ANDRADA MINING LIMITED — Interim / Quarterly Report 2023

Nov 17, 2022

National Storage Mechanism | Additional information

RNS Number : 7474G

AfriTin Mining Ltd

17 November 2022

17 November 2022

AfriTin Mining Limited

("AfriTin", the "Company" or the "Group")

Unaudited Interim Results

for the six months ended August 2022

AfriTin Mining Limited (AIM: ATM), an African technology metals mining company with a portfolio of mining and exploration assets in Namibia , is pleased to release its unaudited interim results for the six months ended 31 August 2022 which should be read in conjunction with the Company's previous operational results communicated on 15 September 2022. (https://polaris.brighterir.com/public/afritin_mining/news/rns/story/ry59p7w?confirm=1)

Highlights:

§ Six month production up 23% to 454 tonnes of tin concentrate (286 tonnes of contained tin) compared to H1 2021: 368 tonnes  (227 contained);

§ Phase 1 processing plant continued to exceed targets and nameplate capacity;

§ Revenue of £4.7 million (H1 2021: £5.1 million) impacted by the decrease in the tin price as well as the impact of the timing of settlement adjustments (initial prepayment versus final settlement spot prices during reporting period);

§ Average tin price achieved before settlement adjustment for the six month period of US$25 227/tonne (H1 2021: US$36 910/tonne);

§ Cost of sales of £5.7 million (H1 2021: £4 million) reflecting inflationary pressures of high fuel prices and higher maintenance costs;

§ Except for higher fuel prices, aforementioned cost factors are expected to be resolved during H2 2022;

§ Unit costs expected to improve with the achievement of higher production volumes from the Phase 1 Expansion Project;

§ Cash and Cash Equivalents of £12.2 million as at 15 November 2022, subsequent to the US$53.6 million proposed funding package announced in September 2022; and,

§ Commissioning of the Uis Phase 1 Expansion Project is now complete with production projected to ramp to more than 1 200 tpa of tin concentrate in H2 2022.

Chief Executive Officer's Statement

I am proud of the AfriTin operational team for once again producing an impressive half-yearly production performance. The first half of FY2023 has seen internal tin production targets exceeded at the Uis Mine and an unwavering focus on bringing lithium and tantalum by-products into production and thereby consolidating our tech-metal exposure. Our vision is to fast-track lithium production to become the only producing lithium company on AIM. Importantly the team aims to capitalise on what we believe is our globally significant resource and bridge the supply gap that currently exists.

Financially, the group recognised revenue of £4.7 million (Sales: 268t contained (H1 2021: 230t contained)) net of final price settlements. The revenue was negatively impacted by the reduction in the tin prices, specifically related to a few delayed shipments which net settled at prices much lower than the original prepayment rate. This amounted to an adjustment to revenue of approximately £1.4 million for which the prepayment was recognised in H2 2021. We have since changed shipping lines to speed up the shipping timelines and limit the time exposure for revenue recognition. The cost of sales for the net of depreciation amounted to £4.8 million, which equated to approximately US$ 22 219 (H1 2021: US$ 19 470) per tonne of contained tin sold. The increase in the costs was part of the expansion commissioning readiness phase as well as higher maintenance costs due to unplanned stoppages. A portion of these costs are planned to be supported by the increased production levels, whilst the maintenance costs are expected to reduce.  

After the end of the period under review, AfriTin negotiated a potential Proposed Funding Package of US$53.6 million (see announcement dated 15 September 2022). Coupled with our cash resources, this package, if completed, could accelerate the organic growth in tin operations, fund the development of the lithium and tantalum by-product opportunities, continue the regional drilling programme, and initiate the Feasibility Study for the Phase 2 production phase at Uis. Whilst there can be no guarantee that the total funding package will be entered into, the Directors have every expectation that it will be. Updates will be provided as this progresses.

The Proposed Funding Package has been produced using a diverse range of funding methods, including debt, convertible notes and an equity raise with Hamman & Partners Advisory Limited and Stifel Nicolaus Europe Ltd acting jointly to raise US$22.8 million (c. £19.8 million), through a placing and subscriptions, a process that successfully closed on 16 September 2022.

The Development Bank of Namibia (DBN) approved a conditional US$5.8 million lending facility, previously announced on 5 July 2022, and as updated in the Company's audited financial results, which provides another component of AfriTin's Proposed Funding Package. Although this has been approved by the credit committee and board of the Development Bank of Namibia, there are certain conditions precedent that need to be adhered to, including completion of final legal documentation. At this stage there can be no guarantee the DBN facility will be entered into, or that any funds will be drawn down, but AfriTin Management have every confidence that it will be. The Directors confirm that this has now been extended such that completion is anticipated during Q1 2023. A further update will be provided when it is entered into.

Furthermore, global asset management firm Orion has been proposed as a key strategic investor for AfriTin, providing a conditional US$25 million (c. £21.5 million) investment, via Royalty (US$12.5 million), Convertible Note (US$10 million) and Equity Conscription (US$2.5 million), which the firm will manage. Orion has a strong history of cultivating sustainable shareholder value in the mining sector, as well as boasting a unique ability to identify growth opportunities at an early stage. As such, their interest in AfriTin provides a compelling endorsement of our current work and future endeavours. This Orion funding package remains subject to the satisfaction of certain conditions and approvals, including due diligence and agreeing definitive documentation, but the Directors anticipate it will be concluded in Q1 2023.

From a macroeconomics perspective, we have also seen tin prices drop drastically in recent months, although the inverse has occurred with regard to lithium prices. This further cements the Group's strategy to accelerate and unlock lithium and tantalum, as we continue to organically grow the operations and move into a lower unit cost position.

We remain conscious of the environment and its people, and this continues to be woven into our corporate DNA as we strive to become a significant African multi-commodity tech-metals producer. The foundation has been laid for the second half of the financial year to deliver on our stated strategy  and I look forward to providing further updates.

