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) as in force in the United Kingdom pursuant to the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via Regulatory Information Service (RIS), this inside information will be in the public domain.

Andrada Mining Limited

("Andrada" or the "Company")

Annual Report and Audited Financial Statements for the year ended 29 February 2024

& Notice of Annual General Meeting

Andrada Mining Limited (AIM: ATM, OTCQB: ATMTF), the African critical raw materials producer with a portfolio of mining and exploration assets in Namibia, is pleased to announce the release of its audited financial results for the 2024 financial year ended 29 February 2024 ("FY2024").

Financial highlights

·    Revenue increased by 83% to £17.9 m (FY 2023: £9.8 m) due to increased tin metal volumes.

·    Gross profit increased by over 100% to £1.7m (FY 2023: loss £0.7m).

·    C1¹ operating costs decreased by 11% to US$17 870 per tonne of contained tin (FY 2023: US$19 762).

·    C2² operating costs decreased by 9% to US$20 796 per tonne of contained tin (FY 2023: US$22 287).

·    All-in sustaining cost³ at US$26 223 per tonne of contained tin (FY 2022: US$24 939) was within guidance.

·    Cash and cash equivalents at year end at £14.5m.

·    Unaudited cash balance at 27 August 2024 was £10.1m.

Highlights

·    Annual tin concentrate tonnage increased 54% to 1 474 tonnes (FY2023: 960 tonnes).

·    Annual tin metal tonnage increased 51% to 885 tonnes (FY2023: 587 tonnes).

·    Exports increased to 56 shipments compared to 33 shipments in FY 2023.

·    Produced saleable petalite bulk sample at 4.16% lithium oxide ("Li₂O").

·    Produced laboratory- scale spodumene concentrate at 6.8% Li₂O.

·    Renewal of the Thaisarco supply agreement for tin concentrate.

·    Renewal of the Afrimet supply agreement for tantalum concentrate.

·    Constructed and commissioned the bulk sample processing facility and tantalum circuit.

Post-period highlights

·    Enhanced the UTMC operating model by providing local partners, the Small Miners of Uis, exposure to Andrada's future growth prospects through owning shares at group level whilst streamlining operational decision making.

·    Conclusion of the NAD175 million Bank Windhoek funding.

·    Concluded a tin price hedge instrument at USD 33 000 per tonne

C1¹ refers to operating cash cost per unit of production, excluding selling expenses and sustaining capital expenditure associated with Uis Mine

C2² refers to operating cash cost (C1) plus selling expenses including logistics, smelting and royalties

All-in sustaining cost (AISC³) incorporates all costs related to sustaining production, capital expenditure associated with developing and maintaining the Uis operation, and pre-stripping waste mining costs

ANNUAL REPORT

The Annual Report including the Annual Financial Statements for the 2024 financial year ended 29 February 2024 is now available on the Company's website at the following link: https://andradamining.com/media/reports/

Physical copies of the Annual Report will also be posted today to shareholders who elected to receive them.

ANNUAL GENERAL MEETING

A Notice of Annual General Meeting ("AGM") will be distributed to shareholders today and is now available on the Company's website: https://andradamining.com/media/reports/

The AGM will be held at 11.00am on 30 September 2024, at PO Box 282, Oak House, Hirzel Street, St Peter Port, Guernsey GY1 3RH.

CONTACT

Andrada Mining Anthony Viljoen, CEO Sakhile Ndlovu, Investor Relations	+27 (11) 268 6555
NOMINATED ADVISOR & BROKER
Zeus Capital Katy Mitchell Harry Ansell Andrew de Andrade	+44 (0) 203 829 5000
CORPORATE BROKER & ADVISOR
H&P Advisory Limited Andrew Chubb Jay Ashfield Matt Hasson	+44 (0) 20 7907 8500
Berenberg Jennifer Lee Natasha Ninkov	+44 (0) 20 3753 3040
FINANCIAL PUBLIC RELATIONS
Tavistock (United Kingdom) Jos Simson Charles Vivian Josephine Clerkin	+44 (0) 207 920 3150 andrada@tavistock.co.uk

 

About Andrada Mining Limited

Andrada Mining Limited is listed on the London Stock Exchange (AIM) with mining assets in Namibia, a top-tier investment jurisdiction in Africa. Andrada strives to produce critical raw materials from a large resource portfolio, to contribute to a more sustainable future, improved lives and the upliftment of communities adjacent to its operations. Leveraging its strong foundation in Namibia, Andrada is on a strategic path to becoming a leading African producer of critical metals including lithium, tin and tantalum. These metals are important enablers of the green energy transition, being essential for components of electric vehicles, solar panels and wind turbines.

CHAIRMAN'S STATEMENT

Andrada Mining transformed itself into a multi-mineral producer during FY 2024 ("the Year") We achieved a remarkable double-digit increase in tin concentrate production and successfully produced our first commercial batch of tantalum, solidifying our position as a key player in the critical metals space.

While navigating challenging market conditions, we focused on building a sustainable future. We implemented a water recycling programme that reduced our environmental impact. We also maintained a 99% Namibian workforce, demonstrating our commitment to the local community. Andrada's vision is deeply intertwined with our identity as a proudly Namibian company with significant future growth and value potential.

OVERVIEW

What differentiates Andrada from its peers is the solid foundation created by our fully operational flagship Uis Mine. The Company managed to unlock additional value through exploration milestones at Lithium Ridge and Spodumene Hill. By continuing to focus on validating the resource potential of our portfolio through phased exploration, we aim to drive and entrench long-term shareholder value creation. This development approach has enabled the production of tantalum and lithium concentrates, establishing additional revenue streams that will significantly mitigate single product price and demand volatility risks. Multi-mineral production at Uis Mine will also drive down overall costs to the benefit of the bottom line. The ability to increase revenue and cash flow while managing costs remains imperative to improving profitability.

KEY ACHIEVEMENTS

Increased tin production and commencement of tantalum production

We achieved over 50% annual volume increases in both tin concentrate and tin metal production. This was mainly due to the plant expansion implemented towards the end of the prior financial year. The expanded plant is now in stable production. Furthermore, we successfully produced our first consignment of tantalum at the end of FY 2024. This proved our ability to meet the AfriMet supply agreement and marked a key milestone in Andrada's goal of being a multi-mineral producer.

Established robust financial partnerships

During the year, we forged new global and local funding partnerships with the Development Bank of Namibia, Bank Windhoek, and Orion Resource Partners while nurturing existing relationships. These partnerships, together with support from our shareholders, enabled us to achieve our objectives of expanded production and supply of tin concentrate, tantalum commercial production, and lithium pilot production. Looking forward, our aim is to achieve an annualised rate of 1 650 tonnes of contained tin. We are confident that the ring-fenced US$12.5m Orion tin royalty, combined with the Continuous Improvement Programme launched during the year at Uis Mine, will enable us to realise this objective. We value our shareholders' and funders' support as we continue to execute our strategy.

STRATEGIC PROCESS

During the year, we decided to accelerate the growth of our lithium offering through a strategic partnership process. Launched in May 2023, this process involves a rigorous review of multiple potential partnership opportunities with the objective of ensuring value accretion to shareholders. I am pleased with the thoroughness of the process and confident that it will secure the right partner - one that has specialised lithium expertise tailored to our unique project dynamics. Simultaneously, we continue to build our internal capabilities to deliver lithium to both the technical and chemical markets while expanding our tin and tantalum production. This comprehensive approach underscores our commitment to becoming a leading and sustainable African producer of critical metals.

Leading international organisations within the lithium value chain have visited the Company's assets in Namibia, conducted mineralogy testwork and implemented detailed due diligence, all demonstrating their interest in the potential of Andrada's assets.

At the time of writing this report, discussions with interested parties are at an advanced stage, and we are encouraged by the keen interest that has been shown. A further update will be provided in due course as appropriate.

SUSTAINABILITY

Governance and sustainability best practices are integrated across our business model. Host communities are vital to our operations, and Andrada seeks to develop and maintain mutually beneficial relationships and trust with all key stakeholders through open and constructive engagement. Additionally, the Board has ensured we have a strong ESG Committee that advises on strategies to improve operational safety. We are committed to creating a safe working environment where our employees can thrive and contribute to the achievement of their goals as well as the Company's strategic objectives. Importantly, we continue to support and contribute to the regional and national economy through local procurement expenditure and royalty. In the year under review, I am pleased to report that Andrada spent just over N$505 million (US$27 million) through procurement from Namibian suppliers in FY 2024.

As Andrada operates in a water-constrained country, on-site water management is a key focus area. We strive to maximise reuse and recycling while preventing unnecessary water loss to the environment. We also support local water projects that drive community growth. In September 2024, we will release the Sustainability Report on the Company's practices, detailing the challenges and successes on our journey and the impact on all our stakeholders.

RISK MANAGEMENT

Commodity markets were challenging during the year, posing risks to the business. We have implemented a detailed enterprise risk management ("ERM") strategy to manage such risks. This includes a defined risk management framework for identifying, interrogating, monitoring and mitigating risks at every level. Implementing the ERM strategy has had a profound impact on our operations, resulting in Company-wide ownership of the strategy.

OUTLOOK

I thank the Board of Directors for their hard work during a challenging but successful year in which we reached significant milestones. I also thank Anthony Viljoen, our CEO, and his dedicated management team for steadfastly driving the strategy and positioning Andrada as an emerging producer of critical metals.

With a strong leadership team and solid business foundations in place, we look forward to similar success in FY 2025. Specifically, we will strengthen our production capabilities and bring our lithium offering to market as we advance towards initial production of petalite concentrate through the integration of the current plant.

Finally, I extend my gratitude to our staff and contractors, who continue to propel Andrada forward on our journey to becoming a leading supplier of critical metals to the global market.

GLEN PARSONS

CHAIRMAN

29 August 2024

CHIEF EXECUTIVE OFFICER'S STATEMENT

The 2024 financial year was extremely productive on all fronts for Andrada, and I am proud to reflect on the progress made over the period.

LITHIUM DEVELOPMENT STRATEGY

Metallurgy

Bringing a lithium concentrate to market will be the first step to validating the lithium potential of the Erongo Region and unlocking the significant potential of the Company's large mineral resource. In May 2023, we announced the production of a high-purity bulk sample of petalite concentrate with 4.16% Li₂O or 85% petalite content. This further proved the economic potential of the pegmatites in our mineral licence areas around Uis.

In December, we announced production of high-grade (6.8% Li₂O) spodumene concentrate from the Lithium Ridge exploration drill chips. It is encouraging that the test work yielded battery-grade spodumene concentrate at attractive lithium recovery rates. We will proceed with the next phase of exploration drilling, metallurgical test work and mineralogical characterisation to boost geological and metallurgical confidence. The goal is to declare a maiden mineral resource estimate for Lithium Ridge. Potential off-take partners have indicated interest in our lithium products. This has opened us up to the next stage of the lithium value chain, including possible test work for conversion to battery-viable lithium hydroxide.

Strategic process

The most important decision we made during the year was to embark on a strategic process to identify a partner with appropriate technical and financial capabilities to accelerate Andrada's lithium strategy. In CY 2022, Andrada received several unsolicited approaches from international entities seeking to partner in accelerating the Company's lithium strategy. In May 2023, Andrada launched the strategic process to undertake a structured assessment of the unsolicited approaches. This process has provided us with a number of high quality opportunities involving some of the industry's most respected names. Since the launch of the process, leading international organisations in the lithium value chain have visited our assets in Namibia, conducted mineralogical test work, and implemented detailed due diligence.

While we are aware of shareholders' expectations to expedite the process, we are focused on securing the best possible partner and terms to create value for shareholders. At the time of this report, our business development team is working tirelessly to thoroughly consider all opportunities, and we look forward to announcing the outcome of the process in due course.

OPERATIONAL REVIEW

Safety performance

Safety remains paramount for Andrada. I am therefore proud to confirm that we continued to improve our safety record during the period. Three lost time injuries were recorded (FY 2023: 3), resulting in a lost time injury frequency rate ("LTIFR") of 2.26 (FY 2023: 3.04). The lower LTIFR was due to the higher number of exposure hours at 1 328 712 compared to 988 389 in the previous year. We recognise that we still have areas of improvement, such as for medical treatment injuries and high-potential incidents.

