TIDMEUA
RNS Number : 6535E
Eurasia Mining PLC
03 July 2023
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.
3 July 2023
Eurasia Mining Plc
Annual Results and Notice of AGM
Eurasia Mining Plc ("Eurasia", the "Company" or the "Group"),
the palladium, platinum, rhodium, iridium and gold producing
company, announces its audited financial results and operational
summary for the year ending 31 December 2022 (the "Annual Report")
as well as a notification of the Annual General Meeting (the
"AGM"), to be held virtual via an electronic meeting platform on 26
July 2023 at 9:00am. More details can be found in the complete
notice of AGM below, which together with the Form of Proxy, is
available on the Company's website from 7:00am today.
Audited Group Reporting for the year ending 31 December 2022
The Company's full Annual Report, including the audited
financial statements for the year ended 31 December 2022, is set
out below and will be posted, along with notice of AGM and form of
proxy to those Eurasia shareholders electing to receive paper
format notifications, today. The Company is grateful to the
remaining 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,
shareholders 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.
Shareholders can also write to Link Group at 10th Floor, Central
Square, 29 Wellington Street, Leeds, LS1 4DL.
A copy of this announcement is also available on Eurasia's
website at:
https://www.eurasiamining.co.uk/investors/news-announcements
For further information, please contact:
Eurasia Mining Plc +44 (0) 20 7932 0418
Christian Schaffalitzky / Keith
Byrne
SP Angel (Nominated Advisor and
Joint Broker)
Jeff Keating / David Hignell /
Adam Cowl +44 (0) 20 3470 0470
Optiva Securities (Joint Broker)
Christian Dennis +44 (0) 20 3137 1902
Chairman's statement
The year 2022 stands out as a uniquely challenging year not only
for Eurasia, but also for the entire mining sector. Apart from the
Ukraine conflict which hit the world hard in February, the entire
industry has been disrupted by supply chain interruptions although
this has, however, resulted in positive price changes for EUA's
metals.
In the meantime, work has continued on optimising the asset base
prior to a possible sale.
West Kytlim
We took the decision to stockpile the ore from West Kytlim and
not to generate revenue from Russia in 2022 due to our strong cash
position and the expectation of improving prices in the future.
The West Kytlim mine saw significant investment over many years
culminating with a conversion of operations from diesel power to
electricity powered equipment and infrastructure. Hydro-derived
grid power and an electric dragline installed to site. This allows
stripping work to continue through the winter, with the
accommodation and office also on the grid. Significant reductions
in operating costs have been achieved.
As previously announced, we took the decision to stockpile the
mine product (a 'black sand' concentrate containing platinum,
palladium, iridium, rhodium and gold) from West Kytlim and not to
generate revenue from Russia during 2022.
Monchetundra
DFS
At Monchetundra, the DFS study for the several open pits at
Loipishnune and West Nittis was completed for the project's
development and submitted at the end of 2022 and the Company was
notified that all authorities were received at the end of June
2023.
NKT / Monchetundra Flanks
The NKT project comprises a brownfield Tier-1 scale deposit:
305Kt of Nickel, 143Kt of Copper, 57 tons of PGM and Gold (11.2Moz
of Platinum equivalent) as estimated by Wardell Armstrong
International as JORC-compliant resources for an underground mining
operation. We continue to look at the potential for additional
mineralisation on the property. For now the NKT Project sits as
considerable upside adjacent the Monchetundra asset.
Nyud Project and Rosgeo agreement
Eurasia retains a right to 75% of the Nyud exploration licence,
which was applied for and later received by Rosgeo's subsidiary OOO
Monchegorskoye with an intention of establishing a joint venture
with Eurasia's 100% owned subsidiary, Yuksporskaya Mining Company,
pursuant to the now expired two-year agreement between Rosgeo and
Eurasia as announced 26 March 2021. The project is now being
considered in the context of the Company's proposed asset sale.
Possible sale of Russian Assets
The Board remains of the view that any buyer is likely to be
found in BRICS countries. This process has now run on substantially
longer than the Company's management team had anticipated. We
acknowledge shareholder frustration regarding the duration of the
sale process, however, we also note recent precedent transactions
which have successfully completed despite the geopolitical
situation. Further updates will be made as appropriate although
there is currently low visibility as to when this might be. As
ever, there can be no guarantee that Eurasia will enter into
binding agreements regarding the sale process.
Company Cash Position
The Company's cash position, including US treasury notes, at 29
June 2023 stands at approximately GBP1.686 million*. In addition,
the Company's unsold PGM concentrate is valued at GBP4.1 million
(net of VAT). The Company's cash reserves are held in USD and GBP
accounts outside of Russia and therefore not exposed to Rouble
foreign exchange gains or losses against other major hard
currencies.
*Please note the cash figures provided by the Company in the
announcements dated 21 December 2022 and 11 April 2023 also
included US treasury notes held by Eurasia.
Sanctions
During 2022, the Board has maintained a regular dialogue with
the Company's legal advisers regarding the potential impact of any
sanctions. The Board remains satisfied the Company's activities are
not prohibited under the sanctions' rules. Furthermore, the Group
does not engage and has not engaged with any sanctioned persons,
entities or agencies.
Directorate Change
Management of the Company has also evolved in parallel with the
other changes. With the completion of the Monchetundra DFS, the
open pit mines are ready for construction. While we have a EPCF
agreement for the development of Monchetundra, the Board do not
believe it is appropriate to commence immediately due to the
ongoing sale process of the Russian assets. It is expected that
counterparties will have their own plans for future development,
and it is important to leave such options open. In that regard,
James Nieuwenhuys, an EPC expert, has retired from Eurasia. The
Company is grateful to James for his excellent work as CEO since
2020 and wish him well for the future.
Konstantin Firstov, our CEO at Kola has been appointed the
Country Manager and at West Kytlim, newly appointed CEO Vasily
Kudrin is in charge of pre-sale activities. Vasily has a strong
audit background with Ernst & Young and other firms in various
senior roles including a partner position.
Following James Nieuwenhuys' departure from the Eurasia board,
Christian Schaffalitzky will take on additional executive
responsibilities. As such, the Company anticipates announcing
further board changes to ensure the roles of the Chairman and CEO
are split.
Outlook
In terms of the future development of Eurasia Mining PLC, we
continue to look at expanding the business in various ways,
including the development of hydrogen projects outside of Russia
coupled with new mining opportunities in investment friendly
jurisdictions. The Company remains committed to the continued sale
of its assets in Russia.
Our strategy continues to be the eventual sale of the Company's
assets in Russia, being the West Kytlim operating mine, the
Monchetundra Project mining license, the NKT brownfield project,
and the entitlement to the Nyud brownfield project.
In conclusion, and especially for this challenging year, I want
to thank my staff colleagues and fellow directors for their hard
work and dedication. I would also like to thank shareholders, who
have shown great patience with us in recognising that much of our
planning assumptions have been altered by the events of this year
past which were outside our control. We look forward to providing
our shareholders with further updates regarding our key objectives,
including the possible sale of our Russian assets.
C. Schaffalitzky
Executive Chairman
02 July 2023
Strategic Report
OPERATIONS UPDATE
Eurasia Mining Plc is a London listed, battery metals, PGM and
green hydrogen Company with a focus on environmental and
sustainability focused solutions, and with awareness of the future
outlook for the world energy supply landscape. Eurasia is an
international company incorporated in the UK with its headquarters
in London.
Following construction of a power line to site, an electric
dragline was assembled at the Company's West Kytlim PGM and gold
mine to provide a more environmentally sustainable and attractive
asset as well as a lower cost operation for the ongoing sale
discussions.
The Central Kola Peninsula Battery Metals (predominantly Nickel
and Copper) and PGM projects developed around the Company's fully
permitted Monchetundra Project adjacent the town of Monchegorsk,
home to Norilsk's Severonickel nickel and PGM processing facility.
A Definitive Feasibility Study was approved for the Monchetundra
Project, while the brown field NKT Mine is advanced, a former
producer.
The Company has demonstrated a consistent approach to creating
value by bringing quality projects from exploration through to
mining, as well as marketing for its proposed strategic sale
following the Board's decision to exit from Russia.
WEST KYTLIM
Open Pit PGM and Gold mine with a sustainability focus.
Predominantly powered by grid (hydro-derived) electric power.
Sustainable Mining
-- Shallow open pitting has reduced environmental impact
compared to conventional mining methods, and less long-term
environmental footprint - no blasting on site and no chemicals used
in the production process.
-- Recovery to previous land use within 5 to 10 years post
remediation and with no remnant pit or tailing dumps. Allows the
mine owner and management team to make provisions for remediation
on realistic time scale.
-- Hydro generated electricity powering ore body development
(dragline) and beneficiation (stationary plant).
-- Water a key element in beneficiation process - recycled in a
closed loop outside of river course.
-- Limiting the use of asphalt and concrete on site, many mine
buildings built from timber milled on site.
Historical CAPEX Highlights
-- Three enrichment plants.
-- Powerline and electric dragline projects delivered on
schedule including peripherals and high voltage substations and
hook ups.
-- A large fleet of equipment to support the electric dragline,
including: 2X Komatsu D275 Dozers, 1X Cat D8 Dozer, 1X Shantui
SD26AS, 6X Cat 330 excavators as well as one additional
washplant.
The Operation at West Kytlim has seen very significant upgrades
to machinery and mining equipment over the past years. Mining at
West Kytlim was initially sub-contracted with Eurasia retaining
control of the concentrate upgrade and refining components for two
seasons in 2017 and 2018. From 2019 to 2021 further machinery
including additional washplants were procured with stripping of
overburden and parts of the mining operation contracted as
required. A 14 kilometre power line was constructed from the nearby
town of Kytlim allowing the mine site and all stationary plant to
switch to hydro-derived grid electricity. A large electric shovel,
or dragline was also procured and assembled on site during 2022 and
was available to contribute to the following winter stripping
program. This machine with a 70m boom and 11m(3) bucket allows
stripping at greater efficiency and a fraction of the cost of
excavator/bulldozer pairings.
