TIDMEUA
RNS Number : 5471Q
Eurasia Mining PLC
29 June 2022
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REGULATIONS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN
REGULATION NO. 596/2014 (AS IT FORMS PART OF RETAINED EU LAW AS
DEFINED IN THE EUROPEAN UNION (WITHDRAWAL) ACT 2018) AND IS IN
ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 7 OF THAT
REGULATION.
29 June 2022
EURASIA MINING PLC
("Eurasia" or "the Company")
Annual Results and Notice of AGM
Eurasia Mining Plc ("Eurasia" or the "Company"), the palladium,
platinum, rhodium, iridium and gold producing company today reports
its audited financial results and operational summary (the "Annual
Report") as well as a notification of the Annual General Meeting
(the "AGM"), to be held on 28 July 2022, at 9am Etc.venues , 8
Eastcheap, London, EC3M 1AE , and virtually via an electronic
meeting platform , more details can be found in the complete notice
of AGM below.
Christian Schaffalitzky, Executive Chairman commented: "We are
pleased to provide our annual report and accounts for 2021, an
important year in the Company's development. We welcome new
additions to our team at Board level and the opportunities provided
by our geographic and commodity diversifications as discussed in
more detail in our annual report. We also recently welcomed KPMG on
board as agent within Russia to progress our asset sale
strategy."
James Nieuwenhuys, Chief Executive Officer commented:
"Operationally the West Kytlim asset is performing well following a
successful winter stripping programme and a subsequent increase in
stripping capacity. As discussed in our Operational Reports the
mine is expected to make the switch to hydro-generated grid power
later this season and the use of electric draglines, both important
developments for sustainable platinum group minerals and gold
production through life of mine. I look forward to providing
shareholders with further updates regarding progress during the
second half of 2022."
Audited Group Reporting for the year ending 31 December 2021
The Company's full Annual Report including the audited financial
statements to year end 31 December 2021 are set out below and will
be posted, along with notice of AGM and form of proxy to those of
our members electing to receive paper format notifications. The
Company is grateful to the remainder of our shareholders choosing
to receive digital notifications and the report is also available
for download from the Company's website at;
https://www.eurasiamining.co.uk/investors/financial-reports .
The Company would like to remind shareholders that they may sign
up for digital notifications, and help to reduce the number of
paper reports printed and posted, by logging on to
www.signalshares.com to amend communications preferences. An
Investor Code is required for initial registration. Alternatively,
you can call the Company's registrar, Link Group, on 0371 664 0300
(calls are charged at the standard geographical rate and may vary
by provider) or +44 371 664 0300 if calling from overseas. You can
also write to Link Group at 10th Floor, Central Square, 29
Wellington Street, Leeds, LS1 4DL.
ENQUIRIES:
Eurasia Mining Plc
Christian Schaffalitzky/ Keith Byrne
+44 (0) 207 932 0418
SP Angel Corporate Finance LLP (Nomad and Joint Broker)
David Hignell / Adam Cowl / Jeff Keating
+44 (0)20 3470 0470
Optiva Securities (Joint Broker)
Christian Dennis
Tel: +44 (0) 20 3137 1902
Chairman's statement
I am pleased to write to you to summarise 2021, the year in
which your Company not only consolidated its Battery Metals and PGM
assets but added additional Battery Metals to the mix. In parallel,
we expanded our business strategy to fully grasp the ambitions of
the 'Green Economy' by exploring the potential for Hydrogen to be
included in our future developments.
During the past year, our West Kytlim project saw a doubling of
mine production and the development of plans for further expansion,
focused on replacing diesel power with grid electricity from 100%
green hydro sources. Looking forward into 2022 and for subsequent
years, we expect to see a further expansion of production with this
conversion scheduled for the second half of this year.
Our flagship Monchetundra project centred on our Battery Metals
and PGM mine developments in Kola was further strengthened with the
addition of new exploration licences, granted exclusively to the
Company. This embraced the relaunch plan of the NKT nickel dominant
mine which immediately became the focus of detailed assessment by
our team and our technical consultants, Wardell Armstrong
International. This confirmed that significant nickel sulphide ores
remain, and we are now working on integrating their development
with our existing Battery Metals and PGM reserves, located next
door.
The further expansion of nickel and copper in our existing
metals basket allows us to develop the mix of outputs from the
Company's project portfolio as Battery Metals, which can be
supplied into the growing demands of the modern world. We expect
Kola to be a key area for future supplies of these critical metals
and our projects should benefit from 'first mover' advantage around
the well-established refinery city of Monchegorsk. This first mover
advantage has also been further upgraded with our agreement with
Rosgeo, which holds other interests in the immediate area which our
project can potentially include.
While we expect these developments to add value to these
projects, we have not lost sight of our principal strategy, which
is to focus on maximising shareholder value, primarily through a
sale of assets, for the benefit of our shareholders. Active
discussions with interested parties continue, and will be pursued
with patience and care, against the background of the now more
complex and changed geopolitical landscape. The Company recently
appointed KPMG as agent within Russia to further this strategy and
although there can be no guarantees, we remain confident of a
positive outcome from these discussions.
Apart from the progress on the ground, we strengthened the
Company's balance sheet by way of two financings through private
placements with institutional investors raising gross aggregate
proceeds of US$35 million (circa GBP28 million). This has allowed
us to make careful investments in developing our assets and also
has given us flexibility in our approach to facilitating
diversification in the future.
We also enlarged our Board with the addition of two new
Asia-based directors: Tamerlan Abdikeev and Kotaro Kosaka, who play
a key role in our Hydrogen strategy, and, more recently, the
appointment of Artem Matyushok, an experienced M&A and Hydrogen
industry professional post year end. On your behalf I welcome them
to our team, as well as new management and employees at West Kytlim
and Kola.
In conclusion, we are confident of achieving additional
milestones during the remainder of 2022. We are well equipped for
the challenge, and I look forward to working towards our goals in
the coming months. I want to thank sincerely all my colleagues on
the Board, the management and staff in Russia for maintaining our
progress over the last year. In particular I wish to thank
Alexander Sushchev, metallurgist and advisor to the Board, who is
retiring this month from the Company. He has played a key role in
the development of our Kola projects and has agreed to provide
occasional advice as needed.
With continued strong support from the team, I am confident the
Company can continue to build and strengthen the foundations for
our future success.
C. Schaffalitzky
Executive Chairman
Strategic Report
Operations update
Eurasia Mining Plc is a producer of palladium, platinum,
rhodium, iridium and gold and a battery metals exploration and
development company. The Company recognised that a switch to
electricity from hydro sources as the main energy source for ore
body development and beneficiation at the West Kytlim Mine would
considerably improve the project's overall sustainability and
environmental credentials, while also improving on project
efficiencies and costs. An electric dragline is being assembled on
site at West Kytlim for commissioning later in the 2022 mining
season.
The Central Kola Peninsula cluster of Battery Metals
(predominantly Nickel and Copper) and PGM projects are being
developed around the Company's fully permitted flagship NKT
relaunch Project adjacent to the town of Monchegorsk, home to the
world's largest nickel and PGM processing facility - Norilsk's
Severonickel. Total of 184.6Moz of Platinum equivalent resource
provides for a new centre for global battery metals and PGM
production on Kola.
Both West Kytlim and Monchetundra are based on the Company's own
exploration discoveries and have been successfully advanced through
the exploration phase to the issue of production licenses. The
Company demonstrates a consistent approach to driving shareholder
value by bringing quality projects from exploration through to
production.
Eurasia is an international mining company with offices in
London (UK), Monchegorsk and Yekaterinburg (Russia), as well as
Tokyo (Japan).
WEST KYTLIM
Producing Open Pit PGM mine in the Ural Mountains with a
sustainability focus - long term target of the world's greenest,
i.e., lowest carbon PGM ounces.
Sustainable Mining
-- Reduced environmental impact compared to conventional mining
methods, and less long-term environmental impact - no blasting on
site and no chemicals used in the production process.
-- Shallow open pits remediated immediately with recovery within
5 to 10 years and with no remnant pit or tailing dumps. Allows the
Company to make provisions for remediation on realistic time
scales, as opposed to larger scale operations with remediation at
the end of a 20+ year Life of Mine.
-- Hydro generated electricity as the dominant energy source for
ore body development and beneficiation from 2022 to the end of mine
life.
-- Careful management of water resources at the mine site by water recycling.
-- Limiting the use of asphalt and concrete on site, many mine
buildings built from timber milled on site.
2021 Highlights
-- 1,350,000 cubic meters of overburden stripped (November 2020
to 31 October 2021) at the Kluchiki and Bolshaya Sosnovka sites
-- 463,500 cubic meters of gravel washed (20 April to 30 October 2021)
-- 2.3 times increase in raw platinum production; 3,643 oz (2020 - 1,525 oz)
-- COVID response ensured no ongoing impact on operations.
-- Significant upgrades to mine fleet as well as mine site buildings and infrastructure
-- West Kytlim Flanks license approved and received
-- Commenced exploration at the Typil site.
-- Continuing to work and build relations with local community
by making equipment available in the town of Kytlim when en route
to site.
Stripping work continued through the winter of 2020/21 and
gravel washing commenced as running water became available in
mid-April. Two washplants were operated initially and a third added
in August treating ores from the Bolshaya Sosnovka and Kluchiki ore
bodies. Each of the three washplants operate on similar process
flowsheets - PGM and gold bearing gravels are trucked from surface
pits to the washplant site where they are loaded to a scrubber and
trommel. Oversized material is removed as sediments are
disintegrated using pressurised water jets. Water, clay, sand and
nuggets of PGM are then entrained in a water column which is
transferred to a sluice where the components separate under gravity
with the higher density material collecting on sluice mats. These
are then emptied daily, and the material collected for upgrading at
an onsite laboratory. Further processing at the onsite laboratory
includes shaking tabling, gravity concentration and hand picking to
produce a 'black sand' concentrate as the mine's product. Weekly
shipments of batches of mine product are sent for further refining
under our agreement with the Ekaterinburg precious metals
refinery.
Exploration upside - Typil and West Kytlim Flanks
'Field exploration work at Typil commenced in August 2021 with
reconnaissance and mapping accompanied by stream sediment sampling.
Both banks of the Kosva River have been worked, at the inflows of
the Typil and Kyria Rivers and in the area of the Typilez Creek. 12
samples have shown presence of platinum and gold.
Land surveying was carried out to allow the planning of drilling
traverses. Drilling then commenced in March 2022 in the area around
the inflow of the Typil River and the adjoining part of the Kosva
River valley. 3 traverses totaling 39 holes and 273 meters have
been drilled for a total of 426 samples. The average depth of the
holes is 3-4 meters, maximum - 11.5 m.
Drilling intersected alluvial sediments of the Kosva and Typil
terraces, 6-7 meters thick, and pre-Quaternary (assumingly Neogene)
sediments up to 5 m thick. Neogene sediments are a key resource in
ore bodies on the current mining license. At the time of writing,
drilling was ongoing, and samples were being washed in a Kosvinsky
Kamen field laboratory. '
Pavel Telegin, Head of Exploration, Kosvinsky Kamen.
West Kytlim powerline, site electrification and e-draglines
Work on project design, appointment of contractors and sourcing
long lead time supplies for the power line to be constructed to
site at West Kytlim commenced in Q3 and Q4 of 2021. The route to
site follows the path of a now disused power line which had been
used to power dredges operational in the area in the 1960's and
'70's. Chief contractors are OboronEnergo providing the connection
to the main grid which derives power from the Perm Oblast via
several hydro-electric plants. OOO ELS were contracted for
technical documentation and project design and installation works.
By the end of May 2022, 10 km of a total 17 km of the route have
been completed as well as the necessary substations at site. Grid
power is expected to be available at the mine site later this year.
Total costs for the project are estimated at $1.5m. The power line
provides a significant cost saving on diesel powered machinery
owing to the considerably greater productivity of draglines when
compared to an excavator and bulldozer combination.
2022 Highlights in the year to date
-- Dragline 1 components delivered to site for assembly and commissioning.
-- Powerline and substation construction underway with expected commissioning in Q2 2022
-- No impact of sanctions on operations
-- Further additions to on site fleet including 5 new Kamaz ore
haulage trucks as well as six Caterpillar excavators, a Cat D8
bulldozer and two Komatsu D275 bulldozers
-- Stripping capacity increased to a current record of
300,000m(3) per month (first achieved in March 2022)
-- Third washplant is now operational at site- two plants
running at Bolshaya Sosnovka currently, and a third plant at the
Kluchiki area.
Following a successful year-round overburden stripping programme
focussed on the Kluchiki and Bolshaya Sosnovka areas, washing of
gravels commenced around end-April as running water became
available at site. Winter stripping operations were maintained on a
schedule optimised to ensure supply of gravels to three washplants
throughout the 2022 washing season. The mining permit for the 2022
mining season was submitted in March 2022 and approved by the local
ministry for subsoil use in mid-April. All other necessary permits
including forestry permits were in place by the end of March.
The mine will operate three washplants throughout the 2022
mining season, two at Bolshaya Sosnovka and one at the Kluchiki
area. All three plants, owned and operated by Eurasia, were
operational by the end of April 2022. Directors consider the
current outlook for the 2022 season to be favourable, given
relatively strong metal prices, greatly increased productivity, an
experienced work force at site as well as a full set of mine and
forestry permits in place.
KOLA BATTERY METALS AND PGM
World class Nickel-Copper and PGM project on the Kola Peninsula
is a cornerstone to a proposed new open-pittable Battery Metals and
PGM mining district. A joint-venture framework agreement with
Rosgeo was announced in March 2021.
Monchetundra - 2021 Highlights
-- Definitive Feasibility study on schedule for submission in 2022.
-- Wardell Armstrong International engaged for various
comprehensive studies on Eurasia and its projects (also the ones
included in the agreement with Rosgeo), i.e. JORC standard MRE
reporting and NPV analyses.
-- Recalculation of MT and Flanks resources and pit outlines,
reflecting metal price increase since Feasibility study of
2016.
-- Recognition of NKT as a Nickel dominant mine relaunch
opportunity, as a standalone project or integrated with
Monchetundra.
A new mining-focused CEO was appointed at Kola subsidiaries
level in July 2021 as the Group seeks to develop the options
available at Monchetundra, the Monchetundra Flanks, NKT and
projects within the Rosgeo agreement. The Monchegorsk area is quite
unique globally in having high levels of extensive previous
exploration and reporting, and numerous deposits of a similar
deposit style and metallurgical type in both the Monchegorsk and
Monchepluton Massifs, directly adjacent to a major infrastructure
corridor and in a mining friendly jurisdiction. This has created a
large body of work by previous explorers and producing mines, state
funded and private.
The focus at Monchetundra during 2022 has been on the analysis
of this catalogue of projects - the Kola Battery Metals and PGM
projects. The task for Eurasia and its subsidiaries has been in
identifying the most sensible and economic means to schedule
project development, within the context of the Rosgeo agreement and
as independent projects. Wardell Armstrong International have been
appointed as chief mining consultants to manage the reporting
process in some cases undertaking new resource calculations.
Two new subsidiaries were created in the Group in January and
February 2022 as Kola Nickel and Kola Mining, both 100% owned.
Having these two subsidiaries available allows the Group
flexibility in how it manages and markets the various
multi-commodity deposits and licenses within the Kola Battery
metals and PGM projects.
NKT PROJECT - Base metal mine relaunch adjacent Monchetundra
projects
Tier-1 scale Nickel deposit with JORC MRE containing: 305Kt
Nickel, 143Kt Copper, and 57 tonnes PGM and Gold (11.2Moz of
Platinum equivalent) estimated by Wardell Armstrong International
(WAI) as JORC-compliant resources for a step room and pillar mining
operation, with nickel comprising half of the value in the metal
basket on a Net Smelter Royalty basis.
The project occurs directly adjacent to Severonickel, the
world's largest nickel processing plant and is a mine formerly
operated by Norilsk. A recent exploration and diamond drilling
campaign was undertaken by Rosgeo during 2015 to 2017, building on
an already significant catalogue of exploration and mining data
from predecessors.
During 2021 work commenced on analysis of options for reopening
the mine. Eurasia's West Nittis deposit occurs at the south-west
extension of the NKT deposit. The current development programme is
based on extension of West Nittis type mineralisation throughout
the NKT massif with treatment at the Monchetundra deposit process
plant. A full independent technical review, mine plan and mineral
resource estimate was undertaken by WAI during 2021, as presented
in the adjacent table.
During 2022 drilling commenced to the east and north of the West
Nittis deposit targeting extensions to the West Nittis ore body
within the NKT Massif. Historical drill core from Norilsk/
Severonickel drilling prior to 2015 did not include an assay for
PGM and the Company has undertaken to complete this work with an
expected improvement in reliability of confidence levels and
therefore resource classification.
Key performance indicators
Results for the year - the Group has made a loss before tax of
GBP3,138,521 for the year ended 31 December 2021 (2020: loss before
tax of GBP3,693,308).
Shareholder return - the performance of the share price. The
Company's shares are quoted on AIM and the shares have traded at
15p-36.5p*(2020: 3.3-42.5p) during the year under review. A range
of factors both internal and external to the Company can impact
share price performance, including geopolitics, commercial and new
business developments, operational performance and metal price and
metal price forecasting fluctuations.
Exploration and development funding and expenditure
The Group was successful in securing the necessary funding to
develop and expand operations at both projects during the year
reported. In 2021, the Group acquired additional plant and
equipment mainly for West Kytlim Mine with a total value of
GBP622,745 (2020: GBP338,237); The Group also incurred GBP64,371
(2020: GBP118,654) of development costs at West Kytlim, including
ore body development costs during and after the production
season.
A feasibility study for the Monchetundra project was advanced
during 2021.
In 2021 the Group raised gross funds of $35 million (2020:
GBP7.9 million) from equity markets through two placings lead by
H.C. Wainwright & Co. No options or warrants were exercised in
the period reported. At 31 December 2021 the Group had a cash
balance of GBP22,009,507 (31 December 2020: GBP5,404,101) which
allowed it to continue development programmes at all projects.
During 2020 the Group acquired some mining equipment under
five-year lease terms. The balance of existing lease commitments
for machinery for the West Kytlim operation at 31 December 2021 was
GBP429,543 (31 December 2020: GBP526,930).
For more details see the operations update herewith.
*Based on yahoo finance historical data of Eurasia Mining Plc
(EUA.L) closing prices for 01 January 2021 to 31 December 2021
Non-financial KPIs
Environmental management - the Group has environmental policies
in place and receives annual approvals for development work at West
Kytlim, where adherence to the relevant environmental subsoil
licensing laws is clearly stipulated. Performance against
environmental policies is continuously monitored and annually
audited including a provision for environmental rehabilitation. The
Company is responsible for the technical and biological
rehabilitation of disturbed areas, as discussed in the
environmental section in this report. Rehabilitation plans are
subject to approval prior to commencing mining, on a site-by-site
basis. The Directors consider that rehabilitation plans are
achievable with some involvement of external specialists to
minimise and rectify any negative impact of current exploration and
operational activities on the environment. Further details may be
found in the operational update and ESG section herein.
Health and Safety - the Group has occupational health and safety
policies and procedures in place ensuring that all efforts are made
to minimise adverse personal and corporate outcomes, through best
practice training, implementation, and monitoring. These were
reviewed following the COVID-19 pandemic and have been
appropriately upgraded commensurate with the expansion of the
operation of West Kytlim which now includes electric power and
large draglines. The Group's Lost Time Injury Frequency remains at
zero for the 2021 year and 2022 season to the end of May.
Operational - The Group has had operational success in
effectively managing the mining operation at West Kytlim through
2021. The Group has also successfully managed a programme of works
at the Kola projects and has continued to manage applications for
new exploration license tenements in the Monchegorsk area.
Governance - The Board has appointed two new non-executive
Directors during the year in review; Tamerlan Abdikeev in April
2021 and Kotaro Kosaka in December 2021. Tamerlan is also
representing the Company as head of the Company's emerging Asia
focussed interests and Japanese representative office where he is
joined by Kotaro Kosaka. Independent non-executive Director Kotaro
strengthens the Company's representation in Asia and the Far East
markets.
Artem Matyushok was appointed to the position of independent
non-executive Director in May 2022. Artem brings experience in and
in-depth knowledge of high-level Mergers and Acquisitions
transactions and expertise in the hydrogen sector. Artem is a
director of H4Enegy Joint Stock Company ("H4Energy"), which entered
into an agreement with the Company on 30 December 2021 to assist
Eurasia in finding joint venture partners ("JVs"), the ultimate aim
of which JVs would be to secure off-take for Eurasia's metal
production and associated financing, which could be used for the
development of the Company's metal production and use of hydrogen
in its operations.
