in payables	73	(151)	(80)	(84)
	Net cash used in operating activities	(2,237)	(1,291)	(715)	(615)

23	EVENTS AFTER THE REPORTING PERIOD
	There have been no material events since the reporting date.

24

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 £48,000 (2017: £48,000) 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 through their holdings of 73.28% and 26.72% respectively. There have been no other material transactions with related parties.

25	OPeRATING LEASES
	The Group has an operating lease over the land for which it has a mining licence which endures until the mining operations permanently cease.  The rent is approximately £150 per annum.

26	CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
	There were no capital commitments authorised by the Directors or contracted for at 30 June 2018 (2017: £nil).

27	ULTIMATE CONTROLLING PARTY
	The Directors do not consider there to be one single ultimate controlling party.

 

END

 

 

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