KOLA BATTERY METALS AND PGM
World class PGM and Nickel-Copper projects on Kola Peninsula -
cornerstone to a proposed new predominantly open-pittable PGM and
Battery Metals mining district.
To enable the sale of the assets and to exit from Russia, the
work during 2022 was dominated by the important Definitive
Feasibility Study (Russian TEO of permanent conditions) for the
open pits at Loipishnune and West Nittis within the Monchetundra
project (License MUR 16493) which was submitted on time in December
2022. The study involved a new metallurgical sample collected from
drill core and analysed following from the 2016 (pre-feasibility)
metallurgical work. Land surveying, geophysics and hydrogeological
and geotechnical studies were also completed. The ore at
Monchetundra contains commercial grades of Palladium, Nickel,
Copper, Platinum and Gold.
Monchetundra - 2022 Highlights
-- Submission of Definitive Feasibility Study for two open pits
at Loipishnune and West Nittis in December 2022.
-- Recognition of NKT as a potential Nickel dominant mine
relaunch opportunity, as a standalone project or integrated with
Monchetundra.
Monchetundra - 2023 Highlights in the year to date
-- Monchetundra DFS final approval received.
-- Mine now shovel ready with further developments to be led by
a new owner in the context of the Company's sale-of-assets
process.
-- No significant expenditure or work programme planned for the
Monchetundra Project during 2023.
NKT (Nittis-Kumuzhya-Travyanaya) Project - Base metals mine
relaunch adjacent the Monchetundra project
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 NKT Project is being developed under license MUR 00950
BP.
A mine was successfully operated by Norilsk Nickel in the area,
put on hold because of low IRR at a Nickel price in the region of
US$2-5/lb versus above US$10/lb today(1) .
Following receipt of the Monchetundra Flanks exploration license
in August 2020, work commenced on collation of the very significant
body of historic and recent exploration and mining data available.
Originally developed as early as the 1930's, some further drilling
was completed in the early 1990's. Subsequently, further
exploration programs were completed by SeveroNickel,
PechengaNickel, Kolskaya Mining Metallurgical Company (Kolskaya
MMC), and more recently a drilling program undertaken by Rosgeo
from 2015 to 2017.
Eurasia commissioned Wardell Armstrong International to complete
a JORC analysis of the principal targets on the site during 2021
leading to publication of an NKT Competent Persons Report
describing the feasibility of a room and pillar mining operation
based on a 93,422kt (room-and-pillar mineable ore per 2021 WAI CPR)
with a total resource of Tier-1 scale: 305Kt of Nickel, 143Kt of
Copper, 57 tons of PGM and Gold (11.2Moz of Platinum equivalent) -
as estimated by WAI as JORC-compliant resources. The net present
value ("NPV") using an 8.33% discount rate for the underground part
of the NKT project is $1.2bn under the WAI price forecast and
$1.7bn under spot prices. The study had an IRR of 47% with a
payback period of 3 years.
The WAI report also included open pit optimisations for the
project area and a development program progressed to further detail
the overall geometry of all open pittable mineralisation throughout
the project area but principally at Kumuzhya, while also gathering
additional information on underground mining targets.
Mineralisation presents in two principal categories throughout the
area, both of which contribute to both open pit and underground
mineral resources;
A. Shallow epigenetic/post-magmatic low sulphide nickel-palladium disseminated and vein (chalcopyrite-pyrrhotite-pentlandite) mineralisation more concentrated in the axis of the massif.
B. Bottom lode syngenetic mineralisation (wider interval and
lower grade) occurring on the margins of the massif - Open pit and
underground mining potential.
(1 Nickel price history :)
(https://www.mining.com/markets/commodity/nickel/all/) (early 200's
price). Despite significant volatility from January 2022 Nickel has
traded above the US$10/lb line for much of the past two years.
Key performance indicators
Results for the year - the Group has made a loss before tax of
GBP7,230,088 for the year ended 31 December 2022 (2021: loss before
tax of GBP3,138,521). The single largest item causing this
variation is the absence of revenue in 2022.
Shareholder return and share price performance . The Company's
shares are quoted on the AIM market of the London Stock Exchange
and the shares have traded at between 4.1p and 28.5p*(2021:
15p-36.5p) during the year under review. A range of factors both
internal and external to the Company can impact share price
performance, including significant geopolitical developments and
uncertainty therein, commercial and new business developments,
operational performance and metal price and metal price forecasting
fluctuations. The emergence of conflict in Ukraine in February and
March 2022 had an immediate effect on the Company's share price as
investor perception was affected across all business sectors.
Exploration and development.
The Group maintained sufficient funding to develop and expand
operations during the year reported.
The West Kytlim asset, following considerable investment over
the past number of years is considered by management to be fully
capitalised and capable of sustained production at current levels
for a life of mine of up to 15 years, excluding further resources
and reserves to be defined in both the West Kytlim Flanks and Typil
license areas adjacent the mining license.
A Definitive Feasibility Study ('DFS') for the Monchetundra
project was completed during 2022. No further significant expenses
are forecast for the Monchetundra project.
The NKT Project is being assessed either as a standalone mine
relaunch adjacent to the Monchetundra Project or with its reserves
and resources integrated with those at the Monchetundra Project for
concurrent development.
No funds were raised in equity or debt capital markets and no
warrants or options were exercised in the period reported.
(*Based on yahoo finance closing prices for 01 January 2022 to
31 December 2022)
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. All relevant codes in
managing exploration programmes (specifically drilling) are also
strictly adhered to. Performance against environmental policies is
continuously monitored and annually audited including a provision
for environmental rehabilitation (note 28).
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
appropriately reviewed including appointment of a permanent health
and safety office following supply of high-voltage electric power
and oversized machinery to West Kytlim. The Group's LTIFR (Lost
time injury frequency ratio) remains at zero for the year
reported.
Operational : The Group has achieved further milestones at each
of the Monchetundra, NKT and West Kytlim Projects during the year
in review, as discussed in the Operations section herewith. Key
deliverables at each project are the Definitive Feasibility Study
at Monchetundra, the provision of electric power to West Kytlim and
the ongoing development program for the NKT project.
Governance : The Company followed the appointment of two board
members during 2021 with the appointment of Artem Matyushok in May
2022. Artem brings significant international mergers and
acquisitions experience to the Board which now comprises four
Directors and an Executive Chairman and Managing Director. New
appointments were made to roles within key subsidiary Kosvinsky
Kamen and the creation of a new Country Manager role in May
2023.
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
described in detail in the Directors' report and Notes 2 (Going
concern) and 32 (Risk management objectives and policies) to the
financial statements. The principal operating risks affecting the
Group are highlighted below:
Exploration and project development risks
Mineral exploration presents an inherent risk in that
information on in-ground resources is both limited (quantitatively
and qualitatively) and in most instances expensive to obtain. This
presents a challenge which if not properly managed can lead to
misallocation of exploration funds, not identifying reserves and
resources or, following discovery, not demonstrating the economics
of an ore reserve to accepted industry standards. The necessary
consents and approvals to conduct exploration and development work
must also be obtained and managed.
Mitigation: The Group maintains appropriate in-house expertise
and long-standing relationships with external consultancies in
mining and metallurgy to keep abreast of their changing
requirements, and to make sure all regulatory obligations are met
and duly reported. Together these increase the prospect of a
successful outcome which is measured in terms of a project meeting
its licensing and reporting requirements and the overall financial
and other metrics of the project. The Board impress on senior
management the need to identify and address the major sources of
execution risk in any development project, and to continuously
monitor diversion from schedules or targets.
Operating mine risks
Machinery breakdowns, departures from expected grade and other
operational risks may have a significant impact on revenue, which
is a component of the group's financial capacity.
Mitigation: Multiple areas are developed concurrently to
mitigate risks of a lower than calculated grade at any location.
In-fill drilling and in pit sampling are carried out as required,
and in addition to resource definition requirements. The majority
of the machinery mine fleet is relatively new, having been acquired
from 2021 onwards. Skilled operators and mechanics were appointed
as required to operate and service this significant new item of
machinery at the mine site, as well as new health and safety
protocols.
Political risk and sanctions compliance
In view of sanctions imposed on individuals and entities in
Russia, from 2014 until the present time, further legal and
economic risks may arise. Further sanctions were imposed on Russia
from late February 2022 and were subject to further updates during
2022. The group has generated no revenue from Russia since the
beginning of February 2022.
Mitigation : Strict adherence to the Group's sanctions policy.
The Group does not engage with politically exposed or sanctioned
persons or entities. The Company employs expert legal advisors and
continues to monitor updates to international sanctions legislation
focussed on Russia and resulting from the conflict in Ukraine to
determine their effect on the businesses operations and medium and
long-term strategies. Two in-depth reviews of operations against
changes in the UK and EU sanctions landscape were carried out in
May and December 2022.
Environmental
The Group's operations are subject to statutory environmental
regulation, including environmental impact assessments and
permitting including forestry permitting. The environmental
legislation comprises numerous federal and regional codes discussed
further in the environmental report herewith. The Group makes an
assessment of the environmental impact when applying for permits
and licences. Review and approval of the rehabilitation plan is a
pre-requisite of the mine plan approval for each season of
mining.
Mitigation: The Group mitigates risk to the operation arising
from environmental issues by strictly adhering to relevant
environmental laws and codes and by ensuring an appropriate plan
for managing the environmental impact of any operation is in place
prior to commencement of on-site activity. The West Kytlim mine, by
nature of the relatively simple beneficiation methods employed does
not require management of hazardous mine and process plant tailings
within a tailings dam, as is necessary in large scale underground
and open pit mining operations.
The regulatory environment
The Company and the group's activities are subject to laws and
regulations governing various matters, including licensing,
production, taxes, mine safety, labour standards, occupational
health and safety and environmental protections.
