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Bezant Resources Plc reported audited full-year results for the year ended 31 December 2021, showing a loss of £1,058,000 and cash and cash equivalents of £728,000, with the auditors highlighting a material uncertainty related to going concern. Subsequent to year-end, on 6 January 2022, the company issued 100,000,000 ordinary shares and 50,000,000 warrants to Colin Bird and Quantum Capital & Consulting Limited for £130,000 in accrued fees. On 30 June 2022, Bezant also drew down £700,000 from a £1,000,000 convertible loan facility with Sanderson Capital Partners Ltd, issuing 12,522,361 shares and £350,000 of warrants as associated fees.
| Date | 30 Jun 2022 |
| Time | 18:09:02 |
| Category | Results |
| ID | 9152Q |
30 June 2022
Bezant Resources Plc
("Bezant" or the "Company")
Final Results for period to 31 December 2021
Bezant Resources plc ("Bezant" or the "Company"), the exploration and resource development company with projects located in Namibia, Botswana, Cyprus, Argentina, Philippines and Zambia, reports its audited full year results for the year ended 31 December 2021.
The Annual Report and Financial Statements for the year ended 31 December 2021 is being sent to shareholders and will shortly be available on the Company's website https://www.bezantresources.com/
Please note that page references in the text below refer to the page numbers in the Annual Report and Financial Statements.
The audited financial information contained in this announcement does not constitute the Company's full financial statements for the year ended 31 December 2021, but is derived from those financial statements, approved by the board of directors. The auditors' report on the 2021 financial statements was unqualified and did not contain any statement under section 498(2) or (3) of the Companies Act 2006 but did as in 2020 contain an 'material uncertainty' paragraph relating to going concern. The full audited financial statements for the year ended 31 December 2021 will be delivered to the Registrar of Companies and filed at Companies House.
This announcement contains information which, prior to its disclosure, was inside information as stipulated under Regulation 7 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310 (as amended).
For further information, please contact:
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Bezant Resources Plc Colin Bird Executive Chairman |
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Beaumont Cornish (Nominated Adviser)
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Novum Securities Limited (Broker) Jon Belliss
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+44 (0) 20 7399 9400
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or visit http://www.bezantresources.com
Chairman's Statement
Dear Shareholder,
We have made good progress during the year under review with all our projects and the Board is of the opinion that we have a strong portfolio of projects in the right commodities and the African focus will be good for our ambitions and shareholders.
During the year under review and currently, the project, which continues to grow and excite is the Hope and Gorob copper and gold project in Namibia. When we acquired the project, we had a substantial database that concluded that the project had good copper and gold grade and could potentially support a small mining operation for at least 10 years. We have now integrated all the data and carried out further near-surface drilling and believe that the project is of significantly more value than previously considered. A number of conclusions were drawn by past operators, which in fact turned out to be extremely unreliable. For example, the prognosis that little ore existed above 150m, has proved to be invalid and our drilling has to date identified similar grades as experienced below 150m, within 25m of surface. We have also identified gold in the Gorob section and at this time suspect that a separate gold horizon may exist, notwithstanding the significant gold influence of copper grades.
We will be submitting a mining licence as previously indicated and intend to test the 17km of potential strike to determine just how large a deposit exists.
The manganese project in Botswana has made satisfactory progress and after several campaigns, we have identified a suitable target for test drilling. The intention of the drilling programme will be to test for battery grade manganese in sufficient quantities to justify a mining development.
The Mankayan project has now been monetised in the form of an arrangement with a group called IDM International Ltd in Australia whose management team has operating experience in the Philippines and has good corporate experience of developing projects. The opportunity exists for development for onward sale or for a dedicated IPO - all of which will be considered during the second half of this year. We have retained 27.5 % of our interest in the project and, I look forward to assisting the new owners with their endeavours going forward and hope to report a favourable outcome before end of the year.
Argentina's COVID situation in 2021 discouraged prospective investors from visiting Argentina but now that Foreign Nationals are permitted to visit Argentina the Company intends to focus on securing a joint venture partner and or conducting exploration on the Eureka project
In light of technical and regulatory issues related to the Kalengwa project the Company has with the agreement of its partners agreed to pause work on this project pending resolution of these issues and accordingly has decided with effect from 31 December 2021 to make a full provision against its investment in the Kalengwa project.
Whilst the world's stock markets are extremely volatile some major mining companies like Glencore are performing extremely well, the converse is the case for the smaller companies in the resource sector. I believe this disconnect is an unusual phenomena and is unsustainable. The demand for all metals have never been so strong and the accompanying forecasts suggest that the strength will continue through this decade.
The board strongly believe that junior resource companies with good mineable deposits will be in much demand in the short to midterm and as such we remain committed to our mission, with Hope and Gorob leading our endeavours.
I would like to thank my fellow directors and management for their endeavours through the year under review and their ongoing support in the year to date. We look forward to enhancing the value of our portfolio during the coming year and beyond, always being responsive to new opportunities that present themselves or that we can engineer.
Mr Colin Bird
Executive Chairman
30 June 2022
Board of directors
For the year ended 31 December 2021
Mr Colin Bird (Executive Chairman) (Appointed 2 March 2018)
Experience and Expertise
Mr Bird, aged 78, joined the board in March 2018, replacing Mr Ed Nealon as Chairman, following a review of Bezant's portfolio and a strategic investment in the Company undertaken in February 2018 by himself as a private individual and also via Tiger Resource Finance Plc, of which he is Chairman.
Colin is a chartered mining engineer with multi commodity mine management experience in Africa, Spain, Latin America and the Middle East. He has been the prime mover in a number of public company listings in the UK, Canada and South Africa. His most notable achievement was founding Kiwara Resources Plc and selling its prime asset, a copper property in Northern Zambia, to First Quantum Minerals for US$260 million in November 2009.
Other current directorships
Includes African Pioneer Plc, Bird Leisure and Admin (Pty) Ltd, Braemore Resources Ltd, Camel Valley Holdings Inc, Crocus-Serv Resources (Pty) Ltd, Dullstroom Plats (Pty) Ltd , Enviro Mining Ltd , Enviro Processing Ltd, Enviro Props Ltd, Galagen (Pty) Ltd, Galileo Resources Plc, Galileo Resources South Africa (Pty) Ltd, Glenover Phosphate (Pty) Ltd, Holyrood Platinum (Pty) Ltd, Kendrick Resources Plc, Kabwe Operations Mauritius, Lion Mining Finance Ltd, Maude Mining & Exploration (Pty) Ltd, Mitte Resources Investment Ltd, New Age Metals Inc, NewPlats (Tjate) (Pty) Ltd, Newmarket Holdings, Revelo Resources Corp, Sandown Holdings , Shamrock Holdings Inc.,Tiger Resource Finance Plc, Tjate Platinum Corporation (Pty) Ltd, Umhlanga Lighthouse Café CC, Windsor Platinum Investments (Pty) Ltd, Windsor SA Pty Ltd ,Virgo Business Solutions (Pty) Ltd and Xtract Resources Plc.
Former directorships in the last 5 years
1 Tara Bar and Restaurant CC, Add X Trading 810 CC, Afminco (Pty) Ltd, Dialyn Café CC, Emanual Mining and Exploration (Pty) Ltd, Europa Metals Ltd, Isigidi Trading 413 CC, Jubilee Metals Group Plc,,Jubilee Smelting & Refining (Pty) Ltd, Jubilee Tailings Treatment Company (Pty) Ltd , M.I.T. Ventures Group, Mokopane Mining & Exploration (Pty) Ltd, NDN Properties CC, Orogen Gold Plc, Pilanesberg Mining Co (Pty) Ltd, Pioneer Coal (Pty) Ltd, PowerAlt (Pty) Ltd, SacOil Holdings Ltd and Sovereign Energy Plc, Thos Begbie Holdings (Pty) Ltd)
Special responsibilities
Executive Chairman of the Board/Remuneration Committee and member of the Audit Committee.
Interests in shares and options
168,125,655 ordinary shares in the capital of the Company.
5,555,555 warrants with each warrant giving the right to subscribe for a new ordinary share at a price of one pence per share which expired on 6 September 2020.
31,250,000 warrants expiring on 26 June 2022 which give the right to subscribe for ordinary shares at a price of 0.16p per share.
15,625,000 warrants expiring on 14 September 2022 which give the right to subscribe for ordinary shares at a price of 0.16p per share.
30,769,231 warrants expiring on 4 November 2024 which give the right to subscribe for ordinary shares at a price of 0.25p per share.
The following options over ordinary shares in the Company which all expire 21 June 2028
15,000,000 at an exercise price of 0.5 pence.
12,500,000 at an exercise price of 1 pence.
24,000,000 at an exercise price of 0.425 pence per share.
24,000,000 at an exercise price of 0.564 pence per share.
Dr. Evan Kirby (Non-Executive Director) (Appointed 4 December 2008)
Experience and Expertise
Dr Kirby, aged 71, is a metallurgist with over 40 years' of international involvement. He worked initially in South Africa for Impala Platinum, Rand Mines and then Rustenburg Platinum Mines. Then in 1992, he moved to Australia to work for Minproc Engineers and then Bechtel Corporation. After leaving Bechtel in 2002, he established his own consulting company to continue with his ongoing mining project involvement. Evan's personal "hands on" experience covers the financial, technical, engineering and environmental issues associated with a wide range of mining and processing projects.
Other current directorships
Technical director of Jubilee Metals Group PLC (Aim listed), Non-executive director of Europa Metals Ltd (listed on AIM and AltX of the JSE) and Kendrick Resources Plc (listed on standard market of the London Stock Exchange) , and Director of private company, Metallurgical Management Services Pty Ltd.
Former directorships in the last 5 years
Balma Resources Pty Ltd, New Energy Minerals Limited (formerly Mustang Resources Limited and ASX listed), Nyota Minerals Limited (listed on AIM and ASX), Nyota Minerals (UK) Limited and Kefi Minerals (Ethiopia) Limited (formerly named Nyota Minerals (Ethiopia) Limited).
Special responsibilities
Chairman of the Audit Committee and member of the Remuneration Committee.
Interests in shares and options
7,479,374 fully paid ordinary shares in Bezant Resources Plc.
The following options over ordinary shares in in the Company which all expire 21 June 2028
5,000,000 at an exercise price of 0.5 pence.
2,500,000 at an exercise price of 1 pence.
10,000,000 at an exercise price of 0.425 pence per share.
10,000,000 at an exercise price of 0.564 pence per share.
Mr Ronnie Siapno (Non-Executive Director) (Appointed 25 October 2007)
Experience and Expertise
Mr Siapno, aged 58 graduated from the Saint Louis University in the Philippines in 1986 with a Bachelor of Science degree in Mining Engineering and is a lifetime member of the Philippine Society of Mining Engineers. Since graduation, he has held various consulting positions such as Mine Planning Engineer to Benguet Exploration Inc., Mine Production Engineer to Pacific Chrome International Inc., Exploration Engineer to both Portman Mining Philippines Inc. and Phoenix Resources Philippines Inc. and Geotechnical Engineer to Pacific Falkon Philippines Inc.
Other current directorships
President of Crescent Mining and Development Corporation and Director of Bezant Holdings Inc. Non-Executive President and Director of Cleangrean Solutions, Inc.
Former directorships in the last 5 years
Former director of Asean Copper Investment Ltd.
Special responsibilities
Remuneration Committee.
Interests in shares and options
1,333,334 fully paid ordinary shares in Bezant Resources Plc.
The following options over ordinary shares in in the Company which all expire 21 June 2028
7,500,000 at an exercise price of 0.5 pence per share.
5,000,000 at an exercise price of 1 pence per share.
5,000,000 at an exercise price of 0.425 pence per share.
5,000,000 at an exercise price of 0.564 pence per share.
Mr Raju Samtani (appointed 26 October 2020)
Experience and Expertise
Mr. Samtani, aged 53, is an Associate Chartered Management Accountant, and is Finance Director of the AIM-listed Tiger Royalties and Investments Plc. Mr. Samtani's previous experience includes his position as founder shareholder and Finance Director of Kiwara Plc which was acquired by First Quantum Minerals Ltd in January 2010. Earlier in his career he spent three years as Group Financial Controller at marketing services agency - WTS Group Limited, where he was appointed by the Virgin Group to oversee their investment in the WTS Group Ltd.
Other current directorships
Tiger Royalties and Investments Plc
Myning Ventures Ltd
African Pioneer Plc
Former directorships in the last 5 years
None
Special responsibilities
Mr. Samtani is the Company's Finance Director and member of the Audit Committee.
Board of directors (continued)
For the year ended 31 December 2021
Interests in shares and options
48,611,111 fully paid ordinary shares in Bezant Resources Plc.
37,500,000 warrants expiring on 26 June 2022 which give the right to subscribe for ordinary shares at a price of 0.16p per share.
The following options over ordinary shares in in the Company which all expire 21 June 2028
20,000,000 at an exercise price of 0.425 pence per share.
20,000,000 at an exercise price of 0.564 pence per share.
Mr Edward Slowey (appointed 26 October 2020)
Experience and Expertise
Mr. Slowey, aged 71, holds a BSc degree in Geology from the National University of Ireland and is a founder member of The Institute of Geology of Ireland. Mr. Slowey has more than 40 years' experience in mineral exploration, mining and project management including working as a mine geologist at Europe's largest zinc mine in Navan, Ireland and was
exploration manager for Rio Tinto in Ireland for more than a decade, which led to the discovery of the Cavanacaw gold deposit. Mr. Slowey is an experienced exploration geologist, having worked in Africa, Europe, America and the FSU and his experience includes joint venture negotiation, exploration programme planning and management through to feasibility study implementation for a variety of commodities. As a professional consultant, Mr. Slowey's work has included completion of CPR's and 43-101 technical reports for international stock exchange listings and fundraising, while also undertaking assignments for the World Bank and European Union bodies. Mr. Slowey has also served as director of several private and public companies, including the role of CEO and Technical Director at AIM-listed Orogen Gold Plc which discovered the Mutsk gold deposit in Armenia.
Other current directorships
Silver Investments Limited
Galileo Resources plc
St Vincent Minerals US Inc
Camel Valley Holdings Inc
Crocus-Serv Resources Pty Ltd
Virgo Business Solutions Pty Ltd
St Vincent Minerals Inc
Fulcrum Metals Ltd
Former directorships in the last 5 years
None
Special responsibilities
Mr. Slowey is the Company's Technical Director with oversight over the Company's projects.
Interests in shares and options
Mr Slowey does not currently hold any shares, or warrants in the Company.
The following options over ordinary shares in in the Company which all expire 21 June 2028
20,000,000 at an exercise price of 0.425 pence per share.
20,000,000 at an exercise price of 0.564 pence per share.
Strategic report
For the year ended 31 December 2021
Principal activity
The Company is registered in England and Wales, having been first incorporated on 13 April 1994 under the Companies Act 1985 with registered number 02918391 as a public company limited by shares, in the name of Yieldbid Public Limited Company. On 19 September 1994, the Company changed its name to Voss Net Plc, with a second change of name to that of Tanzania Gold Plc on 27 September 2006. On 9 July 2007, the Company adopted its current name of Bezant Resources Plc.
The Company was listed on AIM, a market operated by the London Stock Exchange, on 14 August 1995.
The principal activity of the Group is natural resource exploration, development and beneficiation.
Its FTSE Sector classification is that of Mining and FTSE Sub-sector that of Gold Mining.
Review of Business and future prospects
The Chairman's statement contains a review of 2021 and refers to the Company's focus on its copper and gold asset portfolio. During the coming year the Company intends to focus on its projects in Southern Africa where the Company has projects in Namibia, Botswana and Zambia, its joint venture in Cyprus, and completing a joint venture transaction or exploring its Argentina project and its investment in the Philippines.
Principal risks and uncertainties facing the Company
The principal risks and uncertainties facing the Company are disclosed in the Directors' report on pages 14 to 22.
Performance of the Company
The Company is an exploration entity whose assets comprise early-stage projects that are not yet at the production stage. Currently, no revenue is generated from such projects. The key performance indicators for the Company are therefore linked to the achievement of project milestones and the increase in overall enterprise value.
Directors' section 172 statement
The following disclosure describes how the Directors have had regard to the matters set out in section 172 and forms the Directors' statement required under section 414CZA of The Companies Act 2006. This new reporting requirement is made in accordance with the new corporate governance requirements identified in The Companies (Miscellaneous Reporting) Regulations 2018, which apply to company reporting on financial years starting on or after 1 January 2019.
