REG - African Pioneer PLC - Final Results and Annual Financial Report
30/04/2024 14:15
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RNS Number : 6524M African Pioneer PLC 30 April 2024
30 April 2024
African Pioneer Plc
("African Pioneer" or the "Company")
Final Results for period to 31 December 2023
African Pioneer plc, the exploration and resource development company with
advanced projects in Namibia, Botswana, and Zambia, reports its full year
results for the year ended 31 December 2023.
The Annual Report and Financial Statements for the year ended 31 December 2023
will shortly be available on the Company's website
at https://africanpioneerplc.com/ (https://africanpioneerplc.com/) . A copy
of the Annual Report and Financial Statements will also be uploaded to the
National Storage Mechanism where it will be available for viewing
at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
Please note that page references in the text below refer to the page numbers
in the Annual Report and Financial Statements.
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the
European Union (Withdrawal) Act 2018 ("UK MAR").
For further information, please contact:
African Pioneer Plc
Colin Bird, Executive Chairman +44 (0) 20 7581 4477
Beaumont Cornish Limited (Financial Adviser) +44 (0) 20 7628 3396
Roland Cornish / Asia Szusciak
Novum Securities Limited (Broker)
Jon Belliss +44 (0) 20 7399 9400
or visit https://africanpioneerplc.com/ (https://africanpioneerplc.com/)
Beaumont Cornish Limited, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is Financial Adviser to the
Company in relation to the matters referred herein. Beaumont Cornish Limited
is acting exclusively for the Company and for no one else in relation to the
matters described in this announcement and is not advising any other person
and accordingly will not be responsible to anyone other than the Company for
providing the protections afforded to clients of Beaumont Cornish Limited, or
for providing advice in relation to the contents of this announcement or any
matter referred to in it.
KEY HIGHLIGHTS
· Consolidated Net assets - £5,214,181 (2022 - £5,238,820)
· Consolidated (Loss)/Profit - Loss - (£689,213) (2022 - (£670,871))
· The Group reports its results and raises funds in Pounds Sterling
(GBP).
· Its primary assets are in Zambia, Namibia, and Botswana
CHAIRMAN' STATEMENT
Dear Shareholder,
African Pioneer continues to make good technical progress in a climate where
smaller mining companies are starved for attention.
Despite the lengthy period of smaller company neglect, your board remains
convinced that it has an enviable portfolio of projects, which can only
benefit from the forecasted decline in copper production, against an
unprecedented demand for the metal.
In Zambia, we have four exploration licences, which are under option to First
Quantum Mineral Ltd ("First Quantum"). During the period under review, First
Quantum exercised their option on two of the licences and post review period
exercised their option on the other two. We are fortunate in having First
Quantum as a joint venture partner, who throughout our association have
exhibited diligence and transparency over their intent and results.
Our joint venture exploration with First Quantum have resulted in proof of
concept that the rich Congo style and lithology of the Congo extends into
Zambia and possibly beyond into Angola. The exploration programmes have
produced numerous intersections of copper mineralisation close to surface and
our deeper holes have intersected all the pre-cursors necessary for the Kamoa
and western Foreland style, evidenced by Ivanhoe Resources. Thus, the
architecture for mineralisation is in place and our partners are busily
modelling as well as practically pursuing the objective of discovery.
At our Namibian operation, Omgombo, we carried out a near surface drilling
programme and extended the previously identified open-pittable
mineralisation.
In addition, we remodelled the population of boreholes and as announced on 16
May 2023 announced an increased gross 1 (#_ftn1) Indicated Mineral Resource
Estimate (MRE) in our 85% owned Ongombo project of 5.7Mt at 1.1% Cu Equivalent
(CuEq), 0.94% Cu and 0.23g/t Au and a very substantial Inferred underground
potential Resource of 23Mt at 1.1% CuEq, 0.95% Cu and 0.24g/t Au. This result
includes the eastern shoot, though not completely drilled and thus no account
has been taken of the gold values, which is known to exist. We intend to
embark upon a further drilling programme to ascertain the contribution of gold
and test the possibility of mineralisation between the eastern and central
shoot, which has been postulated but not properly tested. The Omgombo
project has the benefit of a 20-year mining licence and an environmental
clearance certificate, which makes it a valuable asset with the company's
portfolio of copper projects.
Our projects in the Botswana Kalahari Copperbelt are considered to be too
small to satisfy the requirements of Sandfire and yet remain as active
projects for our own activities. The propensity for small mine discovery
(5,000-10,000 tonnes per annum) exists as a future exploration activity for
the Company.
The board considers the 4 Zambian licences held with First Quantum are ideally
placed in a much sought-after exploration region and are optimistic for future
exploration. As a result of our general exploration work in Zambia, we have
elected to prioritize Zambia as our key exploration destination and to this
end are pursuing a number of licence acquisitions to complement our existing
licences.
I would like to thank my fellow board members and management for their hard
work during the year and look forward to adding significant value to our
existing portfolio and acquiring new positions, further enhance the value of
our copper portfolio.
Yours sincerely,
Colin Bird, Executive Chairman
African Pioneer Plc
30 April 2024
BOARD OF DIRECTORS AND SENIOR MANAGEMENT
Colin Bird - Executive Chairman
Colin is a chartered mining engineer and a Fellow of the Institute of
Materials, Minerals and Mining with more than 40 years' experience in resource
operations management, corporate management, and finance. Colin has multi
commodity mine management experience in Africa, Spain, Latin America and the
Middle East. He has been the prime mover in a number of public company
listings in the UK, Canada and South Africa. His most notable achievement was
founding Kiwara Resources Plc and selling its prime asset, a copper property
in Northern Zambia, to First Quantum Minerals for US$260 million in January
2010.
Raju Samtani - Finance Director
Raju is currently also finance director of Tiger Royalties and Investments Plc
and Bezant Resources Plc, both listed on AIM. His previous experience includes
three years as Group Financial Controller at marketing services agency WTS
Group Limited, where he was appointed by the Virgin Group to oversee their
investment in the WTS Group Ltd. He was also involved as founder shareholder
and finance director of Kiwara Plc which was acquired by First Quantum
Minerals Ltd in January 2010. Over the last few years, he has been involved in
senior managerial positions for several AIM/Johannesburg Stock Exchange listed
companies predominantly in the resource sector and has also been involved in
FCA compliance work within the investment business sector.
Christian Cordier - Business Development Director
Christian has had considerable involvement in corporate finance and
investments in both public and private mining and exploration companies for
over 25 years. His portfolio includes joint ventures with major international
mining houses, investments in listed companies in the United Kingdom,
Australia and Southern Africa as well as private mining operations. He has
extensive experience in sourcing natural resource projects and nurturing them
through the value curve by packaging and arranging venture funding, managing
the permitting and exploration process, negotiating off-take agreements and
the formation of a strong management team. He worked as CFO and senior
accountant as well as company secretary for private and public companies and
is a member of SA Institute for Professional Accountants ("SAIPA"). Christian
has done transactions in Coal, Platinum Group Metals, Chrome, Copper, Potash,
Phosphates, Diamonds, Gold, Lithium and Manganese. Christian focuses on
business development and wealth creation for private and publicly listed
companies in the mining and exploration sector.
Kjeld Thygesen - Independent Non-Executive Director
Kjeld Thygesen is mining investment veteran of more than 45 years. After being
a mining analyst at James Capel in the latter half of the 1970's he was
manager of the commodities department at Rothschild Asset Management between
1980-89. In 1990 he formed Lion Resource Advisors (LRA) as a specialist
adviser in the mining and natural resource sectors. LRA was the advisor to the
Midas Fund in the US between 1992 - 2000, which was one of the top performing
finds during that period. From 2002-2008 he was Investment director of
Resources Investment Trust Limited, a London listed investment trust which
returned a threefold investment during that period. He has served on several
mining company boards over the past twenty years.
James Cunningham-Davis - Non-Executive Director
James Cunningham-Davis was a Solicitor but is no longer practising and a
Fellow of the Chartered Institute for Securities & Investment and is
founder and Managing Director of Cavendish Trust Company Ltd, and Cavendish
Secretaries Limited, all of which are headquartered in the Isle of Man.
Cavendish Trust and Cavendish Secretaries provide professional services to
many private companies and various listed companies, across a number of
sectors of industry and finance in many jurisdictions, though particularly in
the Natural Resources/Mining, Technology and Property sectors. James has
worked within the international legal and corporate finance/service sectors
for more than 25 years and has held many directorships in both private and
listed companies.
FINANCIAL CORPORATE AND OPERATIONAL REVIEW
INTRODUCTION
African Pioneer Plc a company engaging in development of natural resources
exploration projects in Sub-Saharan Africa presents its year-end results for
the year ended 31 December 2023.
The Directors are required to provide a year-end report in accordance with the
Financial Conduct Authorities ("FCA") Disclosure Guidance and Transparency
Rules ("DTR"). The Directors consider this Financial, Corporate and
Operational Review along with the Chairman's Report, the Strategic Review and
the Director's Report provides details of the important events which have
occurred during the period and their impact on the financial statements as
well as the outlook for the Company going forward.
The Company's short to medium term strategic objectives are to enhance the
value of its mineral resource Projects through exploration and technical
studies conducted by the Company or through joint venture or other
arrangements (such as the Option Agreement with First Quantum on its 4
North-West Zambian licences) with a view to establishing the Projects can be
economically mined for profit. With a positive global outlook for both base
and precious metals, the Directors believe that the Projects provide a base
from which the Company will seek to add significant value through the
application of structured and disciplined exploration.
Financial Review
Financial highlights:
· Consolidated Loss: £689k loss after tax (2022: £671k - loss)
· Approximately £372k cash at bank at the period end (2022: £72k).
· The basic and diluted profit (losses) per share are summarised in the
table below
Profit (Loss) per share (pence)
2023 2022
Basic & Diluted Note 6 (0.33)p (0.35)p
· Net assets as at 31 December 2023 was £5.2m (31 December 2022
£5.2m)
Fundraisings:
On 19 June 2023 the Company announced a fundraising of £790,000 (gross) from
existing shareholders, new investors and Directors and the issuing 1,222,222
ordinary shares with no par value ("Ordinary Shares") to settle £27,500 of
accrued consultancy fees.
Corporate Review
Company Board: The Board of the Company comprises Colin Bird, Executive
Chairman Raju Samtani, Finance Director Christian Cordier, Business
Development Director Kjeld Thygesen, Independent Non-executive Director James
Nicholas Cunningham-Davis, Non-executive Director.
Listing: The Company was admitted to the Official List (Standard Segment) and
commenced trading on the Main Market for listed securities of the London Stock
Exchange on 1 June 2021 (the "Listing" or "IPO").
Corporate Transactions:
1. First Quantum Option Agreement: On 19 January 2022, the Company and its
80% owned subsidiary African Pioneer Zambia Ltd ("African Pioneer Zambia")
entered into an option agreement with First Quantum Minerals Ltd ("First
Quantum") (listed on the Toronto Stock Exchange) in relation to 4 of the 5
Zambian exploration licences held by African Pioneer Zambia (the "First
Quantum Option Agreement"). On 26 October 2023 the Company announced that
First Quantum had issued an Option Exercise Notice in relation to 2 of the 4
Zambian exploration licences the subject of the First Quantum Option Agreement
and post the period end on 16 February 2024 that First Quantum had issued an
Option Exercise Notice in relation to the 2 other Zambian exploration licences
the subject of the First Quantum Option Agreement.
Highlights of First Quantum Option Agreement:
· The four exploration licences the subject of the First Quantum Option
Agreement are in the highly prospective Central Africa Copperbelt in northwest
Zambia which is the largest and most prolific mineralized sediment- hosted
copper province in the world and are located less than 100km from First
Quantum's giant Sentinel copper mine.
· The exploration licenses include geological formations similar in age
and rock type to that hosting the major copper deposits of the Copperbelt
· Prior to exercising its option First Quantum had met is initial
expenditure requirement by spending US500,000 on each of the exploration
licences 27767-HQ-LEL, 27768-HQ-LEL, 27770-HQ-LEL, and 27771-HQ-LEL (the
"Zambian Projects").
· Although First Quantum has exercised its option it has at this stage
not earned any shares in African Pioneer Zambia, just the right to proceed to
the First Earn In Period.
· During the First Earn In Period which expires on 28 February 2026 ,
First Quantum has the right but not the obligation to prepare a Technical
Report in respect of the Zambian Projects demonstrating an Indicated Mineral
Resource of at least 300,000 tonnes of contained copper (the "Technical Report
Requirement"). First Quantum is to fund the Technical Report. Once the
Technical Report is issued First Quantum has the right to be issued shares
equal to a 51% shareholding in African Pioneer Zambia. This will also trigger
the Second Earn-In Period.
· In the Second Earn-In Period First Quantum shall have the right but
not the obligation to complete all necessary mining, metallurgical and
development studies to establish a mine at the Property and make a public
announcement that it intends to proceed towards commercial development of a
Mine on the Property (a "Decision to Mine"). First Quantum is to fund all
costs related to the Decision to Mine. Once First Quantum announces a
Decision to Mine First Quantum has the right to be issued shares in African
Pioneer Zambia to increase their 51% shareholding in African Pioneer Zambia to
75%.
First Quantum: is one of the world's top 10 copper producers operating in
several countries including Zambia where it owns the Sentinel and Kansanshi
mines in North West Zambia and is known for its specialist technical
engineering construction and operational skills which have allowed it to
develop and successfully run complex mines and processing plants. Colin Bird,
the chairman of African Pioneer, was a founder of and floated Kiwara Plc in
around 2008 which discovered copper in northwest Zambia and was sold to First
Quantum in January 2010 for U$260 million. First Quantum then developed the
Kiwara Plc projects into the Sentinel mine which is the world's 14(th) largest
copper mine.
Exploration licence 27769-HQ-LEL which is not covered by the Option Agreement
has been transferred from African Pioneer Zambia to African Pioneer Chongwe
Ltd a new Zambian company owned 80% by the Company and 20% by its local
partners and is in the Zambezi area located within the Zambezi belt of
southern Zambia that hosts a Lower Katanga supergroups.
2. Sandfire Option Agreement: The Sandfire Option Agreement was announced on 4
October 2021 and was for two years from 2 October 2021 and relates to PL
100/2020, PL 101/2020, PL 102/2020 and PL 103/2020 (the "Included
Licences"). Sandfire paid US$500K and issued 107,272 Sandfire ordinary
shares to the Company at the time of entering into the Sandfire Option
Agreement . As announced on 29 September 2023 Sandfire notified the Company
that it would not be exercising its option under the Sandfire Option
Agreement. Sandfire's Exploration Commitment under the Sandfire Option
Agreement was to fund US$1 million of exploration expenditure on the Included
Licences (the "Exploration Commitment") within the Option Period with 60% of
the Exploration Commitment to be on drilling and assay costs. If the
Exploration Commitment is not spent, any shortfall is due to be paid by
Sandfire to African Pioneer. The Company is reviewing the Exploration
Commitment with Sandfire. Sandfire have confirmed that they will provide
Exploration Information that it holds in relation to the Included Licences.
All the Botswana licences are currently under review by the Company in
cooperation with its external geological consultant with specific expertise of
Botswanan copper geology. The region represents a significant copper
exploration and resource development destination and as such all exploration
ground has potential strategic importance particularly in the case of African
Pioneer which has several licences in the general area.
Whilst the exploration to date on the licences which were the subject of the
Sandfire Option Agreement does not currently indicate prospectivity for a
large scale mining operation the Board believes that there is prospectivity
for a smaller to medium sized mining operation targeting in the range of 5,000
to 10,000 tonnes of contained copper per annum. Although too small for a large
scale miner a mine of this size would fit very well into the demand for small
to medium mines to help bridge the gap in the predicted shortfall of copper to
meet future projected demand.