Mitigation: The Group closely monitors all regulatory
requirements and changes to the laws, rules and regulation taking
steps whenever necessary to comply with regulation. The board
considers the regulatory environment for mining companies to be
transparent, not more difficult than other jurisdictions,
sufficiently prescriptive and in general navigable for a company
employing sufficient expertise and resources to manage that aspect
of its business. Sanctions legislation has presented a new
challenge to the Company which has been met by the appointment of
suitably qualified and UK based firm.
Commodity risk
A potential fall in commodity prices could result in it becoming
uneconomic for the Group to mine its assets.
Mitigation: The Group closely monitors the markets for platinum
group metals and battery metals, 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, including
stockpiling concentrate as has occurred during 2022. The group
continues to consider potential opportunities in other mineral and
energy industries which can diversify risk.
Demand for platinum group metals from their principal use -
autocatalysts, which reduce harmful engine emissions is perceived
by market commentators to remain strong as electric vehicle uptake
is offset by tighter emissions control for traditional internal
combustion engine vehicles, and as PGM continue to find application
in emerging transport technologies such as Fuel Cell Electric
Vehicles. For further details see the PGM market summary section at
the front of this report.
Loss of key personnel risk
The loss of key personnel consists of the departure (voluntary
or otherwise) of an important employee, which will, in all
likelihood, result in a financial loss or increased expense to the
small or medium business. The expenses 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 "signing" bonus and higher remuneration packages.
Mitigation: The Group takes measures to motivate and retain
existing employees and has retained a significant number of its
senior management for more than ten years. There is not currently a
shortage of Mining industry personnel and expertise and the Group
is confident a suitable replacement could be found should it be
necessary to replace any key member of staff.
Financing risk
Historically, the Company has relied on international equity and
to a lesser extent debt capital markets to maintain adequate levels
of working capital.
Mitigation: The Group maintains tight financial and budgetary
controls as well as cost controls which with forward planning help
ensure the Company is adequately funded to reach its objectives.
The Russian assets' sale process is in progress.
The Board considers risk assessment to be important in achieving
its strategic objectives. Further details of the Group's financial
risk management policies can be found in note 32.
Research and future development
The Group's activities during the year continued to be
concentrated on advancing mineral exploration projects through
feasibility to mine development. While developing its core projects
as discussed in the Operations Update the Company will continue to
consider new directions for the business in other minerals and
energy markets globally.
ENVIRONMENTAL, SOCIAL and GOVERNANCE
Introduction
Environmental, Social and Governance priorities are a clear
focus of the mining industry generally and increasingly mining
industry investors. 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 developments in
international reporting standards to ensure adequate reporting
mechanisms. The Company's West Kytlim operation has undergone
significant changes in energy usage which will determine its future
environmental impact. With the Monchetundra Project on Kola in
pre-mine development, the Board feel it is premature for the Group
to set a net-zero emissions target but has taken steps to commence
appropriate environmental reporting going forward.
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) describes
how 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 demonstrate an 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. Directors consider the West Kytlim operation, one
of the largest mines of its type in the world, to be an opportunity
to demonstrate a potential new style of lower emissions PGM
production, competing with other global sources of PGM in terms of
CO2/oz metal produced as well as long term environmental
disturbance. The Group ensures the land disturbed by mining
activities is returned, post mining, to a safe and stable landform.
Rehabilitation plans set out land and 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
The area 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 significant disturbance of the upper
layers of top-soil and river sediment terraces which are removed to
allow access to mineral bearing gravels. These areas are then
scheduled for remediation following mining.
Water is a key resource in any stable natural environment.
Process water at the mine site is derived from river water and is
fully recirculated meaning the water used to disintegrate and
beneficiate pay gravels is continuously recycled in a closed loop
maintained separate to any free-flowing water course. This hydro
infrastructure of damns, roads and ponds is constructed as required
at washplant sites in the mining area. There have not as yet been
cases of contamination of rivers or streams in the areas under
development in the year under review or in previous years. Tails
from the mining operation do not contain hazardous chemicals but do
include large volumes of sediment and clay, which could damage the
ecosystem in a natural river course if not correctly managed.
Several relatively small specially protected water environments are
defined within the mine license and particular care is taken to not
disturb these areas.
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.
Measures are taken at site to ensure mine site water is maintained
in a closed loop separate from river courses.
Air emissions
The switch to electric powered draglines as the key machine
component for overburden stripping will remove a significant amount
of the vehicle emissions associated with overburden stripping.
Tracked and heavy machinery on site complies with the latest
accepted emissions standards having mostly been purchased new and
is specified to the latest environmental compliance standards.
Social
Relationship with the local community
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. No impact on local communities or their
activities has been identified at the West Kytlim Mine which is
situated in an area of unpopulated wilderness without nearby
farming operations. The Monchetundra operation adjacent 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 2022 and in the year to date there have been no injuries
or accidents on operational sites. Health and safety protocols have
been upgraded at the West Kytlim mine site following the arrival of
electric draglines and high voltage 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 highest risk situations
are during construction and assembly of various components of the
washplants and their peripherals as no on foot presence is required
in pit during excavation, and no drilling and blasting required
prior to digging.
Maintaining best-in-class Environmental, Social and Governance
position remains a key focus
OUR MINE SITES ARE ENGAGED WITH LOCAL COMMUNITIES
-- Consultation - A key aspect of community involvement for high impact projects.
-- All mine workers and equipment operators are local (within
70km area), Project companies 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 and move to electric power.
ENVIRONMENTAL PROTECTION IS FRONT OF MIND
-- Minimise impact - Surface mining with limited remnant waste and tails heaps
-- Limit use of concrete, steel and asphalt at the mine site
-- Rehabilitate - Eurasia is committed to ensuring the land
disturbed by mining is returned to a safe and stable landform with
no long term damage to the environment or eco system
-- Rehabilitation plans envisage works impacting local climate,
geochemistry of soils, fertility, degree of disturbance, specific
landscape and topography features
-- GHG emissions reduction - Installation of electric draglines
powered by mains hydro-derived electricity
OVER 20 YEARS' EXPERIENCE
-- Building robust partnerships and developing industry contacts
-- Leveraging an in-depth knowledge of the licensing system in
partnership with support from expert international technical
consultants
-- Group companies maintain strong contacts base amongst
machinery suppliers, contractors, industry consultants, and
sub-soil licensing professionals
Christian Schaffalitzky
Managing Director and Chairman
Directors' report
Directors
The Directors who served during the period were:
Christian Schaffalitzky - Executive Chairman
Anthony James Nieuwenhuys - Chief Executive Officer (retired
July 2023)
Tamerlan Abdikeev - Non-Executive Director
David Iain Rawlinson - Non-Executive Director
Kotaro Kosaka - Non-Executive Director
Artem Matyushok - Non-Executive Director (appointed May
2022)
Director's interests
Share interests
The Directors of the Company active at 31 December 2022 held the
following beneficial interests (including interests held by spouses
and minor children) in the ordinary shares of the Company:
31 Dec 2022 31 Dec 2021
No. of shares No. of shares
C. Schaffalitzky 89,569,517 89,569,517
Total 89,569,517 89,569,517
------------------ -------------- --------------
Share options and warrants
31 Dec 2022 31 Dec 2021
Options No. of shares No. of shares
C. Schaffalitzky 20,000,000 20,000,000
Total 20,000,000 20,000,000
-------------- --------------
All options granted to the Directors vested by 31 December
2021.
No share options were exercised by the Directors during 2022
(2021 - nil).
Dividends and profit retention
No dividend is proposed in respect of the year (2021: nil) and
the retained loss for the year attributable to the e quity holders
of the parent of GBP5,840,245 (2021: loss of GBP2,910,479) has been
taken to reserves.
Share capital
The issued capital of the Company as at 31 December 2022
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 -
--------------- ----------- --------------
2,996,937,198 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 32.
Going Concern
As at 31 December 2022 the Group's net current assets amounted
to GBP5,883,581 (GBP23,036,966 in 2021) and includes unsold
inventory of GBP4,182,382. As at the same date, the Group's cash
balance was GBP1,009,908 (GBP22,009,507 in 2021) and investment in
US treasuries of GBP3,807,925 (2021: nil). The majority of the
reduction in year on year cash position (2021 to 2022) is
attributable to capital investments and operating costs for the
West Kytlim Mine.
The Group's debt consists of lease liabilities set up to acquire
mining machinery for a total amount of GBP348,269 (at 31 December
2021 - GBP429,543).
The Group's current (as at 29 June 2023) cash position is around
GBP40,000 and US treasury Bonds valued at GBP1,646,255 with the
reduction since December 2022 being accounted for by GBP150,000 in
capital expenditure, GBP950,000 on development expenditure on its
assets portfolio, and GBP2,031,578 in costs.
These financial statements have been prepared on a going concern
basis, which assumes that the Group will continue in operation for
the foreseeable future. The directors have prepared detailed
bottom-up financial forecasts to address a range of scenarios for
the Group's operations. The Group's forecasts and assumptions
reflect key assumptions based on information available at the time
of review and include:
1. Sale of inventory of raw platinum concentrate:
The Company currently has an inventory of raw platinum
concentrate, the product of the 2022 mining season at the Kluchiki
and Bolshaya Sosnovka areas, which has been retained in safe
storage for later refining. The concentrate has a total net weight
of 199.3 kg and a realisable value of not less than GBP4.1 million.
The Company is in advanced negotiations with a number of parties to
realise this value in the near future. These funds will be used to
support the current mining season (see 2 below) and to continuing
operating costs of the Group.
2. Continuing mining operations of the Group
The Group's current mining operations in West Kytlim mine has
been running at reduced capacity at start-up of the season, as we
were engaged in stripping activity only with a commensurate and
very significant reduction in diesel and labour costs. The Board
have agreed a new and extensive mining plan for the remainder of
the season, based on electricity powered machinery and equipment.