The matters set out in section 172(1) (a) to (f) are that a Director must act in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:
a. the likely consequences of any decision in the long term.
b. the interests of the Company's employees.
c. the need to foster the Company's business relationships with suppliers, customers and others;
d. the impact of the Company's operations on the community and the environment;
e. the desirability of the Company maintaining a reputation for high standards of business conduct; and
f. the need to act fairly between members of the Company.
The analysis is divided into two sections, the first to address Stakeholder engagement, which provides information on stakeholders, issues and methods of engagement. The second section addresses principal decisions made by the Board and focuses on how the regard for stakeholders influenced decision-making.
Section 1: Stakeholder mapping and engagement activities within the reporting period
The Company continuously interacts with a variety of stakeholders important to its success, such as equity investors, employees, government bodies, local community and professional service providers. The Company works within the limitations of what can be disclosed to the various stakeholders with regards to maintaining confidentiality of market and/or commercially sensitive information.
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Who are the key stakeholder groups |
Why is it important to engage this group of stakeholders |
How did Bezant engage with the stakeholder group |
What resulted from the engagement
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Equity investors
All substantial shareholders that own more than 3 per cent. of the Company's shares are listed on page 19 of the Directors' Report.
Company is an exploration entity whose assets comprise early-stage projects that are not yet at the production stage. Currently, no revenue is generated from such projects. As such, existing equity investors and potential investment partners are important stakeholders. |
As an exploration company without a revenue generating project access to capital is of vital importance to the long-term success of our business to be able to continue developing exploration projects and cover corporate overheads.
Through our engagement activities, we strive to obtain investor buy-in into our strategic objectives.
We are seeking to promote an investor base that is interested in a long term holding in the Company and will support the Company in achieving its strategic objectives. |
The key mechanisms of engagement include • The AGM and Annual and Interim Reports. • Investor roadshows and presentations. • Access to the Company's brokers and advisers • Regular news and project updates.
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The Company engaged with investors on topics of strategy, governance, project updates and performance.
Please see "Relationship with shareholders" section of the Corporate governance report on page 26.
The Chairman presented on a number of investor programs but due to Covid-19 restrictions and chaired the 2021 Annual General but was not able in 2021 to conduct roadshows or one on one meetings.
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Employees The Company has one part-time employee and at the year-end had five directors 4 of whom are resident outside the U.K. with one resident in the U.K.
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The number of and location of future employees will be dependent upon the development of its exploration projects which at the date of this report are situated in Zambia, Namibia, Botswana, Argentina and the Philippines. The Directors consider workforce issues holistically for the Group as a whole and the Company's long-term success in developing its exploration projects will be predicated on the development of a local workforce in the countries of its exploration projects. (see the principal risk and uncertainty starting on page 20).
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• The Company maintained an open line of communication between its, professional service providers and Board of Directors. • The Executive Chairman reported regularly to the Board, including the provision of board information. • There is a formalised director induction into the Company's corporate governance policies and procedures. |
The Board met to discuss long term remuneration strategy. Board reporting has been optimised to include sections on engagement with local communities and prospects for future employment. Directors trained in aspects of corporate policies and procedures to engender positive corporate culture aligned with the Company code of conduct. Meetings were held with directors to provide project updates and ongoing business objectives.
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Governmental bodies The Group is impacted by national, regional and local governmental organisations in the UK where it is incorporated and in countries in which it has exploration projects which includes, Botswana, Cyprus, Zambia, Namibia, Argentina and the Philippines. |
The Group will only be able to develop its exploration projects once it receives relevant licences and permits from local governments to explore, mine and undertake mineral processing. |
The Group maintained its good relations with the respective government bodies and frequently communicates progress. • The Group engages with the relevant departments of the relevant government in order to progress the operational licences it will require • The Group engages local in-country experts to advise it on regulatory matters.
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The Group has given general corporate presentations to senior federal government officials.
To date, the Group has received its requisite environmental and land use permits to enable its exploration activities. |
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Community The local community at the Company's exploration projects in Botswana, Cyprus, Zambia, Namibia, Argentina and the Philippines and the surrounding area. |
The community provides social licence to operate. We need to engage with the local community to build trust. Having the community's trust will mean it is more likely that any fears the community has can be assuaged and our plans and strategies are more likely to be accepted. Community engagement will inform better decision making.
The Company will in due course have a social and economic impact on the local community and surrounding area. The Company is committed to ensuring sustainable growth minimising adverse impacts. The Company will engage these stakeholders as appropriate.
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• The Company identifies key stakeholders within the local community based on work programs within the reporting period. • Bezant's modus operandi is to have open dialogue with the local government and community leaders regarding project development. • The Company has existing CSR policies and management structure at corporate level. The Company will expand on these policies and structures at a local project level as the Company moves into further exploration activities and ultimately into construction and then production. |
The Company has systems in place to engage with the local community as part its sustainability initiatives.
Stakeholder identification enables the Company to identify representatives of stakeholder groups and community groups to engage with as it develops its projects.
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Professional service providers During the exploration phase, we will be using key professional service providers who provide drilling, geochemical, geological analysis, assaying and other services under commercial contracts.
At a local level, we also partner with a variety smaller companies/providers, some of whom are independent, or family run businesses. |
Our professional service providers are fundamental to ensuring that the Company can complete projects on time and budget. Using quality professional service providers ensures that as a business we meet the high standards of performance that we expect of ourselves and those we work with. |
• The Company continues to work closely with professional service providers to meet deliverables. • One on one meetings and regular project and work assignment updates with professional service providers. |
The use of third-party exploration services for analysis and field operations as required rather than the Company maintaining its own full time in-house exploration department and conducting its own exploration activities in multiple countries with an in-house team provides very significant cost savings to the Company whilst enabling the Company to diversify its project and jurisdiction risks. |
Section 2: Principal decisions by the board post year end
Principal decisions are defined as both those that have long-term strategic impact and are material to the Group, but also those that are significant to key stakeholder groups. In making the following principal decisions, the Board considered the outcome from its stakeholder engagement, the need to maintain a reputation for high standards of business conduct and the need to act fairly between the members of the Company. The Company makes regular announcements of decisions that strategically impact the Company with decisions during the year being reported in the Chairman's letter to shareholders (page 4) and Directors' report on page 14. Decisions post the year end are referred to in note 25 to the financial statements which is a summary of post balance sheet events.
On behalf of the Board
Mr Colin Bird
Executive Chairman
30 June 2022
Directors' report
For the year ended 31 December 2021
The Directors present their report together with the audited financial statements of Bezant Resources Plc (the "Company") and its subsidiary undertakings (together, the "Group" or "Bezant") for the year ended 31 December 2021.
The principal activity, review of the business and future development disclosures are contained in the Chairman's Statement on pages 4 to 5 and the Strategic Report on page 10 to 13.
Results and dividends
The Group's results for the year are set out in the financial statements. The Directors do not propose recommending any distribution by way of dividend for the year ended 31 December 2021.
Directors
The following directors have held office during and subsequent to the reporting year:
Colin Bird
Ronnie Siapno
Evan Kirby
Raju Samtani
Edward Slowey
Directors' interests
The beneficial and non-beneficial interests of the current directors and related parties in the Company's shares were as follows:
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Ordinary shares of 0.002p each |
Percentage of issued share capital |
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C. Bird |
168,125,655 |
3.34% |
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E. Kirby |
7,479,374 |
0.15% |
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R. Siapno |
1,333,334 |
0.03% |
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R Samtani |
48,611,111 |
0.96% |
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E Slowey |
- |
- |
Options awarded and warrants
On 23 August 2018, 87,500,000 options over ordinary shares of 0.002p each in the capital of the Company ("Ordinary Shares") were granted pursuant to the Executive Share Option Scheme approved at the Company's Annual General Meeting ("AGM") held on 22 June 2018 (the "Options"). Of the 87,500,000 Options, 75,000,000 were awarded to directors of the Company as detailed on the next page:
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Options exercisable at 0.5 pence (vested on 23 August 2018) |
Options exercisable at 1 pence (vested on 31 January 2019) |
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C. Bird(1)(2)(3) |
15,000,000 |
12,500,000 |
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L. Read |
15,000,000 |
12,500,000 |
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E. Kirby |
5,000,000 |
2,500,000 |
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R. Siapno |
7,500,000 |
5,000,000 |
On 9 November 2020, 220,000,000 options over ordinary shares of 0.002p each in the capital of the Company ("Ordinary Shares") were granted pursuant to the Executive Share Option Scheme approved at the Company's Annual General Meeting ("AGM") held on 22 June 2018 (the "Options"). Of the 220,000,000 Options, 158,000,000 were awarded to directors of the Company as detailed below:
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Options exercisable at 0.425 pence (vested on 9 November 2020) |
Options exercisable at 0.565 pence (vested on 31 March 2021) |
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C. Bird(1)(2)(3) |
24,000,000 |
24,000,000 |
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E. Kirby |
10,000,000 |
10,000,000 |
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R. Siapno |
5,000,000 |
5,000,000 |
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R Samtani(4) |
20,000,000 |
20,000,000 |
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E Slowey |
20,000,000 |
20,000,000 |
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1 Colin Bird also has 31,250,000 warrants expiring on 26 June 2022 which give the right to subscribe for ordinary shares at 0.16p per share which were issued to him on 26 June 2020 on the same terms as all other participants in the £350,000 Equity fundraising announced on 19 June 2020
2 Colin Bird also has 15,625,000 warrants expiring on 14 September 2022 which give the right to subscribe for ordinary shares at a price of 0.16p per share which were issued to him on 14 September 2020 on the same terms as all other participants in the £625,000 Equity fundraising announced on 28 August 2020
3 Colin Bird also has 30,769,231 warrants expiring on 4 November 2024 which give the right to subscribe for ordinary shares at a price of 0.25p per share which were issued to him 6 January 2022 in lieu of outstanding fees.
4 Raju Samtani has 37,500,000 warrants expiring on 26 June 2022 which give the right to subscribe for ordinary shares at a price of 0.16p per share which were issued to him on 26 June 2020 prior to his appointment as a director of the company, on the same terms as all other participants in the £350,000 Equity fundraising announced on 19 June 2020.
Report on directors' remuneration and service contracts
This report has been prepared in accordance with the requirements of Chapter 6 of Part 15 of the Companies Act 2006 and describes how the Board has applied the principles of good governance relating to Directors' remuneration set out in the QCA Corporate Governance Code.
Executive remuneration packages are prudently designed to attract, motivate and retain Directors of the necessary calibre and to reward them for enhancing value to shareholders. The performance measurement of the Executive Directors and key members of senior management and the determination of their annual remuneration packages is undertaken by the Remuneration Committee. The remuneration of Non-Executive Directors is determined by the Board within limits set out in the Articles of Association.
Executive Directors are entitled to accept appointments outside the Company providing the Board's permission is sought.
Aside from the Finance Director whose fees in 2021 were £41,500 the other Directors are entitled to receive between £12,500 / £19,000 per annum as Directors' Fees along with relevant Consulting Fees as applicable, with the aggregate of Salary, Directors' Fees and Consulting Fees detailed in the Directors' Remuneration Summary Table on the next page and in note 22.
Each Director is also paid all reasonable expenses incurred wholly, necessarily and exclusively in the proper performance of his duties.
Pensions
The Group does not operate a pension scheme and has not paid any contributions to any pension scheme for Directors or employees.
Directors' remuneration
Remuneration of the Directors for the years ended 31 December 2021 and 2020 was as follows:
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2021 |
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Directors' Fees |
Salary and Consulting Fees |
Total |
Share based payment - share options |
Total |
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£ |
£ |
£ |
£ |
£ |
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C. Bird |
12,500 |
50,000 |
62,500 |
34,961 |
97,461 |
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E. Kirby |
14,226 |
- |
14,226 |
14,567 |
28,793 |
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R. Siapno |
13,000 |
- |
13,000 |
7,284 |
20,284 |
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R. Samtani |
41,500 |
- |
41,500 |
29,135 |
70,635 |
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E. Slowey |
19,000 |
24,600 |
43,600 |
29,135 |
72,735 |
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Total |
100,226 |
74,600 |
174,826 |
115,082 |
289,908 |
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2020 |
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Directors' Fees |
Salary and Consulting Fees |
Total |
Share based payment - share options |
Total |
|
|
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
C. Bird |
14,000 |
49,500 |
63,500 |
82,980 |
146,480 |
|
L. Read |
6,000 |
39,000 |
45,000 |
- |
45,000 |
|
E. Kirby |
14,821 |
- |
14,821 |
34,575 |
49,396 |
|
R. Siapno |
13,000 |
- |
13,000 |
17,287 |
30,287 |
|
R. Samtani |
8,833 |
- |
8,833 |
69,150 |
77,983 |
|
E. Slowey |
3,500 |
4,950 |
8,450 |
69,150 |
77,600 |
|
|
|
|
|
|
|
|
Total |
60,154 |
93,450 |
153,604 |
273,142 |
426,746 |
An amount of £15,000 was paid during 2021 (2020: £15,000) to Lion Mining Finance Limited, a company controlled by C. Bird, for administration services and use of an office.
Notes:
1. Mr Bird and Mr Samtani's Directors' fees include NIC and UK payroll tax.
2. In accordance with the requirements of IFRS 2 Share-based Payments, the estimated fair value for the share options granted in 2020 (£273,142) was calculated using a Black and Scholes option pricing model. None of the 2020 share options have been exercised as they are out of the money. In the event that the share options are not exercised or forfeited before expiry, the option cost will be credited to the Profit and Loss or if expired will be added back to retained earnings. Note 18 to the accounts provides information on Share-based payments.
Environment, Health, Safety and Social Responsibility Policy Statement
The Company adheres to the above Policy, whereby all operations are conducted in a manner that protects the environment, the health and safety of employees, third parties and the entire local communities in general.
The Company is currently principally involved in exploration projects, located within Zambia, Namibia the Philippines and Argentina, Botswana and Cyprus.
The Company is in the process of renewing its Environmental Impact Assessment approvals in respect of its "Eureka Project" in Argentina.
During the year, current operations were closely managed in order to maintain our policy aims, with no matters of concern arising. There have been no convictions in relation to breaches of any applicable legislation recorded against the Group during the year.
Substantial & Significant Shareholdings
The Company has been notified, in accordance with DTR 5 of the FCA's Disclosure Guidance and Transparency Rules, or is aware, of the following interests in its ordinary shares as at 28 June 2022 of those shareholders with a 3% and above equity holding in the Company based on the Company having 5,039,189,252 ordinary shares in issue on 28 June 2022 ("28 June 2022 Shares in Issue").
|
Shareholders per share register |
Number of Ordinary |
Percentage of issued share capital |
|
THE BANK OF NEW YORK (NOMINEES) |
462,277,695 |
9.17% |
|
BARCLAYS DIRECT INVESTING NOMINEES |
311,789,048 |
6.19% |
|
HARGREAVES LANSDOWN (NOMINEES) |
180,110,753 |
3.57% |
|
HARGREAVES LANSDOWN (NOMINEES) |
383,820,369 |
7.62% |
|
HARGREAVES LANSDOWN (NOMINEES) |
365,305,939 |
7.25% |
|
INTERACTIVE INVESTOR SERVICES |
352,948,916 |
7.00% |
|
INTERACTIVE INVESTOR SERVICES |
300,261,656 |
5.96% |
|
JIM NOMINEES LIMITED |
430,286,776 |
8.54% |
|
VIDACOS NOMINEES LIMITED |
167,517,161 |
3.32% |
|
VIDACOS NOMINEES LIMITED |
162,262,947 |
3.22% |
On 4 November 2021 Christian Cordier submitted a TR-1 notification to the Company that he has an indirect interest in 313,906,504 ordinary shares in relation to the following shareholdings Tonehill Pty Ltd acting for the ("aft") The Tonehill Trust 80,705,492 shares, Coreks Super Pty Ltd aft Coreks Superannuation Fund 66,163,350 shares and Breamline Pty Ltd aft Breamline Ministries 167,037,662 shares. Mr Cordier's interest represented 6.455% at the date of issue of the TR-1 and 6.24% based on the 5,039,189,252 shares in issue on 28 June 2022.
