Pensana Plc
(“Pensana”, “the Company” or “the
Group”)
Interim results
for the six months ended 31 December
2021
Pensana Plc, building the world’s first independent, sustainable
rare earth magnet metal supply chain, announces its unaudited
results for the six months ended 31 December
2021.
Half Year Highlights
- Initiation of geotechnical drilling and trenching at both the
Saltend and Longonjo sites ahead of main construction activity
- Appointment of highly experienced natural resources financier
Steven Sharpe as Non-Executive
Director of the Company
- Total comprehensive loss for the period of $4,235,572 (31 December
2020: $1,717,491)
Post period end
- Front-End Engineering Design (“FEED”) for both Saltend and
Longonjo completed and value engineering ongoing
- Approaches received from major European and US electric vehicle
and wind turbine OEMS to secure magnet metal supply chain
- Memorandum of Understanding executed with key Asian trading
house for 50% of Saltend’s production
- Financing well advanced, including potential support from the
UK government’s UK Export Finance and the Automotive Transformation
Fund
- Successful institutional equity placing of £10 million with
M&G, one of the UK's largest and long-standing fund
managers
- Increasing engagement with UK and US generalist institutional
investors following M&G’s 5% direct investment and the
appointment of Head of Investor Relations and Communications
Comment from Paul Atherley, Chairman:
"We have seen six months of considerable progress for the
Company as we look to establish an independent and sustainable
magnet metal rare earth production facility at Saltend in the UK to
meet the burgeoning demand from the electric vehicle and offshore
wind sectors. Both the Saltend and Longonjo projects have been
brought to FEED status, with financing and offtake discussions
being well advanced."
CEO’s Review
COVID-19
Whilst Covid-19’s grip on the world continued to be felt over
this six-month review period to 31 December
2021 (the “Period”) the team, alongside our key technical
advisors progressed unabated on the key workstreams of FEED,
geotechnical drilling and pilot plant test work on the Saltend and
Longonjo projects. Operational readiness programmes saw the work
packages for Saltend and Longonjo delineated to high levels of
accuracy and the Group’s management team strengthened with key
appointments to the Board and our business development team in
Japan and Europe. M&G’s £10 million equity
investment which completed post period end was a further
significant institutional endorsement towards the Company’s
strategy of becoming the world’s first major new rare earth mine in
over a decade and the critical rare earth processing hub for the
UK. The strategic relevance of these projects has been
highlighted by ongoing engagement with several EV makers, OEMs,
large industrials and potential downstream partners.
Rare earth supply continues to take
centre stage
Pensana's Saltend Chemical processing facility is at the
forefront of efforts to break the UK's dependence on China for supplies of rare earths, critical
elements used in the manufacture of permanent magnets, which are
used in green technologies such as EVs and wind turbines.
China produces more than 98% of
the world’s magnets and is preparing to tighten its grip on
the market by combining three of its huge
state enterprises to form China Rare Earth Group that will
control 70% of China's output.
Following recent comments by MP Alexander
Stafford, Chair of the APPG on ESG, vice-chair of the APPG
on Hydrogen, and vice-chair of the APPG for Critical Minerals that
"China's dominance of rare earth
metals has left Britain
strategically vulnerable", politicians in Europe and the US are supporting efforts
to diversify supply chains. Recent events in Europe have further highlighted the
significance of ensuring diversification away from the world’s
traditional reliance on fossil fuels, and we believe Pensana will
directly benefit from supportive UK Government policies by building
the facility within the Humber Freeport.
Saltend rare earth processing hub
(“Saltend”)
Pensana is establishing Saltend in the Humber Freeport zone and
alongside the Wood Group, have designed the facility to be easily
adapted to cater for a range of rare earth feedstocks. This is an
attractive alternative to mining houses who may otherwise be
limited to selling their products to China. In addition to our plans to process
Longonjo’s feedstock material, discussions have advanced with third
parties over the Period for the additional supply of sustainably
sourced rare earth carbonates.
Importantly for many miners around the world who are looking to
access the European and US supply chains, it is becoming
increasingly clear that the planned EU and potential UK carbon
border taxation means that it is no longer acceptable for
manufacturers to source material extracted or processed
unsustainably. Once in production, Pensana will look to expand
production capacity when additional feedstock becomes
available.
Project delivery
FEED for each of Saltend and Longonjo completed post-Period end.
A comprehensive value engineering and optimisation programme is
well advanced and is expected to be reported next month and is
expected to result in further reduction in capital costs.
Working alongside Wood Group’s Perth, Reading and Johannesburg offices, Paradigm Project
Management (PPM), a specialist Africa centric project management and
engineering company, and Professional Cost Consultants (PCC), with
offices in South Africa and the
UK, the estimated capex has been reduced from US$525 million to US$494
million (Saltend: US$195
million and Longonjo: US$299
million).
Worldwide supply chain constraints and inflationary pressures
brought about by Covid-19 and the recent Ukraine-Russia conflict, which could have impacted
both Saltend and Longonjo projects, have been largely mitigated by
this detailed optimisation and value engineering
processes.
Specific workstreams involving capital and operation cost
savings currently underway include:
- Spent acid regeneration to maximise the recycling efficiency of
the sulphuric acid plant integrated with off-gas from the calcining
of concentrate at Longonjo, which is an important aspect of the
process and constitutes a significant reduction of the carbon
footprint through reduced reagent consumption
- Piloting on a more cost-effective flotation concentrate
calcining process offered as a vendor alternative post FEED, which
would enable a significantly shorter lead time for fabrication and
ease of installation at Longonjo
- Optimisation of Saltend’s civil & earthworks for load
bearing structures undertaken alongside the completion of detailed
geotechnical investigation, which will shorten the construction
period and allow for future affordable expansion into downstream
activities associated with magnet metal production, magnet
recycling and processing of HREO
- Piloting of process simplification opportunities discovered in
the MRES precipitation circuit in Longonjo
Corporate
Board and key company appointments
As previously announced in September
2021, highly experienced natural resources financier
Steven Sharpe was appointed as
Non-Executive Director of the Company. Steve’s experience in the
finance space alongside his intimate knowledge of the rare earth
industry has proven invaluable to date. As we move towards main
financing, Steve’s experience and guidance will be a key component
in the team progressing this workstream.
The Company has also appointed experienced ESG professional
Danny McNeice as Sustainability
Manager. He will provide technical and strategic guidance to the
business to embed ESG throughout because of his local Yorkshire experiences in the Drax fold and
their carbon footprint mitigation activities.
A key market for the Company is Japan, and Pensana is pleased to announce the
appointment of experienced marketing executive Junji Kitaguchi as the Company’s marketing
representative. Junji has extensive experience of business
development and directed power, environmental and
infrastructure-related businesses as General Manager of Mitsubishi
Corporation Europe & Africa.
He most recently operated as a senior advisor within Mitsubishi
corporation creating a joint venture with a major European utility
company.
Angola
At a macroeconomic level, Angola’s economy continues to de-risk.
Their handling of the Covid pandemic has been commendable and with
a Fiscal Surplus on the back of oil prices and a Debt to GDP ratio
falling from 135% to 95% in 2021, it was not surprising to see
Moody’s upgrade Angola’s credit rating to B3 with a stable
outlook. Anglo American, De
Beers, Rio Tinto and others are now re-investing in the
country.
Pensana will host a UK Department of International Trade trip to
Angola at the end of this month.
The visit includes delegates from several major mining houses and
UK Export Finance. As part of the trade summit, the delegation will
be visiting the Longonjo site, traveling via the recently upgraded
US$2 billion Benguela railway line,
which provides a direct link from Longonjo to the Port of
Lobito.