Anthony Viljoen

CEO

AfriTin Mining Limited	+27 (11) 268 6555
Anthony Viljoen, CEO
Nominated Adviser	+44 (0) 207 220 1666
WH Ireland Limited Katy Mitchell
Corporate Advisor and Joint Broker
H&P Advisory Limited Andrew Chubb Jay Ashfield	+44 (0) 20 7907 8500
Stifel Nicolaus Europe Limited Ashton Clanfield Callum Stewart	+44 (0) 20 7710 7600
Tavistock Financial PR (United Kingdom)	+44 (0) 207 920 3150
Emily Moss Catherine Drummond Adam Baynes

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the 6 months ended 31 August 2022

	Notes	6 months ended 31 August 2022 (unaudited) £	6 months ended 31 August 2021 (unaudited) £		12 months ended 28 February 2022 (audited) £
Continuing operations
Revenue	5	4 726 609		5 073 337		13 615 045
Cost of Sales	6	(5 724 376)		(3 959 149)		(9 302 518)
Gross Profit		(997 767)		1 114 188		4 312 527
Administrative expenses	7	(2 557 296)		(1 390 177)		(3 674 662)
Other income		-		-		61 753
Operating loss		(3 555 063)		(275 989)		699 619
Finance income		21 368		-		6 545
Finance cost	8	(186 874)		(228 285)		(316 365)
Profit/(loss) before tax		(3 720 569)		(504 274)		389 798
Tax credit/(charge)	9	888 933		-		(864 199)
Loss for the period		(2 831 636)		(504 274)		(474 401)
Other comprehensive income/(loss)
Items that will or may be reclassified to profit or loss:
Exchange differences on translation of share-based payment reserve		126		1 180		767
Exchange differences on translation of foreign operations		394 000		658 735		526 779
Exchange differences on non-controlling interest		5 508		(7 788)		(6 700)
Total comprehensive income/(loss) for the period		(2 432 002)		147 853		46 445
Profit/((loss) for the period attributable to:
Owners of the parent		(2 680 820)		(692 252)		(815 645)
Non-controlling interests		(150 816)		187 978		341 244
		(2 831 636)		(504 274)		(474 401)
Total comprehensive income/(loss) for the period attributable to:
Owners of the parent		(2 286 694)		(32 337)		(288 098)
Non-controlling interests		(145 308)		180 190		334 543
		(2 432 002)		147 853		46 445
Loss per ordinary share
Basic and diluted loss per share (in pence)	10	(0.25)		(0.07)		(0.08)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 August 2022

Company number: 63974

	Notes	31 August 2022 (unaudited) £	31 August 2021 (unaudited) £			28 February 2022 (audited) £
Assets
Non-current assets
Intangible assets	11	6 812 947		6 195 625			5 147 782
Property, plant and equipment	12	26 142 978		15 095 878			19 150 092
Total non-current assets		32 955 925		21 291 503			24 297 875
Current assets
Inventories	13	1 429 829		1 429 694			1 451 933
Trade and other receivables	14	2 830 985		1 136 053			3 953 382
Cash and cash equivalents	15	1 675 245		6 290 694			7 365 379
Total current assets		5 936 059		8 856 441			12 770 694
Total assets		38 891 984		30 147 944			37 068 569
Equity and liabilities
Equity
Share capital	20	38 655 078		38 297 431			38 655 078
Accumulated deficit		(13 420 141)		(10 733 570)			(10 739 321)
Warrant reserve	21	192 632		192 632			192 632
Share-based payment reserve		1 074 125		769 658			704 828
Foreign currency translation reserve		(1 140 560)		(1 402 604)			(1 534 560)
Equity attributable to the owners of the parent		25 361 134		27 123 547			27 278 657
Non-controlling interests		37 892		28 846			183 200
Total equity		25 399 026		27 152 393			27 461 857
Non-current liabilities
Environmental rehabilitation liability	18	319 440		202 242			295 151
Borrowings	16	4 198 763		-			4 095 405
Lease liability	19	89 776		232 858			167 216
Deferred tax liability		-		-			861 784
Total non-current liabilities		4 607 979		435 100			5 419 556
Current liabilities
Trade and other payables	17	3 881 051		1 890 700			2 969 833
Borrowings	16	4 829 492		505 267			1 024 736
Lease liability	19	174 436		164 484			192 586
Total current liabilities		8 884 979		2 560 451			4 187 155
Total equity and liabilities		38 891 984		30 147 944			37 068 569

The notes that follow in this report form part of this interim financial information.

This interim financial information was authorised and approved for issue by the Board of Directors and authorised for issue on 16 November 2022

ANTHONY VILJOEN

Chief Executive Officer

16 November 2022

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the period ended 31 August 2022

	Share capital	Convertible loan note reserve	Accumulated deficit	Warrant reserve	Share-based payment reserve	Foreign currency translation reserve	Total	Non-controlling interests	Total equity
	£	£	£	£	£	£	£	£	£
Total equity at 28 February 2021	25 608 001	2 170 645	(10 030 679)	211 348	743 615	(2 061 339)	16 641 591	(151 344)	16 490 247
Loss for the period			(692 252)				(692 252)	187 978	(504 274)
Other comprehensive income/(loss)	-	-		-	1 180	658 735	659 915	(7 788)	652 127
Transactions with owners:
Issue of shares	13 019 672	-	-	-	(10 000)	-	13 009 672	-	13 009 672
Share issue costs	(823 447)	-	-	-	-	-	(823 447)	-	(823 447)
Share-based payments	-	-	-	-	34 863	-	34 863	-	34 863
Warrants exercised	63 150		18 716	(18 716)	-	-	63 150		63 150
Issue costs reclassified to accumulated deficit	-	29 355	(29 355)	-	-	-	-	-	-
Settlement of convertible loan note in shares	430 055	(430 055)	-	-	-	-	-	-	-
Settlement of convertible loan note in cash	-	(1 769 945)	-	-	-	-	(1 769 945)	-	(1 769 945)
Total equity at 31 August 2021	38 297 431	-	(10 733 570)	192 632	769 658	(1 402 604)	27 123 547	28 846	27 152 393
Loss for the period	-	-	(123 393)	-			(123 393)	153 266	29 873
Other comprehensive income/(loss)	-	-	-	-	(413)	(131 956)	(132 369)	1 088	(131 281)
Transactions with owners:
Issue of shares	49 101	-	-	-		-	49 101	-	49 101
Share options exercised	308 546	-	117 642	-	(117 642)	-	308 546	-	308 546
Share-based payments	-	-	-	-	53 225	-	53 225	-	53 225
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 period	-	-	(2 680 820)	-	-	-	(2 680 820)	(150 816)	(2 831 637)
Other comprehensive income/(loss)	-	-	-	-	126	394 000	394 126	5 508	399 634
Transactions with owners:
Share-based payments	-	-	-	-	369 171	-	369 171	-	369 171
Total equity at 31 August 2022	38 655 078	-	(13 420 141)	192 632	1 074 125	(1 140 560)	25 361 134	37 892	25 399 026

