TIDMVAST
Vast Resources plc / Ticker: VAST / Index: AIM / Sector: Mining
30 September 2019
Vast Resources plc
("Vast" or the "Company")
Posting of Annual Report
Vast Resources plc, the AIM-listed mining company, is pleased to
announce its audited final results for the 13 month period ended 30
April 2019.
A copy of the annual report will be available on the Company's website
at
https://www.globenewswire.com/Tracker?data=E46bfuJhgUnGpyRvHsuHPguO9Fg3JAAsKcv2t4MGo7Pj-ATEcDcD_I1g1LbJBW_3n_xYQxct8bFICuVD7T0yPA==
www.vastplc.com.
For further information, visit www.vastplc.com or please contact:
Vast Resources plc www.vastplc.com
Andrew Prelea (Chief Executive +44 (0) 1491 615 232
Officer)
Andrew Hall
Beaumont Cornish - Financial & www.beaumontcornish.com
Nominated Adviser +44 (0) 020 7628 3396
Roland Cornish
James Biddle
SP Angel Corporate Finance LLP www.spangel.co.uk
-- Broker +44 (0) 20 3470 0470
Richard Morrison
Caroline Rowe
Blytheweigh www.blytheweigh.com
Tim Blythe +44 (0) 20 7138 3204
Megan Ray
The information contained within this announcement is deemed by the
Company to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014 ("MAR").
ABOUT VAST RESOURCES PLC
Vast Resources plc, is an AIM listed mining company with mines in
Romania and Zimbabwe focused on the rapid advancement of high quality
brownfield projects by recommencing production at previously producing
mines in Romania and commencement of the joint venture mining agreement
on the Community Concession Block of the Chiadzwa Diamond Fields in
Zimbabwe.
The Company's portfolio includes an 80% interest in the Baita Plai
Polymetallic Mine in Romania, where work is currently underway towards
developing and recommissioning the mine on completion of funding and the
commencement of the of the Community Concession Block in Chiadzwa,
Zimbabwe
Vast Resources owns the Manaila Polymetallic Mine in Romania, which was
commissioned in 2015, currently on care and maintenance, and is focused
on its expansion through the development of a second open pit operation
and new metallurgical complex at the Carlibaba Extension Area.
ANNUAL REPORT
OVERVIEW OF THE 13 MONTHSED 30(th) APRIL 2019
Vast Resources plc (`Vast' or the `Group') has repositioned the business
to focus resources on two key mining opportunities in Romania and
Zimbabwe with the intention of starting production at these mines in the
current financial year. These opportunities comprise the Baita Plai
Polymetallic Mine (`BPPM') in Romania, and the Group's expected diamond
concession in Zimbabwe. This establishes the platform to support Vast's
strategic objective to expand its footprint in these jurisdictions.
In repositioning the business, the Group has divested its 25.01% stake
in its Zimbabwean gold operations, reduced debt, strengthened its
management team, and directed resources exclusively to placing its key
Romania and Zimbabwean assets into production.
The Group was awarded the Baita licence on 15(th) October 2018 but was
unable to draw on Tranche B of the Mercuria prepayment facility in order
to fund capital expenditure programs at BPPM and the Manaila
Polymetallic Mine (`MPM'). The objective of these programs was to
restart production at BPPM and to improve operational efficiency at MPM.
Consequently, the Group is well advanced in the process of arranging new
funding which it is prioritising for BPPM and its diamond concession
given the short lead times expected to generate free operational
cashflow, and has placed MPM on care and maintenance in expectation of a
second funding round at a later stage.
Financial
-- US$ 8.6 million gain on disposal of Zimbabwean gold operations.
-- US$ 21.4 million reduction in the carrying amounts of loans and
borrowings to US$ 5.5 million (2018: US$ 27 million)
-- Total revenue, including operations that were discontinued in April 2019,
increased to US$ 34.7 million (2018: US$ 30.7 million).
-- Revenue from continuing operations increased to US$ 3.4 million (2018:
US$ 3.1 million)
-- Romanian operations continued to be a net cash absorber given a delay in
financing the required capital expenditure to place BPPM into production
and to improve profitability at MPM.
-- Cash balance at the period end of US$ 0.569 million (2018: US$ 1.3
million).
Operational Development
-- Baita Plai Association Licence executed on 15th October 2018, giving the
Group the right to mine at BPPM.
-- 1,725 and 242 tonnes of copper and zinc concentrate respectively produced
at MPM from April 2018 to December 2018, at which point MPM was placed on
care and maintenance.
-- 29.41% economic interest acquired in the Blueberry Polymetallic Gold
project in Romania which has raised US$ 1 million to meet exploration
costs.
-- Hiring of key management and technical personnel for the Group's Zimbabwe
diamond opportunity.
