RNS Number : 5671U
Botswana Diamonds PLC
06 December 2021
 

6th December 2021

 

Botswana Diamonds PLC

("Botswana Diamonds" or the "Company")

 

Annual Results for the Year Ended 30 June 2021

 

 

Botswana Diamonds plc (AIM: BOD) today announces its audited annual results for the year ended 30 June 2021.

 

and we announced in September that we had exercised our pre-emptive right to acquire the outstanding third-party interests and

Following outside interest in acquiring Vutomi Mining,

 

 

John Teeling

Chairman

 

 3rd December 2021

 

 

Annual Report and Notice of Annual General Meeting

 

The Company's Annual Report and Accounts for the year ended 30 June 2021 (the "Annual Report") will be mailed shortly only to those shareholders who have elected to receive it. Otherwise, shareholders will be notified that the Annual Report and Accounts will be available on the website at www.botswanadiamonds.co.uk.  Copies of The Annual Report will also be available for collection from the company's registered office at Suite 1, 3rd Floor, 11-12 St. James's Square, London, SW1Y 4LB

 

The Annual General Meeting ("AGM") is due to be held on 27th January 2022 at The Hilton London Paddington, 146 Praed St, London W2 1EE, United Kingdom at 11.00am.  A Notice of the AGM will be included in the Annual Report.

 

Coronavirus (Covid-19)

 

The Board continues to closely monitor developments in relation to the Covid-19 pandemic and the health and wellbeing of the Shareholders and the Company's employees continue to remain of paramount importance. At the date of this announcement, there are limited restrictions in England on public gatherings of the nature envisaged for the Meeting, but this situation may have changed at the date of the Meeting. All Shareholders are encouraged to exercise their right to vote by appointing the Chairman of the Meeting as their proxy. If a Shareholder appoints any person other than the Chairman of the Meeting to act as their proxy, that person (for their own safety, and for the safety of others) may not be granted access to the Meeting and in such circumstances their appointing Shareholder's votes would not be counted. If law and/or guidance requires us to restrict entry to the Meeting, it is intended that it would be convened in accordance with the Company's Articles of Association and in line with the UK Government guidance. In such circumstances, the Company would make arrangements such that the legal requirements to hold the Meeting can be satisfied through the physical attendance of a minimum number of people required to form a quorum under the Company's Articles of Association and who are essential for the business of the Meeting to be conducted. These attendees would be officers or employees of the Company.

 

In view of the continuing risk posed by Covid-19, we reserve the right to put in place arrangements to protect attendees from any risk to their health and may refuse entry to persons who do not comply with such arrangements. In particular, Shareholders are reminded that they should not attend the Meeting in person if they or someone living in the same household feels unwell or has been in contact with anyone who has, or may have, Covid-19.

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). The person who arranged for the release of this announcement on behalf of the Company was John Teeling, Director.

 

Enquiries:

 

Botswana Diamonds PLC
John Teeling, Chairman

James Campbell, Managing Director

Jim Finn, Director

 

 

+353 1 833 2833

+27 83 457 3724

+353 1 833 2833

Beaumont Cornish - Nominated Adviser 
Michael Cornish

Roland Cornish

 


+44 (0) 020 7628 3396

Beaumont Cornish Limited - Broker 
Roland Cornish

Felicity Geidt

 

+44 (0) 207 628 3396

First Equity Limited -  Joint Broker 
Jason Robertson

 

+44 (0) 207 374 2212

Blytheweigh - PR
Megan Ray
Rachael Brooks

Said Izagaren

Naomi Holmes

+44 (0) 207 138 3206

+44 (0) 207 138 3553

+44 (0) 207 138 3206

+44 (0) 207 138 3206

+44 (0) 207 138 3206

Teneo

Luke Hogg

Alan Tyrrell

Ciara Wylie

 

+353 (0) 1 661 4055

+353 (0) 1 661 4055

+353 (0) 1 661 4055

 

www.botswanadiamonds.co.uk

 

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2021

 

 

 

 

 

 

 

 

 

 

 

Administrative expenses

(402,089)

(356,831)

 

 

 

Impairment of exploration and evaluation assets

(70,018)

(34,394)

 

 

 

 

OPERATING LOSS

 

 

 

 

LOSS FOR THE YEAR BEFORE TAXATION

 

 

 

Income tax expense

 

LOSS AFTER TAXATION

 

 

 

Items that may be reclassified subsequently to profit or loss

 

 

 

 

 

Exchange difference on translation of foreign operations

 

 

 

 

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

 