We saw an improvement in optimal plant equipment functionality which reduced the likelihood of malfunctions that could lead to safety incidents. This resulted in a safer working environment and enhanced employee health and well being. The Maintenance Wednesdays initiative ensured that our operations remained compliant with safety regulations and standards, thereby minimising the risk of violations and penalties. We further supported the safety drive through a range of complementary initiatives, including externally managed audits, over 1 200 hours of training, 8 200 toolbox talks and visible leadership engagements.

Tin production performance

Thanks to the diligence of the operations team and the FY 2023 expansion, the plant performed exceptionally well throughout the year. The volume of ore processed, and of tin concentrate and contained tin produced, increased by over 50%. The higher tonnage coupled with our optimisation initiatives also meant that all our unit costs were at the lower end of guidance, decreasing by as much as 14% in the fourth quarter due to the enhanced efficiencies. Annual ore processing now stands at approximately 1 million tonnes, and tin concentrate production at approximately 1 500 tonnes. This takes us a step closer to our goal of producing 2 600 tonnes of tin concentrate (1 600 tonnes of contained tin), in line with the Orion royalty agreement.

FUNDING SUPPORT

Aside from headline operational success, Andrada also enjoyed support from its key funding partners. In September 2023, we concluded the N$100m (c. US$5.5m) funding agreement ring-fenced for the CI2 Programme.

The CI2 Programme was established following the modular expansion of the crushing and tin concentration circuits in the third quarter of FY 2023. The expansion aimed at increasing production tonnage to reduce costs through economies of scale. Approximately 70% increased capacity was achieved. However, the enhanced plant performance revealed bottlenecks that had to be eliminated to ensure the increased output and higher production rates were sustainable. Therefore, the CI2 Programme aims to improve processing efficiencies to maximise the tin concentrate recovery rate, establish business sustainability through the enhancement of operational support infrastructure, and to reduce operating costs.

In November 2023, Orion Mine Finance provided a combined US$25m (incorporating share, convertible and warrant issue) funding package with US$12.5m allocated for accelerating the lithium and tantalum revenue streams.

EXPLORATION REVIEW

We received results of significant lithium mineralisation from the Lithium Ridge and Spodumene Hill drilling programmes throughout the year and commenced exploration drilling in the Brandberg West licence area. Work across all our mining assets and multiple metal profiles demonstrates that we are strategically unlocking our resource.

At the beginning of the 2023 calendar year, we announced the results of our V1/V2 pegmatite drilling programme at Uis. These results aligned with our existing geological model and brought our resource to approximately 138 Mt, moving us closer to our target of 200 Mt. We received results from the Lithium Ridge drilling programme in September 2023, confirming that the 6 km of mineralisation at surface continues at depth, indicating intersections at higher lithium grades than those recorded at Uis. These results are commensurate with similar hard-rock resources globally.

Brandberg West, historically a prolific producer of tin and tungsten, shows strong indications of copper mineralisation. In October 2023, we began a 3 000 metre exploration drilling programme to determine the extent of the mineralisation in and around the historic mine. Brandberg West could potentially double the volume of tin concentrate currently produced at Uis, while adding tungsten to the growing list of critical metals produced by Andrada.

POST-PERIOD ACTIVITY

Tantalum supply

I am pleased to confirm that we have supplied tantalum concentrate to AfriMet, in line with the off-take agreement that was renewed in December 2023. The 12-month agreement will see AfriMet purchasing all the production from the tantalum circuit at Uis Mine on a quarterly basis. Pricing is linked to Argus Metals tantalum prices. At the date of this report, we had supplied 15 tonnes and received provisional payment on the initial 5-tonne consignment. The second 10 tonne consignment was still at port awaiting shipping.

Tin expansion

We initiated the expansion plan to increase tin concentrate production at Uis Mine from 1 500 tpa to 2 600 tpa, in line with the Orion royalty agreement. The scope of the expansion entails improvements and additions to both the dry and wet processing sections of the plant. The dry section will be expanded through the installation of a crusher and XRT ore-sorters to constitute the pre-concentration circuit. The expected net effect of the ore-sorters is an increase of approximately 50% in the tin content feed to the wet processing plant.

Restructuring of Uis Tin Mining Company (PTY) Ltd ("UTMC")

On 26 June 2024, the Company executed a legally binding agreement to restructure UTMC, the operational Namibian entity that holds the Company's licences to ensure a more efficient corporate structure. The Company sought to increase its ownership interest in UTMC, from 85% to 100% through the acquisition of the 15% interest held by the Small Miners of Uis.

The rationale of the restructuring was to consolidate the ownership of Uis and Lithium Ridge licences, to provide Andrada the ability to target and expedite the development of these individual mining licences through full operational and strategic control. Subsequently, on 2 August 2024 following the fulfilment of the precedent conditions, the restructure of the ownership of UTMC was completed resulting in Andrada taking full ownership of the Uis and Lithium Ridge licences in lieu of Spodumene Hill which is now fully owned by the SMU.

OUTLOOK

We look forward to concluding the strategic process. This will enable us to push ahead with our development plans on multiple fronts. We will expand our existing tin processing operations, develop our highly prospective lithium assets, and progress our exploration programmes.

There are several milestones Andrada is focusing on for the next few years, including construction of the pre-concentration circuit, completion of the CI2 Programme, completion of the feasibility studies, and implementation of the lithium integration circuit. Furthermore, we have several exploration programmes planned for FY 2025, designed to enhance understanding of the mineralisation on the Company's mining licences. The exploration team has completed the plans to advance the resources as follows:

Uis Mine

Resource validation drilling over the northern and central pegmatites clusters.

The objective is to enhance the current MRE classification of tin and to establish the mineral potential for lithium.

Lithium Ridge

A high-density drilling campaign at the historical TinTan mine area.

The objective is to develop a maiden MRE and enhance understanding of the lithium mineralisation within the high-priority pegmatites identified.

Brandberg West

Exploration drilling will continue to assess the licence's potential.

With a focus on investigating the northern extension mineralisation. The Company will also evaluate mineralisation in the historical pit.

ANTHONY VILJOEN

CHIEF EXECUTIVE OFFICER

29 August 2024

CHIEF FINANCIAL OFFICER'S REVIEW

Andrada recorded solid financial results while delivering on its key strategic objectives during FY 2024 The positive impact of the FY 2023 expansion project was fully reflected in the FY 2024 financial results.

PROFIT AND LOSS STATEMENT OVERVIEW

The Company's revenue increased to £17.9m (FY 2023: £9.8m) mainly due to a 51% increase in tin concentrate tonnage to 1 474 (FY 2023: 960 tonnes) combined with a marginal 2% increase in the effective average tin price to US$25.6k (FY 2023: US$25.1k). Andrada exported 56 shipments (FY 2023: 33) of tin concentrate to the Company's off-take partner, Thaisarco.

Therefore, the Company's gross profit significantly improved to £1.7m from a loss of £0.7m in FY 2023. However, administrative expenses increased to £9.9m (FY 2023: £7.5m). This was mainly due to expanded operations and higher headcount ahead of the increased tin production. Furthermore, the multiple workstreams and special skills needed to achieve the potential lithium production, continue to necessitate an increase in recruitment. The Group's earnings before interest, tax, depreciation and amortisation ("EBITDA") * marginally improved to a loss of £4.8m (FY 2023: loss of £5.9m) due to the higher revenue.

Net finance costs increased to £0.7m (FY 2023: £0.6m), mainly due to the increase in total finance expenses to £1.7m (FY 2023: £0.7m) resulting from interest on the convertible loan notes and transaction costs on the royalty debt that were not charged in the prior period. The loss before tax remained the same at £8.9m (FY 2023: £8.9m) however the loss for the for the year was higher at £8.9m (FY 2023: loss of £8.1 m) resulting in the basic loss per share of 0.54 pence (FY 2023: loss of 0.60 pence). The tax asset credit of approximately £0.9m in FY 2023 improved the relative loss position in the prior year.

The higher production volumes resulted in a reduction in C1 costs to US$17 870 per tonne of contained tin from US$19 762 in the comparative period. The all-in sustaining unit cost was 7% higher YoY at US$26 809 (FY 2023: US$24 939) because of a higher stripping ratio charge resulting from an escalated mining push-back. In open pit mining operations, it is necessary to incur stripping costs to remove overburden and other mine waste materials to enable access to the ore body. The Group has elected to capitalise the costs of accelerated waste stripping activities as these are necessary to allow improved access to the ore and, therefore, will result in future economic benefits. The costs of drilling, blasting and load and haul of waste material is capitalised until such time that the underlying ore is used in production. These costs are then expensed on a proportional basis.

The capitalised costs are included in the mining asset in property, plant and equipment and are expensed back into the statement of comprehensive income as depreciation. Costs incurred for regular waste removal that do not give rise to future economic benefits are considered costs of sales. The C2 operating costs were 9% lower YoY at US$20 796 (FY 2023: US$22 287). The expansion of the Uis Mine plant coupled with the CI2 Programme is expected to reduce operational costs by 10%.

FINANCIAL POSITION STATEMENT OVERVIEW

Total assets increased by 39% to £66.2m, mainly through a £3.2m increase in intangible assets, £5.4m increase in PPE and a £6.3m increase in cash and cash equivalents. Increase in the PPE was due to the costs relating to the construction of the bulk sample processing facility. The facility was initially recognised as part of the mining asset under construction but was subsequently transferred to exploration and evaluation. The value of non-current assets increased to £42.7m (FY 2023: £34.0m), while current assets increased by approximately £10m to £23.5m, mainly due to a 22% increase in available cash to £14.5m (FY 2023: £8.2m) from debt proceeds. Financial liabilities and borrowings increased to £25.3m (FY 2023: £6.2m), mainly due to proceeds from Orion, DBN and shareholders, the latter through convertible loans. The US$12.5m Orion royalty is allocated to increasing tin production at Uis Mine. The royalty funding, coupled with the ongoing CI2 Programme, targets an increase in tonnage. All debt proceeds net of the tin royalty were utilised for the CI2 Programme, working capital, lithium pilot plant and tantalum circuit construction. The value of equity decreased to £32.1m (FY 2023: £35.7m), mainly due to higher accumulated losses and an increase of 81% in the foreign translation loss.

The inventory balance increased to £2.9m (FY 2023: £2.7m) due to higher run of mine ("ROM") stockpile and consumables. At year end, 112 tonnes (FY 2023: 157 tonnes) of tin concentrate was in stock, valued at £1.1m (FY 2023: £1.4m). Trade and other receivables were valued at £6.1m at year end (FY 2023: £2.6m), mainly due to pre-payments and deposits that were paid on equipment necessary for ongoing capital projects. The trade and other payables increased to £7.0m (FY 2023: £3.7m) due to accruals related to the expanded operations. All payables are settled within the agreed credit terms, and no interest has been charged by any supplier because of late payment of invoices during the year. Total liabilities increased by £22.3m to £34.1m, mainly due to the increased borrowings. Further details on assets and liabilities can be found in the notes to the Annual Financial Statements.

CASH FLOW STATEMENT OVERVIEW

Fundraising proceeds supported cash flows during the year as the Company constructed the lithium pilot plant and tantalum circuit and implemented the drilling campaigns as well as the CI2 Programme at Uis Mine. The material changes YoY were on the financing activities resulting in a 32% increase in cash inflows.

FUNDING OVERVIEW

Convertible loan notes

In July 2023, Andrada raised £7.7m (c. US$10m) through the issue of 77 unsecured, convertible loan notes of £100 000 each to new and existing investors. The proceeds were utilised for the construction and commissioning of the lithium pilot plant and the tantalum circuit. In addition, the funds were channelled towards the exploration programme and a lithium feasibility study.

Orion Global Resource Fund

On 22 November 2023, Andrada concluded the transaction and received funds from Orion following the fulfilment of conditions precedent, including shareholder approval. The combined US$25m funding comprises a US$12.5m (c. £10.2m) unsecured tin royalty, a US$2.5m (c. £1.95m) equity subscription for 30 505 755 ordinary shares, and a US$10m (c. £8.2m) unsecured convertible loan note. In addition, the convertible loan accrues interest at 12% annually on a four year tenure to 18 July 2027. The conversion price is 9.45p, the same as the Convertible Loan Notes issued in July 2023.