CONSOLIDATED STATEMENT OF CASH FLOWS

For the period ended 31 August 2022

	Notes	Period ended 31 August 2022 (unaudited) £		Period ended 31 August 2021 (unaudited) £	Year ended 28 February 2022 (audited) £
Cash flows from operating activities
Loss before taxation		(3 720 569)		(504 274)		389 798
Adjustments for:
Fair value adjustment to customer contract	5	30 726		(15 238)		(137 019)
Depreciation of property, plant and equipment	12	949 884		736 792		1 861 023
Depreciation of intangible assets	11	5 285		6 086		28 198
Share-based payments		267 401		22 527		55 793
Equity-settled transactions		-		9 672		66 101
Finance income		(21 368)		-		(6 545)
Finance costs	8	186 874		228 285		316 365
Changes in working capital:
Decrease/(increase) in receivables		1 189 937		124 981		(2 866 192)
Decrease/(increase) in inventory		57 917		(382 786)		(418 556)
Increase in payables		851 750		334 662		1 006 060
Net cash (used)/generated in operating activities		(202 163)		560 707		569 064
Cash flows from investing activities
Purchase of intangible assets		(1 606 380)		(822 753)		(1 442 774)
Purchase of property, plant and equipment		(7 466 335)		(1 511 632)		(4 543 884)
Net cash used in investing activities		(9 072 715)		(2 334 385)		(5 986 658)
Cash flows from financing activities
Finance income		21 368		-		6 545
Finance costs	8	(153 901)		(157 458)		(224 061)
Lease payments	19	(120 977)		(91 258)		(213 661)
Net proceeds from issue of shares	20	-		12 239 703		12 548 248
Settlement of convertible loan notes		-		(1 769 945)		(1 769 945)
Proceeds from borrowings	16	3 997 799		5 298 880		5 024 727
Repayment of borrowings	16	(166 932)		(8 700 696)		(3 907 086)
Net cash generated from financing activities		3 577 357		6 819 226		11 464 767
Net decrease/(increase) in cash and cash equivalents		(5 697 521)		5 045 548		6 047 173
Cash and cash equivalents at the beginning of the period		7 365 379		1 351 200		1 351 200
Exchange differences		7 387		(106 054)		(32 994)
Cash and cash equivalents at the end of the period		1 675 245		6 290 694		7 365 379

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL INFORMATION

For the period ended 31 August 2022

1.     Corporate information and principal activities

AfriTin Mining Limited ("AfriTin") 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 operates from Illovo Edge Office Park, 2nd Floor, Building 3, Corner Harries and Fricker Road, Illovo, Johannesburg, 2116, South Africa.

This financial information is for the period ended 31 August 2022 and the comparative figures for the 6 month period ended 31 August 2021 and for the year ended 28 February 2022 are shown.

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

AfriTin 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 and South Africa. The Namibian subsidiary is AfriTin Mining (Namibia) Pty Limited ("AfriTin 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.

AfriTin 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 containing Namibian exploration licenses EPL5445 and EPL5670 for the exploration of tin, tantalum and associated minerals.

As at 31 August 2022, the AfriTin Group comprised:

Company	Equity holding and voting rights	Country of incorporation	Nature of activities
AfriTin Mining Limited	N/A	Guernsey	Ultimate holding company
Greenhills Resources Limited1	100%	Guernsey	Holding company
AfriTin Mining Pty Limited1	100%	South Africa	Group support services
Tantalum Investment Pty Limited1	100%	Namibia	Tin & tantalum exploration
AfriTin Mining (Namibia) Pty Limited2	100%	Namibia	Tin & tantalum operations
Uis Tin Mining Company Pty Limited3	85%	Namibia	Tin & tantalum operations
Mokopane Tin Company Pty Limited2	100%	South Africa	Holding company
Renetype Pty Limited4	74%	South Africa	Tin & tantalum exploration
Jaxson 641 Pty Limited4	50%	South Africa	Tin & tantalum exploration
Pamish Investments 71 Pty Limited2	100%	South Africa	Holding company
Zaaiplaats Mining Pty Limited5	74%	South Africa	Property owning

1 Held directly by AfriTin Mining Limited

2 Held by Greenhills Resources Limited

3 Held by AfriTin Mining (Namibia) Pty Limited

4 Held by Mokopane Tin Company Pty Limited

5 Held by Pamish Investments 71 Pty Limited

This financial information 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, AfriTin Mining Limited.

The Group's key subsidiaries, AfriTin Namibia and UTMC, use the Namibian Dollar (N$) as their functional currency. The period-end spot rate used to translate all Namibian Dollar balances was £1 = N$19.84 and the average rate for the period was £1 = N$19.70.

2.     Significant accounting policies

Basis of accounting

The Consolidated interim financial information has been prepared in accordance with UK Adopted International Accounting Standards. The Consolidated interim financial information also complies with the AIM Rules for Companies, NSX Listing Requirements and the Companies (Guernsey) Law, 2008 and show a true and fair view.

The significant accounting policies applied in preparing this information are set out below. These policies have been consistently applied throughout the period. This information has been prepared under the historical cost convention except as where stated.

The interim financial information for the six months to 31 August 2022 is unaudited and does not constitute statutory financial information. The statutory accounts for the year ended 28 February 2022 are available on the Company's website.

Going concern

This interim financial information has been prepared on the basis of accounting principles applicable to a going concern which assumes the company will be able to continue in operation for the upcoming 12 months and will be able to realize its assets and discharge its liabilities in the normal course of operations.

At 31 August 2022, the company had cash in the bank of £1.7m. Subsequent to the period end, the group successfully concluded a successful completion of the Placing and Subscription of 396,021,660 new Ordinary Shares raising gross proceeds of £19.8 million (approximately US$22.8million).