Operational Review
The Company completed an Initial Public Offering (IPO) on the Standard List of
the London Stock Exchange and the acquisition of its projects in Zambia,
Namibia, and Botswana in 2021. The primary metal in all countries is
copper with by-product potential in all of our projects. In Zambia we have
potential for cobalt, in Namibia for gold and in Botswana for silver In 2022
the Company granted an option to First Quantum in relation to 4 of the 5
Zambian exploration licences held by African Pioneer Zambia which First
Quantum has exercised more details of which are provided in the Corporate
Highlights section of this review.
The Company's main focus during the period was on evaluating and advancing its
85% owned Namibian Projects, including the Ongombo mining licence application,
and the Zambian licence (80% owned) and Botswana Projects (100% owned) that
are not the subject of options.
Namibia:
The Company has a 85% interest in the Namibian Projects and on 16 May 2023
announced an Independent updated total (gross) 2 (#_ftn2) Indicated Mineral
Resource Estimate (MRE) for its Ongombo project of 5.7Mt at 1.1% Cu Equivalent
(CuEq), 0.94% Cu and 0.23g/t Au and a very substantial Inferred underground
potential Resources of 23Mt at 1.1% CuEq, 0.95% Cu and 0.24g/t Au.
The Ongombo Mining Licence granted in September 2022 is subject to completion
of Environmental and Social Impact Assessment ("ESIA"). On 25 April 2023 the
Company announced the award of an Environmental Clearance Certificate. by the
Ministry of Environment, Forestry and Tourism (MEFT): Department of
Environmental Affairs (DEA). The award of a production-related ECC is an
important step as it achieves compliance with the Environmental Management Act
No,7 (2007) and its associated 2012 regulations, and means that the Project
has now surmounted the last significant permitting hurdle in the pathway to
production, initially by way of low-cost, open-pit extraction of the surface
copper - gold resource. in advance of a second-phase, underground mine based
around a JORC (2012) Mineral Resource Estimate.
In compliance with the requirements of the ECC, an Environmental and Social
Impact Assessment (ESIA) is ongoing as is initial delivery of the now
Ministry- approved Environmental Management Plan that is to accompany mine
development and ore processing operations.
As the result of a successful drill programme in 2022 the Company was on 16
May 2023 able to announce an updated new Mineral Resource Estimate resulting
in an additional 100,000 tonnes in contained copper metal and an additional
84,000 oz of gold across all Resource categories. The Ongombo mineralization
remains open at depth with scope for the addition of further tonnage and based
on recent twinned drilling, potential for significantly enhanced gold grades
in the East - Ost shoots
The updated Mineral Resource Estimate was completed by Addison Mining Services
Ltd., an independent consultancy based in the United Kingdom and is reported
in accordance with the JORC Code 2012 edition. The gross 3 (#_ftn3)
Resources are of Indicated and Inferred categories and include:
· Total Indicated Resources of 5.7 million tonnes gross at 1.1 % Cu
Equivalent ("CuEq"), 0.94 % Cu, 0.23 g/t Au and 4.4 g/t Ag, for 53,000 t Cu,
42,000 oz Au and 800,000 oz Ag, including:
o Open pit potential Resources of 0.93 million tonnes at 0.68% CuEq, 0.57 %
Cu, 0.19 g/t Au and 2.6 g/t Ag, for 5,300 t Cu, 5,700 oz Au and 78,000 oz Ag,
above a cut-off grade of 0.25% CuEq
o Underground potential Resources of 4.7 million tonnes at 1.2% CuEq, 1.0%
Cu, 0.24 g/t Au and 4.7 g/t Ag, for 48,000 t Cu, 36,000 oz Au and 72,000 oz
Ag, above a cut-off grade of 0.5% CuEq
· Inferred Underground potential Resources of approximately, 23 million
tonnes at 1.1% CuEq, 0.95% Cu, 0.24 g/t Au and 5.8 g/t Ag, for 220,000 t Cu,
180,000 oz Au and 4.3 million oz Ag, above a cut-off grade of 0.5% CuEq
Immediately to the north-west of the open pit in the "central shoot" there is
an estimated underground Resource inventory of 2.1 million tonnes at 1.2% Cu
which may be readily accessed by developing access from the high wall of the
open pit, representing potential for a timely and efficient transition from
open pit to underground mining. The remainder of the Indicated underground
resource may then be accessible following further development. Further studies
are required to assess the economic viability of such an operation.
Project Background: The Ongombo project is situated in Exclusive Prospecting License (EPL) 5772 in the Khomas region of the Windhoek District of Namibia, 45 km from Windhoek, the capital of Namibia. The project area has relatively well-developed infrastructure on the farms Ongombo Ost and Ongombo West. The property is easily accessed by a tar road from Windhoek to Gobabis and then on a gravel road up to the project area. There is also a railway line from Gobabis to Walvis Bay, via Windhoek running parallel to the tarred road. The Ongombo Project is located 15km northeast from Otjihase Mine which consists of two underground mines (Otjihase and Matchless) and an 800ktpa copper concentrator.
The Ongombo project lies within the Matchless Member of the Kuiseb Formation,
a conspicuous assemblage of lenses of foliated amphibolites,
chlorite-amphibolite schist, talc schist and metagabbro. This belt, up to 5km
wide in the Otjihase area, stretches 350km east-north-eastwards in the
Southern Zone of the Damara Orogen from the Gorob - Hope area. The deposit is
generally described as a Besshi-type massive sulphide. These are described as
thin sheet-like bodies of massive to well-laminated pyrite, pyrrhotite, and
chalcopyrite within thinly laminated clastic sediments and mafic tuffs. At the
Ongombo project mineralisation occurs in one continuous zone approximately 7
km long and 0.5 - 1 km wide. The mineralisation zone dips consistently
15-20° northwest and plunges 5° northeast. Mineralisation is gradually
thinning westward.
The pending renewal application for EPL 5772 which expired on 8 March 2023 is
now reflected on the Namibian Mines and Energy Cadastre Map Portal and is for
an additional two-year extension. A conditional Environmental Clearance
Certificate for mining activities was granted on EPL 5772 and is valid until
16 April 2026. A 20 Year Mining Licence, ML 240, was granted on 10 August 2022
and covers a portion of EPL 5772 and approximately one third of the open pit
resource. An extension to the Mining Licence was submitted on 6 September 2022
to encompass the wider Resource Area.
Zambia:
As mentioned in the Corporate Transactions summary above First Quantum has
issued Option Exercise Notices in relation to all 4 of the 4 Zambian
exploration licences the subject of the First Quantum Option Agreement.
The licence package the subject of the First Quantum Option Agreement covers
part of the north-western extension of the Zambian Copperbelt. The properties
are located within 80-100km of First Quantum's giant Sentinel copper mine, one
of the largest copper mines in Africa, with a reported Measured and Indicated
Resources of 891Mt @ 0.45% Cu. They also lie close to the Enterprise nickel
deposit (37.7Mt @ 1.03% Ni) which is being reportedly moved towards
development.
The Projects lie on the Lufilian Fold Belt in the Domes region of the Central
African Copperbelt, straddling the western boundary of the Kabompo Dome,
underlain principally by rocks of the Lower and Upper Roan, as well as the
stratigraphically higher Kundelungu and Nguba Groups. This geological package
is similar in age and rock type to that hosting the major copper deposits of
the Copperbelt, including Sentinel. Therefore, the licence areas are
considered to be strongly prospective for Copperbelt-type copper/cobalt and/or
nickel deposits. They are historically underexplored, representing the
westerly extension of the Copperbelt which has not been investigated in
detail, as previous work focussed primarily on the central part of the zone.
Exploration licence 27769-HQ-LEL which is not covered by the Option Agreement
is in the Zambezi area located within the Zambezi belt of southern Zambia that
hosts a Lower Katanga supergroups succession.
Exploration through July 2023
Through July 2023 First Quantum completed an extensive work programme on all
the optioned licences including, mapping, soil sampling, ground geophysics,
air core drilling and diamond drilling.
Several near surface targets have emerged (as detailed in prior quarterly
reports), and three of these prospects at Turaco, Chipopa and Chibwika were
selected for follow-up work including air core and diamond drilling.
In addition to the near surface targeting using soil geochemistry, First
Quantum has conducted a broadscale 'Generative' programme employing
comprehensive proprietary datasets such as airborne gravity, magnetics and
radiometrics as well as remote sensing imagery. These datasets have been
combined with detailed litho-structural mapping, geochronological analysis and
deep-sensing magneto-telluric (MT) traverses to generate an integrated
interpretive model of the district. This model has, for the first time,
clearly defined the key structural architecture domains of the area including
the important boundary between the Western Foreland and Central fold and
thrust terrain of the Katangan basin.
In 2022 First Quantum utilised this architecture model to site two deep
diamond holes ('framework holes') in the Western Foreland succession. These
holes were designed to test prospective stratigraphic positions in the
sequence for mineralisation similar to that found in north of the border in
the DRC at Kamoa-Kakula. The framework holes successfully delineated the
Katangan sequence including a key reduced 'diamictite' horizon. Localised
intercepts of chalcocite copper mineralisation on the boundary of reduced and
oxidised strata suggest that the same mineralising processes are occurring on
the African Pioneer licences as seen north of the border in the DRC.
Further modelling and MT lines have recently been conducted to define the
crucial structural and sedimentalogical features known to be associated with
the high-grade copper accumulations at Kamoa-Kakula.
In the first quarter of 2023 the First Quantum drilling resulted in multiple
high grade copper intercepts peaking at 8m @ 1.25% Cu will be followed up on
the Turaco prospect. High-grade cobalt mineralisation was also identified
peaking at 0.23% Co over 4m within the Fold and Thrust Belt.
Exploration during the second half of 2023
Post the year end on 16 April 2024 the Company announced an update on the
exploration conducted and funded by First Quantum Minerals Limited during the
six-month period to 31 December 2023. The exploration was over the licences
located in NW Zambia within both the Fold & Thrust Belt and Western
Foreland and which are covered by the First Quantum Option Agreement.
Highlights
· Drilling confirmed proof of concept that licences are in the right
lithology confirming Congo-style mineralisation.
· 4 diamond drill holes completed at the Turaco target for 1,297.1m.
· A 772.3m deep diamond drill hole completed over the Ikatu on an Audio
Magneto Telluric ("AMT") generated target. Awaiting results.
· 9 reverse circulation ("RC") holes drilled at the Chipopa target for
a total of 780m. Awaiting results.
· During the course of the programme FQM confirmed their intention to
exercise their option as reported on 16 February 2024.
· The parties have met and agreed an appropriate ground relinquishment
strategy consistent with licence renewal required later in 2024 together with
an aggressive exploration programme.
Exploration completed during the second half of 2023 included diamond and
reverse circulation ('RC") drilling guided initially by the Audio Magneto
Telluric ("AMT") and Passive Seismic geophysical surveys and geological
mapping and extensive soil geochemical anomalies completed in late 2023. This
exploration work has successfully provided a much-improved context to the
broader geology and has resulted in the construction of a regional section
that brings to the fore the architecture critical to both Kamoa and
Kolwezi-type mineralisation and the anticipated location of both the Fold and
Thrust Belt and the Western Foreland.
Follow-up diamond drilling was undertaken at the Turaco Target on Licence
27770-HG-LEL over earlier scout drilling with intercepts peaking at 1.18% Cu
over 8m from 5m depth. Four holes were completed for a total of 1297.1m.
Some holes were potentially stopped prematurely in andesitic basalt and more
recent surface geochemical data suggests that conditions suitable for a redox
front and copper deposition may occur beneath the base of the basalt cover.
First Quantum will consider further drilling closer to the up-dip extension of
the basalt unit to test this possibility.
A 772.3m diamond drill hole was drilled as part of the AMT follow-up programme
at Ikatu with no significant Cu Mineralization and a further 9 RC holes were
completed for a total of 780m at the Chipopa Target.
Drilling was curtailed in late December 2023 partly due to limited
availability of diamond drill rigs and in the case of RC drilling,
unfavourable conditions brought on by the Rainy Season.
Turaco drilling intercepted a diamictite with a carbonaceous shale with
disseminated pyrite and chalcopyrite, interpreted to be the Grand
Conglomérat. Salt related brecciation and complex faulting significantly
disrupts stratigraphy and further work is required to better understand the
complexities of this Thrust and Fold Belt target.
The Ikatu diamond drilling in the Western Foreland was collared to test the
continuous conductor identified from the AMT survey. The hole intersected the
fine-grained carbonaceous siltstone and shale unit with associated
chalcopyrite conductor at 245m to 320m. The hole was extended to 772.3m and
generated a substantial amount of valuable geological information that has
helped build the regional geological section. U-Pb provenance geochronology on
the sandstones intersected and Re-Os dating on the carbonaceous shales has
been proposed by FQM to better constrain the stratigraphy.
Nine RC holes totalling 780m were completed at Chipopa testing soil anomalies
within the Fold & thrust Belt. Analyses are pending.
BOTSWANA
The Botswana projects comprise 5 prospecting licences which have been renewed
through 31 March 2026 and comprise approximately 770 sq. km. in the Kalahari
Copperbelt. Whilst the exploration to date on the licences which were the
subject of the Sandfire Option Agreement does not currently indicate
prospectivity for a large scale mining operation the Board believes that there
is prospectivity for a smaller to medium sized mining operation targeting in
the range of 5,000 to 10,000 tonnes of contained copper per annum. Although
too small for a large scale miner a mine of this size would fit very well into
the demand for small to medium mines to help bridge the gap in the predicted
shortfall of copper to meet future projected demand.
All the Botswana licences are currently under review by the Company in
cooperation with its external geological consultant with specific expertise of
Botswanan copper geology. The region represents a significant copper
exploration and resource development destination and as such all exploration
ground has potential strategic importance particularly in the case of African
Pioneer which has several licences in the general area.
Outlook
Outlook for Copper: During the second half of 2023 and into 2024 the copper
price has recovered and is currently around US$9,000 per tonne. Forecasts for
the price of copper and its by-product metals remain positive in the range of
US$10-US$15,000 per tonne. The outlook for copper supply remains quite
pessimistic as most large copper mining projects have been shelved as a result
of political or economic reasons but we anticipate this will lead to both
smaller but profitable mines being developed , and junior mining companies
with good copper resources in reliable jurisdictions becoming potential
targets for acquisitions by major mining companies. As a result, the Company
is well positioned with all its projects, to take part in a potential
acquisition boom or alternatively to attract financing for its own operations
which might not otherwise have been available.
The major mining companies are seeking new projects for acquisition and all
our projects have the fundamentals which may attract the attention of larger
companies as reflected in the fact that First Quantum has as reported in the
Corporate review section above issued an Option Exercise Notice in relation to
the 4 Zambian exploration licences the subject of the First Quantum Option
Agreement
The Board feels the Group has assembled an enviable portfolio of projects and
we are pleased that Sandfire has taken and retained a significant equity
position in the Company. We look forward to advancing all our projects and
providing our shareholders with the prospects of enhanced value flowing into
next year.
By Order of the Board
30 April 2024
DIRECTORS' REPORT
The directors present their report on the affairs of African Pioneer Plc (the
"Company") for the year ended 31 December 2023. The Company was incorporated
on 20 July 2012.
PRINCIPAL ACTIVITIES
The principal activity of the Company and its subsidiaries (the "Group") is
the exploration for base metals in Zambia, Namibia and Botswana.