On 22 November 2021 the Company announced it was notified that Sanderson Capital Partners Ltd and associates would on 29 November 2021 be interested in 236,469,231 Shares which represents 4.69% based on the 5,039,189,252 shares in issue on 28 June 2022.
Political and charitable contributions
There were no political or charitable contributions made by the Group during the year ended 31 December 2021 (2020: nil).
Information to Shareholders - Website
The Company has its own website (www.bezantresources.com) for the purposes of improving information flow to shareholders, as well as to potential investors.
Statement of Directors' responsibilities
The Directors are responsible for preparing the financial statements in accordance with applicable laws and UK adopted International Accounting Standards. Company law requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Group and of the Company and of the profit or loss of the Group for that year.
In preparing those financial statements, the Directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
- prepare the financial statements on a going concern basis, unless it is inappropriate to presume that the Group will continue in business.
The Directors confirm that the financial statements comply with the above requirements.
The Directors are responsible for keeping adequate accounting records which at any time disclose with reasonable accuracy the financial position of the Company (and the Group) and enable them to ensure that the financial statements comply with the Companies Act 2006. The Directors are also responsible for safeguarding the assets of the Company (and the Group) and for taking steps for the prevention and detection of fraud and other irregularities.
In addition, they are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website.
Statement of disclosure to auditor
So far as all the Directors, at the time of approval of their report, are aware:
- there is no relevant audit information of which the Company's auditors are unaware, and
- the Directors have taken all 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 auditors are aware of that information.
Auditors
UHY Hacker Young LLP have expressed their willingness to continue as the auditors of the Company, and in accordance with section 489 of the Companies Act 2006, a resolution to re-appoint them will be proposed at the Company's forthcoming Annual General Meeting.
Principal risks and uncertainties
The Group has identified the following risks to the ongoing success of the business and has taken various steps to mitigate these, the details of which in relation to its Continuing Operations are as follows:
Risk of development, construction, mining operations and uninsured risks
The Group's ability to meet any production, timing and cost estimates for its properties cannot be assured. Furthermore, the business of mining is subject to a variety of risks such as actual production and costs varying from estimated future production, cash costs and capital costs; revisions to mine plans; risks and hazards associated with mining; natural phenomena; unexpected labour shortages or strikes; delays in permitting and licensing processes; and the timely completion of expansion projects, including land acquisitions required for the expansion of operations from time to time. Geological grade and product value estimations are based on independent resource calculations, studies and historical sales records.
Geological risk factors and adverse market conditions could cause actual results to materially deviate from estimated future production and revenue. Failure to achieve production or cost estimates or material increases in costs could have an adverse impact on the future business, cash flows, profitability, results of operations and financial condition. While steps, such as production and mining planning are in place to limit these risks, occurrences of such incidents do exist and should be noted.
Currency risk
The Group reports its financial results and maintains its accounts in Pounds Sterling, the currency in which the Group primarily operates. The Group's operations in Namibia, Botswana, Zambia, Cyprus and Argentina make it subject to further foreign currency fluctuations and such fluctuations may materially affect the Group's financial position and results (see note 16). The Group does not have any currency hedges in place and is exposed to foreign currency movements.
Copper-gold price volatility
The profitability going forward of the Group's operations is significantly affected by changes in realisable copper-gold prices. The price of copper-gold can fluctuate widely and is affected by numerous factors beyond the Group's control, including demand, inflation and expectations with respect to the rate of inflation, the strength of the Pound Sterling and of other currencies, interest rates, global or regional political or financial events, and production and cost levels. The Group does not have any commodity price hedges in place as it is not mining and does not produce any copper and its investment in exploration projects are exposed to fluctuations in the prices of underlying commodities.
Economic, political, judicial, administrative, taxation or other regulatory factors
The Group's assets are located in Botswana, Cyprus, Zambia, Namibia, the Philippines and Argentina and mineral exploration and mining activities may be affected to varying degrees by political stability and government regulations relating to the mining industry
The Group is exposed to sovereignty risks relating to potential changes of local Governments and possible subsequent changes in jurisdiction concerning the maintenance or renewal of licences and the equity position permitted to be held in the Company's subsidiaries. Which the group seeks to mitigate by working with local advisors and / or partners familiar with the local regulatory environment.
Loss of critical processes
The Group's future mining, processing, development and exploration activities depend on the continuous availability of the Group's operational infrastructure, in addition to reliable utilities and water supplies and access to roads. Any failure or unavailability of operational infrastructure, for example, through equipment failure or disruption, could adversely affect future production output and/or impact exploration and development activities. The group would seek to mitigate this risk by ensuring that access to operational infrastructure is included in any pre mining feasibility studies.
Competition
The Group competes with numerous other companies and individuals, in the search for and acquisition of exploration and development rights on attractive mineral properties and also in relation to the future marketing and sale of precious metals. There is no assurance that the Group will continue to be able to compete successfully with its competitors in acquiring exploration and development rights on such properties and also in relation to the future marketing and sale of precious metals.
Future funding requirements
As referred to in note 1.1 of these financial statements, the Group made a loss from all operations for the year ended 31 December 2021 after tax of £1,058,000 (2020: £1,026,000), had negative cash flows from operations and is currently not generating revenues. Cash and cash equivalents were £728,000 as at 31 December 2021. An operating loss is expected in the year subsequent to the date of these accounts and even though further funding was raised during the year, the Company will need to raise funding to provide additional working capital to finance its ongoing activities. Management has successfully raised money in the past, but there is no guarantee that adequate funds will be available when needed in the future.
Dependence on key personnel
The success of the Group is, and will continue to be, to a significant extent, dependent on retaining the services of the directors and senior management and the loss of one or more could have a materially adverse effect on the Group. A Group-wide share incentive scheme has been implemented.
COVID-19 pandemic
The COVID-19 pandemic announced by the World Health Organisation in 2020 initially had a markedly negative impact on global stock markets although many sectors and stock market losses have been recovered there is increased volatility as stock markets react to ongoing news in relation to the short-term and long-term impact of COVID-19 and the financially implications of the economic stimulus packages adopted by most governments to protect and / or support their economies this has also, affected currencies and general business activity and supply chains
Notwithstanding this the Company was able to complete and announce in 2020 a fundraising of £1,200,000 and secure a £1,000,000 funding facility. The Company developed a work at home policy and adopted local procedures for exploration activities to address the health and wellbeing of its directors, consultants and contractors, and their families, from COVID-19. Whilst in many countries, including the United Kingdom with universal vaccination programmes, COVID-19 appears to be under control the timing and extent of the impact and recovery from COVID-19 in other countries is still not certain as many countries particularly in the developing world have yet to fully implement successful vaccination programs accordingly COVID-19 remains an issue that requires ongoing monitoring in 2022 and likely at least into 2023 but possibly longer.
Impact Of Ukraine Conflict
The Directors are aware of the Ukraine conflict and related sanctions but there is no impact on the Company as it has no assets or business activities or suppliers with links in Ukraine or Russia and is not aware of any persons sanctioned in relation to the Ukraine conflict owning shares in the Company.
Relations with Shareholders
The Company will hold an Annual General Meeting on or around Friday, 29 July 2022 and the wording of each resolution to be tabled will be set out in a formal Notice of Annual General Meeting to be sent to shareholders.
Shareholders who are unable to attend the Annual General Meeting and who wish to appoint a proxy in their place must ensure that their proxy is appointed in accordance with the provisions set out in the Notice of Annual General Meeting.
On behalf of the Board
Mr Colin Bird
Executive Chairman
30 June 2022
Corporate governance
For the year ended 31 December 2021
As an AIM-quoted company, Bezant Resources PLC ("Bezant" or the "Company") and its subsidiaries are required to apply a recognised corporate governance code and demonstrate how the Group complies with such corporate governance code and where it departs from it.
The Directors of the Company have formally taken the decision to apply the QCA Corporate Governance Code (the "QCA Code"). The Board recognises the principles of the QCA Code, which focus on the creation of medium to long-term value for shareholders without stifling the entrepreneurial spirit in which small to medium sized companies, such as Bezant, have been created. The Company is committed to providing annual updates on its compliance with the QCA Code further details of which are set out below.
The Board
The Board comprises (for the time being) five Directors of which three are executive and two are non-executives, reflecting a blend of different experience and backgrounds. The Board considers Dr. Evan Kirby and Ronnie Siapno to be independent non-executives in terms of the QCA guidelines. The Company's Executive Director is Colin Bird who is also Chairman of the Board. Given the stage of the Company's early-stage exploration mining projects and the experience of the Chair Mr. Bird in managing such international exploration mining projects and his familiarity with the Company's projects the Company believes that it is appropriate for the roles of Chairman and Chief Executive Officer to be combined at this stage. The Company will keep this under review as the Company's projects develop with a view to splitting the roles when it is clear which projects will become the principal activities of the Company and can justify the need for and benefit from a separate CEO. The Company will therefore consider making further appropriate appointments to the Board as an when considered appropriate.
The Board is responsible for determining policy and business strategy, setting financial and other performance objectives and monitoring achievement. It meets throughout the year and all major decisions are taken by the full Board. The Chairman takes responsibility for the conduct of the Company and Board meetings and ensures that directors are properly briefed to enable full and constructive discussions to take place. The Group's day-to-day operations are managed by the Executive Director Colin Bird as assisted by the Group Company Secretary in respect of corporate matters generally, compliance and company administration. All Directors have access to the Company's Solicitors, along with the Group Company Secretary and any Director needing independent professional advice in the furtherance of his/her duties may obtain this advice at the expense of the Group. However, no formal procedure has been agreed with the Board regarding the circumstances in which individual directors may take independent professional advice.
The Board is satisfied that it has a suitable balance between independence on the one hand, and knowledge of the Company on the other, to enable it to discharge its duties and responsibilities effectively, and that all Directors have adequate time to fulfil their roles.
Details of the current Directors, biographical details are set out on pages 6 to 9 and their roles and background are set out on the Company's website at www.bezantresources.com
The role of the Chairman is to provide leadership of the Board and ensure its effectiveness on all aspects of its remit to maintain control of the Group. In addition, the Chairman is responsible for the implementation and practice of sound corporate governance.
Under the Company's Articles of Association, the appointment of all new Directors must be approved by shareholders in a general meeting. In addition, one third of Directors are required to retire and to submit themselves for re-election at each Annual General Meeting.
Application of the QCA Code
In the spirit of the QCA Code, it is the Board's task to ensure that the Group is managed for the long-term benefit of all shareholders and other stakeholders with effective and efficient decision-making. Corporate governance is an important part of that task, reducing risk and adding value to the Group. The Board will continue to monitor the governance framework of the Group as it grows.
Bezant is an exploration entity whose assets comprise early-stage projects that are not yet at the production stage. It currently has interests in four copper-gold projects, in Namibia, Cyprus, Argentina and the Philippines a copper-silver project in Zambia and a manganese project in Botswana. Currently, no revenue is generated from such projects. The Company seeks to promote long-term value creation for its shareholders by leveraging the technical knowledge and experience of its directors and senior management to develop and realise value from its projects. The key performance indicators for the Company are therefore linked to the achievement of project milestones and the increase in overall enterprise value which could be through a combination of the development of these projects by the Company or with joint venture or other partners and / or the sale of the projects.
All operations are conducted in a manner that protects the environment and the health and safety of employees, third parties and local communities in general. Bezant believes that a successful project is best achieved through maintaining close working relationships with local communities, such social ideology being at the forefront of all of Bezant's exploration initiatives via establishing and maintaining co-operative relationships with local communities, hiring local personnel and using local contractors and suppliers. Where issues are raised, the Board takes the matters seriously and, where appropriate, steps are taken to ensure that findings are integrated into the Company's strategy.
Careful attention is given to ensure that all exploration activity is performed in an environmentally responsible manner and abides by all relevant mining and environmental acts. Bezant takes a conscientious role in all of its operations and is aware of its social responsibility and its environmental duty.
Both the engagement with local communities and the performance of all activities in an environmentally and socially responsible way are closely monitored by the Board which ensures that ethical values and behaviours are recognised.
Corporate Governance Committees
The Board has established two committees comprising Non-Executive Directors and Executive Directors.
The composition of the committees is as follows:
|
Audit |
Remuneration |
|
Dr. Evan Kirby (Chairman) |
Colin Bird (Chairman) |
|
Raju Samtani |
Dr. Evan Kirby |
|
Colin Bird |
Ronnie Siapno |
The Audit Committee
The audit committee receives reports from management and the external auditors relating to the interim report and the annual report and financial statements, reviews reporting requirements and ensures that the maintenance of accounting systems and controls is effective.
The audit committee has unrestricted access to the Company's auditors. The audit committee also monitors the controls which are in force and any perceived gaps in the control environment.
The Board believes that the current size of the Group does not justify the establishment of an independent internal audit department.
The Audit Committee meets twice during the year to review the published financial information, the effectiveness of external audit and internal financial controls including the specific matters set out below.
Significant issues considered by the Audit Committee during the year have been the Principal Risks and Uncertainties and their effect on the financial statements. The Audit Committee tracked the Principal Risks and Uncertainties through the year and kept in contact with the Group's Management, External Service Providers and Advisers. The Audit Committee is satisfied that there has been appropriate focus and challenge on the high-risk areas.
UHY Hacker Young LLP, the current external auditors, have been in office since 2007 which was the last time a tender for the audit took place. The external auditors present their annual audit findings to the audit committee.
Remuneration Committee
The Remuneration Committee determines the scale and structure of the remuneration of the executive Directors and approves the granting of options to Directors and senior employees and the performance related conditions thereof. The Remuneration Committee also recommends to the Board a framework for rewarding senior management, including Executive Directors, bearing in mind the need to attract and retain individuals of the highest calibre and with the appropriate experience to make a significant contribution to the Group and ensures that the elements of the remuneration package are competitive and help in underpinning the performance-driven culture of the Group.
The Company does not currently have a separate Nominations Committee, with the entire Board involved in the identification and approval of Board members which the Board considers to be appropriate given the Company's size and nature, but it will continue to monitor the situation as it grows.
Internal control
The Board is responsible for establishing and maintaining the Group's system of internal control. Internal control systems manage rather than eliminate the risks to which the Group
is exposed and such systems, by their nature, can provide reasonable but not absolute assurance against misstatement or loss. There is a continuous process for identifying, evaluating and managing the significant risks faced by the Group. The key procedures which the Directors have established with a view to providing effective internal control, are as follows:
¨ Identification and control of business risks
The Board identifies the major business risks faced by the Group and determines the appropriate course of action to manage those risks.
¨ Budgets and business plans
Each year the Board approves the business plan and annual budget. Performance is monitored and relevant action taken throughout the year through the regular reporting to the Board of changes to the business forecasts.
¨ Investment appraisal
Capital expenditure is controlled by budgetary process and authorisation levels. For expenditure beyond specified levels, detailed written proposals have to be submitted to the Board. Appropriate due diligence work is carried out if a business or asset is to be acquired.
¨ Annual review and assessment
In 2018, the Board conducted a detailed review and assessment of the effectiveness of the Group's strategy, a process that is maintained on an ongoing basis.
Relations with shareholders
The Board attaches considerable importance to the maintenance of good relationships with shareholders. Presentations by the Directors to institutional shareholders and City analysts was significantly reduced in 2020 and 2021 due to COVID-19 restrictions but the Company participated in various investor focussed podcasts and as COVID-19 restrictions have been lifted the Company will with the Company's advisers look at ways in which the Company can engage with shareholders. The Company is also looking forward to its 2022 AGM being one at which shareholders are able to attend.
Departures from the QCA Code:
In accordance with the requirements of the AIM Rules for Companies, Bezant departs from the QCA Code in the following ways:
Principle 7 - "Evaluate board performance based on clear and relevant objectives, seeking continuous improvement."
Bezant's board is extremely focussed on implementing the Company's strategy. Given the size and nature of Bezant, the Board does not consider it appropriate to have a formal performance evaluation procedure in place, as described and recommended in Principle 7 of the QCA Code. The Board will closely monitor the situation as the Group grows.
No Nominations Committee
The QCA Code states that there should be a nomination committee to deal with the appointment of both executive and non-executive Directors except in circumstances where the Board is small. The Directors consider the size of the current Board to be small and have not therefore established a separate nomination committee. The appointment of executive and non-executive Directors is currently a matter for the Board as a whole. This position will be reviewed should the number of directors increase.