Andrada has the option to convert the loan at any time after 18 July 2024 if the shares trade at 200% or more of the conversion price. In addition, Andrada issued OMF III (Mauritius) LTD 15.4 million warrants on 21 July 2024 which enable OMF Limited to acquire ordinary shares in Andrada at an exercise price of 9.45p at a ratio of 1:1. The US$12.5m royalty is allocated to increasing tin production at the Uis Mine, and coupled with the ongoing CI2 Programme, it will enable Andrada to achieve targeted tonnage.

The balance of US$12.5m net of costs was utilised to accelerate the lithium and tantalum revenue streams following the exploration drilling results. These workstreams included the expansion of the resource at Uis and exploration drilling across all licences. Furthermore, there were metallurgical testing campaigns at the pilot facility and on-site laboratory. Finally, Andrada initiated various studies to gauge the feasibility of additional revenue streams across the Company's portfolio.

Development Bank of Namibia

On 5 September 2023, Andrada concluded the DBN funding. The funding is ring-fenced for the implementation of the Uis Mine CI2 Programme. The terms are:

·    Tenure of 10 years ranked as senior secured debt pari passu to the Standard Bank Namibia loan.

·    No interest or capital repayments for the initial 12 months after execution.

·    Interest will accrue at the Namibian prime lending rate plus 2.5% per annum.

By the end of the financial year, the balance still to be drawn was N$50m (£2.1m). These funds are being used to expedite the implementation of the CI2 Programme.

Tin hedge

In view of recent tin price volatility, and to minimise financial risk, the Company concluded a hedging instrument with Standard Bank Namibia Limited in respect of the first 20 tonnes of contained tin shipped every month from June 2024 to May 2025. The price under this agreement is fixed at US$33 000 per tonne.

A tin price rally started in April 2024 due to a combination of supply tightness resulting from decreased exports from Myanmar and Indonesia as well as declining inventory in China. Speculative interest also contributed to the rally, with experts cautioning against an excessively bullish view of future pricing. The LME tin spot price was US$25 450 on 2 January 2024, increasing to above US$30 000 on 10 April and peaking at US$35 275 on 22 April 2024. The average daily price from April 2024 to the date of writing was approximately US$32 700. The uncertainty in pricing informed the decision to enter into the hedging agreement. Based on contained tin production in FY 2024, the hedge covers approximately 30% of quarterly production.

POST-PERIOD ACTIVITY

Bank Windhoek

On 5 August 2024, UTMC concluded the N$175m (c.£7.5m) funding agreements with Bank Windhoek Limited ("BWL"). The funding is constituted of a N$100m term loan on a 6 year tenure, with interest at the Namibian Prime Rate plus 1%. BWL will also refinance the Company's working capital facilities totalling N$50m (c.£2.1m). These facilities, which are for 12 months from the date of drawdown, will incur the prime rate minus 0.5%. These working capital facilities will be ranked as senior secured debt pari passu with other debt holders.

CONCLUSION

GOING CONCERN

The main estimates considered as part of management's going concern assessment are production profiles, tin, lithium and tantalum prices, exchange rates and committed capital. The production profile is based on the Group's current achieved production post the completion of the expansion project, as well as the additional production on successful completion of the continuous improvement capital project and ore sorter projects. In addition, the Group successfully raised £7.1m through the funding from Bank Windhoek, with the possibility of future funding through a strategic partner. This further supports the Group's liquidity requirements and its ability to meet its obligations in the ordinary course of business until February 2026. Based on the forecasts, additional funding will be required within the next 12 months for the purpose of envisaged capital and exploration projects without a strategic partner. As the Group is also entering a new market with reference to lithium sales, which are close to near-term production, the cash flow forecast has assumed the successful completion of the lithium pilot plant and the tantalum circuit to deliver the business strategy. Further details on the going concern are in the Annual Financial Statements on page xx.

HITEN OOKA

CHIEF FINANCIAL OFFICER

29 August 2024

* EBITDA refers to earnings before interest, taxation, depreciation and amortisation. Calculated by adding back the depreciation and amortisation charges of approximately £3.4 million to the operating loss of approximately £8.1m disclosed in the cashflow statement and P&L respectively.

INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF ANDRADA MINING

OPINION ON THE FINANCIAL STATEMENTS

In our opinion the financial statements:

·    give a true and fair view of the state of the Group's affairs as at 29 February 2024 and of its loss for the year then ended;

·    have been properly prepared in accordance with UK adopted international accounting standards; and

·    have been prepared in accordance with the requirements of the Companies (Guernsey) Law 2008.

We have audited the financial statements of Andrada Mining Limited (the 'Parent Company') and its subsidiaries (together the 'Group') for the year ended 29 February 2024 which comprise the consolidated statement of comprehensive income, the consolidated statements of financial position, the consolidated statement of changes in equity, the consolidated statement of cash flows and notes to the consolidated financial statements, including a summary material accounting policy information.

The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and UK adopted international accounting standards.

BASIS FOR OPINION

We conducted our audit in accordance with International Standards on Auditing (UK) ('ISAs (UK)') and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remain independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

MATERIAL UNCERTAINTY RELATED TO GOING CONCERN

We draw attention to the Going concern section in Note 2 to the financial statements, which indicates that the Group is reliant on additional funding which is not guaranteed. As stated in note 2, these events or conditions, along with other matters as set out in the Going concern section in Note 2 to the financial statements, indicate that a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Given the material uncertainty noted above and our risk assessment we considered going concern to be a key audit matter.

Our evaluation of the Directors' assessment of the Group's ability to continue to adopt the going concern basis of accounting and our audit procedures in response to the key audit matter included the following:

·    We discussed with the Directors their assessment of the potential risks and uncertainties, forecast commodity prices and production and the availability of financing that are relevant to the Group's business model and operations to assess the going concern assumption. We formed our own assessment of risks and uncertainties based on our understanding of the business and mining sector and considered these in performing sensitivities.

·    We assessed the latest board approved budgets and cash flow forecasts for the Group to February 2026. We challenged the Directors' assumptions in respect of the production profiles, forecast tin, lithium and tantalum prices, operating costs and committed capital. In doing so, we considered factors such as the Group's operational performance, recent cost profile and market analyst commentary regarding forecast commodity prices.

·    We recalculated forecast covenant compliance calculations and assessed the consistency of such calculations with the ratios stated in the relevant lender agreements.

·    We assessed the sensitivity analysis performed by management in respect of key assumptions underpinning the forecasts and considered Directors' conclusions as to whether such scenarios are reasonably possible based on our knowledge of the business and operating environment.

·    We recalculated the forecast covenant compliance calculations to assess arithmetical accuracy and assessed the consistency of such calculations with the ratios stated in the relevant lender agreements.

·    We discussed the Group's strategy to access the funds required, with the Directors to assess the timing of cashflows. We read the draft agreements and term sheets from potential investors in connection with the planned project financing. We checked the post year end funding received by the Group by tracing it to the bank statements.

·    We considered and assessed the adequacy of the disclosures relating to the Directors' assessment of the going concern basis of preparation within the notes to the financial statements against the requirements of the financial reporting framework, our understanding of the business and the Directors' going concern assessment.

In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

OVERVIEW

Coverage	100% (FY 2023: 99%) of Group revenue
	93% (FY 2023: 90%) of Group total assets
Key audit matters		FY 2024	FY 2023
	Carrying value of mining assets	Yes	Yes
	Going concern	Yes	Yes
	Valuation and accounting for convertible loan notes and revenue royalty arrangement	Yes	No
Materiality	Group financial statements as a whole
	£620 000 (FY 2023: £470 000) based on 1% of total assets (FY 2023: 1% of total assets)

 

AN OVERVIEW OF THE SCOPE OF OUR AUDIT

Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group's system of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement.

In approaching the Group audit, we considered how the Group is organised and managed.

Andrada Mining Limited is a company registered in Guernsey and listed on AIM in the United Kingdom, the Namibian Stock Exchange ('NSX') in Namibia and has qualified to trade on the OTCQB (also called 'The Venture Market') in the United States. from 5 June 2023. The Group's principal operations are located in Namibia.

Our Group audit scope focused on the Group's producing and exploration assets to gain sufficient coverage over the Group's total assets, total revenue and loss before tax while considering the audit risks identified. As a result, we determined the Parent Company and two subsidiary entities, AfriTin Mining (Namibia) Pty Limited and Uis Tin Mining Company Pty Limited which operate the Uis Mine, to be significant components of the Group and were subject to full scope audits. The audits of each of the significant components were principally performed in the United Kingdom, Namibia and South Africa. All the audits were conducted by either the group audit team or BDO network member firms. The remaining components of the Group were considered non-significant, and these components were principally subject to analytical review procedures, together with specified audit procedures over exploration and evaluation related assets. This work was conducted by BDO network member firms. We performed a detailed review of the work performed by the component auditors under ISA (UK) 600.

Our involvement with component auditors

For the work performed by component auditors, we determined the level of involvement needed in order to be able to conclude whether sufficient appropriate audit evidence has been obtained as a basis for our opinion on the Group financial statements as a whole. Our involvement with component auditors included the following:

·    We held planning meetings with the component auditors and local management.

·    Detailed Group reporting instructions were sent to the component auditors, which included the principal areas to be covered by the audits (including areas that were considered to be key audit matters as detailed below) and set out the information to be reported to the Group audit team. The Group audit team was actively involved in the direction of the audits performed by the component auditors for Group reporting purposes, along with the consideration of findings and determination of conclusions drawn.

·    The Group audit team was actively involved in the direction of the audits performed by the component auditors for Group reporting purposes, along with the consideration of findings and determination of conclusions drawn.

·    The Group audit team was actively involved in the direction of the audits performed by the component auditor for Group reporting purposes, along with the consideration of findings and determination of conclusions drawn. We performed our own additional procedures in respect of the significant and elevated risk areas that represented key audit matters in addition to the procedures performed by the component auditor.

·    We received and reviewed Group reporting submissions and performed a review of the component auditors' files. Our review was performed remotely using our online audit software.

·    We held clearance meetings remotely with the component auditors and local management to discuss significant audit and accounting issues and judgements.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

