NOTES TO THE GROUP FINANCIAL STATEMENTS

For the year ended 30 June 2023

 

 

1.    General Information

Kazera Global Plc is a public limited company which is listed on the Alternative Investment Market (AIM) and incorporated and domiciled in England and Wales, United Kingdom. The nature of the Group's operations and its principal activities are set out in the Strategic Report and the Directors' Report.

 

2.    Accounting Policies

BASIS OF PREPARATION

These consolidated financial statements have been prepared and approved by the Directors in accordance with UK Adopted International Accounting Standards in accordance with the requirements of the Companies Act 2006.

 

The consolidated financial statements have been prepared under the historical cost convention, except as noted in the accompanying accounting policies.

 

The preparation of financial statements in conformity with UK Adopted International Accounting Standards ('IAS') requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 3.

 

The financial statements are presented in pounds sterling (£'000), which is also the functional currency of the Company and Group.

 

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.

 

PRIOR YEAR ADJUSTMENT

Subsequent to the approval of the 2022 financial statements the Board carried out a review of the prior year 'other payables' balance of £826k shown in non-current liabilities. The Board concluded that £757k of this balance related to amounts due from Deep Blue Minerals (Pty) Ltd to the Company. As DBM is a subsidiary of the Company this amount should have been eliminated against the corresponding receivable amount in the Company, in the consolidated statement of financial position. However, the elimination had instead been allocated to Currency translation reserve. The effect of the adjustment to correct the error increases the Group's net assets by £757k to £3.9m from the previously stated £3.1m. See note 27.

 

Additionally, a reconciliation of the issued share capital of the Company was carried out and a historical error was identified which had resulted in the 2022 financial statements having overstated the number of Ordinary shares of 0.1p in issue by 565,388. See note 21.

 

GOING CONCERN

The financial statements have been prepared assuming the Group and Company will continue as a going concern.

The Company prepares and routinely maintains a cash flow forecast; the directors have, with reference to the cash flow forecast considered a number of potential scenarios under which the Company's ability to continue as a going concern is assessed.

In assessing whether the going concern assumption is appropriate, the directors have taken into account all available information for the forseeable future; in particular for the 12 months from the date of approval of these financial statements and performed sensitivity analysis thereon.  This assessment includes consideration of the cash receipts arising from the disposal of the Group's operations in Namibia, and in South Africa, the Group's future plans, expenditure commitments, and cost reduction measures that can be implemented and permitting requirements.

The Directors' estimates are dependent principally upon the Group's mining operations coming into operation as planned and funds from the sale of African Tantalum Pty Ltd continuing to be received in the short-term.  The Directors are confident that further funds could be raised to meet any shortfall in the event that insufficient funds are received timeously, or operations are delayed or underperform.

in view of the facts that the Group's mining operations are not yet in full operation and the proceeds arising from the sale of the Company's former subsidiary, African Tantalum Pty Ltd have not yet been reveived in full, the Directors consider than a material uncertainty exists as to the Company's ability to continue as a going concern; the auditors have made reference to this material uncertainty in their audit report on page 28 of the Annual Report and Financial Statements.

Following the Company's announcement of 20 December 2022, that Kazera had entered into an agreement for the sale of 100% of its shares in African Tantalum Pty Ltd to Hebei Xinjian Construction for a headline sum of US$13 million (excluding interest at 8% on loans of c.US$9.3 million made by Kazera to Aftan), the Company has received payments amounting to US$4.42m.

 

NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS ADOPTED BY THE GROUP

The following IFRS or IFRIC interpretations were effective for the first time for the financial year beginning 1 July 2022. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.

 

Standards/interpretations	Application	Effective from
IAS 1 amendments	Presentation of Financial Statements: Classification of Liabilities as Current or Non-current	1 January 2024
IAS 1 amendments	Classification of Liabilities as Current or Non-current	1 January 2024
IAS 1 amendments	Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies	1 January 2023
IAS 8 amendments	Accounting policies, Changes in Accounting Estimates and Errors - Definition of Accounting Estimates	1 January 2023
IAS 12 amendments	Income Taxes - Deferred Tax related to Assets and Liabilities arising from a Single Transaction	1 January 2023

 

BASIS OF CONSOLIDATION

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

 

Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated.

 

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the subsidiary and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the subsidiary on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of subsidiary's identifiable net assets.

 

Acquisition-related costs are expensed as incurred.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.

 

Disposal of subsidiary undertakings

A disposal of a subsidiary occurs when control is lost, which can happen through the sale, liquidation, or other forms of relinquishment of control. Upon disposal, the subsidiary will be deconsolidated from the date control is lost. All assets, liabilities, and non-controlling interests related to the subsidiary will be removed from the consolidated balance sheet. The consideration received from the disposal of a subsidiary will be measured at fair value on the disposal date; the gain or loss on disposal will be calculated as the difference between:

 

·      The fair value of the consideration received; and

·      The carrying amount of the subsidiary's assets and liabilities, and any cumulative translation differences recorded in equity.

 

The results of the subsidiary up to the date of disposal will be included in the consolidated income statement and shown separately as discontinued operations.

 

foreign currencies

The individual financial statements of each subsidiary company are presented in South African Rands (and Namibian Dollars for the subsidiary disposed of during the year), which is the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the Group and parent company financial statements, the results and financial position of each group company are expressed in Pounds Sterling, which is the functional currency of the Company, and the presentation currency for the Group financial statements.

 

In preparing the financial statement of the individual companies, transactions in currencies other than the entity's functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each year end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the year end date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

 

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the income statement. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period, except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.

 

For the purpose of presenting Group financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the year end date. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are classified as equity and transferred to the Group's translation reserve. Such translation differences are recognised as income or as expenses in the period in which the operation is disposed of.