These are extremely positive developments for Angola and a true reflection of their ongoing
ambitions to place the country on a strong growth trajectory with
specific focus on critical technology minerals, agriculture and
tourism sectors.
Exploration
Good progress was made in advancing exploration activities on
Longonjo’s neighbouring Coola License despite Covid 19 travel
restrictions preventing international geological consultants from
entering Angola during a large
part of 2021.
Soil samples collected over the Coola carbonatite complex in
2020 were re-assayed for scandium (Sc) and fluorine (F). Scandium
in the soils is highly anomalous with most values >80 ppm. This
is significant as, although scandium is not an uncommon element,
exceptional values of over 200 ppm occur at Coola. Late-stage
hydrothermal fluorite veining occurs in fenite to the southwest of
the ring dyke over an area of roughly 30 000 m2. The fluorite
occurs in breccias as discrete coarse purple grains and irregular
veins varying from a few mm to over 20 cm of pure purple fluorite.
Fluorine in re-assayed soils over the known fluorite occurrence
reached values as high as 21% F. An outcrop sample of a fluorite
vein proved to be of very high-grade material (> 97% CaF2).
The primary focus of exploration during the second half of 2021
was on the Coola carbonatite following up the rare earth element,
scandium and fluorite mineralisation. The carbonatite complex at
Coola was mapped in detail and soil and rock chip sampling
completed over the ring dyke to ascertain the nature, degree, and
extent of rare earth element and scandium mineralisation. In
addition, infill soil sampling and rock chip sampling was completed
over the area of fluorite mineralisation and an augering programme
of the soil covered central diatreme was successful in sampling the
underlying saprolite. Detailed mineralogical work has also
commenced on a selection of Coola rock types.
A total of 750 individual samples were taken and dispatched to
Nagrom in Australia for analysis.
Seven selected rock samples were sent for mineralogical studies.
Analytical results and mineralogical studies are expected to be
completed by late Q1 2022. Assay results received from the soil
sampling programme at Monte Verde alkaline complex identified an
area of roughly 5 km2 of > 0.5% TREO (max 2.0%) corresponding
with mapped outcrops of carbonatite breccia in which up to 1% TREO
was encountered. The REE mineralisation is accompanied by highly
elevated levels of phosphorous, barium, iron, tantalum, manganese,
niobium and strontium.
At the Sulima alkaline complex, extensive trenching was
identified from satellite imagery corresponding with a well-defined
radiometric anomaly. Fieldwork confirmed the presence of five one
to seven metre deep, NE-SW trenches of roughly 90 m length and 500
m apart, excavated over a strike of 2200 m. Material in and around the trenches
comprises predominantly secondary iron and manganese oxides and
hydroxides. Handheld XRF analysis of material from the trenches
indicated elevated iron, manganese, titanium, chromium, zinc and
barite. Rock chip samples from various trenches and outcrops in the
area were taken and have been submitted for whole rock
geochemistry. Various other geophysical anomalies identified within
the Coola License remain to be followed up with stream sediment
sampling, mapping and rock chip sampling.
Environmental, Social and
Governance
Progress continues to be made towards ensuring Pensana upholds
the highest standards of ESG throughout. The ESG Committee, under
the Chair of non-executive director, Baroness Northover, continued
to refine the Committee’s terms of reference to oversee
effectiveness of our framework, policies and systems for ESG
management and integration across the Group. To demonstrate this,
Pensana became a signatory to the United National Global Compact, a
partner of the Taskforce for Climate-related Financial Disclosure
(TCFD) and a launch partner of the Oh Yes! Net Zero campaign
to promote net zero and climate action across the Humber region.
These actions underline the Company’s commitment to transparency
and further efforts have included testing the robustness of the
Group’s strategy under future climate scenarios.
Pensana remains focused on climate risk. In addition to becoming
a partner of the TCFD, a comprehensive transitional climate risk
and opportunity assessment was completed over the period, including
testing the business strategy against external climate models. HCV
Africa have been instructed to carry out a physical climate risk
assessment for Longonjo and have included a specialist climate
hydrologist in their team to ensure any future climate impacts on
water supply are assessed.
At the Longonjo site, the Environment and Social Impact
Assessment (ESIA) has almost completed under the leadership of
independent experts HCV Africa and Groupo Simples. These
independent organisations have ensured adherence to the
International Finance Corporation (IFC) Environmental and Social
Performance Standards has been achieved. The ESIA will provide a
framework against which Pensana will manage and monitor its ESG
performance at Longonjo. Once completed, this document will
be submitted to the Angolan government for mutual agreement.
As part of the resettlement action plan (RAP), mapping of all
land in the affected area has been completed. As a result, minor
changes have been made to the project boundary to minimise impact
on the local communities. This has been a key area of focus for the
team, and we are pleased to report, there will be zero displacement
of the local community from their physical residences.
Agreement with Equinor to recycle
end-of-life wind turbine nacelles using innovative Hydrogen
process
In January, it was announced that Pensana had signed a
cooperation agreement with leading energy provider, Equinor,
to form a working group to share technical and commercial
information to develop a low energy method for recycling of
end-of-life magnets at Saltend. The partnership with Equinor
supports Pensana’s commitment to the circular economy as it looks
to recycle an addressable annual market of 4,000 tonnes of
end-of-life permanent magnets.
Recycling permanent magnets utilising hydrogen not as fuel, but
as a reductant, whilst benefitting from the decarbonised power
supply within Saltend, offers a clean alternative using 88% less
energy than virgin magnet manufacture and aligns with
Pensana's continued efforts to produce a sustainable supply
chain for these critical materials. Equinor has submitted
plans for its ‘Hydrogen to Humber (H2H) Saltend’ hydrogen
production facility into phase two of the Government’s Cluster
Sequencing Process. The facility will be supported by the potential
supply of hydrogen to Pensana and other regional hydrogen users,
which could be a world first and a catalyst for the Humber to
achieve net zero.
Conflict in Ukraine
Russia’s invasion of Ukraine
has added increased concerns to an already constrained global
supply chain and rising inflationary pressures. The Group has no
direct exposure to the region, nor do we anticipate sourcing any
equipment or materials from the area, however we continue to
monitor the situation in the context of the contagion effect it is
having on Europe and the global
economy. The Board has agreed to incorporate specific
measures around procurement, the awarding of contracts and any
associated workstreams involving external third-party service
providers so as to ensure the Group is in no way exposed to
countries on the sanctions list.
Operating and Financial Review
During the period the consolidated entity incurred a
comprehensive loss for the period of $4,235,572 (31 December
2020: $1,717,491).
Administration expenses increased to $3,670,738 (31 December
2020: $2,010,316) as a result
of increases in PR fees, consultancy fees and increased employee
costs due to an increase in staff members driven by a ramp-up to
construction at Longonjo and Saltend.
The foreign currency exchange loss decreased from $621,652 to $410,
204 for the six months ended 31 December
2021. These losses arise from the settlement of invoices in
currencies other than the functional currencies (USD, GBP, AUD), as
well as the translation of balances denominated in currencies such
as the pound, Australian dollar, etc. to the US dollar rate where
the balances are held in currencies other than the functional
currency of the relevant company and reflect the movements in these
currencies during the respective periods.
Group net assets decreased in the period to $31,968,192 from $36,168,634. This was primarily driven by a
decrease in cash and cash equivalents of $12,251,234, as well as a decrease in trade and
other receivables of $3,449,092. These decreases were partially
offset by an increase in property, plant and equipment of
$11,216,164. The loss of
$4,080,914 incurred during the period
further contributed to the decrease in net assets.
The decrease in cash was due to cash spent on the Longonjo and
Saltend projects of $11,407,614.