 

 

 

 

 

 

 

 

 

Loss per share - basic

 

 

 

Loss per share - diluted

 

 

 

 

 

 

 

 

 

CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2021

 

 

 

 

 

ASSETS:

NON CURRENT ASSETS

 

 

 

 

 

Intangible assets

Plant and equipment

 

 

 

                   

                   

CURRENT ASSETS

 

 

 

 

 

Other receivables

Cash and cash equivalents

 

 

 

TOTAL ASSETS

 

 

 

 

LIABILITIES:

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade and other payables

(744,149)

(432,488)

 

TOTAL LIABILITIES

 

NET ASSETS

 

 

 

 

EQUITY

 

 

 

 

 

Called-up share capital - deferred shares

Called-up share capital - ordinary shares

Share premium

Share based payment reserves

Retained deficit

Translation reserve

Other reserve

 

TOTAL EQUITY

 

 

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2021

 

 

 

 

 

Share

 

 

 

 

 

Called-up

 

Based

 

 

 

 

 

Share

Share

Payment

Retained

Translation

Other

 

 

Capital

Premium

Reserve

Deficit

Reserve

Reserves

Total

 

£

£

£

£

£

£

£

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 30 June 2019

3,237,545

10,300,379

111,189

(4,841,473)

(132,947)

(983,287)

7,691,406

 

 

 

 

 

 

 

 

Issue of shares

236,667

281,333

-

-

-

-

518,000

 

 

 

 

 

 

 

 

Share issue expenses

-

(17,000)

-

-

-

-

(17,000)

 

 

 

 

 

 

 

 

Loss for the year and total comprehensive income

-

-

-

(391,225)

(103,715)

-

(494,940)

 

                

                

                

                

                

                

                

At 30 June 2020

3,474,212

10,564,712

111,189

(5,232,698)

(236,662)

(983,287)

7,697,466

 

 

 

 

 

 

 

 

Issue of shares

303,750

425,250

-

-

-

-

729,000

 

 

 

 

 

 

 

 

Share issue expenses

-

(5,600)

-

-

-

-

(5,600)

 

 

 

 

 

 

 

 

Loss for the year and total comprehensive income

-

-

-

(472,107)

(85,392)

-

(557,499)

 

                

                

                

                

                

                

                

At 30 June 2021

3,777,962

10,984,362

       111,189

(5,704,805)

(322,054)

(983,287)

7,863,367

 

             

             

             

             

             

             

             

 

Share Premium

 

The share premium reserve comprises of a premium arising on the issue of shares. Share issue expenses are deducted against the share premium reserve when incurred.

 

Share Based Payment Reserve

 

The share based payment reserve arises on the grant of share options under the share option plan.

 

Retained Deficit

 

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

 

Translation Reserve

 

The translation reserve arises from the translation of foreign operations.

 

Other Reserves

 

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

 

 

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2021

 

 

 

 

 

 

 

 

CASH FLOW FROM OPERATING ACTIVITIES

 

 

 

 

 

Loss for the year

Foreign exchange (gains)/losses

 

 

MOVEMENTS IN WORKING CAPITAL

 

 

 

 

 

 

 

 

 

NET CASH USED IN OPERATING ACTIVITIES

(310,510)

(317,492)

 

 

 

 

CASH FLOW FROM INVESTING ACTIVITIES

 

 

 

 

 

Additions to exploration and evaluation assets

 

NET CASH USED IN INVESTING ACTIVITIES

 

 

 

 

CASH FLOW FROM FINANCING ACTIVITIES

 

 

 

 

 

Proceeds from share issue

Share issue costs

 

NET CASH GENERATED FROM FINANCING ACTIVITIES

 

 

 

 

NET INCREASE IN CASH AND CASH EQUIVALENTS

 

 

 

Cash and cash equivalents at beginning of the financial year

 

 

 

Effect of foreign exchange rate changes

 

Cash and cash equivalents at end of the

 

 

financial YEAR

 

 

 

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 2020. 

 

                        The financial statements have also been prepared in accordance with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB).

 

                        The financial information set out below does not constitute the Group's financial statements for the year ended 30 June 2021 or 30 June 2020, but is derived from those accounts. The financial statements for the year ended 30 June 2020 have been delivered to Companies House and those for the year ended 30 June 2021 will be delivered to Companies House shortly

 

                  The auditors have reported on the 2021 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 net loss for the year of £557,499 (2020: loss of £494,940) after exchange differences on retranslation of foreign operations of £85,392 (2020: £103,715) at the balance sheet date. The Group had net current liabilities of £537,453 (2020:£ 389,107) at the balance sheet date. These conditions represent material uncertainties that may cast doubt on the Group's ability to continue as a going concern.