The Board does not regard the agreement with H4Energy to be
material at this time and n either Artem nor H4 Energy has received
or receives remuneration from Eurasia as a consequence of this
agreement. A ccordingly, the Board does consider that Artem's
independence is not impugned by the agreement between the Company
and H4Energy.
Additional Projects and license applications - Key personnel
continued to assess opportunities in a range of commodities in
Russia and globally, as potential exploration and development
projects. The Company has broadened its interests geographically
through 2021 and is also targeting commodity diversification
through its strategies in battery metals and the hydrogen
economy.
Principal risk and uncertainties
The risks inherent in all mineral exploration and development
businesses are kept under constant review by the Board and the
Executive Team. The risks affecting the Group and the Company are
set out respectively in the Directors' Report. The principal
operating risks affecting the Group are highlighted below.
Exploration and project development risks
Inherent risks associated with the failure to discover or
develop an economically recoverable ore reserve, to conclude a
definitive feasibility study, or to obtain the necessary consents
and approvals to conduct exploration and mining. The Board
impresses on senior management the need to identify and address the
major sources of operational risk in any development project, and
to continuously monitor deviation from schedules or targets.
Operating mine risks
Machinery availability, deviations from expected grade and other
operational risks may have a significant impact on West Kytlim mine
revenue, which is a component of the Group's financial capacity and
performance. At West Kytlim, multiple areas are developed
concurrently to mitigate risks of a lower than expected grade at
any location. Most of the machinery in the West Kytlim mine fleet
is relatively new, having been acquired from 2019-2022 onwards and
currently operate at very high availability levels.
Political risk and sanctions compliance
The Group's assets are located in Russia. In view of sanctions
imposed on identified individuals and entities in Russia, from
2014, legal and economic risks may arise. Further sanctions were
imposed on certain activities, entities and individuals connected
with Russia in 2022, which continue to evolve, which are being
carefully monitored by the Group in accordance with the Company's
sanctions compliance policy, and with the assistance of its
external legal advisers. The Company has satisfied itself that
neither of its current activities at the West Kytlim Mine or on the
Kola Peninsula are prohibited under UK or EU sanctions rules.
Furthermore, the Group does not engage and has not engaged with any
sanctioned persons/ entities or agencies.
To date there has been no significant impact on the Group's
activities as a result of recent updates to the UK and EU sanctions
legislation. Sanctions introduced by the Russian Federal government
have also not affected the Group, although this is being closely
monitored. The Group closely monitors all regulatory requirements
and changes to the laws, rules and regulations, taking steps
whenever necessary to ensure compliance with new legislation.
Environmental risks
The Group's operations are subject to environmental regulation,
including environmental impact assessments and permitting. Russian
environmental legislation comprises numerous federal and regional
codes. The Group makes an assessment of the environmental impact of
any of its activities at the time it applies for the relevant
permits and licences. Review and approval of the rehabilitation
plan is a pre-requisite of the mine plan approval for each season
of mining at the West Kytlim mine. The Group mitigates risk to the
operation arising from environmental issues by strictly adhering to
relevant environmental laws and codes. The West Kytlim mine by its
nature does not require management of hazardous mine tailings
within a tailings dam, as is necessary for large scale underground
mining operations.
The regulatory environment
The Company's and the Group's activities are subject to
extensive federal and regional laws and regulations in Russia
governing various matters, including licensing, production, taxes,
mine safety, labour standards, occupational health and safety and
environmental protection. They are also subject to various UK and
international regulatory requirements. Amendments to current laws
and regulations governing operations and activities of mining
companies, or more stringent implementation or interpretation of
these laws and regulations can have a material adverse impact on
the Group and/or delay or prevent the development or expansion of
the Group's assets in Russia.
The Group closely monitors all regulatory requirements and
changes to the laws, rules and regulations taking steps whenever
necessary to comply with relevant regulations. The Board considers
the regulatory environment for mining companies operating in Russia
to be transparent, not more difficult than other jurisdictions,
sufficiently clear and prescriptive and in general navigable for a
company employing sufficient expertise and resources to manage that
aspect of its business.
The Group has entered into an agreement with Rosgeo, an
exploration and development company with unparalleled expertise in
the Russian mineral and subsoil licensing regulatory framework as
well as an agreement with the Far East and Arctic Development
Corporation both of whom may provide advice and guidance on the
Russian regulatory environment as it pertains to mining and
development companies.
The Group maintains close ties to the Russian Minerals
extraction industries for example by attending industry events with
its mining peers and by maintaining in house expertise in sub-soil
legislation.
Commodity market risk
A potential fall in commodity prices could result in it becoming
uneconomic for the Group to mine its assets. A Russian rouble (that
is highly dependent on the prices of natural resources) devaluation
against USD (as has occurred in Q1 2022) provides a natural hedge
against a potential fall in commodity prices as the Company's costs
are Russian rouble denominated while commodity prices are USD
denominated. The Group closely monitors the markets for platinum
group metals (and the prices of other relevant metals to the extent
these are relevant), changes in their demand and supply, and the
effect these have on metal prices, with a view to taking necessary
measures in response to such changes.
The Group has pursued commodity diversification in targeting
battery metals through its agreement with Rosgeo, adding additional
nickel and copper as well as cobalt potential to its interests, and
adding hydrogen and ammonia interests through its agreement with
H4Energy and the establishment of its representative office in
Japan.
Demand for platinum group metals from their principal use in
autocatalysts, which reduce harmful engine emissions, is perceived
by market commentators to remain strong for the foreseeable future
as electric vehicle uptake is offset by tighter emissions control
for traditional internal combustion engine vehicles, and as PGMs
continue to find application in emerging transport technologies
such as Fuel Cell Electric Vehicles.
Loss of key personnel risk
The loss of key personnel consists of the departure (voluntary
or otherwise) of an important employee, which would, in all
likelihood, result in a loss of management capacity or specific
expertise capacity, or increased expense to the business, for a
period. In general, any loss of management capacity or expertise
can be replaced by recruitment of personnel who are readily
available from the market, while the financial impact may be of a
temporary or a permanent nature. These increased expenses relate to
the search for and hiring of a new employee, training costs for the
new hire, possible "sign on" bonus and higher remuneration
packages. However, such increase (if any) is not expected to be
material.
The Group takes measures to motivate and retain existing
employees, including by bonus incentive schemes as well as
participation in the Company's share and option scheme. Currently
there is no shortage of mining industry personnel and expertise in
Russia or London, and the Group is confident that a suitable
replacement could be found should it be necessary to replace any
key member of staff.
Financing risk
The West Kytlim mine is expected to become a material
contributor to the Group's working capital, and the Directors are
confident that this source of capital can be increased considerably
from 2022 onwards due to increased capacity at the mine site,
thereby mitigating financing risk to the Group. At the current
time, West Kytlim contributes an important but not critical
component to the Group's working capital. Historically, the Group
has successfully relied on international equity and, to a lesser
extent, debt capital markets to create and maintain adequate levels
of working capital, and these financial resources will be
supplemented by revenues from West Kytlim as and when they arise.
The Group maintains tight financial and budgetary controls as well
as cost control, and forward planning helps ensure the Group is
adequately funded to reach its objectives. Two significant equity
placings were undertaken in May and September 2021 raising a total
of $35m and the Directors consider the Group to be well funded for
its short and medium-term objectives.
The Board considers risk assessment to be vitally important in
achieving its strategic objectives.
Pandemic risk
The effects of COVID-19 and any future pandemic, and measures
taken globally to protect populations, can have a direct or
indirect impact on the Group's operations. The Company continues to
monitor the situation and will continue to take the required
actions, including consultations, reviews and tightened expenditure
controls as appropriate. Many of the Group's staff and families who
were affected have now recovered from coronavirus and despite a
continued threat globally it appears that the overall impact on the
Group will be insignificant.
There was no operational downtime through the 2020 or 2021
mining seasons, and no impact at the time of writing on the 2022
mining season from the COVID-19 pandemic. The limited number of
employees, the open pit nature of the mine site, and the employees'
ability to naturally social distance using single cab mining
equipment remains a considerable benefit to the operations. The
Group recognises an ongoing risk to the operations from the
COVID-19 pandemic and future pandemics.
Research and future development
The Group's activities during the year continued to be
concentrated principally on mine development and mineral
exploration programmes, and the improvement of mining techniques
and metallurgical processes. While developing its core projects
disclosed in the Operations Update the Company will continue to
study and search for new "near production" projects in the
geographical area where its current operations are situated. This
has been demonstrated by the signing of the Rosgeo agreement,
securing a pipeline of new Battery Metal and PGM projects aimed at
realising a new PGM mining district on the Kola Peninsula and by
the establishment of a representative office in Japan as a base
from which to generate new business opportunities in the Far East.
The Group is developing strategies in the energy sector through its
interest in hydrogen and ammonia production as evidenced by an
agreement signed with H4 Energy in December 2021.
Brief summary of the Group's current operations
The Group operates in 2 key regions of Russia: (1) The Urals,
where West Kytlim is an operating PGM and gold mine in the Central
Urals; and (2) Kola Peninsula, where a mining licence was granted
in 2018 and the agreement with Rosgeo was signed in 2021 to create
a pipeline of additional projects. At the same time, the Group
continues to assess the potential of other resource and energy
projects internationally.
At West Kytlim, the Group carried out pilot mining operations in
2016 and has been running a commercial operation since 2018. The
mine has been expanded efficiently with a phased roll out of new
machinery added through successive mining seasons in line with
streamlined statutory reporting requirements and mineral reserve
and resource reporting (see operation update section for further
details).
West Kytlim mine is directly owned by ZAO Kosvinsky Kamen in
which the Group has a 68% stake. On the Kola Peninsula, the Group's
discovery of PGM mineralisation in the Monchetundra area led to
submission of a feasibility study, on completion of exploration
work in 2016. A mining permit was subsequently granted in 2018 for
two open-pittable ore bodies at Loipishnune and West Nittis. The
Monchetundra project is owned by ZAO Terskaya Mining Company, in
which the Group has an 80% stake (note 16). More details on both
projects are contained in the Operations Update.
The Board's aim is to deliver value to the Company's
shareholders by leveraging the significant experience of the
Directors and management team to develop the Group's projects. The
Board is also focused on maximising shareholder value and continues
to consider the potential for a sale of the Company's assets.
The Board acknowledges that there is a legal requirement for the
Company to report on how the Board and its Committees have
considered the requirements of Section 172 of the Companies Act
2006 in their decision making. A director of a company must act in
the way he considers, in good faith, would be most likely to
promote the success of the Company for the benefit of its members
and, in doing so, have regard (amongst other matters) to the
following factors:
The likely long-term consequences of any corporate action or
decision
The Board takes a long-term approach to creating and realising
value for the shareholders and is keenly aware of the time scale on
which resource projects are developed. This is reflected in the age
of the Company itself (it was incorporated in 1995) and the tenure
of some of its longest standing employees: 6 employees in our
Russian offices as well as 4 senior executives, have worked with
the Company for more than a decade, including several individuals
who have been working within the Group for more than 20 years. Two
of the Group's key assets have been progressed through discovery
and early-stage exploration through feasibility studies.
The interests and professional development of the Company's
employees;
Staff are encouraged to maintain their professional credentials
and the Company meets annual subscriptions to professional bodies
on behalf of its employees as well as, from time to time, tuition
fees for short- and longer-term studies, and attendance fees for
industry events. Key technical expertise within subsidiaries is in
the areas of geology and mineral exploration, mine engineering,
metallurgy as well as Russian subsoil law. In recent years, and as
the Company's assets have developed, new full-time positions have
been filled in mining engineering and health and safety roles.
The need to foster the Company's business relationships with
suppliers, customers and other stakeholders;
The Group employs local workers, contractors and suppliers
wherever possible and maintains a network of contacts in the
industry, for example by membership of the Urals society of gold
producers. The Group has numerous long-standing commercial
relationships with consultants and contractors, for example
drilling and exploration contractors for both, the West Kytlim and
Monchetundra assets, who have worked with the Company for many
years (e.g. Central Kola Expedition have worked with TGK for more
than 20 years). The Group's strong network of contacts in equipment
and machinery contractors are a key asset to the West Kytlim mine.
The commercial reputation of the Group and each Company within the
Group, within the Russian mining industry, is recognised as
critical to the Group's future success.
The impact of the Company's operations on the communities
adjacent its projects and the environment;
Rehabilitation plans are submitted as a necessary aspect of all
mineral industry statutory reporting in Russia. The Company's mine
at West Kytlim is focused on producing greener, lower emissions
PGM, in line with efforts across the globe to bring climate change
awareness to the mining industry. The construction of the power
line to site during 2022 is a key element of this strategy. The
Board welcomes initiatives within the mining industry generally,
which are focussed on lower carbon, indeed zero-carbon mining.
Please see the ESG section of this report for more information.
The West Kytlim mine is remote, with no population directly
adjacent the mine, however efforts are made to ensure the nearest
communities are kept informed of major items of progress at the
mine site, especially major capital developments such as the power
line and electric dragline commissioned at West Kytlim during
2022.
The requirement of the Company to maintain a reputation for high
standards of business conduct and corporate governance;
The Group applies the Quoted Companies Alliance code and
considers its Corporate Governance responsibilities under their 10
guiding principles (see Directors Responsibilities section). The
Company also maintains an extensive internal body of policies and
procedures which is regularly updated and strictly adhered to.
Where necessary, the Company has resort to its Nominated Advisor
and legal advisors on matters concerning the UK regulatory
environment.
The need to treat all members of the Company fairly and
equitably.
No individual shareholder/ member has greater influence, rights
or obligations than any other shareholder.
Environmental, social and governance
Introduction
Environmental, Social and Governance priorities are a clear
focus of the Company and Board as well as the Company's investor
base. The Board welcome changes to the international mining
landscape particularly with respect to environmental
responsibility, and the example being set by industry majors in
setting net zero emissions targets, as well as the developments
amongst OEM's in developing zero emissions mining equipment in
partnership with major mining companies. The West Kytlim operation
is still being scaled up to full capacity, and the Monchetundra
Project on Kola is in pre-mine development, the Board feel it is
therefore premature for the Group to set a net-zero emissions
target but are determined in their goal to deliver innovative and
carbon aware mining solutions. Through the past number of years,
the Company has looked in detail at the developments in reporting
standards and guidelines for sustainability and ESG reporting and
the information requirements of our investors and stakeholders
making informed and ESG focussed investment decisions.
This section of the report describes how Directors consider and
adopt principles of corporate governance, as well as environmental
and social governance and apply them through the group of Companies
while achieving corporate objectives and ensuring the overall
direction, supervision, and accountability of the organisation.
Other key aspects of Corporate Governance within this report
are:
-- The Section 172 Statement (Strategic Report above) which
describes how the Directors promote the Company for the benefit of
members as a whole.
-- Financial and non-financial Key Performance Indicators which
are outlined to measure performance of the Board year on year;
and
-- Principal Risks and Uncertainties section, which demonstrates
awareness of potential obstacles to achieving corporate goals.
The Board has adopted the QCA Corporate Governance Code (2018)
("QCA Code") and strives to follow its 10 principles to the fullest
extent possible. These principles are supported by a set of
policies and procedures documentation reviewed annually. The
environment is at the forefront of ESG principles for a mining
enterprise and the Directors consider the West Kytlim operation,
the largest mine of its type in the world, to be an opportunity to
demonstrate a potential new style of lower emissions metal
production, competing not in quantity but in quality with other
global sources of PGM. The switch to hydro-derived electric power
at site is a considerable step to achieving this goal. The Group is
committed to ensuring the land disturbed by mining activities is
returned, post mining, to a safe and stable landform.
Rehabilitation plans, and forestry permits are a key aspect of mine
permitting and are submitted for approval in advance of final
mining permissions. Typically, these describe how forestry is
managed with an equal amount of forest planted as is removed for
mining. Open pits are infilled with the overburden removed prior to
mining, top soil is replaced and the land regenerates over a period
of five to ten growing seasons.
Environmental report
West Kytlim;
A total of 32.4 hectares of forest were cleared at the Bolshaya
Sosnovka and Kluchiki sites during 2021, in accordance with
forestry permits received prior to the commencement of the mining
season and the building were built from the sawn timber to minimise
the waste. At year end the Company did not have any outstanding
rehabilitation liabilities meaning allowance was made for
reforestation elsewhere in the Karpinsk Oblast. Ultimately the area
currently being developed at West Kytlim will itself be replanted
with appropriate local species and will recover to its pre-mine
condition within 5 to 10 years following mining.
Surface mining requires disturbance of the upper layers of top
soil and river sediment terraces. Trees and top soils are removed
to allow access to the platinum and PGM bearing gravels which are
'free digging'. These areas are then scheduled for remediation.
Water is a key resource in any stable natural environment.
Process water at the mine site is fully recirculated meaning the
water used to deagglomerate and beneficiate pay gravels is
continuously recycled through a process water pond, maintained
separate to any natural and free flowing water course. There were
no cases of contamination of rivers or streams in all of the areas
under development in the year under review and in previous years.
Tailings from the mining operation do not contain hazardous
chemicals, but do include large volumes of sediment and clay, which
could damage the ecosystem in natural river course. These are
carefully managed to allow clay and fine particles to precipitate
naturally outside of natural river courses. Several relatively
small specially protected water environments are defined within the
mine license and particular care is taken to preserve these
areas.
The Company's rehabilitation plans consider local climate,
geochemistry of soils, fertility, degree of disturbance and
specific landscape and topography features. The Company and
independent advisors determine how the land will be remediated post
mining and this process is easier to manage for an operation with a
limited (per site) life of mine. ZAO Kosvinsky Kamen, Eurasia's
project Company, has 7 active permits for forest plots totalling
over 172 hectares. Prior to the granting of a permit to clear a
site from forest vegetation, a Rehabilitation Plan prepared by the
Company is approved by the Ministry of Natural Resources of the
Sverdlovsk Oblast. Rehabilitation Plans follow guidelines set out
within the Russian Subsoil licensing including:
-- Federal Law "On Environment Protection" of 10.01.2002 No.
7-FZ;
-- Russian Federation ('RF') Land Code of 25.10.2001 No.
136-FZ;
-- RF Forest Code of 04.12.2006 No. 200-FZ;
-- Resolution of the RF Government "On Land Rehabilitation and
Conservation" of 10.07.2018 No.800.
The Company Rehabilitation Plans and the Company's Environmental
Officer set out the necessary land rehabilitation programme prior
to application for a mining permit.
Waste management
The tailings of alluvial mining do not contain any hazardous
substances as no chemicals are used in the beneficiation process
which is driven by gravity and hydro-mechanical operations. Each
washing site is designed to be independent of free-flowing natural
water courses so that mixing of mine process water and free flowing
water cannot occur. Deagglomerating river sediments liberates an
amount of clay material (<.002mm material) which could be
damaging to a natural river course and must be carefully
managed.
Air emissions
To reduce air emissions, the Company ensures that the equipment
used onsite complies with the latest accepted quality standards and
optimize the routes taken by mining vehicles. The machinery fleet
on site was purchased new and is specified to the latest
environmental compliance standards. The Company is also focused on
preventing dust pollution at the mine site and regularly carry out
dust suppression measures. The switch to electric powered draglines
as the key machine for overburden stripping will remove all of the
vehicle emissions associated with overburden stripping, which is
currently done using bulldozers, excavators and haul trucks.
Social
Relationship with the local community
Building and maintaining close relationships with the
communities adjacent to our operations is a Group priority. As in
previous years and mining seasons, machinery being delivered to
site is temporarily made available in the village of Kytlim where
the local Mayor manages a short programme of landscaping or other
work which might benefit from heavy machinery such as bulldozers,
excavators and haulage trucks. This maintains good relations with
the Municipal Administration of the town of Kytlim. A record is
kept of any meetings with representatives of local municipalities
and notice given of any work programmes, such as exploration
activity on the Typil license, delivery of oversized machinery such
as draglines, and construction of the substations and power line
from the village of Kytlim to the mine site. Where possible, the
Company relies on the local community for supply of consumables and
food supplies.
Consultation
Giving notice of pre-approved and permitted work such as the
West Kytlim power line project, and receiving feedback from the
local community who may be affected is a key element of good
community relations. The power line follows the route of a previous
installation and is not more imposing than a standard domestic
line. No impact on local communities or their activities has been
identified. The West Kytlim operations occur in an area of
unpopulated wilderness without nearby farming operations. The
Monchetundra operation adjacent to the town of Monchegorsk is
located in a mining friendly jurisdiction with mining and
metallurgical processing being the largest employer in the town and
district.