Management have prepared a detailed cash flow forecast for the period to 31 October 2022 and stress tests of those forecasts. The base case forecast demonstrates that the Group will have sufficient funds to meet its liabilities as they fall due and includes the following key assumptions:

·      Prices have been set at $19,000 per tonne of tin.

·      The base case forecast assumes continuing steady state production for the current mining and processing facility post the successful expansion, which was commissioned in November 2022.

·      The base case forecast includes capital expenditure required for the pilot lithium and tantalum production facilities. This expenditure will be funded by the secured equity.

·      The base case forecast includes exploration drilling programme expenditure for lithium and tantalum. This expenditure will be funded by the secured equity.

In addition, the Board have considered downside scenarios in relation to commodity pricing and production across the period. The scenarios demonstrated that the Group will be able to maintain liquidity.

The group has also entered into a conditional US$30.8 million funding arrangement made up as follows:

·      US$25 million (c. £21.5m) investment with a fund managed by Orion Resource Partners ("Orion").

·      US$5.8 million (c£5m) lending facility with the Development Bank of Namibia. This was announced on 5 July 2022 (and updated by the disclosures in the Company's Annual Report) ("DBN Debt Financing")

Accordingly, the Directors have concluded that the going concern basis in the preparation of this financial information is appropriate and that there are no material uncertainties that would cast doubt on that basis of preparation.

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. In particular, information about significant areas of estimation uncertainty considered by management in preparing the interim financial information 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 18) 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.

In determining the amount attributable to the rehabilitation liability, management used a discount rate of 13% (August 2021: 12.8% and February 2022: 10%), an inflation rate of 7% (August 2021: 6% and February 2022: 5%) and an estimated mining period of 16.5 years, being the Phase 1 expansion life of mine.

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 Group considers the South African exploration and evaluation assets to be non-core as it continues to primarily focus on developing its Namibian assets. Accordingly, the capitalised exploration and evaluation expenditure relating to the South African assets was impaired to nil in the prior year on the basis that the Group did not intend on incurring any further expenditure on its South African licences. The directors have concluded that there are no indications of impairment in respect of the carrying value of Namibian intangible assets at 28 February 2022 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, the Phase 1 Stage II expansion of the Uis operations, forecast commodity prices, and market capitalisation of the Group. In undertaking the indicator review, management have also reviewed the underlying LoM valuation model for Uis and have concluded that no indicators of impairment have been noted at period end. The LoM valuation model is on a fair value less cost to develop basis and includes assessments of different scenarios associated with capital development and expansion opportunities.

The forecasts required estimates regarding forecast tin prices, ore resources and production, and operating and capital costs. The discounted cash flows use a discount rate of 8.3% post tax nominal. Under the base case forecast using a nominal consensus tin price of $25 000 per tonne, rising to $31 000 per tonne by 2028, the forecast indicates headroom as at 31 August 2022.

As an additional test, management performed certain sensitivity calculations. These included raising the discount rate to 11% post tax nominal, lowering the forecast tin prices by 5%, lowering plant recovery by 5% and increasing operating costs by 10%. In each of these circumstances, the forecast indicated headroom as at 31 August 2022.

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 & 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 & 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 period end. Inventory stockpiles are measured using actual mining and processing costs.

ix)   Determining the lease term

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise, or not to exercise, an extension option. Extension options are only included in the lease term where the company is reasonably certain that it will extend or will not terminate the lease when the lease expires. For all leases, the most relevant factors include:

·      Historical lease durations;

·      Costs incurred in replacing the leased asset;

·      Possible business disruption due to replacing the leased asset;

·      Likelihood of extension of the lease - if there are significant penalties to terminate, then it's reasonably certain that the Group will extend.

The lease term is reassessed on an ongoing basis, especially when the option to extend becomes exercisable, or on occurrence of a significant event or a significant change in circumstances which affects this assessment, and that is within the control of the Group.

x)    Determining the incremental borrowing rate to measure lease liabilities

The interest rate implicit in leases is not available, therefore the Group uses the relevant incremental borrowing rate (IBR) to measure its lease liabilities. The IBR is estimated to be the interest rate that the Group would pay to borrow:

·      over a similar term;

·      with similar security;

·      the amount necessary to obtain an asset of a similar value to the right of use asset; and

·      in a similar economic environment.

The IBR, therefore, is considered to be the best estimate of the incremental rate and requires management's judgement as there are no observable rates available.

xi)   Determining the fair value of trade receivables classified at fair value through profit or loss

The consideration receivable in respect of certain sales for which performance obligations have been satisfied at period end and for which the Group has received prepayment under the terms of the offtake agreement, remain subject to pricing adjustments with reference to market prices at the date of finalisation. Under the Group's accounting policies, the fair value of the consideration is determined, and the remaining receivable is adjusted to reflect fair value. Management estimated the forward price based on the LME 3-month tin price that is expected when the open shipments will be finalised. As at 31 August 2022, the tin price had declined significantly since the provisional payments received and therefore the Group recognised a negative receivable at fair value through profit or loss of £519 321 (August 2021: receivable of £465 529 and February 2022: receivable of £812 594).

3.     Adoption of new and revised standards

A number of new and amended standards and interpretations issued by IASB have become effective for the first time for financial periods beginning on (or after) 1 March 2021 and have been applied by the Group in this interim financial information. None of these new and amended standards and interpretations had a significant effect on the Group because they are either not relevant to the Group's activities or require accounting which is consistent with the Group's current accounting policies.

Accounting standards and interpretations not applied

There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods and which have not been adopted early.

4.     Segmental reporting

The reporting segments are identified by the management steering committee (who are considered to be the chief operating decision-makers) by the way that the Group's operations are organised. As at 31 August 2022, the Group operated within two operating segments, tin exploration and operational activities in Namibia and tin exploration activities in South Africa.

Segment results

The following is an analysis of the Group's results by reportable segment.

