Annual Results for the Year Ended 30 June 2022

1.            ACCOUNTING POLICIES

                            The accounting policies and methods of computation followed in these financial statements are consistent with those published in the Group's Annual Report for the year ended 30 June 2021. The financial statements have also been prepared in accordance with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB).

                            The financial information set out below does not constitute the Group's financial statements for the year ended 30 June 2022 or 30 June 2021, but is derived from those accounts. The financial statements for the year ended 30 June 2021 have been delivered to Companies House and those for the year ended 30 June 2022 will be delivered to Companies House shortly

                            The auditors have reported on the 2022 statements; their report was unqualified and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006. 

2.            GOING CONCERN

The Group incurred a loss for the year of £716,430 (2021: loss of £557,499) after exchange differences on retranslation of foreign operations of £22,562 (2021: loss of £85,392) at the balance sheet date. The Group had net current liabilities of £526,724 (2021:£ 537,453) at the balance sheet date. These conditions represent material uncertainties that may cast doubt on the Group's ability to continue as a going concern.

The directors have prepared cashflow projections and forecasts for a period of not less than 12 months from the date of this report which indicate that the group will require additional funding for working capital requirements and develop existing projects. As the Group is not revenue or cash generating it relies on raising capital from the public market. Subsequent to year end the Company has raised a total of £294,475 from the exercise of warrants. Further details are outlined in Note 10.

As in previous years the Directors have given careful consideration to the appropriateness of the going concern basis in the preparation of the financial statements and believe the going concern basis is appropriate for these financial statements. The financial statements do not include any adjustments that would result if the Group was unable to continue as a going concern.

3.            LOSS PER SHARE

Basic loss per share is computed by dividing the loss after taxation for the year available to ordinary shareholders by the weighted average number of ordinary shares in issue and ranking for dividend during the year. Diluted earnings per share is computed by dividing the profit or loss after taxation for the year by the weighted average number of ordinary shares in issue, adjusted for the effect of all dilutive potential ordinary shares that were outstanding during the year.

The following table sets forth the computation for basic and diluted earnings per share (EPS):

                            The following potential ordinary shares are anti-dilutive and are therefore excluded from the weighted average number of shares for the purposes of the diluted earnings per share:

4.            INTANGIBLE ASSETS

Exploration and evaluation assets relate to expenditure incurred in exploration for diamonds in Botswana and South Africa. The directors are aware that by its nature there is an inherent uncertainty in exploration and evaluation assets and therefore inherent uncertainty in relation to the carrying value of capitalized exploration and evaluation assets.

During the current year, the Group recorded an impairment charge of £253,380 on expenditure incurred exploring for new licences in Botswana and South Africa and expenditure incurred on the Ghaghoo diamond mine as the Group was unsuccessful in securing a joint venture partner to complete the acquisition.

On 11 November 2014 the Brightstone block was farmed out to BCL Investments (Proprietary) Limited, a Botswana Company, who assumed responsibility for the work programme. Botswana Diamonds will retain a 15% equity interest in the project.

On 6 February 2017 the Group entered into an Option and Earn-In Agreement with Vutomi Mining Pty Ltd and Razorbill Properties 12 Pty Ltd (collectively known as 'Vutomi'), a private diamond exploration and development firm in South Africa. Pursuant to the terms of the Agreement, Botswana Diamonds earned a 40% equity interest in the project. A separate agreement for funding of exploration resulted in the Company's interest in Vutomi increasing from 40% to 45.94%. On 28 September 2022 the Group increased its' interest from 45.94% to 74%, further information is detailed in Note 10. 

The realisation of these intangible assets is dependent on the successful discovery and development of economic diamond resources and the ability of the Group to raise sufficient finance to develop the projects. It is subject to a number of significant potential risks, as set out below.

The Group's exploration activities are subject to a number of significant and potential risks including:

-      licence obligations;

-      exchange rate risks;

-      uncertainties over development and operational costs;

-      political and legal risks, including arrangements with governments for licenses, profit sharing and taxation;

-      foreign investment risks including increases in taxes, royalties and renegotiation of contracts;

-      title to assets;

-      financial risk management ;

-      going concern; and

-      operational and environmental risks.

Included in additions for the year are payments of £Nil (2021: £14,225) of wages and salaries and £71,768 (2021: £65,553) of directors' remuneration which has been capitalized. This is for time spent directly on the operations rather than on corporate activities.

5.            PLANT AND EQUIPMENT

On 18 July 2020 the Group entered into an agreement to acquire the KX36 Diamond discovery in Botswana, along with two adjacent Prospecting Licences and a diamond processing plant. These interests are part of a package held by Sekaka Diamond Exploration (Pty) Ltd.  The acquisition was completed on 20 November 2020. The diamond processing plant is a recently constructed, fit-for-purpose bulk sampling plant on site. The sampling plant includes crushing, scrubbing, dense media separation circuits and x-ray recovery modules within a secured area. 

6.            CALLED-UP SHARE CAPITAL

               Movements in share capital

On 25 October 2021, the Company raised £550,000 through the issue of 55,000,000 new ordinary shares of 0.25p each at a price of 1.0p per share to provide additional working capital and fund development costs. Each placing share has one warrant attached with the right to subscribe for one new ordinary share at 2.0p per share for a period of three years from 5 November 2021.