Health and Safety report
During 2021 and in the year to date there have been no
significant injuries or accidents on site. Close control is being
exercised in the critical areas of work to ensure no infringements
to health and safety rules. Health and safety protocols have been
upgraded at the West Kytlim mine site in preparation for the
arrival of electric draglines and high voltage mains electricity.
Appropriate HSE is available to all employees and its use closely
monitored. Signage is a key element of safety awareness which is
maintained by the mine site Health and Safety Officer. The open pit
and open-air nature of the operation at West Kytlim reduces the
risks of serious injury. No individuals are required in pit during
excavation. The highest risk situations are during construction and
assembly of various components of the washplants and their
peripherals.
OUR MINE SITES ARE ENGAGED WITH LOCAL COMMUNITIES
-- Consultations are a key aspect of community involvement for
high impact operations.
-- All mine workers and equipment operators are local (they
reside within a 70km area). Project companies of the Group are
registered locally, and taxes are paid locally.
-- The mine has a sustainability focus, for example, most mine
building structures and interiors are constructed from timber
milled on site.
ENVIRONMENTAL PROTECTION IS FRONT OF MIND
-- Minimise impact:
o Surface mining with limited remnant waste and tailing
dumps.
o Limited use of concrete, steel and asphalt at the mine
site.
-- Rehabilitate:
o The Group is committed to ensuring the land disturbed by
mining is returned to a safe and stable
o Landform with no long-term damage to the environment or eco
system.
o Rehabilitation plans envisage works impacting local climate,
geochemistry of soils, fertility, degree of disturbance, specific
landscape and topography features.
-- GHG emissions reduction:
o Installation of e-draglines powered by grid hydro-derived
electricity.
-- ESG Indices:
o Eurasia has been included in the L&G Future World ESG UK
Index; and Liberum's
climate portfolio.
OVER 20 YEARS EXPERIENCE OF OPERATING IN RUSSIA
-- Building robust partnerships and developing industry contacts
in the Russian mining sector including Far East and Arctic
Development Corporation and Rosgeo;
-- Leveraging an in-depth knowledge of the Russian licensing
system in partnership with support from expert Russian and
international technical consultants;
-- The Group companies maintain strong contacts base amongst
equipment suppliers, contractors, industry consultants, and local
and state sub-soil licensing professionals; and
-- Eurasia is a permanent member of Urals Association of gold
producers whose role is to work alongside government agencies to
optimise legislation and improve business environment.
J. Nieuwenhuys
Chief Executive Officer
Directors' report
Directors
The Directors who served during the period were:
Christian Schaffalitzky - Executive Chairman
Gary FitzGerald - Non-Executive Director (passed away February
2021)
Anthony James Nieuwenhuys - Executive Director and CEO
David Iain Rawlinson - Non-Executive Director
Tamerlan Abdikeev - Non-Executive Director (appointed 9 April
2021)
Kotaro Kosaka -Non-Executive Director (appointed 21 December
2021)
Artem Matyushok - Non-Executive Director (appointed 16 May
2022)
Company Secretary
Keith Byrne
Directors' interests
Share interests
The Directors of the Company active at 31 December 2021 held the
following beneficial interests (including interests held by spouses
and minor children) in the ordinary shares of the Company:
31 Dec 2021 31 Dec 2020
No. of shares No. of shares
C. Schaffalitzky 89,569,517 89,569,517
G. FitzGerald - 23,378,445
Total 89,569,517 112,947,962
------------------ -------------- --------------
Share options and warrants
31 Dec 2021 31 Dec 2020
Options No. of shares No. of shares
C. Schaffalitzky 20,000,000 20,000,000
G. FitzGerald - 5,000,000
-------------- --------------
Total 20,000,000 25,000,000
-------------- --------------
All options granted to the Directors vested by 31 December
2021.
No share options were exercised by the Directors during 2021
(2020 - nil).
Dividends and profit retention
No dividend is proposed in respect of the year (2020: nil) and
the retained loss for the year attributable to the e quity holders
of the parent of GBP2,910,479 (2020: loss of GBP3,080,336) has been
taken to reserves.
Share capital
The issued capital of the Company as at 31 December 2021
was:
Number of Nominal Share premium
shares value account
Fully paid ordinary of
shares at 0.1 pence each 2,853,559,995 2,853,560 51,343,246
Deferred shares of 4 .9
pence each 143,377,203 7,025,483 -
--------------- ----------- --------------
2,996,947,198 9,879,043 51,343,246
Risk Management
The Directors consider that assessing and monitoring the
inherent risks in the exploration and mine development business, as
well as other financial risks, is crucial for the success of the
Group. The Board regularly reviews the performance of the Company's
projects against plans and forecasts. Further detail on management
of financial risks, which includes foreign currency, interest rate,
credit, liquidity and capital risks are set out in Note 31.
Going Concern
Following two significant fund raisings through the issue of new
ordinary shares in May and September 2021, as at 31 December 2021
the Group's net current assets amounted to GBP 23,036,966
(GBP5,286,051 in 2020). As at the same date, the Group's cash
balance was GBP22,009,507 (GBP5,404,101 in 2020). The Group's debt
largely consisted of lease liabilities set up to acquire mining
machinery for a total amount of GBP429,543 (at 31 December 2020 -
GBP558,614).
The Group's current (as at 30 May 2022) cash position is around
GBP14,200,000 with the reduction since December 2021 being
accounted for by GBP3,900,000 in capital expenditure, GBP1,300,000
on development expenditure on its assets portfolio, and
GBP3,500,000 in costs.
The Board consider the West Kytlim asset to be fully capitalised
for sustainable mine production for an up to 15 year mine life (at
2022 capacity), without consideration of possible reserves in the
adjacent West Kytlim Flanks and Typil License areas. The Group is
in the process of installing electric draglines and grid power,
realising its plans for the West Kytlim asset which is intended to
be self-funding from 2022.
The Group has spent GBP682,419 on a development programme for
the Monchetundra asset during 2021 and has budgeted a further
GBP527,000 for statutory reporting on this asset to November 2022,
keeping the asset in good standing while strategic options for the
project's development are considered.
2022 events and sanctions compliance
The Company has satisfied itself that neither of its current
activities at the West Kytlim Mine or on the Kola Peninsula are
prohibited under UK or EU sanctions rules. Furthermore, the Group
does not engage and has not engaged with any sanctioned persons/
entities or agencies
The Company continues to progress discussions with regard to the
potential sale of its assets, appointing KPMG Russia as agent in
May 2022, and has set aside sufficient funds to complete and submit
a Definitive Feasibility Study for the Monchetundra project in
November 2022.
All of the Group's net current assets as mentioned above are
held in 'A' rated banks in GBP accounts outside of the Russian
Federation. The Company has continued to fund Group companies as
required through the first part of 2022 and in compliance with
applicable regulation.
The Company is active in considering new business development
outside Russia, including a potential transition to the hydrogen
and ammonia market as described in the Strategic Report herewith.
The Group has also diversified geographically in the year being
reported, by opening a representative office in Japan, and with the
appointment of two Directors working from the Japanese office.
The Directors have concluded that the combination of these
factors, including the level of the Company's current cash balances
(the substantial majority of which is held within the international
banking system outside Russia), and taking account of the current
applicable sanctions regime, support the Board's opinion that it
has a reasonable expectation that the Group has adequate resources
to continue in operational existence for the foreseeable future,
which management has determined to be at least 12 months from the
signing of this Annual Report to the conclusion of the 2023
financial year. For these reasons, the Board believes it is
appropriate to adopt the going concern basis in preparing the
Annual Report and Accounts.
Directors Responsibilities statement
The Directors are responsible for preparing the Strategic Report
and the Directors' Report.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
must prepare the financial statements in accordance with UK-adopted
international accounting standards and in accordance with the
Companies Act 2006 . Under company law, the Directors must not
approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs and profit
or loss of the Company and the Group for that period. In preparing
these financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them
consistently;
-- make judgements and accounting estimates that are reasonable
and prudent;
-- state whether applicable accounting standards, have been
followed, subject to any material departures disclosed and
explained in the financial statements;
-- with contributions from advisors, set the Company's and
Group's corporate strategy including research and development
activities (detailed in the strategic report above);
-- prepare the financial statements on a going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time, the
financial position of the Company and the Group and enable them to
ensure that the financial statements comply with the Companies Act
2006. They are also responsible for safeguarding the assets of the
Company and the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors confirm that, so far as each Director is aware,
there is no relevant audit information of which the Company's
auditor is unaware; and the Directors have taken all the steps that
they ought to have taken as Directors in order to make themselves
aware of any relevant audit information and to establish that the
Company's auditor is aware of that information.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
Revenue
All revenues generated by the Group are from sale of metals,
within the Russian Federation. Currently the sole source of revenue
is metal sales from the West Kytlim mine. Refinery receipts record
the total of metal sales with payments received for platinum and
gold, at the market rate, on average every month throughout the
mining season. For reasons related to the nature of metals refining
the revenue for other PGM (Rhodium, Iridium and Palladium) are
received when all shipments for that year have been received. The
Company will be evaluating alternative metal refining and sales
options to improve the revenue stream.
Directors Indemnity
The Group maintains Directors and Officers liability insurance
as an indemnity provision renewed annually.
Corporate Governance
Eurasia Mining applies the QCA Code as a Corporate Governance
framework to ensure adequate corporate governance standards as
befits the nature of the Company's business and the stage attained
in the continuing evolution of the Company, and in-line with its
corporate strategy and business goals. The QCA Code's ten
principles and their application to Eurasia Mining PLC and the
Group of companies is described below.
Delivering Growth
Eurasia has established a strategy designed to promote long term
value and a return on investment for its shareholders, a strategy
which also aims to build the Company to an increasingly profitable
enterprise while maintaining good corporate governance and social
and environmental responsibility standards. The Company's strategy
is to self-fund exploration and development of marketable resource
and energy projects in various commodities, and to realise a return
on investment, either by carrying the project through feasibility
to commissioning or by straightforward sale.
Principle 1: Strategy
The Company is focused on developing several key assets; The
West Kytlim mine produces Platinum group metals ('PGM') and gold in
the Ural Mountains, Russia, while the Kola battery metal and PGM
projects are being developed towards production of PGM, gold and
battery metals near the town of Monchegorsk, on the Kola Peninsula,
Russia. During 2021 the Company has diversified both geographically
and in terms of commodities by developing commercial relations in
far east markets concurrently with interests in the Hydrogen
economy. The Company intends to further these commercial goals
while maintaining corporate governance principles in line with the
QCA Code. The key commitments and challenges in achieving this are
set out below.
Principle 2: Understanding shareholders
Eurasia seeks to maintain open, direct and two-way communication
with its shareholders through various media including press
releases, the Company website, twitter feed, presentations,
investor events, video blogs filmed on site at the Company's
projects, live and recorded video and audio interviews, and direct
communication by phone and email through the Company's contact
information. The Company employs public relations professionals and
maintains several third-party contracts to better disseminate
Company news-flow. Through shareholder feedback the Company ensures
that it remains in touch with the information requirements of our
shareholders, their expectations regarding their investment, and
the motivation behind their voting decisions. Director's consider
shareholder's motivations and expectations to be correlated with
that of the Company and the Company's strategy. Shareholders'
information requirements can therefore be summarised as either
operational in nature or commercial. The Company aims to update on
key events within these categories as events materialise. Directors
recognise that shareholders require complete and timely information
as a necessary input to their investment decisions.
Principle 3: Stakeholders and social responsibility
Experienced and knowledgeable long-standing employees and
service providers are a recognised key asset within the Company and
our Corporate Governance principles seek to cultivate a productive
and fulfilling working environment within the Company and the Group
of companies.
Our mining and other operations are a further key asset and
attention is paid to how these operations engage with society and
the various stakeholders important to the project's continuous
success. These include sub-contractors to the Company, and
officials within the Russian sub-soil licensing and other agencies.
The West Kytlim mining operation is in a remote area and where
possible employs local persons but does not otherwise impact on a
local population. The Company is devoted to maintaining the
strictest environmental policies as required within Russian
sub-soil licensing protocols.
Key personnel from the Company's subsidiary maintain
communication with representatives from the nearest village to the
West Kytlim mining operation, in the town of Kytlim, in order to
ensure feedback on potential issues. The mining community in this
area of the Urals is relatively small with good communication
between companies operating nearby mines, and with all suppliers to
the industry generally. Communication with officials from sub-soil
licensing agencies and their sub-contractors is more formal, and
within the reporting structures designed by those agencies to
protect the environment, the country's natural resources and the
rights of local populations. Any issue arising from any stakeholder
will immediately be dealt with or communicated to the required
level to allow for action to be taken. No such events have occurred
in the history of the mining operation and where an issue may arise
it is reported in full to senior management and directors.
Managing relationships within the Company's workforce, and its
outward interactions with local communities, service providers, and
the environment, all have the potential to impact on the Company's
ability to achieve its medium to long term goals - managing these
relationships is considered a fundamental facet of good Corporate
Governance.
Principle 4: Risk management
The leading risks at operational level relate to the reliability
of our resource and reserve estimations and our ability to manage
the mining operation to achieve its goals. These risks are
mitigated by ensuring we employ qualified and knowledgeable
personnel who are adequately resourced and supported by effective
management. Resource exploration involves inherent risks stemming
from the fact that information relating to the mineralisation is
not immediately available and is expensive to obtain. Recognising
this risk and then managing it effectively is a critical aspect of
a successful resource exploration and development business.
The Company's annual audit provides an opportunity to reassess
the chief risks facing the business at both a corporate and
operational level. These are agreed by directors and delineated and
audited on an annual basis, thus ensuring adequate recognition and
articulation of each risk category.
Principle 5: Maintaining a dynamic management framework
The Board consists of a Chairman and Chief Executive Officer
supported by four Non-Executive Directors. The Board endeavours to
maintain two independent Non-Executive Director positions at all
times. At the date of this revision Iain Rawlinson, Artem Matyushok
and Kotaro Kosaka are considered independent Non-Executive
Directors. In addition, the board maintains appointments made as
strategic advisors. Current Board and advisor roles are listed on
our website at https://www.eurasiamining.co.uk/about/team-2
The board meets when an executive decision requires board
approval, and in any event no less than once per six-week period.
Board members are regularly consulted on executive decisions which
would benefit from specific input relevant to a board members area
of expertise. All board members are aware of and comfortable with
the time and resource requirements associated with their position.
Relevant information relating to a board discussion is carefully
prepared and circulated in advance of board meetings. Minutes are
kept and then circulated directly after all board meetings. Minutes
are noted on a prescribed form, which includes heading information
such as attendance. An attendance record for each director is
maintained and annualised for distribution within the board.
Separately, the Company secretary, is considered a key position
necessary in preserving a functional and ergonomic management
framework within the Company and good communication across the
Group of companies.
Principle 6: Experience and skills
The board has an effective combination of commercial and
technical experience, being led by a chair with a strong background
in geology, who is supported by non-executive directors with
commercial, legal and technical experience in a range of markets
and jurisdictions. Board members retire on a fixed rota and declare
themselves eligible for reappointment by shareholders at the
Company's AGM.
The board considers the skill sets within the board to be
sufficient for the successful running of the business, and the
delivery of the stated corporate strategy and goals through the
medium to long term, however further appointments may be made in
due course. In addition, where more specialised skills are
required, the board has access to a network of individuals and
organisations with whom it can consult for further information.
This can include input to operational decisions relating to the
Company's operating mine, or advice of a commercial nature. Each
board member's long-standing career in the industry is invaluable
in this regard.
Continuing Professional Development ('CPD') and membership of
institutions which promote best practice in industry is encouraged
in all board members, though not compulsory to board membership. As
an example, the professional accreditations PGeo ('Professional
Geologist', Institute of Geologists of Ireland) and EurGeol
('European Geologist', European Federation of Geologists), attained
by the Executive Chairman, are maintained by strict adherence to a
programme of quantitative and qualitative CPD activities. Likewise,
the Company's financial controller maintains membership of the
Association of Chartered and Certified Accountants by following a
prescribed CPD programme. All board members regularly attend
industry events and conferences to keep abreast of developments in
their area of expertise.
No one board member, or group of board members, dominates
decision making within the Board.
Principle 7: Board performance
The Remuneration Committee, whose membership is considered
annually is responsible for evaluating the performance of the
executive directors. As mentioned above board members retire on a
fixed rota, and efforts are made with regard to succession planning
and appointment of new board members.
The appointment process involves; assessment of suitability
based on qualifications and work history, due diligence by the
Company and its Nominated Adviser, a series of meetings with board
members and key personnel, and finally contract negotiation and
appointment.
Board evaluations are internal to the Company and on an ad-hoc
basis, as befits the small scale of the Company currently, but not
less than once per year at the time of the Company AGM. Adhering to
the Company's strategy, achieving the Company's goals, and
maintaining good corporate governance standards are the three most
prominent identifiers by which board effectiveness is evaluated.
Board evaluations are not currently made public, and it is the
Company's intention to reconsider this position and ensure
continued compliance with the Code as the Company develops.
Principle 8: Values
The Company is founded on a culture of following and promoting
the highest ethical standards with regard to its commercial
transactions, business practices, strategy, internal employee
relations and outward-facing stakeholder and community
relationships. The Company operates chiefly in the Russian
Federation though it is incorporated in the UK and governed by the
laws of England and Wales. The corporate culture and values extend
from the corporate level throughout the organisation irrespective
of jurisdiction. An ability to recognise and promote good ethical
values and behaviours is seen throughout the organisation as an
excellent behavioural asset to an employee, potential employee or
board member. The current board members have been chosen with this
awareness of the corporate culture and the Company's ethical
standards in mind - new board appointments are also considered in
this light. Corporate culture, and high ethical standards with
regard to business practices are considered a critical element in
attaining the Company's strategy and goals and these standards are
reinforced through the appraisal process. High standards of ethics
create a competitive advantage for the Company and are a core
element of the Company's business model, as they ensure the
Company's long-term sustainability. Eurasia is an equal
opportunities employer and the Board has recognised a lack of board
diversity which it intends to address.
Principle 9: Governance
Maintaining governance structures that are fit for use as the
Company evolves in size and complexity is an essential element of
good corporate governance. Maintenance of the corporate governance
code is the sole remit of the Chairman, who instigates changes in
policy, and ensures the code is applied throughout the
organisation.
Non-executive directors are appointed and participate in all
board level decisions and also provide scrutiny and oversight of
the executive director's roles. The board's non-executive directors
are each skilled in different aspects of commerce, law, finance and
the UK regulatory environment, with a combined breath of experience
across various markets, commodities and jurisdictions. They
communicate regularly with the Chairman and executive directors and
provide reliable advice in their areas of expertise. The terms and
functions of the audit and risk, remuneration and nomination
committees are set out below. The Company Secretary is available to
non-executive directors to support their information requirements
and decision making and reports directly to the Chairman.
AUDIT AND RISK COMMITTEE
The Audit and Risk Committee may examine any matter relating to
the financial affairs of the Group and the Group's audits, this
includes reviews of the annual financial statements and
announcements, internal control procedures, accounting procedures,
accounting policies, the appointment, independence, objectivity,
terms of reference and fees of external auditors and such other
related functions as the Board may require. The external Auditors
have direct access to the members of the committee, without
presence of the executive Directors, for independent discussions.
Several Audit and Risk Committee meetings are held during the year,
prior to and during the annual audit; and to approve Interim and
Annual Financial Statements. The Audit and Risk Committee opines on
whether accounts are in compliance with International Financial
Reporting Standards.
The Chairman of the Audit and Risk Committee is Iain Rawlinson
and the committee comprises Iain Rawlinson and Tamerlan Abdikeev.
The Audit and Risk Committee is guided by company policy and
procedure including the Audit and Risk Committee terms of
reference.
REMUNERATION COMMITTEE
The Remuneration Committee determines the terms and conditions
of employment and annual remuneration of the executive Directors
and senior staff. It consults with the Executive Chairman, takes
into consideration external data and comparative third-party
remuneration and has access to professional advice outside the
Company. The Chairman of the Remuneration Committee is Iain
Rawlinson and the committee comprises Iain Rawlinson and Tamerlan
Abdikeev.
The key policy objectives of the Remuneration Committee in
respect of the Company's executive Directors and other senior
executives are:-
-- to ensure that individuals are fairly rewarded for their
personal contribution to the Company's overall performance, and
-- to act as an independent committee ensuring that due regard
is given to the interests of the Company's Shareholders and to the
financial and commercial health of the Company.
Remuneration of executive Directors comprises basic salary,
discretionary bonuses, participation in the Company's Share Option
Scheme and other benefits. The Company's remuneration policy with
regard to options is to maintain an amount of not more than 10% of
the issued share capital in options for the Company's management
and employees which may include the issue of new options in line
with any new share issues. The Remuneration Committee is guided by
company policy and procedure including the Remuneration Committee
terms of reference.