	South Africa		Namibia		Total
	£		£		£
Period ended 31 August 2022
Results
Revenue	33 478		4 693 131		4 726 609
Associated costs	(5 229)		(6 485 826)		(6 491 056)
Segmental profit/(loss)	28 249		(1 792 695)		(1 764 446)
Period ended 31 August 2021
Results
Revenue	17 778		5 055 559		5 073 337
Associated costs	(2 006)		(4 498 287)		(4 500 293)
Segmental profit	15 772		557 271		573 044
Year ended 28 February 2022
Results
Revenue	34 444		13 580 600		13 615 045
Associated costs	(30 843)		(10 693 637)		(10 724 480)
Segmental profit	3 601		2 886 963		2 890 564

The reconciliation of segmental gross loss to the Group's loss before tax is as follows:

	Period ended 31 August 2022 £	Period ended 31 August 2021 £		Year ended 28 February 2022 £
Segmental loss	(1 764 446)		573 044		2 890 564
Unallocated costs	(1 790 616)		(849 033)		(2 252 700)
Other income	-		-		61 755
Finance income	21 368		-		6 545
Finance costs	(186 874)		(228 285)		(316 365)
Profit/(loss) before tax	(3 720 569)		(504 274)		389 798

Unallocated costs are mainly comprised of corporate overheads and costs associated with being listed in London.

Other segmental information

	South Africa		Namibia		Total
	£		£		£
As at 31 August 2022
Intangible assets	12 871		6 711 027		6 723 898
Other reportable segmental assets	95 428		30 766 260		30 861 688
Other reportable segmental liabilities	(66 939)		(13 437 197		(13 504 136)
Unallocated net liabilities	-		-		1 317 576
Total consolidated net assets	41 360		24 040 089		25 399 025
As at 31 August 2021
Intangible assets	12 718		6 182 907		6 195 625
Other reportable segmental assets	98 119		17 326 294		17 424 413
Other reportable segmental liabilities	(63 974)		(2 080 988)		(2 144 962)
Unallocated net assets	-		-		5 677 317
Total consolidated net assets	46 863		21 428 214		27 152 393
As at 28 February 2022
Intangible assets	12 565		5 043 165		5 055 730
Other reportable segmental assets	70 564		24 119 470		24 190 033
Other reportable segmental liabilities	(63 006)		(4 038 840)		(4 101 846)
Unallocated net assets	-		-		2 317 939
Total consolidated net assets	20 122		25 123 795		27 461 857

Unallocated net assets/liabilities are mainly comprised of cash and cash equivalents and the borrowings which are managed at a corporate level.

5.     Revenue

	Period ended 31 August 2022 £		Period ended 31 August 2021 £	Year ended 28 February 2022 £
Revenue from the sale of tin	4 723 857		5 040 321		13 717 620
Revenue from the sale of sand	33 478		17 778		34 444
Total revenue from customers	4 757 335		5 058 099		13 752 064
Other revenue - change in fair value of customer contract	(30 726)		15 238		(137 019)
	4 726 609		5 073 337		13 615 045

6.     Cost of sales

	Period ended 31 August 2022 £		Period ended 31 August 2021 £	Year ended 28 February 2022 £
Costs of production	5 049 956		3 510 718		8 057 083
Smelter charges	339 978		268 818		748 892
Logistics costs	59 328		41 523		126 086
Government royalties	275 114		138 090		370 457
	5 724 376		3 959 149		9 302 518

7.     Administrative expenses

The loss for the period has been arrived at after charging:

	Period ended 31 August 2022 £		Period ended 31 August 2021 £	Year ended 28 February 2022 £
Staff costs	1 083 726		506 904		1 269 882
Depreciation of property, plant & equipment	113 185		97 166		221 948
Professional fees	443 781		132 991		621 379
Travelling expenses	150 450		56 969		96 956
Uis administration expenses	266 779		230 007		660 476
Auditor's remuneration	5 000		1 500		95 000
Other costs	494 374		364 641		709 022
	2 557 296		1 390 177		3 674 662

Other costs are mainly comprised of corporate overheads necessary to run the South African head office and the costs associated with being listed in London.

8.     Finance cost

	Period ended 31 August 2022 £		Period ended 31 August 2021 £	Year ended 28 February 2022 £
Interest on lease liability	15 882		21 060		42 630
Interest on environmental rehabilitation liability	17 209		12 173		12 080
Bank interest	95 900		60 891		102 655
Interest on loan notes	-		68 836		68 836
Amortisation of warrant charge	-		37 594		37 594
Other interest	57 882		27 731		52 570
	186 874		228 285		316 365

9.     Taxation

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

	Period ended 31 August 2022 £		Period ended 31 August 2021 £	Year ended 28 February 2022 £
Factors affecting tax for the period:
The tax assessed for the period at the Guernsey corporation tax charge rate of 0%, as explained below:
Loss before taxation	(3 720 569)		(504 274)		389 798
Loss before taxation multiplied by the Guernsey Corporation tax charge rate of 0%	-		-		-
Effects of:
Differences in tax rates (overseas jurisdictions)	(615 188)		(452 848)		(525 598)
Tax losses carried forward	615 188		452 848		525 598
Movement in deferred tax	888 933		-		(864 199)
Tax for the period	888 933		-		(864 199)

Accumulated losses in the subsidiary undertakings for which there is an unrecognised deferred tax asset are £5 131 401 (August 2021: £3 919 522 and February 2022: £4 290 665).

10.  Loss per share from continuing operations

The calculation of a basic loss per share of 0.25 pence (August 2021: loss per share of 0.07 pence and February 2022: loss per share of 0.08 pence), is calculated using the total loss for the period attributable to the owners of the Company of £2 680 820 (August 2021: £692 251 and February 2022: £815 645) and the weighted average number of shares in issue during the period of 1 064 247 295 (August 2021: 1 016 465 204 and February 2022: 1 064 247 295).

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 31 August 2022 is 131 220 649 (August 2021: 84 895 572 and February 2022: 76 261 762). These potentially dilutive ordinary shares may have a dilutive effect on future earnings per share.

11.  Intangible assets

	Exploration and evaluation assets		Computer software		Total
Cost	£		£		£
As at 31 August 2021	6 080 069		121 637		6 201 706
Additions for the period	741 977				741 977
Transfer to mining asset	(1 058 602)				(1 058 602)
Transfer to mining asset under construction	(678 467)				(678 467)
Exchange differences	(29 248)		(1 465)		(30 713)
As at 28 February 2022	5 055 729		120 172		5 175 901
Additions for the period	1 622 407		-		1 622 407
Exchange differences	45 761		2 246		48 007
As at 31 August 2022	6 723 897		122 418		6 846 315
Accumulated Depreciation
As at 31 August 2021	-		6 081		6 081
Charge for the period	-		22 112		22 112
Exchange differences	-		(75)		(75)
As at 28 February 2022	-		28 119		28 119
Charge for the period	-		5 285		5 285
Exchange differences	-		(36)		(36)
As at 31 August 2022	-		33 368		33 368
Net Book Value
As at 31 August 2022	6 723 897		89 050		6 812 947
As at 28 February 2022	5 055 729		92 053		5 147 782
As at 31 August 2021	6 080 069		115 556		6 195 625

The additions to the evaluation and exploration asset during the period mainly comprise of expenses capitalised as part of the Phase 2 exploration drilling project, the metallurgical testwork programme, environmental studies and region exploration projects.