Investing in small natural resource projects and mineral exploration projects
can be very rewarding, but because of the issues and uncertainties arising
from exploration, resource estimation, commodity price volatility, politics
and the financing of such projects, there is a significant possibility of such
reward not materialising. As a result of the nature and size of the Company it
will, in the early years particularly, be exposed to a concentration of risk
either by sector or geographically, or possibly both. These risks are outlined
in more detail in the Strategic Report.
REVIEW OF THE BUSINESS
During the year, the Group made a loss of £689,213 - (2022: loss of
£670,871).
A review of the current and future development of the Group's business are
included in the Strategic Report.
The Directors do not recommend the payment of a dividend.
SUBSEQUENT EVENTS
Details of subsequent events after the year end are disclosed in note 17 of
the financial statements
DIRECTORS
The names of the Directors who served throughout the period and subsequent to
the year end, are as follows:
C Bird
R. Samtani
C Cordier
K Thygesen
J Cunningham-Davis
Directors' interests in the ordinary share capital of the Company at the date
of this report are disclosed within the Directors Remuneration Report
DIRECTOR'S REMUNERATION
The Directors' remuneration is detailed in the Directors' Remuneration Report
on pages 17 to 19
DIRECTORS' AND OFFICERS' INDEMNITY INSURANCE
The Group has purchased Directors' and Officers' liability insurance which
provides cover against liabilities arising against them in that capacity.
USE OF FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
Details of the use of financial instruments and associated risk management by
the Group are included in note 3 to the financial statements.
SUBSTANTIAL SHAREHOLDINGS
Other than Directors interests which are set out below on a separate table in
this report, the following shareholders held 3% or more of the issued share
capital of the Company at 26 April 2024. These holdings are extracted as
they appear in the relevant custodian account on the Company's share register.
Registered Shareholder No. of Shares Percentage
The Bank Of New York (Nominees) Limited * 39,091,269 17.14%
Vidacos Nominees Limited * 28,418,932 12.46%
Jim Nominees Limited * 25,185,057 11.04%
Vidacos Nominees Limited * 24,028,866 10.54%
Hargreaves Lansdown (Nominees) Limited * 17,565,285 7.70%
Mohamad Ali Ahmad 15,000,000 6.58%
Hargreaves Lansdown (Nominees) Limited * 9,567,345 4.20%
158,856,754 69.66%
*Nominee shareholder; not beneficial owner.
UK STREAMLINED ENERGY AND CARBON REPORTING
The Group's UK energy and carbon information is not disclosed as the Company
qualifies as it consumed less than 40MWh and is a Low Energy user in the UK as
defined in the Environmental Reporting Guidelines Including streamlined
energy and carbon reporting guidance March 2019 (Updated Introduction and
Chapter 1) and as such is not required to provide detailed disclosures of
energy and carbon information. The Company is based in the Isle of Man and
has no UK-based subsidiaries and its overseas subsidiaries, some of which own
exploration licences and conduct exploration activities outside the U.K. are
not required to report U.K. energy consumption in their own right. The Company
was also below this threshold in 2022.
POLITICAL DONATIONS
The Group made no political donations during the year (2022: none).
STATEMENT AS TO THE DISCLOSURE OF INFORMATION TO
THE AUDITORS AND DIRECTORS' RESPONSIBILITIES
The Directors (being Colin Bird-Chairman, Raju Samtani-Finance Director,
Christian Cordier-Business Development Director, Kjeld Thygesen -Independent
Non-Executive Director and James Cunningham-Davis Non-Executive Director, who
were in office at the date of approval of this report, confirm that, so far as
they are aware, there is no relevant audit information of which the Company's
auditor is unaware of and that they have taken all reasonable steps to take
themselves aware of any relevant audit information and to establish that the
Company's auditor is aware of that information.
The Directors are responsible for preparing the financial statements in
accordance with the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority ("DTR") and with International Financial
Reporting Standards as adopted by the United Kingdom.
The Directors confirm to the best of their knowledge that:
· the financial statements have been prepared in accordance with the
relevant financial reporting framework and give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Group and
the Company; and
· the Strategic Report and Directors' Report include a fair review of
the development and performance of the business and the financial position of
the Group and the Company, together with a description of the principal risks
and uncertainties that it faces; and
· the annual report and financial statements, taken as a whole, are
fair, balanced, and understandable and provide the information necessary for
shareholders to assess the Group's position, performance, business model and
strategy.
AUDITORS
The auditors, RPG Crouch Chapman LLP have indicated their willingness to
continue in office. A resolution to re-appoint them will be proposed at the
forthcoming Annual General Meeting.
Signed on behalf of the Board:
30 April 2024
Colin Bird
Raju
Samtani
Executive
Chairman
Director
DIRECTORS' REMUNERATION REPORT
This Remuneration Report sets out the Group's policy on the remuneration of
Directors, together with details of Directors' remuneration packages and
service contracts for the year ended 31 December 2023.
The Company's policy is to maintain levels of remuneration to attract,
motivate, and retain Directors and Senior Executives of the highest calibre
who can contribute their experience to deliver industry-leading performance
with the Company's operations. The Company is nonetheless mindful of the need
to balance this objective with the fact that it is pre-revenue.
Since listing on 1 June 2021, the Company's Directors have largely remunerated
through a combination of modest salaries and/or fees and where relevant,
equity positions as founders and as a result the total salaries and fees
payable to directors has been relatively modest.
As the Company grows, and increasingly makes hires, it will become necessary
to move to a more long-term and sustainable policy, which continues to align
the interests of Directors and senior staff with those of shareholders while
recognising that new hires will not initially have a significant equity
position.
Accordingly, it is likely that compensation packages for Executive Directors
will need to move over time to a level more consistent with the market.
Currently, Directors' remuneration is not subject to specific performance
targets. The Company is sufficiently small that the Board does not consider
that it is necessary to impose such targets as a matter of principle but
believes that exceptional performance can be rewarded on an ad hoc basis.
The Board proposed and shareholders approved at the 2022 AGM a share option
scheme which is to incentivise both Executive and non-Executive Directors as
well individuals holding positions of responsibility in the Company ("Share
Option Scheme"). On 24 January 2023 the Company announced that pursuant to the
Share Option Scheme approved at the Company's Annual General Meeting ("AGM")
held on 23 August 2022 16,850,000 options over Ordinary Shares ("Options")
were awarded, 6,600,000 of the Options were awarded to directors of the
Company, as detailed further in Note 14 and the balance of 10,250,000 Options
to other eligible participants. The Company had not previously issued any
Options.
The 2022 AGM also approved the Company establishing new incentive schemes to
more closely align the interest of directors, officers, employees and
consultants with those of shareholders by providing for the payment of
short-term, annual and transaction incentive awards in cash or Company shares
(the "Proposed Incentive Schemes"). Awards under the Proposed Incentive
Schemes are not intended to replace the Share Option Scheme arrangements and
the Proposed Incentive Schemes, shall continue in place until the Board of
the Company have put an alternative incentive scheme to the Company's
shareholders which the Company's shareholders have approved.
The Board considers the remuneration of Directors and senior staff and their
employment terms and makes recommendations to the Board of Directors on the
overall remuneration packages. No Director takes part in any decision directly
affecting their own remuneration.
There has been no correspondence to date from shareholders relating to
Directors' remuneration matters and therefore no such matters have been
considered by the Board in formulating the Company's remuneration policy.
In determining Executive Director remuneration policy and practices, the Board
aims to address the following factors:
• Clarity - remuneration arrangements should be transparent and
promote effective engagement with shareholders and the workforce;
• Simplicity - remuneration structures should avoid complexity and
their rationale and operation should be easy to understand;
• Risk - remuneration arrangements should ensure reputational and
other risks from excessive rewards, and risks that can arise from
target-based incentive plans, are identified and mitigated;
• Predictability - the range of possible values of rewards to
individual directors and any other limits or discretions are identified and
explained at the time of approving the policy;
• Proportionality - the clarity of the link between individual
awards, the delivery of strategy and the long-term performance of the company
should be clear; and
• Alignment to culture - incentive schemes, when implemented will
drive behaviours consistent with company purpose, values and strategy.
Directors' remuneration
Remuneration of the Directors for the years ended 31 December 2023 and 2022
was as follows:
2023 2022
Total Total
Emoluments
Emoluments
Consulting Fees
Directors' Fees
£ £ £ £
C. Bird 18,000 42,000 60,000 60,000
R. Samtani 18,000 32,003 50,003 50,004
C Cordier 18,000 12,000 30,000 30,000
K Thygesen 18,000 - 18,000 18,000
James Cunningham-Davis 14,400 - 14,400 14,400
Total 86,400 86,003 172,003 172,004
Each of the Directors entered into service agreements at the time of the Company's admission to the market on 1 June 2021. Details of Directors' Letters of Appointment and Service Agreements as disclosed in Note 16 of these Financial Statements.
There were no pensions or other similar arrangements in place with any of the
Directors during the years ended 31 December 2023 or 2022.
Payments to past directors
The Company did not pay any compensation to past Directors in 2023 and 2022.
DIRECTORS' INTERESTS
The beneficial interest of the directors, their spouses and minor children in
the share capital of the Company are as follows:
Ordinary Shares of No Par Value
Date of this report 31 December 2023 31 December 2022
C Bird* 24,492,284 24,117,284 21,061,728
R Samtani 18,395,061 18,395,061 16,061,728
J Cunningham-Davis*** - - -
C Cordier** 17,222,222 17,222,222 15,000,000
K Thygesen 1,033,334 1,033,334 200,000
* Colin Bird's shareholding includes 5,000,000 ordinary shares held by Campden
Park Trading, a company owned and controlled by Colin Bird, the Company's
Chairman
** Christian Cordier's shareholding includes 4,000,000 ordinary shares held by
Tonehill Pty Ltd as trustee for The Tonehill Trust and 5,222,222 ordinary
shares held by Coreks Super Pty Ltd as trustee for Coreks Superannuation Fund
both of which companies are owned and controlled by Christian Cordier. It also
includes 8,000,000 ordinary shares held by Breamline Pty Ltd of which
Christian Cordier is a director and which is a trustee company for Breamline
Ministries
*** 230,000 warrants are held by Cavendish Trust of which James
Cunningham-Davis is a director and a controlling majority shareholder.
The Directors have also been granted fully vested options over ordinary shares detailed below, the options are exercisable at 4.5 pence per Ordinary Share and expire on 23 January 2033 one day prior to the tenth anniversary of the grant of the options. Further details of the terms of the options are in note 14
Directors No. of Options
Executive Directors:
Colin Bird Executive Chairman 5,000,000
Christian Cordier Commercial Director 500,000
Raju Samtani Finance Director 600,000
Non Executive Directors:
Kjeld Thygesen Independent 500,000
James Cunningham-Davis Nil
Total Directors 6,600,000
There have been no further changes in directors' interests in the Company's
shares since the year end other than those noted above.
Approved by the Board on 30 April 2024.
CORPORATE GOVERNANCE REPORT
Corporate Governance
The Board guides and monitors the business and affairs of the Company on
behalf of the Shareholders to whom it is accountable and is responsible for
corporate governance matters. While certain key matters are reserved for the
Board, it has delegated responsibilities for the day-to-day operational,
corporate, financial and administrative activities to the Business Development
Director, the Executive Chairman and the Finance Director.
In assessing the composition of the Board, the Directors have had regard to
the following principles:
· the role of the Executive Chairman and the other directors should not
be exercised by the same person;
· the Board should include at least one independent non-executive
director, increasing where additional expertise is considered desirable in
certain areas, or to ensure a smooth transition between outgoing and incoming
non-executive directors; and
· the Board should comprise of directors with an appropriate range of
qualifications and expertise.
The Company believes it complies with each of these principles.
Both James Cunningham-Davis and Kjeld Thygesen are the Non-Executive Directors
of the Company. James Cunningham-Davis is one of the directors of Cavendish
Secretaries Limited, a subsidiary of Cavendish Trust Company Limited, which
provides secretarial services to the Company in the Isle of Man and is
therefore for these purposes not considered independent.
Kjeld Thygesen has a holding of Ordinary Shares representing 0.45 per cent. of
the issued share capital and he is considered independent given this holding
is de minimis.
Directors appointed by the Board are subject to election by shareholders at
the Annual General Meeting of the Company following their appointment and
thereafter are subject to re-election in accordance with the Company's
Articles of Association.
The QCA Corporate Governance Code, as published by the Quoted Companies
Alliance, is tailored for small and mid-size quoted companies in the United
Kingdom. The Company follows, to the extent practicable for a company of its
size and nature, follow the QCA Corporate Governance Code (2018). The
Directors are aware that there are currently certain provisions of the QCA
Corporate Governance Code that the Company is not in compliance with, given
the size and early stage nature of the Company. These include, inter alia:
· The Company does not currently have a remuneration, nomination or
risk committee. The Board as a whole will review remuneration, nomination and
risk matters, on the basis of adopted terms of reference governing the matters
to be reviewed and the frequency with which such matters are considered. The
Board as a whole will also take responsibility for the appointment of auditors
and payment of their audit fee, monitor and review the integrity of the
Company's financial statements and take responsibility for any formal
announcements on the Company's financial performance.
· Unless further independent non-executive directors are appointed, the
Board will not comply with the provision of the QCA Corporate Governance Code
that at least to members of the Board, excluding the Chairman, should comprise
non-executive directors determined by the Board to be independent.
· The Executive Chairman of the Company is an executive director rather
than an independent non-executive director as suggested by the QCA corporate
governance code.
Share Dealing Code
The Company has adopted, with effect from Admission, a share dealing policy
regulating trading and confidentiality of inside information for the Directors
and other persons discharging managerial responsibilities (and their persons
closely associated) which contains provisions appropriate for a company whose
shares are admitted to trading on the Official List (particularly relating to
dealing during closed periods which will be in line with the Market Abuse
Regulation). The Company takes all reasonable steps to ensure compliance by
the Directors and any relevant employees with the terms of that share dealing
policy.
Audit Committee
The Audit Committee is chaired by James Cunningham-Davis and its other member
is Christian Cordier. The Audit Committee meets at least twice a year, or more
frequently if required. The Audit Committee is responsible, amongst other
things, for making recommendations to the Board on the appointment of auditors
and the audit fee, monitoring and reviewing the integrity of the Company's
financial statements and any formal announcements on the Company's financial
performance as well as reports from the Company's auditors on those financial
statements.
In addition, the Audit Committee considers and reviews the Company's internal
financial control and risk management systems to assist the Board in
fulfilling its responsibilities relating to the effectiveness of those
systems, including an evaluation of the capabilities of such systems in light
of the expected requirements for any specific acquisition target.
Meetings of the Directors
The number of meetings of the board of directors of the Company and its
committees held during the year ended 31 December 2023 and the number of
meetings attended by each director is tabled below.
2023
Meetings Meetings attended
Board Audit Board Audit
C. Bird 2 - 2 -
R. Samtani 2 - 2 -
J. Cunningham-Davis 2 2 2 2
K Thygesen 2 - 2 -
C. Cordier 2 2 2 2
2022
Meetings Meetings attended
Board Audit Board Audit
C. Bird 2 - 2 -
R. Samtani 2 - 2 -
J. Cunningham-Davis 2 2 2 2
K Thygesen 2 - 2 -
C. Cordier 2 2 2 2
Diversity Policy
The Board operates a policy whereby Directors and other individuals considered
for employment and professional services across the Group are selected on the
basis of their experience, professional qualifications and ability and a such
the Company does not discriminate on aspects such as age, gender or
educational and professional background.