-- The Chiadzwa Community Diamond Concession Joint Venture was signed post
period end.
Funding
Equity:
Fundraising share issues during the year (gross proceeds before cost of
issue):
US$ GBP Shares Issued Issued to
124,338 91,351 18,270,103 Exercise of warrants
7,804,519 5,987.332 2,313,540,750 Issued to investors
Issued to convertible
985,929 769,451 488,073,476 security investor
8,914,786 6,848,134 2,819,884,329
Fundraising share issues post period end (gross proceeds before cost of
issue):
Announced US$ GBP Shares Issued Issued to
30 May 1,136,646 900,000 775,862,068 Issued to investors
8 August 795,268 655,000 595,454,545 Issued to investors
Total 1,931,914 1,555,000 1,371,316,613
---------- --------- --------- -------------
Debt
-- US$ 3.1 million was repaid to Sub-Sahara Goldia Investments.
-- US$ 20.6 million was disposed of as part of the sale and restructuring of
Vast's Zimbabwe operations.
Management
-- Appointment of Nick Hatch as Non-executive Director on 9th May 2018.
-- Appointment of Mark Mabhudhu as specialist adviser to and then Executive
Director of Vast's diamond division on 6th July 2018
-- Appointment of Andrew Hall as Head of Corporate Development and Investor
Relations on 1st December 2018.
-- Resignation of Carl Kindinger as Group CFO on 10th February 2019.
-- Appointment of Paul Fletcher as Group CFO on 11th February 2019.
Political
-- Continued improved business environment in Zimbabwe
CHAIRMAN'S REPORT
The reporting period and the period to date since, has been a testing
one for the Board. It has been a period marked equally by great
opportunities and challenges. It has also been one of significant
change of direction for the Company due to the decision to dispose of
our Zimbabwe gold interests and instead use our accumulated in-house
knowledge of Zimbabwe by focussing on the Zimbabwe diamond sector.
Romania
In Romania we were delighted in October to acquire the association
licence giving the right to mine at Baita Plai. But we were of course
disappointed that the process had proved to have been such a long and
exacting one. We have had to bear monthly dewatering and maintenance
costs over a long period. We have forgone the income that might
otherwise have arisen from production. The delay has been costly.
Our financial planning for the Romanian operation -- both Baita Plai and
Manaila -- had been underpinned by the Mercuria pre-payment facility
from which we had expected a second tranche (Tranche B) of US$5.5
million. The drawdown of the tranche was delayed and eventually, to our
great surprise, was withdrawn in January. As stated in the Strategic
Report this withdrawal was unrelated to the Company's standing or to the
viability of the Company's Romanian operation. The effect of this has
been to further delay the commissioning of Baita Plai and to force the
decision to put Manaila onto care and maintenance while we prioritised
Baita Plai.
The process of negotiating and agreeing the detailed documentation
necessary for the refinance of Baita Plai has been time consuming but
has, at the time of writing, reached an advanced stage. However, during
the waiting period we have prepared a detailed and costed commissioning
and production plan for Baita Plai, and have moreover ordered, purchased,
or are already implementing the long lead items so that the mine can be
commissioned within three months of the drawdown of the finance.
We continue to believe that Baita Plai is a key asset for the Company
and that when in production the mine will be transformational for the
Company.
Zimbabwe
During the reporting period we have been steadily appraising the diamond
opportunities in Zimbabwe and in July 2018 appointed as head of our
diamond division Mark Mabhudhu who has a lifetime of experience in
senior management roles in the diamond sector including being former CEO
of Government owned Zimbabwe Consolidated Diamond Company (pvt) Ltd
('ZCDC'). As a result, a number of opportunities have been offered to
us and due diligence, where appropriate, has been undertaken.
Considerable effort has now resulted in a formal joint venture agreement
with the Chiadzwa Community and the prospect very shortly of a joint
venture involving both the Community and ourselves with ZCDC under which
the ZCDC joint venture company will be given the right to mine the
Chiadzwa Community Concession. This Concession is in a general area
which we had previously referred to as the Marange Diamond Fields.
Indigenisation laws in Zimbabwe, including for diamonds, have now been
abolished. Moreover, we understand that the diamond joint venture with
our partners, Chiadzwa Community and ZCDC will, subject to completion of
all agreements, entitle the ZCDC joint venture company to retain sale
proceeds from the diamonds, that are not required in Zimbabwe, offshore.
This constitutes a significant advantage compared with the position for
gold operations where all sales have to be made via the in-country
refinery owned by the Reserve Bank, and where remission of proceeds are
restricted by the Exchange Control laws.
Although our Zimbabwe gold assets were performing well there were
several issues which militated against our ability to extract cash from
their operation in the short or medium term for general corporate
purposes. The operation also carried large debt on our balance sheet
which was unhelpful in our fundraising negotiations. We accordingly
took the fundamental decision to dispose of our Zimbabwe gold assets and
concentrate our resources on the diamond sector.