In addition to the matter described in the material uncertainty related to going concern section above, we have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter	How the scope of our audit addressed the key audit matter
Carrying value of mining assets (See note 2: Critical accounting estimates and judgements and Note 12 Property, Plant and Equipment) As disclosed in Note 2 Critical accounting estimates and judgements, management have reviewed the Uis Mine for indicators of impairment and have considered among other factors, the operations to date at Uis Mine including production from the lithium pilot plant and tantalum circuit, forecast commodity prices, production profile, inflation rate, post-tax real discount rate and market capitalisation of the Group. As set out in Note 2, Management have identified the reduction in the tin price as an indicator of impairment. In undertaking the impairment review, management have also reviewed the underlying Life of Mine ("LoM") valuation model for Uis. The LoM valuation model is on a fair value less cost to develop basis and includes assessments of different scenarios associated with capital improvements and expansion opportunities. The impairment testing performed by management did not result in an impairment. The assessment of the recoverable value of the Uis mining assets requires significant judgement and estimates to be made by management - in particular regarding the inputs applied in the models including future tin, tantalum and lithium prices, ore production and reserves, operating and development costs and discount rates. The estimation of future tin price is subject to uncertainty considering the volatility of market. The carrying value of the Uis mining assets is therefore considered a key audit matter given the level of judgement and estimation involved.	We reviewed and challenged management's impairment indicator assessment and testing performed on the underlying LoM valuation model for the Uis mining assets which was carried out in accordance with relevant accounting standards. Our audit procedures in this regard included: ·    Reviewing the Competent Person's Report to support the mineral reserve and performed an assessment of the independence and competence of management's expert. ·    Critically reviewing LoM forecast by making enquiries of operational management, evaluating it against our understanding of the operations and historic performance, and evaluating the consistency of available reserves with the Competent Person's Report. ·    Obtaining management's LoM valuation model to confirm that sufficient headroom existed over the asset carrying value as part of our assessment of potential impairment indicators. ·    Checking the mathematical accuracy of management's LoM valuation model. ·    Challenging the significant inputs and assumptions used in the management's LoM valuation model and whether these were indicative of potential bias. This included comparing forecast commodity prices to a range of third-party independent market outlook reports and historical actual data, comparing the forecast production to third party feasibility and resource studies. We compared forecasted costs against the expected production profiles in the mine plans and recent historical performance. ·    Recalculating the discount rate and utilising BDO valuation experts to assist us in assessing management's discount rate by recalculating it in reference to external data. ·    Review of management's sensitivity analysis and performance of our own sensitivity analysis over individual key inputs including tin prices, discount rate and plant recovery. Key observation: Based on the procedures performed, we found that the key judgements and estimates applied by management in their LoM valuation model to be within an acceptable range and found their conclusion that there was no impairment as of 29 February 2024 to be reasonable.
Valuation and accounting for the convertible loan notes and revenue royalty arrangement (See note 2 and 17 for details relating to this key audit matter) As disclosed in Note 17 Other financial liabilities, in November 2023, the Group finalised a financing contract for its mine expansion with Orion Mining Finance III LTD ("Orion"), for a USD25m package consisting of: ·    convertible loan notes that have been issued by Andrada Mining Limited to Orion to the value of USD10m; ·    an equity investment of USD2.5m in Andrada Mining Limited; and ·    revenue royalty arrangement of USD12.5m with Uis Tin Mining Company (Pty) Ltd. Management involved an expert to assist with the accounting implications of the arrangement. Revenue Royalty arrangement: As disclosed in Note 2 Critical accounting estimates and judgements, the Group's obligations under the revenue royalty arrangement is accounted for as a financial liability at fair value through profit or loss. The revenue royalty arrangement is a financial instrument for which the accounting and valuation can be complex, with key estimates and judgements such as applying the correct accounting policy, determining the appropriate discount rate, and forecasting production volumes and commodity prices. Convertible loan note: As disclosed in Note 2 Material accounting policy information, the loan notes are classified as a hybrid financial liability, consisting of the loan note as the host and an embedded derivative measured separately.   The convertible loan note is a financial instrument for which the accounting can be complex, with key estimates and judgements such as credit spread and volatility. Due to these complexities and the key estimates and judgements required, we therefore considered the valuation and accounting for revenue royalty arrangement and convertible loan note to be a key audit matter.	Our specific audit testing regarding this included the following: ·    We reviewed the terms of the revenue royalty arrangement and convertible loan notes agreements to understand the accounting implications. ·    We evaluated the competence, independence and objectivity of the management expert who compiled the report with respect to the accounting and valuation of the revenue royalty arrangement and convertible loan notes. Revenue Royalty Arrangement: ·    We obtained Management's assessment on the accounting treatment and with the assistance of our valuation experts, we assessed Management's conclusion that the revenue royalty arrangement should be recognised as a financial liability and accounted for at fair value through profit or loss, against the requirements of the relevant accounting standard. ·    We recalculated the fair value of the revenue royalty arrangement to confirm the accuracy of inputs considered in the model and evaluated the suitability of Management's valuation methodology used to value the royalty by involving our valuation experts. ·    We evaluated the revenue royalty arrangement model and checked the reasonableness of forecasted production volumes based on reserve report obtained during the audit and our understanding of the mining industry. ·    We compared the discount rates used by management to rates provided by our valuation experts. ·    We benchmarked forecast commodity prices to current price curves, empirical data and market analysis. ·    We also performed data integrity and arithmetical checks on the model. Convertible loan note: ·    We read and assessed the work of management's expert on the convertible loan notes with respect to the requirements of applicable accounting standards which were used to assess whether it should be recognised as a hybrid financial liability, consisting of the loan note as the host and an embedded derivative measured separately.     We confirmed the inputs used and checked the calculation of the convertible loan notes and derivative liability by involving our valuation experts, to evaluate the volatility and credit spread associated with the convertible loan notes and derivative liability. We have assessed the changes and performed a sensitivity analysis of the credit spread between the issue date and the reporting date to identify any material change. ·    We checked the calculation of the implied credit spread of the royalty to par as at the issue date. We further checked if the credit spread used in arriving at the fair value of the royalty at the issue date matches the fair value at the transaction date. Key observation: Based on the procedures performed, we found key estimates and judgements made by Management to not be unreasonable.

OUR APPLICATION OF MATERIALITY

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements.

In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:

	Group financial statements
	FY 2024	FY 2023
Materiality	£620 000	£470 000
Basis for determining materiality	1% of total assets	1% of total assets
Rationale for the benchmark applied	We consider total assets to be the most significant determinant of the Group's financial performance used by members given the nature of Group. The Group has invested significant sums on its production and non-production mining assets and these are considered to be the key value driver for the Group as its assets are an indicator of future value to shareholders.
Performance materiality	£465 000	£352 000
Basis for determining performance materiality	75% of the above materiality level	75% of the above materiality level
Rationale for the percentage applied for performance materiality	We considered several factors, including the expected total value of known and likely misstatements, and management's attitude towards proposed adjustments and our knowledge of the Group's internal controls.

Component materiality

For the purposes of our Group audit opinion, we set materiality for each significant component of the Group based on a percentage of between 18% and 71% (FY 2023: 21% and 66%) of Group materiality dependent on the size and our assessment of the risk of material misstatement of that component. Component materiality ranged from £110 000 to £465 000 (FY 2023: £97 000 to £310 000). In the audit of each component, we further applied performance materiality levels of 75% (FY 2023: 75%) of the component materiality to our testing to ensure that the risk of errors exceeding component materiality was appropriately mitigated.

Reporting threshold

We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £31 000 (FY 2023: £23 000). We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.

OTHER INFORMATION

The Directors are responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.

If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

OTHER COMPANIES (GUERNSEY) LAW, 2008 REPORTING

We have nothing to report in respect of the following matters where the Companies (Guernsey) Law, 2008 requires us to report to you if, in our opinion:

·    proper accounting records have not been kept by the Company; or

·    the financial statements are not in agreement with the accounting records; or

·    we have failed to obtain all the information and explanations which, to the best of our knowledge and belief, are necessary for the purposes of our audit.

RESPONSIBILITIES OF DIRECTORS

As explained more fully in the Directors' responsibilities statement, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of noncompliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Non-compliance with laws and regulations

Based on:

·    Our understanding of the Group and the industry in which it operates;

·    Obtaining and understanding of the Group's policies and procedures regarding compliance with laws and regulations; and

·    Discussion with management, the Audit Committee and the Component auditors.

We considered the significant laws and regulations to be the UK adopted international accounting standards, the Companies (Guernsey) Law, 2008, the listing rules of AIM, NSX and OTCQB, the various Mining Regulations in Namibia, the terms and conditions included in the Group's exploration, the evaluation licenses and the mining licences.

The Group is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be Environmental and health and safety legislation, Anti-bribery legislation, Electronic Communications and Transactions Act, 2002, Environment Conservation Act, 1989, Compensation for Occupation Injuries and Disease Act, 1993, Labour Relations Act, 1995, Skills Development Act, 1998, Environment Protection Act, 2002, Companies Act 28 of 2004 (Namibia), Occupational Health and Safety Act 85 of 1993, Labour Act 11 of 2007 (Namibia), Employment legislation (local South African employment legislation), Minerals Act 33 of 1992 (amended in 2008).

Our procedures in respect of the above included:

·    Review of RNS announcements and minutes of meeting of those charged with governance for any instances of non-compliance with laws and regulations;

·    Review of management's correspondence with regulatory and tax authorities for any instances of noncompliance with laws and regulations;

·    Holding discussions with Management and the Audit Committee to consider any known or suspected instances of non-compliance with laws and regulations, or fraud;

·    Review of financial statement disclosures and agreeing to supporting documentation; and

·    Review of legal expenditure accounts to understand the nature of expenditure incurred.

Fraud

We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:

·    Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;

·    Obtaining an understanding of the Group's policies and procedures relating to;

o Detecting and responding to the risks of fraud; and

o Internal controls established to mitigate risks related to fraud.

·    Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud;

·    Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;

·    Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and

·    Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted by these.

Based on our risk assessment, we considered the areas most susceptible to fraud to be revenue recognition and management override of controls. Significant judgements related going concern and management was regarding the following key accounting estimates and judgements:

·    Impairment review of Uis mine

·    Fair valuation of year end receivables balance

·    Capitalisation of waste stripping costs

·    Going concern

·    Rehabilitation provision

·    Ore stockpile and tin concentrate

·    Cost capitalisation

·    Carrying value of exploration and evaluation assets

·    Gross royalty arrangement - Forecasted commodity price, risk-free rate and projected production inputs

·    Convertible Loan Notes (CLN) - volatility and credit spread

Our procedures in respect of the above included:

·    Addressing the fraud risk in relation to revenue recognition tracing revenue transactions to supporting documentation, including testing that revenue was recorded in the correct period by testing revenue transactions in the period proceeding and preceding year end;

·    Addressing the risk of fraud through management override of internal controls, by testing the appropriateness of journal entries made throughout the year by applying specific criteria to select journals which may be indicative of possible irregularities or fraud;

·    Holding meeting with forensic specialists to understand industry specific susceptible areas;

·    Assessing the susceptibility of the Group's financial statements to material misstatement, including how fraud might occur by making enquiries of the Directors and the Audit Committee during the planning and execution phases of our audit to understand where they considered there to be susceptibility to fraud, considering the risk of management override of controls and relevant controls established to address risks identified to prevent or detect fraud;

·    Agreeing the financial statement disclosures to underlying supporting documentation;

·    Making enquiries with management and those charged with governance regarding any known or suspected instances of fraud;

·    Reviewing of minutes of meeting of those charged with governance for any known or suspected instances of fraud;

·    Selecting journals by applying specific criteria to detect possible irregularities and fraud and agreed them to the supporting documents to test the appropriateness of journal entries;

·    Performing a detailed review of the group's year end adjusting entries an investigating any that appear unusual as to nature or amount and agreeing to supporting documentation;

·    Making enquiries of Directors as to whether there was any correspondence from regulators in so far as the correspondence related to the financial statements;

·    Assessing the judgements made in respect of going concern (see section on Material uncertainty relating to going concern above) and note 2 to the financial statements; and

·    Assessing whether the judgements made in accounting estimates were indicative of a potential bias (refer to key audit matters above and note 2 to the financial statements).

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including component engagement teams who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. For component engagement teams, we also reviewed the result of their work performed in this regard.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities . This description forms part of our auditor's report.

USE OF OUR REPORT

This report is made solely to the Company's members, as a body, in accordance with Section 262 of the Companies (Guernsey) Law, 2008. Our audit work has been undertaken so that we might state to the Parent Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Parent Company and the Parent Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

BDO LLP

Chartered Accountants

London, UK

29 August 2024

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 29 February 2024

Notes		Year ended 29 February 2024 £	Year ended 28 February 2023 £
Revenue	4	17 967 889	9 827 474
Cost of Sales	5	(16 247 748)	(10 509 418)
Gross profit/(loss)		1 720 141	(681 944)
Administrative expenses	6	(9 959 549)	(7 451 352)
Idle plant costs		-	(258 177)
Other income		97 415	52 196
Operating loss		(8 141 993)	(8 339 277)
Finance income	8	955 940	39 054
Finance expenses	8	(1 684 506)	(669 824)
Loss before tax		(8 870 559)	(8 970 047)
Income tax expense                                                              9		-	866 203
Loss for the year		(8 870 559)	(8 103 844)
Other comprehensive loss
Items that will or may be reclassified to profit or loss:
Exchange differences on translation of share-based payment reserve		(410)	(441)
Exchange differences on translation of foreign operations		(3 074 742)	(2 298 674)
Exchange differences on non-controlling interest		24 785	19 395
Total comprehensive loss for the year		(11 920 926)	(10 383 564)
Loss for the year attributable to:
Owners of the parent		(8 438 465)	(7 753 819)
Non-controlling interests	24	(432 094)	(350 025)
		(8 870 559)	(8 103 844)
Total comprehensive loss for the year attributable to:
Owners of the parent		(11 513 617)	(10 052 933)
Non-controlling interests		(407 309)	(330 631)
		(11 920 926)	(10 383 564)
Loss per ordinary share Basic loss per share (in pence)                                             10		(0.54)	(0.60)

The notes form an integral part of these financial statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 29 February 2024

	NOTES	29 February 2024£	28 February 2023£
ASSETS
NON-CURRENT ASSETS
Intangible assets	11	10 519 937	7 279 593
Property, plant and equipment	12	32 170 329	26 723 218
TOTAL NON-CURRENT ASSETS		42 690 266	34 002 811
CURRENT ASSETS
Inventories	13	2 948 618	2 667 193
Trade and other receivables	14	6 050 465	2 592 770
Cash and cash equivalents	15	14 505 800	8 205 705
TOTAL CURRENT ASSETS		23 504 883	13 465 668
TOTAL ASSETS		66 195 149	47 468 479
EQUITY AND LIABILITIES
EQUITY
Share capital	21	59 247 558	56 883 908
Accumulated deficit		(26 623 617)	(18 334 115)
Warrant reserve		482 199	50 307
Share-based payment reserve		1 831 764	1 049 663
Convertible Loan Note Reserve		4 579 427	-
Foreign currency translation reserve		(6 907 976)	(3 833 234)
Equity attributable to the owners of the parent		32 609 355	35 816 529
Non-controlling interests	24	(554 739)	(147 430)
TOTAL EQUITY
NON-CURRENT LIABILITIES
Environmental rehabilitation provision	19	1 152 121	965 578
Borrowings	16	9 888 216	3 287 121
Other financial liabilities	17	10 386 425	-
Lease liability	20	478 523	707 355
TOTAL NON-CURRENT LIABILITIES		21 905 285	4 960 054
CURRENT LIABILITIES
Trade and other payables	18	6 972 743	3 655 126
Borrowings	16	4 061 447	2 915 917
Other financial liabilities	17	966 519	-
Lease liability	20	234 539	268 283
TOTAL CURRENT LIABILITIES		12 235 248	6 839 326
TOTAL EQUITY AND LIABILITIES		66 195 149	47 468 479

The notes form an integral part of these financial statements.