NOMINATIONS COMMITTEE
The Chairman of the Nominations Committee is Christian
Schaffalitzky and the committee comprises Christian Schaffalitzky
and Iain Rawlinson. The committee convenes at a minimum twice
annually to consider board composition, and, if considered
necessary, seek further appointments. The committee is conscious of
a need for board diversity when considering future
appointments.
The Nominations Committee is guided by company policy and
procedure including the Nominations Committee terms of
reference.
Principle 10: Build trust
The Board seeks to maintain both direct and two-way
communication with its shareholders through its public and investor
relations programmes. All shareholders may at their discretion
chose to attend the Company AGM and speak directly to the Board and
management.
The Company employs Public Relations and Investor Relations
professionals and maintains several third-party contracts to better
disseminate Company news-flow. Through shareholder feedback the
Company ensures that the Board's communication of the Company's
progress is thorough and well understood.
A clear statement on the outcomes of board resolutions is
communicated immediately after the Company's AGM by RNS and posted
to the Company's website. This includes a summary of votes for and
against the resolutions put before the shareholders, and where a
significant number of votes is cast against a resolution this is
clearly stated, with an explanation as to possible remediation
regarding that voting. A catalogue of historical annual reports and
AGM notices is maintained at an appropriate location on the
Company's website.
Matters which are reserved strictly for the consideration of the
board include, but are not limited to, discussions and decision on
Company strategy, major investment decisions in new business
development, commercial arrangements including funding
requirements, high-level decisions on distribution of funds, and
recruitment or dismissal of senior personnel and board members.
The above outline of the Company's corporate governance
framework befits the current scale of the Company but will be
subject to appropriate modifications as the Company grows in line
with its stated strategy. An annual review of the corporate
governance framework is undertaken at the board meeting preceding
or directly following the Company's AGM. Changes considered to the
current corporate governance framework, to be assessed in due
course, include further appointments to the board, and establishing
independent bodies to review and assess board performance.
HEALTH AND SAFETY
The Group has occupational health and safety policies and
procedures in place ensuring that all efforts are made to minimise
adverse personal and corporate outcomes, through best practice
training, implementation and monitoring. No serious incidents
occurred in the past year.
UK CODE ON TAKEOVER AND MERGERS
Eurasia Mining is subject to the UK City code on takeovers and
mergers, which was revised and extended to apply to all companies
listed on the AIM market in October 2013.
AUDITORS
Grant Thornton are willing to continue in office and a
resolution proposing their re-appointment as auditors of the
Company and a resolution authoring the Directors to agree their
remuneration will be put to shareholders at the Annual General
Meeting.
By order of the Board
K. Byrne
Company Secretary
Consolidated statement of profit of loss and other comprehensive
income
For the year ended 31 December 2021
Note Year
Year to to
31 December 31 December
2021 2020
GBP GBP
Sales 8 2,331,225 937,962
Cost of sales 9 (2,584,680) (1,131,954)
------------- -------------
Gross (loss)/profit (253,455) (193,992)
Administrative costs 9 (2,717,765) (1,889,793)
Investment income 1,394 486
Finance cost 10 (103,445) (100,886)
Other losses 11 (65,250) (1,509,123)
------------- -------------
Loss before tax (3,138,521) (3,693,308)
Income tax expense 12 - -
------------- -------------
Loss for the year (3,138,521) (3,693,308)
Other comprehensive income:
Items that will not be reclassified
subsequently to profit and
loss:
NCI share of foreign exchange
differences on translation
of foreign operations 16 36,855 181,670
Items that will be reclassified
subsequently to profit and
loss:
Parent's share of foreign exchange
differences on translation
of foreign operations (58,679) 382,686
------------- -------------
Other comprehensive income
for the year, net of tax (21,824) 564,356
------------- -------------
Total comprehensive loss for
the year (3,160,345) (3,128,952)
============= =============
Loss for the period attributable
to:
Equity holders of the parent (2,910,479) (3,080,336)
Non-controlling interest 16 (228,042) (612,972)
------------- -------------
(3,138,521) (3,693,308)
============= =============
Total comprehensive loss for
the year attributable to:
Equity holders of the parent (2,969,158) (2,697,650)
Non-controlling interest 16 (191,187) (431,302)
------------- -------------
(3,160,345) (3,128,952)
============= =============
(Loss)/profit per share attributable
to equity holders of the parent:
Basic and diluted loss (pence
per share) 29 (0.10) (0.11)
The accompanying notes are an integral part of these financial
statements.
Consolidated statement of financial position
As at 31 December 2021
Note 31 December 31 December
2021 2020
GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 13 5,061,743 4,295,908
Assets in the course of construction 13 640,423 28,957
Intangible assets 14 1,389,029 696,504
Investment to potential share
in joint venture 15 367,464 -
------------- -------------
Total non-current assets 7,458,659 5,021,369
------------- -------------
Current assets
Inventories 18 38,673 13,695
Trade and other receivables 19 1,681,864 285,081
Current tax asset 5,334 5,307
Cash and cash equivalents 20 22,009,507 5,404,101
------------- -------------
Total current assets 23,735,378 5,708,184
------------- -------------
Total assets 31,194,037 10,729,553
============= =============
EQUITY
Issued capital 21 61,187,111 37,812,856
Other reserves 23 3,922,691 3,981,370
Accumulated losses (33,114,532) (30,204,053)
------------- -------------
Equity attributable to equity
holders
of the parent 31,995,270 11,590,173
Non-controlling interest 16 (1,950,049) (1,758,862)
------------- -------------
Total equity 30,045,221 9,831,311
------------- -------------
LIABILITIES
Non-current liabilities
Lease liabilities 25 307,136 425,923
Provisions 27 143,268 50,186
------------- -------------
Total non-current liabilities 450,404 476,109
------------- -------------
Current liabilities
Borrowings 24 31,953 31,684
Lease liabilities 25 122,407 101,007
Trade and other payables 26 486,558 287,491
Provisions 27 57,494 1,951
Total current liabilities 698,412 422,133
------------- -------------
Total liabilities 1,148,816 898,242
------------- -------------
Total equity and liabilities 31,194,037 10,729,553
============= =============
These financial statements were approved by the board on 28 June
2022 and were signed on its behalf by:
C. Schaffalitzky
Executive Chairman
The accompanying notes are an integral part of these financial
statements.
Company statement of financial position
As at 31 December 2021
Note 31 December 31 December
2021 2020)
GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 13 804 1,507
Investments in subsidiaries 16 1,132,246 1,132,246
Total non-current assets 1,133,050 1,133,753
------------- -------------
Current assets
Trade and other receivables 19 308,485 106,042
Other financial assets 17 12,681,450 8,226,176
Cash and cash equivalents 20 21,892,793 5,247,106
------------- -------------
Total current assets 34,882,728 13,579,324
------------- -------------
Total assets 36,015,778 14,713,077
============= =============
EQUITY
Issued capital 21 61,187,111 37,812,856
Other reserves 23 3,924,026 3,924,026
Accumulated losses (29,371,048) (27,366,492)
------------- -------------
Total equity 35,740,089 14,370,390
LIABILITIES
Current liabilities
Trade and other payables 26 275,689 342,687
Total current liabilities 275,689 342,687
------------- -------------
Total liabilities 275,689 342,687
------------- -------------
Total equity and liabilities 36,015,778 14,713,077
============= =============
In accordance with section 408(3) of the Companies Act 2006,
Eurasia Mining plc is exempt from the requirement to present its
own statement of profit or loss. The amount of loss for the
financial year recorded within the financial statements of Eurasia
Mining plc is GBP2,004,556 (2020: loss of GBP1,432,061).
These financial statements were approved by the board on 28 June
2022 and were signed on its behalf by:
C. Schaffalitzky
Executive Chairman
The accompanying notes are an integral part of these financial
statements.
Consolidated statement of changes in equity
For the year ended 31 December 2021
Attributable
to equity
holders
Share Share Deferred Other Translation Retained of the Non-controlling
Note capital premium shares reserves reserve loss parent interest Total
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 1 January
2020 2,693,757 20,572,186 7,025,483 3,958,087 (325,342) (27,157,778) 6,766,393 (1,327,560) 5,438,833
Issue of ordinary
share
capital for cash 33,927 7,599,661 - - - - 7,633,588 - 7,633,588
Issue of ordinary
shares
on exercise of
warrants 22,018 202,983 - (674) - 674 225,001 - 225,001
Issue of shares under
employee
share option plan 9,000 67,200 - (14,904) - 14,904 76,200 - 76,200
Share issue cost - (413,359) - - - - (413,359) - (413,359)
Reversal on
cancellation
or exercise of
options and
warrants - - - (18,483) - 18,483 - - -
Transaction with
owners 64,945 7,456,485 - (34,061) - 34,061 7,521,430 - 7,521,430
---------- ----------- ---------- ---------- ------------ ------------- ------------- ---------------- ------------
Loss for the year - - - - - (3,080,336) (3,080,336) (612,972) (3,693,308)
-
Other
comprehensive
income
Exchange differences
on
translation
of foreign operations - - - - 382,686 - 382,686 181,670 564,356
Total comprehensive
loss
for the period ended
31
December 2020 - - - - 382,686 (3,080,336) (2,697,650) (431,302) (3,128,952)
---------- ----------- ---------- ---------- ------------ ------------- ------------- ---------------- ------------
Balance at 31 December
2020 2,758,702 28,028,671 7,025,483 3,924,026 57,344 (30,204,053) 11,590,173 (1,758,862) 9,831,311
========== =========== ========== ========== ============ ============= ============= ================ ============
Attributable
to equity
holders
Share Share Deferred Other Translation Retained of the Non-controlling
Note capital premium shares reserves reserve loss parent interest Total
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 1 January
2021 2,758,702 28,028,671 7,025,483 3,924,026 57,344 (30,204,053) 11,590,173 (1,758,862) 9,831,311
Issue of ordinary
share
capital for cash 94,858 24,834,836 - - - - 24,929,694 24,929,694
Share issue cost - (1,555,439) - - - - (1,555,439) (1,555,439)
Transaction with
owners 94,858 23,279,397 - - - - 23,374,255 - 23,374,255
---------- ------------ ---------- ---------- ------------ ------------- ------------- ---------------- ------------
Loss for the year - - - - - (2,910,479) (2,910,479) (228,042) (3,138,521)
-
Other
comprehensive
income
Exchange differences
on
translation
of foreign operations - - - - (58,679) - (58,679) 36,855 (21,824)
Total comprehensive
loss
for the period ended
31
December 2021 - - - - (58,679) (2,910,479) (2,969,158) (191,187) (3,160,345)
---------- ------------ ---------- ---------- ------------ ------------- ------------- ---------------- ------------
Balance at 31 December
2021 2,853,560 51,308,068 7,025,483 3,924,026 (1,335) (33,114,532) 31,995,270 (1,950,049) 30,045,221
========== ============ ========== ========== ============ ============= ============= ================ ============
The accompanying notes are an integral part of these financial
statements.
Company statement of changes in equity
For the year ended 31 December 2021
Share Share Deferred Retained
Note capital premium shares Other reserves loss Total
GBP GBP GBP GBP GBP GBP
Balance at 1 January 2020 2,693,757 20,572,186 7,025,483 3,958,087 (25,968,492) 8,281,021
Issue of ordinary share capital
for cash 33,927 7,599,661 - - - 7,633,588
Issue of ordinary shares on
exercise of warrants 22,018 202,983 - (674) 674 225,001
Issue of shares under employee
share option plan 9,000 67,200 - (14,904) 14,904 76,200
Share issue cost - (413,359) - - - (413,359)
Reversal on cancellation or
exercise of options and warrants - - - (18,483) 18,483 -
Transactions with owners 64,945 7,456,485 - (34,061) 34,061 7,521,430
---------- ----------- ---------- --------------- ------------- ------------
Loss and total comprehensive
income - - - - (1,432,061) (1,432,061)
Balance at 31 December 2020 2,758,702 28,028,671 7,025,483 3,924,026 (27,366,492) 14,370,390
========== =========== ========== =============== ============= ============
Share Share Deferred Retained
Note capital premium shares Other reserves loss Total
GBP GBP GBP GBP GBP GBP
Balance at 1 January 2021 2,758,702 20,028,671 7,025,483 3,924,026 (27,366,492) 14,370,390
Issue of ordinary share capital
for cash 94,858 24,834,836 - 24,929,694
Share issue cost - (1,555,439) - (1,555,439)
Transactions with owners 94,858 23,279,397 - - - 23,374,255
---------- ------------ ---------- --------------- ------------- ------------
Loss and total comprehensive
income - - - - (2,004,556) (2,004,556)
Balance at 31 December 2021 2,853,560 51,308,068 7,025,483 3,924,026 (29,371,048) 35,740,089
========== ============ ========== =============== ============= ============
The accompanying notes are an integral part of these financial
statements.
Consolidated statement of cash flows
For the year ended 31 December 2021
Year to Year to
31 December 31 December
Note 20 2 1 2020
GBP GBP
Cash flows from operating activities
Loss for the year (3,138,521) (3,693,308)
Adjustments for:
Depreciation of non-current assets 13 422,752 205,200
Asset value write offs to cost 149,882
of sales -
Finance costs recognised in profit
or loss 24 103,445 100,886
Investment income recognised
in profit or loss (1,394) (486)
Rehabilitation (change in estimate)/cost
recognised in profit or loss 145,785 (14,671)
Income tax expense recognised
in profit or loss - -
Net foreign exchange loss 11 65,250 1,509,123
(2,252,801) (1,893,256)
Movement in working capital
Increase in inventories (24,862) (12,152)
Increase in trade and other receivables (1,395,059) (130,219)
Decrease/(increased) in trade
and other payables 197,728 (65,555)
------------- -------------
Cash outflow from operations (3,474,993) (2,101,182)
Income tax paid - -
Net cash used in operating activities (3,474,993) (2,101,182)
------------- -------------
Cash flows from investing activities
Investment income 1,394 486
Investment to acquire interest
in joint venture 15 (367,464)
Purchase of property, plant and
equipment 13 (1,910,033) (687,167)
Payment for exploration and evaluation
assets 14 (682,419) (9,599)
Net cash used in investing activities (2,958,523) (696,280)
------------- -------------
Cash flows from financing activities
Proceeds from issue of equity
shares 24,929,694 7,934,789
Share issue costs (1,555,439) (413,359)
Proceeds from borrowings - 300,000
Repayment of borrowings - (306,341)
Repayment of lease liability (101,674) (81,491)
Interest paid (101,048) (96,965)
Net cash proceeds from financing
activities 23,171,533 7,336,633
------------- -------------
Net increase in cash and cash 16,737,99
equivalents 6 4,539,171
Effects of exchange rate changes
on the balance of cash held in
foreign currencies (132,611) (55,083)
Cash and cash equivalents at beginning
of year 5,404,101 920,013
Cash and cash equivalents at
end of year 22,009,507 5,404,101
============= =============
The accompanying notes are an integral part of these financial
statements.
Company statement of cash flows
For the year ended 31 December 2021
Year to Year to
31 December 31 December
Note 20 2 1 20 20
GBP GBP
Cash flows from operating activities
Loss for the year (2,004,556) (1,432,061)
Adjustments for:
Depreciation of non-current assets 703 416
Finance costs recognised in profit
or loss 10 - 4,586
Net foreign exchange loss 26,576 -
(1,977,277) (1,427,059)
Movement in working capital
Increase in trade and other receivables (202,443) (14,481)
(Decrease)/increase in trade and
other payables (66,998) (184,863)
------------- -------------
Cash outflow from operations (2,246,718) (1,626,403)
Income tax paid - -
Net cash used in operating activities (2,246,718) (1,626,403)
------------- -------------
Cash flows from investing activities
Amounts advanced to related party (4,455,274) (1,537,070)
Purchase of property, plant and
equipment - (1,260)
Net cash used in investing activities (4,455,274) (1,538,330)
------------- -------------
Cash flows from financing activities
Proceeds from issue of equity shares 24,929,694 7,934,789
Share issue costs (1,555,439) (413,359)
Proceeds from the borrowings - 300,000
Repayment of borrowings - (304,586)
Net cash proceeds from financing
activities 23,374,255 7,516,844
------------- -------------
Net increase in cash and cash
equivalents 16,672,263 4,352,111
Effects of exchange rate changes
on the balance of cash held in
foreign currencies (26,576) -
Cash and cash equivalents at beginning
of year 5,247,106 894,995
Cash and cash equivalents at end
of year 21,892,793 5,247,106
============= =============
The accompanying notes are an integral part of these financial
statements.
Notes to the financial statements
1 General information
Eurasia Mining Plc (the "Company") is a public limited company
incorporated and domiciled in Great Britain with its registered
office at International House, 142 Cromwell Road, London SW7 4EF,
United Kingdom and principal place of business at Clubhouse
Holborn, 20 St Andrew Street, EC4A 3AG, United Kingdom. The
Company's shares are listed on the AIM Market of the London Stock
Exchange plc. The principal activities of the Company and its
subsidiaries (collectively "Group") are related to the exploration
for and development of platinum group metals, gold and other
minerals in Russia.
Eurasia Mining Plc's consolidated financial statements are
presented in Pounds Sterling (GBP), which is also the functional
currency of the parent company.
2 Going concern
Following two significant fund raisings through the issue of new
ordinary shares in May and September 2021, as at 31 December 2021
the Group's net current assets amounted to GBP 23,036,966
(GBP5,286,051 in 2020). As at the same date, the Group's cash
balance was GBP22,009,507 (GBP5,404,101 in 2020). The Group's debt
largely consisted of lease liabilities set up to acquire mining
machinery for a total amount of GBP429,543 (at 31 December 2020 -
GBP558,614).
The Group's current (as at 30 May 2022) cash position is around
GBP14,200,000 with the reduction since December 2021 being
accounted for by GBP3,900,000 in capital expenditure, GBP1,300,000
on development expenditure on its assets portfolio, and
GBP3,500,000 in costs.
The Board consider the West Kytlim asset to be fully capitalised
for sustainable mine production for an up to 15 year mine life (at
2022 capacity), without consideration of possible reserves in the
adjacent West Kytlim Flanks and Typil License areas. The Group is
in the process of installing electric draglines and grid power,
realising its plans for the West Kytlim asset which is intended to
be self-funding from 2022.
The Group has spent GBP682,419 on a development programme for
the Monchetundra asset during 2021 and has budgeted a further
GBP527,000 for statutory reporting on this asset to November 2022,
keeping the asset in good standing while strategic options for the
project's development are considered.
3 Changes in accounting policies
3.1 New and revised relevant standards that are effective for
annual periods commencing on or after 1 January 2021
Interest Rate Benchmark Reform - Phase 2: Amendments to IFRS 9,
IAS 39, IFRS 7, IFRS 4 and IFRS 16:
The amendments provide temporary reliefs which address the
financial reporting effects when an interbank offered rate (IBOR)
is replaced with an alternative nearly risk-free interest rate
(RFR). The amendments include the following practical
expedients:
-- A practical expedient to require contractual changes, or
changes to cash flows that are directly required by the reform, to
be treated as changes to a floating interest rate, equivalent to a
movement in a market rate of interest
to cash flows that are directly required by the reform, to be
treated as changes to a floating interest rate, equivalent to a
movement in a market rate of interest;
-- Permit changes required by IBOR reform to be made to hedge
designations and hedge documentation without the hedging
relationship being discontinued;
-- Provide temporary relief to entities from having to meet the
separately identifiable requirement when an RFR instrument is
designated as a hedge of a risk component.
These amendments did not have any impact on the financial
statements of the Group. The Group intends to apply the practical
expedients in future periods, if necessary.
COVID-19-Related Rent Concessions beyond 30 June 2021 Amendments
to IFRS 16
On 28 May 2020, the IASB issued COVID-19-Related Rent
Concessions - amendment to IFRS 16 Leases. The amendments provide
relief to lessees from applying IFRS 16 guidance on lease
modification accounting for rent concessions arising as a direct
consequence of the COVID-19 pandemic. As a practical expedient, a
lessee may elect not to assess whether a COVID-19 related rent
concession from a lessor is a lease modification. A lessee that
makes this election accounts for any change in lease payments
resulting from the COVID-19 related rent concession the same way it
would account for the change under IFRS 16, if the change were not
a lease modification.
The amendment was intended to apply until 30 June 2021, but due
to the continued impact of the COVID-19 pandemic, on 31 March 2021
the IASB elected to extend the application of the practical
expedients until 30 June 2022.
The new amendment is effective for annual periods beginning on
or after 1 April 2021.
The Group does not have any granted rent concessions related to
the COVID-19, but plans to apply practical expedients, if
necessary, within a reasonable period.