 

TAXATION

The tax currently payable is based on taxable profit or loss for the period. Taxable profit or loss differs from net profit or loss as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

 

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying value of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered.

 

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realised based on tax laws and rates that have been enacted at the balance sheet date. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

 

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

 

INTANGIBLE ASSETS - EXPLORATION AND EVALUATION EXPENDITURE

Exploration and evaluation activity involve the search for mineral resources, the determination of technical feasibility and the assessment of commercial viability of an identified resource. Research expenditure is written off in the year in which it is incurred. The Group recognises expenditure as exploration and evaluation assets when it determines that the legal rights to said assets have been obtained. Costs incurred which relate wholly to exploration work only, are expensed through the statement of comprehensive income. When a decision is taken that a mining property becomes viable for commercial production, all further pre-production expenditure is capitalised.

 

Expenditure included in the initial measurement of exploration and evaluation assets and which is classified as intangible assets, relates to the acquisition of rights to undertake topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and other activities to evaluate the technical feasibility and commercial viability of extracting a mineral source.

 

MINES UNDER CONSTRUCTION

Expenditure is transferred from "Exploration and evaluation" assets to "Mines under construction" once the work completed to date supports the future development of the property and such development receives the requisite approvals. All subsequent expenditure on technically and commercially feasible sites is capitalised within mining rights.

 

All expenditure on the construction, installation or completion of infrastructure facilities is capitalised as construction in progress within "Mines under construction". Once production starts, all assets included in "Mines under construction" are transferred into "Property, Plant and Equipment" or "Producing Mines. It is at this point that depreciation/amortisation commences over its useful economic life. The asset will be depreciated using the Units of Production method (UOP).

 

Mines under construction are stated at cost. The initial cost comprises transferred exploration and evaluation assets, construction costs, infrastructure facilities, any costs directly attributable to bringing the asset into operation, the initial estimate of the rehabilitation obligation, and, for qualifying assets, borrowing costs. Costs are capitalised and categorised between mining rights and construction in progress respectively according to whether they are intangible or tangible in nature.

 

PROPERTY, PLANT AND EQUIPMENT

Property, Plant and equipment are recorded at cost, less depreciation, less any amount of adjustments for impairment, if any.

 

Significant improvements are capitalised, provided they qualify for recognition as assets. The costs of maintenance, repairs and minor improvements are expensed when incurred.

 

Tangible assets, retired or withdrawn from service, are removed from the balance sheet together with the related accumulated depreciation. Any profit or loss resulting from such an operation is included in the income statement.

 

Tangible and intangible assets are depreciated on the straight-line method based on their estimated useful lives from the time they are put into operation, so that their net cost is diminished over the lifetime of consideration to estimated residual value as follows:

Buildings	Over 20 years
Plant and machinery	Between 5 and 10 years
Furniture and equipment	Between 5 and 10 years

 

IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENT AND INTANGIBLE ASSETS EXCLUDING GOODWILL

Assets that have an indefinite useful life are not subject to amortisation but are reviewed for impairment annually and where there are indications that the carrying value may not be recoverable. An impairment loss is recognised for the amount by which the carrying value exceeds the recoverable amount.

 

ASSET ACQUISITIONS - land

Acquisitions of mineral exploration licences through the acquisition of non-operational corporate structures that do not represent a business, and therefore do not meet the definition of a business combination, are accounted for as the acquisition of an asset. The consideration for the asset is allocated to the assets based on their relative fair values at the date of acquisition. Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated.

 

Where the asset was acquired during the period however licensing becomes available post year end this is accounted for as an acquisition of Land.

 

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash at bank and in hand, deposits at call with banks, other short-term highly liquid investments with original maturity at acquisition of three months or less that are readily convertible to cash, net of bank overdrafts. For the purpose of the cash flow statement, cash and cash equivalents consist of the definition outlined above.

 

EQUITY INSTRUMENTS INCLUDING SHARE CAPITAL

Equity instruments consist of the Company's ordinary share capital and are recorded at the proceeds received, net of direct issue costs.

 

FINANCIAL INSTRUMENTS - INITIAL RECOGNITION AND SUBSEQUENT MEASUREMENT

Classification

The Group classifies its financial assets into only one category, being those to be measured at amortised cost.

The classification depends on the Group's business model for managing the financial assets and the contractual terms of the cash flows.

 

Recognition

Purchases and sales of financial assets are recognised on trade date (that is, the date on which the Group commits to purchase or sell the asset). Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

 

Measurement

At initial recognition, the Group measures a financial asset at its fair value plus transaction costs that are directly attributable to the acquisition of the financial asset.

 

Debt instruments  

Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the statement of profit or loss.

 

Impairment

The Group assesses, on a forward-looking basis, the expected credit losses associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

 

FINANCIAL LIABILITIES

All non-derivative financial liabilities are classified as other financial liabilities and are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Other financial liabilities consist of borrowings and trade and other payables.

 

Financial liabilities are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

 

OTHER FINANCIAL LIABILITIES, BANK AND SHORT-TERM BORROWINGS

Other financial liabilities, as categorised above, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. Other financial liabilities are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

 

TRIAL PRODUCTION REVENUE AND COSTS

Revenue

IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. These steps are as follows: identification of the customer contract; identification of the contract performance obligations; determination of the transaction price; allocation of the transaction price to the performance obligations; and revenue recognition as performance obligations are satisfied.

 

Under IFRS 15, revenue is recognised when performance obligations are met. This is the point of delivery of goods to the customer. Revenue is measured at the fair value of consideration received or receivable from sales of diamonds and tantalite to an end user, net of buyer's discount, treatment charges, freight costs and value added tax. The application of the standard including the five-step approach has not resulted in any changes to the timing of recognition of revenue in the current or any prior period.

 

Cost of revenue

These are the costs directly associated with the extraction and processing of diamonds from mining operations.