The financial statements were authorised and approved for issue by the Board of Directors on 29 August 2024.

Glen Parsons                                                                         Hiten Ooka

Board Chairman and Non-Executive Director                Chief Financial Officer and Executive Director

29 August 2024

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 29 February 2024

	Share capital £	Convertible loan reserve £	Accumulated deficit  £	Warrant reserve £	Share-based payment reserve £	Foreign currency translation reserve £	Total £	Non-controlling interests £	Total equity £
Total equity at 28 February 2022	38 655 078	-	(10 739 321)	192 632	704 828	(1 534 560)	27 278 657	183 200	27 461 857
Loss for the year	-	-	(7 753 819)	-	-	-	(7 753 819)	(350 025)	(8 103 844)
Other comprehensive income/loss	-	-	-	-	(441)	(2 298 674)	(2 299 115)	19 395	(2 279 720)
Transactions with owners:
Issue of shares	19 801 083	-	-	-	-	-	19 801 083	-	19 801 083
Share issue costs	(1 962 253)	-	-	-	345 276	-	(1 962 253)	-	(1 962 253)
Share-based payments	-	-	-	(159 025)	-	-	345 276	-	345 276
Warrants exercised in the year	390 000	-	159 025	16 700	-	-	390 000	-	390 000
Warrants modified in the year	-	-	-	192 632	704 828	-	16 700	-	16 700
Total equity at 28 February 2023	56 883 908	-	(18 334 115)	50 307	1 049 663	(3 833 234)	35 816 529	(147 430)	35 669 099
Loss for the year	-	-	(8 438 465)	-	-	-	(8 438 465)	(432 094)	(8 870 559)
Other comprehensive income/loss	-	-	-	-	(410)	(3 074 742)	(3 075 152)	24 785	(3 050 367)
Transactions with owners:				-	(60 500)	-
Issue of shares	2 097 000	-	-	-	-	-	2 036 500	-	2 036 500
Share issue costs	(99 300)	-	-	-	18 000	-	(99 300)	-	(99 300)
Share-based payments	-	-	-	-	-	-	18 000	-	18 000
Issue of convertible loan notes	-	4 835 481	-	-	-	-	4 835 481	-	4 835 481
Convertible loan note issue costs	-	(256 054)	-	-	-	-	(256 054)	-	(256 054)
Issue of warrants	-	-	-	431 892	-	-	431 892	-	431 892
Share options raised in the year	-	-	-	-	973 974	-	973 974	-	973 974
Share options exercised in the year	365 950	-	148 963	-	(148 963)	-	365 950	-	365 950
Total equity at 29 February 2024	59 247 558	4 579 427	26 623 617	482 199	1 831 764	(6 907 976)	32 609 355	(554 739)	32 054 616

The notes form an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CASHFLOWS

As at 29 February 2024

NOTES		Year ended 29 February 2024 £	Year ended 28 February 2023 £
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before taxation		(8 870 559)	(8 970 047)
Adjustments for:
Fair value adjustment to customer contract	4	(58 941)	261 689
Depreciation of property, plant and equipment	12	3 363 011	2 377 349
Amortisation of intangible assets	11	16 370	10 290
Share-based payments		710 523	345 276
Equity-settled transactions		-	16 700
Finance income		(955 939)	(39 054)
Finance expenses		1 684 506	669 824
Changes in working capital:
Decrease/(increase) in receivables	14	(1 322 157)	869 458
Increase in inventory	13	(530 596)	(1 471 706)
Increase in payables	18	2 226 900	997 469
Net cash used in operating activities		(3 736 882)	(4 932 752)
Cash flows from investing activities
Purchase of intangible assets		(3 348 698)	(2 580 267)
Purchase of property, plant and equipment		(11 782 638)	(10 677 505)
Finance income		211 974	-
Net cash used in investing activities		(14 919 362)	(13 257 772)
Cash flows from financing activities
Finance income		-	39 054
Finance expenses	8	(890 945)	(499 621)
Lease payments	20	(375 660)	(363 959)
Warrant Reserve		143 296
Net proceeds from issue of shares		2 303 150	18 228 830
Proceeds from issue of July convertible loan notes (equity)		4 868 023	-
Proceeds from issue of July convertible loan notes (debt)	16	2 446 977	-
Proceeds from issue of November convertible loan notes (debt)	16	5 359 794	-
Proceeds from issue of November convertible loan notes (derivative liability)	17	2 155 674	-
Proceeds from November royalty debt	17	9 522 780	-
Proceeds from bank borrowings	16	2 127 221	1 729 454
Repayment of bank borrowings	16	(2 438 797)	(89 014)
Net cash generated from financing activities		25 221 513	19 044 744
Net increase in cash and cash equivalents		6 565 269	854 220
Cash and cash equivalents at the beginning of the year		8 205 705	7 365 379
Foreign exchange differences		(265 174)	(13 894)
Cash and cash equivalents at the end of the year	15	14 505 800	8 205 705

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 29 February 2024

1.    CORPORATE INFORMATION AND PRINCIPAL ACTIVITIES

Andrada Mining Limited ("Andrada") was incorporated and domiciled in Guernsey on 1 September 2017 and admitted to the AIM market in London on 9 November 2017. The Company's registered office is PO Box 282, Oak House, Hirzel Street, St Peter Port, Guernsey GY1 3RH, and it operates from Illovo Edge Office Park, Ground Floor, Building 3, Corner Harries and Fricker Road, Illovo, Johannesburg, 2116, South Africa.

These financial statements are for the year ended 29 February 2024 and the comparative figures are for the year ended 28 February 2023.

The Andrada Group comprises Andrada Mining Limited, and its subsidiaries as noted below.

Andrada Mining Limited ("AML") is an investment holding company and holds 100% of Guernsey subsidiary, Greenhills Resources Limited ("GRL").

GRL is an investment holding company that holds investments in resource-based tin and tantalum exploration companies in Namibia, South Africa and Rwanda. The Namibian subsidiary is Andrada Mining (Namibia) Pty Limited ("Andrada Namibia"), in which GRL holds 100% equity interest. The South African subsidiaries are Mokopane Tin Company Pty Limited ("Mokopane") and Pamish Investments 71 Pty Limited ("Pamish 71"), in which GRL holds 100% equity interest. The Rwandan subsidiary is Uis Tin Mining Rwanda Limited ("UTMR"), in which GRL holds 100% equity interest.

Andrada Namibia owns an 85% equity interest in Uis Tin Mining Company Pty Limited ("UTMC"). The minority shareholder in UTMC is The Small Miners of Uis who own 15%.

Mokopane owns a 74% equity interest in Renetype Pty Limited ("Renetype") and a 50% equity interest in Jaxson 641 Pty Limited ("Jaxson").

The minority shareholders in Renetype are African Women Enterprises Investments Pty Limited and Cannosia Trading 62 CC who own 10% and 16% respectively.

The minority shareholder in Jaxson is Lerama Resources Pty Limited who owns a 50% interest in Jaxson. Pamish 71 owns a 74% interest in Zaaiplaats Mining Pty Limited ("Zaaiplaats"). The minority shareholder in Zaaiplaats is Tamiforce Pty Limited who owns 26%.

AML holds 100% of Tantalum Investment Pty Limited, a company holding Namibian exploration licences EPL5445 and EPL5670 for the exploration of tin, tantalum and associated minerals.

As at 29 February 2024, the Andrada Group comprised:

 

Company	Equity holding and voting rights	Country of incorporation	Nature of activities
Andrada Mining Limited	N/A	Guernsey	Ultimate holding company
Greenhills Resources Limited1	100%	Guernsey	Holding company
Andrada Mining Pty Limited1	100%	South Africa	Group support services
Tantalum Investment Pty Limited1	100%	Namibia	Tin & tantalum exploration
Andrada Mining (Namibia) Pty Limited3	100%	Namibia	Tin, tantalum & lithium operations
Uis Tin Mining Company Pty Limited2	85%	Namibia	Tin, tantalum & lithium operations
Mokopane Tin Company Pty Limited3	100%	South Africa	Holding company
Renetype Pty Limited1	74%	South Africa	Tin exploration
Jaxson 641 Pty Limited4	50%	South Africa	Tin exploration
Pamish Investments 71 Pty Limited2	100%	South Africa	Holding company
Zaaiplaats Mining Pty Limited3	74%	South Africa	Property owning
Uis Tin Mining Rwanda Limited2	100%	Rwanda	Tin & tantalum exploration

1 Held directly by Andrada Mining Limited

2 Held by Greenhills Resources Limited

3 Held by Andrada Mining (Namibia) Pty Limited

4 Held by Mokopane Tin Company Pty Limited

5 Held by Pamish Investments 71 Pty Limited

These financial statements are presented in Pound Sterling (£) because that is the currency in which the Group has raised funding on the AIM market in the United Kingdom. Furthermore, Pound Sterling (£) is the functional currency of the ultimate holding company, Andrada Mining Limited.

The Group's key subsidiaries, Andrada Namibia and UTMC, use the Namibian Dollar (N$) as their functional currency. The year-end spot rate used to translate all Namibian Dollar balances was £1 = N$24.33 and the average rate for the financial year was £1 = N$23.50.

2.    MATERIAL ACCOUNTING POLICIES

BASIS OF ACCOUNTING

The consolidated financial statements have been prepared in accordance with UK Adopted International Accounting Standards. The consolidated financial statements also comply with the AIM Rules for Companies, NSX Listing Requirements and the Companies (Guernsey) Law, 2008 and show a true and fair view.

The material accounting policies applied in preparing these consolidated financial statements are set out below. These policies have been consistently applied throughout the period. The consolidated financial statements have been prepared under the historical cost convention except as where stated.

GOING CONCERN

The Group closely monitors and manages its liquidity risk and day-to-day working capital requirements. Cash forecasts are regularly produced, considering the global logistical challenges around sales to ensure that there is sufficient cash within the Group to meet its obligations. The Group runs sensitivities for different scenarios, including but not limited to changes in commodity prices and exchange rates. The Group also routinely monitors the covenants associated with the borrowing facilities and proactively engages with Standard Bank, the lender, where there is any risk. Although the lender granted the Group a waiver on all covenants on the 29 February 2024 measurement date, based on the year-to-date production profile and latest forecast, the Group will be able to meet its covenant obligations for the testing period to February 2025. For the purpose of assessing going concern, the Directors have prepared forecasts to February 2026.

The main estimates considered as part of the Directors' going concern assessment are production profiles, tin, lithium and tantalum prices, exchange rates and committed capital. The production profile is based on the Group's current achieved production post the completion of the expansion project, as well as the additional production on the successful completion of the continuous improvement capital project and ore sorter projects. In addition, the Group successfully raised £7.1m through the funding of Bank Windhoek, with the possibility of future funding through a strategic partner. This further supports the liquidity requirements of the Group and its ability to meet its obligations in the ordinary course of business until February 2026. The Group also retains the ability to flex its ongoing exploration and metallurgical capital expenditures in line with cash availability as well as macro-economic circumstances.