The Company is a small exploration company and the Company's only employees
comprising of the 5 Board Directors who have been in office since the Listing
on 1 June 2021 and were the Board members on the basis of whose experience and
expertise investors invested in the Company at the time of the Listing. The
Company has at the date of these accounts not expanded or changes the
composition of its Board and accordingly has not met the following targets
on board diversity
(i) at least 40% of the individuals on its board of directors are women; and
(ii) at least one of the following senior positions on its board of directors
is held by a woman (A) the chair; (B) the chief executive; (C) the senior
independent director; or (D) the chief financial officer.
The Company has met the target that at least one individual on its board of
directors s from a minority ethnic background
The diversity composition of the Board is shown in the table below:
Percentage of the board Number of senior positions on the board (CEO, CFO, SID and Chair) Number in executive management Percentage of executive management
Number of board members
Men 5 100 % 3 3 100%
Women 0 Nil - - Nil
Ethnic Background of Board members
Number of board members Percentage of the board Number of senior positions on the board (CEO, CFO, SID and Chair) Number in executive management Percentage of executive management
White British or other White (including minority-white groups) 4 80% 2 2 66%
Mixed/Multiple Ethnic Groups
Asian/Asian British 1 20% 1 1 33%
Black/African/Caribbean/Black British
Other ethnic group, including Arab
Not specified/ prefer not to say
Ethnic Background of Board members
Number of board members Percentage of the board Number of senior positions on the board (CEO, CFO, SID and Chair) Number in executive management Percentage of executive management
White British or other White (including minority-white groups) 4 80% 2 2 66%
Mixed/Multiple Ethnic Groups
Asian/Asian British 1 20% 1 1 33%
Black/African/Caribbean/Black British
Other ethnic group, including Arab
Not specified/ prefer not to say
Internal controls
The Board is responsible for establishing and maintaining the Group's system
of internal control. Internal control systems manage rather than eliminate the
risks to which the Group is exposed and such systems, by their nature, can
provide reasonable but not absolute assurance against misstatement or loss.
There is a continuous process for identifying, evaluating and managing the
significant risks faced by the Group. The key procedures which the Directors
have established with a view to providing effective internal control, are as
follows:
· Identification and control of business risks The Board identifies the
major business risks faced by the Group and determines the appropriate course
of action to manage those risks.
· Budgets and business plans Each year the Board approves the business
plan and annual budget. Performance is monitored and relevant action taken
throughout the year through the regular reporting to the Board of changes to
the business forecasts.
· Investment appraisal Capital expenditure is controlled by budgetary
process and authorisation levels. For expenditure beyond specified levels,
detailed written proposals must be submitted to the Board. Appropriate due
diligence work is carried out if a business or asset is to be acquired.
Environmental, Social and Governance (ESG) Policy
African Pioneer plc practises responsible exploration as reflected in our ESG
policy and our activities. By doing so we reduce project risk, avoid adverse
environmental and social impacts, optimising benefits for all stakeholders
while adding value to our projects.
Our business associates, consultants and contractors perform much of our
primary activities at our projects and therefore we require that all
representatives and contractors working on our behalf or for our subsidiaries
accept and adhere to the principles set out in this policy. We encourage input
from those with local knowledge and we review this policy on a regular basis.
Our ESG policy is guided by the Prospectors & Developers Association of
Canada's (PDAC) Framework for Responsible Exploration (known as e3 Plus) which
encourages mineral exploration companies to complement and improve social,
environmental and health and safety performance across all exploration
activities around the world.
Adopting Responsible Governance and Management: African Pioneer is committed
to environmentally and socially responsible mineral exploration and has
developed and implemented policies and procedures for corporate governance and
ethics. We ensure that all staff and key associates are familiar with these
and have the appropriate level of knowledge of these policies and procedures.
The Company employs persons and engages contractors with the required
experience and qualifications relevant to their specific tasks and, where
necessary, seeks the advice of specialists to improve understanding and
management of social, environmental, human rights and security, and health and
safety.
African Pioneer's Corporate Governance Statement can be viewed on our website
and the Company has an Anti-Bribery and Corruption policy and an Anti-Slavery
policy.
· Applying Ethical Business Practices: As well as our shareholders and
staff, our stakeholders include local communities and local leadership,
government and regulatory authorities, suppliers, contactors and consultants,
our local business partners and other interested parties. Our corporate
culture and policies require honesty, integrity, transparency and
accountability in all aspects of our work and when interacting with all
stakeholders.
The Company takes all necessary steps to ensure that activities in the field
minimise or mitigate any adverse impacts on both the environment and on local
communities.
· Respecting Human Rights: The exploration activities of African
Pioneer are carried out in line with applicable laws on human rights and the
Company does not engage in activities that have adverse human rights impacts.
· Commitment to Project Due Diligence and Risk Assessment: We make sure
we are informed of the laws, regulations, treaties and standards that are
applicable with respect to our activities. We ensure that relevant parties are
informed and prepared before going into the field in order to minimise the
risk of miscommunication, unnecessary costs and conflict, and to understand
the potential for creating opportunities with local communities where
possible.
· Engaging Host Communities and Other Affected and Interested
Parties: African Pioneer is committed to engaging positively with local
communities, regulatory authorities, suppliers and other stakeholders in its
project locations, and encourages feedback through this engagement. Through
this process, the Company develops and fosters the relationships on which our
business relies for success.
· Protecting the Environment: We are committed to ensuring that
environmental standards are met or exceeded in the course of our exploration
activities. Applicable laws and local guidelines in all project jurisdictions
are followed diligently and exploration programmes are only carried out once
relevant permits and approvals have been secured from the appropriate
regulatory bodies.
African Pioneer is committed to good practices in rehabilitation and repair
during its mineral exploration activities and, where possible, choose less
impactful exploration methods to limit disturbance.
· Safeguarding the Health and Safety of Workers and the Local
Population: Company activities are carried out in accordance with good
practice and applicable laws related to Health and Safety.
Environment Health, safety and community statement
The Group is committed to providing a safe working environment for all its
employees and to responsibly manage all of the environmental interactions of
its business. Its objective is to perform and achieve at a level notably in
excess of the regulatory minima required by the host countries in which it
does business.
The following specific principles are adhered to by the Group:
Health & Safety
• Provision of health and safety training to all employees;
• All necessary measures are taken to minimise workplace injuries, and
• Establishment of management and advisory programmes for the prevention of
transmissible diseases.
Environment
The Group prides itself on being a skilled and responsible operator. It
functions with the clear mandate of being in full compliance with, applicable
environmental laws, regulations and permit requirements. It has an internal
monitoring programme in place that plays a critical role in continuously
improving its environmental performance.
The Group strives to minimise its environmental effects wherever and to:
• Comply with applicable laws, regulations and commitments wherever
it operates;
• Ensure it has the necessary resources, procedures, training
programmes and responsibilities in place to achieve its environmental
objectives;
• Strive to protect air and water quality, minimise consumption of
water and energy, and protect natural habitats and biodiversity;
• Promote an ongoing environmental dialogue with its stakeholders in
the communities where it conducts business;
• Collaborate with stakeholders to define environmental priorities
and to protect the environment, and
• Consider the requirement for environmental protection in all
aspects of exploration and development.
Communities
As well as recognising the need to protect the natural environment the Group
follows best practices in:
• its interactions with local communities,
• respecting customs and cultural practices, and
• minimising intrusion upon lifestyles and traditions.
The Group will not violate human rights and will, wherever possible, favour
employment for local people when it recruits. It will strive to be recognised
as a socially aware and responsible business
Task Force on Climate-related Financial Disclosures (TCFD)
The Company has not included climate-related financial disclosures consistent
with any of the TCFD Recommendations and Recommended Disclosures, as required
by Listing Rule 14.3.27, neither in this annual financial report or any other
document as it has not yet established the metrics and obtained the data to do
this. Set out below is a summary of the Company's activities and how the
Company proposes to align with the TCFD recommendations. The Company will
provide an update of its alignment with the TCFD recommendations in next
year's Annual Report.
The Company's business strategy is to explore for base metals focusing on
Southern Africa which are materials used to produce diverse products used in
modern living in a safe and sustainable environment for all its stakeholders
with a focus on copper projects. As an organisation, we recognise the growing
importance of understanding the impact of climate change on the environment in
which we operate and its potential impact on the business.
TCFD was established in 2015 to improve and increase reporting of
climate-related financial information and to provide information to investors
about the actions companies are taking to mitigate the risks of climate
change, as well as to provide increased clarity on the way in which they are
governed.
The Company's exploration activities are "asset" light as the Company does not
own its drilling and exploration equipment and instead uses contractors and it
is a standard operating procedure for exploration activities to be conducted
in accordance with applicable environmental regulations. The effect of this
is that the Company's demand for and use of carbon fuels is very low though
its contractors will use carbon fuels. An opportunity arising for the
Company from climate change is that copper is projected to increase in
response to the global green energy transition in particular for electric
vehicles, charging stations and the generation and distribution of renewable
energy.
The Company is planning to adopt the TCFD framework and recommendations to the
extent that it is appropriate given the size of the company and its
activities. The framework is useful as a guide to understand how climate
change could impact a broad range of business drivers and will provide a
structured approach for the Group, to work towards embedding climate into our
decision-making and will enable us to learn from and apply best practice on
reporting and disclosures.
We see this as a means to increase the quality and transparency in our climate
related disclosures whilst taking the first steps on the roadmap of TCFD
reporting. We aim to ensure our stakeholders will have a better understanding
of the Company's operational and business resilience to climate change and how
we will incorporate the consideration of climate-related risks and
opportunities in our business model. The table below provides a brief
statement on our current thought process to understand and begin aligning with
the TCFD recommendations.
Governance: The Group's governance relating to climate-related risks and
opportunities is the responsibility of the Board.
Strategy: The actual and potential impacts of climate-related risks and
opportunities will have effects on the business policies, strategy and
financial planning of the Company.
Risk Management: The financial director is responsible for Company's risk
assessment and identifying, assessing, and managing climate related risks is
part of that function.
Metrics & Targets: The formulation of metrics and targets used to assess
and manage relevant climate related risks and opportunities will be
considered.
STRATEGIC REPORT
The Directors present their strategic report on the group for the year ended 31 December 2023.
PRINCIPAL ACTIVITY
African Pioneer Plc ("the Company") is a public limited company which is
listed on the main market of the London Stock Exchange and incorporated and
domiciled in the Isle of Man. The Company's registered address is 19-21
Circular, Douglas, Isle of Man IM1 1AF.
The Company is the parent company of African Pioneer Zambia Ltd (80% owned),
African Pioneer Chongwe Ltd (80% owned), Resource Capital Partners Pty Ltd
(100% owned) and Zamcu Exploration Pty Ltd (100% owned), which has an 85%
equity holding in Ongombo Mine (Pty) Limited and Manmar Investments One
Hundred and Thirty Six (Pty) Ltd. (see note 10 for further details).
The principal activity of the Company and its subsidiaries (the "Group") is
the exploration for base metals in Zambia, Namibia and Botswana.
GOING CONCERN
As disclosed in Note 2 The Group made a loss from all operations for the year
ended 31 December 2023 after tax of £(689,000) (2022: £671,000). In June
2023, the Company raised £790,000 (gross) and at the year end had cash of
£372,156 (2022 £71,674). An operating loss is expected in the year
subsequent to the date of these accounts and as a result the Company will need
to raise funding to provide additional working capital to finance its ongoing
activities. The management team has successfully raised funding for
exploration projects in the past, but there is no guarantee that adequate
funds will be available when needed in the future.
Based on its current reserves and the Board's assessment that the Company will
be able to raise additional funds, as and when required, to meet its working
capital and capital expenditure requirements, the Board have concluded that
they have a reasonable expectation that the Group can continue in operational
existence for the foreseeable future. For these reasons the financial
statements have been prepared on the going concern basis, which contemplates
continuity of normal business activities and the realisation of assets and
discharge of liabilities in the normal course of business.
The management team has successfully raised funding for exploration projects
in the past, but there is no guarantee that adequate funds will be available
when needed in the future.
There is a material uncertainty relating to the conditions above that 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 normal course of business.
KEY PERFORMANCE INDICATORS
The key performance indicators in assessing the completion of this activity
are monitored on a regular basis:
• Progress with exploration, monitoring licence commitments and
environmental compliance; and
• Cash management - ensuring that the Company is well funded and has
adequate cash to meet its obligations as they fall due.
REVIEW OF THE BUSINESS
Details of the Company's strategy, results and prospects are set out in the
Chairman's Statement on page 3 and in the Financial, Corporate and Operational
Review on page 6.
Financial highlights:
· £689k consolidated loss after tax (2022: £671k - loss)
· Approximately £372k cash at bank at the year-end (2022: £72k).
· The basic and diluted losses per share are summarised in the table
below
Profit/(Loss) per share (pence) 2023 2022
Basic & Diluted Note 6 (0.33)p (0.35)p
· The net assets of the Group at as at 31 December 2023 were £5.2M (31
December 2022 £5.2m)
INVESTMENTS HELD BY THE COMPANY FOR RESALE
The Company has previously held investments available-for-sale investments but
sold these during the year as a source of liquidity to cover explorations
costs and general overheads of the Group. It is the Group's intention not to
purchase any new investments.
PORTFOLIO HOLDING AT 31 December 2023
Number Cost Valuation Valuation
31/12/23 31/12/23 31/12/23 31/12/22
Jubilee Metals Group Plc - - - 22,107
Galileo Resources Plc - - - 32,500
Sandfire Resources Ltd - - - 329,325
South 32 Limited - - - -
Xtract Resources Plc - - - 11,818
TOTAL FOR COMPANY - - 395,750
PRINCIPAL RISKS AND UNCERTAINTIES
This business carries a high level of risk and uncertainty, although the
potential rewards can be outstanding. The Directors have identified the
following principal risks in regards to the Group's future. The relative
importance of risks faced by the Group can, and is likely to, change as the
Group executes its strategy and as the external business environment evolves
the strategy as may be required based on developments and exploration results.
Key elements of this process are the Group's reporting and Board meetings.
Strategic risk
The Group's strategy may not deliver the results expected by shareholders. The Directors regularly monitor the appropriateness of the strategy, taking into account both internal and external factors, together with progress in and modify
Exploration risk
Exploration at the Namibia, Zambia and Botswana Projects may not result in success.
Whilst the Directors endeavour to apply what they consider to be the latest technology to assess projects, the business of exploration for and identification of minerals and metals, is speculative and involves a high degree of risk. The mineral and metal potential of the Group's projects in Namibia, Zambia and Botswana, may not contain economically recoverable volumes of minerals, base metals, or precious metals of sufficient quality or quantity. To mitigate this risk, the Group has acquired the rights to carry out exploration and earn an interest in certain licences in the specific areas.
Even if there are economically recoverable deposits, delays in the construction and commissioning of mining projects or other technical difficulties may make the deposits difficult to exploit. The exploration and development of any project may be disrupted, damaged or delayed by a variety of risks and hazards which are beyond the control of the Group. These include (without limitation) geological, geotechnical and seismic factors, environmental hazards, technical failures, adverse weather conditions, acts of God and government regulations or delays.
Exploration is also subject to general industrial operating risks, such as equipment failure, explosions, fires and industrial accidents, which may result in potential delays or liabilities, loss of life, injury, environmental damage, damage to or destruction of property and regulatory investigations. The Group may also be liable for the mining activities of previous miners and previous exploration works. Although the Group intends, itself or through its operators, to maintain insurance in accordance with industry practice, no assurance can be given that the Group or the operator of an exploration project will be able to obtain insurance coverage at reasonable rates (or at all), or that any coverage it obtains will be adequate and available to cover any such claims. The Group may elect not to become insured because of high premium costs or may incur a liability to third parties (in excess of any insurance cover) arising from pollution or other damage or injury.