The mining operations in West Kytlim will contribute significant
additional funds to the Group when the value of the extracted
concentrate is realised.
3. Expenditure on Monchetundra asset
The Group has spent GBP900,000 on a development programme for
the Monchetundra asset during 2022 leading to approval of the DFS
in 2023. No further significant outgoings have been budgeted for
this asset.
4. Management of future cash outflows
In addition to the above, the Group have the ability to manage
and where required, reduce expenditure as needed.
As such, the Directors have prepared the financial statements on
a going concern basis and consider it to be reasonable.
2022 Events and sanctions compliance
The Company has satisfied itself that its current activities at
the West Kytlim Mine and on the Kola Peninsula are not prohibited
under UK or EU sanctions rules. For the avoidance of doubt this
includes sale of West Kytlim mine product. Furthermore, the Group
does not engage and has not engaged with any sanctioned persons/
entities or agencies. Two in-depth reviews of the Company and
Group's activities were tested with appropriate legal advice
against EU and UK sanctions legislation in May and December
2022.
The Company has continued to fund Group companies through
international disbursements as required and in compliance with
applicable regulation.
Debt and equity capital markets are expected to remain as
options for the Company going forward.
Directors have concluded that the combination of the above
factors, with account of the current applicable sanctions regimes,
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.
The Board therefore believes it is appropriate to adopt a 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 the 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 Group for that period. In preparing
these financial statements, the Directors are required to;
-- select suitable accounting policies and 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 being disclosed and
explained in the financial statements;
-- with contributions from advisors, set the Company 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 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 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
No sale of mine product from the West Kytlim mine occurred in
the year under review. Historically, revenues generated by the
Group have been from refining of PGM concentrates. 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.
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 for the
current business and mindful of how the business will evolve
in-line with its corporate strategy and business goals. The QCA
Code's ten principles describe how the code should be applied to
any company.
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.
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.
Principle 1: Strategy
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 at any stage of development. The Company
recognises that all project development expenditure adds value to a
project by increasing its resource and reserve base. Risk to
further investment in development expenditure, or in mine
development, is also reduced as resources are moved to lower risk
categories. The Company has adopted a dual strategy of both project
development towards mining, while also investing significant
resources in active high-level mergers and acquisitions activity.
The Company adapts this strategy in response to external stimulus
such as geopolitical events.
The Company is focused on selling its assets in Russia while
maintaining corporate governance principles in line with the QCA
Code. The key commitments and challenges in adhering to the QCA's
10 principles 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, interviews and industry events. The
Company employs public relations professionals and maintains
third-party contracts as required to better disseminate Company
news-flow. Through shareholder feedback the Company ensures that it
remains in touch with the information requirements of shareholders,
their expectations regarding their investment, and the motivation
behind their voting decisions. Director's consider shareholder's
expectations to be correlated with that of the Company and the
Company's strategy. The Company aims to update on key operation and
commercial events as appropriate and the Board recognises that
shareholders require complete and timely information as a necessary
input to their investment decisions. Working with its Nominated
Advisor the Company maintains strict adherence to the AIM rules for
Companies.
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. 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 material 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 operating at project level.
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 qualified and knowledgeable personnel are
employed and that they 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 key risks facing the business at both a
corporate and operational level (see principal risks and
uncertainties herewith). 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 Managing Director supported
by four Non-Executive Directors. The Board aims 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 with the Mergers and Acquisitions Officer role recognised
as pivotal in the current overall strategy.
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 prepared and
circulated in advance of board meetings. 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 mergers and acquisitions 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 current 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 adherence to
a programme of CPD activities.
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 is incorporated and domiciled in the UK
and governed by the laws of England and Wales and its corporate
culture and values extend from PLC level throughout the
organisation irrespective of jurisdiction. An ability to recognise
and promote good ethical values is seen throughout the organisation
as an asset to an employee, potential employee or board member. The
current board members have been chosen with awareness of the
Company's 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 nominations and staff 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 either virtually or in person. 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 outlined
above 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.
UK Code on Takeovers 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
02 July 2023
Consolidated statement of profit or loss and other comprehensive
income
For the year ended 31 December 2022
Note Year to Year to
31 December 31 December
2022 2021
GBP GBP
Sales 8 119,525 2,331,225
Cost of sales 9 (30,173) (2,584,680)
------------- -------------
Gross profit/(loss) 89,352 (253,455)
Administrative costs 9 (4,618,351) (2,717,765)
Investment income 61,325 1,394
Finance cost 10 (107,697) (103,445)
Other gains 11 187,592 -
Other losses 11 (2,842,309) (65,250)
------------- -------------
Loss before tax (7,230,088) (3,138,521)
Income tax expense 12 - -
------------- -------------
Loss for the year (7,230,088) (3,138,521)
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 (61,656) 36,855
Items that will be reclassified
subsequently to profit and
loss:
Parent's share of foreign exchange
differences on translation
of foreign operations (341,762) (58,679)
------------- -------------
Other comprehensive expense
for the year, net of tax (403,418) (21,824)
------------- -------------
Total comprehensive loss for
the year (7,633,506) (3,160,345)
============= =============
Loss for the year attributable
to:
Equity holders of the parent (5,840,245) (2,910,479)
Non-controlling interest 16 (1,389,843) (228,042)
------------- -------------
(7,230,088) (3,138,521)
============= =============
Total comprehensive loss for
the year attributable to:
Equity holders of the parent (6,182,007) (2,969,158)
Non-controlling interest 16 (1,451,499) (191,187)
------------- -------------
(7,633,506) (3,160,345)
============= =============
Loss per share attributable
to equity holders of the parent:
Basic and diluted loss (pence
per share) 30 (0.22) (0.10)
The accompanying notes are an integral part of these financial
statements.
Consolidated statement of financial position
As at 31 December 2022
Note 31 December 31 December
2022 2021
GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 13 9,600,231 5,061,743
Assets in the course of construction 13 696,026 640,423
Intangible assets 14 2,859,368 1,389,029
Investment in financial assets 17 3,807,925 -
Investment to potential share
in joint venture 15 - 367,464
------------- -------------
Total non-current assets 16,963,550 7,458,659
------------- -------------
Current assets
Inventories 19 4,182,382 38,673
Trade and other receivables 20 3,171,669 1,681,864
Current tax asset 6,050 5,334
Cash and cash equivalents 21 1,009,908 22,009,507
------------- -------------
Total current assets 8,370,009 23,735,378
------------- -------------
Total assets 25,333,559 31,194,037
============= =============
EQUITY
Issued capital 22 61,187,111 61,187,111
Other reserves 24 3,580,929 3,922,691
Accumulated losses (38,954,777) (33,114,532)
------------- -------------
Equity attributable to equity
holders
of the parent 25,813,263 31,995,270
Non-controlling interest 16 (3,401,548) (1,950,049)
------------- -------------
Total equity 22,411,715 30,045,221
------------- -------------
LIABILITIES
Non-current liabilities
Lease liabilities 26 181,198 307,136
Provisions 28 254,218 143,268
------------- -------------
Total non-current liabilities 435,416 450,404
------------- -------------
Current liabilities
Borrowings 25 - 31,953
Lease liabilities 26 167,071 122,407
Trade and other payables 27 2,230,879 486,558
Provisions 28 88,478 57,494
Total current liabilities 2,486,428 698,412
------------- -------------
Total liabilities 2,921,844 1,148,816
------------- -------------
Total equity and liabilities 25,333,559 31,194,037
============= =============
These financial statements were approved by the board on 02 July
2023 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 2022
Note 31 December 31 December
2022 2021
GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 13 419 804
Investments in financial assets 17 3,807,925 -
Investments in subsidiaries 16 1,132,246 1,132,246
Total non-current assets 4,940,590 1,133,050
------------- -------------
Current assets
Trade and other receivables 20 434,040 308,485
Other financial assets 18 28,157,840 12,681,450
Cash and cash equivalents 21 136,733 21,892,793
------------- -------------
Total current assets 28,728,613 34,882,728
------------- -------------
Total assets 33,669,203 36,015,778
============= =============
EQUITY
Issued capital 22 61,187,111 61,187,111
Other reserves 24 3,924,026 3,924,026
Accumulated losses (31,878,477) (29,371,048)
------------- -------------
Total equity 33,232,660 35,740,089
LIABILITIES
Current liabilities
Trade and other payables 27 436,543 275,689
Total current liabilities 436,543 275,689
------------- -------------
Total liabilities 436,543 275,689
------------- -------------
Total equity and liabilities 33,669,203 36,015,778
============= =============
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 GBP2,507,429 (2021: loss of GBP2,004,556).
These financial statements were approved by the board on 02 July
2023 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 2022Consolidated statement of
changes in equity
Attributable
to equity
holders
Share Share Deferred Other Translation Accumulated of the Non-controlling
Note capital premium shares reserves reserve losses 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 year 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
========== ============ ========== ========== ============ ============= ============= ================ ============
Attributable
to equity
holders
Share Share Deferred Other Translation Accumulated of the Non-controlling
Note capital premium shares reserves reserve losses parent interest Total
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 1 January
2022 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
Transaction
with owners - - - - - - - - -
---------- ----------- ---------- ---------- ------------ ------------- ------------- ---------------- ------------
Loss for the year - - - - - (5,840,245) (5,840,245) (1,389,843) (7,230,088)
-
Other
comprehensive
income
Exchange differences
on
translation
of foreign operations - - - - (341,762) - (341,762) (61,656) (403,418)
Total comprehensive
loss
for the year ended 31
December
2022 - - - - (341,762) (5,840,245) (6,182,007) (1,451,499) (7,633,506)
---------- ----------- ---------- ---------- ------------ ------------- ------------- ---------------- ------------
Balance at 31 December
2022 2,853,560 51,308,068 7,025,483 3,924,026 (343,097) (38,954,777) 25,813,263 (3,401,548) 22,411,715
========== =========== ========== ========== ============ ============= ============= ================ ============
The accompanying notes are an integral part of these financial
statements.