On 3 December 2021, a total of 1,683,333 warrants were exercised at a price of 0.60p per warrant for £10,100.

On 20 January 2022, a total of 29,666,667 warrants were exercised at a price of 0.60p per warrant for £178,000.

7.            SHARE-BASED PAYMENTS

The Group issues equity-settled share-based payments to certain directors and individuals who have performed services for the Group. Equity-settled share-based payments are measured at fair value at the date of grant.

Fair value is measured by use of a Black-Scholes valuation model.

The Group plan provides for a grant price equal to the average quoted market price of the ordinary shares on the date of grant.

SHARE OPTIONS

WARRANTS

Refer to note 6 Called up Share Capital for the details of the share options and warrants.

8.            OTHER RESERVES

Share Based Payment Reserve

The share based payment reserve arises on the grant of share options under the share option plan as detailed in Note 7.

Translation Reserve

The translation reserve arises from the translation of foreign operations.

Other Reserves

During 2010 the Company acquired certain assets and liabilities from African Diamonds plc, a Company under common control. The assets and liabilities acquired were recognised at their book value and no goodwill was recognised on acquisition. The difference between the book value of the assets acquired and the purchase consideration was recognised directly in reserves.

9.            RETAINED DEFICIT

Retained Deficit

Retained deficit comprises of losses incurred in the current and prior years.

10.         POST BALANCE SHEET EVENTS

On 4 July 2022 the Company announced that pursuant to the receipt of conversion notice from a holder of 1,666,667 warrants exercisable at 0.60 pence each, it had issued 1,666,667 ordinary shares for £10,000.

On 20 July 2022 the Company announced the acquisition of an additional stake in the prospective Maibwe joint venture in Botswana.

                Details

Siseko Minerals Pty Ltd ("Siseko") increased its stake in the highly prospective Maibwe JV from 29% to 50%.  BOD holds a 51.7% stake in Siseko.  The consideration payable by Siseko is Pula 411,800 (equivalent to approximately £27,215). In addition, Maibwe agreed to pay a royalty to the liquidators of BCL Botswana of 2% from any future commercial development.  Maibwe has eleven Prospecting Licenses in the Kalahari of Botswana with several kimberlite pipes; one of which has reported significant quantities of microdiamonds.

                The agreement was subject to the following conditions:

·                 Regulatory (Section 23) approval;

·                 Competition Authority approval, if required;

·                 Guarantee for the acquisition consideration;

·                 Authorisation that the liquidators can enter into such an agreement, and lastly

·                 Execution of the Royalty Agreement.

                The completion date is 90-days after the signature date of the agreement.

BOD funded its share of the consideration (amounting to approximately £13,600) from existing resources. Maibwe is effectively dormant and in the last financial period for the year ended 31 May 2020 total assets were nil (with all exploration expenditure expensed) and the loss before tax amounted to approximately £4,000.

On 8 September 2022 the Company announced that pursuant to the receipt of conversion notices from holders of 47,000,000 warrants exercisable at 0.60 pence each, it had issued 47,000,000 ordinary shares for £282,000.

On 28 September 2022 the Company announced that the Vutomi acquisition had completed.

Previously on 29 September 2021 the Board announced that it had exercised its pre-emptive right to acquire the outstanding third-party interests in Vutomi Mining (Proprietary) Limited and Razorbill Properties 12 (Proprietary) Limited (together "Vutomi"). Vutomi holds the mineral rights to the Thorny River Project as well as other exploration assets. The acquisition of Vutomi ("Acquisition") was conditional on, inter alia, customary regulatory and competition authority approvals in South Africa.

The Board announced that the Company had received Section 11 regulatory approval for the transaction in terms of the South African MPRDA all conditions had been satisfied.

As previously announced, the consideration for Vutomi comprises 56,989,330 new ordinary shares of £0.0025 each ("Ordinary Shares") in the Company ("Consideration Shares"). There are no lock-in arrangements, but the Consideration Shares will be issued in two equal tranches (three months apart) following Completion. Accordingly, 28,464,665 Consideration Shares ("First Tranche Consideration Shares") have been issued to the vendors of Vutomi.

The Company also agreed that immediately on completion of the Acquisition, the Company would sell 26% of Vutomi for a deferred consideration of US$316,333 to the Company's local South African Empowerment partner, Baroville Trade and Investments 02 Proprietary Limited ("Baroville"), in order to comply with South African

On 6 October 2022 the Company announced that pursuant to the receipt of conversion notice from a holder of 412,545 warrants exercisable at 0.60 pence each, it had issued 412,545 ordinary shares for £2,475.

11.         GENERAL INFORMATION

The Annual Report and Accounts will be mailed shortly only to those shareholders who have elected to receive it. Otherwise, shareholders will be notified that the Annual Report and Accounts will be available on the website at www.botswanadiamonds.co.uk.  Copies of The Annual Report will also be available for collection from the company's registered office at Suite 1, 7th Floor, 50 Broadway, London SW1H 0BL

12.         ANNUAL GENERAL MEETING

The Annual General Meeting is due to be held on Thursday 19^th January 2023 at The Hilton London, Paddington, 146 Praed St, London W2 1EE, United Kingdom at 11.00am.  A Notice of the Annual General Meeting is included in the Company's Annual Report.

ENDS