Environmental and other regulatory risks
In relation to the Group's existing projects the environmental impact to date is limited to activities associated with exploration. The ultimate development of any project into a mining operation will inevitably impact considerably on the local landscape and communities. These projects sit in an area of considerable natural beauty and therefore there is likely to be opposition to mining by some parties. This may impact on the cost and/or Group's ability to sell or move these projects into production.
While the Group believes that its operations and future projects are currently, and will be, in substantial compliance with all relevant material environmental and health and safety laws and regulations, including relevant international standards, there can be no assurance that new laws and regulations, or amendments to, or stringent enforcement of, existing laws and regulations will not be introduced.
Nevertheless, the Group will continue to vigorously apply international standards to the design and execution of any and all of its activities, including engagement and consultation with local communities, and non-governmental and Governmental organisations to ensure any impacts of current and future activities are minimised and appropriately managed. The Group has organisations to ensure any impacts of current and future activities are minimised and appropriately managed. The Group has established a comprehensive suite of health, safety, environmental and community policies which will underpin all future activities.
Financing
The successful exploration or exploitation of natural resources on any project will require significant capital investment. The only sources of financing currently available to the Group are through the issue of additional equity capital in the Company convertible loans or through bringing in partners to fund exploration and development costs. The Group's ability to raise further funds will depend on the success of their investment strategy and conditions in financial and commodity markets. The Group may not be successful in procuring the requisite funds on terms which are acceptable to it (or at all) and, if such funding is unavailable, the Group may be required to reduce the scope of its investments or anticipated expansion.
Political, economic and regulatory regime
The licences and operations of the Group are in jurisdictions outside the United Kingdom and accordingly there will be a number of risks which the Group will be unable to control. Whilst the Group will make every effort to ensure it has robust commercial agreements covering its activities, there is a risk that the Group's activities will be adversely affected by economic and political factors such as the imposition of additional taxes and charges, cancellation or suspension of licences and changes to the laws governing mineral exploration and operations.
The Group's activities will be dependent upon the grant of appropriate licences, concessions, leases, permits, and regulatory consents that may be withdrawn or made subject to limitations. There can be no assurance that they will be granted or renewed or if so, on what terms. There is also the possibility that the terms of any licence may be changed other than as represented or expected.
The current focus of the Group's activities, offer stable political frameworks and actively support foreign investment. The countries have well-developed exploration and mining code and proactive support for foreign companies. Through a programme of proactive engagement with each Government at all levels the Group is able to partially mitigate these risks by establishing professional working relationships.
Dependence on key personnel
The Group is dependent upon its executive management team and various technical consultants. Whilst it has entered into contractual agreements with the aim of securing the services of these personnel, the retention of their services cannot be guaranteed. The development and success of the Group depends on its ability to recruit and retain high quality and experienced staff. The loss of the service of key personnel or the inability to attract additional qualified personnel as the Group grows could have an adverse effect on future business and financial conditions. Nevertheless, through programmes of incentivising staff, appropriate succession planning, and good management these risks can be largely mitigated.
Uninsured risk
The Group, as a participant in exploration and development programmes, may become subject to liability for hazards that cannot be insured against or third-party claims that exceed the insurance cover. The Group may also be disrupted by a variety of risks and hazards that are beyond its control, including geological, geotechnical and seismic factors, environmental hazards, industrial accidents, occupation and health hazards and weather conditions or other acts of God.
Other business risks
In addition to the current principal risks identified above and those
disclosed in note 3 to the financial statements, the Group's business is
subject to risks relating to the financial markets and commodity markets. The
buoyancy of both the aforementioned markets can affect the ability of the
Group to raise funds for exploration. The Group has identified certain risks
pertinent to its business including:
Strategic and Economic:
• Business environment changes
• Limited diversification
Operational:
• Difficulty in obtaining / maintaining / renewing Licences / approvals
Commercial:
• Failure to maximise value from its Namibia/Zambia/Botswana projects
• Loss of interest in key assets
• Regulatory compliance and legal
Human Resources and Management:
• Failure to recruit and retain key personnel
• Human error or deliberate negative action
• Inadequate management processes
Financial:
• Restrictions in capital markets impacting available financial resources
• Cost escalation and budget overruns
• Fraud and corruption
The Directors regularly monitor such risks, using information obtained or
developed from external and internal sources, and will take actions as
appropriate to mitigate these. Effective risk mitigation may be critical to
the Group in achieving its strategic objectives and protecting its assets,
personnel and reputation. The Group assesses its risk on an ongoing basis to
ensure it identifies key business risks and takes measures to mitigate these.
Other steps include regular Board review of the business, monthly management
reporting, financial operating procedures and antibribery management systems.
The Group reviews its business risks and management systems on a regular basis
PROMOTION OF THE COMPANY FOR THE BENEFIT OF THE MEMBERS AS A WHOLE
The Director's believe they have acted in the way most likely to promote the
success of the Company for the benefit of its members as detailed below.
• Consider the likely consequences of any decision in the long term
• Act fairly between the members of the Company,
• Maintain a reputation for high standards of business conduct,
• Consider the interests of the Company's employees,
• Foster the Company's relationships with suppliers, customers, and
others, and
• Consider the impact of the Company's operations on the community
and the environment.
Our Board of Directors remain aware of their responsibilities both within and
outside of the Group. Within the limitations of a Group with so few employees
we endeavour to follow these principles, and examples of the application of
the s172 are summarised and demonstrated below.
The Group operates as a mining exploration and development business which is
speculative in nature and at times may be dependent upon fund-raising for its
continued operation. The nature of the business is well understood by the
Company's members, employees and suppliers, and the Directors are transparent
about the cash position and funding requirements.
The Company is investing time in developing and fostering its relationships
with its key suppliers.
As a mining exploration company with future operations based in Scandinavia,
the Board intends to take seriously its ethical responsibilities to the
communities and environment in which it works.
The interests of future employees and consultants are a primary consideration
for the Board, and we have introduced an inclusive share-option programme
allowing them to share in the future success of the company. Personal
development opportunities are encouraged and supported.
OUTLOOK
Outlook for Copper: During the second half of 2023 and into 2024 the copper
price has recovered and is currently around US$9,000 per tonne. Forecasts for
the price of copper and its by-product metals remain positive in the range of
US$10-US$15,000 per tonne. The outlook for copper supply remains quite
pessimistic as most large copper mining projects have been shelved as a result
of political or economic reasons but we anticipate this will lead to both
smaller but profitable mines being developed , and junior mining companies
with good copper resources in reliable jurisdictions becoming potential
targets for acquisitions by major mining companies. As a result, the Company
is well positioned with all its projects, to take part in a potential
acquisition boom or alternatively to attract financing for its own operations
which might not otherwise have been available.
The major mining companies are seeking new projects for acquisition and all
our projects have the fundamentals which may attract the attention of larger
companies as reflected in the fact that First Quantum has as reported in the
Corporate review section issued an Option Exercise Notice in relation to the 4
Zambian exploration licences the subject of the First Quantum Option Agreement
The Board feels the Group has assembled an enviable portfolio of projects and
we are pleased that Sandfire has taken and retained a significant equity
position in the Company. We look forward to advancing all our projects and
providing our shareholders with the prospects of enhanced value flowing into
next year.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
STATEMENT AS TO THE DISCLOSURE OF INFORMATION TO THE AUDITORS
The directors are responsible for preparing the Report of the Directors and
the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each
financial year. Under the law the directors have prepared the financial
statements in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union. Under company law the directors must
not approve the financial statements unless they are satisfied that the
financial statements give a true and fair view of the state of affairs and
profit or loss of the Company for that period. In preparing these financial
statements, the directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are reasonable and
prudent;
• prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Company will continue in business;
• state whether applicable IFRS's have been followed, subject to any
material departures disclosed and explained in the financial statements.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies
Act 2006 and Article 4 of the IAS Regulation. They are also responsible for
safeguarding the assets of the Company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The directors confirm that:
• so far as each director is aware, there is no relevant audit
information of which the Company's auditor is unaware; and
• the directors have taken all the steps that they ought to have
taken as directors in order to make themselves aware of any relevant audit
information and establish that the auditors are aware of that information.
Legislation in the Isle of Man governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
Signed on behalf of the Board:
30 April 2024
Colin
Bird
Executive Chairman
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AFRICAN PIONEER PLC FOR THE
YEAR ENDED 31 DECEMBER 2023
Independent Auditors Report
Opinion
We have audited the financial statements of African Pioneer Plc (the
'Company') and its subsidiaries (the 'Group') for the year ended 31 December
2023 which comprise the Consolidated Statement of Comprehensive Income, the
Consolidated and Parent Company Statement of Financial Position, the
Consolidated and Parent Company Statements of Changes in Equity, the
Consolidated and Parent Company Statements of Cash flows, the notes to the
financial statements, which include a summary of significant accounting
policies. The financial reporting framework that has been applied in in the
preparation of the financial statements is applicable law and UK-adopted
international accounting standards ('IFRS').
In our opinion the financial statements:
· give a true and fair view of the state of the Group's and of the
Company's affairs as at 31 December 2023 and of the Group's loss for the year
then ended; and
· have been properly prepared in accordance with IFRS.
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 Auditors' responsibilities for the
audit of the financial statements section of our report. We are 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. We believe
that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2 in the financial statements. We have considered
the adequacy of the going concern disclosures made concerning the Company and
the Group's ability to continue as a going concern. The Company and Group has
made a loss of (£685,126) and (£689,213) respectively, and an operating loss
is expected in the year subsequent to the year of these financial statements.
As a result, the Company and Group will need to raise funding to provide
additional working capital to finance its ongoing activities. As stated in
note 2, these conditions, along with other matters set forth in note 2,
indicate that material uncertainty exists that may cast significant doubt on
the Company and Group's ability to continue as a going concern. Our opinion is
not modified in respect of this matter.
We have highlighted going concern as a key audit matter. 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 evaluation of the Directors' assessment of the Group and the
Parent Company's ability to continue to adopt the going concern basis of
accounting included:
· Analysing management's and the Directors' cash flow forecast which
forms the basis of their assessment that the going concern basis of
preparation remains appropriate for the preparation of the Group and Company
financial statements for a period of at least twelve months from the date of
approval of these financial statements;
· Testing the integrity of the cash flow model;
· Reviewing post year-end financial statements for each entity and
comparing actual performance to managements assessments
· Sensitising the cash flows for changes in key assumptions and
considering impact on headroom;
· Reviewing and considering the adequacy of the disclosure within the
financial statements relating to the Directors' assessment of the going
concern basis of preparation.
· Reviewing any additional financial and non-financial subsequent
events which may be identified post the year end in relation to going concern.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our approach to the audit
In planning our audit, we determined materiality and assessed the risks of
material misstatement in the financial statements. In particular, we looked at
where the directors made subjective judgements, for example in respect of
significant accounting estimates. As in all of our audits, we also addressed
the risk of management override of internal controls, including evaluating
whether there was evidence of bias by the directors that represented a risk of
material misstatement due to fraud.
We tailored the scope of our audit to ensure that we performed sufficient work
to be able to issue an opinion on the financial statements as a whole,
considering the structure of the Group, the accounting processes and controls,
and the industry in which they operate.
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 we identified (whether or not due to fraud), 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. The use of the Going Concern
basis of accounting was assessed as a key audit matter and has already been
covered in an earlier section of this report. The other key audit matters
identified are described below.
Key audit matter How our work addressed this matter
Carrying value of E&E assets (Group) Our work included:
The most significant assets of the group as at December 2023 were intangible · Reviewing brought forward calculations to agree to the opening balance
assets of £5.2m comprising exploration and evaluation assets. position and prior year assessment of compliance with IFRS6;
In accordance with IAS36 Impairment of Assets, entities are required to · Reviewing additions in the year for compliance with IFRS6;
conduct annual impairment tests for goodwill and certain intangible assets.
· Reviewing the impairment model provided and checking that the value in
Given the subjectivity and number of estimates involved in any such use model is appropriate;
assessment, we consider the carrying value of E&E assets in the Group's
balance sheet to be a key audit matter. · Discussing with management the assumptions used and obtaining support for
key assumptions; and
· Obtain an understanding as to the status of each project to ensure the
accounting treatment complies with IFRS6.
Investment valuation (Company) Our work included:
The most significant asset of the group and company are investments assets at · Reviewing brought forward calculations to agree the opening balance
£2.8m. position;
There is a risk that these balances may be subject to impairment and therefore · Reviewing management's assessment of impairment, including challenging
materially misstated within the financial statements. the assumptions used;
Given the subjectivity and number of estimates involved in any such · Consider the consistency of cost of investment with the underlying
assessment, we consider the carrying value of investments in the Company's carrying value of E&E assets tested at Group level; and
balance sheet be a key audit matter.
· Reviewing any additional financial and non-financial subsequent events
which may be identified post the year end indicating an impairment may be
present in the valuation of investments.
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.
We consider gross assets to be the most significant determinant of the Group's
financial performance used by the users of the financial statements. We have
based materiality on 1.5% of reported gross assets for the group. Overall
materiality for the group was therefore set at £84,000.
Other information
The other information comprises the information included in the annual report
other than the financial statements and auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. 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.
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities, the
directors are responsible for the preparation of the Group financial
statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine necessary to enable the
preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the Group 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.
Those charged with governance are responsible for overseeing the Group's
financial reporting process.
Auditors' 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 a Report of the Auditors 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.
Irregularities, including fraud, are instances of non-compliance 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:
· We obtained an understanding of the Group and the sector in which it
operates to identify laws and regulations that could reasonably be expected to
have a direct effect on the financial statements, including equity accounted
associate. We obtained our understanding in this regard through discussions
with management and application of our cumulative audit knowledge and
experience of the industry.
· We determined the principal laws and regulations relevant to the
Group in this regard to be, but were not limited to, those arising from local
licensing laws, Isle of Man Companies Act, and the London Stock Exchange
Listing Rules. We focused on laws and regulations that could give rise to a
material misstatement in the financial statements.
· We designed our audit procedures to ensure the audit team considered
whether there were any indications of non-compliance by the Group with those
laws and regulations. Our test included, but were not limited to specific
enquiries of management, reviewing Board minutes and any legal or regulatory
compliance correspondence.
· We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to the
non-rebuttable presumption of a risk of fraud arising from management override
of controls, whether key accounting estimates and judgements made by
management when auditing significant accounting estimates. We address these
risks by challenging the assumptions and judgements made by management when
auditing significant accounting estimates, comprising the impairment
assessment of intangible assets.
· We addressed the risk of fraud arising from management override of
controls by performing audit procedures which included, but were not limited
to: the testing of journals and evaluating the business rationale of any
significant transactions that are unusual or outside the normal course of
business, as well as discussions with management.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit If the financial
statements is located on the Financial Reporting Council's website at
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
Report of the Auditors.
Other matters that we are required to address
We were appointed on 15 December 2023 and this is the first year of our
engagement as auditors for the Group.
We confirm that we are independent of the Group and have not provided any
prohibited non-audit services, as defined by the Ethical Standard issued by
the Financial Reporting Council as applied to listed entities, and we have
fulfilled our ethical responsibilities in accordance with these requirements.
Our audit report is consistent with our additional report to the Audit
Committee explaining the results of our audit.
Use of our report
This report 's made solely to the Company's members, as a body, in accordance
with our engagement letter. Our audit work has been undertaken so that we
might state to the 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 Company and the Company's members as a body, for our audit work, for
this report, or for the opinions we have formed.