Similarly, the increase in property, plant and equipment was the
result of the capitalisation to the Longonjo Project development
asset of $7,677,072, as well as the
capitalization of assets under construction at the Saltend facility
of $3,555,777.
The decrease in trade and other receivables was due to the
receipt of funds following the equity raise in FY21.
The Group experienced net cash outflows from operating
activities of $4,204,325
(31 December 2020: $1,971,930).
Net cash outflows from operating activities increased due to an
increase in operating losses. Net cash outflows from
investing activities of $11,407,586
increased from cash outflows of $3,172,186 at 31 December
2020 due to cash spent on the additions to the Longonjo and
Saltend projects as noted above. The decrease in the cash
inflows from financing activities from $8,576,685 for the six months ended 31 December 2020 to $3,360,677 for the six months ended31 December
2021 was due to the decrease in the proceeds from the issuance of
equity.
The Directors have prepared a cash flow forecast for the period
ended 30 June 2023. The forecast
indicates that whilst the Group has sufficient funding to meet its
corporate and general operating costs, the Group will require
additional funding over the next twelve months to meet its
committed and planned exploration and development expenditure
related to the Saltend and Longonjo Projects. Please refer note 3
to the financial statements for more detail on the going concern
statement.
Accordingly, the Directors have resolved to undertake certain
mitigating actions including actively engaging with institutional
investors and financing institutions in the United Kingdom and Europe to discuss opportunities around
potential future financing in anticipation of key project
investment milestones as part of the business plan being reached
and the associated funding requirements attached thereto. Such
additional funding will be required to meet the Group’s committed
and planned development expenditure across the forthcoming
year.
The ability of the Group to continue as a going concern is
dependent on securing such additional funding given its forecast
expenditure above. These conditions indicate a material uncertainty
which may cast significant doubt as to the Group’s ability to
continue as a going concern and therefore it may be unable to
realise its assets and discharge its liabilities in the normal
course of business.
Principal Business Risks
The Group is exposed to a number of risks and uncertainties
which could have a material impact on its long-term development,
and performance and management of these risks is an integral part
of the management of the Group. An overview of the key risks which
could affect the Group’s operational and financial performance was
included in the Company’s 2021 Annual Report, which can be accessed
at www.pensana.co.uk. These may impact the Group over the medium to
long term; however, the following key risks have been identified
which may impact the Group over the short term.
Financing and liquidity
The Company is of the opinion that the Group has sufficient cash
to meet its day to day corporate and operational working capital
requirements and currently committed exploration and development
expenditure, however post announcement of FEED and final investment
decision expected by Q3 FY 2022, the Group will furthermore need to
raise additional capital based on the forecasted exploration and
development expenditures costs related to rollout of the Longonjo
and Saltend projects and the Coola exploration. The Group has no
history of NdPr oxide production at its planned Saltend facility
nor mineral production at the Longonjo Project and accordingly has
no revenues from operations and negative cash flows and will
require additional future capital in the short term to continue its
exploration activities and to commence development of the Saltend
and Longonjo Project.
COVID-19 pandemic and Ukraine-Russia conflict
The outbreak of the COVID-19 pandemic has had an impact on the
Group’s businesses. The government lockdown in Angola led to a temporary suspension of work
at the Longonjo Project albeit that work has now resumed. Further
escalation of the COVID-19 pandemic, and the implementation of any
additional government-regulated restrictions which delays the Group
in carrying out its business activities at the Longonjo and Saltend
Projects (such as preparatory works) ultimately delays the Group’s
ability to reach production and start to generate cash and so could
have a material adverse impact on the Group’s operations and
financial results. Additionally, the recent Ukraine-Russia conflict has created increased
uncertainty and volatility in debt and equity markets alongside
increased inflationary pressures, supply chain constraints and
increased FX volatility which may make the requisite funding for
the Longonjo and Saltend Projects more difficult to secure or
affect the terms available.
Mr. Tim
George
Chief Executive Officer
29 March 2022
INDEPENDENT REVIEW REPORT TO PENSANA PLC
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended
31 December 2021 is not prepared, in
all material respects, in accordance with UK adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency
Rules of the United Kingdom’s Financial Conduct Authority.
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 31 December 2021
which comprises the condensed consolidated statement of
comprehensive income, condensed consolidated statement of financial
position, condensed consolidated statement of changes in equity,
the condensed consolidated statement of cash flows and the related
notes.
Basis for conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410, “Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity” (“ISRE (UK) 2410”). A review of interim financial
information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with
International Standards on Auditing (UK) and consequently does not
enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
As disclosed in note 3, the annual financial statements of the
group are prepared in accordance with UK adopted International
Financial Reporting Standards (IFRSs). The condensed set of
financial statements included in this half-yearly financial report
has been prepared in accordance with UK adopted International
Accounting Standard 34, “Interim Financial Reporting”.
Material uncertainty related to Going
Concern
We draw attention to note 3 to the half-yearly financial report
concerning the Group’s ability to continue as a going concern. The
matters explained in note 3 indicate that the Group will require
additional funding to meet its planned expenditures, that the
required capital has not been secured at the date of this report
and the availability of such funding is not guaranteed. As stated
in note 3, these conditions indicate the existence of a material
uncertainty which may cast significant doubt over the Group’s
ability to continue as a going concern. Our opinion is not modified
in respect of this matter.
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
conclusion section of this report, nothing has come to our
attention to suggest that the directors have inappropriately
adopted the going concern basis of accounting.
This conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410, however future events or conditions
may cause the group to cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom’s Financial Conduct
Authority.
In preparing the half-yearly financial report, the directors are
responsible for assessing the company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the
review of the financial information
In reviewing the half-yearly report, we are responsible for
expressing to the Company a conclusion on the condensed set of
financial statement in the half-yearly financial report. Our
conclusions, including our conclusions in the Material Uncertainty
related to Going Concern section, are based on procedures that are
less extensive than audit procedures, as described in the Basis for
Conclusion paragraph of this report.
Use of our report
Our report has been prepared in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the
Disclosure Guidance and Transparency Rules of the United Kingdom’s
Financial Conduct Authority and for no other purpose. No
person is entitled to rely on this report unless such a person is a
person entitled to rely upon this report by virtue of and for the
purpose of our terms of engagement or has been expressly authorised
to do so by our prior written consent. Save as above, we do
not accept responsibility for this report to any other person or
for any other purpose and we hereby expressly disclaim any and all
such liability.
BDO LLP
Chartered Accountants
London, UK
29 March 2022
BDO LLP is a limited liability partnership registered in
England and Wales (with registered number OC305127).
Condensed consolidated Statement of
Comprehensive Income
for the six months ended 31 December
2021
|
|
Unaudited
31 December 2021 |
Unaudited
31 December 2020 |
|
Note |
US$ |
US$ |
Administration
expenses |
5 |
(3,670,738) |
(2,010,316) |
Foreign currency
exchange loss |
|
(410,204) |
(621,652) |
Finance Income |
|
28 |
223 |
Loss before income
tax |
|
(4,080,914) |
(2,631,745) |
Income tax credit |
6 |
- |
- |
Total loss for the
period |
|
(4,080,914) |
(2,631,745) |
|
|
|
|
Other comprehensive
loss |
|
|
|
Items that may be
reclassified subsequently to profit or loss |
|
|
|
Foreign currency
translation |
|
(154,658) |
914,254 |
Total comprehensive
loss for the period |
|
(4,235,572) |
(1,717,491) |
|
|
|
|
Net loss for the
period is attributable to: |
|
|
|
Owners of Pensana
Plc |
|
(4,080,914) |
(2,631,745) |
|
|
|
|
Total comprehensive
loss is attributable to: |
|
|
|
Owners of Pensana
Plc |
|
(4,235,572) |
(1,717,491) |
|
|
|
|
Loss
per share attributable to owners of Pensana Plc: |
|
Basic (cents per
share) |
16 |
(1.82) |
(1.00) |
Diluted (cents per
share) |
16 |
(1.82) |
(1.00) |
Notes to the interim financial statements are included on pages
13 to 23.