3.2 Standards, amendments and interpretations to existing
standards that are not yet effective and have not been adopted
early by the Group
IFRS 17 Insurance Contracts
In May 2017, the IASB issued IFRS 17 Insurance Contracts (IFRS
17), a comprehensive new accounting standard for insurance
contracts covering recognition and measurement, presentation and
disclosure. Once effective, IFRS 17 replaces IFRS 4 Insurance
Contracts (IFRS 4) that was issued in 2005. IFRS 17 applies to all
types of insurance contracts (i.e., life, non-life, direct
insurance and re-insurance), regardless of the type of entities
that issue them, as well as to certain guarantees and financial
instruments with discretionary participation features. There are
several scope exceptions. The overall objective of IFRS 17 is to
provide an accounting model for insurance contracts that is more
useful and consistent for insurers. In contrast to the requirements
in IFRS 4, which are largely based on grandfathering previous local
accounting policies, IFRS 17 provides a comprehensive model for
insurance contracts, covering all relevant accounting aspects. The
core of IFRS 17 is the general model, supplemented by:
-- A specific adaptation for insurance contracts with direct
participation terms (the variable fee approach).
-- A simplified approach (the premium allocation approach) is
mainly for short-duration contracts.
IFRS 17 is effective for reporting periods starting on or after
1 January 2023, with comparative figures required. Early
application is permitted, provided the entity also applies IFRS 9
and IFRS 15 on or before the date it first applies IFRS 17. This
standard is not applicable to the Group.
Amendments to IAS 1 - Classification of Liabilities as Current
or Non-current
In January 2020, the IASB issued amendments to paragraphs 69 to
76 of IAS 1 to specify the requirements for classifying liabilities
as current or non-current. The amendments clarify:
-- What is meant by a right to defer settlement;
-- That a right to defer must exist at the end of the reporting period;
-- That classification is unaffected by the likelihood that an
entity will exercise its deferral right;
-- That only if an embedded derivative in a convertible
liability is itself an equity instrument would the terms of a
liability not impact its classification.
These amendments are effective for annual periods beginning on
or after 1 January 2023 and are applied retrospectively. The Group
is currently assessing the possible impact the amendments will have
on current liabilities and whether existing loan agreements may
require renegotiation.
Reference to the Conceptual Framework - Amendments to IFRS 3
In May 2020, the IASB issued Amendments to IFRS 3 Business
Combinations - Reference to the Conceptual Framework. The
amendments are intended to replace a reference to the Framework for
the Preparation and Presentation of Financial Statements, issued in
1989, with a reference to the Conceptual Framework for f inancial
Reporting issued in March 2018 without significantly changing its
requirements.
The Board also added an exception to the recognition principle
of IFRS 3 to avoid the issue of potential 'day 2' gains or losses
arising for liabilities and contingent liabilities that would be
within the scope of IAS 37 or IFRIC 21 Levies, if incurred
separately.
At the same time, the Board decided to clarify existing guidance
in IFRS 3 for contingent assets that would not be affected by
replacing the reference to the Framework for the Preparation and
Presentation of Financial Statements.
These amendments are effective for annual periods beginning on
or after 1 January 2022 and are applied prospectively.
Property, Plant and Equipment: Proceeds before Intended Use -
Amendments to IAS 16
In May 2020, the IASB issued Property, Plant and Equipment -
Proceeds before Intended Use, which prohibits entities deducting
from the cost of an item of property, plant and equipment, any
proceeds from selling items produced while bringing that asset to
the location and condition necessary for it to be capable of
operating in the manner intended by management. Instead, an entity
recognises the proceeds from selling such items, and the costs of
producing those items, in profit or loss.
These amendments are effective for annual reporting periods
beginning on or after 1 January 2022 and must be applied
retrospectively to items of property, plant and equipment made
available for use on or after the beginning of the earliest period
presented when the entity first applies these amendments.
These amendments are not expected to have an impact on the
Group.
Onerous Contracts - Costs of Fulfilling a Contract - Amendments
to IAS 37
In May 2020, the IASB issued amendments to IAS 37 to specify
which costs an entity needs to include when assessing whether a
contract is onerous or loss-making.
The amendments apply a "directly related cost approach". The
costs that relate directly to a contract to provide goods or
services include both incremental costs and an allocation of costs
directly related to contract activities. General and administrative
costs do not relate directly to a contract and are excluded unless
they are explicitly chargeable to the counterparty under the
contract.
These amendments are effective for annual periods beginning on
or after 1 January 2022. The Company will apply these amendments to
contracts for which it has not yet fulfilled all its obligations at
the beginning of the annual reporting period in which it first
applies the amendments.
IFRS 1 First-time Adoption of International Financial Reporting
Standards - Subsidiary as a first-time adopter
As part of its 2018-2021 annual improvements to IFRS standards
process, the IASB issued an amendment to IFRS 1 First-time Adoption
of International Financial Reporting Standards. The amendment
permits a subsidiary that elects to apply paragraph D16(a) of IFRS
1 to measure cumulative translation differences using the amounts
reported by the parent, based on the parent's date of transition to
IFRS. This amendment is also applied to an associate or joint
venture that elects to apply paragraph D16(a) of IFRS 1.
This amendment is effective for annual periods beginning on or
after 1 January 2022 with earlier adoption is permitted.
IFRS 9 Financial Instruments - Fees in the '10 per cent' test
for derecognition of financial liabilities
As part of its 2018-2020 annual improvements to IFRS standards
process the IASB issued amendment to IFRS 9. The amendment
clarifies the fees that an entity includes when assessing whether
the terms of a new or modified financial liability are
substantially different from the terms of the original financial
liability. These fees include only those paid or received between
the borrower and the lender, including fees paid or received by
either the borrower or lender on the other's behalf. An entity
applies the amendment to financial liabilities that are modified or
exchanged on or after the beginning of the annual reporting period
in which the entity first applies the amendment.
This amendment is effective for annual periods beginning on or
after 1 January 2022. Early adoption is permitted. The Company will
apply the amendment to financial liabilities that are modified or
exchanged on or after the beginning of the annual reporting period
in which the Company first applies the amendment.
The amendment is not expected to have a material impact on the
Group.
Amendment to IAS 41 Agriculture - Taxation in fair value
measurements
As part of its 2018-2020 annual improvements to IFRS standards
process the IASB issued amendment to IAS 41 Agriculture. The
amendment removes the requirement in paragraph 22 of IAS 41 that
entities exclude cash flows for taxation when measuring the fair
value of assets within the scope of IAS 41.
An entity applies the amendment prospectively to fair value
measurements on or after the beginning of the first annual
reporting period beginning on or after 1 January 2022. Early
adoption is permitted.
The amendment is not expected to have an impact on the
Group.
Definition of Accounting Estimates - Amendments to IAS 8
In February 2021, the IASB issued amendments to IAS 8, in which
it introduces a definition of 'accounting estimates. The amendments
clarify the distinction between changes in accounting estimates and
changes in accounting policies and the correction of errors. It
also explains how organizations use measurement methods and inputs
to develop accounting estimates.
The amendments are effective for annual reporting periods
beginning on or after 1 January 2023 and apply to changes in
accounting policies and changes in accounting estimates that occur
on or after the start of that period. Early application is
permitted and must be disclosed.
These amendments are not expected to have an impact on the
Group.
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS
Practice Statement 2
In February 2021, the IASB issued amendments to IAS 1 and IFRS
Practice Statement 2 Making Materiality Judgments, which provide
guidance and examples to help entities apply materiality judgments
to accounting policy disclosures. The amendments should help
entities disclose more useful information about accounting policies
by replacing the requirement for entities to disclose "significant
accounting policies" with a requirement to disclose "material
accounting policy information", and by adding guidance on how
entities should apply materiality judgements to disclosure of
accounting policies.
The amendments to IAS 1 apply for annual periods beginning on or
after 1 January 2023, early application is permitted. Since the
amendments to the Practice Statement 2 provide non-mandatory
guidance on the application of the definition of material to
accounting policy information, an effective date for these
amendments is not necessary.
The Group is currently assessing the impact these
amendments.
4 Summary of significant accounting policies
4.1 Basis of preparation
The consolidated financial statements of the Group and the
Company financial statements have been prepared in accordance with
UK-adopted International Accounting Standards in conformity with
the requirements of the Companies Act 2006.
These financial statements have been prepared under the
historical cost convention. The accounting policies have been
applied consistently throughout the Group for the purposes of
preparation of these consolidated financial statements.
4.2 Presentation of financial statements
The consolidated financial statements are presented in
accordance with IAS 1 Presentation of Financial Statements. The
Group has elected to present the "Consolidated Statement of Profit
or Loss" in one statement.
4.3 Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company.
Control is achieved where the Company has all of the following:
-- Power over investee;
-- Exposure, or rights, to variable returns from its involvement with the investee;
-- The ability to use its power over the investee to affect the
amount of investor's returns.
The results of subsidiaries acquired or disposed of are included
in the Consolidated Statement of Profit or Loss from the effective
date of acquisition or up to the effective date of disposal, as
appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting policies in
line with those used by other members of the Group.
All intra-group transactions, balances, income and expenses are
eliminated in full on consolidation.
Non-controlling interests in the net assets of consolidated
subsidiaries are identified separately from the Group's equity
therein. Non-controlling interests consist of the amount of those
interests at the date of the original business combination and the
non-controlling party's share of changes in equity since the date
of the combination.
4.4 Business combinations
The Group applies the acquisition method in accounting for
business combinations. The consideration transferred by the Group
to obtain control of a subsidiary is calculated as the sum of the
acquisition-date fair values of assets transferred, liabilities
incurred, and the equity interests issued by the Group, which
includes the fair value of any asset or liability arising from a
contingent consideration arrangement. Acquisition costs are
expensed as incurred.
The Group recognises identifiable assets acquired and
liabilities assumed in a business combination regardless of whether
they have been previously recognised in the acquiree's financial
statements prior to the acquisition. Assets acquired and
liabilities assumed are generally measured at their
acquisition-date fair values.
Goodwill is stated after separate recognition of identifiable
intangible assets. It is calculated as the excess of the sum of a)
fair value of consideration transferred, b) the recognised amount
of any non-controlling interest in the acquiree and c)
acquisition-date fair value of any existing equity interest in the
acquiree, over the acquisition-date fair values of identifiable net
assets. If the fair values of identifiable net assets exceed the
sum calculated above, the excess amount (i.e. gain on a bargain
purchase) is recognised as a profit or loss immediately.
In a business combination achieved in stages, the Group
re-measure its previously held equity interest in the acquiree at
its acquisition-date fair value and recognise the resulting gain or
loss, if any, in profit or loss or other comprehensive income, as
appropriate.
4.5 Foreign currencies
Functional and presentation currency
The individual financial statements of each group entity are
prepared in the currency of the primary economic environment in
which the entity operates ("the functional currency"). The
consolidated financial statements are presented in GBP, which is
the functional and the presentation currency of the Company.
Transaction and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the profit or
loss.
Non-monetary items that are measured in terms of historical cost
in a foreign currency are not retranslated.
Group companies
The results and financial position of all the Group entities
(none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation
currency are translated into the presentation currency as
follows:
-- assets and liabilities for each statement of financial
position presented are translated at the closing rate at the date
of that statement of financial position;
-- income and expenses for each Statement of Profit or Loss are
translated at average exchange rates (unless this average is not a
reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and
expenses are translated at the rate on the dates of the
transactions); and
-- all resulting exchange differences are recognised as a
separate component of other comprehensive income.
4.6 Share-based payments
Equity-settled share-based payments to employees and others
providing similar services are measured at the fair value of the
equity instrument at the grant date. Fair value is measured by use
of Black Scholes model. The expected life used in the model has
been adjusted, based on management's best estimate, for the effects
of non-transferability, exercise restrictions and behavioural
considerations.
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 Group's estimate of
shares that will eventually vest.
Equity-settled share-based payment transactions with other
parties are measured at the fair value of the goods and services
received, except where the fair value cannot be estimated reliably,
in which case they are measured at the fair value of the equity
instruments granted, measured at the date the entity obtains the
goods or the counterparty renders the service.
All equity-settled share-based payments are ultimately
recognised as an expense in the profit or loss with a corresponding
credit to "Share-based payments reserve".
Upon exercise of share options, the proceeds received net of
attributable transaction costs are credited to share capital, and
where appropriate share premium. No adjustment is made to any
expense recognised in prior periods if share options ultimately
exercised are different to that estimated on vesting or if the
share options vest but are not exercised.
When share options lapse or are forfeited the respective amount
recognised in the Share-based payment reserve is reversed and
credited to accumulated profit and loss reserve.
4.7 Revenue
To determine whether to recognise revenue, the Group follows a
5-step process:
1 Identifying the contract with a customer;
2 Identifying the performance obligations;
3 Determining the transaction price;
4 Allocating the transaction price to the performance
obligations;
5 Recognising revenue when/as performance obligation(s) are
satisfied.
The Group earns its revenues primarily from the sale of platinum
group metals from the West Kytlim mine. The Company enters into a
contract with its main customer to deliver all mined metals
extracted from the mine. There is one performance obligation under
the sales contract, and that is the delivery of metals. As such,
the entire price under the contract is allocated to the single
performance obligation. Revenue is recognised when control over the
metals passes to the customer.
The Group has determined that it is the principal in the sales
transactions as the Group holds the mining license and has the
rights to the underlying resources. The Group controls the sales
process, from selecting the customer to determining sales
price.
4.8 Taxation
Income tax expense represents the sum of the tax currently
payable and deferred tax.
Current tax
The tax payable is based on taxable profit for the year. Taxable
profit differs from profit as reported in the statement of
comprehensive income 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 Group's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the statement of financial
position date.
Deferred tax
Deferred income tax is provided in full, using the liability
method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the
consolidated financial statements. However, the deferred income tax
is not accounted for if it arises from initial recognition of
goodwill, initial recognition of an asset or liability in a
transaction other than a business combination that at the time of
the transaction affects neither accounting nor taxable profit or
loss. Deferred income tax is determined using tax rates (and laws)
that have been enacted or substantively enacted by the statement of
financial position date and are expected to apply when the related
deferred income tax asset is realised, or the deferred income tax
liability is settled.
Deferred income tax assets are recognised to the extent that it
is probable that future taxable profit will be available against
which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising
on investments in subsidiaries and associates, except where the
timing of the reversal of the temporary difference is controlled by
the Group and it is probable that the temporary difference will not
reverse in the foreseeable future.
4.9 Property, plant and equipment
Mining assets
Mining assets are stated at cost less accumulated depreciation.
Mining assets include the cost of acquiring and developing mining
assets and mineral rights, buildings, vehicles, plant and machinery
and other equipment located on mine sites and used in the mining
operations.
Mining assets, where economic benefits from the asset are
consumed in a pattern which is linked to the production level, are
depreciated using a unit of production method based on the volume
of ore reserves. This results in a depreciation charge proportional
to the depletion of reserves
Stripping activity asset costs
In alluvial mining operations, it is necessary to remove
overburden and other waste in order to improve access the ore body.
Associated costs are recognised as a stripping activity asset. A
stripping activity asset is initially measured at cost and
subsequently carried at cost or its revalued amount less
depreciation or amortisation and impairment losses.
A stripping activity asset is depreciated or amortised on a
systematic basis, over the expected useful life of the identified
component of the ore body that becomes more accessible as a result
of the stripping activity. The units of production method is
used.
Other assets
Freehold properties held for administrative purposes, are stated
in the statement of financial position at cost.
Fixtures and equipment are stated at cost less accumulated
depreciation and any accumulated impairment losses.
Depreciation is charged to write off the cost or valuation of
assets over their estimated useful lives, using the straight-line
method. The estimated useful lives, residual values and
depreciation method are reviewed at each year end, with the effect
of any changes in estimate accounted for on a prospective
basis.
The estimated useful lives are as follows:
Property 30 years
Plant & machinery 3-30 years
Office, fixture and fittings 3-5 years
The gain or loss arising on the disposal or retirement of an
item of property, plant and equipment is determined as the
difference between the sales proceeds and the carrying amount of
the asset and is recognised in profit or loss.
4.10 Intangible assets
Exploration and evaluation of mineral resources
Exploration and evaluation expenditure comprise costs that are
directly attributable to:
-- researching and analysing existing exploration data;
-- conducting geological studies, exploratory drilling and sampling;
-- examining and testing extraction and treatment methods; and/or
-- compiling prefeasibility and feasibility studies.
4.11 Investments in subsidiary undertakings
Investments in subsidiaries are measured at cost less
accumulated impairment.
The carrying values of non-financial assets are reviewed
annually for impairment when events or changes in circumstances
indicate the carrying value may not be recoverable. The recoverable
amount of non-financial assets is the greater of net selling price
and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. For an asset
that does not generate largely independent cash inflows, the
recoverable amount is determined for the cash generating unit to
which the asset belongs. If such indication of impairment exists
and where the carrying values exceed the estimated recoverable
amount, the assets or cash generating units are written down to
their recoverable amount. Impairment losses are recognised within
operating loss.
4.12 Impairment testing intangible assets and property, plant
and equipment
At each statement of financial position date, the Group reviews
the carrying amounts of the assets to determine whether there is
any indication that those assets have suffered an impairment loss.
If any such indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the impairment
loss (if any). Where it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
Where a reasonable and consistent basis of allocation can be
identified, corporate assets are also allocated to individual
cash-generating units, or otherwise they are allocated to the
smallest group of cash-generating units for which a reasonable and
consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible
assets not yet available for use are tested for impairment
annually, and whenever there is an indication that the asset may be
impaired.
In assessing whether an impairment is required, the carrying
value of the asset is compared with its recoverable amount. The
recoverable amount is the higher of the fair value less costs of
disposal (FVLCD) and value in use (VIU).The FVLCD is estimated
based on future discounted cash flows expected to be generated from
the continued use of the asset, including any expansion prospects
and eventual disposal, using market-based commodity prices,
exchange assumptions, estimated quantities of recoverable minerals,
production levels, operating costs and capital requirements based
on the latest Life of mine plans. These cash flows were discounted
using a real post-tax discount rate that reflect the current market
assessments of time value of money.
Value in use is determined as the present value of the estimated
cash flows expected to arse from continued use in its current form
and eventual disposal. Value in use cannot take into consideration
future development. The assumptions used in the calculation are
often different than those used in a FVLCD and therefore is likely
to yield a different result.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately in
profit or loss, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a
revaluation decrease.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (cash-generating unit) in prior years.
A reversal of an impairment loss of the assets is recognised
immediately in profit or loss, unless the relevant asset is carried
at a revalued amount, in which case the reversal of the impairment
loss is treated as a revaluation increase.
4.13 Inventories
Inventories are measured at the lower of cost and net realisable
value. The cost of inventories is based on the first-in first-out
principle, and includes expenditure incurred in acquiring the
inventories, production or conversion costs and other costs
incurred in bringing them to their existing location and condition.
In the case of manufactured inventories and work in progress, cost
includes an appropriate share of production overheads based on
normal operating capacity.
Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated costs of completion
and selling expenses.
4.14 Cash
Cash and cash equivalents comprise cash balances, call deposits
and highly liquid investments with maturities of three months or
less from the acquisition date that are subject to insignificant
risk of changes in their fair value.
4.15 Financial instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when
the Group becomes a party to the contractual provisions of the
financial instrument.
Financial assets are derecognised when the contractual rights to
the cash flows from the financial asset expire, or when the
financial asset and substantially all the risks and rewards are
transferred.
A financial liability is derecognised when it is extinguished,
discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a
significant financing component and are measured at the transaction
price in accordance with IFRS 15, all financial assets are
initially measured at fair value adjusted for transaction costs
(where applicable).
Financial instruments, other than those designated and effective
as hedging instruments, are classified into the following
categories:
-- amortised cost
-- fair value through profit or loss (FVTPL)
-- fair value through other comprehensive income (FVOCI).
The classification is determined by both:
-- the entity's business model for managing the financial
asset
-- the contractual cash flow characteristics of the financial
asset.
All income and expenses relating to financial assets that are
recognised in profit or loss are presented within finance costs,
finance income or other financial items, except for impairment of
trade receivables which is presented within other expenses.
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets
meet the following conditions (and are not designated as
FVTPL):
-- they are held within a business model whose objective is to
hold the financial assets and collect its contractual cash
flows
-- the contractual terms of the financial assets give rise to
cash flows that are solely payments of principal and interest on
the principal amount outstanding After initial recognition, these
are measured at amortised cost using the effective interest
method.
Discounting is omitted where the effect of discounting is
immaterial. The Group's cash and cash equivalents, trade and most
other receivables fall into this category of financial instruments
as well as listed bonds.