Paul Randall BA FCA
Recognised Auditor
for and on behalf of RPG Crouch Chapman LLP
Chartered Accountants and Recognised Auditors
40 Gracechurch Street
London
EC3V 0BT
Date: 30 April 2024
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2023
Notes Year ended 31 December 2023 Year ended 31 December 2022
£ £
CONTINUING OPERATIONS
Income:
Dividend receivable - 2,951
Realised gain on sale of investments 34,799 4,320
Unrealised loss on investments (78,197)
Total Income 34,799 (70,926)
Administrative expenses
Administrative expenses 4 (724,012) (599,965)
Total Administrative Expense (724,012) (599,965)
OPERATING (LOSS)FOR THE YEAR (689,213) (670,891)
Interest expense - -
Interest income - 20
(LOSS) BEFORE TAX (689,213) (670,871)
Taxation 7 - -
NET (LOSS) FOR THE YEAR (689,213) (670,871)
Other comprehensive income:
Other comprehensive income - -
(Loss)/Profit for the financial year
Items that may be reclassified to profit or loss:
Foreign currency reserve movement (120,526) (32,256)
Total comprehensive (loss) for the financial year (809,739) (703,127)
Attributable to: (809,739) (703,127)
Owners of the Company
Non-controlling interest - -
(809,739) (703,127)
Basic & Diluted loss per share 6 (0.33) p (0.35) p
All results are derived from continuing operations.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2023
Notes Year ended 31 Year ended 31 December 2022
December 2023 Restated
£ £
NON-CURRENT ASSETS
Exploration and evaluation assets 10 5,221,534 5,112,856
Total Non-Current Assets 5,221,534 5,112,856
CURRENT ASSETS
Trade and other receivables 11 12,026 11,023
Cash and cash equivalents 372,156 71,674
Available-for-sale investments 8 - 395,750
Total Current Assets 384,182 478,447
TOTAL ASSETS 5,605,716 5,591,303
CURRENT LIABILITIES
Trade and other payables 12 (269,313) (230,260)
Taxation 7 (122,222) (122,222)
Total Current Liabilities (391,535) (352,482)
NET CURRENT (LIABILITIES) / ASSETS (7,353) 125,965
TOTAL LIABILITIES (391,535) (352,482)
NET ASSETS 5,214,181 5,238,820
EQUITY
Share capital 13 6,216,282 5,475,204
Warrant reserve 15 67,923 23,901
Foreign exchange reserve (118,443) 2,083
Retained earnings (1,638,929) (949,716)
4,526,833 4,551,472
Non controlling interest 9 687,348 687,348
TOTAL EQUITY 5,214,181 5,238,820
The notes on pages 46-65 are an integral part of these financial statements.
The financial statements of African Pioneer Plc (registered number 008591V)
were approved by the board on 30 April 2024 and signed on its behalf by:
C
Bird
R Samtani
Executive
Chairman
Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2023
Share capital Retained earnings Foreign exchange reserve Warrant reserve Non Total equity
Restated Controlling interest Restated
£ £ £ £ £ £
As at 1 January 2022 5,490,271 (278,845) 34,339 8,834 687,348 5,941,947
Loss for the year - (670,871) (32,256) (703,127)
Share based payment charge (15,067) - - 15,067 - -
As at 31 December 2022 5,475,204 (949,716) 2,083 23,901 687,348 5,238,820
Restated
As at 1 January 2023 5,475,204 (949,716) 2,083 23,901 687,348 5,238,820
Net proceeds from shares issued 785,100 - - - - 785,100
(Loss) for the year - (689,213) (120,526) (809,739)
Share based payment charge (44,022) - 44,022 - -
Non-controlling interests on acquisition of subsidiary - - - -
As at 31 December 2023 6,216,282 (1,638,929) (118,443) 67,923 687,348 5,214,181
The notes on pages 46-65 are an integral part of these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2023
Notes Year ended Year ended
31 December 2023 31 December 2022
£ £
CASH FLOW FROM OPERATIONS
Profit/(Loss) before taxation (689,213) (670,871)
Adjustments for:
Interest received - -
Dividends received - (2,951)
(Loss)/Gain on disposal of investment shares 34,799 (4,320)
Loss/(Gain) in fair value of investment at reporting date 8 - 78,197
Interest expense - -
Operating (loss) before movements in working capital (654,414) (599,945)
Decrease/(Increase in receivables) (1,004) 10,699
Increase in payables 39,053 146,311
NET CASH OUTFLOW FROM OPERATING ACTIVITIES (616, 365) (442,935)
TAXATION PAID
CASH FLOW FROM INVESTING ACTIVITIES
Dividends received - 2,951
Investments sold 360,951 32,829
Purchases of Exploration and evaluation assets (108,678) (679,894)
Purchase of Exploration and Evaluation
assets on Acquisition of subsidiaries
NET CASH INFLOW FROM INVESTING ACTIVITIES 252,273 (644,114)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Issue of shares, net of issue costs 785,100 -
NET CASH INFLOW FROM FINANCING ACTIVITIES 785,100 -
Net increase/(decrease) in cash and cash equivalents in the period 421,008 (1,087,049)
Effect of foreign exchange rate changes (120,526) (32,256)
Cash and cash equivalents at the beginning of the period 71,674 1,190,979
372,156 71,674
Cash and cash equivalents at the end of the period
The notes on pages 46-65 are an integral part of these financial statements.
COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 December 2023
Notes 31 December 2023 31 December 2022
£ £
NON-CURRENT ASSETS
Investment in subsidiaries 10 2,796,500 2,796,500
Total Non-Current Assets 2,796,500 2,796,500
CURRENT ASSETS
Trade and other receivables 11 1,712,138 1,557,828
Cash and cash equivalents 371,525 71,664
Available-for-sale investments 8 - 395,750
Total Current Assets 2,083,663 2,025,242
TOTAL ASSETS 4,880,163 4,821,742
CURRENT LIABILITIES
Trade and other payables 12 (648,256) (689,809)
Total Current Liabilities (648,256) (689,809)
NET CURRENT ASSETS / (LIABILITIES) 1,435,407 1,335,433
TOTAL LIABILITIES (648,256) (689,809)
NET ASSETS 4,231,907 4,131,933
EQUITY
Share capital 13 6,216,282 5,475,204
Warrant reserve 15 67,923 23,901
Retained earnings (2,052,298) (1,367,172)
TOTAL EQUITY 4,231,907 4,131,933
The notes on pages 46-65 are an integral part of these financial statements.
The financial statements of African Pioneer Plc (registered number 008591V)
were approved by the board on 30 April 2024 and signed on its behalf by:
C
Bird
R Samtani
Executive
Chairman
Director
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2023
Share capital Retained earnings Warrant reserve Total equity
Restated Restated
£ £ £ £
As at 1 January 2022 5,490,271 (708,667) 8,834 4,790,438
Share based payment charge (15,067) - 15,067 -
Loss for the year - (658,505) (658,505)
As at 31 December 2022 (Restated) 5,475,204 (1,367,172) 23,901 4,131,933
As at 1 January 2023 5,475,204 (1,367,172) 23,901 4,131,933
Net proceeds from shares issued 785,100 - - 785,100
Share based payment charge (44,022) - 44,022 -
Loss for the year - (685,126) (685,126)
As at 31 December 2023 6,216,282 (2,052,298) 67,923 4,231,907
The notes on pages 46- 65 are an integral part of these financial statements.
COMPANY STATEMENT OF CASH FLOWS
For the year ended 31 December 2023
Notes Year ended Year ended
31 December 2023 31 December 2022
£ £
CASH FLOW FROM OPERATIONS
Profit/(Loss) before taxation (685,126) (658,505)
Adjustments for:
Dividends received - (2,951)
(Loss)/ Gain on disposal of investment shares 34,799 (4,320)
Loss/(Gain) in fair value of investment at reporting date 8 - 78,197
Interest expense - -
Operating (loss) before movements in working capital (650,327) (587,579)
Decrease/(Increase) in receivables (1,004) 10,699
Increase/(decrease) in payables 39,069 146,305
Increase / (decrease) in loans to subsidiaries (233,928) (724,510)
NET CASH OUTFLOW FROM OPERATING ACTIVITIES (846,190)) (1,155,085)
TAXATION PAID
CASH FLOW FROM INVESTING ACTIVITIES
Interest received - -
Dividends received - 2,951
Investments purchased 8 - -
Investments sold 360,951 32,829
Acquisition of subsidiaries - -
- -
NET CASH INFLOW FROM INVESTING ACTIVITIES 360,951 35,780
CASH FLOW FROM FINANCING ACTIVITIES
Issue of convertible loan notes - -
Proceeds from Issue of shares, net of issue costs 785,100 -
Loan repayment - -
NET CASH INFLOW FROM FINANCING ACTIVITIES 785,100 -
Net increase/(decrease) in cash and cash equivalents in the period 299,861 (1,119,305)
Cash and cash equivalents at the beginning of the period 71,664 1,190,969
371,525 71,664
Cash and cash equivalents at the end of the period
The notes on pages 46-65 are an integral part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1. GENERAL INFORMATION
This financial information is for African Pioneer Plc ("the Company") and its
subsidiary undertakings. The principal activity of African Pioneer Plc (the
'Company') and its subsidiaries (together the 'Group') is the development of
natural resources exploration projects in Sub-Saharan Africa.
The Company is a public limited company and was listed on to the Official List
(Standard Segment) and commenced trading on the Main Market for listed
securities of the London Stock Exchange on 1 June 2021. The Company is
domiciled in the Isle of Man and was incorporated on 20th July 2012 under the
Isle of Man Companies Act 2006 with company registration number 00859IV, and
with registered address being 19-21 Circular, Douglas, Isle of Man IM1 1AF.
2. ACCOUNTING POLICIES
Basis of preparation
The financial statements have been prepared under the historical cost
convention except for the measurement of certain non-current asset investments
at fair value. The measurement basis and principal accounting policies of the
Group are set out below. The financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS) issued by
the International Accounting Standards Board (IASB) and endorsed by the
European Union.
New and amended IFRS Standards that are effective for the current year
There are a number of standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective from 1 January 2023,
none of which have a material impact on these financial statements.
New and revised IFRS Standards in issue but not yet effective
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 that the group has decided not to apply early.
The following amendments are effective for the period beginning 1 January 2024
• IAS 1 Presentation of Financial Statements (Amendment - Classification of
Liabilities as Current or Non-Current);
• IFRS 16 Leases (Amendment - Liability in a sale and leaseback); and
• IAS 7 and IFRS 7 (Amendment - Supplier Finance Arrangements).
It is not expected that the amendments listed above, once adopted, will have a
material impact on the financial statements
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiaries). Control
is achieved where the Company has power over the investee, is exposed or has
rights to variable returns from its involvement with the investee and has the
ability to use its power to affect its returns.
The results of subsidiaries acquired or disposed of are included in the
consolidated Statement of Comprehensive Income from the effective date of
acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used in line with those used by
other members of the Group.
All intragroup assets and liabilities, equity, income, expenses, and cash
flows relating to transactions between members of the Group are eliminated in
full on consolidation.
Profits/(losses) attributable to non-controlling interests are shown
separately in the Statement of Comprehensive income and the portion of net
assets attributable to non-controlling interest is shown on the Statement of
Financial Position.
Going concern
The Group made a loss from all operations for the year ended 31 December 2023
after tax of (£689,213) (2022: £670,871), In June 2023, the Company raised
£790,000 (gross) via a fundraising arranged by the Company's brokers and at
the year end had cash of £372,156 (2022 £71,674). An operating loss is
expected in the year subsequent to the date of these accounts and as a result
the Company will need to raise funding to provide additional working capital
to finance its ongoing activities. The management team has successfully raised
funding for exploration projects in the past, but there is no guarantee that
adequate funds will be available when needed in the future.
Based on its current reserves and the Board's assessment that the Company will
be able to raise additional funds, as and when required, to meet its working
capital and capital expenditure requirements, the Board have concluded that
they have a reasonable expectation that the Group can continue in operational
existence for the foreseeable future. For these reasons the financial
statements have been prepared on the going concern basis, which contemplates
continuity of normal business activities and the realisation of assets and
discharge of liabilities in the normal course of business.
The management team has successfully raised funding for exploration projects
in the past, but there is no guarantee that adequate funds will be available
when needed in the future.
There is a material uncertainty relating to the conditions above that 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 normal course of business.
This financial report does not include any adjustments relating to the
recoverability and classification of recorded assets amounts or liabilities
that might be necessary should the entity not continue as a going concern.
Exploration assets accounting policy
The Company's exploration assets accounting policy is in line with IFRS6.
Exploration, evaluation and development expenditure incurred is accumulated in
respect of each identifiable area of interest. These costs are only carried
forward to the extent that they are expected to be recouped through the
successful development of the area or where activities in the area have not
yet reached a stage which permits reasonable assessment of the existence of
economically recoverable reserves. Accumulated costs in relation to an
abandoned area are written off in full in the year in which the decision to
abandon the area is made. When production commences, the accumulated costs for
the relevant area of interest are transferred to development assets and
amortised over the life of the area according to the rate of depletion of the
economically recoverable reserves. A regular review is undertaken of each area
of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest.
Valuation of investments
The company has adopted the provisions of IFRS9 and has elected to treat all
available for sale investments at fair value with changes through the profit
and loss.
Available-for-sale investments under IFRS9 are initially measured at fair
value plus incidental acquisition costs. Subsequently, they are measured at
fair value in accordance with IFRS 13. This is either the bid price or the
last traded price, depending on the convention of the exchange on which the
investment is quoted. All gains and losses are taken to profit and loss.
Equity and reserves
An equity instrument is any contract that evidences a residual interest in the
assets of a company after deducting all of its liabilities. Equity instruments
issued are recorded at the proceeds received net of direct issue costs.
Share capital represents the amount subscribed for shares with no par nominal
value. Any transaction costs associated with the issuing of shares are
deducted from share capital, net of any related income tax benefits.
Foreign exchange reserve - amounts arising on re-translating the net assets of
overseas operations into the presentational currency
The capital contribution reserve represents the value of the equity component
of loans made from parent undertakings.
The warrant reserve presents the proceeds from issuance of warrants, net of
issue costs. Warrant reserve is non-distributable and will be transferred to
share capital account and accumulated losses upon exercise of warrants. Shares
to be issued reserve arises on the timing difference between the Company
making a commitment to issue shares and the shares being issued. Once the
shares are issued a transfer is made to the share capital account. Accumulated
losses include all current and prior period results as disclosed in the
statement of comprehensive income, less dividends paid to the owners of the
parent.
Significant management judgement in applying accounting policies and
estimation uncertainty
When preparing the financial statements, management makes a number of
judgements, estimates and assumptions about the recognition and measurement of
assets, liabilities, income and expenses.
Functional and presentational currency
The presentation and functional currency of the Company is Sterling.
Expenses
All expenses are accounted for on an accruals basis. Expenses are charged to
the statement of comprehensive income except for expenses incurred on the
acquisition of an investment, which are included within the cost of that
investment, expenses arising on the disposal of investments are deducted from
the disposal proceeds.
Cash and cash equivalents
This consists of cash held in the Company's bank account.
Financial liabilities
The Company has financial liabilities consisting of trade payables and accrued
expenses which are non-derivative financial liabilities recognised at
amortised cost.
Taxation
The Company is subject to tax in the Isle of Man in the period at a rate of 0%
and accordingly, interest and gains payable to the Company are received by the
Company without any deduction relating to Isle of Man taxed. and during the
period the Company had no income subject to taxation in other jurisdictions.