Based on the forecasts, additional funding will be required within the next 12 months for the purpose of envisaged capital and exploration projects without a strategic partner. As the Group is also entering a new market with reference to lithium sales, which are close to near-term production, the cash flow forecast has assumed the successful completion of the lithium pilot plant and the tantalum circuit in order to deliver the business strategy. The need for further funding would be required for additional exploration and capital projects as well as studies related to the feasibility of the future growth phases. The Group believes it has several options available to it, including but not limited to, use of the overdraft facility, restructuring of the debt, additional debt or equity, cost reduction strategies as well as potential offtake arrangements. The Directors are already at an advanced stage of securing additional funding through the bank mentioned above as well as other finance for the next 12 months. However, this is yet to be finalised as at the date of approval of the financial statements. Thus, the Group is reliant on additional funding which is not guaranteed. This indicates the existence of a material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern and, therefore, the Group may be unable to realise its assets and discharge its liabilities in the ordinary course of business.

As a result of their review, and despite the aforementioned material uncertainty, the Directors have confidence in the Group's forecasts and that additional funding will be forthcoming. Accordingly, the Directors continue to adopt the going concern basis in preparing the consolidated financial statements.

The financial statements do not include any adjustments that would result if the Group were unable to continue as a going concern.

BASIS OF CONSOLIDATION

Subsidiaries

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/losses on transactions between Group companies are eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with the Group's accounting policies.

Non-controlling interests

Non-controlling interests in subsidiaries are identified separately from the Group's equity therein. Those interests of non-controlling shareholders that present ownership interests entitling their holders to a proportionate share of the net assets upon liquidation are initially measured at fair value. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests' share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non- controlling interests having a deficit balance.

SEGMENT REPORTING

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the management steering committee that makes strategic decisions.

The Group previously reported a Namibian and a South African operating segment. In the 2021 financial year, the Group made the decision to impair the full value of the South African mining licences as it chose to focus on developing its Namibian assets and it did not intend to incur any further expenditure on its South African licences. The Group now has a single operating segment consisting of the Namibian operations. During the financial year, the Namibian operations earned £17 922 216 revenue from the sale of tin concentrate to the Group's customer, Thailand Smelting and Refining Company ("Thaisarco"). The Namibian operating segment has a non-current asset balance of £34 582 425 (consisting of property, plant and equipment of £27 055 343 and intangible assets of £7 527 083). The Group will continue to monitor their operating segments and provide the necessary disclosure going forward.

FOREIGN CURRENCIES

Functional and presentation currency

The individual financial statements of each Group company are prepared in the currency of the primary economic environment in which that company operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each Group company are expressed in Pound Sterling, which is the functional currency of the Group, and the presentation currency for the consolidated financial statements.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation date where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

REVENUE RECOGNITION

IFRS 15 "Revenue from Contracts with Customers" establishes a comprehensive framework for determining whether, how much, and when revenue is recognised. The core principle is that an entity recognises revenue to depict the transfer of promised goods and services to the customer of an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Group generates revenue from its primary activity, the sale of tin concentrate, and it continued to generate immaterial revenue from the sale of sand.

The Group produces and sells tin concentrate from its Uis Tin Mine in Namibia. Once concentrate has been produced at the Uis plant, it is sampled, bagged and loaded into containers for transportation to the port in Walvis Bay for shipment.

The Group currently has an offtake agreement with its customer, Thailand Smelting and Refining Company ("Thaisarco"), which was signed on 1 August 2019. This contract was renewed on 1 December 2023 for a further 3 years. As per the contract, Thaisarco pays the Group on the basis of actual tin content in the concentrate per Thaisarco's analysis, at the London Metal Exchange price less treatment charges, unit deductions and impurity charges.

The Group can elect for the sale of each shipment to occur under the following terms:

Previous contract applicable from 1 March 2023 to 30 November 2023:

Option 1: Standard provisional payment

Thaisarco shall pay 90% provisional payment on the basis of actual tin content as per their own analysis. Payment is to be made within 10 working days after the arrival of concentrate at Thaisarco's works. Title shall pass to Thaisarco when the concentrate arrives at the Songkhla Port in Thailand.

Option 2: Provisional payment option against original bill of lading

Thaisarco shall pay 90% provisional payment on the basis of provisional tin content per UTMC's analysis. The provisional payment shall be done against presentation of a provisional invoice and an original bill of lading. Title shall pass to Thaisarco when UTMC receives the 90% provisional payment.

Option 3: Provisional payment option against warehouse holding certificate

Thaisarco shall pay 70% provisional payment on the basis of provisional tin content per UTMC's analysis. The provisional payment shall be done against presentation of a provisional invoice and an original warehouse holding certificate. Thaisarco shall pay an additional 20% provisional payment upon presentation of the original bill of lading. Title shall pass to Thaisarco when UTMC receives the 70% provisional payment.

Updated contract applicable from 1 December 2023 to 29 February 2024:

Option 1: Standard provisional payment

Thaisarco shall pay 90% provisional payment on the basis of actual tin content as per their own analysis. Payment is to be made within 10 working days after the arrival of concentrate at Thaisarco's works. Title shall pass to Thaisarco when the concentrate arrives at the Songkhla Port in Thailand.

Option 2: Provisional payment option against warehouse holding certificate

Thaisarco shall pay 80% provisional payment on the basis of provisional tin content per UTMC's analysis. The provisional payment shall be done against presentation of a provisional invoice and an original warehouse holding certificate. Thaisarco shall pay an additional 10% provisional payment upon presentation of the sea waybill. Title shall pass to Thaisarco when UTMC receives the 80% provisional payment.

Option 3: Provisional payment option against sea waybill

Thaisarco shall pay 90% provisional payment on the basis of provisional tin content per UTMC's analysis. The provisional payment shall be done against presentation of a provisional invoice and a sea waybill. Title shall pass to Thaisarco when UTMC receives the 90% provisional payment.

During the financial year, the Group concluded sales under Option 3 of the previous contract and Option 2 of the updated contract.

Revenue is recognised at a point in time when title and control of the goods has transferred to the customer, which is when the concentrate arrives at Songkhla Port in Thailand under Option 1 or when provisional payment is received by UTMC under Option 2 and Option 3. There is limited judgement needed to identify the point at which control passes: once physical delivery of the products to the agreed location has occurred, the Group no longer has physical possession of the products. At this point, the Group will have a present right to payment and retains none of the significant risks and rewards of the goods in question.

Pricing for the provisional payment is determined by the published tin price on the date that title and control passes. Pricing for the final payment shall be declared within 20 market days after arrival at Thaisarco's works. The lower of the four LME cash official bid and offer prices and the LME 3-months official bid and offer prices on the agreed date is used in these calculations.

Variable consideration relating to final assay results is constrained in estimating revenue unless it is highly probable that there will not be a future reversal in the amount of revenue recognised when the final assay has been determined.

Revenue from the sale of sand is recognised at the point  in time when control of the goods has transferred to the customer, which is when the sand leaves the Group's premises. At this point, the Group will have a present right to payment and retains none of the significant risks and rewards of the goods in question.

TAXATION

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax charge is based on taxable profit for the period. The Group's liability for current tax is calculated by using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount 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 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. Deferred tax is calculated at the tax rates that are expected to apply to the year when the asset is realised, or the liability is settled based upon rates enacted and substantively enacted at the reporting date. Deferred tax is charged or credited to profit or loss, except when it relates to items credited or charged to other comprehensive income, in which case the deferred tax is also dealt with in other comprehensive income.

EXPLORATION AND EVALUATION ASSETS

All costs associated with mineral exploration and evaluation are capitalised as intangible exploration and evaluation assets and subsequently measured at cost. These include the costs of: acquiring prospecting licences; mineral production licences and annual licence fees; rights to explore; topographical, geological, geochemical and geophysical studies; and exploratory drilling, trenching, sampling and other activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource.

If an exploration project is successful, the related expenditures will be transferred at cost to property, plant and equipment and depreciated over the estimated life of the commercial ore reserves on a unit of production basis (with this charge being taken through profit or loss). Where capitalised costs relate to both development projects and exploration projects, the Group reclassifies a portion of the costs which are considered attributable to near-term production based on a percentage of the ore resource expected to be mined in the relevant phase. Where a project does not lead to the discovery of commercially viable quantities of mineral resources and is relinquished, abandoned, or is considered to be of no further commercial value to the Group, the related costs are recognised in the income statement.

The recoverability of deferred exploration costs is dependent upon the discovery of economically viable ore reserves, the ability of the Group to obtain necessary financing to complete the development of ore reserves and future profitable production or proceeds from the extraction or disposal thereof.

In 2023, the Group completed the construction of its on-site pilot plant that enables the mine to expedite bulk pilot test work and increase pilot production of lithium concentrate. Both the pilot plant and day to day running costs have been accounted for in accordance with IFRS 6.

IMPAIRMENT OF EXPLORATION AND EVALUATION ASSETS

Intangible exploration and evaluation assets are reviewed regularly for indicators of impairment following the guidance in IFRS 6 "Exploration for and Evaluation of Mineral Resources" and tested for impairment where such indicators exist.

In accordance with IFRS 6, the Group considers the following facts and circumstances in their assessment of whether the Group's exploration assets may be impaired:

·      whether the period for which the Group has the right to explore in a specific area has expired during the period or will expire in the near future, and is not expected to be renewed; or

·      whether substantive expenditure on further exploration for and evaluation of mineral resources in a specific area is neither budgeted for nor planned for; or

·      whether exploration for and evaluation of mineral resources in a specific area have not led to the discovery of commercially viable deposits and the Group has decided to discontinue such activities in the specific area; or

·      whether sufficient data exists to indicate that although a development in a specific area is likely to proceed, the carrying amount of the exploration and evaluation assets is unlikely to be recovered in full from successful development or by sale.

If any such facts or circumstances are noted, the Group, as a next step, performs an impairment test in accordance with the provisions of IAS 36 "Impairment of Assets". In such circumstances, the aggregate carrying value of the mining exploration and evaluation assets is compared to the expected recoverable amount of the cash-generating unit. The recoverable amount is the higher of value in use and the fair value less costs to sell.

SHARE CAPITAL AND RESERVES

i)              Warrant reserve

The warrants issued by the Group are recorded at fair value on initial recognition net of transaction costs. The fair value of warrants granted is recognised as an expense or as share issue costs based on their nature, with a corresponding increase in equity. The fair value of the warrants granted is measured using the Black Scholes valuation model, taking into account the terms and conditions under which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of warrants that vest.

ii)             Share-based payment reserve

Where equity-settled share options are awarded to Directors or employees, the fair value of the options at the date of grant is charged to the statement of comprehensive income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the statement of comprehensive income over the remaining vesting period.

Where equity instruments are granted to persons other than employees, the statement of comprehensive income is charged with the fair value of goods and services received.

iii)            STIP and LTIP Equity Schemes

The Group operates an STIP scheme which runs a calendar year basis, with employees receiving either cash or shares subsequent to year end based on their performance during the year. An option pricing model is used to measure the Group's liability at each reporting date, taking into account the terms and conditions on which the bonus is awarded and the extent to which employees have rendered their service. Movement in the liability (other than cash payments) are recognised in the consolidated statement of comprehensive income.

The LTIP scheme is a share based scheme that applies to permanent employees at Global 13 and above. The intention of the scheme is to get management to behave like owners through owning shares, driving Company performance. The Group is still in the process of implementing the scheme.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at historical cost less accumulated depreciation.

Depreciation is provided at rates calculated to write off the cost less the estimated residual value of each asset over its expected useful economic life. The applicable rates are:

·      The mining assets are depreciated using the units of production method from the point that commercial production was achieved. This reflects the production activity in the period as a proportion of the total mining reserve. Where the units of production method is used, the assets are depreciated based on a rate determined by the tonnes of ore processed divided by the estimate of the mineral reserve.

·      Short-lived assets which are used in the mining and processing plant are depreciated over a period of between one and ten years.

·      Right-of-use assets are depreciated over the period of the lease contract.

·      Computer equipment is depreciated over three years.

·      Furniture is depreciated over five years.

·      Vehicles are depreciated over four years.

·      Mobile equipment is depreciated over ten years.

·      Buildings are depreciated over twenty years.

Land and mining assets under construction are not depreciated.

The estimated useful lives, residual values and depreciation methods are reviewed at each year end and adjusted if necessary.