Financial assets at fair value through profit or loss
(FVTPL)
Financial assets that are held within a different business model
other than 'hold to collect' or 'hold to collect and sell' are
categorised at fair value through profit and loss. Further,
irrespective of business model financial assets whose contractual
cash flows are not solely payments of principal and interest are
accounted for at FVTPL. All derivative financial instruments fall
into this category, except for those designated and effective as
hedging instruments, for which the hedge accounting requirements
apply. The category also contains an equity investment. Assets in
this category are measured at fair value with gains or losses
recognised in profit or loss.
The fair values of financial assets in this category are
determined by reference to active market transactions or using a
valuation technique where no active market exists.
Financial assets at fair value through other comprehensive
income (FVOCI)
The Group accounts for financial assets at FVOCI if the assets
meet the following conditions:
-- they are held under a business model whose objective it is
"hold to collect" the associated cash flows and sell and
-- the contractual terms of the financial assets give rise to
cash flows that are solely payments of principal and interest on
the principal amount outstanding.
Any gains or losses recognised in other comprehensive income
(OCI) will be recycled upon derecognition of the asset.
Impairment of financial assets
IFRS 9's impairment requirements use more forward-looking
information to recognise expected credit losses - the 'expected
credit loss (ECL) model'.
Instruments within the scope of the new requirements included
loans and other debt-type financial assets measured at amortised
cost and FVOCI, trade receivables, contract assets recognised and
measured under IFRS 15 and loan commitments and some financial
guarantee contracts (for the issuer) that are not measured at fair
value through profit or loss.
Recognition of credit losses is no longer dependent on the Group
first identifying a credit loss event. Instead the Group considers
a broader range of information when assessing credit risk and
measuring expected credit losses, including past events, current
conditions, reasonable and supportable forecasts that affect the
expected collectability of the future cash flows of the
instrument.
In applying this forward-looking approach, a distinction is made
between:
-- financial instruments that have not deteriorated
significantly in credit quality since initial recognition or that
have low credit risk ('Stage 1') and
-- financial instruments that have deteriorated significantly in
credit quality since initial recognition and whose credit risk is
not low ('Stage 2').
'Stage 3' would cover financial assets that have objective
evidence of impairment at the reporting date.
'12-month expected credit losses' are recognised for the first
category while 'lifetime expected credit losses' are recognised for
the second category.
Measurement of the expected credit losses is determined by a
probability-weighted estimate of credit losses over the expected
life of the financial instrument.
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting for
trade and other receivables as well as contract assets and records
the loss allowance as lifetime expected credit losses. These are
the expected shortfalls in contractual cash flows, considering the
potential for default at any point during the life of the financial
instrument. In calculating, the Group uses its historical
experience, external indicators and forward-looking information to
calculate the expected credit losses using a provision matrix.
The Group assess impairment of trade receivables on a collective
basis as they possess shared credit risk characteristics they have
been grouped based on the days past due.
Borrowings
Amounts borrowed from third parties are recorded initially at
fair value, being the amount received under the agreements less
issuance costs, and subsequently measure at amortised cost using an
effective interest rate. There are times when there are conversion
options included in the Group's borrowing agreements. The
conversion options are analysed under IAS 32 - Financial
Instruments: presentation to determine the proper classification.
If the option is determined to be equity, the fair value of the
conversion option is included in other reserves, with the fair
value of the liability portion being recorded as a liability with
interest accruing under the effective interest rate. If the
conversion option is determined to be a liability, it is treated as
a derivative financial instrument measured at fair value through
profit or loss.
When a conversion option is exercised, the fair value of the
shares issued is recorded in share capital and share premium. The
amortised carrying value of the liability portion is extinguished.
If the conversion option is an equity instrument, this is closed to
retained earnings. If the conversion option is a liability
component, it is extinguished. Any difference between the carrying
value of the liability and the conversion option and the fair value
of share issued is taken to the profit and loss as gain or loss on
extinguishment.
If debt agreements are modified, any difference between the fair
value of the original debt and the modified debt is included as a
gain or loss on modification. If the modification is significant,
this is considered an extinguishment of the old debt and
recognition of new debt.
Warrants
The Company will issue warrants in association with debt and
equity issuances and as compensation to suppliers or vendors in
exchange for services. These are determined to be equity
instruments. When warrants are issued with debt or as compensation
to suppliers or vendors, the value of the warrants are included
within the share-based payments reserve that sits within the other
reserve. When warrants are issued together with equity issuances
any fair value associated with these are recognised when the
warrants are exercised within share premium. On exercise of the
warrants, the value of the warrants will be transferred from other
reserves to the profit and loss reserve as applicable.
4.16 Provisions
A provision is recognised if, as a result of a past event, the
Group has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic
benefits will be required to settle the obligation. Provisions are
determined by discounting the expected future cash flows at a
pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the liability. The
unwinding of the discount is recognised as finance cost.
Environmental protection, rehabilitation and closure costs
Provision is made for close down, restoration and environmental
rehabilitation costs (which include the dismantling and demolition
of infrastructure, removal of residual materials and remediation of
disturbed areas) in the financial period when the related
environmental disturbance occurs, based on the estimated future
costs using information available at the reporting date. The
provision is discounted using a discount rate equal to yield to
maturity of relevant state bonds and the unwinding of the discount
is included in interest expense.
The provision is reviewed on an annual basis for changes to
obligations, legislation or discount rates that impact estimated
costs or lives of operations. .
4.17 Leases
The Group as lessee
The Group assesses whether a contract is or contains a lease, at
inception of the contract. The Group recognises a right-of-use
asset and a corresponding lease liability with respect to all lease
arrangements in which it is the lessee, except for short-term
leases (defined as leases with a lease term of 12 months or less)
and leases of low value assets (such as tablets and personal
computers, small items of office furniture and telephones). For
these leases, the Group recognises the lease payments as an
operating expense on a straight-line basis over the term of the
lease unless another systematic basis is more representative of the
time pattern in which economic benefits from the leased assets are
consumed.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. If this rate
cannot be readily determined, the Group uses its incremental
borrowing rate.
.
Lease payments included in the measurement of the lease
liability comprise:
Fixed lease payments (including in-substance fixed payments),
less any lease incentives receivable;
Variable lease payments that depend on an index or rate,
initially measured using the index or rate at the commencement
date;
The amount expected to be payable by the lessee under residual
value guarantees;
The exercise price of purchase options, if the lessee is
reasonably certain to exercise the options; and
Payments of penalties for terminating the lease, if the lease
term reflects the exercise of an option to terminate the lease.
The lease liability is presented as a separate line in the
consolidated statement of financial position.
The lease liability is subsequently measured by increasing the
carrying amount to reflect interest on the lease liability (using
the effective interest method) and by reducing the carrying amount
to reflect the lease payments made.
The Group remeasures the lease liability (and makes a
corresponding adjustment to the related right-of-use asset)
whenever:
The lease term has changed or there is a significant event or
change in circumstances resulting in a change in the assessment of
exercise of a purchase option, in which case the lease liability is
remeasured by discounting the revised lease payments using a
revised discount rate.
The lease payments change due to changes in an index or rate or
a change in expected payment under a guaranteed residual value, in
which cases the lease liability is remeasured by discounting the
revised lease payments using an unchanged discount rate (unless the
lease payments change is due to a change in a floating interest
rate, in which case a revised discount rate is used).
The Group did not make any such adjustments during the periods
presented.
The right-of-use assets comprise the initial measurement of the
corresponding lease liability, lease payments made at or before the
commencement day, less any lease incentives received and any
initial direct costs. They are subsequently measured at cost less
accumulated depreciation and impairment losses.
Whenever the Group incurs an obligation for costs to dismantle
and remove a leased asset, restore the site on which it is located
or restore the underlying asset to the condition required by the
terms and conditions of the lease, a provision is recognised and
measured under IAS 37. To the extent that the costs relate to a
right-of-use asset, the costs are included in the related
right-of-use asset, unless those costs are incurred to produce
inventories.
Right-of-use assets are depreciated over the shorter period of
lease term and useful life of the underlying asset. If a lease
transfers ownership of the underlying asset or the cost of the
right-of-use asset reflects that the Group expects to exercise a
purchase option, the related right-of-use asset is depreciated over
the useful life of the underlying asset. The depreciation starts at
the commencement date of the lease.
The right-of-use assets are presented within property plant and
equipment in the consolidated statement of financial position.
The Group applies IAS 36 to determine whether a right-of-use
asset is impaired and accounts for any identified impairment loss
as described in the 'Impairment testing intangible assets and
property, plant and equipment' policy.
4.18 Segmental reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the Chief Operating Decision-Maker.
The Chief Operating Decision-Maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Executive Directors of the
Group that make the operating decisions.
5 Critical accounting judgements and key sources of estimation uncertainty
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
5.1 Key sources of estimation uncertainty
The following are the key assumptions / uncertainties at the
statement of financial position date, which have a significant risk
of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year.
5.1.1 Provision for environmental rehabilitation
Provision is made for close down, restoration and environmental
rehabilitation costs based on the estimated future costs using
information available at the reporting date. Costs are estimated
based on the observable local prices, fees and already agreed
contract for specific jobs. The provision is discounted using a
risk-free discount rate of from 8.39% to 8.66% attributed to the
Russian Federal bonds with corresponding maturity.
5.1.2 Impairment review of the mining assets
The impairment assessment of the West Kytlim mining asset was
performed by calculating the higher of fair value less cost of
disposal and value in use and compared against the carrying value
of the mining assets . Projected cash flows from 2021 to 2030 were
used to assess the fair value less costs of disposal. The chosen
period is consistent with the quantity of the approved reserves and
resources and available for mining operations. No impairment has
been recognised.
Assumptions used throughout 2021-2030:
Pt grade 0.332g/tonne
Process recovery 75%
Platinum/Gold price $1,000/oz / $1,800/oz
Post-tax discount rate 8.01%
Management has performed a sensitivity analysis on the key
variable, such as platinum and production levels and the model is
robust up to 17.26% on platinum and gold prices and lower than
anticipated production levels. Every 0.1% change above the said
17.26% would cause recognition of impairment loss in the amount of
GBP40,943.
PGM deliveries commenced in May 2022 at a current platinum price
is around 5% lower than that modelled. Stripping of overburden to
access platinum bearing gravels was carried out over the 2021/22
and will ensure better control on production levels during the
current season.
5.1.3 Impairment review of the intangible asset
Intangible asset represents Monchetundra (the "MT") development
and Nittis-Kumuzhya-Travyanaya (the "NKT") exploration and
evaluation assets. NKT is a northeast extension of the MT
mineralisation. The MT has been assessed as economically viable
asset for the purpose of obtaining of the mining licence,
parameters of the assessment are being regularly evaluated for the
signs which can trigger impairment of the asset. The NKT
exploration and evaluation asset falls under the IFRS 6 treatment.
There were no indicators of impairment identified during the course
of the year ended 31 December 2021.
5.1.4. Impairment of investments in subsidiary and receivables
from subsidiaries
The Company's financial statements, and in particular its
investments in and receivables from subsidiaries, are affected by
certain of the critical accounting judgements and key sources of
estimation uncertainty.
The critical estimates and judgments referred to application of
the expected credit loss model to intercompany receivables (note
31). Management determined that the interest free on demand loans
were required to be assessed on the lifetime expected credit loss
approach and assessed scenarios considering risks of loss events
and the amounts which could be realised on the loans. In doing so,
consideration was given to factors such as the cash held by
subsidiaries and the underlying forecasts of the Group's divisions
and their incorporation of prospective risks and uncertainties.
In relation to impairment of investments in subsidiary please
refer to Note 4.11.
6 Segmental information
During the year under review management identified the Group
consisting of separate segments operating mainly in mining and
exploration for and development of platinum group metals, gold and
other minerals in Russia. These segments are monitored, and
strategic decisions are made based upon it and other non-financial
data collated from the on-going mining and exploration
activities.
The Company is developing two key assets, West Kytlim and
Monchetundra, their geography outlined in the following table.
West Kytlim Monchetundra Corporate Total
and other
segments
Geographical Urals Mountains, Kola Peninsula, -
location Russia Russia
Activity Operating Licenced mining Management
mine and revenue project and investment
generating
unit
2021 GBP GBP GBP GBP
Non-current
assets 5,362,684 1,376,006 719,969 7,458,659
Total assets 6,730,257 1,546,716 22,917,064 31,194,037
Total liability 826,471 15,653 306,692 1,148,816
Revenue 2,331,225 - - 2,331,225
Loss for the
year (621,695) (145,502) (2,371,324) (3,138,521)
2020 GBP GBP GBP GBP
Non-current
assets 3,999,098 669,080 353,191 5,021,369
Total assets 4,231,046 804,065 5,694,442 10,729,553
Total liability 726,276 3,590 168,376 898,242
Revenue 937,962 - - 937,962
Loss for the
year (1,754,307) (289,707) (1,649,294) (3,693,308)
7 Employees
Average number of staff (excluding Non-Executive Directors)
employed throughout the year was as follows:
2021 20 20
By the Company 4 3
By the Group 74 54
8 Revenue
Disaggregation of by primary markets is as follows:
Year to 3 1 December Year to 3 1 December
20 2 1 20 20
Group Company Group Company
GBP GBP GBP GBP
Revenue from sale of platinum
and other precious metals 2,331,225 - 937,962 -
Revenue from other management
services - 120,000 - 120,000
------------- -------- ------------ ---------
2,331,225 120,000 937,962 120,000
Disaggregation of revenue from contracts with customers:
Year to 3 1 December Year to 3 1 December
20 2 1 20 20
Group Company Group Company
Russia Cyprus Russia Cyprus
GBP GBP GBP GBP
Revenue from external customers
- Sale of platinum and
other precious metals 2,331,225 - 937,962 -
Revenue from related parties
- Management services - 120,000 - 120,000
------------- -------- ------------ ---------
2,331,225 120,000 937,962 120,000
Timing of revenue recognition
At a point of time 2,331,225 - 937,962 -
Over time - 120,000 - 120,000
------------- -------- ------------ ---------
2,331,225 120,000 937,962 120,000
All revenue recognised in 2021 and 2020 relate to the sale of
PGM from West Kytlim. West Kytlim revenue generated from sale of
platinum and other precious metals to a single customer
"Ekaterinburg Non-ferrous Metals Refinery", being the only regional
refinery, processing platinum group metals and being duly licenced
by the Russian governmental to deal with precious metals.
9 Profit/(loss) for the year
Profit/(loss) for the year has been arrived at after
charging:
Year to 3 1 December Year to 3 1 December
20 21 20 20
Group Company Group Company
GBP GBP GBP GBP
Cost of sales (2,584,680) - (1,131,954) -
Administrative expenses (2,717,765) (2,296,563) (1,889,793) (1,547,475)
Cost of sales includes:
------------- ------------- ------------- -------------
Staff benefits expenses 433,872 - 291,036 -
Depreciation* 421,987 - 204,748 -
------------- ------------- ------------- -------------
Administration expenses
include:
------------- ------------- ------------- -------------
Staff benefits expenses 1,517,088 1,275,474 812,076 598,012
Depreciation* 765 702 452 416
Audit fees payable 110,000 110,000 110,000 110,000
Mineral extraction tax 149,918 - 57,578 -
------------- ------------- ------------- -------------
Staff benefits expense:**
Wages, salaries and
Directors' fees (note
28) 1,958,156 1,253,471 1,067,790 581,941
Social security costs 196,319 20,684 138,420 16,071
Other short-term benefits 1,319 1,319 1,314 1,314
------------- ------------- ------------- -------------
2,155,794 1,275,474 1,207,524 599,326
------------- ------------- ------------- -------------
* Total depreciation for the year ended 31 December 2021 was
GBP422,588 (2020: GBP205,200)
** Inclusive of capitalised employee costs during the financial
year amounted to GBP204,412 (2020: 104,412).
10 Finance cost
Year to 3 1 December Year to 3 1 December
20 2 1 20 20
Group Company Group Company
GBP GBP GBP GBP
Interest on obligations
under finance leases 101,048 - 92,379 -
Interest on unsecured borrowings - - 4,586 -
Unwinding of discounts on
provisions 2,397 - 3,921 -
----------- ---------- ----------- ----------
103,445 - 100,886 -
11 Other losses
Year to 3 1 December Year to 3 1 December
20 2 1 20 20
Group Company Group Company
GBP GBP GBP GBP
Losses
Net foreign exchange loss (65,250) (26,576) (1,509,123) -
----------- ---------- ------------- --------
(65,250) (26,576) (1,509,123) -
The majority of the foreign exchange gains and losses are a
result of the revaluation of monetary assets and liabilities in the
subsidiary accounts as a result of movements in the Rouble exchange
rates.
12 Income taxes
(a) tax charged in the statement of profit and loss
Year to Year to
3 1 December 3 1 December
2021 20 20
Group Group
GBP GBP
Current tax - -
-------------- --------------
There was no tax payable by the Company for the year ended 31
December 2021 (2020: nil) due to the Company having taxable
losses.
(b) Reconciliation of the total tax charge
Year to Year to
3 1 December 3 1 December
2021 20 20
Group Group
GBP GBP
Loss before tax (3,182,199) (3,693,308)
-------------- --------------
Current tax at 19% (2020:
19%) (604,618) (701,729)
Adjusted for the effect
of:
Expenses not deductible
for tax purposes - -
Profits not subject to
tax - -
Tax losses utilised - -
Unrecognised tax losses
carried forward 604,618 701,729
-------------- --------------
Actual tax expense - -
-------------- --------------
The Group operates in the following jurisdictions with the
following applicable tax rates:
Year to Year to
3 1 December 3 1 December
Jurisdiction 2021 20 20
United Kingdom 19% 19%
Russia 20% 20%
Cyprus 12.5% 12.5%
No tax is payable for the year ended 31 December 2021 (2020:
nil) due to the Group and the Company having taxable losses.
13 Property, plant and equipment
(a) Group property, plant and equipment
Mining Stripping Property Plant Right Office Total
asset asset and machinery of use fixture
assets and
fittings
GBP GBP GBP GBP GBP GBP
Cost
Balance at 1 January
2020 4,385,753 - 24,621 179,972 - 12,246 4,602,592
Additions 118,654 148,618 338,237 682,691 - 1,288,200
Disposals - - - (178) (178)
Exchange differences (799,896) - (1,584) (35,062) - (1,926) (838,468)
---------- ---------- --------- --------------- ---------- ---------- ------------
Balance at 31 December
2020 3,704,511 148,618 23,037 483,147 682,691 10,142 5,052,146
Additions 64,371 609,968 622,745 - 1,729 1,298,813
Disposals - - - (2,834) - (868) (3,702)
Written off to cost
of sales (149,882) - - - - (149,882)
Exchange differences 35,380 1,264 56 4,106 5,802 66 46,674
---------- ---------- --------- --------------- ---------- ---------- ------------
Balance at 31 December
2021 3,804,262 609,968 23,093 1,107,164 688,493 11,069 6,244,049
---------- ---------- --------- --------------- ---------- ---------- ------------
Depreciation
Balance at 1 January
2020 (582,896) - (1,194) (78,481) - (10,984) (673,555)
Disposals - - - 178 178
Depreciation expense (84,087) - (87) (29,421) (92,277) 672 (205,200)
Exchange differences 105,005 - 233 15,290 - 1,811 122,339
---------- ------------
Balance at 31 December
2020 (561,978) - (1,048) (92,612) (92,277) (8,323) (756,238)
Disposals - - - 2,834 - 868 3,702
Depreciation expense (127,280) - (87) (156,536) (137,699) (1,150) (422,752)
Exchange differences (5,372) - (10) (787) (784) (65) (7,018)
Balance at 31 December
2021 (694,630) - (1,145) (247,101) (230,760) (8,670) (1,182,306)
Carrying amount :
at 31 December 2021 3,109,632 609,968 21,948 860,063 457,733 2,399 5,061,743
========== ========== ========= =============== ========== ========== ============
at 31 December 2020 3,142,533 148,618 21,989 390,535 590,414 1,819 4,295,908
========== ========== ========= =============== ========== ========== ============
The Group's right of use assets represents plant and machinery
type assets acquired under lease terms (note 25).
The stripping asset is also a component of the mining assets;
however, this is being shown separate from the mining assets for
presentational purposes. There was no depreciation of the stripping
asset in the current period.
(b) Assets in the course of construction
20 2 1 2020
GBP GBP
Cost
Balance at 1 January 28,957 3 5 , 964
Additions 611,220 -
Exchange differences 246 (7 , 007)
--------- ----------
Balance at 31 December 640,423 28 , 957
========= ==========
Assets in the course of construction represent the Group's
investment in the powerline to deliver electricity to the West
Kytlim mining site. At 31 December 2021 the power line had not been
commissioned yet. The Group has resumed building powerline and site
electrical infrastructure to power drag lines, which are being
acquired in accordance with plans of expanding its mining
operations.