Chair is also Chief Executive officer
The QCA Code states that the role of Chair and chief Executive Officer should be separate. Given the stage of the Company's early-stage exploration mining projects and the experience of the Chair Mr. Bird in managing such international exploration mining projects and his familiarity with the Company's projects the Company believes that it is appropriate for the roles of Chairman and Chief Executive Officer to be combined at this stage. The Company will keep this under review as the Company's projects develop with a view to splitting the roles when it is clear which projects will become the principal activities of the Company and can justify the need for and benefit from a separate CEO. The Company will therefore consider making further appropriate appointments to the Board as an when considered appropriate.
Going concern
The Group made a loss from all operations for the year ended 31 December 2021 after tax of £948,000 (2020: £1,026,000), had negative cash flows from operations and is currently not generating revenues. Cash and cash equivalents were £728,000 as at 31 December 2021. An operating loss is expected in the year subsequent to the date of these accounts and as a result the Company will need to raise funding to provide additional working capital to finance its ongoing activities. Management has successfully raised money in the past, but there is no guarantee that adequate funds will be available when needed in the future.
The COVID-19 pandemic announced by the World Health Organisation in 2020 initially had a markedly negative impact on global stock markets although many sectors and stock market losses have been recovered there is increased volatility as stock markets react to ongoing news in relation to the short-term and long-term impact of COVID-19 and the financially implications of the economic stimulus packages adopted by most governments to protect and / or support their economies this has also, affected currencies and general business activity and supply chains
Notwithstanding this the Company was able to complete and announce in 2020 a fundraising of £1,200,000 and secure a £1,000,000 funding facility. The Company developed a work at home policy and adopted local procedures for exploration activities to address the health and wellbeing of its directors, consultants and contractors, and their families, from COVID-19. Whilst in many countries, including the United Kingdom with universal vaccination programmes, COVID-19 appears to be under control the timing and extent of the impact and recovery from COVID-19 in other countries is still not certain as many countries particularly in the developing world have yet to fully implement successful vaccination programs accordingly COVID-19 remains an issue that requires ongoing monitoring in 2022 and likely at least into 2023 but possibly longer.
Based on the Board's assessment that the Company will be able to raise additional funds, as and when required, to meet its working capital and capital expenditure requirements, the Board have concluded that they have a reasonable expectation that the Group can continue
in operational existence for the foreseeable future. For these reasons, the Group continues to adopt the going concern basis in preparing the annual report and financial statements.
There is a material uncertainty related to the conditions above that may cast significant doubt on the Group's ability to continue as a going concern and therefore the Group may be unable to realise its assets and discharge its liabilities in the normal course of business.
The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or liabilities that might be necessary should the entity not continue as a going concern.
Dr. Evan Kirby
Non-Executive Director
30 June 2022
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BEZANT RESOURCES PLC
FOR THE YEAR ENDED 31 DECEMBER 2021
Opinion
We have audited the financial statements of Bezant Resources Plc (the 'Company') and its subsidiaries (the 'Group') for the year ended 31 December 2021 which comprise the Consolidated Statement of Profit and Loss, the Consolidated Statement of Other Comprehensive Income, the Consolidated and Company Statements of Changes in Equity, the Consolidated and Company Balance Sheets, the Consolidated and Company Statements of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in the preparation of the group's and company's financial statements is applicable law and UK adopted International Accounting Standards
In our opinion:
· the financial statements give a true and fair view of the state of the Group's and of the Company's affairs as at 31 December 2021 and of the Group's loss for the year then ended;
· the financial statements have been properly prepared in accordance with UK adopted International Accounting Standards; and
· the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Group and Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty relating to going concern
We draw attention to the Going Concern section of the Accounting Policies of the Group financial statements concerning the Group's and Company's ability to continue as a going concern. The Group incurred an operating loss of £948k during the year ended 31 December 2021 and is still incurring losses. As discussed in note 1.1, the Company will need to raise further funds in order to meet its budgeted operating costs for the foreseeable future. These conditions, along with other matters discussed in note 1.1 indicate the existence of a material uncertainty which may cast significant doubt about the Group's and Company's ability to continue as a going concern. The financial statements do not include the adjustments (such as impairment of assets) that would result if the Group and Company were unable to continue as a going concern. These conditions, along with other matters discussed in the Principal Accounting Policies indicate the existence of a material uncertainty which may cast significant doubt about the Group's and Company's ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
The risk
The group currently does not generate any revenue, therefore in order to provide sufficient working capital to fund the group commitments as they fall due over the next 12 months the group is reliant on further fund raisings in order to fund its ongoing activities.
We understand it is the group's intention to fund future exploration programmes by a combination of farm in and/or further fundraising which the group will need to complete in the next 12 months. Accordingly the Group will require additional funding and/or a working capital reduction within twelve months from the date when the financial statements are authorised for issue.
Given the above factors, we consider going concern to be a significant audit risk area.
The directors' conclusion of the risks and circumstances described in the Going Concern section of the Principal Accounting Policies of the Group financial statements represent a material uncertainty over the ability of the Group and Company to continue as a going concern for a period of at least a year from the date of approval of the financial statements. However, clear and full disclosure of the facts and the directors' rationale for the use of the going concern basis of preparation, including that there is a related material uncertainty, is a key financial statement disclosure and so was the focus of our audit in this area. Auditing standards require that to be reported as a key audit matter.
How our audit addressed the key audit matter
Our audit procedures included:
· Assessing the transparency and the completeness and accuracy of the matters covered in the going concern disclosure by evaluating management's cash flow projections for the next 12 months and the underlying assumptions.
· We obtained cash flow forecasts, reviewed the methodology behind these, ensured arithmetically correct and challenged the assumptions.
· We performed a sensitivity analysis for an increase in costs to consider the impact of inflation and other unforeseen additional costs incurring.
· We discussed plans for the Group going forward with management, ensuring these had been incorporated into the budgeting and would not have an impact on the going concern status of the Group.
Key observations:
It is clear the group will need to raise funds in order to fund any further exploration costs. The Group has been able to raise funds in the past, however there is no guarantee that adequate funds will be available when needed in the future
Our approach to the audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the directors made subjective judgements, for example in respect of impairment reviews on exploration assets that involved making assumptions and considering future events that are inherently uncertain.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account an understanding of the structure of the Company and the Group, their activities, the accounting processes and controls, and the industry in which they operate. Our planned audit testing was directed accordingly and was focused on areas where we assessed there to be the highest risk of material misstatement.
Our Group audit scope includes all of the group companies. At the Company level, we also tested the consolidation procedures. During the audit we reassessed and re-evaluated audit risks and tailored our approach accordingly.
The audit testing included substantive testing on significant transactions, balances and disclosures, the extent of which was based on various factors such as our overall assessment of the control environment, the effectiveness of controls and the management of specific risk.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant findings that we identified during the course of the audit.
Other Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete list of all risks identified during our audit.
|
Key audit matter |
How the matter was addressed during the audit
|
|
Impairment of exploration and evaluation assets in the Group
The Group has capitalised costs in respect of the Group's licence interests in accordance with IFRS 6 'Exploration for and Evaluation of Mineral Resources' (IFRS 6). The Directors need to assess the exploration assets for indicators of impairment and where they exist to undertake a full review to assess the need for impairment charge. This involves significant judgements and assumptions.
We therefore identified the impairment of exploration and evaluation assets as a key audit matter, which was one of the most significant assessed risks of material misstatement.
|
Our audit work included, but was not restricted to:
· Obtaining each of the licences along with supporting information available for each exploration project to assess whether the licenses remain in good standing. · We discussed each of the licence areas with the directors and considered their assessment in conjunction with the available information for each exploration project and reviewed available information to assess whether the licenses remain in good standing. · We reviewed the future plans of the projects in respect of funding, viability and development to assess whether there were any indicators of impairment.
Key observations We obtained evidence that the licenses remain valid and are in good standing. Where licenses had expired and not been renewed in Botswana, these related to areas which were not ascribed any value on acquisition.
Whilst the limited spending on the Eureka Project was identified as an indicator of impairment, based on a review of the expiry dates of the licences, potential future funding and the intention to continue the exploration and evaluation of this asset, the directors' assessment that no impairment was required was considered to be appropriate.
Management have impaired the Kalengwa Project exploration assets following the decision to pause work on the project pending resolution to technical and regulatory issues in Zambia.
The acquisition of the interests in the Kanye Manganese project in Botswana and the Troulli, Kokkinapetra and Angleside projects in Cyprus have taken place during the year and no indicators of impairment were identified in respect of the projects.
|
|
Impairment of investments and loans due from subsidiary companies in the Parent Company
Under International Accounting Standard 36 'Impairment of Assets', companies are required to assess whether there is any indication that an asset may be impaired at each reporting date.
Management assessment involves significant judgements and assumptions such as the timing and extent and probability of future cash flow.
The Company has investments of £6.07m (2020: £4.52m). In conjunction with the exploration assets, the investments represent the primary balance on the Company balance sheet and there is a risk it could be impaired and that intragroup loans may not be recoverable as a result of the subsidiary companies incurring losses.
We therefore identified the impairment of loans due from subsidiary companies as a key audit matter in the Company financial statements, which was one of the most significant assessed risks of material misstatement.
|
Our audit work included, but was not restricted to:
· Reviewing the investments balances for indicators of impairment in accordance with IAS 36; · Assessing the appropriateness of the methodology applied by management in their assessment of the recoverable amount of intragroup loans by comparing it to the Group's accounting policy and IAS 36; · Assessing management's evaluation of the recoverable amounts of intergroup loans including review the impairment provisions and net asset values of components that have intercompany debt; · Checking that intergroup loans have been reconciled and confirming that there are no material differences.
Key observations The investment balance correlates with the Mankayan Project, Eureka Project, Hope Copper Gold Project, Kalengwa Project and Kanye Manganese Project, held by subsidiaries and the joint arrangement in Cyprus. Our impairment review was therefore linked to our assessment of indicators of impairment on the corresponding exploration assets.
Management have impaired the KPZ International Ltd investment investment and loan balance in full and following the decision to pause work on the Kalengwa project pending resolution to technical and regulatory issues in Zambia.
No further impairments were considered necessary.
|
|
Accounting and valuation in relation to the acquisition of 100% of Metrock Resources Ltd (and its interests in the Kanye Manganese Project in Botswana)
There is a risk that the accounting treatment for the acquisitions or the disclosure of the investment or valuation could be misstated.
|
Our audit work included, but was not restricted to:
· Obtaining and reviewing the agreement supporting the acquisition and agreeing the investment percentage and consideration associated with the investments. · Agreeing the fair value of the consideration issued for the investments made. · Reviewing management's assessment of the valuation of the investments at the year end. · Ensuring that the investments have been appropriately accounted for in accordance with IFRS 3 Business Combinations.
Key observations The fair value of the consideration paid exceeds the fair value of the net assets acquired on the acquisition and the difference has been recognised as an intangible asset, being Exploration and Evaluation assets. We consider the accounting for the acquisition to have been carried out appropriately.
|
|
Accounting and valuation in relation to the 50% joint venture agreement and option agreement with Caerus Mineral Resources
There is a risk that the accounting treatment for the acquisitions or the disclosure of the investment or valuation could be misstated.
|
Our audit work included, but was not restricted to:
· Obtaining and reviewing the agreements supporting the investment and agreeing the investment percentage and costs associated with the investments. · Reviewing management's assessment of the valuation of the investments at the year end. · Ensuring that the investments have been appropriately accounted for in accordance with IFRS 11 Joint Arrangements.
Key observations This arrangement has currently been treated as a joint arrangement based on the contractual arrangement gives both parties joint control of the exploration activities.
We consider the accounting for the acquisition to have been carried out appropriately. |
Our application of materiality
The scope and focus of our audit was influenced by our assessment and application of materiality. We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements on our audit and on the financial statements.
We define financial statement materiality as the magnitude by which misstatements, including omissions, could reasonably be expected to influence the economic decisions taken on the basis of the financial statements by reasonable users.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
|
Materiality Measure |
Group |
Parent |
|
|
Overall materiality We determined materiality for the financial statements as a whole to be: |
£170,000 (2020: £141,000)
|
£170,000 (2020: £112,000) |
|
|
How we determine it |
Based on the main key indicator, being 2% of the net assets of the Group
|
2% of net assets of the Parent Company exceeded the Group materiality amount therefore this was capped at Group materiality. |
|
|
Rationale for benchmarks applied |
We believe the net assets are the most appropriate benchmark due to the size and stage of development of the Company and Group. This is further supported by the Group not yet generating any revenue.
|
|
|
|
Performance materiality
|
£127,500 On the basis of our risk assessment, together with our assessment of the Group's control environment, our judgment is that performance materiality for the financial statements should be 75% of materiality. |
||
|
Specific materiality |
We also determine a lower level of specific materiality for certain areas such as directors' remuneration and related party transactions of £2,000 as these are considered to be material by nature.
|
|
|
|
Reporting threshold
|
We agreed with the Audit Committee that we would report to them all misstatements over 5% of Group materiality identified during the audit, as well as differences below that threshold that, in our view, warrant reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements. |
|
|
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditors' report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
· the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches not visited by us; or
· the Company financial statements are not in agreement with the accounting records and returns; or
· certain disclosures of directors' remuneration specified by law are not made; or
· we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities, set out on page 19, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group's and the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or Company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Based on our understanding of the Group and the industry in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to exploration laws and regulations in the countries the Group operates and company law and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to overstatement of assets.