 

Costs to be included in cost of sales are as follows:

 

·      Extraction costs: These include labour and overhead costs directly related to the extraction of diamonds from the mine.

·      Processing Costs: Costs incurred in the crushing, sorting, and other processing required to prepare the diamonds for sale.

·      Inventory Costs: Costs related to the storage and security of diamonds until they are sold. This includes warehousing and insurance costs.

·      Depreciation and Amortization: The systematic allocation of the depreciable amount of assets (e.g., machinery, equipment) used in the extraction and processing of diamonds.

 

Exclusion of costs: General administrative expenses, marketing, and distribution costs are not included in the cost of sales but are recognized as separate expense categories in the income statement.

 

Cost of sales is recognized in the income statement when the related revenue is recognized.

 

EARNINGS PER SHARE

Basic earnings per share (EPS) is calculated by dividing: the profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares; by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares (note 11).

 

Diluted EPS adjusts the figures used in the determination of basic EPS to take into account the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and the weighted average number of additional ordinary shares that would have been outstanding, assuming the conversion of all dilutive potential ordinary shares.

 

Discontinued operations

Basic EPS for discontinued operations is calculated by dividing the net profit or loss attributable to ordinary shareholders from discontinued operations by the weighted average number of ordinary shares outstanding during the period.

 

Diluted EPS considers the potential dilution that would occur if convertible instruments or contracts to issue shares were converted into ordinary shares.

 

SEGMENTAL ANALYSIS

Under IFRS 8 operating segments are considered to be components of an entity about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. The Company's chief operating decision maker is the Board of Directors. At present, and for the period under review, the Company's reporting segments are the holding company, tantalite and lithium mining operation in Namibia and the diamond mining operations in South Africa.

 

3.    Critical Accounting Judgements

In the application of the Group's accounting policies, which are described in Note 2, the Directors are required to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

 

Valuation of options

The valuation of the options involves making a number of critical estimates relating to price volatility, future dividend yields, expected life of the options and forfeiture rates. These assumptions and valuation methodology adopted have been described in more detail in Note 22. The estimates and assumptions could materially affect the Income Statement.

 

Carrying value of mines under construction (Note 12)

The Group tests annually whether its mines under construction have suffered any impairment and management make judgements in this respect. The judgements are based on the recoverable amounts of cash generating units ("CGUs") which are determined based on value in use calculations which require the use estimates and assumptions such as long-term commodity prices and recovery rates, discount rates, operating costs and therefore expected margins and future capital requirements. These estimates and assumptions are subject to risk and uncertainty and therefore there is a possibility that changes in circumstances will impact the recoverable amount.

 

During the year, progress on production at the Walviskop site held by Whale Head Minerals, the parent company's 60% owned subsidiary, was delayed by the need to apply for authorisation from the National Nuclear Regulator after slightly elevated levels of radioactivity within the gravels were detected. The necessary application has been submitted and it is expected that authorisation will be granted during Q1 2024. Should this authorisation be denied or the process be further delayed, this would impact the Company's cash flow projections and potentially also the carrying values of the 'investment in subsidiary' and 'mines under construction'.

 

The Group continually monitors and updates its cash flow forecast on both Group and legal entity bases, applying the latest available information as regards operations and key inputs such as commodity prices or sales forecasts, production rates, transport costs. In reviewing the carrying value of mines under construction, the Board has considered the present value of expected future cash flows, discounted at a rate of 10%, and has ensured these exceed the present carrying value.

 

Investment in subsidiaries

The investments in subsidiaries are recognised at cost less accumulated impairments. Details of the investments are listed in Note 14.

 

Upon acquisition, the excess of the sum of the consideration transferred over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed, is recognised under mines under construction.

 

Any potential impairments to the investments in subsidiaries are measured in line with the impairment of mines under construction in the paragraph above.

 

The Directors are confident that the future operational cashflows forecast to be generated from the sale of diamonds and HMS will be sufficient to repay the intragroup loans.

 

Loss of Control of African Tantalum Pty Ltd

In December 2022, the Company agreed to dispose of its interest in 100% of the issued share capital of subsidiary African Tantalum Pty Ltd ("Aftan") to Hebei Xinjian Construction CC ("Xinjian"). On 4 January 2023, Dennis Edmonds resigned as a director of Aftan and each of its subsidiaries, following which Kazera has no control of the board, operations or finances of Aftan and there is no shareholder or relationship agreement in place through which Kazera can exert control. Kazera is unable to compel the provision of such detailed financial information from Aftan to enable it to consolidate Aftan's financial information as it has no operational control and no right to receive operational accounting information. Furthermore, (without prejudice, and notwithstanding its ongoing contractual breach) Xinjian has the power to compel the final transfer of the issued share capital by making the final payment and the remaining completion elements under the terms of the sale and purchase agreement ("SPA") between the parties.

 

Whilst the ongoing fixed-rate royalty leads to a variable absolute return, the Directors consider this to be consistent with other forms of debt financing, and the SPA includes a negative covenant restricting the payment of dividends by Aftan to Kazera.

 

As a result of the loss of control of Aftan, that Company's financial statements have been deconsolidated from the Group, as further detailed in Note 15.

 

Recoverability of proceeds from disposal of Aftan

The directors acknowledge that:

·      There are uncertainties surrounding final amounts to be received from Xinjian

·      There are uncertainties surrounding timing of receipts

·      If the transaction is terminated due to non-payment of the disposal proceeds the loan to Aftan may need to be reinstated; the amounts received to date would be treated as repayment of this loan and the deferred consideration would need to be written off

As at the date of this financial statements the directors consider that the amounts due from Xinjian are recoverable, however, if Xinjian remains in breach of contract and the parties cease to progress the transaction in good faith, Kazera could attempt to exercise its powers as a shareholder to eject Xinjian's representatives from the board and retake operational control of Aftan.