As per Note 15 in 2022 the Company made a prior year adjustment in respect of
provision for tax due by a subsidiary of £122,222.
Earnings per share
The earnings per share are calculated by dividing the net result attributed to
the equity shareholders by the weighted average number of participating shares
in issue in the period.
Geographical segments
A segment is a distinguishable component of the Company that is engaged either
in providing products or services (business segment) or in providing products
or services within a particular economic environment (geographical segment),
which is subject to risk and rewards that are different from those of other
segments. The internal management reporting used by the chief operating
decision maker consists of one segment. Hence in the opinion of the directors,
no separate disclosures are required under IFRS 8. The Company's revenue in
the year is not material and consequently no geographical segment information
has been disclosed.
Critical accounting estimates and judgements
The preparation of the Group's financial statements under IFRS requires the
Directors to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and
liabilities. Estimates and judgements are continually evaluated and are based
on historical experience and other factors including expectations of future
events that are believed to be reasonable under the circumstances. Actual
results may differ from these estimates.
Details of the Group's significant accounting judgements used in the
preparation of these financial statements include:
Recoverability of intangible exploration and evaluation assets
Where a project is sufficiently advanced, the recoverability of intangible
exploration and evaluation assets is assessed by comparing the carrying value
to internal and operator estimates of the net present value of projects.
Intangible exploration assets are inherently judgemental to value. The amounts
for intangible exploration and evaluation assets represent active exploration
projects. These amounts will be written-off to the profit and loss as
exploration costs unless commercial reserves are established, or the
determination process is completed and there are no indications of impairment.
The carrying value of exploration assets in the consolidated financial
statements as at 31 December 2023
is £5,221,534 (2022 £5,112,856). The recoverability of this carrying value,
and thus potential impairment, requires use of significant judgments and
estimates. The details of these assets are outlined in note 10.
Recoverability of investment in subsidiaries and intragroup receivables
In the Company financial statements, the carrying value of the Company's
investment in subsidiaries and intragroup receivables is £4,497,354 (2022
£4,344,048). The recoverability of this balance is driven by the same
judgements and uncertainties as the recoverability of the exploration and
evaluation assets held by the subsidiaries.
Valuation of share-based payments
Equity-settled share-based payment transactions with parties other than
employees are measured at the fair value of the goods or services received,
except where that fair value cannot be estimated reliably, in which case they
are measured at the fair value of the equity instruments granted, measured at
the date the entity obtains the goods or the counterparty renders the service.
The share-based payment expense is recognised as deduction in share capital. A
corresponding increase in the warrant reserve is also recognised The fair
value of these payments is calculated by the Company using the Black Scholes
option pricing model. The model requires the Directors to make assumptions
regarding the share price volatility, risk free rate and expected life of
awards in order to determine the fair values of the awards at grant dates.
3. FINANCIAL RISK MANAGEMENT
Prior to the Company's listing in May 2021 it was an investment company and
its objective was to achieve capital growth through investing in selection of
equity and other instruments. However all available for sale investments were
sold by the year end and there's no intention to invest in any in the future.
The Company's financial instruments comprise:
· Cash, short-term receivables and payables
Throughout the period under review, it was the Company's policy that no
trading in derivatives shall be undertaken. The main financial risks arising
from the Company's financial instruments are market price risk and liquidity
risk. The
Board regularly reviews and agrees policies for managing each of these risks
and they are summarised below. These policies have remained constant
throughout the period.
Market risk
Market risk consists of interest rate risk, foreign currency risk and other
price risk. There are no foreign currency exposures. Hence, no foreign
currency risk. It is the Board's policy to maintain an appropriate spread of
investments in the portfolio whilst maintaining the investment policy and aims
of the Company. The Investment Committee actively monitors market prices and
other relevant information throughout the year and reports to the Board, who
is ultimately responsible for the Company's investment policy.
Interest rate risk
Changes in interest rates would affect the Company returns from its cash
balances. A floating rate of interest, which is linked to bank base rates, is
earned on cash deposits. The exposure to cash flow interest rate risk at 31
December 2023 for the Company was £372,156 (2022: £71,674). As the Company
does not have any borrowings and finances its operations through its share
capital and retained revenues, it does not have any interest rate risk except
in relation to cash balances.
Other price risk
Other price risk which comprises changes in market prices other than those
arising from interest rate risk or currency risk may affect the value of
quoted and unquoted equity investments. The Board of directors manages the
market price risks inherent in the investment portfolio by regularly
monitoring price movements and other relevant market information. The Company
accounts for movements in the fair value of its available-for-sale financial
assets in other comprehensive income. As at the year end the Company held no
quoted equity investments.
Liquidity risk
The Company maintains appropriate cash reserves and the majority of the
Company's assets comprise of realisable securities, most of which can be sold
to meet funding requirements, if necessary. Given the Company's cash reserves,
it has been able to settle all liabilities on average within 1 month. Given
the current level of cash resources the liquidity risk is not considered to be
material.
Credit risk
Credit risk is the risk of financial loss to the Company if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations.
The carrying amount of financial assets represents the maximum credit
exposure. The maximum exposure to credit risk as at 31 December 2023 is
detailed below:
For the Group, credit risk arises primarily from cash balances held at banks.
The risk is mitigated by using only reputable financial institutions with a
high credit rating.
The Company is additionally exposed to credit risk on the intercompany
balances with its subsidiaries. The recoverability of these balances is linked
directly to the success of the exploration activities of the Group.
As discussed in note 10, no impairment indicators exist on the exploration
assets and thus the balances are deemed to be recoverable. The Company and
Group do not hold any collateral as security. The credit rating bands are
provided by independent ratings agencies:
As at 31 December 2023 Not rated /not readily available Total
Cash and cash equivalents 372,156 372,156
Total assets subject to credit risk 372,156 372,156
As at 31 December 2022 Not rated /not readily available Total
Cash and cash equivalents 71,674 71,674
Total assets subject to credit risk 71,764 71,764
Financial liabilities
There are no currency or interest rate risk exposures on financial liabilities
as they are denominated in £ Sterling.
Capital management
The Company actively reviews its issued share capital and reserves and manages
its capital requirements in order to maintain an efficient overall financing
structure whilst avoiding any leverage.
4. EXPENSES BY NATURE
31 December 2023 31 December 2022
Directors' fees (172,403) (172,404)
Audit fees (49,980) (49,200)
Stock exchange related costs (59,309) (52,073)
Legal, professional and consultancy fees (88,228) (96,319)
Consultancy fees (131,400) (106,500)
Management services (11,050) (10,800)
Insurance (16,693) (20,146)
Other administration expenses (92,371) (88,561)
Travel (2,309) (7,999)
Investor relations (70,875) (37,740)
Foreign currency (losses)/gains (29,394) 41,777
Total Expense (724,012) (599,965)
31 December 2023 31 December 2022
£ £
Auditor's remuneration
Audit of the financial statements of the Company 49,980 49,200
5. DIRECTORS' EMOLUMENTS
Other than directors, there were no employees or key management personnel in
the year.
31 December 2023 31 December 2022
£ £
Colin Bird 60,000 60,000
Raju Samtani 50,003 50,004
Christian Cordier 30,000 30,000
Kjeld Thygesen 18,000 18,000
James Cunningham-Davis 14,400 14,400
Total 172,403 172,404
The emoluments paid to the directors relate to both the Company and the Group
2023 2022
Number Number
Directors 5 5
Employees * - -
Consultants who are directors of subsidiary companies 2 2
The average monthly number of employees 7 7
* The Company and Group has no employees and instead
uses the services of consultants
6. EARNINGS PER SHARE
31 December 2023 31 December 2022
Loss after tax for the purposes of earnings per share attributable to equity £(689,213) £(670,871)
shareholders
Weighted average number of shares 211,218,347 191,707,845
Weighted average number of shares and warrants 265,536,801 229,430,224
Basic & Diluted loss per ordinary share (0.33) p (0.35) p
The use of the weighted average number of shares in issue in the period
recognises the variations in the number of shares throughout the period and
this is in accordance with IAS 33 as is the fact that the diluted earnings per
share should not show a more favourable position that the basic earnings per
share.
7. TAXATION
The Company is subject to Isle of Man income tax at 0%, and during the period
had no income subject to taxation in other jurisdictions, and has no capital
allowances or deferred tax implications. Accordingly, the Directors have made
no provision for taxation charges or liabilities for the period and have not
presented the formal reconciliation required under IAS 12. As per Note 15 in
2022 the Company made a prior year adjustment in respect of provision for tax
due by a subsidiary of £122,222.
8. AVAILABLE FOR SALE INVESTMENTS
Group & Company Group & Company
31 December 2023 31 December 2022
£ £
Investments at fair value at 1 January 395,750 502,456
Additions - -
Disposals (395,750) (28,509)
Movements in fair value - (78,197)
Investments at fair value at 31 December - 395,750
The book cost of the investments at 31 December 2023 was £Nil (2022:
£381,541).
The Company sold its investments and utilised the sales proceeds as a means to
cover explorations costs and general overheads of the Company.
Financial instruments measured at fair value
The following table presents financial assets and liabilities measured at fair
value in the statement of financial position in accordance with the fair value
hierarchy. This hierarchy groups financial assets and liabilities into three
levels based on the significance of inputs used in measuring the fair value of
the financial assets and liabilities. The fair value hierarchy has the
following levels:
- Level 1: quoted prices (unadjusted) in active markets for identical
assets or liabilities;
- Level 2: inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly (i.e., as prices)
or indirectly (i.e., derived from prices); and
- Level 3: inputs for the asset or liability that are not based on
observable market data (unobserved inputs).
The level within which the financial asset or liability is classified is
determined based on the lowest level of significant input to the fair value
measurement.
The financial assets and liabilities measured at fair value in the statement
of financial position are grouped into the fair value hierarchy as follows:
Level 1 Level 2 Level 3 Total
31 December 2023 £ £ £ £
Assets - - - -
Total - - - -
Level 1 Level 2 Level 3 Total
£ £ £ £
31 December 2022
Assets 395,750 - 395,750
Total 395,750 - 395,750
9. ACQUISITION OF SUBSIDIARIES
Acquisition of Zamcu Exploration Pty Limited (Namibian Projects)
On 1 June 2021 the Company completed the acquisition of 100% of Zamcu
Exploration Pty Ltd ("Zamcu"), which via its subsidiaries, held a 70 per cent.
interest in two Namibian Exclusive Prospecting Licenses ("EPLs") comprising
the Ongombo and Ongeama projects, located within the Matchless amphibolite
Belt of central Namibia that hosts copper-gold mineralisation. On 27 August
2021 the Company entered into an agreement to acquire a further 15% interest
in its Ongombo Project and Ongeama Project in Namibian (the "Namibian
Projects") by acquiring an additional 15% in its two Namibian subsidiaries
thus increasing its interest in the Namibian Projects to 85% (see note 10).
The fair value of the assets and liabilities acquired were as follows:
£
Consideration
Equity consideration
- Ordinary shares (issued) 687,500
Cash consideration 149,149
836,649
Fair value of assets and liabilities acquired
- Assets -
- Liabilities (262)
(262)
Deemed fair value of 836,911
exploration assets acquired
Additional 15% acquired 331,240
Total 85% acquisition value 1,168,151
Attributable to non-controlling interest 206,098
Gross fair value of exploration assets acquired 1,374,249
Acquisition of African Pioneer Zambia Limited ("APZ") (Zambia Projects)
On 1 June 2021 the Company completed the acquisition of 80% of APZ, which held
a 100 per cent. interest in five Zambian Prospecting Licenses (PLs) located in
two areas namely (i) the Central Africa Copperbelt (Copperbelt), which is the
largest and most prolific mineralized sediment- hosted copper province known
on Earth and which comprises four PLs and (ii) the Zambezi area located within
the Zambezi Belt of southern Zambia that hosts a lower Katanga Supergroup
succession which, although less studied than its northern counterpart, also
hosts a number of Copperbelt-style occurrences and which comprises one PL.
During the year the PL in the Zambezi area located within the Zambezi Belt of
southern Zambia was transferred to a new established 80% owned subsidiary
African Pioneer Chongwe Limited as this licence is not subject to the option
agreement with First Quantum.
The fair value of the assets and liabilities acquired were as follows:
£
Ordinary shares (issued) 1,925,000
Fair value of assets and liabilities acquired
- Assets 743
- Loan for exploration licenses (41,205)
- (40,462)
Deemed fair value of 1,965,462
- exploration assets acquired
481,250
Attributable to non-controlling interest
Gross fair value of exploration assets acquired 2,446,712
Resource Capital Partners Pty Ltd ("RCP") (Botswana Projects)
On 1 June 2021 the Company completed the acquisition of 100% of Resource
Capital Partners Pty Ltd ("RCP"), which held a 100 per cent. interest in eight
Botswana Prospecting Licenses ("PLs") located in two areas namely (i) the
Kalahari Copperbelt (KC) that contains copper-silver mineralisation and which
is generally stratabound and hosted in metasedimentary rocks that have been
folded, faulted and metamorphosed to greenschist facies during the Damara
Orogeny and which comprises six PLs and (ii) the Limpopo Mobile Belt
("Limpopo") set within the Motloutse Complex of eastern Botswana, a
transitional boundary between the Zimbabwe Craton to the north and the Limpopo
Mobile Belt to the south which comprises two Pls. During the year two of the
PLs in the Kalahari Copperbelt and the two PLs in the Limpopo Mobile Belt were
relinquished due to low prospectivity and so the Company could focus on its
other Botswana PLs.
The fair value of the assets and liabilities acquired were as follows:
£
Consideration
Equity consideration
- Ordinary shares (issued) 350,000
Fair value of assets and liabilities acquired
- Assets -
- Liabilities -
-
Deemed fair value of 350,000
exploration assets acquired
10. EXPLORATION AND EVALUATION ASSETS
Group Company Group Company
Investment in subsidiary Investment in subsidiary
Exploration and evaluation assets Exploration and evaluation assets
31 December 2023 31 December 2023 31 December 2022 31 December 2022
£ £ £ £
Balance at beginning of period 5,112,856 2,796,500 4,432,962 2,796,500
Acquisitions during the period
- Namibia Projects (note 9)
- Zambia Projects (note 9)
- Botswana Projects (note 9)
Exploration expenditure 108,678 - 679,894 -
-
Carried forward 5,221,534 2,796,500 5,112,856 2,796,500
at end of year
Investments in subsidiaries are recorded at cost, which is the fair value of
the consideration paid less impairment.
The Company conducted an impairment review and is satisfied that the carrying
value of £2,796,500 is reasonable and no impairment is necessary. (2022-
£Nil).
The Company's principal business is to explore opportunities within the
natural resources sector in Sub-Saharan Africa, with a focus on base and
precious metals including but not limited to copper, nickel, lead and zinc.
The Company acquired the Namibia Projects, Zambia Projects and Botswana
Projects in 2021 (see Note 9 for details):
No current JORC 2012 compliant Mineral Resources exist for the Zambia and
Botswana Projects and no Mineral Reserve estimates have been completed for the
Zambia and Botswana Projects.