12.  Property, plant and equipment

	Land	Mining asset under construction	Mining Asset	Mining Asset - Stripping	Decommissioning asset	Right-of-use Asset	Computer Equipment	Furniture	Vehicles	Mobile equipment (crane)	Buildings	Total
Cost	£	£	£	£	£	£	£	£	£	£	£	£
As at 31 August 2021	12 463	390 218	14 629 402	745 755	175 501	594 193	169 898	121 973	79 294	-	-	16 918 697
Additions for the period	-	2 210 779	395 160	589 604	95 585	68 073	42 256	58 844	-	176 273	-	3 636 574
Disposals for the period	-	-	-	-	-	-	(12 831)	-	(12 523)	-	-	(25 354)
Transfer from exploration and evaluation asset	-	678 467	1 058 602	-	-	-	-	-	-	-	-	1 737 069
Exchange differences	(150)	304 389	(473 395)	(3 233)	(2 382)	(6 735)	(1 851)	(1 487)	(920)	(493)	-	(186 258)
As at 28 February 2022	12 312	3 583 853	15 609 768	1 332 128	268 704	655 530	197 472	179 330	65 851	175 780	-	22 080 728
Additions for the period	-	5 112 760	1 106 936	723 532	-	-	40 407	14 370	190 122	311 316	52 634	7 552 078
Disposals for the period	-	-	-	-	-	-	-	-	-	-	-	-
Exchange differences	300	44 513	346 390	27 502	6 554	15 989	4 537	4 262	295	2 141	(363)	452 120
As at 31 August 2022	12 613	8 741 126	17 063 094	2 083 162	275 258	671 519	242 417	197 962	256 268	489 237	52 271	30 084 926
Accumulated Depreciation
As at 31 August 2021	-	-	1 377 680	-	4 775	237 798	97 721	48 676	56 169	-		1 822 819
Charge for the period	-	-	492 511	489 372	4 683	97 285	20 931	16 932	(715)	3 231	-	1 124 231
Exchange differences	-	-	(10 416)	(1 368)	(23)	(2 459)	(1 047)	(516)	(576)	(9)	-	(16 414)
As at 28 February 2022	-	-	1 859 775	488 005	9 435	332 624	117 605	65 091	54 878	3 222		2 930 635
Charge for the period	-	-	431 992	342 996	7 975	85 804	25 574	21 853	16 692	16 339	658	949 884
Exchange differences	-	-	38 881	9 538	175	7 521	2 701	1 428	1 223	(34)	(5)	61 429
As at 31 August 2022	-	-	2 330 648	840 539	17 585	425 950	145 881	88 373	72 793	19 527	653	3 941 948
Net Book Value
As at 31 August 2022	12 613	8 741 126	14 732 446	1 242 624	257 673	245 569	96 536	109 589	183 475	469 710	51 618	26 142 978
As at 28 February 2022	12 312	3 583 853	13 749 993	844 123	259 269	322 906	79 867	114 239	10 973	172 558	-	19 150 092
As at 31 August 2021	12 463	390 218	13 251 722	745 755	170 726	356 395	72 177	73 297	23 125	-	-	15 095 878

The additions to the mining asset under construction during the period mainly comprise of the construction of the Uis Phase 1 Stage II expansion. The construction costs of the expansion will remain in mining asset under construction until the project has been completed and a commission certificate has been issued.

Additions to the mining asset include capitalised costs and equipment purchased as part of the Uis Phase 1 Continuous Improvement project

13.  Inventories

	31 August 2022 £		31 August 2021 £	28 February 2022 £
Run-of-mine stockpile	605 258		962 781		909 180
Tin concentrate on hand	204 236		167 367		155 389
Consumables	620 335		299 546		387 364
	1 429 829		1 429 694		1 451 933

14.  Trade and other receivables

	31 August 2022 £		31 August 2021 £	28 February 2022 £
Trade receivables	160 188		120 042		96 173
Trade receivables at fair value through profit or loss	(519 321)		465 529		812 594
Other receivables	538 218		165 475		1 875 561
VAT receivables	2 651 899		385 007		1 169 053
	2 830 984		1 136 053		3 953 382

Due to the decline in the tin price between receipt of provisional payment and finalisation of tin sales, the trade receivables carried at fair value through profit and loss resulted in a negative balance.

15.  Cash and cash equivalents

	31 August 2022 £		31 August 2021 £	28 February 2022 £
Cash on hand and in bank	1 675 245		6 290 694		7 365 379

16.  Borrowings

	31 August 2022 £		31 August 2021 £	28 February 2022 £
Standard Bank term loan facility	4 467 960		-		4 523 414
Standard Bank VAT facility	376 709		-		367 739
Standard Bank Vehicle Asset Financing	503 444		-		-
Standard Bank Short-term Loan Facility	2 005 565		-		-
Standard Bank working capital facility	1 674 577		-		228 988
Nedbank working capital facility	-		505 267		-
	9 028 255		505 267		5 120 141

On 18 November 2021, a term loan facility of N$90 000 000 (c. £4 536 000), a VAT facility of N$8 000 000 (c. £403 000) and a working capital facility of N$35 000 000 (c. £1 764 000) was entered into between the Company's subsidiary, Uis Tin Mining Company (Pty) Ltd and Standard Bank Namibia.

The maturity date of the term loan facility is November 2026 and the capital balance of the loan together with accrued interest will be repaid in quarterly instalments over the next 5 years. Interest is charged on the outstanding capital balance of the loan at a rate of 3-month JIBAR plus a margin of 4.5%.