The Directors consider that the Company's potential economic benefit from Aftan post-signing of the SPA is capped at the amount of the outstanding intercompany loan and the remaining consideration payable in respect of the equity sold.

Recoverability of intragroup loans

Significant judgment has been exercised by the directors in assessing the recoverability of intragroup loans. The Company has provided financial assistance to its subsidiaries in the form of loans. These loans are assessed for recoverability annually.

 

The determination of recoverability involves estimating the future cash flows expected to be received from the subsidiaries, considering their financial position, profit projections, and external market conditions. Based on these assessments, management has concluded that the loans are recoverable and has recognised them at their carrying amount in the financial statements.

 

Given the inherent uncertainties in predicting future events and behaviours, this judgment is subject to estimation uncertainty. Any changes in the financial condition of the subsidiaries, or in the economic conditions under which they operate, could impact the estimated recoverability of these loans, which may require adjustments to their carrying values in future periods.

 

4.    Segmental Reporting

The Directors are of the opinion that under IFRS 8 - Operating Segments the Group operates in three primary business segments; being holding company expenses, tantalite mining and diamond mining activities. The secondary segment is geographic. The Group's profit/(losses) and net assets by primary business segments are shown below.

 

Segmentation by continuing business

Profit/ (loss) before income tax	Year ended 30 June 2023  £'000	Year ended  30 June 2022  £'000
Holding company	(1,060)	(620)
Diamond mining activity	(453)	(187)
Mineral sands mining activity	(129)	-
Operating loss	(1,642)	(807)
Net finance income/(charge)	246	(44)
Taxation expense	(142)	-
Loss from continuing activities	(1,538)	(851)
Profit/(loss) on discontinued operation, net of tax	8,128	(1,170)
Group profit/(loss) for the year	6,590	(2,021)

 

Net assets /(liabilities)	Year ended 30 June 2023  £'000	Year ended  30 June 2022  £'000
Holding company	12,027	11,124
Diamond mining activity	(1,009)	(504)
Mineral sands mining activity	(115)	-
Tantalite mining activity	-	(6,722)
Group net assets	10,903	3,898

 

Segmentation by geographical area

Operating loss	Year ended 30 June 2023  £'000	Year ended  30 June 2022  £'000
United Kingdom	(1,060)	(620)
South Africa	(582)	(187)
	(1,642)	(807)

 

Net assets /(liabilities)	Year ended 30 June 2023  £'000	Year ended  30 June 2022  £'000
United Kingdom	12,027	11,124
Namibia	-	(6,722)
South Africa	(1,124)	(504)
	10,903	3,898

 

 

5.    Revenue

	Year ended 30 June 2023  £'000	Year ended  30 June 2022  £'000
Revenue from external customers	31	107

Revenues of £31k (2022: £107k) were derived for the sale of the by-products of testing and evaluation activities. Additionally, there were £24k of revenues also from testing and evaluation activities incurred in the disposal group (see note 15). For the prior year the revenues derived from pre-production activities were considered against the Mines Under Construction intangible asset recognised in the Group. This amount was not deemed to be material to the financial statements. (see note 12).

 

 

6.    Operating Loss

	Year ended 30 June 2023  £'000	Year ended  30 June 2022  £'000
Loss for the period has been arrived at after charging:
Staff costs as per Note 9 below	790	520
Auditors' remuneration	61	50
Depreciation of property, plant and equipment	40	52
Share-based payment expense	256	116

 

 

7.    Finance Charges/INCOME

	Year ended 30 June 2023  £'000	Year ended  30 June 2022  £'000
Loan interest payable	(15)	(44)
Interest income on deferred consideration	261	-
	246	(44)

 

 

8.    Auditors' Remuneration

	Year ended 30 June 2023 £'000	Year ended 30 June 2022 £'000
Fees payable to the Group's auditors for the audit of the Group's annual accounts	61	50
Total audit fees	61	50

 

 

9.    Staff Costs

The average monthly number of employees (including executive directors) for the continuing operations was:

	Year ended 30 June 2023 Number	Year ended 30 June 2022 Number
Group total staff	29	16
	£'000	£'000
Wages and salaries	507	400
Share based payment in respect of exercise of options	256	118
Other benefits	-	1
Social security costs	27	1
	790	520

 

Directors' emoluments

An analysis of the directors' emoluments and pension entitlements and their interest in the share capital of the Company is contained in the Directors' Remuneration report on page 24 in the Annual Report and Financial Statements. All emoluments are short term in nature and the Directors are considered to be key management personnel.

 

10.  Taxation

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax applied to profits for the year are as follows:

	Year ended 30 June 2023 £'000	Year ended 30 June 2022 £'000
Analysis of income tax expense:
Current tax	-	-
Deferred tax	142	-
Total income tax expense	142	-
Loss before tax from continuing operations	(1,396)	(851)
Profit/(loss) before tax from discontinued operations	8,128	(1,170)
Profit/(loss) before tax for the year	6,732	(2,021)
Tax using the Company's domestic tax rate of 20.50% (2022:19%)	1,380	(571)
Effects of:
Expenses not deductible for tax purposes	52	33
Unutilised tax losses carried forward	664	538
Substantial shareholder relief	(1,832)	-
Local deferred tax derecognised	142	-
Effect of difference between local and UK tax rate	(264)	-
Tax charge for period	142	-

 

The taxation charge in future periods will be affected by any changes to the corporation tax rates in force in the countries in which the Group operates. Losses from the previous period have been carried forward. A deferred tax asset has not been recognised in the financial statements due to the uncertainty of the recoverability of the amount.

 

At the balance sheet date the Group had unused tax losses of £5,288k (2022: £7,401k)£.