The Company's' main focus in 2023 was on evaluating and advancing the Namibian
Projects as at the beginning of the year the Zambian Projects and Botswana
Projects are were the subject of option agreements. During the year and post
the year end it was announced that First Quantum has exercised its option in
relation to all 4 of the Zambian exploration licences which formed part of its
option agreement. As announced in the Company's interim accounts to 30 June
2023 Sandfire has notified the Company that it has decided not to exercise its
option in relation to 4 of the Groups' Botswana exploration licences. During
the year two of the exploration licences in the Kalahari Copperbelt and the
two exploration licences in the Limpopo Mobile Belt were relinquished due to
low prospectivity and so the Company could focus on its other Botswana
licences. The remaining Botswana licences are currently under review by the
Company in cooperation with its external geological consultant with
specific expertise of Botswanan copper geology. Whilst the exploration to
date on the licences which were the subject of the Sandfire Option Agreement
does not currently indicate prospectivity for a large scale mining operation
the Board believes that there is prospectivity for a smaller to medium sized
mining operation targeting in the range of 5,000 to 10,000 tonnes of contained
copper per annum. Although too small for a large scale miner a mine of this
size would fit very well into the demand for small to medium mines to help
bridge the gap in the predicted shortfall of copper to meet future projected
demand.
Principal Subsidiaries
Name & registered office address Country of incorporation and residence Nature of business Proportion of equity shares held by Company
Resource Capital Partners Pty Ltd Botswana Base Metals Exploration 100%
Plot 102, Unit 13
Gaborone International Commerce Park,
Gaborone, Botswana
African Pioneer Zambia Ltd Zambia Base Metals Exploration 80%
Plot No397/0/1 Chipwenupwenu Road
Makeni, Lusaka
PO Box 34033, Zambia
African Pioneer Chongwe Ltd Zambia Base Metals Exploration 80%
Plot No397/0/1Chipwenupwenu Road
Makeni, Lusaka
PO Box 34033, Zambia
Zamcu Exploration Pty Ltd Australia Holding Company 100%
5 Eze Terrace, Hillarys
WA, 6025
AUSTRALIA
Ongombo Mine (Pty) Ltd Namibia Base Metals Exploration 85% via Zamcu
36 Simeon Kambo Shixungileni Street,
Windhoek, Namibia
Manmar investments One Three Six (Pty) Ltd Namibia Base Metals Exploration 85% via Zamcu
36 Simeon Kambo Shixungileni Street,
Windhoek, Namibia
11. TRADE AND OTHER RECEIVABLES
Group Company Group Company
31 December 2023 31 December 2023 31 December 2022 31 December 2022
£ £ £ £
Loans to subsidiaries * - 1,700,854 - 1,547,548
Prepayments 11,284 11,284 10,280 10,280
Other debtors 743 - 743 -
Total 12,027 1,712,138 11,023 1,557,828
* Loans to subsidiaries are interest free and payable on demand.
Group Receivables and other current assets are all due within one year. The
fair value of all receivables is the same as their carrying values stated
above.
12. TRADE AND OTHER PAYABLES
Group Company Group Company
31 December 2023 31 December 2023 31 December 2022 31 December 2022
Restated
£ £ £ £
Creditors 106,912 106,912 138,510 138,510
Accrued expenses 120,934 120,934 50,267 50,267
Loans from subsidiaries 420,410 501,032
Other creditors 262 - 278 -
Loan from directors 41,205 - 41,205 -
Total 269,313 648,256 230,460 689,809
Carrying amounts of trade and other payables approximate their fair value.
13. CALLED UP SHARE CAPITAL
The share capital of African Pioneer Plc consists only of fully paid ordinary
shares with no par value. All shares are equally eligible to receive dividends
and the repayment of capital and represent one vote at shareholders' meetings
of the Company.
Number £
Authorised:
1,000,000,000 ordinary shares of no par value 1,000,000,000 n/a
2023 2022
Issued equity share capital Number £ Number £
Issued and fully paid Ordinary Shares 228,041,178 6,216,282 191,707,845 5,946,610
Group and Company Number of shares Share
capital
£
As at 1 January 2023 191,707,845 5,475,204
Shares issued during the period 36,333,333 817,500
Share issue costs * - (32,400)
Share based payment charge (44,022)
As at 31 December 2023 228,041,178 6,216,282
25,000,000 two year warrants were issued to the placees on 1 June 2021
exercisable at 5.25p per ordinary share which expired unexercised on 1 June
2023.
8,571,428 three year warrants were issued to Sanderson Capital LLP on 1 June
2021 exercisable at 3.5p per ordinary share
A further 4,150,947 warrants exercisable at 3.5 p per ordinary share were
issued on 1 June 2021 for services carried out as detailed in note 14 of which
230,000 of the warrants expired unexercised on 1 June 2023.
14. THE NOTE NO. IS INTENTIONALLY NOT USED
15. WARRANTS SHARE OPTIONS AND SHARE BASED PAYMENT
On 1 June 2021 the Company granted the following warrants for services carried
out in relation to the listing of the Company on 1 June 2021 on the Standard
Listing on the Official List trading on the Main Market of the London Stock
Exchange.
To Number Date granted Exercise price Expiry Vesting conditions
Novum Securities Ltd 2,500,000 01/06/2021 3.5p 1 June 24 upon being granted
Quantum Capital and Consulting Ltd 1,420,947 01/06/2021 3.5p 1 June 24 upon being granted
Cavendish Trust 230,000 01/06/2021 3.5p 1 June 23 now expired
4,150,947
As a result of this the fair value of the warrants was determined at the date
of the grant using the Black Scholes model, using the following inputs:
Share price at the date of amendment
3.5p
Strike
price
3.5p
Volatility
50%
Expected
life
2/3
years
Risk free
rate
0.17%
The 50% volatility rate is based on the average volatility from historical
data in this sector
The share-based payment charge for these warrants for the year to 31 December
2023 was £13,282, which has been taken to the share-based payment reserve and
the resultant fair value of the warrants as at 31 December 2023 was determined
to be £37,183 (2022: £23,901).
In addition a new Share Option Scheme for the directors, senior management,
consultants and employees was approved at the AGM on 23 August 2022. On 24
January 2023 the Company announced that pursuant to the Share Option Scheme
approved 16,850,000 options over Ordinary Shares ("Options") were
awarded, 6,600,000 of the Options were awarded to directors of the Company,
as detailed below and the balance of 10,250,000 Options to other eligible
participants. The Company had not previously issued any Options.
Summary of the Options awarded:
Total number of options: A total of 16,850,000 Options have been awarded.
Exercise prices & award date: All the Options have an exercise price of 4.5 pence per Ordinary Share and
vested on issue.
Purpose of options: To incentivise and retain directors, officers, consultants and employees
critical to enhancing the future market value of the Company and have been
issued at a significant premium to the 30 day volume weighted average share
price ("VWAP") when the Options were approved.
30 day VWAP when Options approved: The 30 day VWAP to 23 January 2023, being the latest practicable date prior to
the approval of the Options by the Company's Remuneration Committee and Board,
was 2.945 pence per share.
Prevailing share price: The Company's mid-market closing share price on 23 January 2023, being the
latest practicable date prior to the announcement of the Options, was 3.3
pence.
Exercise prices versus abovementioned VWAP and prevailing share price: Premium to:
Prevailing closing 30 day
share price
VWAP
Exercise price of 4.5 pence 36% 53%
Life of Options: The options expire on 23 January 2033 being the date one day prior to the
tenth anniversary of the award of the Options.
Exercise period: The Options can be exercised any time after vesting and prior to their
scheduled expiry and must be exercised within 6 months of an option holder
leaving the Company or within 12 months of the death of an option holder.
Options awarded to the Directors Directors No. of Options
Executive Directors:
Colin Bird Executive Chairman 5,000,000
Christian Cordier Commercial Director 500,000
Raju Samtani Finance Director 600,000
Non Executive Directors:
Kjeld Thygesen Independent 500,000
James Cunningham-Davis Nil
Total Directors 6,600,000
As a result of this the fair value of the share options was determined at the
date of the grant using the Black Scholes model, using the following inputs:
Share price at the date of amendment
3.3p
Strike
price
4.5p
Volatility
50%
Expected
life
10
years
Risk free interest
rate
4%
The 50% volatility rate is based on the average volatility from historical
data in this sector
The share-based payment charge for these share options for the year to 31
December 2023 was £30,740, which has been taken to the share-based payment
reserve and the resultant fair value of the share options as at 31 December
2023 was determined to be £30,740.
The combined share-based payment charge for both the warrants and share
options for the year to 31 December 2023 was £44,022 and the overall fair
value for both the warrants and share options as at 31 December 2023 is
£67,923.
16. 2022 PRIOR PERIOD ADJUSTMENT
In 2022 the Company restated it's statement of Comprehensive Income and
Financial Position as at 31st December 2021 as during this period the
Company's income was overstated by £555,556 and the Group's net profit after
taxation was overstated by £122,222. The Company overstatement of income
arose as a result of a subsidiary's income being attributed to the Company so
did not affect the Group's Comprehensive Income for the period. The Group's
overstatement of net profit after taxation arose due to a provision of
£122,222 for taxation by one of the Group's subsidiaries. For the Company
the effect was that net assets were lower by £555,556 and for the group the
effect was net assets were lower by £122,222.
17. RELATED PARTY TRANSACTIONS
Cavendish Trust Company Limited (CTC) provides company administration and
secretarial services to the Company on normal commercial terms as part of
their normal business activity. As such it is not normally treated as a
related party. Fees invoiced by CTC during the year include £14,400 (2022:
£14,400), relating to director's fees for the services of J.
Cunningham-Davis, a director of CTC. At the year-end a balance of £42,216
(2022: £78,056), was outstanding.
Lion Mining Finance Limited, a company in which Colin Bird is director and
shareholder, has provided financial and technical services to the Company
amounting to £11,050 plus VAT in the year (2022 - £10,800 plus VAT). At
the year-end a balance of £900 (2022: £Nil) was outstanding. The Board
considers this transaction to be on normal commercial terms and on an arm's
length basis.
In October 2020 a loan of US$ 54,940 (£41,250) was advanced to African
Pioneer Zambia Ltd jointly by Colin Bird (US$ 27,470) and Raju Samtani (US$
27470) in order to acquire certain licenses
Intragroup Loans
African Pioneer Plc Loans due from / (due to) balances with group companies at
the end of the year are as follows. Loans are interest free and repayable on
demand.
2023 2022
£ £
Zamcu Exploration Pty Ltd 1,592,399 1,414,900
Resource Capital Partners Pty Ltd (420,410) (501,032)
African Pioneer Zambia Ltd 105,073 123,817
Directors' Letters of Appointment and Service Agreements as disclosed in the
May 2021 Prospectus
(a) Pursuant to an agreement dated 24 May 2021, the Company renewed the
appointment of James Cunningham-Davis as a Director. The appointment continues
unless terminated by either party giving to the other 3 months' notice in
writing. James Cunningham-Davis is entitled to director's fees of £12,000 per
annum for being a director of the Company plus reasonable and properly
documented expenses incurred during the performance of his duties which will
be invoiced by Cavendish Trust Company Ltd an Isle of Man Trust Company that
James Cunningham-Davis is a founder and managing director of. James
Cunningham-Davis is not entitled to any pension, medical or similar employee
benefits. The agreement replaces all previous agreements with James
Cunningham-Davis and/or Cavendish Trust Company Ltd in relation to the
appointment of James Cunningham-Davis as a director of the Company.
(b) Pursuant to an agreement dated 24 May 2021, the Company appointed
Kjeld Thygesen as a non-executive Director with effect from the date of the
IPO. The appointment continues unless terminated by either party giving to the
other 3 months' notice in writing and Kjeld Thygesen is entitled to director's
fees of £18,000 per annum for being a director of the Company plus reasonable
and properly documented expenses incurred during the performance of his
duties. Kjeld Thygesen is not entitled to any pension, medical or similar
employee benefits.
(c) Pursuant to an agreement dated 24 May 2021, the Company renewed the
appointment of Colin Bird as a Director. The appointment continues unless
terminated by either party giving to the other 3 months' notice in writing.
Colin Bird is entitled to director's fees of £18,000 per annum for being a
director of the Company plus reasonable and properly documented expenses
incurred during the performance of his duties. Colin Bird is not entitled to
any pension, medical or similar employee benefits. The agreement replaces all
previous agreements with Colin Bird in relation to his appointment as a
director of the Company.
(d) Pursuant to a consultancy agreement dated 24 May 2021, the Company
has, with effect from the date of the IPO, appointed Colin Bird as a
consultant to provide technical advisory services in relation to its current
and future projects including but not limited to assessing existing geological
data and studies, existing mine development studies and developing exploration
programs and defining the framework of future geological and mine study
reports (the "Colin Bird Services"). The appointment continues unless
terminated by either party giving to the other 3 months' notice in writing.
Colin Bird is entitled to fees of £3,500 per month for being a consultant to
the Company plus reasonable and properly documented expenses incurred during
the performance of the Colin Bird Services.
(e) Pursuant to an agreement dated 24 May 2021, the Company renewed the
appointment of Raju Samtani. The appointment continues unless terminated by
either party giving to the other 3 months' notice in writing. Raju Samtani is
entitled to director's fees of £18,000 per annum for being a director of the
Company plus reasonable and properly documented expenses incurred during the
performance of his duties. Raju Samtani is not entitled to any pension,
medical or similar employee benefits. The agreement replaces all previous
agreements with Raju Samtani in relation to his appointment as a director of
the Company.
(f) Pursuant to a consultancy agreement dated 24 May 2021, the Company
has ,with effect from the date of Admission, appointed Raju Samtani as a
financial consultant to provide financial advisory services to the Company
(the "Raju Samtani Services"). The appointment continues unless terminated
by either party giving to the other 3 months' notice in writing. Raju
Samtani is entitled to fees of £2,667 per month for being a consultant to the
Company plus reasonable and properly documented expenses incurred during the
performance of the Raju Samtani Services.
(g) Pursuant to an agreement dated 24 May 2021, the Company appointed
Christian Cordier as a Director with effect from the date of Admission. The
appointment continues unless terminated by either party giving to the other 3
months' notice in writing. Christian Cordier is entitled to director's fees of
£18,000 per annum for being a director of the Company plus reasonable and
properly documented expenses incurred during the performance of his duties.
Christian Cordier is not entitled to any pension, medical or similar employee
benefits.
(h) Pursuant to a consultancy agreement dated 24 May 2021, with Mystic
Light Pty Ltd a personal service company of Christian Cordier the Company has
secured the services of Christian Cordier, with effect from the date of the
IPO, as a business development consultant to provide business development l
advisory services to the Company in relation to its existing and future
projects (the "Christian Cordier Services"). The appointment continues
unless terminated by either party giving to the other 3 months' notice in
writing. Mystic Light Pty Ltd is entitled to fees of £1,000 per month for
providing the Christian Cordier Services plus reasonable and properly
documented expenses incurred during the performance of the Christian Cordier
Services.
18. POST BALANCE SHEET EVENTS
On 19 January 2022, the Company and its 80% owned subsidiary African Pioneer
Zambia Ltd ("African Pioneer Zambia") entered into an option agreement with
First Quantum Minerals Ltd ("First Quantum") (listed on the Toronto Stock
Exchange) in relation to 4 of the 5 Zambian exploration licences held by
African Pioneer Zambia (the "First Quantum Option Agreement"). On 26 October
2023 the Company announced that First Quantum had issued an Option Exercise
Notice in relation to 2 of the 4 Zambian exploration licences the subject of
the First Quantum Option Agreement and post the period end on 16 February 2024
the Company announced that First Quantum had issued an Option Exercise Notice
in relation to the 2 other Zambian exploration licences the subject of the
First Quantum Option Agreement.
Other than mentioned above there are no significant events have occurred
subsequent to the reporting date that would have a material impact on the
consolidated financial statements.
1 (#_ftnref1) gross representing 100% MRE and African Pioneer has 85%
interest in the Project
2 (#_ftnref2) gross representing 100% MRE and African Pioneer has 85%
interest in the Project
3 (#_ftnref3) gross representing 100% MRE and African Pioneer has 85%
interest in the Project
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