Condensed consolidated Statement of
Financial Position
as at 31 December 2021
|
|
Unaudited
As at
31 December
2021 |
Audited
As at
30 June
2021 |
|
Note |
US$ |
US$ |
ASSETS |
|
|
|
NON-CURRENT
ASSETS |
|
|
|
Property, plant and
equipment |
9 |
29,723,932 |
18,507,768 |
Exploration and
evaluation expenditure |
10 |
135,453 |
132,040 |
TOTAL NON-CURRENT
ASSETS |
|
29,859,385 |
18,639,808 |
|
|
|
|
CURRENT
ASSETS |
|
|
|
Cash and cash
equivalents |
7 |
4,552,862 |
16,787,591 |
Trade and other
receivables |
8 |
1,920,915 |
5,370,007 |
TOTAL CURRENT
ASSETS |
|
6,473,777 |
22,157,598 |
|
|
|
|
TOTAL
ASSETS |
|
36,333,162 |
40,797,406 |
|
|
|
|
LIABILITIES |
|
|
|
CURRENT
LIABILITIES |
|
|
|
Trade and other
payables |
11 |
4,364,970 |
4,628,772 |
TOTAL CURRENT
LIABILITIES |
|
4,364,970 |
4,628,772 |
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES |
|
4,364,970 |
4,628,772 |
|
|
|
|
NET ASSETS |
|
31,968,192 |
36,168,634 |
EQUITY |
|
|
|
Issued
capital |
12 |
280,413 |
279,398 |
Share premium |
|
34,278,655 |
34,195,957 |
Reserves |
|
51,331,279 |
51,534,520 |
Accumulated
losses |
|
(53,922,155) |
(49,841,241) |
TOTAL
EQUITY |
|
31,968,192 |
36,168,634 |
Notes to the interim financial statements are included on pages
13 to 23.
Condensed consolidated Statement of
Changes in Equity for the six months ended 31 December 2021
|
Fully paid ordinary
shares |
Share
premium |
Shares
to be issued
Reserve |
Accumulated Losses |
Merger Reserve |
Unaudited |
US$ |
US$ |
US$ |
US$ |
US$ |
Balance at 1 July
2021 |
279,398 |
34,195,957 |
- |
(49,841,241) |
45,748,045 |
Loss for the
period |
- |
- |
- |
(4,080,914) |
|
Other
comprehensive
income |
- |
- |
- |
- |
- |
Total
comprehensive
loss for the period |
- |
- |
- |
(4,080,914) |
- |
Issue of
shares (note
12) |
1,015 |
82,698 |
- |
- |
- |
Share based payments
(note 15) |
- |
- |
- |
- |
- |
Balance at 31
December 2021 |
280,413 |
34,278,655 |
- |
(53,922,155) |
45,748,045 |
|
Foreign
Currency Reserve |
Share
based Payments
Reserve |
Equity Reserve |
Total |
Unaudited |
US$ |
US$ |
US$ |
US$ |
Balance at 1 July
2021 |
422,678 |
5,863,797 |
(500,000) |
36,168,634 |
Loss for the
period |
|
- |
- |
(4,080,914) |
Other
comprehensive
income |
(154,658) |
- |
- |
(154,658) |
Total
comprehensive
loss for the period |
(154,658) |
- |
- |
(4,235,572) |
Issue of
shares (note
12) |
- |
(83,713) |
- |
- |
Share based payments
(note 15) |
- |
35,130 |
- |
35,130 |
Balance at 31
December 2021 |
268,020 |
5,815,214 |
(500,000) |
31,968,192 |
|
Fully paid ordinary
shares |
Share
premium |
Shares
to
be issued Reserve |
Accumulated Losses |
Merger Reserve |
|
US$ |
US$ |
US$ |
US$ |
US$ |
Unaudited |
|
|
|
|
|
Balance at 1 July
2020 |
221 945 |
3,116,850 |
3,300,560 |
(40,470,379) |
45,748,045 |
Loss for the
period |
- |
- |
- |
(2,631,745) |
- |
Other comprehensive
income |
- |
- |
- |
- |
- |
Total
comprehensive loss |
- |
- |
- |
(2,631,745) |
- |
Issue of shares (note
12) |
39,541 |
11,954,334 |
(3,330,560) |
- |
- |
Cost of issuing
shares |
|
(116,620) |
- |
- |
- |
Share
based payments (note
15) |
- |
- |
- |
- |
- |
Issue of shares –
conversion of performance rights |
654 |
62,922 |
- |
- |
- |
Balance at 31
December 2020 |
262,140 |
15,017,486 |
- |
(43,102,124) |
45,748,045 |
|
Foreign
Currency Reserve |
Share
based Payments
Reserve |
Equity Reserve |
Total |
|
US$ |
US$ |
US$ |
US$ |
Unaudited |
|
|
|
|
Balance at 1 July
2020 |
(2,032,999) |
5,477,162 |
(500,000) |
14,861,184 |
Loss for the
period |
- |
- |
- |
(2,631,745) |
Other comprehensive
income |
914,254 |
- |
- |
914,254 |
Total
comprehensive loss |
914,254 |
- |
- |
(1,717,491) |
Issue of shares (note
12) |
- |
- |
- |
8,693,305 |
Cost of issuing
shares |
- |
- |
- |
(116,620) |
Share
based payments (note
15) |
- |
350,797 |
- |
350,797 |
Issue of shares –
conversion of performance rights |
- |
(63,576) |
- |
- |
Balance at 31
December 2020 |
(1,118,745) |
5,764,383 |
(500,000) |
22,071,185 |
Notes to the interim financial statements are included on pages
13 to 23.
Condensed consolidated Statement of
Cash Flows
for the six months ended 31 December
2021
|
|
Unaudited
31 December 2021 |
Unaudited
31 December 2020 |
|
Note |
US$ |
US$ |
Cash flows from
operating activities |
|
|
|
Operating cash
flows |
18 |
(4,204,325) |
(1,971,930) |
Net cash used in
operating activities |
|
(4,204,325) |
(1,971,930) |
|
|
|
|
Cash flows from
investing activities |
|
|
|
Interest received |
|
28 |
223 |
Payments for
exploration expenditure |
|
(3,413) |
(3,172,409) |
Additions to property,
plant and equipment |
|
(11,404,201) |
- |
Net cash used in
investing activities |
|
(11,407,586) |
(3,172,186) |
|
|
|
|
Cash flows from
financing activities |
|
|
|
Proceeds from issues
of equity securities |
|
3,360,677 |
8,693,305 |
Share issue costs |
|
- |
(116,620) |
Net cash provided
by financing activities |
|
3,360,677 |
8,576,685 |
|
|
|
|
Net (decrease)/
increase in cash and cash equivalents |
|
(12,251,234) |
3,432,569 |
|
|
|
|
Cash and cash
equivalents at 1 July |
|
16,787,591 |
4,106,321 |
Effects of exchange
rate changes on the balance of cash held in foreign currencies |
|
16,505 |
13,851 |
Cash and cash
equivalents at the end of the period |
7 |
4,552,862 |
7,552,741 |
Notes to the interim financial statements are included on pages
13 to 23.