The Group is required to meet the following covenants each year on 28 February as part of the term loan facility agreement:

·      EBITDA ÷ total interest must not be lower than 4.5 times

·      Total debt ÷ EBITDA must not exceed 4 times in year 1, 3.5 times in year 2 and 3 times thereafter

·      Free cash flow before Debt Service Cover ÷ Principal and Interest Senior Debt Service Payments must not be lower than 1.3 times

·      Free cash flow before Debt Service Cover + Total Cash Collateral ÷ Principal and Interest Senior Debt Service Payments must not be lower than 2 times

The Group met all the above covenant requirements at 28 February 2022.

The VAT facility is secured by assessed/audited VAT returns (refunds) which have not been paid by Namibia Inland Revenue. Standard Bank Namibia provides a facility amounting to the unpaid refunds. Any drawdowns against this facility are repaid to the bank upon receipt of cash from Namibia Inland Revenue.

The VAT facility and the working capital facility have no fixed maturity date, but are both renewed on an annual basis. Interest accrues on these facilities at the Namibian prime rate less 1%.

Standard Bank have recently provided vehicle asset financing of N$10 000 000 (c. £504 000) and a short-term loan facility of N$40 000 000 (c. £2 016 000).

Standard Bank Namibia have provided a N$ 4 117 500 (c. £195 000) guarantee to the Namibia Power Corporation Pty Limited in relation to a deposit for the supply of electrical power. As a result of the guarantee provided by Standard Bank, no cash was paid over for the deposit.

The full working capital facility that was previously held with Nedbank Namibia was repaid during the previous year as the Group's facilities were moved over to Standard Bank.

Reconciliation of net cash flow to movement in combined Long and Short term Borrowings

Balance as at 31 August 2021		505 267
Incoming cash flows		5 024 727
Proceeds from term loan facility		4 428 000
Proceeds from VAT facility Proceeds from working capital facility		367 739 228 988
Outgoing cash flows		(505 267)
Repayment of working capital facility		(505 267)
Non-cash flows		95 414
Interest accrued on term loan facility		95 414
Balance as at 28 February 2022		5 120 141
Incoming cash flows		3 997 799
Proceeds from vehicle asset financing facility		506 939
Proceeds from short-term loan facility		2 019 492
Proceeds from working capital facility Interest received on bank balances		1 450 001 21 368
Outgoing cash flows		(116 932)
Repayment of capital balance of term loan Interest paid on facilities		(68 512) (98 420)
Non-cash flows		77 247
Interest accrued on facilities (a portion has been capitalised to mining asset under construction)		175 864
Foreign exchange differences		(98 617)
Balance as at 31 August 2022		9 028 255

17.  Trade and other payables

	31 August 2022 £		31 August 2021 £	28 February 2022 £
Trade payables	3 344 593		1 436 435		2 293 471
Other payables	168 378		78 520		341 276
Accruals	368 080		375 745		335 087
	3 881 051		1 890 700		2 969 833

18.  Environmental rehabilitation liability

	£
Balance at 31 August 2021	202 240
Increase in provision	95 585
Interest expense	(93)
Foreign exchange differences	(2 581)
Balance at 28 February 2022	295 151
Increase in provision	-
Interest expense	17 091
Foreign exchange differences	7 199
Balance at 31 August 2022	319 441

Provision for future environmental rehabilitation and decommissioning costs are made on a progressive basis. Estimates are based on costs that are regularly reviewed and adjusted appropriately for new circumstances. The environmental rehabilitation liability is based on disturbances and the required rehabilitation as at 31 August 2021.

The rehabilitation provision represents the present value of decommissioning costs relating to the dismantling of mechanical equipment and steel structures related to the Phase 1 Pilot Plant, the demolishing of civil platforms and reshaping of earthworks. A provision for this requires estimates and assumptions to be made around the relevant regulatory framework, the magnitude of the possible disturbance and the timing, extent and costs of the required closure and rehabilitation activities. In calculating the appropriate provision, cost estimates of the future potential cash outflows based on current studies of the expected rehabilitation activities and timing thereof are prepared. These forecasts are then discounted to their present value using a risk-free rate specific to the liability. In determining the amount attributable to the rehabilitation liability, management used a discount rate of 13% (August 2021: 12.8% and February 2022: 10%), an inflation rate of 7% (August 2021: 6% and February 2022: 5%) and an estimated mining period of 16.5 years, being the Phase 1 expansion life of mine. Actual rehabilitation and decommissioning costs will ultimately depend upon future market prices for the necessary rehabilitation works and timing of when the mine ceases operation.

19.  Lease liability

The Company assessed all rental agreements and concluded that the following rentals fall within the scope of IFRS 16: Leases and therefore a lease liability has been recognised:

	Lease term	Option to extend/terminate	Incremental borrowing rate
Office building	5 years	Option to extend not specified in contract. Term of lease determined to be 5 years.	13.75%
Workshop facility	2 years	Option to extend not specified in contract. Term of lease determined to be 2 years.	7.5%
Residential housing	5 years	The lease will continue automatically after the initial period for an open-ended period. Either party must provide written notice if they wish to terminate. Lease term determined to be 5 years.	8.5%
Mobile Units	2 years	The lessee is granted the option to purchase the units after the lease period of 2 years.	7.5%

	Office Building		Workshop		Housing		Mobile Units		Total
	£		£		£		£		£
Balance at 31 August 2021	211 841		61 892		123 609		-		397 342
Additions	(616)		-		-		68 689		68 073
Interest expense	11 910		1 648		4 601		3 411		21 570
Lease payments	(50 167)		(27 046)		(18 298)		(26 892)		(122 403)
Foreign exchange differences	(2 147)		(922)		(1 584)		(126)		(4 779)
Balance at 28 February 2022	170 821		35 572		108 328		45 082		359 803
Additions	-		-		-		-		-
Interest expense	9 645		750		4 182		1 305		15 882
Lease payments	(54 272)		(28 103)		(19 541)		(19 061)		(120 977)
Foreign exchange differences	4 475		1 057		2 748		1 224		9 504
Balance at 31 August 2022	130 669		9 276		95 717		28 550		264 212

The following is the split between the current and the non-current portion of the liability:

	31 August 2022 £		31 August 2021 £	28 February 2022 £
Non-current liability	89 776		232 858		167 215
Current liability	174 436		164 484		192 588
	264 212		397 342		359 803

20.  Share capital

	Number of ordinary shares of no par value issued and fully paid		Share Capital £
Balance at 31 August 2021	1 112 334 912		38 297 431
Shares issued to suppliers - 15 Dec	798 001		49 101
Exercising of employee share options - 14 Jan	2 185 087		72 059
Exercising of employee share options - 27 Jan	1 250 000		56 250
Exercising of employee share options - 22 Feb	5 273 684		180 237
Balance at 28 February 2022	1 121 841 684		38 655 078
Balance at 31 August 2022	1 121 841 684		38 655 078

Authorised: 1 220 486 913 ordinary shares of no par value

Allotted, issued and fully paid: 1 121 841 684 ordinary shares of no par value

On 15 December 2021, 798 001 ordinary shares of no par value were issued to settle a contractual liability at 4.90 pence in lieu of fees in relation to a consulting agreement.