Audit procedures performed included: review of the financial statement disclosures to underlying supporting documentation, review of legal and professional expenditure, enquiries of management, and testing of journals and evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the Company's members, as a body, in accordance with part 3 of Chapter 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Daniel Hutson
(Senior Statutory Auditor)
For and on behalf of UHY Hacker Young
Chartered Accountants and Statutory Auditor
UHY Hacker Young
4 Thomas More Square
London E1W 1YW
30 June 2022
Consolidated Statement of Profit and Loss
For the year ended 31 December 2021
|
|
Notes |
|
Year ended 31 December 2021 £'000 |
|
Year ended 31 December 2020 £'000 |
|
|
|
|
|
|
|
|
|
|
CONTINUING OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group revenue |
|
|
- |
|
- |
|
|
Cost of sales |
|
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
Gross profit/(loss) |
|
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
Operating expenses |
3 |
|
(788) |
|
(658) |
|
|
Share based payments |
3 |
|
(160) |
|
(380) |
|
|
Operating loss |
4 |
|
(948) |
|
(1,038) |
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
- |
|
12 |
|
|
Impairment of assets |
5 |
|
(110) |
|
- |
|
|
|
|
|
|
|
|
|
|
Loss before taxation |
|
|
(1,058) |
|
(1,026) |
|
|
Taxation |
6 |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
Loss for the financial year from continuing operations |
|
|
(1,058) |
|
(1,026) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the financial year |
|
|
(1,058) |
|
(1,026) |
|
|
|
|
|
|
|
|
|
|
Attributable to: Owners of the Company |
|
|
(1,058) |
|
(977) |
|
|
- Continuing operations |
|
|
(1,058) |
|
(977) |
|
|
- Discontinued operations |
|
|
- |
|
- |
|
|
Non-controlling interest |
|
|
- |
|
(49) |
|
|
|
|
|
(1,058) |
|
(1,026) |
|
|
Loss per share (pence) |
|
|
|
|
|
|
|
Basic loss per share from continuing operations |
7 |
|
(0.02) |
|
(0.05) |
|
|
Diluted loss per share from continuing operations |
7 |
|
(0.02) |
|
(0.05) |
|
|
|
|
|
|
|
|
|
For the year ended 31 December 2021
|
|
|
|
Year ended 31 December 2021 £'000 |
|
Year ended 31 December 2020 £'000 |
|
|
|
|
|
|
|
|
|
|
Other comprehensive income: |
|
|
|
|
|
|
|
Loss for the financial year |
|
|
(1,058) |
|
(1,026) |
|
|
Items that may be reclassified to profit or loss: |
|
|
|
|
|
|
|
Foreign currency reserve movement |
|
|
(40) |
|
(1) |
|
|
Total comprehensive loss for the financial year |
|
|
(1,098) |
|
(1,027) |
|
|
|
|
|
|
|
|
|
|
Attributable to: Owners of the Company |
|
|
(1,098) |
|
(978) |
|
|
Non-controlling interest |
|
|
- |
|
(49) |
|
|
|
|
|
(1,098) |
|
(1,027) |
|
|
|
|
|
|
|
|
|
Consolidated Statement of Changes in Equity
|
|
Share Capital £'000 |
Share Premium £'000 |
Other Reserves1 £'000 |
Retained Losses £'000 |
Non Controlling interest £'000 |
Total Equity £'000 |
|
Year ended 31 December 2021 |
|
|
|
|
|
|
|
Balance at 1 January 2021 |
2,049 |
39,125 |
1,523 |
(35,674) |
(12) |
7,011 |
|
Current year loss |
- |
- |
- |
(1,058) |
- |
(1,058) |
|
Foreign currency reserve |
- |
- |
(40) |
- |
- |
(40) |
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the year |
- |
- |
(40) |
(1,058) |
- |
(1,098) |
|
Proceeds from shares issued |
18 |
1,182 |
- |
- |
- |
1,200 |
|
Share issue costs |
- |
(144) |
- |
- |
- |
(144) |
|
Shares issued - Acquisitions |
6 |
44 |
711 |
- |
- |
761 |
|
Shares issued - Acquisitions (2020)2 |
- |
(1,120) |
1,120 |
- |
- |
- |
|
Shares issued - Legal fees |
1 |
71 |
- |
- |
- |
72 |
|
Warrants issued to shareholders |
- |
- |
300 |
(270) |
- |
30 |
|
Warrants exercised |
2 |
145 |
(50) |
50 |
- |
147 |
|
Share options granted |
- |
- |
217 |
- |
- |
217 |
|
|
|
|
|
|
|
|
|
Balance at 31 December 2021 |
2,076 |
39,301 |
3,781 |
(36,952) |
(12) |
8,196 |
|
|
Share Capital £'000 |
Share Premium £'000 |
Other Reserves1 £'000 |
Retained Losses £'000 |
Non Controlling interest £'000 |
Total Equity £'000 |
|
Year ended 31 December 2020 |
|
|
|
|
|
|
|
Balance at 1 January 2020 |
2,003 |
36,429 |
840 |
(34,489) |
- |
4,783 |
|
Current year loss |
- |
- |
- |
(977) |
(49) |
(1,026) |
|
Foreign currency reserve |
- |
- |
(1) |
- |
- |
(1) |
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the year |
- |
- |
(1) |
(977) |
(49) |
(1,027) |
|
Proceeds from shares issued |
24 |
951 |
- |
- |
- |
975 |
|
Share issue costs |
- |
(105) |
- |
- |
- |
(105) |
|
Shares issued - Acquisitions |
12 |
1,120 |
- |
- |
- |
1,132 |
|
Warrants issued to shareholders |
- |
- |
486 |
(451) |
- |
35 |
|
Warrants exercised |
10 |
730 |
(243) |
243 |
- |
740 |
|
Share options granted |
- |
- |
441 |
- |
- |
441 |
|
Non-controlling interests on acquisition of subsidiary |
- |
- |
- |
- |
37 |
37 |
|
|
|
|
|
|
|
|
|
Balance at 31 December 2020 |
2,049 |
39,125 |
1,523 |
(35,674) |
(12) |
7,011 |
1 Other reserves is made up of the share-based payment and foreign exchange reserve.
2 Share premium on acquisitions during the year to 31 December 2020 have been reclassified to merger reserves during the year.
Company Statement of Changes in Equity
|
|
Share Capital £'000 |
Share Premium £'000 |
Other Reserves1 £'000 |
Retained Losses £'000 |
Total Equity £'000 |
|
Year ended 31 December 2021 |
|
|
|
|
|
|
Balance at 1 January 2021 |
2,049 |
39,125 |
1,000 |
(33,818) |
8,356 |
|
Current year loss |
- |
- |
- |
(1,211) |
(1,211) |
|
|
|
|
|
|
|
|
Total comprehensive loss for the year |
- |
- |
- |
(1,211) |
(1,211) |
|
Proceeds from shares issued |
18 |
1,182 |
- |
- |
1,200 |
|
Share issue costs |
- |
(144) |
- |
- |
(144) |
|
Shares issued - Acquisitions |
6 |
44 |
711 |
- |
761 |
|
Shares issued - Acquisitions (2020)2 |
- |
(1,120) |
1,120 |
- |
- |
|
Share Issued - Legal fees |
1 |
71 |
- |
- |
72 |
|
Warrants issued to shareholders |
- |
- |
300 |
(270) |
30 |
|
Warrants exercised |
2 |
145 |
(50) |
50 |
147 |
|
Share options granted |
- |
- |
217 |
- |
217 |
|
Balance at 31 December 2021 |
2,076 |
39,303 |
3,298 |
(35,249) |
9,428 |
|
|
Share Capital £'000 |
Share Premium £'000 |
Other Reserves1 £'000 |
Retained Losses £'000 |
Total Equity £'000 |
|
Year ended 31 December 2020 |
|
|
|
|
|
|
Balance at 1 January 2020 |
2,003 |
36,429 |
316 |
(32,732) |
6,016 |
|
Current year loss |
- |
- |
- |
(878) |
(878) |
|
|
|
|
|
|
|
|
Total comprehensive loss for the year |
- |
- |
- |
(878) |
(878) |
|
Proceeds from shares issued |
24 |
951 |
- |
- |
975 |
|
Share issue costs |
- |
(105) |
- |
- |
(105) |
|
Shares issued - Acquisitions |
12 |
1,120 |
- |
- |
1,132 |
|
Warrants issued to shareholders |
- |
- |
486 |
(451) |
35 |
|
Warrants exercised |
10 |
730 |
(243) |
243 |
740 |
|
Share options granted |
- |
- |
441 |
- |
441 |
|
Balance at 31 December 2020 |
2,049 |
39,125 |
1,000 |
(33,818) |
8,356 |
1 Other reserves is made up of the share-based payment, foreign exchange and merger reserve.
2 Share premium on acquisitions during the year to 31 December 2020 have been reclassified to merger reserves during the year.
As at 31 December 2021
|
|
|
|
Consolidated |
Company |
||
|
|
|
|
2021 |
2020 |
2021 |
2020 |
|
|
Notes |
|
£'000 |
£'000 |
£'000 |
£'000 |
|
ASSETS
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
Plant and equipment |
10 |
|
2 |
3 |
- |
- |
|
Investments |
11 |
|
49 |
- |
6,066 |
4,516 |
|
Exploration and evaluation assets |
13 |
|
7,900 |
6,405 |
3,129 |
3,129 |
|
Total non-current assets |
|
|
7,951 |
6,408 |
9,195 |
7,645 |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Trade and other receivables |
14 |
|
48 |
28 |
26 |
16 |
|
Cash and cash equivalents |
|
|
728 |
1,128 |
710 |
1,094 |
|
|
|
|
776 |
1,156 |
736 |
1,110 |
|
Total current assets |
|
|
776 |
1,156 |
736 |
1,110 |
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
|
8,727 |
7,564 |
9,931 |
8,755 |
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Trade and other payables |
15 |
|
531 |
553 |
503 |
399 |
|
Total current liabilities |
|
|
531 |
553 |
503 |
399 |
|
|
|
|
|
|
|
|
|
NET ASSETS |
|
|
8,196 |
7,011 |
9,428 |
8,356 |
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
|
|
Share capital |
17 |
|
2,076 |
2,049 |
2,076 |
2,049 |
|
Share premium |
17 |
|
39,303 |
39,125 |
39,303 |
39,125 |
|
Share-based payment reserve |
|
|
1,325 |
858 |
1,325 |
858 |
|
Foreign exchange reserve |
|
|
625 |
665 |
142 |
142 |
|
Merger reserve |
|
|
1,831 |
- |
1,831 |
- |
|
Retained losses |
|
|
(36,952) |
(35,674) |
(35,249) |
(33,818) |
|
|
|
|
8,208 |
7,023 |
9,428 |
8,356 |
|
Non-controlling interests |
|
|
(12) |
(12) |
- |
- |
|
TOTAL EQUITY |
|
|
8,196 |
7,011 |
9,428 |
8,356 |
In accordance with the provisions of Section 408 of the Companies Act 2006, the Parent Company has not presented a separate income statement. A loss for the year ended 31 December 2021 of £1,211,000 (2020: £878,000) has been included in the consolidated income statement.
These financial statements were approved by the Board of Directors on 30 June 2022 and signed on its behalf by:
Mr Colin Bird
Executive Chairman Company Registration No. 02918391
Consolidated and Company Statements of Cash Flows
For the year ended 31 December 2021
|
|
|
Consolidated |
Company |
||
|
|
|
Year ended 31 December 2021 |
Year ended 31 December 2020 |
Year ended 31 December 2021 |
Year ended 31 December 2020 |
|
|
Notes |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
Net cash outflow from operating activities |
20 |
(837) |
(576) |
(507) |
(407) |
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
Proceeds from sale of PP&E |
|
- |
12 |
- |
- |
|
Deferred exploration expenditure |
|
(801) |
(271) |
- |
- |
|
Investment in subsidiary |
|
- |
- |
(345) |
(245) |
|
Loans to subsidiaries |
|
- |
- |
(766) |
(227) |
|
|
|
(801) |
(259) |
(1,111) |
(472) |
|
Cash flows from financing activities |
|
|
|
|
|
|
Proceeds from issuance of ordinary shares |
21 |
1,235 |
1,644 |
1,235 |
1,644 |
|
|
|
|
|
|
|
|
(Decrease)/increase in cash |
|
(403) |
809 |
(383) |
765 |
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of year |
|
1,128 |
330 |
1,094 |
329 |
|
Foreign exchange movement |
|
3 |
(11) |
(1) |
- |
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of year |
|
728 |
1,128 |
710 |
1,094 |
|
|
|
|
|
|
|
Notes to the financial statements
For the year ended 31 December 2021
|
General information |
|
Bezant Resources Plc (the "Company") is a company incorporated in England and Wales. The address of its registered office and principal place of business is disclosed in the corporate directory. The Company is quoted on the AIM Market ("AIM") of the London Stock Exchange and has the TIDM code of BZT. Information required by AIM Rule 26 is available in the section of the Group's website with that heading at www.bezantresources.com.
|
1. Accounting policies
|
1.1 |
Accounting policies The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated below.
Going concern basis of accounting The Group made a loss from all operations for the year ended 31 December 2021 after tax of £1,058,000 (2020: £1,026,000), had negative cash flows from operations and is currently not generating revenues. Cash and cash equivalents were £728,000 as at 31 December 2021. An operating loss is expected in the year subsequent to the date of these accounts and as a result the Company will need to raise funding to provide additional working capital to finance its ongoing activities. Management has successfully raised money in the past, but there is no guarantee that adequate funds will be available when needed in the future.
The COVID-19 pandemic announced by the World Health Organisation in 2020 initially had a markedly negative impact on global stock markets although many sectors and stock market losses have been recovered there is increased volatility as stock markets react to ongoing news in relation to the short-term and long-term impact of COVID-19 and the financially implications of the economic stimulus packages adopted by most governments to protect and / or support their economies this has also, affected currencies and general business activity and supply chains
Notwithstanding this the Company was able to complete and announce in 2020 a fundraising of £1,200,000 and secure a £1,000,000 funding facility. The Company developed a work at home policy and adopted local procedures for exploration activities to address the health and wellbeing of its directors, consultants and contractors, and their families, from COVID-19. Whilst in many countries, including the United Kingdom with universal vaccination programmes, COVID-19 appears to be under control the timing and extent of the impact and recovery from COVID-19 in other countries is still not certain as many countries particularly in the developing world have yet to fully implement successful vaccination programs accordingly COVID-19 remains an issue that requires ongoing monitoring in 2022 and likely at least into 2023 but possibly longer.
Based on the Board's assessment that the Company will be able to raise additional funds, as and when required, to meet its working capital and capital expenditure requirements, the Board have concluded that they have a reasonable expectation that the Group can continue in operational existence for the foreseeable future. For these reasons the Group continues to adopt the going concern basis in preparing the annual report and financial statements.
There is a material uncertainty related to the conditions above that may cast significant doubt on the Group's ability to continue as a going concern and therefore the Group may be unable to realise its assets and discharge its liabilities in the normal course of business.
The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or liabilities that might be necessary should the entity not continue as a going concern.
Basis of preparation The financial information, which incorporates the financial information of the Company and its subsidiary undertakings (the "Group"), has been prepared using the historical cost convention and in accordance with UK adopted International Accounting Standards including IFRS 6 'Exploration for and Evaluation of Mineral Resources'. |
|
|
Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and its subsidiary undertakings and have been prepared using the principles of acquisition accounting, which includes the results of the subsidiaries from their dates of acquisition.
All intra-group transactions, income, expenses and balances are eliminated fully on consolidation.
A subsidiary undertaking is excluded from the consolidation where the interest in the subsidiary undertaking is held exclusively with a view to subsequent resale and the subsidiary undertaking has not previously been consolidated in the consolidated accounts prepared by the parent undertaking.
|
|
|
Business combination On acquisition, the assets and liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired (i.e. discount on acquisition) is credited to profit and loss in the year of acquisition. The interest of non-controlling shareholders is stated at the minority's proportion of the fair values of the assets and liabilities recognised. Subsequently, any losses applicable to the non-controlling interest in excess of the non-controlling interest are allocated against the interests of the parent. |
|
|
New IFRS standards and interpretations At the date of authorisation of these financial statements, the company has not early adopted the following amendments to Standards and Interpretations that have been issued but are not yet effective:
|
||
|
|
Standard or Interpretation
|
Effective for annual periods commencing on or after |
|
|
|
Narrow scope amendments to IFRS 3, IAS 16 and IAS 37 |
1 January 2022 |
|
|
|
Annual improvements to IFRS Standards 2018-2020 |
1 January 2022 |
|
|
|
Amendments to IAS 1: Classification of Liabilities as Current or Non-Current
|
1 January 2023 |
|
|
|
Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies
|
1 January 2023 |
|
|
|
Amendments to IAS 8: Definition of Accounting Estimates
|
1 January 2023 |
|
|
|
Amendments to IAS 12: Deferred Tax Related to Assets and Liabilities arising from a Single Transaction.
|
1 January 2023
|
|
|
|
As yet, none of these have been endorsed for use in the UK and will not be adopted until such time as endorsement is confirmed. The directors do not expect any material impact as a result of adopting the standards and amendments listed above in the financial year they become effective. |
|
|
|
1.2 |
Significant accounting judgments, estimates and assumptions |
|
|
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting year are:
|
|
|
Share-based payment transactions: |
|
|
The Group measures the cost of equity-settled transactions with directors, consultants and employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using a Black and Scholes model which takes into account expected share volatility, strike price, term of the option and the dividend policy.
|
|
|
Impairment of investments, options and deferred exploration expenditure: |
|
|
|
The Group determines whether investments (including those acquired during the period), options and deferred exploration expenditure are impaired when indicators, based on facts and circumstances, suggest that the carrying amount may exceed its recoverable amount. Such indicators include the point at which a determination is made as to whether or not commercial mining reserves exist in the subsidiary or associate in which the investment is held or whether exploration expenditure capitalised is recoverable by way of future exploitation or sale, obviously pending completion of the exploration activities associated with any specific project in each segment.
|
|
|
|
Fair value of assets and liabilities acquired on acquisition of subsidiaries |
|
|
|
The Group determines the fair value of assets and liabilities acquired on acquisition of subsidiaries by reference to the carrying value at the date of acquisition and by reference to exploration activities undertaken and/or information that the Directors become aware of post acquisition (note 12).
|
|
|
1.3 |
Interest income |
|
|
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset. |
|
1.4 |
Share-based payments |
|
|
The Company offered share-based payments to certain directors and advisers by way of issues of share options, none of which to date have been exercised. The fair value of these payments is calculated by the Company using the Black Scholes option pricing model. The expense is recognised on a straight-line basis over the year from the date of award to the date of vesting, based on the Company's best estimate of shares that will eventually vest (note 18). |
|
1.5 |
Financial instruments |
|
|
Recognition, initial measurement and derecognition Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument, and are measured initially at fair value adjusted by transactions costs, except for those carried at fair value through profit or loss, which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities are described below.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and subsequent 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).
|
|
|
|
|
|
For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are classified into the following categories upon initial recognition: • amortised cost • fair value through profit or loss ("FVPL") • equity instruments at fair value through other comprehensive income ("FVOCI") • debt instruments at FVOCI
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 expected credit losses of trade receivables which is presented within other expenses. |
|
|
Classifications are determined by both: • The entities business model for managing the financial asset; • The contractual cash flow characteristics of the financial assets. |
|
|
Subsequent measurement 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 FVPL): • 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.