Notes to the financial statements
1. General information
The consolidated financial statements present the financial
information of Pensana Plc and its subsidiary (collectively, the
Group) for the six months ended 31 December
2021 in United States
dollars (USD or $). Pensana Plc (the Company or the parent) is a
public company limited by shares listed on the Main Market of the
London Stock Exchange and incorporated in England & Wales on 13 September
2019. The registered office is located at 100 Pall Mall, St
James, London, United Kingdom,
SW1Y 5NQ.
The Company is focussed on the establishment of an integrated
rare earth processing facility in the UK with a view to creating
the world’s first sustainable magnet metal supply chain.
In early 2020, Pensana Metals Ltd re-domiciled the group to the
United Kingdom pursuant to a
scheme of arrangement in which Pensana Metals Ltd became a wholly
owned subsidiary of Pensana Plc. Prior to the transaction the
Company was incorporated on 13 September
2019 and was a wholly owned subsidiary of Pensana Metals
Ltd.
The Board of Pensana Plc resolved to restructure the group to
remove redundant holding companies and streamline the group
structure. As part of this restructuring process the shares in the
wholly owned subsidiaries, Sable Minerals GmbH and Sable Rare
Earths GmbH were acquired directly by Pensana Rare Earths Plc and
it is anticipated that additional dormant entities in Tanzania and Australia will be liquidated during the next 6
months.
2. New accounting standards and interpretations
(a) Changes in accounting
policies and disclosures
From 1 July 2021, the Group has
adopted the following Standards and Interpretations, mandatory for
annual periods beginning on 1 July
2021.
Standard |
Description |
Effective date |
Amendments to IFRS 16 |
Amendments to IFRS 16: Covid-19 –
Related Rent Concessions |
1 April 2021 |
Amendments to IFRS 4 |
Amendments to IFRS 4 Insurance
Contracts – deferral of IFRS 9 |
1 January 2021 |
Improvements to IFRSs’ |
Amendments to IFRS 9, IAS 39, IFRS
7, IFRS 4 and IFRS 16: Interest Rate Benchmark Reform – Phase
2 |
1 January 2021 |
The application of these standards have not had a material
impact on the financial statements.
(b) Accounting standards and
interpretations issued but not yet effective:
The Group has elected not to early adopt the following revised
and amended standards.
Standard |
Description |
Effective date |
IFRS 17 |
IFRS 17 Insurance contracts |
1 January 2023 |
Amendment to IFRS 17 |
Amendment to IFRS 17 – Initial
application |
1 January 2023 |
IAS 16 |
Amendments to IAS 16 ‘Property,
plant and equipment’ |
1 January 2022 |
IAS 37 |
Amendments to IAS 37 ‘Provisions,
contingent liabilities and contingent assets’ |
1 January 2022 |
IFRS 3 |
Amendments to IFRS 3 ‘Business
Combinations’ |
1 January 2022 |
Improvements to IFRSs’ |
Improvements to IFRS1, IFRS 9, IFRS
16 and IAS 41 |
1 June 2022 |
Amendments to IAS 8 |
Amendments to IAS 8: Definition of
accounting estimates |
1 January 2023 |
Amendments to IAS 1 and IFRS
Practise Statement 2 |
Amendments to IAS 1 and IFRS
Practise Statement 2 – Disclosure of accounting policies |
1 January 2023 |
Amendments to IAS 12 |
Amendments to IAS 12: Deferred tax
related to assets and liabilities from a single transaction |
1 January 2023 |
Amendment to IAS 1 |
Amendments to IAS 1: Classification
of liabilities as current or non-current |
1 January 2023 |
Management has reviewed and considered these new standards and
interpretations and none of these are expected to have a material
effect on the reported results or financial position of the
Group.
3. Significant accounting policies and Going Concern
Basis of preparation
The interim results, which are unaudited, have been prepared in
accordance with the requirements of International Accounting
Standard 34. This condensed interim report does not include all the
notes of the type normally included in an annual financial report.
This condensed report is to be read in conjunction with the Annual
Report for the year ended 30 June
2021, and any public announcements made by the Group during
the interim reporting period. The comparative financial information
for the year ended 30 June 2021 in
this interim report does not constitute statutory accounts for that
year. The statutory accounts for 30 June
2021 have been delivered to the Registrar of Companies.
The auditors' report on those accounts was unqualified but drew
attention to a material uncertainty in relation to going concern.
It did not contain a statement under 498(2) or 498(3) of the
Companies Act 2006. The financial report for the six months
ended 31 December 2021 was prepared
in accordance with the annual financial statements of the group are
prepared in accordance with UK adopted International Financial
Reporting Standards (IFRSs).
The accounting policies applied in this condensed interim report
are consistent with the polices applied in the annual financial
report for the year ended 30 June
2021 unless otherwise noted.
As disclosed in the 30 June 2021
Annual Report the Company was incorporated on 13 September 2019 as a wholly owned subsidiary of
Pensana Metals Ltd. The Company subsequently acquired 100% of the
share capital of Pensana Metals and its subsidiary companies for
the effective issuance of 152,973,315 shares to the shareholders of
Pensana Metals Ltd further to the scheme of arrangement approved on
22 January 2020 and completed on
5 February 2020.
The shares issued to the former shareholders of Pensana Metals
Ltd comprised the 50,000,000 shares with a nominal value of £0.001
per share subscribed on incorporation of the Company by Pensana
Metals Ltd which were transferred to CHESS Depositary Nominees Pty
Ltd (a subsidiary of the ASX) for use in the scheme of arrangement
and 102,973,314 shares with a nominal value of £0.001 per share
additionally issued by the Company to CHESS Depositary Nominees Pty
Ltd for use in the scheme of arrangement. CHESS Depositary Nominees
Ltd subsequently issued CHESS Depositary Instruments in proportion
to the interests the former shareholders of Pensana Metals held in
that company for trading on the ASX with 152,973,315 CHESS
Depositary Instruments issued for trading. The transaction
represented a group reconstruction and common control
transaction.
The accounting for common control transactions is scoped out of
IFRS 3 and, accordingly the Group has developed an accounting
policy with reference to methods applied in alternative GAAPs
(Generally Accepted Accounting Principles). Consequently, the
consolidated financial statements are presented as if the Company
has always been the holding Company for the Group and the Group has
elected to apply merger accounting principles. Under this policy,
the Company and its subsidiaries are treated as if they had always
been a Group.
The results are included from the date the subsidiaries joined
the Group and the comparatives reflect the results of the Company
and its subsidiaries. No fair value adjustments occur as a result
of the transaction and the assets and liabilities are incorporated
at their predecessor carrying values.
The consolidated financial statements are presented in
United States Dollars (US$)
rounded to the nearest dollar.
The policies have been consistently applied to all the years
presented, unless otherwise stated.
Going Concern
The consolidated financial statements have been prepared on a
going concern basis with the Directors of the opinion that the
Group can meet its obligations as and when they fall due.
At 31 December 2021 the Group has
a net asset position of $31,968,192
(30 June 2021: $36,168,634) including cash and cash equivalents
of $4,552,862 (30 June 2021: $16,787,591), had incurred a loss after income
tax of $4,080,914 (Six months ended
31 December 2021: $2,631,745) and experienced cumulative net cash
outflows from operating and investing activities of $15,440,748 (Six months ended 31 December 2020: $5,144,116).
The Directors have prepared a cashflow forecast for a period of
at least twelve months from the date of this report. In assessing
the going concern basis of preparation, the Directors have given
consideration to the principal risks and uncertainties facing the
business, including specific consideration of the impact of
COVID-19 in terms of the availability of funding and progression of
the Longonjo NdPr Project in Angola and the Saltend Project in the UK.