On 14 January 2022, the Company received notice from share option holders to exercise 1 300 877 share options at an exercise price of 3 pence, 467 105 share options at an exercise price of 3.5 pence and 417 105 share options at an exercise price of 4 pence.

On 27 January 2022, the Company received notice from share option holders to exercise 1 250 000 share options at an exercise price of 4.5 pence.

On 22 February 2022, the Company received notice from share option holders to exercise 2 336 842 share options at an exercise price of 3 pence, 1 468 421 share options at an exercise price of 3.5 pence, and 1 468 421 share options at an exercise price of 4 pence.

21.  Warrant reserve

The warrants in issue during the period are as follows:

Outstanding at 31 August 2021	22 613 334
Exercisable at 31 August 2021	22 613 334
Granted during the period	-
Expired during the period	-
Exercised during the period	-
Outstanding at 28 February 2022	22 613 334
Exercisable at 28 February 2022	22 613 334
Granted during the period	-
Expired during the period	-
Exercised during the period	-
Outstanding at 31 August 2022	22 613 334
Exercisable at 31 August 2022	22 613 334

The warrants outstanding at the end of the period have an average exercise price of 2.2 pence, with a weighted average remaining contractual life of 0.65 years.

22.  Share-based payment reserve

Director share options

The following director share options were granted during the period ended 31 August 2022:

Date of grant	8 April 2022	8 April 2022	8 April 2022
Number granted	7 800 000	3 900 000	3 900 000
Vesting period	1 year	2 years	3 years
Contractual life	3 years	3 years	3 years
Estimated fair value per option (pence)	2.0830	2.8490	3.4090

The estimated fair values were calculated by applying the Black Scholes pricing model. The model inputs were:

Date of grant	8 April 2022	8 April 2022	8 April 2022
Share price at grant date (pence)	9.35	9.35	9.35
Exercise price (pence)	9.80	10.30	10.80
Expiry date	8 April 2025	8 April 2025	8 April 2025
Expected volatility	60%	60%	60%
Expected dividends	Nil	Nil	Nil
Risk-free interest rate	1.24%	1.24%	1.24%

The director share options in issue during the period are as follows:

Outstanding at 31 August 2021	27 100 000
Exercisable at 31 August 2021	8 389 999
Granted during the period	-
Forfeited during the period	-
Exercised during the period	(1 250 000)
Expired during the period	-
Outstanding at 28 February 2022	25 850 000
Exercisable at 28 February 2022	23 850 000
Granted during the period	15 600 000
Forfeited during the period	-
Exercised during the period	-
Expired during the period	-
Outstanding at 31 August 2022	41 450 000
Exercisable at 31 August 2022	23 850 000

The director share options outstanding at period end have an average exercise price of £0.067, with a weighted average remaining contractual life of 1.78 years.

Employee share options

The following employee share options were granted during the period ended 31 August 2022:

Date of grant	8 April 2022	8 April 2022	8 April 2022
Number granted	19 355 000	9 677 500	9 677 500
Vesting period	1 year	2 years	3 years
Contractual life	3 years	3 years	3 years
Estimated fair value per option (pence)	2.0830	2.8490	3.4090

The estimated fair values were calculated by applying the Black Scholes pricing model. The model inputs were:

Date of grant	8 April 2022	8 April 2022	8 April 2022
Share price at grant date (pence)	9.35	9.35	9.35
Exercise price (pence)	9.80	10.30	10.80
Expiry date	8 April 2025	8 April 2025	8 April 2025
Expected volatility	60%	60%	60%
Expected dividends	Nil	Nil	Nil
Risk-free interest rate	1.24%	1.24%	1.24%

The employee share options in issue during the period are as follows:

Outstanding at 31 August 2021	34 830 000
Exercisable at 31 August 2021	26 610 001
Granted during the period	-
Forfeited during the period	-
Exercised during the period	(7 458 771)
Expired during the period	-
Outstanding at 28 February 2022	27 371 229
Exercisable at 28 February 2022	27 371 229
Granted during the period	38 710 000
Forfeited during the period	-
Exercised during the period	-
Expired during the period	-
Outstanding at 31 August 2022	66 081 229
Exercisable at 31 August 2022	27 371 229

The employee share options outstanding at the period end have an average exercise price of £0.074, with a weighted average remaining contractual life of 2.13 years.

23.  Events after balance sheet date

Funding:

Subsequent to the period end, the group successfully concluded a successful completion of the Placing and Subscription of 396,021,660 new Ordinary Shares raising gross proceeds of £19.8 million (approximately US$22.8million).

The group has also entered into a conditional US$30.8 million funding arrangement made up as follows:

·      US$25 million (c. £21.5m) investment with a fund managed by Orion Resource Partners ("Orion").

·      US$5.8 million (c£5m) lending facility with the Development Bank of Namibia. This was announced on 5 July 2022 (and updated by the disclosures in the Company's Annual Report) ("DBN Debt Financing")

Decline in tin price:

The recent volatility in the tin prices has placed additional pressures on the Company with regards to funding of capital expansion project via internal sources. Management had anticipated the declines and have secured the necessary funding in order to continue its growth ambitions. Furthermore, the consensus view of the forward-looking range of prices used by management in the forecast modelling still results in a positive recoverability of assets.

Recovery of VAT receivable:

Full balance of the outstanding VAT receivables were recovered from the Namibian Revenue Agency in September and October

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