Financial assets at fair value through profit or loss (FVPL) 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 FVPL. All derivative financial instruments fall into this category, except for those designated and effective as hedging instruments, for which the hedge accounting requirements apply (see below).
Equity instruments at fair value through other comprehensive income (Equity FVOCI) Investments in equity instruments that are not held for trading are eligible for an irrevocable election at inception to be measured at FVOCI. Under Equity FVOCI, subsequent movements in fair value are recognised in other comprehensive income and are never reclassified to profit or loss. Dividends from these investments continue to be recorded as other income within the profit or loss unless the dividend clearly represents return of capital.
Debt instruments at fair value through other comprehensive income (Debt FVOCI) Financial assets with contractual cash flows representing solely payments of principal and interest and held within a business model of collecting the contractual cash flows and selling the assets are accounted for at debt FVOCI.
|
|
|
|
|
|
Any gains or losses recognised in OCI will be reclassified to profit or loss upon derecognition of the asset. |
|
|
IFRS 9's impairment requirements use more forward-looking information to recognize expected credit losses - the 'expected credit losses ("ECL") model'.
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 at the amount equal to the expected lifetime credit losses. In using this practical expedient, the Group uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix.
Classification and measurement of financial liabilities
The Group's financial liabilities include trade and other payables.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives and financial liabilities designated at FVPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss (other than derivative financial instruments that are designated and effective as hedging instruments).
All interest-related charges and, if applicable, changes in an instrument's fair value that are reported in profit or loss are included within finance costs or finance income.
|
|
1.6 |
Cash and cash equivalents |
|
|
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. |
|
1.7 |
Trade and other receivables |
|
|
Trade receivables are recognised and carried at original invoice amount less an allowance for any expected credit loss amounts.
|
|
1.8 |
Foreign currency transactions and balances |
|
|
(i) Functional and presentational currency Items included in the Group's financial statements are measured using Pounds Sterling ("£"), which is the currency of the primary economic environment in which the Group operates ("the functional currency"). The financial statements are presented in Pounds Sterling ("£"), which is the functional currency of the Company and is the Group's presentational currency.
The individual financial statements of each Group company are presented in the functional currency of the primary economic environment in which it operates.
|
|
|
(ii) Transactions 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 income statement.
Transactions in the accounts of individual Group companies are recorded at the rate of exchange ruling on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rates ruling at the balance sheet date. All differences are taken to the income statement.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the year. Exchange differences arising recognised in other comprehensive income and transferred to the Group's translation reserve within equity as 'Other reserves'. Upon disposal of foreign operations, such translation differences are derecognised as an income or as expenses in the year in which the operation is disposed of in other comprehensive income. |
|
1.9 |
Taxation |
|
|
Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset. Deferred tax is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax asset is not recognised when it arises from the initial recognition of an asset or liability in a transaction at the time of the transaction, affects neither accounting profit nor taxable profit. Deferred tax balances are not discounted. |
|
1.10 |
Plant and equipment |
|
|
Plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset's carrying amount, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the profit and loss account during the financial year in which they are incurred.
Depreciation on these assets is calculated using the diminishing value method to allocate the cost less residual values over their estimated useful lives as follows: |
|
|
|
|
|
Plant and equipment - 33.33% Fixtures and fittings - 7.5%
The assets' residual values and useful lives are reviewed, and adjusted if appropriate at the balance sheet date. |
|
1.11 |
Impairment of assets |
|
|
At each reporting date, the Company reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in use, is compared to the asset's carrying value. Any excess of the asset's carrying value over its recoverable amount is expensed to the profit and loss account. |
|
1.12 |
Trade and other payables |
|
|
Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. |
|
1.13 |
Exploration, evaluation and development expenditure |
|
|
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves. Accumulated costs in relation to an abandoned area are written off in full in the year in which the decision to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are transferred to development assets and amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.
Costs of site restoration are provided when an obligating event occurs from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have been determined using estimates of future costs, current legal requirements and technology on a discounted basis.
|
|
|
Any changes in the estimates for the costs are accounted for on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly, the costs have been determined on the basis that the restoration will be completed within one year of abandoning the site. |
|
1.14 |
Investments |
|
|
Investments in subsidiaries, joint ventures and associated companies are carried at cost less accumulated impairment losses in the Company's balance sheet. On disposal of investments in subsidiaries, joint ventures and associated companies, the difference between disposal proceeds and the carrying amounts of the investments are recognised in profit or loss. |
|
2. |
Segment reporting For the purposes of segmental information, the operations of the Group are focused in geographical segments, namely the UK, Argentina, Namibia, Zambia, Botswana, Cyprus and the Philippines and comprise one class of business: the exploration, evaluation and development of mineral resources. The UK is used for the administration of the Group.
The Group's loss before tax arose from its operations in the UK, Argentina, Namibia, Zambia, Botswana, Philippines and Cyprus. |
|
|
|
|
|
|
|
For the year ended 31 December 2021 |
|
|
|
|
|
|
|
||||||||
|
|
|
Continuing operations |
|
|||||||||||||
|
|
|
UK |
Argentina |
Philippines |
Namibia |
Zambia |
Botswana |
Cyprus |
Total |
|||||||
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|||||||
|
|
Consolidated loss before tax |
(945) |
(87) |
- |
(3) |
- |
(1) |
- |
(1,036) |
|||||||
|
|
Included in the consolidated loss before tax are the following income/(expense) items: |
|
|
|
|
|
|
|
|
|||||||
|
|
Foreign currency loss |
(22) |
- |
- |
- |
- |
- |
- |
(22) |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
Total Assets |
845 |
5,201 |
49 |
1,840 |
- |
792 |
|
8,727 |
|||||||
|
|
Total Liabilities |
(506) |
(25) |
- |
- |
- |
- |
- |
(531) |
|||||||
|
|
For the year ended 31 December 2020 |
|
|
|
|
|
|
|
||||||||
|
|
|
Continuing operations |
|
|||||||||||||
|
|
|
UK |
Argentina |
Philippines |
Namibia |
Zambia |
Botswana |
Cyprus |
Total |
|||||||
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|||||||
|
|
Consolidated loss before tax |
(860) |
(53) |
- |
(32) |
(70) |
- |
- |
(1,015) |
|||||||
|
|
Included in the consolidated loss before tax are the following income/(expense) items: |
|
|
|
|
|
|
|
|
|||||||
|
|
Foreign currency loss |
(11) |
- |
- |
- |
- |
- |
- |
(11) |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
Total Assets |
1,117 |
4,834 |
- |
1,405 |
208 |
- |
- |
7,564 |
|||||||
|
|
Total Liabilities |
(404) |
(42) |
- |
(107) |
- |
- |
- |
(553) |
|||||||
|
3. |
Operating expenses |
|
|
|
|
|
Year ended 31 December 2021 |
Year ended 31 December 2020 |
|
|
|
£'000 |
£'000 |
|
|
|
|
|
|
|
On-going operating expenses |
788 |
657 |
|
|
Depreciation and amortisation |
- |
1 |
|
|
Share option expense |
160 |
380 |
|
|
|
948 |
1,038 |
|
4. |
Operating loss |
|
|
|
|
|
Year ended 31 December 2021 |
Year ended 31 December 2020 |
|
|
The Group's operating loss is stated after charging: |
£'000 |
£'000 |
|
|
|
|
|
|
|
Parent Company auditor's remuneration - audit services |
32 |
28 |
|
|
Parent Company auditor's remuneration - tax services |
- |
2 |
|
|
Parent Company auditor's remuneration - other services |
2 |
1 |
|
|
Operating lease - premises |
15 |
15 |
|
|
Foreign exchange loss |
22 |
8 |
|
5. |
Impairment of assets |
|
|
|
|
|
|
Year ended 31 December 2021 |
Year ended 31 December 2020 |
|
|
|
|
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
Impairment loss on loan to associate (1) |
- |
- |
|
|
|
Provision for impairment of investment - Kalengwa Project (Zambia) (2) |
110 |
- |
|
|
|
|
110 |
- |
|
|
|
|
|
|
|
|
|
(1) The Mankayan project owned by Crescent Mining and Development Corporation was fully impaired in 2016 due to then significant lingering uncertainty concerning the political and tax environment in the Philippines. Although the political and tax environment has subsequently improved it was not considered prudent in the 2019 accounts to write back any of the provision made in prior years.
In 2019, the Group sold 80% of its interest in the Mankayan copper-gold project and derecognised its investment in its subsidiary, Asean Copper Investments Limited and the loan balances outstanding have been fully impaired.
|
|||
|
|
On 28 April 2021 the Company announced that it had served notice of termination of its transaction agreement (the "Transaction Agreement") dated 4 October 2019 with Mining and Minerals Industries Holding Pte. Ltd. ("MMIH"), a private company incorporated in Singapore, with respect to the sale of 80 per cent. of the Company's interest in the Mankayan copper‐gold project in the Philippines (the "Mankayan Project") to MMJV Pte. Ltd. ("MMJV"), a 100 percent subsidiary of MMIH, (the "Transaction") as MMIH has not met its Total Funding Commitment as defined in the Transaction Agreement and that the Company, would explore and pursue options including the possibility of re‐positioning the Mankayan project within the Company's portfolio of copper and gold assets but in the meantime the previous provisions against the Company's investment in the Mankayan Project writing it down to Nil have not been written back. |
|||
|
|
|
|
|
On 13 September 2021 the Company, entered into a conditional agreement with IDM Mankayan Pty Ltd ("IDM"), a company incorporated in Australia, to take the Mankayan Project in the Philippines forward (the "IDM Agreement"). The IDM Agreement has completed and IDM and now owns 27.5% of IDM. The Mankayan project's MPSA was originally issued for a standard 25 year period, which expired on 11 November 2021, and as announced by the Company on 18 March 2022 has been renewed for a second 25 year term with effect from 12 November 2021.
|
|
|
(2) In light of technical and regulatory issues related to the Kalengwa project the Company has with the agreement of its partners agreed to pause work on this project pending resolution of these issues and accordingly has decided with effect from 31 December 2021 to make a full provision against its investment in the Kalengwa project. |
|
6. |
Taxation |
|
|
|
|
|
Year ended 31 December 2021 |
Year ended 31 December 2020 |
|
|
UK Corporation tax |
£'000 |
£'000 |
|
|
- current year |
- |
- |
|
|
Total current tax charge |
- |
- |
|
|
|
|
|
|
|
Factors affecting the tax charge for the year: |
|
|
|
|
Loss on ordinary activities before tax |
(1,058) |
(1,026) |
|
|
|
|
|
|
|
Loss on ordinary activities multiplied by the |
|
|
|
|
standard rate of UK corporation tax of 19% (2020: 19%) |
(201) |
(196) |
|
|
Effects of: |
|
|
|
|
Non-deductible expenses |
- |
- |
|
|
Tax losses (unprovided deferred tax) |
201 |
196 |
|
|
Total tax charge |
- |
- |
|
|
At 31 December 2021, the Group had unused losses carried forward of £13,825,000 (2020: £13,037,000) available for offset against suitable future profits. Most of the losses were sustained in the United Kingdom.
The Group's deferred tax asset as at 31 December 2021 that arose from these losses has not been recognised in respect of such losses due to the uncertainty of future profit streams. The contingent deferred tax asset, which has been measured at 25%, is estimated to be £3,456,000 (2020: £2,336,000). A net deferred tax asset arising from these losses has not been established as the Directors have assessed the likelihood of future profits being available to offset such deferred tax assets is uncertain.
|
|
7. |
Loss per share |
|
|
The basic and diluted loss per share have been calculated using the loss attributable to equity holders of the Company for the year ended 31 December 2021 of £1,058,000 (2020: £977,000) of which £1,058,000 (2020: £977,000) was from Continuing Operations and £nil (2020: nil) was from Discontinued Operations. The basic loss per share was calculated using a weighted average number of shares in issue of 4,015,035,915 (2020: 2,046,170,268). The diluted loss per share has been calculated using a weighted average number of shares in issue and to be issued of 4,813,590,723 (2020: 2,397,420,278). The diluted loss per share and the basic loss per share are recorded as the same amount, as conversion of share options decreases the basic loss per share, thus being anti-dilutive. |
|
8. |
Directors' emoluments |
|
|
|
|
|
Year ended 31 December 2021 |
Year ended 31 December 2020 |
|
|
|
£'000 |
£'000 |
|
|
The Directors' emoluments of the Group are as follows: |
|
|
|
|
Wages, salaries, fees and share options |
290 |
427 |
|
|
Refer to page 17 for details of the remuneration of each director. |
|
|
|
9. |
Employee information |
|
|
|
|
|
Year ended 31 December 2021 |
Year ended 31 December 2020 |
|
|
Average number of employees including directors and consultants: |
|
|
|
|
Management and technical |
5 |
5 |
|
|
|
|
|
|
|
|
Year ended 31 December 2021 |
Year ended 31 December 2020 |
|
|
|
£'000 |
£'000 |
|
|
Salaries (excluding directors' remuneration) |
- |
- |
|
10. |
Plant and equipment |
|
|
||||
|
|
|
Consolidated |
Company |
||||
|
|
|
2021 |
2020 |
2021 |
2020 |
||
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
||
|
|
Plant and equipment |
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
Cost |
|
|
|
|
||
|
|
At beginning of year |
67 |
68 |
60 |
60 |
||
|
|
Exchange differences |
- |
(1) |
- |
- |
||
|
|
At end of year |
67 |
67 |
60 |
60 |
||
|
|
Depreciation |
|
|
|
|
||
|
|
At beginning of year |
64 |
64 |
59 |
58 |
||
|
|
Charge for the year |
1 |
1 |
1 |
1 |
||
|
|
Exchange differences |
- |
(1) |
- |
- |
||
|
|
At end of year |
65 |
64 |
60 |
59 |
||
|
|
Net book value at end of year |
2 |
3 |
- |
1 |
||
|
11. |
Investments |
|
||||
|
|
|
Consolidated |
Company |
|||
|
|
|
2021 |
2020 |
2021 |
2020 |
|
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
|
Loan to associate (note 11.1) |
211 |
211 |
124 |
3,980 |
|
|
|
Impairment provision (note 5) |
(211) |
(211) |
(124) |
(3,980) |
|
|
|
Investment in associate |
49 |
- |
49 |
- |
|
|
|
Investment in subsidiaries |
- |
- |
2,978 |
2,077 |
|
|
|
Impairment Provision (note 5) |
- |
- |
(208) |
- |
|
|
|
Other Investments |
- |
- |
228 |
- |
|
|
|
Loan to subsidiaries |
- |
- |
3,779 |
3,022 |
|
|
|
Provision for subsidiary loan recoverability |
- |
- |
(760) |
(583) |
|
|
|
|
49 |
- |
6,066 |
4,516 |
|
|
11.1 |
The Group's share of the results of its associate and its assets and liabilities:
The Mankayan project owned by Crescent Mining and Development Corporation was fully impaired in 2016 due to then significant lingering uncertainty concerning the political and tax environment in the Philippines. Although the political and tax environment has subsequently improved it was not considered prudent in the 2019 accounts to write back any of the provision made in prior years.