 

The directors have prepared cashflow projections and forecasts for a period of not less than 12 months from the date of this report which indicate that the group will require additional funding for working capital requirements and develop existing projects. As the Group is not revenue or cash generating it relies on raising capital from the public market. On 25 October 2021 the Group raised £550,000 by placing 55,000,000 new ordinary shares and related warrants. 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):

 

 

2020

 

2020

 

£

 

£

Numerator

 

 

 

 

 

 

 

For basic and diluted EPS - loss after taxation

(472,107)

 

(391,225)

 

 

 

 

 

 

 

 

Denominator

No.

 

No.

 

 

 

 

For basic and diluted EPS

739,571,217

 

642,643,820

 

 

 

 

Basic EPS

(0.06p)

 

(0.06p)

Diluted EPS

(0.06p)

 

(0.06p)

                           

                            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:

                           

 

No.

 

No.

 

 

 

 

Share options

11,410,000

 

11,410,000

 

 

4.            INTANGIBLE ASSETS 

               

Exploration and evaluation assets:

 

 

 

 

2021

 

2020

 

£

 

£

Cost:

 

 

 

At 1 July

9,385,051

 

9,299,236

Additions

262,869

 

189,530

Exchange losses

(85,392)

 

(103,715)

At 30 June

9,562,528

 

9,385,051

 

 

 

 

Impairment:

 

 

 

At 1 July

1,298,478

 

1,264,084

Impairment

70,018

 

34,394

At 30 June

1,368,496

 

1,298,478

 

 

 

 

Carrying Value:

 

 

 

At 1 July

8,086,573

 

8,035,152

 

At 30 June

 

8,194,032

 

 

8,086,573

 

 

 

 

 

 

 

 

Segmental analysis

2021

 

2020

 

£

 

£

Botswana

7,042,620

 

7,024,389

South Africa

1,151,412

 

1,038,411

Zimbabwe

-

 

23,773

 

8,194,032

 

8,086,573

 

 

 

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.

 

To date the Group incurred expenditure of £58,815 on exploring for new licences in Zimbabwe and £11,203 miscellaneous costs. As at year end no licences have been granted. Therefore, the directors have decided to impair the costs. Accordingly, an impairment of £70,018 (2020: £34,394) 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. More recently a separate agreement for funding of exploration resulted in the Company's interest in Vutomi increasing from 40% to 45.94%.

 

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 (2020: £ Nil) of share based payments, £14,225 (2020: £14,599) of wages and salaries and £65,553 (2020: £76,910) of directors' remuneration which has been capitalized. This is for time spent directly on the operations rather than on corporate activities.

  

5.            PLANT AND EQUIPMENT 

 

 

 

 

 

At 1 July

 

Additions

206,788

 

-

 

 

At 30 June

206,788

 

-

 

 

 

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

 

6.            CALLED-UP SHARE CAPITAL

 

Deferred Shares- nominal value of 0.75p

Number

Share Capital

Share Premium

 

 

£

£

At 1 July 2019 and 2020

239,487,648

1,796,157

-

 

                     

                     

                     

At 30 June 2020 and 2021

239,487,648

1,796,157

-

 

                    

                     

                     

 

 

 

 

Ordinary Shares - nominal value of 0.25p

 

 

 

Allotted, called-up and fully paid:

Number

Share Capital

Share Premium

 

 

£

£

 

 

 

 

At 1 July 2019

576,555,235

1,441,388

10,300,379

Issued during the year

94,666,667

236,667

281,333

Share issue expenses

-

-

(17,000)

 

                     

                     

                     

At 30 June 2020

671,221,902

1,678,055

10,564,712

 

                     

                     

                     

 

 

 

 

Issued during the year

121,500,000

303,750

425,250

Share issue expenses

-

-

(5,600)

 

                     

                     

                     

At 30 June 2021

792,721,902

1,981,805

10,984,362

 

                    

                     

                     

 

               Movements in share capital

 

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.

 

On 7 September 2020, the Company raised £300,000 through the issue of 50,000,000 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 7 September 2020.

 

On 22 January 2021, the Company raised £363,000 through the issue of 60,500,000 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 23 January 2021.

              

               On 13 May 2021, a total of 11,000,000 warrants were exercised at a price of 0.60p per warrant for £66,000.