Company statement of changes in equity
For the year ended 31 December 2022
Share Share Deferred Accumulated
Note capital premium shares Other reserves losses Total
GBP GBP GBP GBP GBP GBP
Balance at 1 January 2021 2,758,702 28,028,671 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
========== ============ ========== =============== ============= ============
Share Share Deferred Accumulated
Note capital premium shares Other reserves losses Total
GBP GBP GBP GBP GBP GBP
Balance at 1 January 2022 2,853,560 51,308,068 7,025,483 3,924,026 (29,371,048) 35,740,089
Transactions with owners - - - - - -
---------- ----------- ---------- --------------- ------------- ------------
Loss and total comprehensive
income - - - - (2,507,429) (2,507,429)
Balance at 31 December 2022 2,853,560 51,308,068 7,025,483 3,924,026 (31,878,477) 33,232,660
========== =========== ========== =============== ============= ============
The accompanying notes are an integral part of these financial
statements.
Consolidated statement of cash flows
For the year ended 31 December 2022
Year to Year to
31 December 31 December
Note 20 2 2 2021
GBP GBP
Cash flows from operating activities
Loss for the year (7,230,088) (3,138,521)
Adjustments for:
Depreciation of non-current assets 13 1,006,210 422,752
Asset value write offs to cost
of sales/production 2,365,988 149,882
Finance costs recognised in profit
or loss 25 107,697 103,445
Investment income recognised
in profit or loss (61,325) (1,394)
Loss recognised on disposal of
investments 814,158 -
Loss recognised on valuation
of inventory 2,028,151 -
Gain on disposal of property,
plant and equipment (4,952) -
Rehabilitation cost recognised
in profit or loss 99,725 145,785
Net foreign exchange (gains)/losses 11 (182,640) 65,250
(1,057,076) (2,252,801)
Movement in working capital
Increase in inventories (6,166,681) (24,862)
Increase in trade and other receivables (1,300,887) (1,395,059)
Increase in trade and other payables 1,716,777 197,728
-------------- -------------
Cash outflow from operations (6,807,867) (3,474,994)
Income tax paid - -
Net cash used in operating activities (6,807,867) (3,474,994)
-------------- -------------
Cash flows from investing activities
Payments for investment securities (7,030,548) -
Proceeds from sale of investment
securities 2,835,299 -
Investment income 11,943 1,394
Investment to acquire interest
in other entities (354,769) (367,464)
Purchase of property, plant and
equipment 13 (7,190,406) (1,910,033)
Proceeds from disposal of property,
plant and equipment 4,952 -
Payment for exploration and evaluation
assets 14 (1,239,085) (682,419)
Net cash used in investing activities (12,962,614) (2,958,522)
-------------- -------------
Cash flows from financing activities
Proceeds from issue of equity
shares - 24,929,694
Share issue costs - (1,555,439)
Repayment of borrowings (36,232) -
Repayment of lease liability (141,528) (101,674)
Interest paid (90,446) (101,048)
Net cash proceeds (used in) from
financing activities (268,206) 23,171,533
-------------- -------------
Net (decrease)/increase in cash
and cash equivalents (20,038,687) 16,738,017
Effects of exchange rate changes
on the balance of cash held in
foreign currencies (960,912) (132,611)
Cash and cash equivalents at beginning
of year 22,009,507 5,404,101
Cash and cash equivalents at
end of year 1,009,908 22,009,507
============== =============
The accompanying notes are an integral part of these financial
statements.
Company statement of cash flows
For the year ended 31 December 2022
Year to Year to
31 December 31 December
Note 20 2 2 20 2 1
GBP GBP
Cash flows from operating activities
Loss for the year (2,507,429) (2,004,556)
Adjustments for:
Depreciation of non-current assets 385 703
Investment revenue recognised in
profit or loss (49,382)
Impairment loss on investments 11 389,292 -
Net foreign exchange loss 64,219 26,576
(2,102,915) (1,977,277)
Movement in working capital
Increase in trade and other receivables (124,319) (202,443)
Increase/(decrease) in trade and
other payables 160,854 (66,998)
------------- -------------
Cash outflow from operations (2,066,380) (2,246,718)
Income tax paid - -
Net cash used in operating activities (2,066,380) (2,246,718)
------------- -------------
Cash flows from investing activities
Payments for investment securities (7,030,548) -
Proceeds on sale of investment
securities 2,835,299 -
Amounts advanced to related party (15,476,390) (4,455,274)
Investments to acquire interest
in other entities (354,769) -
Net cash used in investing activities (20,026,408) (4,455,274)
------------- -------------
Cash flows from financing activities
Proceeds from issue of equity shares - 24,929,694
Share issue costs - (1,555,439)
Net cash proceeds from financing
activities - 23,374,255
------------- -------------
Net (decrease)/increase in cash
and cash equivalents (22,092,788) 16,672,263
Effects of exchange rate changes
on the balance of cash held in
foreign currencies 336,728 (26,576)
Cash and cash equivalents at beginning
of year 21,892,793 5,247,106
Cash and cash equivalents at end
of year 136,733 21,892,793
============= =============
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 battery metals, platinum group metals, gold
and other minerals as well as green hydrogen projects.
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
As at 31 December 2022 the Group's net current assets amounted
to GBP5,883,581 (GBP23,036,966 in 2021) and includes unsold
inventory of GBP4,182,382. As at the same date, the Group's cash
balance was GBP1,009,908 (GBP22,009,507 in 2021) and investment in
US treasuries of GBP3,807,925 (2021: nil). The majority of the
reduction in year on year cash position (2021 to 2022) is
attributable to capital investments and operating costs for the
West Kytlim Mine.
The Group's debt consists of lease liabilities set up to acquire
mining machinery for a total amount of GBP348,269 (at 31 December
2021 - GBP429,543).
The Group's current (as at 29 June 2023) cash position is around
GBP40,000 and US treasury Bonds valued at GBP1,646,255 with the
reduction since December 2022 being accounted for by GBP150,000 in
capital expenditure, GBP950,000 on development expenditure on its
assets portfolio, and GBP2,031,578 in costs.
These financial statements have been prepared on a going concern
basis, which assumes that the Group will continue in operation for
the foreseeable future. The directors have prepared detailed
bottom-up financial forecasts to address a range of scenarios for
the Group's operations. The Group's forecasts and assumptions
reflect key assumptions based on information available at the time
of review and include:
1. Sale of inventory of raw platinum concentrate:
The Company currently has an inventory of raw platinum
concentrate, the product of the 2022 mining season at the Kluchiki
and Bolshaya Sosnovka areas, which has been retained in safe
storage for later refining. The concentrate has a total net weight
of 199.3 kg and a realisable value of not less than 4.1 million.
The Company is in advanced negotiations with a number of parties to
realise this value in the near future. These funds will be used to
support the current mining season (see 2 below) and to continuing
operating costs of the Group.
2. Continuing mining operations of the Group
The Group's current mining operations in West Kytlim mine has
been running at reduced capacity at start-up of the season, as we
were engaged in stripping activity only with a commensurate and
very significant reduction in diesel and labour costs. The Board
have agreed a new and extensive mining plan for the remainder of
the season, based on electricity powered machinery and equipment.
The mining operations in West Kytlim will contribute significant
additional funds to the Group when the value of the extracted
concentrate is realised.
3. Expenditure on Monchetundra asset
The Group has spent GBP900,000 on a development programme for
the Monchetundra asset during 2022 leading to approval of the DFS
in 2023. No further significant outgoings have been budgeted for
this asset.
4. Management of future cash outflows
In addition to the above, the Group have the ability to manage
and where required, reduce expenditure as needed.
As such, the Directors have prepared the financial statements on
a going concern basis and consider it to be reasonable.
3 Changes in accounting policies
3.1 New and revised relevant standards that are effective for
annual periods commencing on or after 1 January 2022
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 financial
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.
These amendments did not have an impact on the Group.
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 did not 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 Group 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.
These amendments did not have an impact on the Group.
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.
These amendments did not have an impact on the Group.
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.
These amendments did not have an 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.
These amendments did not have an impact on the Group.
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.
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 access or improve access to
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.
Assets under construction
Assets under construction are fixed asset investments that have
not been commissioned by the year-end. The expenses associated with
acquisition, building, delivery and other allowed expenses are
first capitalised as assets under construction and then, once
completed, depreciated over their useful life.
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 from 6.99% to 8.31% 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 2023 to 2043were
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 20232-2043:
Pt grade 0.454g/tonne
Process recovery 89.7%
Platinum/Gold price $1,172-1,381/oz / $1,825/oz
Post-tax discount rate 7.74%
5.1.3 Impairment review of the intangible asset
Intangible asset represents the Monchetundra development and
Nittis-Kumuzhya-Travyanaya (the "NKT") exploration and evaluation
assets. NKT, previously referred to as The Monchetundra Flanks, is
a northeast extension of the Monchetundra mineralisation.
Monchetundra has been assessed as an economically viable asset for
the purpose of preparing and submitting a Definitive Feasibility
Study for the mines development. Parameters of the assessment have
been evaluated by an expert panel of mining industry professionals
and are being regularly evaluated by the Company for 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 2022.