Similarly, the Directors have also considered the impact of the
Russia-Ukraine war as it relates to costs and the
potential volatility in debt and equity markets. Conversely,
the demand for clean energy rises at such times, sparking increases
in prices of rare earth metals.
The forecasts demonstrate that the Group has sufficient cash to
meet its day to day corporate and operational working capital
requirements and currently committed exploration and development
expenditure, however post announcement of FEED and final investment
decision expected by Q3 FY 2022, the Group will furthermore need to
raise additional capital based on the forecasted exploration and
development expenditures costs related to rollout of the Longonjo
and Saltend projects and the Coola exploration.
The Directors have therefore considered mitigating actions and
are confident of being able to raise the required capital through
either debt or equity financing (or combination thereof) during the
12-month period and have engaged ABG Sundal Collier (ABGSC), a
leading Nordic investment bank headquartered in Oslo, Norway, to progress the debt financing.
Furthermore, the Company’s expression of interest in the UK
Government’s up to £1bn Automotive Transformation Fund (“ATF”) has
been received positively by the programme board. The application
for grant or other forms of financial support is currently under
Government review, however the Company does not have any indication
on the timing of any potential award.
Despite the ongoing engagements, the directors note that the
required capital has not been secured at the date of this report
and the availability of such funding is not guaranteed. These
circumstances indicate the existence of a material uncertainty
which may cast significant doubt about the Group’s ability to
continue as a going concern and therefore it may be unable to
realise its assets and discharge its liabilities in the normal
course of business. The financial statements do not include
the adjustments that would result if the Group was unable to
continue as a going concern.
Critical
accounting judgements and key sources of estimation uncertainty
In applying the Group’s accounting policies management
continually evaluates judgements, estimates and assumptions based
on experience and other factors, including expectations of future
events that may have an impact on the Group. All judgments,
estimates and assumptions made are believed to be reasonable based
on the most current set of circumstances available to management.
Actual results may differ from the judgements, estimates and
assumptions.
Significant judgements, estimates and assumptions made by
management in the preparation of these financial statements are
outlined below:
(i)
Significant accounting judgements
Impairment of assessment of
development assets (note 9), the impairment of assessment of
exploration and evaluation expenditure (note 9), as well as the
impairment of assessment of assets under construction (note 9)
The ultimate recovery of the value of the Group’s development
assets and assets under construction as at 31 December 2021, as well as the ultimate
recovery of the value of the Group’s exploration and evaluation
assets as at 31 December 2021 and
31 December 2020, are dependent on
the successful development and commercial exploitation, or
alternatively, sale, of the Longonjo Project, as well as the
successful development and commercial exploitation of the Saltend
facility.
31 December 2021
Judgment was exercised in assessing the extent to which
impairment indicators existed at 31 December
2021 in respect of the Longonjo Project and associated
balances, as well as the Saltend project. In forming this
assessment, internal and external factors were evaluated.
Management determined that no impairment indicators existed having
considered the Company’s market capitalisation relative to the
Group’s net asset value, the progression of the Longonjo Project
and associated Competent Person’s Report, financial Life of
Mine Plan, studies and Bankable
Feasibility Study equivalent assessments. The underlying
financial Life of Mine Plan involves
estimates regarding commodity prices, production and reserves,
operating costs and capital development together with discount
rates.
31 December 2020
Management considered whether there are indicators as to whether
the asset carrying values for exploration and evaluation assets
exceed their recoverable amounts. This consideration included
assessment of the following:
- expiration of the period for which the entity has the right to
explore in the specific area of interest with no plans for
renewal;
- whether substantive expenditure on further exploration for and
evaluation of mineral resources in the specific area is neither
budgeted nor planned;
- exploration for and evaluation activities have not led to the
discovery of commercially viable quantities of mineral resources
and the entity has decided to discontinue such activities in the
specific area; and
- whether sufficient data exists to indicate that, although a
development in the specific area is likely to proceed, the carrying
amount of the exploration and evaluation asset is unlikely to be
recovered in full from successful development or by sale.
Management judgement is required to determine whether the
expenditures which are capitalised as exploration and evaluation
assets will be recovered by future exploitation or sale or whether
they should be impaired. In assessing this, management determines
the possibility of finding recoverable ore reserves related to a
particular area of interest, which is a subject to significant
uncertainties. Many of the factors, judgements and variables
involved in measuring resources are beyond the Group’s control and
may prove to be incorrect over time. Subsequent changes in
resources could impact the carrying value of exploration and
evaluation assets.
Based on the information the Company has on the above, it was
concluded by management that no impairment indicator existed at
31 December 2020 for the exploration
and evaluation assets. In forming this assessment, the
Directors exercised judgement and considered the results of ongoing
exploration work, the significant increase in demand for NdPr and
associated pricing, the implied valuations provided by the equity
placings in the period, the progression in the Business Plan
towards project start up and the resource statement.
Recoverability of equity receivable
(note 8)
Management’s judgement is required to determine whether the
outstanding equity receivable at period end is recoverable.
Management is comfortable that the structured repayment plan, that
includes secured collateralisation in excess of the outstanding
receivable adequately covers the outstanding receivable and that no
further provision thereon is required. Refer to note 8 for
further details.
(ii)
Significant accounting estimates and assumptions
Share-based payment transactions
(note 15).
The Group measures the cost of equity-settled transactions with
directors and others by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value
is determined using a Binomial model and requires estimates for
inputs such as share price volatility. The share-based payments
arrangements are expensed on a straight-line basis over the vesting
period, based on the Group’s estimate of shares that will
eventually vest. At each reporting date, vesting assumptions are
reviewed to ensure they reflect current expectations and
immediately recognises any impact of the revision to original
estimates. Judgment is required as to the likelihood of the vesting
conditions being met, such as project milestones being achieved if
fully vested share options are not exercised and expire then the
accumulated expense in respect of these is reclassified to
accumulated losses.
4. Operating Segments
Description of
segments
The Group has identified its operating segments based on the
internal reports that are used by the chief operating decision
makers in assessing performance and determining the allocation of
resources.
The Group has identified that it has two operating segments
being related to the activities in Angola and Saltend (UK), on the basis that the
assets in Tanzania were fully
impaired at 30 June 2021. The unallocated relates to
operations in Australia and
Portugal.
2021
|
|
Angola |
UK |
Unallocated |
Total |
As at 31 December
2021 |
|
US
$ |
US
$ |
US
$ |
US
$ |
Non-current
assets |
|
21,682,389 |
3,716,490 |
4,460,506 |
29,859,385 |
Current and
non-current liabilities |
|
26,055 |
1,397,095 |
2,941,820 |
4,364,970 |
|
|
|
|
|
|
Six months ended 31
December 2021 |
|
|
|
|
|
Operating Loss |
|
(2,894,202) |
(3,242,001) |
2,055,261 |
(4,080,942) |
Loss before tax |
|
(2,894,202) |
(3,242,001) |
2,055,289 |
(4,080,914) |
Loss for the
period |
|
(2,894,202) |
(3,242,001) |
2,055,289 |
(4,080,914) |
2020
|
|
Angola |
UK |
Unallocated |
Total |
|
|
US
$ |
US
$ |
US
$ |
US
$ |
As at 30 June
2021 |
|
|
|
|
|
Non-current
assets |
|
18,473,893 |
162,330 |
3,585 |
18,639,808 |
Current and
non-current liabilities |
|
51,980 |
1,514,687 |
3,062,105 |
4,628,772 |
|
|
|
|
|
|
Six months ended 31
December 2020 |
|
|
|
|
|
Operating Loss |
|
- |
(2,346,411) |
(285,557) |
(2,631,968) |
Loss before tax |
|
- |
(2,346,411) |
(285,334) |
(2,631,745) |
Loss for the year |
|
- |
(2,346,411) |
(285,334) |
(2,631,745) |
Non-current assets consist mainly of development assets and
assets under construction. Additions and depreciation to
non-current assets are disclosed in note 9.