 

7.            SHARE-BASED PAYMENTS

 

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

 

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

 

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

 

SHARE OPTIONS

 

 

 

2021

              

2020

 

 

 

 

30/06/2021

Options

Weighted average exercise price in pence

 

 

 

30/06/2020

Options

 Weighted average exercise price 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

11,410,000

5.14

 

                   

                   

                   

                   

 

WARRANTS

 

 

 

2021

           

2020

 

30/06/2021

Warrants

Weighted average exercise price in pence

 30/06/2020

Warrants

 Weighted average exercise price in pence

 

 

 

 

 

Outstanding at beginning of year

105,939,394

0.60

67,272,727

0.60

Issued

110,500,000

0.60

41,666,667

0.60

Exercised

(11,000,000)

0.60

(3,000,000)

0.60

Expired

(66,272,727)

0.60

-

-

 

                     

                   

                     

                   

Outstanding at end of the year

139,166,667

0.60

105,939,394

0.60

 

                     

                   

                     

                   

 

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

 

8.            POST BALANCE SHEET EVENTS

 

On 23 August 2021 the Company announced that Okwa Diamonds Pty Ltd, a joint venture with Vast Resources plc ("VAST") in which Botswana Diamonds has an initial 10% carried interest, had conditionally agreed to acquire Gem Diamonds Botswana Pty Ltd ("GDB"), a wholly owned subsidiary of Gem Diamonds Ltd ("Gem Diamonds"), for a cash consideration of US$4 million. GDB's primary asset is the fully permitted Ghaghoo diamond mine in central Botswana which is currently under care and maintenance.

 

The Company has an initial free carried interest of 10% in Okwa Diamonds Pty Ltd ("Okwa") for the first US$15 million of expenditure by Okwa, which is being funded by VAST (including the acquisition cash consideration). Thereafter, Botswana Diamonds will not be diluted below 2.5% of Okwa.  Botswana Diamonds can also earn up to a further 20% interest in Okwa through funding 20% of expenditure. Under the terms of the joint venture with VAST, Botswana Diamonds will be the operator of the Ghaghoo mine until such time as an agreed management team is in place.

 

The acquisition of GDB is conditional, inter alia, on relevant regulatory and competition authority approvals in Botswana

 

On 29 September 2021 the Company exercised its pre-emptive right to acquire the outstanding third-party interests in Vutomi Mining (Proprietary) Limited and Razorbill Properties 12 (Proprietary) Limited.

Vutomi holds the mineral rights to the Thorny River Diamond Project as well as other exploration assets.

The consideration for Vutomi comprises 56,989,330 new ordinary shares in Botswana Diamonds plc which, at the closing mid-market price on 28 September 2021 of 1.10p per share, is valued at £626,883.

There are no lock-in arrangements, but the consideration shares will be issued in two equal tranches (three months apart) following Completion. Completion is subject to a number of conditions (with a long stop date of 22 September 2022 unless otherwise agreed between the parties).

The Company expects the conditions to be fulfilled and the transaction to complete during Q2 2022.

The Company has further agreed that, immediately on completion of the acquisition, the Company will sell 26% of Vutomi for a deferred consideration of US$316,333 to the Company's local South African Empowerment partner, Baroville, in order to comply with South African requirements on empowerment ownership, which will be funded by a loan from Botswana Diamonds.

On completion, the Company will own 74% of Vutomi.

The Company has separately agreed to sell its interests in Evoid to Red Sky Trust. Evoid is currently dormant and holds the Mooikloof prospecting licence and Palmietgat prospecting licence on which very limited work has been carried out to date. Red Sky has agreed that as soon as Evoid has the available cash to do so, Evoid will settle the outstanding shareholder loans provided by the Company to Evoid and which amounts to ZAR320,374 (equivalent to approximately £16,000). There is no further consideration payable. Any consideration received from the sale to Baroville and Red Sky will be retained for working capital.

 

On 25 October 2021 the Company announced that it had raised £550,000 via the issue of 55,000,000 new ordinary shares at a placing price of 1p per share. Each share has one warrant attached with the right to subscribe for one new ordinary share at 2p per new ordinary share for a period of three years from 25 October 2021 being the date of the warrants issue.

 

9.            GENERAL INFORMATION

 

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

 

10.         ANNUAL GENERAL MEETING

 

The Annual General Meeting is due to be held 27th January 2022 at The Hilton London, Paddington, 146 Praed St, London W2 1EE, United Kingdom at 11.00am.  A Notice of the Annual General Meeting is included in the Company's Annual Report.

 

 

ENDS

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