 

11.  Earnings Per Share

The calculation of basic earnings per share is based on the following data:

	Year ended  30 June 2023	Year ended  30 June 2022
	£'000	£'000
Profit/(loss) for the year attributable to owners of the Company
Continuing operations	(1,538)	(851)
Discontinued operations	8,128	(1,170)
Weighted average number of ordinary shares in issue for basic and fully diluted earnings	936,599,523	770,895,360
EARNINGS PER SHARE (PENCE PER SHARE)
BASIC AND FULLY DILUTED:
- from continuing operations	(0.17)	(0.11)
- from discontinued operations	0.87	(0.15)
	0.70	(0.26)

 

The Company has outstanding warrants and options as disclosed under Note 22 which may be dilutive in future periods. As all options and warrants had fully vested they had no-dilutive effect on the basic earnings per share.

 

12.  Mines under Construction

	Construction in progress	Mining licences	Total
GROUP	£'000	£'000	£'000
At 1 July 2021	2,861	36	2,897
Additions	-	6	6
Sale of by-products	(107)	-	(107)
Exchange translation difference	161	4	165
At 30 June 2022	2,915	46	2,961
Additions	27	-	27
Exchange translation difference	(92)	-	(92)
Disposal of subsidiary	(2,147)	-	(2,147)
At 30 June 2023	703	46	749

 

13.  Property, Plant and Equipment

	Land & buildings	Plant & machinery	Total
GROUP	£'000	£'000	£'000
Cost
At 1 July 2021	125	1,224	1,349
Exchange translation difference	-	(350)	(350)
Additions	184	254	438
Cost at 30 June 2022	309	1,128	1,437
Exchange translation difference	-	(169)	(169)
Additions	-	279	279
Disposal of subsidiary	(125)	(778)	(903)
Cost at 30 June 2023	184	460	644
Depreciation
At 1 July 2021	35	598	633
Exchange translation difference	-	(44)	(44)
Charge for the year	5	47	52
Depreciation at 30 June 2022	40	601	641
Exchange translation difference	-	(103)	(103)
Charge for the year	-	40	40
Disposal of subsidiary	(40)	(425)	(465)
Depreciation at 30 June 2023	-	113	113
Net book value at 30 June 2023	184	347	531
Net book value at 30 June 2022	269	528	796

 

14.  Investment in Subsidiary Undertakings

The Company's investments in its subsidiary and associated undertakings
COMPANY				Total £'000
Cost and net book value
As at 1 July 2021				3,114
Acquisition: 60% of Whale Head Minerals (Pty) Ltd (Note 15)				184
As at 30 June 2022				3,298
Disposal of African Tantalum				(2,514)
As at 30 June 2023				784
All principal subsidiaries of the Group are consolidated into the financial statements.   At 30 June 2023 the subsidiaries were as follows:
Subsidiary undertakings	Country of registration	Principal activity	Holding		%
Whale Head Minerals (Pty) Ltd (1) 6 Reier Avenue Alexander Bay Northern Cape 8290 South Africa	South Africa	Mining License holder	Ordinary shares		60%
Deep Blue Minerals (Pty) Ltd (1)(2) 6 Reier Avenue Alexander Bay Northern Cape 8290 South Africa	South Africa	Mining License holder	Ordinary shares		90%
Kazera Trading Limited Unit D, De Clare House, Sir Alfred Owen Way, Pontygwindy Industrial Estate Caerphilly Wales, CF83 3HU	UK	Dormant	Ordinary shares		100%

 

⁽¹⁾ Companies incorporated in South Africa are required to comply with Broad-Based Black Economic Empowerment (B-BBEE) regulations.

⁽²⁾ 26% of the shares in Deep Blue Minerals (Pty) Ltd are reserved for Black Economic Empowerment partners, and therefore Kazera's ultimate beneficial interest in Deep Blue Minerals (Pty) Ltd is 64%.

 

African Tantalum (Pty) Ltd and subsidiaries ("Aftan")

On 20 December 2022 the Company announced the 100% sale of Aftan to Hebei Xinjian Construction for cash consideration of US$13m (details provided in note 15).

 

15.  Disposal of Subsidiary

On 20 December 2022, the Company announced the 100% sale of Aftan to Hebei Xinjian Construction for cash consideration of US$13m. Comprised of purchase consideration for the sale of the shares in Aftan of USD3,642,207 and the repayment of the intercompany loan to Kazera of USD9,357,793. Total consideration in GBP is £10,673k.

 

On 4 January 2023, Dennis Edmonds resigned as a director of Aftan and each of its subsidiaries, and from that date, the accounts of Aftan ceased to be consolidated as a group company. See note 3 for further information.

 

The post-tax gain on disposal of Aftan was determined as follows:

 

Group	£'000
Cash consideration	2,990
Repayment of existing loan	7,863
Total consideration	10,673
Cash disposed of	615
Net inflow on disposal of discontinued operations	10,059
Net assets disposed (other than cash)
Mines under construction	(2,147)
Property, plant and equipment	(438)
Trade and other receivables	(92)
Trade and other payables	655
Pre-tax gain on disposal of subsidiary undertaking	8,037

The post tax gain on disposal of discontinued operations was determined as follows:

 

	2023	2022
	£'000	£'000
Revenue	24	-
Administration and other costs	67	(1,170)
Gain from selling discontinued operations after tax	8,037	-
Profit/(loss) on discontinued operations after tax	8,128	(1,170)

 

The statement of cash flows included £73k in relation to outflow from operating activities relating to discontinued operations.

 

16.  Long Term Loan (Company)

Company	Loan to Aftan Tantalum £'000	Loan to Deep Blue Minerals £'000	Loan to Whale Head Minerals £'000	Total £'000
As at 1 July 2021	7,145	499	-	7,644
As at 30 June 2022	7,985	733	19	8,737
Increase in loan	361	338	517	1,216
Disposal of subsidiary	(8,346)	-	-	(8,346)
As at 30 June 2023	-	1,071	536	1,607

 

17.  Trade and Other Receivables

	GROUP		COMPANY
	2023	2022	2023	2022
	£'000	£'000	£'000	£'000
Other receivables	8,520	262	8,500	5
Prepayments and accrued income	533	17	366	17
	9,053	279	8,866	22

 

Included in other receivables is £8,501k (2022: nil) with respect to amounts due on the sale of Aftan.