Directors and management
Executives
Mark Mabhudhu was appointed on 6 July 2018 initially as a specialist
advisor to the board of our Zimbabwe subsidiary, but subsequently as
executive head of the Company's diamond division. Mark, at appointment,
had been involved in diamond mining for more than 22 years, both in
Zimbabwe and internationally, including 11 years with Debswana, the
joint venture company between De Beers and the government of Botswana.
As already stated he had previously been CEO of ZCDC.
Andrew Hall was appointed Head of Corporate Development and Investor
Relations on 1 December 2018. He has a background in natural resource
and finance linked businesses and previously worked at a natural
resources focussed merchant bank where he established and managed the
alternative finance distribution business covering asset managers,
private equity, investment banks, family offices and trading houses.
Paul Fletcher was appointed on 8 February 2019 as Chief Financial
Officer and has progressed into playing an integral senior role in the
management of the Group's finances. Paul has formerly held a variety of
senior finance and operational roles in trading, processing, and
financial businesses in the US, Europe and Asia.
Non-Executive
As reported in the 2018 Annual Report Nick Hatch was appointed to the
Board as a Non-Executive Director on 9 May 2018. Nick has 35 years of
experience in mining investment banking, primarily as a mining analyst
and in managing mining and metals research and equities teams, most
recently as a Director of Mining Equity Research at Canaccord Genuity in
London.
Funding
During the reporting period US$7.9 million was raised in equity finance
(including warrant exercises) and a further US$1.0 net of payments was
raised through the Bergen Facility. US$3.1 million was repaid to
Sub-Sahara Goldia Investments Ltd.
At the time of writing we are near to finalisation of documentation on a
funding which will be sufficient to fund both the commissioning of Baita
Plai and the commencement of diamond mining at the Chiadzwa Community
Concession.
Corporate Governance
As stated in the Strategic Report the Company has adopted the Quoted
Company Alliance ('QCA') code on Corporate Governance.
The Board strives to promote a corporate culture based on sound ethical
values and behaviours. To that end the Company has adopted a strict
anti-corruption and whistle blowing policy, but the Directors are not
aware of any event in either jurisdiction which might be considered to
breach this policy. The Company has also adopted a code for Directors'
and employees' dealings in securities which is appropriate for a company
whose securities are traded on AIM and is in accordance with the
requirements of the Market Abuse Regulation which came into effect in
2016.
The Board is also aware that the tone and culture it sets will greatly
impact all aspects of the Company and the way that employees behave, as
well as the achievement of corporate objectives. A large part of the
Company's activities is centred upon an open dialogue with shareholders,
employees and other stakeholders. Therefore, the importance of sound
ethical values and behaviours is crucial to the ability of the Company
to successfully achieve its corporate objectives.
Appreciation
The continued support of shareholders through times that have been
challenging is much appreciated. Following the funding of the Baita
Plai Mine in Romania, and (subject to completion of agreements) of the
Chiadzwa Community Concession in Zimbabwe, the Group believes that it
will become cash positive.
To fellow directors, thank you for your advice and support, and to
management and staff both in Romania and Zimbabwe for their continued
effort on behalf of the Company.
Brian Moritz
Chairman
STRATEGIC REPORT
Principal activities, review of business and future developments
Vision
The vision of the Group is to become a mid-tier mining group, one of the
largest polymetallic (copper, zinc, silver, and gold) producers in
Romania, and a major player in the re-emergence of the mining industry
in Zimbabwe, where the Group now has a major focus on its diamond
interests.
Principal activities
In Romania the Group is focussed on reopening the Baita Plai
Polymetallic Mine ('BPPM') where an accelerated commissioning schedule
(from the time that funding is secured) aimed at delivering cashflow
within six months has been agreed and will be fully implemented
following drawdown of full funding now expected to be agreed shortly.
Meanwhile the previously operating Manaila Polymetallic Mine ('MPM')
remains on care and maintenance pending adoption of a new effective mine
plan that will achieve profitability.
In Zimbabwe, following the divestment of its gold mining interests
shortly prior to period end, the Group reached an advanced stage in the
agreement of joint ventures on a substantial diamond concession in the
Chiadzwa Diamond Fields (previously referred to as the Marange Diamond
Fields).
In both jurisdictions the Group holds further mining claims or other
interests which are under appraisal.
Review of business
Romania
General
Following intensive negotiations between the Romanian Government,
related agencies, and Baita SA, as holder of the head licence, the
association licence granting the Group the right to mine at BPPM was
approved by the State Mining Regulatory Body on 15(th) October 2018. Due
to matters unrelated to either Vast's standing or to the viability of
Vast's Romanian operations, the Group was unable to draw down on the US$
5.5 million second tranche ('Tranche B') of the Mercuria prepayment
facility. These funds were earmarked for capital expenditure programs at
BPPM and MPM with the objective of recommission at BPPM and improving
operational efficiency at MPM.