(c) Company's office fixture and fittings
20 2 1 20 20
GBP GBP
Cost
Balance at 1 January 2,298 2,354
Additions - 1,260
Disposal - (1,316)
--------- ---------
Balance at 31 December 2,298 2,298
Depreciation
Balance at 1 January (791) (1,691)
Depreciation expense (703) (416)
Disposals - 1,316
Balance at 31 December (1,494) (791)
Carrying amount 804 1,507
========= =========
The Company's property, plant and equipment are free from any
mortgage or charge.
14 Intangible assets
In 2021 intangible assets represented only capitalised costs
associated with the Group's exploration, evaluation and development
of mineral resources.
20 21 2020
GBP GBP
Cost
Balance at 1 January 696,504 854,995
Additions 682,4 20 9,599
Exchange differences 10,10 5 (168,090)
---------- -----------
Balance at 31 December 1,389,029 696,504
========== ===========
At 31 December 2021 and 31 December 2020, the intangible asset
consisted of Monchetundra (the "MT") development and
Nittis-Kumuzhya-Travyanaya (the "NKT") exploration and evaluation
assets. NKT is a northeast extension of the MT mineralisation.
The Company did not directly own any intangible assets at 31
December 2021 (2020: nil)
15 Investment to potential share in joint venture
In 2021 the Group entered into an agreement with Rosgeo a
Russian registered and state funded exploration Company, to set up
a joint venture. The Rosgeo agreement allows the Group to gain a
75% equity stake in several new assets with the remaining 25%
equity stakes to be held by Rosgeo. Eurasia will be the operator of
the joint venture and will develop the additional assets at its
discretion.
By 31 December 2021 the Company invested RUB37,180,000
(GBP367,464 at a prevailing exchange rate at the reporting date)
out of total RUB169,000,000.
16 Subsidiaries
Details of the Company's subsidiaries at 31 December 2021 are as
follows:
Proportion
Place of of ordinary Principal
Name of subsidiary incorporation shares held activity
Holding
Urals Alluvial Platinum Limited Cyprus 100% Company
Holding
ZAO Eurasia Mining Service Russia 100% Company
Mineral
ZAO Kosvinsky Kamen Russia 68% Evaluation
Mineral
ZAO Terskaya Mining Company Russia 80% Evaluation
Mineral
ZAO Yuksporskaya Mining Company Russia 100% Evaluation
Dormant
Eurasia Mining (UK) Limited UK 100% company
The Company's investments in subsidiaries presented on the basis
of direct equity interest and represent the following:
20 2 1 2020
GBP GBP
Investment in subsidiaries (i) 1,132,246 1,132,246
1,132,246 1,132,246
========== ==========
Investment in subsidiaries represents the Company investments
made into its 100% subsidiary Urals Alluvial Platinum Limited (the
"UAP"), which in turn controls other subsidiaries within the
Group.
Subsidiaries with material non-controlling interests ("NCI")
Summary of non-controlling interest
20 2 1 2020
GBP GBP
As at 1 January (1,758,862) (1,327,560)
NCI arising on reduction of interest
in subsidiary
Loss attributable to NCI (228,042) (612,972)
Exchange differences 36,856 181,670
------------
As at 31 December (1,950,049) (1,758,862)
============ =============
Non-controlling interest on subsidiary basis
20 2 1 2020
GBP GBP
ZAO Kosvinsky Kamen (1,218,383) (1,055,149)
ZAO Terskaya Mining Company (731,666) (703,713)
-------------
(1,950,049) (1,758,862)
============= =============
ZAO Kosvinsky Kamen
20 2 1 20 20
GBP GBP
Non-current assets 5,362,684 3,850,480
Current assets 1,367,573 380,566
------------
Total assets 6,730,257 4,231,046
------------
Non-current liabilities 7,874,026 6,137,681
Current liabilities 570,275 442,739
------------
Total liabilities 8,444,301 6,580,420
------------
Net assets (1,714,044) (2,349,374)
Equity attributable to owners
of the parent (495,661) (1,294,225)
Non-controlling interests (1,218,383) (1,055,149)
Loss for the year attributable
to owners of the parent (449,647) (1,199,276)
Loss for the year attributable
to NCI (198,942) (555,031)
------------
Loss for the year (648,589) (1,754,307)
------------
Total comprehensive income
for the year attributable to
owners of the parent (367,601) (904,135)
Total comprehensive income
for the year attributable to
NCI (163,234) (331,654)
------------
Total comprehensive loss for
the year (530,835) (1,235,789)
------------
ZAO Terskaya Mining Company
20 2 1 2020
GBP GBP
Non-current assets 1,376,006 669,080
Current assets 170,710 134,985
Total assets 1,546,716 804,065
Non-current liabilities 2,097,248 1,213,855
Current liabilities 66,434 57,430
Total liabilities 2,163,682 1,271,285
Net assets (616,966) (467,220)
Equity attributable to owners of
the parent 114,700 236,493
Non-controlling interests (731,666) (703,713)
Loss for the year attributable
to owners of the parent (116,402) (231,766)
Loss for the year attributable
to NCI (29,100) (57,941)
Loss for the year (145,502) (289,707)
----------
Total comprehensive income for
the year attributable to owners
of the parent (121,793) (114,493)
Total comprehensive income for
the year attributable to NCI (27,953) (99,648)
----------
Total comprehensive loss for the
year (149,746) (214,141)
---------- ----------
17 Other financial assets
20 2 1 2020
Group Company Group Company
GBP GBP GBP GBP
Current
Advances to related parties - 12,681,450 - 8,226,176
- 12,681,450 - 8,226,176
===================================== ============ ====== ===========
The maximum exposure to credit risk at the reporting date is the
carrying value of each class of assets mentioned above.
The Group has assessed the estimated credit losses of these
loans and given the effective interest rate of the loans is 0%,
there would be an immaterial loss expected on these loans.
Amounts due from related parties are non-interest bearing and
are repayable on demand.
18 Inventories
20 21 2020
Group Company Group Company
GBP GBP GBP GBP
Stores 38,673 - 13,695 -
38,673 - 13,695 -
======= ======== ======= ========
Inventories held by the Group represent stores, stated at the
lower of cost and net realisable value.
19 Trade and other receivables
20 2 1 2020
Group Company Group Company
GBP GBP GBP GBP
Trade receivables 480,588 - - -
Advances made* 520,385 -
Prepayments 140,335 134,661 75,041 22,365
VAT recoverable 361,906 25,796 142,477 -
Other receivables 178,652 120,000 66,256 59,942
Due from related parties - 28,028 - 23,735
1,681,864 308,485 285,081 106,042
=========== ========= ========= =========
* The Group had made several advances to and down payments to
secure new earth moving machinery to be acquired for the West
Kytlim mine and to progress with installation of power line to the
mine.
The fair value of trade and other receivables is not materially
different to the carrying values presented. None of the receivables
are provided as security or past due.
20 Cash and cash equivalents
20 2 1 2020
Group Company Group Company
GBP GBP GBP GBP
Cash at bank 22,009,507 21,892,793 5,404,101 5,247,106
22,009,507 21,892,793 5,404,101 5,247,106
============ =========== ========== ===========
All amounts are short -term. The carrying value of cash and cash
equivalents is considered a reasonable approximation of fair
value.
21 Issued capital
20 2 1 2020
Issued and fully paid ordinary
shares
with a nominal value of 0.1p
Number 2,853,559,995 2,758,701,681
Nominal value (GBP) 2,853,560 2,758,702
Issued and fully paid deferred
shares
with a nominal value of 4.9p
Number 143,377,203 143,377,203
Nominal value (GBP) 7,025,483 7,025,483
Share premium
Value (GBP) 51,308,068 28,028,671
Total issued capital (GBP) 61,187,111 37,812,856
============== ===============
Fully paid ordinary shares carry one vote per share and carry
the right to dividends.
Deferred shares have attached to them the following rights and
restrictions:
- they do not entitle the holders to receive any dividends and
distributions;
- they do not entitle the holders to receive notice or to attend
or vote at General Meetings of the Company;
- on return of capital on a winding up the holders of the
deferred shares are only entitled to receive the amount paid up on
such shares after the holders of the ordinary shares have received
the sum of 0.1p for each ordinary share held by them and do not
have any other right to participate in the assets of the
Company.
Issue of ordinary share capital in 2021:
Price Number Nominal
in pence value
per share GBP
As at 1 January 20 2 1 2,758,701,681 2,758,702
20-May-2021 - Share placing for
cash 26.5 53,306,751 53,307
20-September-2021 - Share placing
for cash 26.0 41,551,563 41,551
94,858,314 94,858
-------------- ----------
As at 31 December 2021 2,853,559,995 2,853,560
-------------- ----------
Issue of ordinary share capital in 2020:
Price Number Nominal
in pence value
per share GBP
As at 1 January 20 2 0 2,693,756,753 2,693,757
12 February 2020 - Exercise of
warrants 26.5 20,000,000 20,000
12 February 2020 - Exercise warrants 1.24 2,017,871 2,018
12 February 2020 - Exercise options 0.90 8,000,000 8,000
12 February 2020 - Exercise options 0.42 1,000,000 1,000
18 August 2020 - Share placing
for cash 22.5 33,927,057 33,927
64,944,928 64,945
-------------- ----------
As at 31 December 2020 2,758,701,681 2,758,702
-------------- ----------
22 Share based payments
Share options and warrants outstanding at the end of the year
have the following expiry date and exercise prices:
Expiry date Exercise Number of Number of options
price in options as at
pence per as at 31 December
share 31 December 2020
2021
Share options
02 November 2022 0.42 55,000,000 55,000,000
02 November 2022 0.60 40,000,000 40,000,000
02 November 2022 0.90 35,000,000 35,000,000
Weighted average exercise
price 0.60 130,000,000 130,000,000
----------- ------------- ------------------
Warrants
20 May 2021 26.5 53,306,751 -
23 September 2021 26.0 41,531,563 -
Weighted average exercise
price 26.28 94,838,314 -
----------- ------------- --------------------
Total contingently issuable
shares
at 31 December 224,838,314 130,000,000
----------- ------------- --------------------
All the listed options and warrants were exercisable as at 31
December 2021 (2020 - all).
Share options
Movement in number of share options outstanding and their
related weighted average exercise prices are as follows:
(Price expressed in pence
per share) 2021 2020
Average Average
exercise No. of exercise No. of
price share options price share options
Share options
At 1 January 0.60 130,000,000 0.61 139,000,000
Exercised - - 0.42 (1,000,000)
Exercised - - 0.9 (8,000,000)
At 31 December 0.6 130,000,000 0.60 130,000,000
---------- --------------- ---------- ---------------
No options were granted by the Group in 2021 (2020 - nil) to the
Directors, Group employees and consultants to the Group. 21,000,000
options have been authorised in 2018 to be granted at later date.
No amounts are paid or payable by the recipient on receipt of the
option. The options carry neither right to dividends nor voting
rights . Options may be exercised at any time from the vesting date
to the date of their expiry . The Group has no legal or
constructive obligation to repurchase or settle the options in
cash.
Out of 173,000,000 options granted by the Group in 2018:
- 72,000,000 options issued with exercise price of 0.42p and vested on the issue date.
- 53,000,000 options issued with exercise price of 0.6p and were
due to vest at the date when VWAP has been 0.6 p or above for 10
consecutive days, or at the latest 31 December 2018. Options vested
on 22 November 2018.
- 48,000,000 options issued with exercise price of 0.9p vesting
at the date when VWAP has been 0.9 p or above for 10 consecutive
days, or at the latest 30 June 2019. Options vested on 30 June
2019.
All options granted in 2018 expire on 02 November 2022.
Warrants
94,838,314 warrants were granted by the Group in 2021 (2020 -
nil).
Movement in number of warrants outstanding and their related
weighted average exercise prices are as follows:
(Price expressed in pence
per share) 2021 2020
Average Average
exercise No. of exercise No. of
price warrants price warrants
Warrant s
At 1 January - - 1.02 32,017,871
Granted 26.5 53,306,751 - -
Granted 26.0 41,531,563
Exercised - - 1.00 (20,000,000)
Exercised - - 1.24 (2,017,871)
Expired - - 1.00 (10,000,000)
At 31 December 26.28 94,838,314 - -
---------- ------------ ---------- --------------
23 Other reserves
2021 2020
Group Company Group Company
GBP GBP GBP GBP
Capital redemption reserve 3,539,906 3,539,906 3,539,906 3,539,906
Foreign currency translation
reserve:
At 1 January 57,344 - (325,342) -
Recognised in the period (58,679) - 382,686 -
----------- ----------- ----------- -----------
At 31 December (1,335) - 57,344 -
----------- ----------- ----------- -----------
Share-based payments reserve:
At 1 January 384,120 418,181 418,181 418,181
Recognised in the period - (18,483) (18,483) (18,483)
Utilised on exercise of
warrants - (15,578) (15,578) (15,578)
At 31 December 384,120 384,120 384,120 384,120
----------- ----------- ----------- -----------
3,922,691 3,924,026 3,981,370 3,924,026
----------- ----------- ----------- -----------
The capital redemption reserve was created as a result of a
share capital restructure in earlier years.
The foreign currency translation reserve represents exchange
differences relating to the translation from the functional
currencies of the Group's foreign subsidiaries into GBP.
The s hare-based payments reserve represents (i) reserve arisen
on the grant of share options to employees under the employee share
option plan and (ii) reserve arisen on the grant of warrants under
terms of professional service agreements and/or issued under terms
of financing arrangements.
24 Borrowings
2021 2020
Group Company Group Company
GBP GBP GBP GBP
Current borrowings
Unsecured loan 31,953 - 31,684 -
31,953 - 31,684 -
======= ======== ======= ========
In 2017 the Group entered into unsecured loan facility to borrow
up to 57 million Russian Rubbles (RUB) at 14% per annum, from
Region Metal, the then contractor and the West Kytlim mine
operator. The Group had drawn RR 4.18 million and repaid RR0.9
million by 31 December 2021. As the contractor's arrangements had
been discontinued the Group has no intention to utilise any more
funds from this facility. The loan was due for repayment in 2021
but the Group received a court order not to repay the loan due to
ongoing court arbitrage between the lender and its creditors.
The Group is not a party of this arbitrage and/or not linked to
any party.
25 Lease liabilities
Leases
The Group leases certain of its plant and equipment. The average
lease term is 3.5 years (2020: 4.5 years). The Group has option to
purchase the equipment for a nominal amount at the maturity of the
finance lease. The Group's obligation under finance leases are
secured by the lessor's title to the leased assets.
Interest rates underlying all obligations under finance leases
are fixed at respective contract dates ranging from 21.9% to 23.5%
per annum.
Present value of
Minimum lease payments minimum lease payments
2021 2021 2020 2020
GBP GBP GBP GBP
Less than one year 200,633 201,392 122,407 101,007
Between one and five years 377,027 572,791 307,136 425,923
More than five years - - - -
577,660 774,183 429,543 526,929
Less future finance charges (148,117) (247,254) - -
------------ ----------- ------------ ------------
Present value of minimum
lease payments 429,543 526,929 429,543 526,929
============ =========== ============ ============
Reconciliation of movements in lease liabilities
2021 2020
Group Company Group Company
GBP GBP GBP GBP
At 1 January 526,929 - - -
Lease acquired - - 601,033 -
Interest accrued 101,048 - 92,379 -
Interest paid in cash (101,048) - (92,379) -
Principle paid in cash (101,674) - (81,491) -
Exchange differences 4,288 - 7,387 -
---------- -------- --------- --------
At 31 December 429,543 - 526,929 -
========== ======== ========= ========
Short-term leases
Short-term leases relate to the office premises with lease terms
up to one year. The Group does not have an option to purchase the
leased asset at the expiry of the lease period.
2021 2020
Group Company Group Company
GBP GBP GBP GBP
Payments recognised as an
expense:
Minimum lease payments 10,494 - 12,708 -
------- -------- ------- --------
Non-cancellable operating
lease commitments:
No longer than one year 8,741 - 9,531 -
8,741 - 9,531 -
======= ======== ======= ========
The short-term lease commitments represent full commitment by
the Company under office lease arrangements.
26 Trade and other payables
2021 2020
Group Company Group Company
GBP GBP GBP GBP
Trade payables 210,665 - - -
Accruals 161,035 121,565 101,090 82,630
Social security and other
taxes 18,751 4,965 18,559 3,745
Other payables 96,107 149,159 167,842 57,729
Due to related party - - - 198,583
486,558 275,689 287,491 342,687
======== ========= ========= =========
The fair value of trade and other payables is not materially
different to the carrying values presented. The above listed
payables were all unsecured.
27 Provision
2021 2020
GBP GBP
Long term provision:
Environment rehabilitation 143,268 50,186
Short term provision:
Environment rehabilitation 57,494 1,951
200,762 52,137
-------- --------
Movement in provision is as follows
2021 2020
GBP GBP
At 1 January 52,137 78,103
Recognised in the period 138,020 15,545
Utilised in the period - (11,986)
Results of re-measurement or settlement
without cost 7,487 (19,301)
Unwinding of discount and effect
of changes in the discount rate 2,397 3,921
Exchange differences 721 (14,145)
--------- ----------
At 31 December 200,762 52,137
--------- ----------
Provision is made for the cost of restoration and environmental
rehabilitation of the land disturbed by the West Kytlim mining
operations, based on the estimated future costs using information
available at the reporting date.
The provision is discounted using a risk-free discount rate of
from 8.39% to 8.66% (2020: 3.87% to 5.08%) depending on the
commitment terms, attributed to the Russian Federal Bonds.
Provision is estimated based on the sub-areas within general
West Kytlim mining licence the Company has carried down its
operations on by the end of the reporting period. Timing is
stipulated by the forestry permits issued at the pre-mining stage
for each of sub-areas. Short term provision relates to technical
and biological recultivation and forest compensation to be
completed by the end of financial year end 2022.
28 Related party transactions
Transactions with subsidiaries
In the normal course of business, the Company provides funding
to its subsidiaries for reinvestment into exploration projects.
2021 2020
GBP GBP
Receivables from subsidiaries 28,028 23,735
Loans provided to subsidiaries 12,681,450 8,226,176
Payables to subsidiaries - (198,583)
------------ -----------
Service charges to subsidiary 120,000 120,000
------------ -----------
The amounts owed by subsidiaries are unsecured and receivable on
demand.
Amount payable to a subsidiary was written off. Subsidiary has
been in dormant state for a long period and does not have bank
account or prospects of further operations.
Transactions with key management personnel
The Group considers that the key management personnel are the
Directors of the Company.
The following amounts were paid and/or accrued to the Directors
of the Company who held office at 31 December 2021:
2021 2020
GBP GBP
Short-term benefits 638,288 254,575
638,288 254,575
-------- --------
The remuneration of the Directors is determined by the
remuneration committee having regard to the performance of
individuals and market trends. No pension contribution has been
made for the Directors in 2021 (2020: nil).
An analysis of remuneration for each Director of the Company
during 2021:
Salaries,
bonuses Directors
Name Position and allowances fees Total
GBP GBP GBP
C. Schaffalitzky Executive Chairman 187,504 - 187,504
J. Nieuwenhuys Executive Director 350,000 - 350,000
Non-Executive
I. Rawlinson Director - 42,500 42,500
Non-Executive
T. Abdikeev Director 22,620 29,333 51,953
Non-Executive
K. Kosaka Director - 1,331 1,331
Non-Executive
G. FitzGerald Director - 5,000 5,000
560,124 78,164 615,668
---------------- ---------- --------
29 Loss per share
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the year.
2021 2020
GBP GBP
Loss attributable to equity holders
of the Company (2,910,479) (3,080,336)
Weighted average number of ordinary
shares in issue 2,803,433,563 2,733,821,972
-------------- ---------------
Basic loss per share (pence) (0.10) (0.11)
-------------- ---------------
Potential number of shares that could be issued following
exercise of share options or warrants:
Number of exercisable instruments: 2021 2020
GBP GBP
Share options 139,000,000 139,000,000
Warrants 94,838,314 -
------------- ------------
224,838,314 139,000,000
------------- ------------
There is no dilutive effect of share options or warrants (2020:
nil) as the Group was in a loss position.
30 Commitments
At the time of the award of the Monchetundra mining license a
royalty payment was calculated by the Russian Federal Reserves
Commission. 20% of this payment was paid in December of 2018 and
the remaining 80%, or RUB6.68 mln (approximately GBP165,000) to be
paid by November 2023.
During 2020 the Group entered into several lease agreements to
lease mining plant and equipment. As at 31 December 2021 the
average lease term was 3.5 years and present value of minimum lease
payments GBP429,543 (2020: GBP526,929).