 

18.  Cash and Cash Equivalents

	GROUP		COMPANY
	2023	2022	2023	2022
	£'000	£'000	£'000	£'000
Cash and cash equivalents	761	637	758	609

 

Cash and cash equivalents (which are presented as a single class of asset on the face of the balance sheet) comprise cash at bank and other short term, highly liquid investments with a maturity of three months or less.

 

The Directors consider the carrying amount of cash and cash equivalents approximates to their fair value.

 

19.  Trade and Other Payables

	GROUP		COMPANY
	2023	2022 (as restated)	2023	2022
	£'000	£'000	£'000	£'000
Current Liabilities
Trade payables	17	12	11	12
Other payables	124	482	12	480
Accruals	50	158	50	153
	191	652	73	645
Non-Current Liabilities
Other payables	-	123	-	-
	-	123	-	-

 

The Directors consider the carrying amount of trade payables approximates to their fair value.

 

The 'other payables' non-current liability for the year ended 30 June 2022 has been re-stated as it had incorrectly included amounts due from subsidiary, Deep Blue Minerals (Pty) Limited to the Company. For further details see note 27 - prior year adjustment.

 

20.  Provisions

	GROUP		COMPANY
	2023	2022	2023	2022
	£'000	£'000	£'000	£'000
Mine rehabilitation provision	-	44	-	-
Mine decommissioning provision	-	10	-	-
	-	54	-	-

 

The provisions for mine rehabilitation and decommissioning in 2022 related to Aftan. Following the disposal of Aftan during the year these provisions are no longer required. For further info on the disposal of Aftan see note 15.

 

Each of Deep Blue and WHM carry out continuous rehabilitation as an embedded part of the mining process. Consequently, any rehabilitation costs are incurred on an ongoing basis and no provision is required.

 

21.  Share Capital and Share Premium

	No. Ordinary shares of 0.1p each	Deferred shares of 0.9p each	Share Capital £'000	Share Premium £'000
Total as at 30 June 2022 (restated)	936,599,523	286,561,208	3,516	17,556
Share issues	-	-	-	-
Total as at 30 June 2023	936,599,523	286,561,208	3,516	17,556

 

The number of Ordinary shares of 0.1p each in the capital of the Company as at 30 June 2022 has been restated as the number of such Ordinary shares had previously been overstated by 565,388 Ordinary shares of 0.1p each.

 

Reserves

The Group's reserves are made up as follows:

Share capital:                                Represents the nominal value of the issued share capital.

 

Share premium account:            Represents amounts received in excess of the nominal value on the issue of share capital less any costs associated with the issue of shares.

 

Capital redemption reserve:      Reserve created on the redemption of the Company's shares

 

Share option reserve:                 Reserve created for the equity settled share option scheme (see note 22).

 

Currency translation reserve:    Reserve arising from the translation of foreign subsidiaries at consolidation. The total movement in the foreign currency translation reserve was presented in both the Statement of Changes in Equity and in Other Comprehensive Income in the current year. During the prior year, this movement was presented in the Statement of Changes in Equity.

 

Retained earnings:                       Represents accumulated comprehensive income for the year and prior periods.

 

22.  Share-Based Payments

Equity-settled share option scheme and share warrants

The Company operates share-based payment arrangements to incentivise directors by the grant of share options.

 

Equity-settled share-based payments within the scope of IFRS 2 are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company's estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions.

 

The fair value of the share-based payments issued during the year has been calculated using the Black-Scholes valuation model. The assumptions used in the fair value calculation were as follows:

Date of grant	8 July 2022	18 July 2022	3 November 2022	16 May 2023
Number of options/warrants	3,000,000	4,000,000	16,500,000	4,000,000
Weighted average share price	£0.00725	£0.008	£0.00925	£0.00875
Exercise price (pence)	£0.01	£0.01	£0.01	£0.01
Risk free interest (%)	1.91%	1.87%	3.345%	3,628%
Expected volatility (%)	80%	80%	78%	76%
Expected life (years)	5	5	5	5
Fair value per option/warrant (pence)	0.42p	0.48p	0.59p	0.54p

 

 

The expected volatility is calculated by obtaining daily closing prices over period of measure, computing the daily returns, determining their standard deviation, and then annualizing this figure by multiplying by the square root of the number of trading days which is usually 252 days.

 

The total share-based payment expense recognised in the income statement for the year ended 30 June 2023 in respect of the share options granted was £256k (2022: £116k).

 

The total number of share options and share warrants in issue as at 30 June 2023 are as follows:

 

Share Warrants
Exercise Price	Expiry Date	At 1 July 2022	Issued	Exercised	Lapsed	At 30 June 2023
£0.02	27/12/2022	10,000,000	-	-	(10,000,000)	-
£0.02	04/01/2023	2,500,000	-	-	(2,500,000)	-
£0.02	04/01/2023	5,000,000	-	-	(5,000,000)	-
£0.01	30/10/2023	39,937,643	-	-	-	39,937,643
£0.02	01/02/2023	2,500,000	-	-	(2,500,000)	-
£0.02	31/01/2023	10,000,000	-	-	(10,000,000)	-
£0.01	31/05/2023	116,131,500	-	-	(116,131,500)	-
£0.02	01/02/2023	3,500,000	-	-	(3,500,000)	-
		189,354,143	-	-	(149,631,500)	39,397,643

As at 30 June 2023 the weighted average contractual life of the warrants in issue was 4 months (2022: 11.3 months).