Termination of Agreement with MMIH: In 2019 the Company sold 80% of its interest in the Mankayan copper-gold porphyry project in the Philippines to MMIH of Singapore who intend a reverse takeover or listing on the Singapore or other suitable exchange. Post the period end on 28 April 2021 the Company announced it had served notice of termination of its transaction agreement (the "Transaction Agreement") dated 4 October 2019 with Mining and Minerals Industries Holding Pte. Ltd. ("MMIH"), a private company incorporated in Singapore, with respect to the sale of 80 per cent. of the Company's interest in the Mankayan copper‐gold project in the Philippines (the "Mankayan Project") to MMJV Pte. Ltd. ("MMJV"), a 100 percent subsidiary of MMIH, (the "Transaction") as MMIH has not met its Total Funding Commitment as defined in the Transaction Agreement. Bezant, is exploring and pursuing options including the possibility of re‐positioning the Mankayan project within the Company's portfolio of copper and gold assets. As mentioned in note 5 the previous provisions writing the Group investment in the Mankayan Project to Nil have not been written back. Due to the termination of the Transaction Agreement the contingent consideration due to the Company under the Transaction Agreement of S$10m shares in a ListCo has not been recognised. |
|
|
On 13 September 2021 the Company, entered into a conditional agreement with IDM Mankayan Pty Ltd ("IDM"), a company incorporated in Australia, to take the Mankayan Project in the Philippines forward (the "IDM Agreement"). The IDM Agreement has completed and IDM and now owns 27.5% of IDM but has no management control over or right to appoint directors of IDM which is why the shareholding is held as an investment at cost. The Mankayan project's MPSA was originally issued for a standard 25 year period, which expired on 11 November 2021, and as announced by the Company on 18 March 2022 has been renewed for a second 25 year term with effect from 12 November 2021.
|
|
11.2 |
Investments - subsidiary undertakings |
|
|
The Company's significant subsidiary undertakings held as fixed asset investments as at 31 December 2021 were as follows: |
|||
|
|
|
Country of incorporation |
Principal Activity |
Percentage of ordinary share capital held |
|
|
Held directly |
|
|
|
|
|
Tanzania Gold Limited |
Ireland |
Holding Company |
100% |
|
|
Virgo Resources Limited |
Australia |
Holding Company |
100% |
|
|
KPZ International Limited |
BVI |
Holding Company |
30% |
|
|
Hope Copper Gold Investments Ltd (BVI) |
BVI |
Holding Company |
100% |
|
|
Held indirectly |
|
|
|
|
|
Anglo Tanzania Gold Limited |
England |
Gold and copper exploration |
100% |
|
|
Eureka Mining & Exploration SA |
Argentina |
Gold and copper exploration |
100% |
|
|
Puna Metals SA |
Argentina |
Gold and copper exploration |
100% |
|
|
Hepburn Resources Pty Ltd |
Australia |
Gold and copper exploration |
100% |
|
|
Hope and Gorob Mining Pty Ltd |
Namibia |
Gold and copper exploration |
70% |
|
|
Hope Namibia Exploration Pty Ltd |
Namibia |
Gold and copper exploration |
80% |
|
|
KPZ Processing Zone Limited |
Zambia |
Gold and copper exploration |
30% |
|
|
Metrock Resources Pty Ltd |
Australia |
Holding Company |
100% |
|
|
Coastal Resources Pty Ltd |
Australia |
Gold and copper exploration |
100% |
|
|
Coastal Minerals Proprietary Limited |
Botswana |
Gold and copper exploration |
100% |
|
|
Cypress Sources Proprietary Limited |
Botswana |
Gold and copper exploration |
100% |
|
12. |
Acquisition of subsidiaries |
||||
|
|
|
||||
|
|
12.1 Acquisition of Metrock Resources Limited |
||||
|
|
Botswana On 12 February 2021 the Company completed the acquisition of 100% of Metrock Resources Pty Ltd and its interest in the Kanye Manganese Project.
The fair value of the assets and liabilities acquired were as follows: |
||||
|
|
|
2021 |
|
|
|
|
|
|
£'000 |
|
|
|
|
|
Consideration |
|
|
|
|
|
|
Equity consideration |
|
|
|
|
|
|
- Ordinary shares (issued) |
633 |
|
|
|
|
|
- Options |
57 |
|
|
|
|
|
Cash consideration |
13 |
|
|
|
|
|
|
703 |
|
|
|
|
|
Fair value of assets and liabilities acquired |
(171) |
|
|
|
|
|
|
|
|
|
|
|
|
Deemed fair value of exploration assets acquired |
532 |
|
|
|
|
|
|
|
|
12.2 Acquisition of Virgo Resources Pty Ltd |
|
|
On 18 February 2021 the Company settled Virgo Resources Pty Ltd creditors by issuing 19,703,703 shares totalling £44,333. The balance of deferred consideration shares to be issued at 31 December 2021 is 15,763,889 shares (note 15). |
|
13. |
Exploration and evaluation assets |
||||
|
|
|
Consolidated |
Company |
||
|
|
|
2021 |
2020 |
2021 |
2020 |
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
Balance at beginning of year |
6,405 |
4,778 |
3,129 |
3,129 |
|
|
Acquisitions during year |
|
|
- |
- |
|
|
- Namibia (note 12) |
- |
1,283 |
- |
- |
|
|
- Zambia |
- |
131 |
|
|
|
|
- Botswana (note 12) |
532 |
- |
- |
- |
|
|
Exploration expenditure |
1,073 |
218 |
- |
- |
|
|
Provision for impairment (note 5) |
(110) |
- |
- |
- |
|
|
Exchange differences |
- |
(5) |
- |
- |
|
|
Carried forward at end of year |
7,900 |
6,405 |
3,129 |
3,129 |
|
13.1 |
Exploration Assets |
|
|
Argentina The amount of capitalised exploration and evaluation expenditure relates to 12 licences comprising the Eureka Project and are located in north-west Jujuy near to the Argentine border with Bolivia and are formally known as Mina Eureka, Mina Eureka II, Mina Gino I, Mina Gino II, Mina Mason I, Mina Mason II, Mina Julio I, Mina Julio II, Mina Paul I, Mina Paul II, Mina Sur Eureka and Mina Cabereria Sur, covering, in aggregate, an area in excess of approximately 5,500 hectares and accessible via a series of gravel roads. All licences remain valid and in May 2019 the Company obtained a two-year renewal of its Environmental Impact.
Assessment (EIA) approvals in respect of its Mina Eureka, Mina Gino I, Mina Gino II, Mina Mason I, Mina Mason II, Mina Julio I, Mina Julio II, Mina Paul I, Mina Paul II, being the 9 northern most licences which are the intended focus of a future exploration programme the Company is in the process of applying for the extension of the validity period of the May 2019 EIA approvals.
Notwithstanding the absence of new exploration activities on-site during the period the directors, given their intention post COVID-19 in Argentina to focuss on finding a joint venture partner for the project have assessed the value of the intangible asset having considered any indicators of impairment, and in their opinion, based on a review of the expiry dates of licences, future expected availability of funds to develop the Eureka Project and the intention to continue exploration and evaluation, no impairment is necessary. The capitalised cost at 31 December 2021 was £4,776,069. |
|
|
Namibia On 14 August 2020 the Company completed the acquisition of 100% of Virgo Resources Ltd and its interests in the Hope Copper-Gold Project in Namibia. On 14 January 2021 and 2 June 2021 announced positive results in relation to exploration activities undertaken post acquisition which support the Company's confidence in the Hope Copper-Gold Project. Post acquisition there have been no indications that any impairment provisions are required in relation to the carrying value of the Hope Copper-Gold Project. The capitalised cost at 31 December 2021 was £2,120,337.
|
|
|
Zambia On 27 April 2020 the Company entered into a binding agreement with KPZ International Limited ("KPZ Int") (the "KPZ Agreement") in relation to the acquisition of a 30 per cent. interest in the approximate 974 km2 large scale exploration licence numbered 24401-HQ-LEL in the Kalengwa greater exploration area in The Republic of Zambia (the "Licence") (the "Kalengwa Project") by acquiring a 30 per cent. shareholding in KPZ Int. Under the terms of the KPZ Agreement the Company has the right to appoint the majority of directors to the Board of KPZ Int and has operational control of the Kalengwa Project therefore in accordance with IFRS 10 the Company's investment in KPZ Int has been consolidated. The Licence is held by Kalengwa Processing Zone Ltd ("KPZ"), a 100 per cent. (less one share) Zambian subsidiary of KPZ Int, and is for the exploration of copper, cobalt, silver, gold and certain other specified minerals. The Licence was granted on 2 April 2019 and is valid for an initial period up to 1 April 2023. Cash consideration for the acquisition was US$250,000 (₤202,493) which was settled on 6 November 2020 by the issue of 76,923,077 shares and costs of £23,775. On 12 April 2021 and 24 April 2021 the Company announced positive results in relation to exploration activities undertaken and on 20 September 2021 further exploration results and the Company's intention to undertake a comparative review of recent holes and historical holes and to consider further drilling to re-test geophysical targets. Post period end in light of technical and regulatory issues related to the Kalengwa project the Company has with the agreement of its partners agreed to pause work on this project pending resolution of these issues and accordingly has decided with effect from 31 December 2021 to make a full provision against its investment in the Kalengwa project.
|
|
|
Botswana On 12 February 2021 the Company further to its announcement on 22 December 2020 announced the completion of the acquisition of 100% of Metrock Resources Ltd ("Metrock") and its manganese mineral exploration licences in Southern Botswana comprising the Kanye Manganese Project (the "Kanye Manganese Project"). The Kanye Manganese Project i) comprises a 4,043 sq km land package with 125 km of potential on trend manganese mineralisation across the licences ii) has historical trenching results have yielded in the case on one prospect of between 53% and 74% manganese oxide ("MnO"), and iii) project area is near the ground of a TSX listed public company that has a preliminary economic assessment showing high rates of return based on a MnO grade of 27.3.
On 24 June 2021 the Company announced it had completed reconnaissance mapping, prospecting and sampling work on the Kanye Manganese Project and that i) Up to four historic manganese occurrences were successfully located and sampled in the field within an 8km-belt ii) 40 grab samples were obtained which assayed from traces up to high-grade results of 67.18% MnO occurring at the Moshaneng borrow pit and 68.01% MnO at the Mheelo prospect; iii) the Mheelo prospect is located just 6km from the Giyani Metals K-Hill manganese project where a Mineral Resource Estimate was complted in march 2022 and an April 2021 PEA indicates an 80% IRR) iv) the Company plans to follow-up the main targets with clearance/trenching by mechanical excavator to facilitate detailed mapping, prospecting and more systematic sampling ; and confirmed targets will be drill tested to define lateral and depth extent of deposits.
On 31 January 2022 the Company announced the completion of a geological mapping that indicates that the target horizon hosting high-grade manganese may extend continuously for at least 4km between the Loltware and Moshaneng prospects.
On 22 March 2022 the Company announced an update of its trenching and soil programme that highlighted i) Soil sampling between the Loltware manganese occurrence and the Moshaneng Borrow Pit has confirmed a strong, continuous soil anomaly of greater than 2km lateral extent and up to 750m wide based on hand-held XRF analyses of sieved soils ii) Trenching at the Loltware prospect intersected zones of in-situ manganese mineralisation based on hand-held XRF analysis of one metre channel samples iii) Trench channel samples have been dispatched for full laboratory analysis iv) Based on preliminary evaluation, it appears that Loltware is a distinct manganese sub-zone, with the larger target located around and southeast of the Borrow Pit and iv) Once trench assay samples are received and evaluated preparations will be made for a maiden drill programme at the Kanye project.
|
|
|
|
|
|
Note 12.1 provides details of the deemed fair value of the exploration assets of £532,000 arising on the acquisition of Metrock. Post-acquisition there have been no indications that any impairment provisions are required in relation to the carrying value of the Kanye Manganese Project.
The capitalised cost at 31 December 2021 was £791,851.
|
|
|
Cyprus On 11 November 2021 the Company announced that on 10 November 2021it had entered into a Joint Venture Agreement with Caerus Mineral Resources PLC in relation to three of Caerus's copper gold projects in Cyprus.
On 15 December 2021 the Company announced the results from initial assay sampling at the Troulli Project that indicated the potential for development of a shallow gold resource as well as the opportunity to deepen and extend the current open pit to access the sulphides which contain both copper and gold.
On 18 January 2022 the Company announced an update on the JV Projects and the objectives set for 2022 focussing on the rapid development of the Troulli Mine Project. On 24 February the Company announced the results from both dump sampling and drilling for the Troulli, Kokkinapetre and Anglisides JV Projects.
Troulli Project: stockpile sampling average grade of 1.2% Cu; tailings sampling at double projected grade; and positive copper and gold mineralisation drill results outside main Troulli deposit area Kokkinapetra Project: Drilling of the 1.5km strike length of the Kokkinapetra extension of the Troulli deposit returned extremely encouraging drill results including 0.85% Cu eq over 28.10m from surface, 1.0g/t Au over 10.8m and 0.66% Cu eq over 29.2, also from surface. Ground geophysical survey will now be conducted to better define the next round of drill targets. Anglsides Project: Validation drilling of the Troulli satellite project, Anglisides returned equally encouraging results with a peak intercept of 1.18% Cu eq over 40m from surface. A more comprehensive drilling programme will now be undertaken with the objective of defining a high-grade resource that can be processed off-site at the future Troulli plant site.
On 6 April 2022 the Company announced the results of an independent Initial Resource Estimate: At a selected cut-off grade of 0.5% Cu, a hard rock resource estimate of approximately 2.7 million tonnes at a Cu equivalent grade of 0.74% CuEq (0.51% Cu and 0.26 g/t Au) has been established. A Total Hard Rock Resource Estimate of approximately 4.9 million tonnes at 0.41% Cu and 0.2 g/t Au for 20,000 t of Cu metal and 31,000 ounces of Au, from a cut-off grade of 0.26% Cu equivalent.
On 3 May 2022 the Company announced further drill results from its Troulli JV Project.
On 8 June 2022 the Company announced further drill results from its Anglisides Licence, a satellite project of the Troulli Joint Venture.
The capitalised cost at 31 December 2021 was £228,307.
|
|
14. |
Trade and other receivables |
||||
|
|
|
Consolidated |
Company |
||
|
|
|
2021 |
2020 |
2021 |
2020 |
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
Due within one year: |
|
|
|
|
|
|
VAT recoverable |
19 |
10 |
19 |
10 |
|
|
Other debtors |
29 |
18 |
7 |
6 |
|
|
|
48 |
28 |
26 |
16 |
|
15. |
Trade and other payables |
||||
|
|
|
Consolidated |
Company |
||
|
|
|
2021 |
2020 |
2021 |
2020 |
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
Trade creditors |
113 |
229 |
85 |
75 |
|
|
Directors |
135 |
50 |
135 |
50 |
|
|
Accruals |
240 |
148 |
240 |
148 |
|
|
Deferred acquisition costs (note 12) |
43 |
126 |
43 |
126 |
|
|
|
531 |
553 |
503 |
399 |
|
16. |
Financial instruments |
|
|
|
|
(a) Interest rate risk |
|
|
|
|
As the Group has no borrowings, it is not exposed to interest rate risk on financial liabilities. The Group's interest rate risk arises from its cash held on short term deposit, which is not significant. |
||
|
|
(b) Net fair value |
|
|
The net fair value of financial assets and financial liabilities approximates to their carrying amount as disclosed in the balance sheet and in the related notes. |
|
|
(c) Foreign currency risk |
|
|
The Group undertakes certain transactions denominated in foreign currencies, hence exposure to exchange rate fluctuations arise. The Group has not hedged against currency depreciation but continues to keep the matter under review. |
|
|
The carrying amount of the Group's foreign currency denominated monetary assets and monetary liabilities at the reporting date is as follows: |
||||
|
|
|
Assets |
Liabilities |
||
|
|
|
2021 |
2020 |
2021 |
2020 |
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
US Dollars |
9 |
2 |
15 |
15 |
|
|
AU Dollars |
2 |
5 |
111 |
111 |
|
|
AR Pesos |
9 |
33 |
42 |
42 |
|
|
NA Dollars |
- |
|
1 |
1 |
|
|
|
20 |
40 |
169 |
169 |
|
|
Sensitivity analysis A 10 per cent strengthening of the British Pound against the foreign currencies listed above at 31 December would have increased/(decreased) profit or loss by the amounts shown below. The analysis assumes that all other variables remain the same. The analysis is performed on the same basis as at 31 December 2020.