In 2021 the Group entered into a framework agreement with
Rosgeo, a Russian registered exploration company, to develop up to
nine projects in a joint venture. The Rosgeo agreement allows the
Group to gain a 75% equity stake in these new assets with the
remaining 25% equity stakes to be held by Rosgeo and acquired
subsequently at Eurasia's option. Eurasia will be the operator of
each joint venture asset and will develop the additional assets at
its discretion.
By 31 December 2021 the Company had invested RUB37,180,000
(GBP367,464 at a prevailing exchange rate at the reporting date)
out of total RUB169,000,000 in respect of the Nyud license and
project. Discussions with Rosgeo regarding the project's
development are ongoing concurrent with CPR compilation including
JORC compliant mineral resource estimation and NPV computation by
Wardell Armstrong International, Engineering and Mining consultancy
firm. The Nyud project is being used by the Company as the template
for the remaining assets, which will only be evaluated after the
successful conclusion of the Nyud project.
The Group has no other material commitments.
31 Risk management objectives and policies
Financial risk management objectives
The Group's operations are limited at present to investing in
entities that undertake mineral exploration. All investments in
exploration are capitalised on project basis, which are funded by
shareholders funds and fixed rate borrowings. The Group's
activities expose it to a variety of financial risks including
currency, fair value and liquidity risk. The Group seeks to
minimise the effect of these risks on a daily basis, though due to
its limited activities the Group has not applied policy of using
any financial instruments to hedge these risks exposures.
Risk management is carried out by the Company under close board
supervision.
Foreign currency risk
The Group operates internationally and is exposed to foreign
exchange risk arising from various currency exposures, primarily
with respect to US Dollars and Russian Roubles. Foreign exchange
risk arises from future commercial transactions, recognised assets
and liabilities and net investments in foreign operations. The
Group's policy is not to enter into currency hedging
transactions.
The following significant exchange rates have been applied
during the year:
Reporting date spot
GBP Average rate rate
-------------- ---------------------
2021 2020 2021 2020
------- ----- ---------- ---------
USD 1.376 1.284 1.348 1.365
RUB 101.37 92.79 101.18 102.04
Sensitivity analysis
A reasonably possible strengthening (weakening) of the USD and
RUB, as indicated below, against GBP at 31 December would have
affected the measurement of financial instruments denominated in a
foreign currency and affected equity and profit or loss before
taxes by the amounts shown below. The analysis assumes that all
other variables, in particular interest rates, remain constant and
ignores any impact of forecast sales and purchases.
Strengthening Weakening
------------------ --------------------
Profit or Profit or
Equity loss Equity loss
------- --------- --------- ---------
GBP GBP GBP GBP
31 December 2021
USD (5% movement) 100,534 69,642 (90,957) (63,013)
RUB (5% movement) 111,281 43,678 (100,700) (39,523)
Strengthening Weakening
------------------ --------------------
Profit or Profit or
Equity loss Equity loss
------- --------- --------- ---------
GBP GBP GBP GBP
31 December 2020
USD (5% movement) 29,075 7,628 (26,308) (6,902)
RUB (5% movement) 135,129 108,443 (122,265) (98,115)
Interest rate risk
As the Group has no significant interest-bearing assets, the
group's operating cash flows are substantially independent of
changes in market interest rates.
The Group has interest-bearing loans and lease liabilities
disclosed in the notes 24 and 25 respectively. All loans are at a
fixed rate of interest.
Fair values
In the opinion of the Directors, there is no significant
difference between the fair values of the Group's and the Company's
assets and liabilities and their carrying values.
Credit risk
The Group's exposure to credit risk is limited to the carrying
amount of financial assets recognised at the consolidated statement
of financial position date, as summarised below:
2021 2020
Group Company Group Company
GBP GBP GBP GBP
Non-current loans and advances - - - -
Current loans and advances - 12,681,450 - 8,226,176
Trade and other receivables 1,681,864 275,689 285,081 106,042
Cash and cash equivalents 22,009,507 21,892,793 5,404,101 5,247,106
------------ ------------ ----------- -----------
23,691,371 34,849,932 5,689,182 13,579,324
============ ============ =========== ===========
The Group's risk on cash at bank is mitigated by holding of the
majority of funds at "A" rated bank.
No significant amounts are held at banks rated less than "B".
Cash is held either on current account or on short-term deposit at
floating rate. Interest is determined by the relevant prevailing
base rate. The fair value of cash and cash equivalents at 31
December 2021 are not materially different from its carrying
value.
Recoverability of the loans is dependent on the borrower's
ability to transform them into cash generating units through
discovery of economically recoverable reserves and their
development into profitable production.
The Company continuously monitors defaults by the
counterparties, identified either individually or by group, and
incorporates this information into its credit risk control.
Management considers that all of the above financial assets that
are not impaired are of good credit quality.
Liquidity risk
Ultimate responsibility for liquidity risk management rests with
the board of Directors, which has built an appropriate liquidity
risk management framework for the management of the Group's short,
medium and long term funding and liquidity management requirements.
The Group manages liquidity risk by maintaining adequate reserves,
borrowing facilities, cash and cash equivalent by continuously
monitoring forecast and actual cash flows and matching the maturity
profiles of financial assets and liabilities.
The following table details the Group's remaining contractual
maturity for its non-derivative financial liabilities.
Current Non-current
later
within 2 to 5 than 5
12 months years years
GBP GBP GBP
2021
Borrowings 31,953 - -
Lease liabilities 200,633 377,027 -
Trade and other payables 486,558 - -
----------- -------- --------
719,144 377,027 -
2020
Borrowings 31,684 - -
Lease liabilities 201,392 572,791 -
Trade and other payables 287,491 - -
----------- -------- --------
520,567 572,791 -
The following table details the Company's remaining contractual
maturity for its non-derivative financial liabilities.
Current Non-current
later
within 2 to 5 than 5
12 months years years
GBP GBP GBP
2021
Trade and other payables 275,689 - -
----------- ------- --------
275,689 - -
2020
Trade and other payables 342,687 - -
----------- ------- --------
342,687 - -
The tables above have been drawn up based on the undiscounted
cash flows of financial liabilities based on the earliest date on
which the Group can be required to pay. The table includes both
interest and principal cash flows.
The contractual maturities reflect the gross cash flows, which
may differ to the carrying values of the liabilities at the
statement of financial position date.
Capital risk
At present the Group's capital management objective is to ensure
the Group's ability to continue as a going concern.
Capital is monitored on the basis of its carrying amount and
summarised as follows:
2021 2020
Group Company Group Company
GBP GBP GBP GBP
Total borrowings 461,496 - 558,614 -
Less cash and cash equivalents (22,009,507) (21,892,793) (5,404,101) (5,247,106)
-------------- -------------- ------------- -------------
Net debt - - - -
Total equity 31,995,270 35,740,089 11,590,173 14,370,390
-------------- -------------- ------------- -------------
Total capital 31,995,270 35,740,089 11,590,173 14,370,390
Gearing 0% 0% 0% 0%
Capital structure is managed depending on economic conditions
and risk characteristics of underlying assets. In order to maintain
or adjust capital structure, the Group may issue new shares and
debt financial instruments or sell assets to reduce debt.
32 Events after the statement of financial position date
The Group's assets are located in Russia. In 2022 additional
sanctions to those which had existed since 2014 were imposed on
certain activities, entities and individuals connected with Russia,
which continue to evolve and which are being carefully monitored by
the Group in accordance with the Group's sanctions compliance
policy, and with the assistance of its external legal advisers. The
Company has satisfied itself that neither of its current activities
at the West Kytlim Mine or on the Kola Peninsula are prohibited
under UK or EU sanctions rules. Furthermore, the Group does not
engage and has not engaged with any sanctioned persons/ entities or
agencies.
To date there has been no significant impact on the Group's
activities as a result of recent updates to the UK and EU sanctions
legislation. Sanctions introduced by the Russian Federal government
have also not affected the Group, although this is being closely
monitored. The Group closely monitors all regulatory requirements
and changes to the laws, rules and regulations, taking steps
whenever necessary to ensure compliance with new legislation.
There have been no further adjusting events after the statement
of financial position date and the following non-adjusting
events.
Notice of 2022 Annual General Meeting
NOTICE IS HEREBY GIVEN that the AGM of Eurasia Mining Plc, will
be held at Etc.venues, 8 Eastcheap, London, EC3M 1AE , and
virtually via an electronic meeting platform on Thursday 28 July
2022 at 9:00am, to consider the below resolutions.
Please note that this notice is important and requires your
immediate attention. If you are in any doubt as to the action to be
taken, please consult an independent adviser immediately. If you
have sold or transferred or otherwise intend to sell or transfer
all of your holding of ordinary shares in the Company prior to the
record date (as described in Note 1) for the meeting, you should
send this document to the (intended) purchaser or transferee, or to
the stockbroker, bank or other agent through whom the sale or
transfer was or is to be effected for transmission to the
(intended) purchaser or transferee.
At the time of notice, no COVID-19 travel, or public gathering
restrictions are in place, however, as this situation can change at
short notice and as COVID-19 remains a concern for large public
gatherings with attendance from disparate locations, the Company
would still encourage shareholders to exercise their votes by
submitting their Form of Proxy electronically or by post in advance
of the meeting, and by making use of the electronic meeting
platform to attend, and vote, electronically. Lodging of a proxy
will not preclude shareholders from attending and voting in person,
or attending and voting virtually via the meeting platform.
The formal business of the Annual General Meeting (AGM) will be
to consider and vote on the resolutions set out in this notice of
meeting. Shareholders wishing to vote, or appoint the Chairman of
the meeting as proxy, on any of the matters of business may do so
electronically at www.signalshares.com , or by following
instructions in Note 2 below . A form of proxy is available at the
Company's website (
https://www.eurasiamining.co.uk/investors/circulars-notices ), or
can be requested from the Company's registrar ("Registrar"), and
must be completed and submitted in accordance with the instructions
thereon to be received by the Registrar before 09.00 am on 26 July
2022. Further information on voting procedures follow the
resolutions below. Queries regarding these procedures may be
directed to info@eurasiamining.co.uk or the Company's registrar s,
Link Group,
https://www.linkgroup.eu/get-in-touch/shareholders-in-uk-companies/
; telephone number: 0371 664 0300 from the United Kingdom and +44
371 664 0300 from overseas.
Shareholders who wish to attend the annual general meeting
virtually will be able to attend, ask questions and vote in real
time via the electronic meeting platform, Lumi (see note 14 for
more details).
The following resolutions will be proposed at the AGM, as
ordinary resolutions.
Ordinary Resolutions
To consider, and if thought fit, pass the following resolutions
as ordinary resolutions:
1. To receive and consider the audited accounts for the period
ended 31 December 2021 together with the Directors' and the
auditors' reports therein.
2. To re-appoint Grant Thornton LLP as auditors of the Company.
3. To authorise the Directors to determine the remuneration of
the auditors of the Company.
4. To re-appoint Kotaro Kosaka as a Non-Executive Director, who
retires in accordance with Article 47.1.1 of the Company's Articles
of Association, having been appointed by the Board since the last
annual general meeting of the Company.
5. To re-appoint Artem Matyushok as a Non-Executive Director,
who retires in accordance with Article 47.1.1 of the Company's
Articles of Association, having been appointed by the Board since
the last annual general meeting of the Company.
Notice of Meeting Notes:
The following notes explain your general rights as a shareholder
and your right to attend and vote at this Meeting or to appoint
someone else to vote on your behalf .
1. To be entitled to attend or vote electronically at a general
meeting (and for the purpose of the determination by the Company of
the number of votes they may cast), shareholders must be registered
in the Register of Members of the Company at close of trading on 26
July 2022. Changes to the Register of Members after the relevant
deadline shall be disregarded in determining the rights of any
person to vote at the AGM.
2. You can vote, or appoint a proxy, by:
-- logging on to the Registrar's website at www.signalshares.com
and following the instructions;
-- through your relevant Nominee account platform - Please note:
-- the Registrar will only accept voting instructions from the
legal holder of a shareholding;
-- Nominee providers may require voting instructions to be
submitted by their clients up to one week in advance of the
Registrar/Company's submission deadline;
-- by requesting a hard copy Form of Proxy directly from Link
Group by telephoning 0371 664 0300 (calls are charged at the
standard geographic rate and will vary by provider. Calls outside
the United Kingdom will be charged at the applicable international
rate. Lines are open 9am to 5.30pm Monday to Friday, excluding
public holidays in England and Wales). The form of proxy can also
be downloaded and printed from the Eurasia Mining website -
https://www.eurasiamining.co.uk/investors/circulars-notices .
-- In the case of CREST members, by utilising the CREST
electronic voting and proxy appointment service in accordance with
the procedures set out in 7, 8 and 9 below.
In order for a proxy appointment to be valid a form of proxy
must be completed. In each case the form of proxy must be received,
electronically or by post by the Registrar at:
Link Group,
PXS1,
Central Square,
29 Wellington Street,
Leeds,
LS1 4DL.
During normal business hours by 9am on 26 July 2022 or, in the
event of any adjournment of the meeting, 48 hours before the time
of the adjourned meeting).
3. A vote withheld is not a vote in law, which means that the
vote will not be counted in the calculation of votes for or against
the resolution. If no voting indication is given, your proxy will
vote or abstain from voting at his or her discretion. Your proxy
will vote (or abstain from voting) as he or she thinks fit in
relation to any other matter which is put before the Meeting.
4. If you return more than one proxy appointment, either by
paper or electronic communication, the appointment received last by
the Registrar before the latest time for the receipt of proxies
will take precedence. You are advised to read the terms and
conditions of use carefully. Electronic communication facilities
are open to all shareholders and those who use them will not be
disadvantaged.
5. The return of a completed form of proxy, electronic filing or
any CREST Proxy Instruction will not prevent a shareholder from
attending the meeting and voting in person, if the meeting is open
to general attendance and he/she wishes to do so.
6. CREST members who wish to appoint a proxy or proxies through
the CREST electronic proxy appointment service may do so for the
Meeting (and any adjournment of the Meeting) by using the
procedures described in the CREST Manual (available from
www.euroclear.com/site/public/EUI) . CREST Personal Members or
other CREST sponsored members, and those CREST members who have
appointed a service provider(s), should refer to their CREST
sponsor or voting service provider(s), who will be able to take the
appropriate action on their behalf.
7. In order for a proxy appointment or instruction made by means
of CREST to be valid, the appropriate CREST message (a 'CREST Proxy
Instruction') must be properly authenticated in accordance with
Euroclear UK & Ireland Limited's specifications and must
contain the information required for such instructions, as
described in the CREST Manual. The message must be transmitted so
as to be received by the issuer's agent (ID RA10) by 9am on 26 July
2022 (being not less than 48 hours before the time for the holding
of the meeting or any adjourned meeting). For this purpose, the
time of receipt will be taken to mean the time (as determined by
the timestamp applied to the message by the CREST application host)
from which the issuer's agent is able to retrieve the message by
enquiry to CREST in the manner prescribed by CREST. After this
time, any change of instructions to proxies appointed through CREST
should be communicated to the appointee through other means.
8. CREST members and, where applicable, their CREST sponsors or
voting service providers should note that Euroclear UK &
Ireland Limited does not make available special procedures in CREST
for any particular message. Normal system timings and limitations
will, therefore, apply in relation to the input of CREST Proxy
Instructions. It is the responsibility of the CREST member
concerned to take (or, if the CREST member is a CREST personal
member, or sponsored member, or has appointed a voting service
provider(s), to procure that his CREST sponsor or voting service
provider(s) take(s)) such action as shall be necessary to ensure
that a message is transmitted by means of the CREST system by any
particular time. In this connection, CREST members and, where
applicable, their CREST sponsors or voting system providers are
referred, in particular, to those sections of the CREST Manual
concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the
circumstances set out in Regulation 35(5)(a) of the Uncertificated
Securities Regulations 2001.
9. Any corporation which is a shareholder can appoint one or
more corporate representatives who may exercise on its behalf all
of its powers as a shareholder provided that no more than one
corporate representative exercises powers in relation to the same
shares.
10. As at 27 June 2022 (being the latest practicable business
day prior to the publication of this Notice), the Company's
ordinary issued share capital consists of 2,853,559,995 ordinary
shares, carrying one vote each. Therefore, the total voting rights
in the Company as at 27 June 2022 are 2,853,559,995 .
11. Under Section 527 of the Companies Act 2006, shareholders
meeting the threshold requirements set out in that section have the
right to require the Company to publish on a website a statement
setting out any matter relating to: (i) the audit of the Company's
financial statements (including the Auditor's Report and the
conduct of the audit) that are to be laid before the Meeting; or
(ii) any circumstances connected with an auditor of the Company
ceasing to hold office since the previous meeting at which annual
financial statements and reports were laid in accordance with
Section 437 of the Companies Act 2006 (in each case) that the
shareholders propose to raise at the relevant meeting. The Company
may not require the shareholders requesting any such website
publication to pay its expenses in complying with Sections 527 or
528 of the Companies Act 2006. Where the Company is required to
place a statement on a website under Section 527 of the Companies
Act 2006, it must forward the statement to the Company's auditor
not later than the time when it makes the statement available on
the website. The business which may be dealt with at the Meeting
for the relevant financial year includes any statement that the
Company has been required under Section 527 of the Companies Act
2006 to publish on a website.
12. You may not use any electronic address (within the meaning
of Section 333(4) of the Companies Act 2006) provided in either
this Notice or any related documents (including the form of proxy)
to communicate with the Company for any purposes other than those
expressly stated.
13. A copy of this Notice and any other information required by
Section 311A of the Companies Act 2006, can be found on the
Company's website at www.eurasiamining.co.uk .
14. Virtual Meeting Attendance
The Company is pleased to be able to offer facilities for
Shareholders to attend, ask questions and vote at the AGM
electronically in real time should they wish to do so. The details
are set out below.
Instructions on how to join the virtual meeting, vote and ask
questions via the video webcast.
Logging in:
In order to join the AGM electronically, and ask questions via
the platform, Shareholders will need to connect to the following
site https://web.lumiagm.com . Lumi is available as a mobile web
client, compatible with the latest browser versions of Chrome,
Firefox, Edge and Safari and can be accessed using any web browser,
on a PC or smartphone device.
Once you have accessed https://web.lumiagm.com from your web
browser on a tablet or Computer, you will be asked to enter the
Lumi Meeting ID, which is 182-777-772. You will then be prompted to
enter your unique 11 digit Investor Code (IVC) including any
leading zeros and 'PIN'. Your PIN is the last 4 digits of your IVC.
This will authenticate you as a shareholder.
Your IVC can be found on your share certificate, or Signal
Shares users will find this under 'Manage your account' when logged
in to the Signal Shares portal ( www.signalshares.com ). You can
also obtain your IVC by contacting Link, our Registrar, by calling
+44 (0) 371 277 1020*
Access to the virtual AGM will be available from 30 minutes
before meeting start time, although the voting functionality will
not be enabled until the Chairman of the meeting declares a poll
open. During the AGM, you must ensure you are connected to the
internet at all times in order to vote when the Chairman commences
polling on the Resolutions. Therefore, it is your responsibility to
ensure connectivity for the duration of the AGM via your wi-fi. A
user guide to the Lumi platform is available on our website at:
https://www.eurasiamining.co.uk/investors/circulars-notices.
If you wish to appoint a proxy other than the Chair of the
meeting and for them to attend the virtual meeting on your behalf,
please submit your proxy appointment in the usual way before
contacting Link Group on +44 (0) 371 277 1020* in order to obtain
their IVC and PIN. It is suggested that you do this as soon as
possible and at least 48 hours (excluding non-business days) before
the meeting.
If your shares are held within a nominee and you wish to attend
the electronic meeting, you will need to contact your nominee as
soon as possible. Your nominee will need to present a corporate
letter of representation to Link Group, our registrar, as soon as
possible and at least 72 hours (excluding non-business days) before
the meeting, in order that they can obtain for you your unique IVC
and PIN to enable you to attend the electronic meeting.
*Lines are open from 9.00 a.m. to 5.30 p.m. Monday to Friday,
calls are charged at the standard geographic rate and will vary by
provider. Calls outside the UK will be charged at the applicable
international rate.
A copy of this Notice, the proposed amendments to the Company's
articles of association, and other information required by Section
311A of the Companies Act 2006, can be found on the Company's
website at www.eurasiamining.co.uk.
This information is provided by RNS, the news service of the
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use the personal data you provide us, please see our Privacy
Policy.
END
FR FPMPTMTBTBRT
(END) Dow Jones Newswires
June 29, 2022 02:00 ET (06:00 GMT)
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