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
32). 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:
West Kytlim Monchetundra Corporate Total
and other
segments
Geographical Urals Mountains, Kola Peninsula, London, UK
location Russia Russia
Activity Operating Licenced mining Management
mine and revenue project and investment
generating
unit
2022 GBP GBP GBP GBP
Non-current
assets 9,726,366 2,797,496 4,439,688 16,963,550
Total assets 16,948,963 3,237,597 5,146,999 25,333,559
Total liability 2,397,851 51,042 472,951 2,921,844
Revenue 119,525 - - 119,525
Loss for the
year (4,397,875) 87,385 (2,919,598) (7,230,088)
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)
7 Employees
Average number of staff (excluding Non-Executive Directors)
employed throughout the year was as follows:
2022 20 2 1
By the Company 4 4
By the Group 116 74
8 Revenue
Disaggregation of by primary markets is as follows:
Year to 3 1 December Year to 3 1 December
20 2 2 20 2 1
Group Company Group Company
GBP GBP GBP GBP
Revenue from sale of platinum
and other precious metals 61,075 - 2,331,225 -
Revenue from management
services - 120,000 - 120,000
Revenue from other services 58,450 - - -
119,525 120,000 2,331,225 120,000
Disaggregation of revenue from contracts with customers:
Year to 3 1 December Year to 3 1 December
20 2 2 20 2 1
Group Company Group Company
Russia Cyprus Russia Cyprus
GBP GBP GBP GBP
Revenue from external customers
- Sale of platinum and
other precious metals 61,075 - 2,331,225 -
- Other services 58,450 - - -
Revenue from related parties
- Management services - 120,000 - 120,000
----------- ---------- ------------- --------
119,525 120,000 2,331,225 120,000
Timing of revenue recognition
At a point of time 119,525 - 2,331,225 -
Over time - 120,000 - 120,000
----------- ---------- ------------- --------
119,525 120,000 2,331,225 120,000
There was no sale of PGM concentrate from the 2022 mining season
at West Kytlim. Revenue recognised in 2021 relates to the sale of
PGM concentrate from the West Kytlim mine to a single customer
"Ekaterinburg Non-ferrous Metals Refinery", being the only regional
refinery, processing platinum group metals and being duly licenced
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 2 2 20 2 1
Group Company Group Company
GBP GBP GBP GBP
Cost of sales (30,173) - (2,584,680) -
Administrative expenses (4,618,351) (2,223,300) (2,717,765) (2,296,563)
Cost of sales includes:
Staff benefits expenses - - 433,872 -
Depreciation* - - 421,987 -
Administration expenses
include:
Staff benefits expenses 1,174,636 823,106 1,517,088 1,275,474
Depreciation* 8,602 385 765 702
Audit fees payable 145,000 145,000 110,000 110,000
Mineral extraction tax** 1,953,851 - 149,918 -
Staff benefits expense:
Wages, salaries and
Directors' fees (note
29) 1,073,952 804,174 1,958,156 1,253,471
Social security costs 99,364 17,592 196,319 20,684
Other short-term benefits 1,321 1,321 1,319 1,319
------------ ------------- ------------- -------------
1,174,637 823,087 2,155,794 1,275,474
------------ ------------- ------------- -------------
* Total depreciation for the year ended 31 December 2022 was
GBP1,006,210 (2021: GBP422,588)
** Mineral extraction tax contains a provision of GBP1,652,122
reflecting a recent change to mineral tax legislation and its
application to the product of the West Kytlim mine. This is made as
a conservative measure as the Group is taking the necessary steps
to have the decision reconsidered.
10 Finance cost
Year to 3 1 December Year to 3 1 December
20 2 2 20 2 1
Group Company Group Company
GBP GBP GBP GBP
Interest on obligations
under finance leases 90,446 - 101,048 -
Unwinding of discounts on
provisions 17,251 - 2,397 -
----------- ---------- ----------- ----------
107,697 - 103,445 -
11 Other gains and losses
Year to 3 1 December Year to 3 1 December
20 2 2 20 2 1
Group Company Group Company
GBP GBP GBP GBP
Gains
Net foreign exchange gain 182,640 - - -
Gain on disposal of property,
plant and equipment 4,952 - - -
------------ ---------- ----------- ----------
187,592 - - -
Losses
Net foreign exchange loss - (64,219) (65,250) (26,576)
Loss on revaluation of stock
to net realisable value (2,028,151) - - -
Impairment loss on investments (814,158) (389,292) - -
(2,842,309) (453,511) (65,250) (26,576)
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.
In 2022 the Group took a decision to postpone the sale of
platinum and other metals due to a strong Ruble and low platinum
price. Stock available at 31 December 2022 represents platinum
concentrate ready for refining, which was valued (i) using
methodology set in the refining and sale and purchase agreement
made with local refinery in 2021 and (ii) exchange rate and metal
prices at 31 December 2022.
The Group recognised an impairment loss on (i) the investment
made to build a joint venture with Rosgeo (Note 15) due to
uncertainty of any near-term development in that regard due to
limitations enforced by current sanctions legislation (ii) a loss
on an investment in to a UK "waste to electricity" project the
company decided not to immediately carry through to binding
agreements.
12 Income taxes
(a) tax charged in the statement of profit and loss
Year to Year to
3 1 December 3 1 December
2022 20 2 1
Group Group
GBP GBP
Current tax - -
-------------- --------------
There was no tax payable by the Company for the year ended 31
December 2022 (2021: 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
2022 20 2 1
Group Group
GBP GBP
(3,1 82 ,
Loss before tax (7,230,088) 199 )
-------------- --------------
Current tax at 19% (2021: ( 604 , 618
19%) (1,373,717) )
Adjusted for the effect
of:
Expenses not deductible
for tax purposes - -
Profits not subject to
tax - -
Tax losses utilised - -
Unrecognised tax losses
carried forward 1,373,717 604,618
-------------- --------------
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 2022 20 2 1
United Kingdom 19% 19%
Russia 20% 20%
Cyprus 12.5% 12.5%
No tax is payable for the year ended 31 December 2022 (2021:
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
2021 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)
Transferred to
inventory - (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
Additions 49,950 2,391,500 - - 2,477 2,443,927
Transfer from
assets under
construction - - - 4,776,644 - - 4,776,644
Disposals - - - (61,910) - (2,389) (64,299)
Transferred to
inventory - (2,365,988) - - - - (2,365,988)
Exchange differences 527,350 81,689 883 148,276 92,206 1,175 851,579
---------- ------------ --------- --------------- ---------- ---------- ------------
Balance at 31
December 2022 4,381,562 717,169 23,976 5,970,174 780,699 12,332 11,885,912
---------- ------------ --------- --------------- ---------- ---------- ------------
Depreciation
Balance at 1 January
2021 (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)
Disposals - - - 61,910 - 2,389 64,299
Depreciation expense (81,361) - (99) (766,873) (156,139) (1,738) (1,006,210)
Exchange differences (96,354) - (153) (33,093) (30,904) (960) (161,464)
Balance at 31
December 2022 (872,345) - (1,397) (985,157) (417,803) (8,979) (2,285,681)
Carrying amount
:
at 31 December
2022 3,509,217 717,169 22,579 4,985,017 362,896 3,353 9,600,231
========== ============ ========= =============== ========== ========== ============
at 31 December
2021 3,109,632 609,968 21,948 860,063 457,733 2,399 5,061,743
========== ============ ========= =============== ========== ========== ============
The Group's right of use assets represents plant and machinery
type assets acquired under lease terms (note 26).
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 2 2021
GBP GBP
Cost
Balance at 1 January 640,423 28,957
Additions 4,746,479 611,220
Commissioned assets (4,776,644) -
Exchange differences 85,768 246
------------ ---------
Balance at 31 December 696,026 640,423
============ =========
Assets in the course of construction represent the Group's
investment in the asset taken time to construct and bring into
operation. Such items include powerline, dragline and field
workers' camp structures.
(c) Company's office fixture and fittings
20 2 2 2021
GBP GBP
Cost
Balance at 1 January 2,298 2,298
Additions - -
Disposal - -
--------- ---------
Balance at 31 December 2,298 2,298
Depreciation
Balance at 1 January (1,494) (791)
Depreciation expense (385) (703)
Disposals - -
Balance at 31 December (1,879) (1,494)
Carrying amount 419 804
========= =========
The Company's property, plant and equipment are free from any
mortgage or charge.
14 Intangible assets
In 2022 intangible assets represented only capitalised costs
associated with the Group's exploration, evaluation and development
of mineral resources.
20 2 2 2021
GBP GBP
Cost
Balance at 1 January 1,389,029 696,504
Additions 1,239,085 682,4 20
Exchange differences 231,254 10,10 5
---------- ----------
Balance at 31 December 2,859,368 1,389,029
========== ==========
At 31 December 2022 and 31 December 2021, the Group's intangible
asset consisted of the Monchetundra development and
Nittis-Kumuzhya-Travyanaya (the "NKT") exploration and evaluation
assets.
The Company did not directly own any intangible assets at 31
December 2022 (2021: nil)
No impairment loss has been recognised in 2022 (2021: 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 series of joint ventures. The Rosgeo agreement allowed the Group
to gain a 75% equity stake in several new assets with the remaining
25% equity stakes to be held by Rosgeo.
In 2021 the Company invested RUB37,180,000 (GBP367,464 at a
prevailing exchange rate at the transaction date). Owing to the
uncertainty of any near-term development in that regard due
principally to limitations enforced by current sanctions
legislation the Group had made provision for impairment loss on
this investment in full.