Gains or losses on disposal are included in profit or loss.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

MINING ASSET - STRIPPING

In open pit mining operations, it is necessary to incur costs to remove overburden and other mine waste materials in order to access the ore body ("stripping costs").

During the development of a mine, stripping costs are capitalised and included in the carrying amount of the related mining property. During the production phase of a mine, stripping costs will be recognised as an asset only if the following conditions are met:

·      it is probable that the future economic benefit (improved access to the ore body) associated with the stripping activity will flow to the entity;

·      the entity can identify the component of the ore body (mining phases) for which access has been improved; and

·      the costs relating to the stripping activity associated with that component can be measured reliably.

Stripping costs incurred and capitalised during the development and production phase are depreciated using the unit-of-production method over the reserves and, in some cases, a portion of resources of the area that directly benefit from the specific stripping activity. Costs incurred for regular waste removal that do not give rise to future economic benefits are considered as costs of sales.

RIGHT-OF-USE ASSET

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset, for a period of time, in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

·      the contract involves the use of an identified asset. The asset may be specified explicitly or implicitly and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified;

·      the Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and

·      the Group has the right to direct the use of the asset. The Group has the right when it has the decision-making rights that are most relevant to changing how and for what purposes the asset is used. In rare cases where the decision about how and for what purposes the assets is used is predetermined, the Group has the right to direct the use of the asset if either:

o    the Group has the right to operate the asset; or

o    the Group designed the asset in a way that predetermines how and for what purposes it will be used.

At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone price.

The right-of-use asset is initially measured at the present value of the remaining lease payments, discounted using the incremental borrowing rate.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term. In addition, the right-of-use asset is annually assessed for impairment and will be adjusted for certain re-measurements of the lease liability.

IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT

At each statement of financial position date, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Where there has been a change in economic conditions that indicate a possible impairment in a cash-generating unit, the recoverability of the net book value relating to that unit is assessed by comparison with the estimated discounted future cash flows based on management's expectations of future commodity prices and future costs.

The recoverable amount is determined on the fair value less cost to develop basis. In assessing the recoverable amount, the expected future post-tax cash flows from the asset are discounted to their present value using a post-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. The Life of Mine ("LoM") plan is the approved management plan at the reporting date for ore extraction and its associated capital expenditure. The capital expenditure included in the impairment model does not include capital expenditure to enhance the asset performance outside of the existing LoM plan. The ore tonnes included in the LoM plan are those as per the Reserve Statement, which management considers economically viable.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease to the extent that it reverses gains previously recognised in other comprehensive income.

Where conditions giving rise to impairment subsequently reverse, the effect of the impairment charge is also reversed as a credit to the income statement, net of any depreciation that would have been charged since the impairment.

INVENTORIES

Inventory consists of tin concentrate on hand, the run of mine stockpile, and consumable items.

The tin concentrate is carried at the lower of cost or net realisable value. The cost of the concentrate includes direct materials, direct labour, depreciation, and overhead costs relating to processing and engineering activities. Net realisable value is the estimated selling price net of any estimated selling costs in the ordinary course of business.

The run of mine stockpile is carried at the lower of cost or net realisable value. The cost of the stockpile includes direct materials, direct labour, depreciation and overhead costs relating to mining activities. Net realisable value is the estimated selling price net of necessary processing costs and any estimated selling costs in the ordinary course of business, including both government and Orion royalties.

Consumables are valued at the lower of cost (determined on the weighted average basis) and net realisable value. Cost comprises all costs of purchase, costs of conversion, and other costs incurred in bringing the inventories to their present location and condition. Replacement cost is used as the best available measure of net realisable value.

FINANCIAL INSTRUMENTS

Financial instruments are recognised in the Group's statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

FINANCIAL ASSETS

The Group has the following financial assets:

·      Trade and other receivables

·      Cash and cash equivalents

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

Financial assets are classified as at amortised cost only if the asset is held to collect the contractual cash flows and the contractual terms of the asset give rise to cash flows that are solely payments of principal and interest. At subsequent reporting dates, financial assets at amortised cost are measured at amortised cost less any impairment losses.

For assets measured at fair value, gains and losses will be recorded in profit or loss.

 IMPAIRMENT OF FINANCIAL ASSETS

The Group assesses on a forward-looking basis the expected credit loss, defined as the difference between the contractual cash flows and the cash flows that are expected to be received, associated with its assets carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables only, the simplified approach permitted by IFRS 9 "Financial Instruments" is applied, which requires expected lifetime losses to be recognised from initial recognition of the receivables. Losses are recognised in the income statement. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through the income statement.

To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due.

The expected loss rates are based on the payment profiles of sales over a period of 24 months before 29 February 2024 and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of our customer to settle the receivables balance.

FINANCIAL LIABILITIES

Financial liabilities include trade and other payables, borrowings and other financial liabilities classified into one of the following categories:

·      Fair value through profit or loss ("FVTPL"): The liabilities are carried in the statement of financial position at fair value with changes in fair value recognised in the income statement. The Group currently has no financial liabilities carried at fair value through profit or loss.

·      Financial liabilities carried at amortised cost.

Borrowings and other financial liabilities are classified as either financial liabilities or as equity in accordance with the substance of the contractual agreement.

Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is: (i) a contingent consideration that may be paid by an acquirer as part of a business combination;

(ii) held for trading; or (iii) designated as at FVTPL. Financial liabilities at FVTPL are stated at fair value, with any gains and losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the fair value adjustment line item in the statement of comprehensive income.

Financial liabilities at amortised cost

After initial recognition at fair value, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate ("EIR") method. Gains and losses are recognised in the statement of comprehensive income when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs.

Borrowings

Interest-bearing debt is initially recorded at fair value less transaction costs, and is subsequently measured at amortised cost, calculated using the effective interest rate method.

Borrowing costs are expensed as incurred except where they relate to the financing of construction or development of qualifying assets in which case they are capitalised up to the date when the qualifying asset is ready for its intended use.

Compound debt

Upon issuance, the fair value of the compound financial instrument is established. The liability component is assessed at the fair value of a comparable liability that lacks an equity conversion feature. The equity component is calculated as the remaining amount after subtracting the fair value of the liability component from the total fair value of the instrument. Any transaction costs are distributed between the liability and equity components based on their respective fair values. The liability component is subsequently evaluated at amortised cost using the effective interest method. The equity component remains unchanged after initial recognition.

Hybrid debt

The proceeds received on the issue of the Group's convertible debt are allocated to their debt and derivative liability components. The amount initially attributable to debt component equals the discounted cash flows using a market rate of interest that would be payable on a similar debt instrument that does not include as option to convert. Subsequently, the debt component is accounted for as a financial liability measured at amortised cost until extinguished on conversion or maturity of the debt. The remainder of the proceeds is allocated to the conversion option and recognised as a derivative liability.

DERECOGNITION

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised when:

·      the rights to receive cash flows from the asset have expired; or

·      the Group has transferred its right to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party, and either:

o  the Group has transferred substantially all the risks and rewards of the asset; or

o  the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

A financial liability (in whole or in part) is derecognised when the Group has extinguished its contractual obligations, it expires, or it is cancelled.

Any gain or loss on derecognition is taken to the profit or loss.

REHABILITATION PROVISION

The net present value of estimated future rehabilitation costs is provided for in the financial statements and capitalised within property, plant and equipment on initial recognition. Rehabilitation will generally occur on or after closure of a mine.

Initial recognition is at the time that the construction or disturbance occurs, and thereafter as and when additional construction or disturbances take place. The estimates are reviewed annually to take into account the effects of inflation and changes in the estimated cost of the rehabilitation works and are discounted using rates that reflect the time value of money. Annual increases in the provision due to the unwinding of the discount are recognised in the statement of comprehensive income as a finance cost. The present value of additional disturbances and changes in the estimate of the rehabilitation liability are recorded to mining assets against an increase/decrease in the rehabilitation provision.

The rehabilitation asset is amortised over the life of the mine once commercial production commences using the straight-line method. Rehabilitation projects undertaken, included in the estimates, are charged to the provision as incurred. Environmental liabilities, other than rehabilitation costs, which relate to liabilities arising from specific events, are expensed when they are known, probable and may be reasonably estimated.

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

In the application of the Group's accounting policies, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. Information about significant areas of estimation uncertainty considered by management in preparing the financial statements is provided below.

Estimates and judgements are continually evaluated. Revisions to accounting estimates are recognised in the year in which the estimates are revised if the revision affects only that year, or in the year of revision and in future years if the revision affects both current and future years.

i)              Going concern and liquidity

Significant estimates were required in forecasting cash flows used in the assessment of going concern including tin and tantalum prices, the levels of production, operating costs, and capital expenditure requirements. For further details, refer to going concern considerations laid out earlier in Note 2.

ii)             Decommissioning and rehabilitation obligations

Estimating the future costs of environmental and rehabilitation obligations is complex and requires management to make estimates and judgements, as most of the obligations will be fulfilled in the future and contracts and laws are often not clear regarding what is required. The resulting provisions (see Note 19) are further influenced by changing technologies, and by political, environmental, safety, business, and statutory considerations.

The Group's rehabilitation provision is based on the net present value of management's best estimates of future rehabilitation costs. Judgement is required in establishing the disturbance and associated rehabilitation costs at period end, timing of costs, discount rates, and inflation. In forming estimates of the cost of rehabilitation which are risk adjusted, the Group assessed the Environmental Management Plan and reports provided by internal and external experts. Actual costs incurred in future periods could differ materially from the estimates, and changes to environmental laws and regulations, life of mine estimates, inflation rates, and discount rates could affect the carrying amount of the provision.

The carrying amount of the rehabilitation obligations for the Group at 29 February 2024 was £1 152 121 (FY 2023:

£965 578). In determining the amount attributable to the rehabilitation liability, management used a discount rate of 12.3% (FY 2023: 13%), an inflation rate of 4.8% (FY 2023: 5.3%) and an estimated mining period of 12.56 years (FY 2023: 13.4 years), being the Phase 1 expansion life of mine.

The decrease in the mining period is as a result of the increased mining volumes post the Phase 1 Expansion. A 1% increase or decrease in the inflation rate used would result in a £130 831 difference in the liability. A 2% increase or decrease in the discount rate used would result in a £207 909 difference in the liability.

iii)            Impairment indicator assessment for exploration and evaluation assets

Determining whether an exploration and evaluation asset is impaired requires an assessment of whether there are any indicators of impairment, including specific impairment indicators prescribed in IFRS 6 "Exploration for and Evaluation of Mineral Resources". If there is any indication of potential impairment, an impairment test is required based on value in use of the asset. The valuation of intangible exploration assets is dependent upon the discovery of economically recoverable deposits which, in turn, is dependent on future tin prices, future capital expenditures, environmental and regulatory restrictions, and the successful renewal of licences.

The Directors have concluded that there are no indications of impairment in respect of the carrying value of Namibian intangible assets at 29 February 2024 based on planned future development of the Namibian projects, and current and forecast tin prices. Exploration and evaluation assets are disclosed fully in Note 11.

iv)            Impairment assessment for property, plant and equipment

Management have reviewed the Uis mine for indicators of impairment and have considered, among other factors, the operations to date at the Uis Tin Mine, forecast commodity prices, production profile, inflation rate, post- tax discount rate and market capitalisation of the Group. Management identified the reduction in the tin price as an indicator of impairment. In undertaking the impairment review, management have also reviewed the underlying LoM valuation model for Uis. The LoM valuation model is on a fair value less cost to develop basis and includes assessments of different scenarios associated with capital improvements and expansion opportunities. The impairment testing performed by management did not result in an impairment.

The forecasts require estimates regarding forecast tin, tantalum and lithium prices, ore resources, production, operating and capital costs. Under the base case forecast scenario, management used a forecast tin price of

$30 000, tantalum price of $175 000, lithium price of $1 120, discount rate of 11.75% post tax real rate and inflation rate of 6% The forecast indicates sufficient headroom as at 29 February 2024.

The complex judgement in determining the recoverable amount of mining assets is an estimation of the future tin price. The estimation of future tin price is subject to uncertainty considering the volatility of market. Management has therefore compared the forecast tin price with the economic consensus estimates. Furthermore, a sensitivity analysis was performed by lowering the forecast tin prices by 5% which also indicated sufficient headroom as at 29 February 2024.

