Annual Results for the Year Ended 30 June 2020

1.            ACCOUNTING POLICIES

                            The accounting policies and methods of computation followed in these financial statements are consistent with those published in the Group's Annual Report for the year ended 30 June 2019. 

                            The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs). The financial statements have also been prepared in accordance with International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB) and International Financial Reporting Interpretations Committee (IFRIC) as adopted by the European Union.

                            The financial information set out below does not constitute the Group's financial statements for the year ended 30 June 2020 or 30 June 2019, but is derived from those accounts. The financial statements for the year ended 30 June 2019 have been delivered to the Registrar of Companies and those for the year ended 30 June 2020 will be delivered to the Registrar of Companies shortly

                            The auditors have reported on the 2020 statements; their report was unqualified with an emphasis of matter in respect of considering the adequacy of the disclosures made in the financial statements concerning the valuation of intangible assets, and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006. 

2.            GOING CONCERN

The Group incurred a loss for the year, after exchange differences on retranslation of foreign operations, of £494,940 (2019: loss of £905,051) at the balance sheet date. The Group had net current liabilities of £389,107 (2019:£343,746) and the Company £382,560 (2019:£340,349) at the balance sheet date. These conditions represent a material uncertainty that may cast doubt on the Group's ability to continue as a going concern.

The directors have prepared cashflow projections and forecasts for a period of not less than 12 months from the date of this report which indicate that the group will require additional finance to fund working capital requirements and develop existing projects. The cashflow projections include any anticipated impacts of the Covid-19 pandemic on the Group. As the Group is not revenue or cash generating it relies on raising capital from the public market. On 7 September 2020 the Group raised £300,000 by placing 50,000,000 new ordinary shares. Further details are outlined in Note 9.

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

3.            LOSS PER SHARE

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

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

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

4.            INTANGIBLE ASSETS 

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

During the current year, some licences held by the Group in its subsidiary company Sunland Minerals (Pty) Ltd were relinquished. Therefore, the directors have decided to impair the costs of exploration on these licences. Accordingly, an impairment of £34,394 (2019: £435,139) has been recorded by the Group in the current year.

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

On 6 February 2017 the Group entered into an Option and Earn-In Agreement with Vutomi Mining Pty Ltd and Razorbill Properties 12 Pty Ltd (collectively known as 'Vutomi'), a private diamond exploration and development firm in South Africa. Pursuant to the terms of the Agreement, Botswana Diamonds earned a 40% equity interest in the project.

The directors believe that there were no facts or circumstances indicating that the carrying value of intangible assets may exceed their recoverable amount and thus no impairment review was deemed necessary by the directors. The realisation of these intangible assets is dependent on the successful discovery and development of economic diamond resources and the ability of the Group to raise sufficient finance to develop the projects. It is subject to a number of significant potential risks, as set out below:

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

-      licence obligations;

-      exchange rate risks;

-      uncertainties over development and operational costs;

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

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

-      title to assets;

-      financial risk management ;

-      going concern; and

-      operational and environmental risks.

Included in additions for the year are £Nil (2019: £6,951) of share based payments, £14,599 (2019: £15,754) of wages and salaries and £76,910 (2019: £74,620) of directors remuneration which has been capitalized. This is for time spent directly on the operations rather than on corporate activities.

5.            CALLED-UP SHARE CAPITAL

               Movements in share capital

On 28 January 2019, the Company raised £370,000 through the issue of 67,272,727 new ordinary shares of 0.25p each at a price of 0.55p per share to provide additional working capital and fund development costs. Each placing share has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per share for a period of two years from 23 January 2019.

On 18 July 2019, the Company raised £250,000 through the issue of 50,000,000 new ordinary shares of 0.25p each at a price of 0.50p per share to provide additional working capital and fund development costs.

On 18 November 2019, a total of 1,000,000 warrants were exercised at a price of 0.60p per warrant for £6,000.

On 28 January 2020, the Company raised £250,000 through the issue of 41,666,667 new ordinary shares of 0.25p each at a price of 0.60p per share to provide additional working capital and fund development costs. Each placing share has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per share for a period of two years from 28 January 2020.

               On 12 June 2020, a total of 2,000,000 warrants were exercised at a price of 0.60p per warrant for £12,000.

6.            SHARE-BASED PAYMENTS

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

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

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

SHARE OPTIONS                                                                                           2020                                                          2019

                                                                                                                                Weighted                                                  Weighted

                                                                                                                                    average                                                     average

                                                                                              30/06/2020   exercise price         30/06/2019           exercise price

                                                                                                    Options              in pence                Options                    in pence

                Outstanding at beginning of year             11,410,000                        5.14           11,410,000                        5.14

                Issued                                                                                      -                              -                              -                              -

                Outstanding at end of the year                 11,410,000                        5.14           11,410,000                        5,14

                Exercisable at end of the year                   11,410,000                        5.14           10,410,000                        5.14

WARRANTS                                                                                                   2020                                                           2019

                                                                                                                                Weighted                                                 Weighted

                                                                                                                                    average                                                      average

                                                                                              30/06/2020   exercise price         30/06/2019           exercise price

                                                                                                  Warrants              in pence             Warrants                    in pence

                Outstanding at beginning of year             67,272,727                        0.60           28,298,700                        0.85

                Issued                                                                  41,666,667                        0.60           67,272,727                        0.60

                Exercised                                                             (3,000,000)                      0.60                              -                              -

                Expired                                                                                    -                              -         (28,298,700)                      0.85

                Outstanding at end of the year               105,939,394                        0.60           67,272,727                        0.60

Refer to note 5 Called up Share Capital for the details of the share options and warrants.

7.            POST BALANCE SHEET EVENTS

On 20 July 2020, the Company agreed to acquire the KX36 Diamond discovery in Botswana, along with two adjacent Prospecting Licences and a diamond processing plant. These interests are part of a package held by Sekaka Diamonds. Botswana Diamonds plc acquired 100% of the shares of Sekaka. The vendor was Petra Diamonds. The consideration comprised a cash payment of US$300,000 and a 5% royalty on future revenues.  The cash consideration is payable on a deferred basis with US$150,000 payable on 27 November 2021 and the balance on or before 27 November 2022. The acquisition was completed on 30 November 2020.

On 7 September 2020, the Company announced that they had raised £300,000 via the placing of 50,000,000 new ordinary shares with new and existing investors at a price of 0.6p per share. Each share has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per new ordinary share for a period of two years from 7 September 2020.

8.            GENERAL INFORMATION

                            The Annual Report and Accounts will be mailed on the 18^th December 2020 only to those shareholders who have elected to receive it. Otherwise, shareholders will be notified that the Annual Report and Accounts will be available on the website at www.botswanadiamonds.co.uk.  Copies of The Annual Report will also be available for collection from the company's registered office at Suite 1, 3^rd Floor, 11-12 St. James's Square, London, SW1Y 4LB

9.            ANNUAL GENERAL MEETING

The Annual General Meeting is due to be held on Thursday 28^th January 2021 at The Granite Exchange, 5-6 Kildare Street, Newry, Northern Ireland, BT34 1DQ at 11.00am.  A Notice of the Annual General Meeting is included in the Company's Annual Report.

ENDS