16 Subsidiaries
Details of the Company's subsidiaries at 31 December 2022 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
Mineral
OOO Kola Mining Russia 100% Evaluation
Mineral
OOO Kola Nickel 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 2 2021
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 2 2021
GBP GBP
As at 1 January (1,950,049) (1,758,862)
Loss attributable to NCI (1,389,843) (228,042)
Exchange differences (61,656) 36,856
-------------
As at 31 December (3,401,548) (1,950,049)
============= ============
Non-controlling interest on subsidiary basis
20 2 2 2021
GBP GBP
ZAO Kosvinsky Kamen (2,702,482) (1,218,383)
ZAO Terskaya Mining Company (699,066) (731,666)
------------
(3,401,548) (1,950,049)
============ =============
ZAO Kosvinsky Kamen
20 2 2 20 2 1
GBP GBP
Non-current assets 9,726,366 5,362,684
Current assets 7,222,597 1,367,573
------------
Total assets 16,948,963 6,730,257
------------
Non-current liabilities 21,083,191 7,874,026
Current liabilities 2,184,055 570,275
------------
Total liabilities 23,267,246 8,444,301
------------
Net assets (6,318,283) (1,714,044)
Equity attributable to owners
of the parent (3,615,801) (495,661)
Non-controlling interests (2,702,482) (1,218,383)
Loss for the year attributable
to owners of the parent (3,053,367) (449,647)
Loss for the year attributable
to NCI (1,407,320) (198,942)
------------
Loss for the year (4,460,687) (648,589)
------------
Total comprehensive expense
for the year attributable to
owners of the parent (3,120,140) (367,601)
Total comprehensive expense
for the year attributable to
NCI (1,484,099) (163,234)
------------
Total comprehensive expense
for the year (4,604,239) (530,835)
------------
ZAO Terskaya Mining Company
20 2 2 2021
GBP GBP
Non-current assets 2,797,496 1,376,006
Current assets 440,101 170,710
Total assets 3,237,597 1,546,716
Non-current liabilities 3,073,744 2,097,248
Current liabilities 776,399 66,434
Total liabilities 3,850,143 2,163,682
Net assets (612,546) (616,966)
Equity attributable to owners of
the parent 86,520 114,700
Non-controlling interests (699,066) (731,666)
Profit (loss) for the year attributable
to owners of the parent 69,908 (116,402)
Profit (loss) for the year attributable
to NCI 17,477 (29,100)
Profit (loss) for the year 87,385 (145,502)
----------
Total comprehensive expense for
the year attributable to owners
of the parent (28,180) (121,793)
Total comprehensive income (expense)
for the year attributable to NCI 32,600 (27,953)
----------
Total comprehensive income (expense)
for the year 4,420 (149,746)
---------- ----------
17 Financial assets
20 2 2 2021
Group Company Group Company
GBP GBP GBP GBP
Non-current
Financial assets at amortised
cost:
US treasury notes 3,807,925 3,807,925 - -
3,807,925 3,807,925 - -
========== ========== ====== ========
US treasury notes return interest of 1.25 % to 2.125% per annum
payable semi-annually, and mature between August and October
2024.
18 Other financial assets
20 2 2 2021
Group Company Group Company
GBP GBP GBP GBP
Current
Advances to related parties - 28,157,840 - 12,681,450
- 28,157,840 - 12,681,450
===================================== =========== ====== ============
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. Advances made in 2022 were used to acquire
earth moving machineries, fund mine operating cost and exploration
programme.
19 Inventories
20 2 2 2021
Group Company Group Company
GBP GBP GBP GBP
Platinum concentrate 4,131,104 - -
Stores 51,278 - 38,673 -
4,182,382 - 38,673 -
========== ======== ======= ========
Platinum Concentrate is the PGM and gold bearing concentrate
produced at the West Kytlim Mine for full year 2022 which was held
in stock at 31 December 2022 ready for later refining. Inventories
held by the Group are stated at the lower of cost and net
realisable value.
20 Trade and other receivables
20 2 2 2021
Group Company Group Company
GBP GBP GBP GBP
Trade receivables - - 480,588 -
Advances made* 822,280 - 520,385 -
Prepayments 135,447 128,425 140,335 134,661
VAT recoverable 1,942,410 97,817 361,906 25,796
Other receivables 271,532 171,529 178,652 120,000
Due from related parties - 36,269 - 28,028
3,171,669 434,040 1,681,864 308,485
========== ======== =========== =========
* The Group had made several advances to and down payments to
secure new earth moving machinery to be acquired for the West
Kytlim 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.
21 Cash and cash equivalents
20 2 2 2021
Group Company Group Company
GBP GBP GBP GBP
Cash at bank 1,009,908 136,733 22,009,507 21,892,793
1,009,908 136,733 22,009,507 21,892,793
========== ======== ============ ===========
All amounts are short -term. The carrying value of cash and cash
equivalents is considered a reasonable approximation of fair
value.
22 Issued capital
20 2 2 2021
Issued and fully paid ordinary
shares
with a nominal value of 0.1p
Number 2,853,559,995 2,853,559,995
Nominal value (GBP) 2,853,560 2,853,560
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 51,308,068
Total issued capital (GBP) 61,187,111 61,187,111
============== ==============
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.
No shares were issued in 2022.
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
-------------- ----------
23 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 2021
2022
Share options
02 November 2023 0.42 55,000,000 55,000,000
02 November 2023 0.60 40,000,000 40,000,000
02 November 2023 0.90 35,000,000 35,000,000
Weighted average exercise
price 0.60 130,000,000 130,000,000
----------- ------------- ------------------
Warrants
20 May 2024 26.5 53,306,751 53,306,751
23 September 2024 26.0 41,551,563 41,551,563
Weighted average exercise
price 26.28 94,858,314 94,858,314
----------- ------------- --------------------
Total contingently issuable
shares
at 31 December 224,858,314 224,858,314
----------- ------------- --------------------
All the listed options and warrants were exercisable as at 31
December 2022 (2021 - 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) 2022 2021
Average Average
exercise No. of share exercise No. of
price options price share options
Share options
At 1 January 0.60 130,000,000 0.60 130,000,000
At 31 December 0.60 130,000,000 0.60 130,000,000
---------- ------------- ---------- ---------------
No options were granted by the Group in 2022 (2021 - 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 were due to expire on 02 November
2022 and were extended to 02 November 2023.
Warrants
No warrants were granted by the Group in 2022 (94,838,314
warrants were granted by the Group in 2021).
Movement in number of warrants outstanding and their related
weighted average exercise prices are as follows:
(Price expressed in pence
per share) 2022 2021
Average Average
exercise exercise No. of
price No. of warrants price warrants
Warrant s
At 1 January 26.28 94,8 5 8,314 - -
Granted - - 26.5 53,306,751
41,5 5
Granted - - 26.0 1,563
94,8 5
At 31 December 26.28 94,8 5 8,314 26.28 8,314
---------- ---------------- ---------- ------------
24 Other reserves
2022 2021
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 (1,335) - 57,344 -
Recognised in the period (341,762) - (58,679) -
---------- ----------- ----------- -----------
At 31 December (343,097) - (1,335) -
---------- ----------- ----------- -----------
Share-based payments reserve:
At 1 January 384,120 384,120 384,120 418,181
Recognised in the period - - - (18,483)
Utilised on exercise of
warrants - - - (15,578)
At 31 December 384,120 384,120 384,120 384,120
---------- ----------- ----------- -----------
3,580,929 3,924,026 3,922,691 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.
25 Borrowings
2022 2021
Group Company Group Company
GBP GBP GBP GBP
Current borrowings
Unsecured loan - - 31,953 -
- - 31,953 -
====== ======== ======= ========
In 2017 the Group entered into unsecured loan facility to borrow
up to 57 million 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 have 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. The loan was repaid in full in 2022.
26 Lease liabilities
Leases
The Group leases certain of its plant and equipment. The average
lease term is 2.5 years (2021: 3.5 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
2022 2021 2022 2021
GBP GBP GBP GBP
Less than one year 224,700 200,633 167,071 122,407
Between one and five years 202,820 377,027 181,198 307,136
More than five years - - - -
427,520 577,660 348,269 429,543
Less future finance charges (79,251) (148,117) - -
----------- ------------ ------------ ------------
Present value of minimum
lease payments 348,269 429,543 348,269 429,543
=========== ============ ============ ============
Reconciliation of movements in lease liabilities
2022 2021
Group Company Group Company
GBP GBP GBP GBP
At 1 January 429,543 - 526,929 -
Interest accrued 90,446 - 101,048 -
Interest paid in cash (90,446) - (101,048) -
Principle paid in cash (141,528) - (101,674) -
Exchange differences 60,254 - 4,288 -
---------- -------- ---------- --------
At 31 December 348,269 - 429,543 -
========== ======== ========== ========
27 Trade and other payables
2022 2021
Group Company Group Company
GBP GBP GBP GBP
Trade payables 270,214 - 210,665 -
Accruals 1,825,269 159,583 161,035 121,565
Social security and other
taxes 46,460 7,998 18,751 4,965
Other payables 88,936 268,962 96,107 149,159
2,230,879 436,543 486,558 275,689
========== ======== ======== =========
The fair value of trade and other payables is not materially
different to the carrying values presented. The above listed
payables were all unsecured.
28 Provisions
2022 2021
GBP GBP
Long term provision:
Environment rehabilitation 254,218 143,268
Short term provision:
Environment rehabilitation 88,478 57,494
342,696 200,762
-------- --------
Movement in provision is as follows
2022 2021
GBP GBP
At 1 January 200,762 52,137
Recognised in the period 54.612 138,020
Results of re-measurement or settlement
without cost 45,446 7,487
Unwinding of discount and effect
of changes in the discount rate 17,251 2,397
Exchange differences 24,625 721
-------- ---------
At 31 December 342,696 200,762
-------- ---------
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 6.99% to 8.31% (2021: 8.39% to 8.66%) 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 2023.
29 Related party transactions
Transactions with subsidiaries
In the normal course of business, the Company provides funding
to its subsidiaries for reinvestment into exploration projects.
2022 2021
GBP GBP
Receivables from subsidiaries 36,269 28,028
Loans provided to subsidiaries 28,157,840 12,681,450
Service charges to subsidiary 120,000 120,000
------------ ------------
The amounts owed by subsidiaries are unsecured and receivable on
demand.
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 2022:
2022 2021
GBP GBP
Short-term benefits 5 80 ,194 638,288
580,194 638,288
---------- --------
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 2022 (2021: nil).