As an additional test, management performed certain sensitivity calculations. These included raising the discount rate to 13.1% post tax real rate, lowering plant recovery by 5% and increasing operating costs by 5%. In each of these circumstances, the forecast indicated sufficient headroom as at 29 February 2024.

v)             Depreciation

Judgement is applied in making assumptions about the depreciation charge for mining assets when using the unit- of-production method in estimating the ore tonnes held in reserves. The relevant reserves are those included in the current approved LoM plan which relates to the Phase 1 expansion. Judgement is also applied when assessing the estimated useful life of individual assets and residual values. The assumptions are reviewed at least annually by management and the judgement is based on consideration of the LoM plan, as well as the nature of the assets. The reserve assumptions included in the LoM plan are evaluated by management.

vi)            Capitalisation and depreciation of waste stripping

The Group has elected to capitalise the costs of waste stripping activities as these are necessary to allow improved access to the ore and, therefore, will result in future economic benefits. The costs of drilling, blasting and load and haul of waste material is capitalised until such time that the underlying ore is used in production. These costs are then expensed on a proportional basis. The capitalised costs are included in the mining asset in property, plant and equipment and are expensed back into the statement of comprehensive income as depreciation. Capitalisation of waste stripping requires the Group to make judgements and estimates in determining the amounts to be capitalised. These judgements and estimates include, amongst others, the expected life of mine stripping ratio for each separate open pit, the determination of what defines separate pits, and the expected volumes to be extracted from each component of a pit for which the stripping asset is depreciated.

vii)           Determination of ore reserves

The estimation of ore reserves primarily impacts the depreciation charge of evaluated mining assets, which are depreciated based on the quantity of ore reserves. Reserve volumes are also used in calculating whether an impairment charge should be recorded where an impairment indicator exists.

The Group estimates its ore reserves and mineral resources based on information, compiled by appropriately qualified persons, relating to geological and technical data on the size, depth, shape, and grade of the ore body and related to suitable production techniques and recovery rates.

The estimate of recoverable reserves is based on factors such as tin prices, future capital requirements and production costs, along with geological assumptions and judgements made in estimating the size and grade of the ore body.

There are numerous uncertainties inherent in estimating ore reserves and mineral resources. Consequently, assumptions that are valid at the time of estimation may change significantly if or when new information becomes available.

viii)          Valuation of inventories

Judgement is applied in making assumptions about the value of inventories and inventory stockpiles, including tin prices, plant recoveries and processing costs, to determine the extent to which the Group values inventory and inventory stockpiles. The Group uses forecast tin prices to determine the net realisable value of the ROM stockpile and the tin concentrate inventory on hand at year end. Inventory stockpiles are measured using actual mining and processing costs.

ix)            Determining the fair value of royalty debt

The Group entered into a royalty agreement during the financial year. The measurement of the royalty obligation factored in numerous key inputs and the use of a technical expert. These inputs include the forecast of the tin production and price over a period of 30 years, the risk-free rate and the credit spread. The tin price forecast was based on estimates provided by the Group as of November 2023. The risk-free rate was based on the United States Constant Maturity Treasury rates commensurate with the terms as of the valuation date, as reported on the Federal Reserve website. The Group used a credit spread of 10.58% computed by backsolving the convertible notes to par and further adjusted down 3.5% to account for the lower risk factor as a result of the ongoing operations at the Uis Tin Mining Company (operating subsidiary). The operating subsidiary attracts a lower risk factor due to it being closely aligned to the underlying Tin mining operation and its performance since commissioned, relative to the holding company, which is implicitly subordinated. The royalty obligation is measured at fair value through profit and loss.

3.    ADOPTION OF NEW AND REVISED STANDARDS

The following amendments standards and interpretations were adopted by the group from 1 March 2023:

·      Amendments to IAS 12 - International Tax Reform - Pillar Two Model Rules

·      Lease Liability in a Sale and Leaseback - Amendments to IFRS 16 Leases

·      Classification of liabilities as Current or Non-Current and Non-current Liabilities with Covenants - Amendments to IAS 1 Presentation of Financial Statements

·      Amendments to IAS 7 - Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures - Supplier Finance Arrangements

·      Amendments to IAS 12 Income Taxes - Deferred Tax related to Assets and Liabilities arising from a Single Transaction

·      Amendments to IAS 1 - Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements - Disclosure of Accounting Policies

These amended standards and interpretations have not had a significant impact on the consolidated financial statements.

ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET APPLIED

The following standards, interpretations and amendments are effective for the period beginning 1 March 2024:

·      Lack of Exchangeability - Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates

·      Amendments to the Classification and Measurement of Financial Instruments - Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures

·      Annual improvements to IFRS 1 (first time adoption of International Financial Reporting Standards), IFRS 7 financial instruments: disclosures and its accompanying guidance on implementing IFRS 7), IFRS 9 (financial instruments), IFRS 10 (consolidated financial statements) and IAS 7 (statement of cash flows).

·      Amendments to IAS 1 - Classification of liabilities as Current or Non-current and Non-current liabilities with Covenants.

The updated standards, interpretations and amendments may have a significant impact on the consolidated financial statements in the future as the Group holds financial instruments recognised under IFRS 9 and IFRS 7.

4.    REVENUE

 

	Year ended 29 February 2024 £	Year ended 28 February 2023 £
Revenue from the sale of tin	17 863 275	10 024 487
Revenue from the sale of sand	45 673	64 676
Total revenue from customers	17 908 948	10 089 163
Revenue - change in fair value of customer contract	58 941	(261 689)
Total revenue	17 967 889	9 827 473

 

The revenue from the sale of tin and sand is recognised at the point in time at which control transfers.

Other revenue relates to the change in the fair value of amounts receivable under the offtake agreement between the date of initial recognition and the period end resulting from forecast market prices at the estimated final pricing date. Refer to Note 2 for further details.

5.    COST OF SALES

 

	Year ended 29 February 2024 £	Year ended 28 February 2023 £
Costs of production	14 178 153	9 334 142
Smelter charges	1 328 387	757 459
Logistics costs	154 932	106 626
Government royalties	484 976	311 191
Orion royalties	101 300	-
	16 247 748	10 509 418

 

6.    ADMINISTRATIVE EXPENSES

The profit/(loss) for the year has been arrived at after charging/(crediting):

	Year ended 29 February 2024 £	Year ended 28 February 2023 £
Staff costs	4 261 360	3 025 406
Depreciation of property, plant & equipment	452 769	366 190
Professional fees	1 972 100	1 201 984
Travelling expenses	459 919	350 884
Uis administration expenses	1 259 206	916 238
Auditor's remuneration	240 000	190 000
Foreign exchange losses	260 061	375 931
IT costs	356 396	285 408
Listing costs	530 677	696 621
Other costs	167 061	42 690
	9 959 549	7 451 352

 

Other costs are mainly comprised of corporate overheads necessary to run the South African head office.

 

7.    STAFF COSTS

	Year ended 29 February 2024 £	Year ended 28 February 2023 £
Staff costs capitalised under property, plant and equipment	814 709	1 044 009
Staff costs capitalised under intangible assets	416 871	413 939
Staff costs recognised as administrative expenses	3 543 336	2 680 130
Staff costs included in cost of sales	2 008 142	1 796 229
Share-based payment charge capitalised under property,	213 042	-
plant and equipment
Share-based payment charge capitalised under intangible assets	68 410	-
Share-based payment charge recognised as administrative expenses	710 523	345 276
	7 775 033	6 279 583

 

Key management personnel have been identified as the Board of Directors, Frans van Daalen (Chief Strategy Officer of the Group), Hiten Ooka (Chief Financial Officer of the Group) and Chris Smith (Chief Operating Officer of the Group). Details of key management remuneration are shown in Note 26.

The average number of staff during the period was 283 (FY 2023: 219) with an average total cost per employee for the year of £24 015 (FY 2023: £23 102). Emoluments of £341 199 including £53 652 of share options and shares to be issued (FY 2023: £305 270 including £90 081 of share options and shares to be issued) were paid in respect of the highest-paid Director during the year.

8.    FINANCE INCOME & EXPENSE

Recognised in the statement of comprehensive income

	Year ended 29 February 2024 £	Year ended 28 February 2023 £
Finance expense
Interest on lease liability	98 923	156 118
Interest on environmental rehabilitation provision	118 694	14 085
Interest on bank facilities	275 807	338 812
Interest on convertible loan note	488 383	-
Transaction costs on royalty debt	456 062	-
Fair value loss on royalty debt	87 561	-
Other interest	159 076	160 809
Total finance expense	1 684 506	669 824
Finance income
Fair value gain on derivative liability - held at fair value through profit or loss	743 965	-
Interest on bank deposit	211 975	39 054
Total finance income	955 940	39 054
The above financial income and expense include the following in respect of assets/ (liabilities) not at fair value through profit or loss:
Total interest income on financial assets	211 975	39 054
Total interest expense on financial liabilities	1 021 976	655 739

TAXATION

The tax expense represents the sum of the tax currently payable and deferred tax.

 

	Year ended 29 February 2024 £	Year ended 28 February 2023 £
Factors affecting tax for the year: The tax assessed for the year at the Guernsey company standard rate of 0%, as explained below: Loss before taxation	(8 870 559)	(8 970 048)
Loss before taxation multiplied by the Guernsey company standard rate of 0% Effects of: Differences in tax rates (overseas jurisdictions)	-     (2 125 662)	-     (1 791 238)
Tax losses carried forward Derecognition of previously recognised deductible temporary difference	2 125 662	1 791 238 866 203
Tax for the year	-	866 203

 

Accumulated losses in the subsidiary undertakings for which there is an unrecognised deferred tax asset are £13 903 618 (FY 2023: £8 100 173).

A deferred tax asset of £592 166 (FY 2023: £1 694 362) was not recognised in the Namibian entities. Due to the sizeable assessed losses that have accumulated in these entities, management has decided not to raise the deferred tax asset in the 2024 financial year as the timing of future taxable profits is not certain at this stage.

9.    LOSS PER SHARE

The calculation of a basic loss per share of 0.54 pence (FY 2023: loss per share of 0.60 pence), is calculated using the total loss for the period attributable to the owners of the Company of £8 438 465 (FY 2023: £7 753 819) and the weighted average number of shares in issue during the period of 1 551 422 631 (FY 2023: 1 291 331 804).

Due to the loss for the period, the diluted loss per share is the same as the basic loss per share. The number of potentially dilutive ordinary shares, in respect of share options, warrants and shares to be issued as at 29 February 2024 is 165 625 801 (FY 2023: 77 636 918). These potentially dilutive ordinary shares may have a dilutive effect on future earnings per share.

 

10.  INTANGIBLE ASSETS

 

Cost	Exploration and evaluation assets £	Computer software £		Total £
As at 28 February 2022	5 055 729	120 172		5 175 901
Additions for the year - other expenditure	2 580 267	-		2 580 267
Exchange differences	(431 234)	(7 858)		(439 092)
As at 28 February 2023	7 204 762	112 314	7 317 076
Additions for the year - other expenditure	3 742 889	33 864	3 776 753
Exchange differences	(512 959)	(7 636)	(520 595)
As at 29 February 2024	10 434 692	138 542	10 573 234

 

Accumulated depreciation	Exploration and evaluation assets £	Computer software £	Total £
As at 28 February 2022	-	28 119	28 119
Charge for the period	-	10 290	10 290
Exchange differences	-	(926)	(926)
As at 28 February 2023	-	37 483	37 483
Charge for the period	-	16 370	16 370
Exchange differences	-	(556)	(556)
As at 29 February 2024	-	53 297	53 297

 

	Exploration and evaluation £	Computer Software £	Total £
Net book value
As at 29 February 2024	10 434 692	85 245	10 519 937
As at 28 February 2023	7 204 762	74 831	7 279 593
As at 28 February 2022	5 055 729	92 053	5 147 782

 

Additions to exploration and evaluation assets represents costs incurred on active exploration projects, day to day costs of running the lithium pilot plant, staff costs and share based payments charges (refer to Note 7 for additional details on staff costs and share based payments charges).

Each year, management performs a review of intangibles to identify potential impairment triggers in line with IFRS 6. For the year ending 2024 and 2023, no such triggers were identified for exploration and evaluation assets.

The Directors have concluded that there are no indicators of impairment in respect of the carrying value of the Namibian exploration and evaluation assets at 29 February 2024 based on planned future development of the projects and current and forecast tin prices.