5. Other Expenses
|
|
|
|
Six
months ended 31 December
2021
US $ |
Six
months ended 31 December
2020
US $ |
Administration
expenses: |
|
|
|
|
|
General administration
costs |
|
|
|
1,076,237 |
799,932 |
Audit fees |
|
|
|
138,205 |
130,507 |
Consultant Fees |
|
|
|
449,972 |
19,430 |
Travel expenses |
|
|
|
100,579 |
1,825 |
Legal fees |
|
|
|
133,433 |
91,068 |
|
|
|
|
|
|
Operating lease
rental expenses: |
|
|
|
|
|
Lease payments (short
life leases) |
|
|
|
45,795 |
23,036 |
|
|
|
|
|
|
Depreciation on
non-current assets: |
|
|
|
|
|
Property, plant and
equipment |
|
|
|
16,682 |
- |
|
|
|
|
|
|
Employee Benefits |
|
|
|
2021
US $ |
2020
US $ |
Performance rights and
options granted to directors, officers and employees |
|
|
|
35,130 |
350,797 |
Directors’ fees,
superannuation and salaries & wages |
|
|
|
1,674,705 |
593,721 |
Total
Administration expenses |
|
|
|
3,670,738 |
2,010,316 |
Foreign currency
exchange gains/losses:
Foreign exchange loss of $410,204
(2020: $621,652 loss) comprises
realised foreign exchange movements on retranslation of monetary
balances and unrealised foreign exchange movements on intercompany
loans which are considered repayable in the foreseeable future.
6. Income Taxes
|
|
|
|
Consolidated |
|
|
|
|
2021
US $ |
2020
US $ |
Current
taxation |
|
|
|
|
|
Current tax charge/
(credit) |
|
|
|
- |
- |
No Liability to corporation tax arose
in ordinary activities for the half year ending 31 December 2021 or 31
December 2020.
The tax assessed for the year the
standard rate of tax in the UK of 19% (2020: 19%).
Tax rate reconciliation:
|
|
|
|
Consolidated |
|
|
|
|
Six
months ended 31 December
2021
US $ |
Six
months ended 31 December
2020
US $ |
Loss from continuing
operations before tax |
|
|
|
(4,080,914) |
(2,631,745) |
|
|
|
|
|
|
Loss on continuing
activities multiplied by the rate of corporation tax in the UK of
19% (2020:19%) |
|
|
|
(775,374) |
(500,032) |
|
|
|
|
|
|
Tax effects of: |
|
|
|
|
|
Different tax rates in
overseas jurisdictions |
|
|
|
(681,057) |
(130,849) |
Permanent
differences |
|
|
|
(664,276) |
(160,116) |
Deferred tax assets
not recognised |
|
|
|
2,120,707 |
790,997 |
Total tax
credit |
|
|
|
- |
- |
|
|
|
|
|
|
7. Cash and Cash Equivalents
|
|
|
|
|
Consolidated |
|
|
|
|
|
As at
31 December
2021 |
As at
30 June
2021 |
|
|
|
|
|
US$ |
US$ |
|
|
|
|
|
|
|
Cash at bank and on
hand |
|
|
|
|
4,552,862 |
16,787,591 |
|
|
|
|
|
4,552,862 |
16,787,591 |
8. Trade and Other Receivables
|
|
|
|
|
Consolidated |
|
|
|
|
|
As at
31 December
2021 |
As at
30June
2021 |
|
|
|
|
|
US$ |
US$ |
|
|
|
|
|
|
|
Other debtors |
|
|
|
|
1,920,915 |
5,370,007 |
|
|
|
|
|
1,920,915 |
5,370,007 |
Of the other debtors as at 31 December
2021, $1,350,834 related to
payment pending as part of the equity raise completed on
25 June 2021. Management are
comfortable that the structured repayment plan, that includes
secured collateralisation in excess of the outstanding receivable
adequately covers the outstanding receivable and that no further
provision thereon is required.
9. Property, plant and equipment
|
Buildings |
Plant
and equipment |
Development
asset |
Assets under
construction1 |
Motor
vehicles |
Office
equipment |
Computer
equipment |
Total |
|
US$ |
US$ |
US$ |
US$ |
US$ |
US$ |
US$ |
US$ |
|
|
|
|
|
|
|
|
|
Cost |
|
|
|
|
|
|
|
|
Balance at 1 July
2021 |
6,199 |
10,204 |
18,400,076 |
65,728 |
54,507 |
6,080 |
30,611 |
18,573,405 |
Additions |
17,158 |
7,158 |
7,607,366 |
3,551,221 |
41,792 |
1,245 |
6,906 |
11,232,846 |
Balance at 31
December 2021 |
23,357 |
17,362 |
26,007,442 |
3,616,949 |
96,299 |
7,325 |
37,517 |
29,806,251 |
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
- |
- |
|
|
|
|
Balance at 1 July
2021 |
1,807 |
1,407 |
- |
- |
40,653 |
1,400 |
20,370 |
65,637 |
Charge for the
year |
541 |
1,577 |
- |
- |
10,490 |
351 |
3,723 |
16,682 |
Disposals |
- |
- |
- |
- |
- |
- |
- |
- |
Balance at 31
December 2021 |
2,348 |
2,984 |
- |
- |
51,143 |
1,751 |
24,093 |
82,319 |
|
|
|
|
|
|
|
|
|
Net Book
Value |
|
|
|
|
|
|
|
|
At 30 June 2021 |
4,392 |
8,797 |
18,400,076 |
65,728 |
13,854 |
4,680 |
10,241 |
18,507,768 |
At 31 December
2021 |
21,009 |
14,378 |
26,007,442 |
3,616,949 |
45,156 |
5,574 |
13,424 |
29,723,932 |
- Assets under construction relate to Saltend
10. Exploration and Evaluation Expenditure
|
|
As at
31 December
2021
US$ |
As
at
30 June
2021
US$ |
|
|
|
|
Carrying value: |
|
|
|
Balance at beginning
of the period |
|
132,040 |
9,600,234 |
Additions |
|
3,413 |
8,931,882 |
Transfers from asset
held for sale |
|
- |
2,500,000 |
Impairment of
asset |
|
- |
(2,500,000) |
Transfer to Longonjo
development asset |
|
|
(18,400,076) |
Balance at end of the
period |
|
135,453 |
132,040 |
The above amounts represent capitalised costs of exploration
carried forward as an asset in accordance with the accounting
policies set out in the annual report. The ultimate recoupment of
the exploration and evaluation expenditure in respect to the areas
of interest carried forward is dependent upon the discovery of
commercially viable reserves and the successful development and
exploitation of the respective areas or alternatively the sale of
the underlying areas of interest for at least their carrying
value.