 

 

Share options
Exercise Price (p)	Expiry Date	At 1 July 2022	Issued	Exercised	Lapsed	At 30 June 2023
£0.0175	20/12/2022	3,300,000	-	-	(3,300,000)	-
£0.0175	20/12/2023	3,300,000	-	-	-	3,300,000
£0.0175	20/12/2024	3,400,000	-	-	-	3,400,000
£0.0100	03/06/2025	5,000,000	-	-	-	5,000,000
£0.0100	03/06/2025	5,000,000	-	-	-	5,000,000
£0.0100	03/06/2025	5,000,000	-	-	-	5,000,000
£0.0100	03/06/2025	10,000,000	-	-	-	10,000,000
£0.0100	08/07/2027	-	3,000,000	-	-	3,000,000
£0.0100	18/07/2027	-	4,000,000	-	-	4,000,000
£0.0100	06/05/2027	-	15,000,000	-	-	15,000,000
£0.0200	12/01/2023	1,500,000	-	-	(1,500,000)	-
£0.0100	06/05/2027	-	1,500,000	-	-	1,500,000
£0.0100	11/05/2028	-	3,000,000	-	-	3,000,000
£0.0100	11/05/2028	-	1,000,000	-	-	1,000,000
		36,500,000	27,500,000	-	(4,800,000)	59,200,000

As at 30 June 2023 the weighted average contractual life of the share options in issue was 2.8 years (2022: 2.4 years).

 

23.  Financial Instruments

The Group's financial instruments comprise borrowings, cash and various items, such as trade receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Group's operations.

 

FINANCIAL ASSETS BY CATEGORY

Financial assets included in the Statement of financial position and the headings in which they are included are as follows:

	GROUP		COMPANY
	2023	2022	2023	2022
	£'000	£'000	£'000	£'000
Financial assets at amortised cost:
Cash and cash equivalents	761	637	758	609
Loans and receivables	9,053	279	8,866	22
	9,814	916	9,624	631

 

 

FINANCIAL LIABILITIES BY CATEGORY

Financial liabilities included in the Statement of financial position and the headings in which they are included are as follows:

	GROUP		COMPANY
	2023	2022	2023	2022
	£'000	£'000	£'000	£'000
Financial liabilities at amortised cost:
Trade and other payables	191	652	73	645
	191	652	73	645

 

The following table details the Group's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest repayment date on which the Group can be required to pay. The table includes both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from the interest rate curves at the balance sheet date. The contractual maturity is based on the earliest date on which the Group may be required to pay.

 

	Less than 1 month	1-3 months	3 months to 1 year	1-5 years	Over 5 years
	£'000	£'000	£'000	£'000	£'000
30 June 2022 Non-interest bearing:
Trade and other payables	-	652	-	-	-
Short term borrowings	-	-	-	-	-
30 June 2023
Non-interest bearing:
Trade and other payables	-	191	-	-	-
Short term borrowings	-	-	-	-	-

 

 

24.  Risk Management Objectives and Policies

The Group is exposed to a variety of financial risks which result from both its operating and investing activities. The Group's risk management is coordinated by the Board of Directors and focuses on actively securing the Group's short to medium term cash flows by minimising the exposure to financial markets.

 

The main risks the Group are exposed to through its financial instruments and the operations of the Group are credit risk, foreign currency risk, liquidity risk and market price risk. These risks are managed by the Group's finance function together with the Board of Directors.

 

Capital risk management

The Group's objectives when managing capital are:

·      to safeguard the Group's ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders;

·      to support the Group's growth; and

·      to provide capital for the purpose of strengthening the Group's risk management capability.

 

The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. Management regards total equity as capital and reserves, for capital management purposes.

 

Credit risk

The Company's principal financial assets are bank balances and cash and other receivables, which represent the Company's maximum exposure to credit risk in relation to financial assets. The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.

 

As at 30 June 2023, the Group's maximum exposure to credit risk was £760,576 (2022: £636,854) comprising cash and cash equivalents.

 

Liquidity risk

Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through maintaining a positive cash balance and controlling expenses and commitments. The Directors are confident that adequate resources exist to finance current operations.

 

Foreign Currency risk

The Group undertakes transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. Following the acquisition of African Tantalum (Pty) Ltd, the Group's major activity has been in Namibia, bringing exposure to the exchange rate fluctuations of GBP/£ Sterling with the Namibian Dollar and South African Rand, the currencies in which most of the operating costs are denominated. It is expected that the Group's future exposure will principally be to GBP South African Rand foreign exchange fluctuations following the Company's disposal of African Tantalum (Pty) Ltd. At the year end the value of assets denominated in these currencies was such that the resulting exposure to exchange rate fluctuations was not material to the Group's operations.

 

Exchange rate exposures are managed within approved policy parameters. The Group has not entered into forward exchange contracts to mitigate the exposure to foreign currency risk.

 

The Directors consider the assets most susceptible to foreign currency movements to be the Investment in Subsidiaries. Although these investments are denominated in South African Rands their value is dependent on the global market value of the available Tantalite resources.

 

The table below details the split of the cash held as at 30 June 2023 between the various currencies. The impact due to movements in the exchange rates is considered to be immaterial.

 

Currency		2023	2022
Namibian Dollar		-	NAD 173,234
South African Rand		ZAR 233,109	ZAR 220,360
Great British Pounds		GBP 366,884	GBP 608,504
US Dollars		USD 480,289	-
Euros		EUR 6,031	-
Total in GBP		GBP 761,000	GBP 637,000

 

Market Price risk

Going forwards the Group's exposure to market price risk mainly arises from potential movements in the market price of Tantalite. The Group is managing this price risk by completing a fixed price off-take agreement in respect of the major part of its planned production.