|
|
||||
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
|
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
|
US Dollars |
|
|
(1) |
(1) |
|
|
|
AU Dollars |
|
|
- |
11 |
|
|
|
AR Pesos |
|
|
1 |
(1) |
|
|
|
A 10 per cent weakening of the British Pound against the foreign currencies listed above at 31 December would have had the equal but opposite effect to the amounts shown above, on the basis that all other variables remain constant. |
|
|
|
|
|
|
|
(d) Financial risk management |
||
|
|
The Directors recognise that this is an area in which they may need to develop specific policies should the Group become exposed to wider financial risks as the business develops. |
||
|
|
(e) Liquidity risk management |
|
|
The Directors have regard to the maintenance of sufficient cash resources to fund the Group's immediate operating and exploration activities. Cash resources are managed in accordance with planned expenditure forecasts. |
|
|
(f) Capital risk management |
|
|
The Directors recognise that the Group's capital is its equity reserves. The Group's current objective is to manage its capital in a manner that ensures that the funds raised meet its operating and exploration expenditure commitments. Currently, the Company does not seek any borrowings to operate the Company and all future supplemental funding is raised through investors as and when required in order to finance working capital requirements and potential new project opportunities, as they may develop. |
|
17. |
Share capital |
|
|||
|
|
|
|
|
2021 |
2020 |
|
|
Number |
|
|
£'000 |
£'000 |
|
|
Authorised |
|
|
|
|
|
|
5,000,000,000 ordinary shares of 0.002p each |
100 |
100 |
||
|
|
5,000,000,000 deferred shares of 0.198p each |
9,900 |
9,900 |
||
|
|
|
|
|
10,000 |
10,000 |
|
|
|
|
|
|
|
|
|
Allotted ordinary shares, called up and fully paid |
|
|
||
|
|
As at beginning of the year |
71 |
25 |
||
|
|
Share subscription |
18 |
24 |
||
|
|
Shares issued for exploration project acquisitions |
6 |
12 |
||
|
|
Shares issued on exercise of warrants |
2 |
10 |
||
|
|
Shares issued to settle third party fees |
1 |
- |
||
|
|
Total ordinary shares at end of year |
98 |
71 |
||
|
|
|
|
|
||
|
|
Allotted deferred shares, called up and fully paid |
|
|
||
|
|
As at beginning of the period |
1,978 |
1,978 |
||
|
|
Total deferred shares at end of period (1) |
1,978 |
1,978 |
||
|
|
Ordinary and deferred as at end of year |
2,076 |
2,049 |
||
|
|
|
|
|
|
|
|
|
|
Number of shares 2021 |
Number of shares 2020 |
||
|
|
Ordinary share capital is summarised below: |
|
|
||
|
|
As at beginning of the year |
3,543,699,116 |
1,269,755,181 |
||
|
|
Share subscription |
923,076,923 |
1,218,750,000 |
||
|
|
Shares issued for exploration project acquisitions |
304,064,999(2) |
578,318,935 |
||
|
|
Shares issued on exercise of warrants |
92,187,500 |
476,875,000 |
||
|
|
Shares issued to settle third party fees |
50,000,000(3) |
- |
||
|
|
As at end of year |
4,913,028,538 |
3,543,699,116 |
||
|
|
|
|
|
||
|
|
|
|
|
|
|
Deferred share capital is summarised below: |
|
|
|
|
As at beginning of the year (1) |
998,773,038 |
998,773,038 |
|
|
As at end of year |
998,773,038 |
998,773,038 |
|
|
(1) The Deferred Shares have very limited rights and are effectively valueless as they have no voting rights and have no rights as to dividends and only very limited rights on a return of capital. The Deferred Shares are not admitted to trading or listed on any stock exchange and are not freely transferable. |
|
|
(2) The 304,064,999 shares issued during the year were detailed in the Company's announcements' dated;
a) 12 February 2021 when the Company announced the completion of its acquisition of 100% of Metrock Resources Pty Ltd and its interest in the Kanye Manganese Project. The acquisition consideration included the issue of 234,597,407 ordinary shares to the vendors of the project (note 12.1);
b) 18 February 2021 when the Company announced the issue of 35,467,592 shares in relation to the acquisition of Virgo Resources Ltd which completed on 14 August 2020 (note 12.2); and
c) 1 March 2021 when the Company announced the issue of 34,000,000 deferred acquisition shares issued to the vendors of Virgo Resources Ltd. |
|
|
(3) On 29 November 2021 the Company issued 50,000,000 shares relating to a funding facility fee announced on 23 November 2021. |
|
|
|
2021 |
2020 |
|
|
|
£'000 |
£'000 |
|
|
The share premium was as follows: |
|
|
|
|
As at beginning of year |
39,125 |
36,429 |
|
|
Share subscription |
1,181 |
951 |
|
|
Shares issued to settle third party fees |
71 |
- |
|
|
Shares issued - Acquisitions |
44 |
- |
|
|
Share issued - 2020 Acquisitions1 |
(1,120) |
1,120 |
|
|
Share issue costs |
(144) |
(105) |
|
|
Warrants lapsed |
- |
- |
|
|
Warrants exercised |
146 |
730 |
|
|
Warrants issued |
- |
- |
|
|
As at end of year |
39,303 |
39,125 |
|
|
Each fully paid ordinary share carries the right to one vote at a meeting of the Company. Holders of ordinary shares also have the right to receive dividends and to participate in the proceeds from sale of all surplus assets in proportion to the total shares issued in the event of the Company winding up.
|
1 Share premium on acquisitions during the year to 31 December 2020 have been reclassified to merger reserves during the year.
|
18. |
Share-based payments |
|
At the year end, the Company had the following share-based payment plans involving equity settled share options and warrants in existence:
|
Scheme |
Number |
Date granted |
Exercise price |
Maximum term |
Vesting conditions |
|
Warrants |
6,363,636 |
13/10/2017 |
1.1p |
5 years |
Vested immediately upon being granted |
|
Share options |
50,000,000 |
23/08/2018 |
0.5p |
Expire on 21/06/28 |
Vested on 23 August 2018 |
|
Share options |
37,500,000 |
23/08/2018 |
1.0p |
Expire on 21/06/28 |
Vested on 31 January 2019 |
|
Warrants |
12,500,000 |
5/12/2019 |
0.14p |
3 years |
Vested immediately upon being granted |
|
Warrants |
80,625,000 |
26/06/2020 |
0.16p |
2 years |
Vested immediately upon being granted |
|
Warrants |
10,937,500 |
26/06/2020 |
0.08p |
2 years |
Vested immediately upon being granted |
|
Share options |
98,361,250 |
14/08/2020 |
0.3p |
2 years |
Vested on 1 August 2021 |
|
Warrants |
208,125,000 |
14/09/2020 |
0.16p |
2 years |
Vested immediately upon being granted |
|
Warrants |
18,750,000 |
14/09/2020 |
0.08p |
2 years |
Vested immediately upon being granted |
|
Share options |
110,000,000 |
06/11/2020 |
0.425p |
Expire on 21/06/2028 |
Vested immediately upon being granted |
|
Share options |
110,000,000 |
06/11/2020 |
0.565p |
Expire on 21/06/2028 |
Vested on 31 March 2021 |
|
Warrants |
461,538,462 |
29/12/2021 |
0.25p |
3 years |
Vested immediately upon being granted |
|
Warrants |
46,153,846 |
29/12/2021 |
0.13p |
2 years |
Vested immediately upon being granted |
|
Share options |
31,800,000 |
12/02/2021 |
0.40p |
Expire on 30/09/2024 |
Vested immediately upon being granted |
The number and weighted average exercise prices of the above options and warrants are as follows:
|
|
31 December 2021 |
31 December 2020 |
||
|
|
Number |
Weighted average exercise price |
Number |
Weighted average exercise price |
|
Outstanding at beginning of year |
835,349,886 |
0.33p |
106,363,636 |
0.79p |
|
Share options issued (1) |
31,800,000 |
0.40p |
318,361,250 |
0.435p |
|
Lapsed/exercised warrants/options |
(92,187,500) |
0.16p |
(476,875,000) |
1.5p |
|
Warrants issued (2) |
507,692,308 |
0.24p |
887,500,000 |
0.14p |
|
Outstanding at end of year |
1,282,654,694 |
0.30p |
835,349,886 |
0.33p |
(1) Share options issued during the year have been valued using a Black and Scholes option pricing model using a risk-free rate of 0.06% and a volatility rate of 110%.
(2) 461,538,462 Warrants were issued as free attaching warrants part of the capital raising and valued using a Black Scholes option pricing model. 46,153,846 Warrants were issued to brokers and were valued using a Black and Scholes option pricing model using a risk-free rate of 0.25% and a volatility rate of 86.86%.
|
19. |
Reconciliation of movements in shareholders' funds |
|
|
|||
|
|
|
Consolidated |
Company |
|||
|
|
|
Year ended 31 December 2021 |
Year ended 31 December 2020 |
Year ended 31 December 2021 |
Year ended 31 December 2020 |
|
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
Total comprehensive loss for the year |
(1,098) |
(1,027) |
(1,211) |
(878) |
|
|
|
|
|
|
|
|
|
|
|
Proceeds from shares issued |
1,056 |
870 |
1,056 |
870 |
|
|
|
Currency translation differences on foreign currency operations |
- |
- |
- |
- |
|
|
|
Share option expense |
217 |
441 |
217 |
441 |
|
|
|
Warrants exercised |
147 |
740 |
147 |
740 |
|
|
|
Warrants issued |
102 |
35 |
102 |
35 |
|
|
|
Shares issued - Acquisitions |
761 |
1,132 |
761 |
1,132 |
|
|
|
Non-controlling interests on acquisition of subsidiary |
- |
37 |
- |
- |
|
|
|
Opening shareholders' funds |
7,011 |
4,783 |
8,356 |
6,016 |
|
|
|
Closing shareholders' funds |
8,196 |
7,011 |
9,428 |
8,356 |
|
|
20. |
Reconciliation of operating loss to net cash outflow from operating activities |
||||
|
|
|
Consolidated |
Company |
||
|
|
|
Year ended 31 December 2021 |
Year ended 31 December 2020 |
Year ended 31 December 2021 |
Year ended 31 December 2020 |
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Operating loss from all operations |
(948) |
(1,038) |
(832) |
(879) |
|
|
|
|
|
|
|
|
|
Share options |
160 |
380 |
160 |
380 |
|
|
Shares issued - Legal fees |
72 |
- |
72 |
- |
|
|
|
|
|
|
|
|
|
Foreign exchange gain |
(6) |
5 |
(6) |
5 |
|
|
(Increase)/decrease in receivables |
(20) |
37 |
(10) |
42 |
|
|
Increase in payables |
(95) |
40 |
109 |
45 |
|
|
Net cash outflow from operating activities |
(837) |
(576) |
(507) |
(407) |
|
21. |
Proceeds from the issuance of ordinary shares |
|
|
||
|
|
|
Consolidated |
Company |
||
|
|
|
Year ended 31 December 2021 |
Year ended 31 December 2020 |
Year ended 31 December 2021 |
Year ended 31 December 2020 |
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Share capital and premium at end of year (note 17) |
41,379 |
41,174 |
41,379 |
41,174 |
|
|
Shares issued - Legal fees |
(72) |
- |
(72) |
- |
|
|
Share issued on acquisition on subsidiaries |
1,070 |
(1,132) |
1,070 |
(1,132) |
|
|
Share issue costs |
144 |
34 |
144 |
34 |
|
|
Share capital and premium at beginning of year |
(41,174) |
(38,432) |
(41,174) |
(38,432) |
|
|
|
1,347 |
1,644 |
1,347 |
1,644 |
|
22. |
Related party transactions |
|
|
|
|
|
(a) Parent entity |
|
|
The parent entity within the Group is Bezant Resources Plc. |
|
|
|
|
|
(b) Subsidiaries |
|
|
Interests in subsidiaries are set out in note 11. |
|
|
|
|
|
(c) Associates |
|
|
Interests in associates are set out in note 11. |
|
|
|
|
|
(d) Transactions with related parties |
|
|
The following table provides details of remuneration and fees to related parties during the year and outstanding balances at the year-end date: |
|
|
|
31 December 2021 |
31 December 2020 |
||
|
|
|
Paid in the year |
Due by at year-end date |
Paid in the year |
Due by at year-end date |
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
Colin Bird |
85 |
80 |
146 |
68 |
|
|
Laurence Read |
29 |
30 |
45 |
59 |
|
|
Metallurgical Management Services Pty. Ltd |
29 |
- |
49 |
7 |
|
|
R Siapno |
20 |
- |
30 |
2 |
|
|
R. Samtani |
71 |
- |
78 |
- |
|
|
E. Slowey |
73 |
- |
78 |
- |
|
|
|
281* |
110 |
426 |
136 |
* The above amounts represent directors' fees inclusive of share options awarded during 2020 and expensed during 2021 and are included in directors' remuneration per note 8.
|
|
|
An amount of £15,000 was incurred during 2021 (2020: £15,000) to Lion Mining Finance Limited, a company controlled by C. Bird, for administration services and use of an office as well as a deposit of £2,500 which is included in trade and other receivables.
|
|
Related parties |
|
|
Mowbrai Limited is a consultancy company controlled by former director Mr Laurence Read. Metallurgical Management Services Pty. Ltd is a consultancy company controlled by the director Dr. Evan Kirby. |
|
23. |
Commitments |
||
|
|
|
||
|
|
Non-cancellable lease rentals payable as follows: |
||
|
|
|
2021 |
2020 |
|
|
|
£'000 |
£'000 |
|
|
|
|
|
|
|
Less than one year |
- |
- |
|
|
Between two and five years |
- |
- |
|
|
|
- |
- |
|
|
Payments represent rentals payable by the Company for administration services and office occupancy. |
||
|
24. |
Control |
|
|
|
|
|
Bezant Resources Plc is listed on the AIM market of the London Stock Exchange and not under the control of any one party. |
|
25. |
Subsequent events |
|
1. Issue of shares for fees. On 6 January 2022 the Company announced as approved by shareholders at the General Meeting on 29 December 2021 it intended to settle outstanding remuneration owed to a director of the Company, Colin Bird, amounting to £80,000 and fees of £50,000 owed to Quantum Capital & Consulting Limited, a personal service company of Michael Allardice who is a person discharging managerial responsibilities on behalf of the Company (collectively, the "Accrued Fees") by the issue 100,000,000 ordinary shares of 0.002p each ("Ordinary Shares") (the "Accrued Fee Shares") and 50,000,000 warrants over Ordinary Shares exercisable at 0.25 pence per Ordinary Share valid until 4 November 2024 ("Accrued Fee Warrants") in accordance with the table below:
|
||||||||||||||||
|
|
||||||||||||||||
|
|
||||||||||||||||
|
2. Exercise of warrants. On 12 May 2022 the Company announced the exercise of 11,875,000 warrants at a price on 0.16p per share for £19,000.
|
||||||||||||||||
|
3. Impairment. In light of technical and regulatory issues related to the Kalengwa project the Company has with the agreement of its partners agreed to pause work on this project pending resolution of these issues and accordingly has decided with effect from 31 December 2021 to make a full provision against its investment in the Kalengwa project. |
|
|||||||||||||||
|
4. Drawdown under Loan Facility: On 30 June 2022 the Company further to its announcement of 23 November 2021 confirms that it had issued two drawdown notices of £350,000 each ("Tranche 1" and "Tranche 2") for a total amount of £700,000 (the "Drawdowns") under its £1,000,000 unsecured convertible loan funding facility with Sanderson Capital Partners Ltd (the "Lender"), a long-term shareholder in the Company (the "Facility"). The amount drawdown is repayable in 12 months and convertible by the Lender at the fixed prices; £350,000, at 0.19 pence per share and £350,000 at 0.225 pence per share. The Company can use the Facility, at its discretion, to fund the working capital requirements of the Company and its subsidiaries as determined by the Company and proposes to use the funds in the first instance to advance exploration and its mining licence application in Namibia, exploration at its Kanye Manganese project in Botswana and the general working capital requirements of the group.
Under the terms of the Facility the Lender is due;
i) a drawdown fee of £14,000 being 2% of the amount drawdown which will be settled by the issue of 12,522,361 new ordinary shares of £0.00002 each ("Shares") credited as fully paid at 0.1118 pence per share being the five-day VWAP on 28 June 2022 (the "Drawdown Fee Shares"); and
ii) £350,000 of three year warrants over Shares (the "Warrants"). The exercise price for the Warrants are as follows:
· £175,000 at 0.25 pence per share for the drawdown of Tranche 1; and · £175,000 at 0.30 pence per share for the drawdown of Tranche 2.
|
|
|||||||||||||||
|
Other that these matters, no significant events have occurred subsequent to the reporting date that would have a material impact on the consolidated financial statements. |
|
|||||||||||||||