11. Trade and Other Payables
|
|
As at
31 December
2021
$ |
As at
30 June
2020
$ |
|
|
|
|
Trade and other
payables |
|
3,279,620 |
2,988,864 |
Accrued expenses |
|
1,085,350 |
1,639,908 |
|
|
4,364,970 |
4,628,772 |
12. Issued Capital
|
2021
No. |
2021
US$ |
2020
No. |
2020
US$ |
Fully paid ordinary shares |
|
|
|
|
Balance at 1 July |
216,145,822 |
279,398 |
171,766,032 |
221,945 |
Share Placement |
- |
- |
16,508,633 |
20,342 |
Shares issued in lieu of fees |
- |
- |
821,157 |
1,728 |
Shares issued - conversion of
performance rights |
7,108,037 |
1,015 |
500,000 |
654 |
Share Placement |
- |
- |
13,500,000 |
17,471 |
Balance at 31 December |
223,253,859 |
280,413 |
203,095,822 |
262,140 |
|
|
|
|
|
Shares not yet issued |
|
|
- |
- |
Placements during
2021 and 2020:
On 1 July 2020 the Company issued
16,508,633 fully paid ordinary shares to the Angolan Sovereign
Wealth fund (“ASF”). This was the balance of the shares to be
allotted out of a total of 25,808,633 fully paid ordinary shares
that formed part of their second equity placing in the Company of
$ 5million as announced on
11 June 2020.
On 11 August 2020, the Company
announced the conversion of 500,000 zero cost performance rights
into fully paid ordinary shares on Listing on the London Stock
Exchange.
On 11 August 2020, the Company
issued 821,157 fully paid ordinary shares to third party service
providers at a price of A$0.33 per
share, for a total of $0.2
million.
On 25 September 2020 the Group
raised an additional $8.6 million
(net of share issuance costs) via the placing of 13,500,000 fully
paid ordinary shares with the ASF.
On 4 January 2021, the Company
issued 550,000 fully paid ordinary shares (of which 250,000 were
related to share options, and 300,000 to third party service
providers at a price of £0.50 per share, for a total of
$0.2 million.
On 25 June 2021, the Group raised
circa $21.1 million (net of share
issuance costs) via the placing of 12,500,000 fully paid ordinary
shares to long term shareholders, the ASF and Chairman Paul Atherley.
On 6 July 2021 7,108,037 shares
related to share awards were issued to executive management.
Share options on
issue
During the period, 500,000 options expired. As at 31 December 2021, there are 1,500,000 shares
under option.
Performance rights
on issue
There are no performance rights outstanding as at period
end.
13. Commitments for Expenditure
The Group has certain obligations to perform exploration work
and expend minimum amounts of money on mineral exploration
tenements.
No provision has been made in the accounts for minimum
expenditure requirements in respect of tenements.
- Exploration Commitments
Commitments for payments under exploration permits and mineral
leases in existence at the reporting date but not recognised as
liabilities payable are as follows:
|
|
As at
31 December 2021
$ |
As at
31 December
2020
$ |
Exploration and evaluation
expenditure |
|
|
|
Not longer than 1
year |
|
650,000 |
655,200 |
Longer than 1 year and not longer
than 5 years |
|
4,350,000 |
4,344,800 |
Longer than 5 years |
|
- |
- |
|
|
5,000,000 |
5,000,000 |
14. Contingent Liabilities and Contingent Assets
The Directors are not aware of any other contingent liabilities
or contingent assets that are likely to have a material effect on
the results of the Group as disclosed in these financial
statements.
15. Share-based Payments
Half year ended
31 December 2021
During the period, 7,108,037 shares were issued. These
related to the vesting of executive share awards. In addition
750,000, of the outstanding 2,250,000 legacy awards vested during
the Period and amount of $16,179 was
charged to the statement of comprehensive income.
Half year ended
31 December 2020
During the prior period, no performance rights were issued.
$350,797 was charged to the statement
of comprehensive income in respect of existing performance rights.
As at 31 December 2020 there were
10,358,037 performance rights on issue. During the prior
period, 500,000 performance rights were converted to ordinary
shares on the successful listing on the London Stock Exchange.
During the prior period, no options were issued. No amount was
charged to the statement of comprehensive income in respect of
existing options. As at 31 December
2020 there are were no options on issue.
Reconciliation of
options outstanding
The following reconciles outstanding share options provided as
share-based payments at the beginning and end of the financial
period:
|
|
Half year ended
31 December 2021 |
|
Half year ended
31 December 2020 |
|
|
Number of
options |
Weighted average
exercise price |
|
Number of
options |
Weighted average
exercise price |
Balance at beginning of the
financial year |
|
2,750,000 |
- |
|
250,000 |
$0.226 |
|
|
|
|
|
- |
- |
Vested during the financial
period |
|
(750,000) |
$0.001 |
|
|
|
Expired during the financial
period |
|
(500,000) |
$0.001 |
|
- |
- |
Exercised during the financial
period |
|
- |
- |
|
(250,000) |
$0.226 |
|
|
|
|
|
|
|
Balance at end of the financial
period |
|
1,500,000 |
- |
|
- |
- |
16. Loss per share
|
|
2021
cents per share |
2020
cents per share |
Basic loss per
share |
|
|
|
From continuing
operations |
|
1.82 |
1.00 |
Total basic loss per
share |
|
1.82 |
1.00 |
Diluted loss per
share |
|
|
|
From continuing
operations |
|
1.82 |
1.00 |
Total diluted loss per
share |
|
1.82 |
1.00 |
Basic loss per
share
The net loss and weighted average number of ordinary shares used
in the calculation of basic loss per share are as follows:
|
|
Unaudited
As at
31 December 2021
US$ |
Unaudited
As at
31 December
2020
US$ |
Net loss |
|
(4,080,914) |
(2,631,745) |
|
Losses used in the
calculation of basic loss per share from continuing operations |
|
(4,080,914) |
(2,631,745) |
|
Losses used in the
calculation of diluted loss per share attributable to ordinary
shareholders |
|
(4,080,914) |
(2,631,745) |
|
|
|
As
at
31 December 2021
No. |
As
at
31 December
2020
No. |
Weighted average
number of ordinary shares for the purposes of calculating basic
loss per share and diluted loss per share |
|
223,253,859 |
195,710,638 |
1,500,000 options (31 December
2020: nil) and nil performance rights (31 December 2020: 10,358,037) have not been
included in the diluted earnings per share, as they were
anti-dilutive in the current and prior period.
17. Related party transactions
Transactions with
Key Management Personnel and Related Parties
No reportable related party transactions occurred during the
period under review.
18. Notes to the Consolidated Statement of Cashflows
Reconciliation of loss for the period
to net cash flows from operating activities
|
|
Half
year ended
31 December 2021
US$ |
Half year ended
31 December 2020
US$ |
|
|
|
|
Net
loss |
|
(4,080,914) |
(2,631,745) |
Add/less
non-cash items |
|
|
|
Depreciation |
|
16,682 |
- |
Share based
payments |
|
35,130 |
350,797 |
Unrealised FX
loss |
|
410,204 |
621,652 |
Changes in Trade and
other receivables |
|
88,415 |
(78,331) |
Changes in Trade and
other payables |
|
(673,842) |
(234,303) |
Net cash used in
operating activities |
|
(4,204,325) |
(1,971,930) |
19. Subsequent events
Post period end the Group completed a £10 million Placement to
M&G Investment Management (“M&G) by way of a placement of
12,345,680 new ordinary shares of £0.001 each in the capital of the
Company at a price of 81 pence per
share. Following the admission of the ordinary shares to
trading M&G had an interest in approximately 5% of the
Company’s enlarged issued share capital.
No other matters or circumstances have arisen since 31 December 2021 that have significantly
affected, or may significantly affect:
- The Group’s operations in future financial years; or
- The results of those operations in future financial
years; or
- The Group’s state of affairs in future financial
years.
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge: a. the Condensed
Financial Statements have been prepared in accordance with IAS 34
Interim Financial Reporting and give a true and fair view of the
assets, liabilities, financial position and profit of the Group;
and a. the Interim Management Report includes a fair review of the
information required by FCA’s Disclosure and Transparency Rules
(DTR 4.2.7 R and 4.2.8 R).
By order of the Board
Mr Paul
Atherley
29 March 2022