 

25.  Events After the Reporting Period

In respect of the disposal of Aftan, the Company received £795k in August 2023 and £264k in November 2023.

 

On 30 October, warrants over 39,397,643 Ordinary shares exercisable at a price of £0.01 per share, lapsed unexercised.

 

26.  Related Party Transactions

The remuneration of the Directors, who are the key management personnel of the Company, is set out in the report of the Board on remuneration accompanying these financial statements.

 

During the year, Westleigh Investment Holdings Ltd ("WIHL") received £55,000 (2022: £49,000) in respect of accounting, administration and office accommodation services provided to the Company. WIHL is a substantial shareholder in the Company and is controlled by Giles Clarke and Nick Harrison (each of whom resigned as directors on 8 July 2022).

 

As at 30 June 2022, the Company had an outstanding loan of £199,000 with WIHL. This loan was repaid in January 2023.

 

As at 30 June 2022, £71,000 and £57,000 was owed to Giles Clarke and Nick Harrison (each of whom was a director until 8 July 2022) respectively in unpaid salaries. These amounts were settled in full in December 2022.

 

There have been no other material transactions with related parties.

 

27.  PRIOR YEAR ADJUSTMENT

The prior year comparatives for the Group have been restated from those previously reported by the Company as shown below:

 

	As previously stated 2022 £'000	Adjustment £'000	As restated 2022 £'000
Non-Current assets
Mines under construction	2,961	-	2,961
Property, plant and equipment	796	-	796
	3,757	-	3,757
Current assets
Trade and other receivables	279	-	279
Cash and cash equivalents	637	-	637
	916	-	916
Current liabilities
Trade and other payables	652	-	652
	652	-	652
Non-Current liabilities
Other payables	826	(757)	69
Provisions	54		54
	880	(757)	123
Net current assets / (liabilities)	264	-	264
Net assets	3,141	(757)	3,898
Equity
Share capital	3,516	-	3,516
Share premium account	17,556	-	17,556
Capital redemption reserve	2,077	-	2,077
Share option reserve	443	-	443
Currency translation reserve	(494)	757	263
Retained earnings	(19,908)	-	(19,908)
Equity attributable to owners of the Company	3,190	757	3,947
Non-controlling interests	(49)	-	(49)
Total equity	3,141	757	3,898

 

Subsequent to the approval of the 2022 financial statements the Board carried out a review of the prior year Other payables balance of £826k shown in non-current liabilities. The Board concluded that £757k of this balance related to amounts due from Deep Blue Minerals (Pty) Ltd (DBM) to the Company. As DBM is a subsidiary of the Company this amount should have been eliminated against the corresponding receivable amount in the Company, in the consolidated statement of financial position. However, the elimination had instead been allocated to Currency translation reserve. The effect of the adjustment to correct the error increases the Group's net assets by £757k to £3.9m from the previously stated £3.1m.  There was no resulting impact on profit or loss.   

 

28.  Notes supporting statement of cashflows

Significant non-cash transactions from investing activities are as follows:

		2023	2022
		£'000	£'000
Consideration for the disposal of subsidiary		10,673	-

See note 15

 

Reconciliation of net cash flow to movement in net debt

Group	2023 £000	2022 £000
Cash and cash equivalents	761	637
Borrowings	-	(474)
Net debt	761	163
Net increase in cash and cash equivalents in the period	126	590
Cash flows from decrease/(increase) in borrowings	474	(347)
Other non-cash changes	(2)	16
Change in net debt resulting from cashflows	598	259
Net debt at the start of the year	163	(96)
Net debt at the end of the year	761	163

 

 

29.  Ultimate Controlling Party

The Directors do not consider there to be one single ultimate controlling party.

 

 

**ENDS**

 

 

For further information on the Company, visit:?www.kazeraglobal.com. 

 

Kazera Global plc£  Dennis Edmonds, CEO£  £	kazera@stbridespartners.co.uk£  £
Cavendish Capital Markets Ltd (Nominated Adviser and Broker)£  Derrick Lee / Neil McDonald / Fergus Sullivan (Corporate Finance) £	Tel: +44 (0)207 220 0500£
St Brides Partners?(Financial PR)£  Paul Dulieu?/?Isabel de Salis?	kazera@stbridespartners.co.uk£  £

 

About Kazera Global plc

Kazera is a global investment company focused on leveraging the skills and expertise of its Board of Directors to develop early-stage mineral exploration & development assets towards meaningful cashflow and production.

Its three principal investments are as follows:

(1)  Alluvial diamond mining through Deep Blue Minerals (Pty) Ltd, Alexander Bay, South Africa. Kazera currently has a 90% direct interest in Deep Blue Minerals, of which 64% is held beneficially by Kazera and 26% is held on behalf of Black Economic Empowerment partners.

(2)  Heavy Mineral Sands mining (including ilmenite, monazite, rutile, and zircon) through Whale Head Minerals (Pty) Ltd, Alexander Bay, South Africa. Kazera currently has a 60% direct beneficial interest in Whale Head Minerals.

(3)  Tantalite mining in South-East Namibia (divestment in progress)

As announced on 20 December 2022, Kazera has agreed to dispose of African Tantalum (Pty) Ltd ("Aftan") for a cash consideration of US$13 million plus a debenture payment of 2.5% of the gross sales of produced lithium and tantalum for life-of-mine. Completion of the sale is subject to receipt of full consideration proceeds. Aftan has been deconsolidated from the Company's financial statements with effect from 4 January 2023 because in accordance with the terms of the sale agreement, it has relinquished control of the Aftan in favour of the purchaser, Hebei Xinjian Construction Close Corp with effect from that date. Kazera retains the right to cancel the transaction and retain all amounts paid to date in the event of default by Hebei Xinjian.

The Company will consider additional investment opportunities as appropriate, having regard to the Group's future cash flow requirements.TER WILSON HAHA) LSON HAHA