An analysis of remuneration for each Director of the Company
during 2022:
Payment
Salaries, to entity
bonuses Directors controlled
Name Position and allowances fees by director Total
GBP GBP GBP GBP
C. Schaffalitzky Executive Chairman 120,000 - - 120,000
J. Nieuwenhuys Executive Director 180,000 - - 180,000
Non-Executive
T. Abdikeev Director 90,000 26,250 - 116,250
Non-Executive
I. Rawlinson Director - 55,000 - 55,000
Non-Executive
K. Kosaka Director 15,000 45,000 - 60,000
Non-Executive
A. Matyushok Director - 27,944 21,000 48,944
405,000 154,194 21,000 580,194
---------------- ---------- ------------- --------
30 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.
2022 2021
GBP GBP
Loss attributable to equity holders
of the Company (6,045,421) (2,910,479)
Weighted average number of ordinary
shares in issue 2,853,559,995 2,803,433,563
-------------- --------------
Basic loss per share (pence) (0.22) (0.10)
-------------- --------------
Potential number of shares that could be issued following
exercise of share options or warrants:
Number of exercisable instruments: 2022 2021
GBP GBP
Share options 13 0 ,000,000 13 0 ,000,000
Warrants 94,8 5 8,314 94,8 5 8,314
-------------- --------------
224,8 5 224,8 5
8,314 8,314
-------------- --------------
There is no dilutive effect of share options or warrants (2021:
nil) as the Group was in a loss position.
31 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 RUB16.68 mln (approximately GBP187,000) 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 2022 the
average lease term was 2.5 years and present value of minimum lease
payments GBP348,269 (2021: GBP429,543).
The Group has no other material commitments.
32 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
-------------- ---------------------
2022 2021 2022 2021
------ ------ --------- ----------
USD 1.238 1.376 1.204 1.348
RUB 87.51 101.37 89.23 101.18
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 2022
USD (5% movement) 89,077 (22,834) (80,597) 20,660
RUB (5% movement) 387,517 266,807 (350,616) (241,394)
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)
Interest rate risk
The Group has investment into US treasury notes returning fixed
interest of 1.25 % to 2.125% per cent per annum payable
semi-annually, and mature between August and October 2024. The
group's operating cash flows dependent on changes in note price
prevailing on the time of selling the notes for cash prior to
maturity date.
The Group has lease liabilities disclosed in the notes 26. All
lease liabilities 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:
2022 2021
Group Company Group Company
GBP GBP GBP GBP
Non-current financial assets 3,807,925 - - -
Current loans and advances - 28,157,840 - 12,681,450
Trade and other receivables 3,171,669 434,040 1,681,864 275,689
Cash and cash equivalents 1,009,908 136,733 22,009,507 21,892,793
---------- ------------- ------------ ------------
7,989,502 28,728,613 23,691,371 34,849,932
========== ============= ============ ============
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 2022 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 1 to 2 than 2
12 months years years
GBP GBP GBP
2022
Lease liabilities 224,700 202,820 -
Trade and other payables 2,230,879 - -
----------- -------- --------
2,455,579 202,820 -
2021
Borrowings 31,953 - -
Lease liabilities 200,633 377,027 -
Trade and other payables 486,558 - -
----------- -------- --------
719,144 377,027 -
The following table details the Company's remaining contractual
maturity for its non-derivative financial liabilities.
Current Non-current
later
within 1 to 2 than 2
12 months years years
GBP GBP GBP
2022
Trade and other payables 436,543 - -
----------- ------- --------
436,543 - -
2021
Trade and other payables 275,689 - -
----------- ------- --------
275,689 - -
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:
2022 2021
Group Company Group Company
GBP GBP GBP GBP
Total borrowings 348,269 - 461,496 -
Less cash and cash equivalents (1,009,908) (136,733) (22,009,507) (21,892,793)
------------ ------------ -------------- --------------
Net debt - - - -
Total equity 25,813,263 33,232,660 31,995,270 35,740,089
------------ ------------ -------------- --------------
Total capital 25,813,263 33,232,660 31,995,270 35,740,089
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.
33 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.
Notice of 2022 Annual General Meeting
NOTICE IS HEREBY GIVEN that the Annual General Meeting of
Eurasia Mining Plc, ('AGM'), (company number 03010091), will be
held virtually via an electronic meeting platform on 26 July 2023
at 09:00am, to consider the below resolutions.
Annual Report for the year ended 31 December 2022
The Company's full Annual Report including the audited financial
statements to year end 31 December 2022 is now available for
download at the following address:
https://www.eurasiamining.co.uk/investors/financial-reports and
will be posted, along with notice of AGM and form of proxy to those
of our members electing to receive paper format notifications.
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.
Voting on the resolutions will be available electronically
during the meeting for those wishing to virtually attend the
meeting via the electronic meeting platform, however the Company
would still encourage shareholders to exercise their votes by
submitting their proxy appointment electronically or by post in
advance of the meeting. Lodging of a proxy will not preclude
shareholders from attending and voting virtually via the electronic
meeting platform. A vote submitted during the meeting will override
a vote submitted in advance by proxy, further details below.
The formal business of the (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 24 July
2023. 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,
Resolutions 1 to 6 to be proposed as ordinary resolutions and
Resolutions 7 and 8 to be proposed as special 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 2022 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 Christian Schaffalitzky as executive Chairman,
who retires for reappointment in accordance with Article 47.1.2 of
the Company's Articles of Association.
5. To re-appoint David Iain Rawlinson as a Non-Executive
Director, who retires in accordance with Article 47.1.2 of the
Company's Articles of Association.
6. That, in accordance with section 551 of the Companies Act
2006, the Directors be generally and unconditionally authorised to
allot shares in the Company or grant rights to subscribe for or to
convert any security into shares in the Company ("Rights") up to an
aggregate nominal amount of GBP500,000 provided that this authority
shall, unless renewed, varied or revoked by the Company, expire at
the earlier of 18 months and the end of the next Annual General
Meeting of the Company to be held after the date on which this
resolution is passed, save that the Company may, before expiry,
make an offer or agreement which would or might require shares to
be allotted, or Rights to be granted and the Directors may allot
shares or grant Rights in pursuance of such offer or agreement
notwithstanding that the authority conferred by this resolution has
expired. This authority is in substitution for all previous
authorities conferred on the Directors in accordance with section
551 of the 2006 Act, but without prejudice to any allotment of
equity securities already made or agreed to be made pursuant to
this authority.
Special Resolutions
To consider, and if thought fit, pass the following resolutions
as special resolutions:
7. That, subject to the passing of resolution 6, the Directors
be given the general power to allot equity securities pursuant to
section 570 (as defined by section 560 of the 2006 Act) for cash,
either pursuant to the authority conferred by resolution 6 or by
way of a sale of treasury shares, as if section 561(1) of the 2006
Act did not apply to any such allotment, provided that this power
shall be limited to the allotment of equity securities up to an
aggregate nominal amount of GBP500,000.
The power granted by this resolution will expire on the earlier
of 18 months and conclusion of the Company's next annual general
meeting (unless renewed, varied or revoked by the Company prior to
or on that date) save that the Company may, before this expiry,
make offers or agreements which would or might require equity
securities to be allotted after the expiry and the Directors may
allot equity securities in pursuance of any offer or agreement
notwithstanding that the power conferred by this resolution has
expired.
This resolution revokes and replaces all unexercised powers
previously granted to the Directors to allot equity securities as
if section 561(1) of the 2006 Act did not apply, but without
prejudice to any allotment of equity securities already made or
agreed to be made pursuant to this authority.
8. To authorise the Directors, in accordance with the Company's
Articles of Association, to call a general meeting of the Company,
other than an annual general meeting, on not less than 14 clear
days' notice.
Notice of Meeting Notes:
The following notes explain your general rights as a shareholder
and your right to attend, ask questions and vote electronically at
this Meeting or to appoint someone else to vote on your behalf
.
1. To be entitled to attend, ask questions or vote
electronically at the Annual 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 24 July 2023. 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 09:00 am 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.
-- If you are an institutional investor you may also be able to
appoint a proxy electronically via the Proxymity platform, a
process which has been agreed by the Company and approved by the
Registrar. For further information regarding Proxymity, please go
to www.proxymity.io. Your proxy must be lodged by 09:00 am on 24
July 2023 in order to be considered valid or, if the meeting is
adjourned, by the time which is 48 hours before the time of the
adjourned meeting. Before you can appoint a proxy via this process
you will need to have agreed to Proxymity's associated terms and
conditions. It is important that you read these carefully as you
will be bound by them and they will govern the electronic
appointment of your proxy. An electronic proxy appointment via the
Proxymity platform may be revoked completely by sending an
authenticated message via the platform instructing the removal of
your proxy vote.
In order for a proxy appointment to be valid, it 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 09:00 am on 24 July 2023 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 electronically, if 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) . 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 09:00 am on 24
July 2023 (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 &
International 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 30 June 2023 (being the latest practicable business
day prior to the publication of this Notice), the Company's
ordinary issued share capital consists of 2,858,559,995 ordinary
shares, carrying one vote each. Therefore, the total voting rights
in the Company as at 30 June 2023 are 2,858,559,995 .
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, vote 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 156-228-828. 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.
For certificated holdings, Your IVC can be found on your share
certificate. Signal Shares users will also find their IVC under
'Manage your account' when logged in to the Signal Shares portal (
www.signalshares.com ). You can also obtain your IVC by contacting
Link Group, our Registrar, by calling +44 (0) 371 277 1020*
For holdings through Nominee accounts , your Nominee will
provide you with a unique IVC and PIN codes with which to access
the meeting, upon request. Please contact the Corporate Actions
team at your Nominee, or login to your Nominee client account.
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
your appointee's 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 you should receive
further instructions from your Nominees Corporate Actions teams in
due course, or will be notified through your online Nominee client
account/ portal. If you do not receive a notification please
contact your Nominee provider as soon as possible. Your nominee
will need to present a corporate letter of representation to Link
Group, the Company's 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 virtual 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 .
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
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END
FR RTMLTMTJMBAJ
(END) Dow Jones Newswires
July 03, 2023 02:00 ET (06:00 GMT)
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