Consequently, the Group has been in the process of arranging, and is now
expected shortly to achieve, new funding which as far as Romania is
concerned will prioritise BPPM given the project's short lead time to
generating free operational cash flows. MPM will remain on care and
maintenance in expectation of a second funding round at a later stage.
BPPM (80% interest, 10% Directors)
The non-availability of Mercuria Tranche B has negatively impacted the
Group's results in Romania and has caused the Group to raise
supplemental debt and equity funds during the course of the period.
Despite these headwinds, the Group has made progress rehabilitating the
BPPM infrastructure and in making improvements as well as significant
inroads into implementing long lead items. Specific accomplishments
include the following:
-- Installation of new, high efficiency pumps
-- Securing direct electricity supply
-- Cleaning milling and flotation circuits
-- Maintained and continued restoration of underground workings and access
-- Commenced installation of new, independent electricity supply
-- Advanced work on refurbishment of the flotation plant including
installation of a new sediment tank
-- Commenced installation of the 7 kilometre tailings pipe to the tailings
dam
-- Cleaning railway in preparation for use
-- Acquired and restored a 300 metre drilling rig
Completion is dependent upon obtaining drawdown of funding which is
expected to be agreed shortly. The Group estimates that subject to
financing being arranged as hoped in the near future profitable
production will have been achieved during the now current financial
year.
MPM (100% interest)
1,720 and 242 tonnes of copper and zinc concentrate respectively were
produced at MPM from April 2018 to December 2018, at which point MPM was
then placed on temporary care and maintenance originally due to adverse
winter weather conditions. However, given the absence of funding, the
decision was later taken to place the mine on continued care and
maintenance until such time that BPPM was funded, and new funding
arranged for MPM that was better suited to its investment needs and
exploration potential. Revenues increased 10.8% to US$ 3.432 million
(2018: US$ 3.098 million).
As highlighted last year, a program of drilling undertaken in 2017 has
proven the potential of opening a second open-pit mine at the Carlibaba
section of MPM. A JORC compliant Resource statement confirmed a Measured,
Indicated and Inferred mineral Resource of 4.6 million tonnes suitable
for open-pit mining (3.6 million tonnes Measured and Indicated).
Underground mineral Resources in the Measured and Indicated category was
determined at 0.399 million tonnes. The implied open pit life is 11
years based on open pit and underground Measured and Indicated Resources
at a rate of 30,000 tonnes per month. MPM also has significant
underground exploration potential which would be transformative and
would require additional investment beyond those planned for the
Carlibaba open pit extension and new plant facility. For these reasons,
the commercial opportunity is potentially much larger and will require a
revised funding and investment strategy.
Blueberry Polymetallic Gold Project (`Blueberry') (29.41% effective
interest).
The Group acquired an effective 29.41% economic interest in Blueberry
through EMA Resources Ltd (`EMA') in a brown field perimeter located at
Baia de Aries in the `Golden Quadrilateral' of Western Romania on which
historic work has demonstrated prospectivity for gold and polymetallic
minerals. The Group is undertaking exploration on the perimeter with a
view to establishing a JORC Resource sufficient to justify an
independent IPO.
The following exploration activities were undertaken at the Blueberry
prospect:
-- Surface geological mapping.
-- Archival data searches for information relating to the Baia de Aries
polymetallic mine.
-- 41 surface diamond drill holes completed for a total core length of 6 717
metres.
-- All 6,717 metres of core split with half sent to an independent
laboratory for assay and the remaining half kept in storage.
-- 300 soil geochemical samples gathered on an approximate 100 metre by 100
metre grid spacing and analysed at an independent laboratory.
-- The exploration perimeter divided into eight zones for exploration and
preliminary drilling undertaken in 4 of the 8 identified target areas.
Drilling successfully intersected mineralised zones containing
predominantly gold and silver with certain localities exhibiting
polymetallic copper -- lead - zinc mineralisation.
Follow up drilling is planned for these areas in order to define the
orientations and the extent of the mineralised zones as a number of
intersections remain open at depth and along strike.
The soil sampling program encompassed approximately 40% of the
exploration area. Further sampling is required to the southwest and the
northeast to complete the soil sampling coverage. The soil sampling
identified previously unknown areas of mineralisation in the southern
portion of the exploration area with gold in soil values of up to 17.7
grams per ton gold.
To date the Group has arranged US$ 1 million third party financing on
behalf of the venture.
Other Romanian prospects
Work has been in progress with the benefit of third party money on
extending our footprint in Romania through our current claims at Magura
Neagra and Piciorul Zimbrului (collectively known as `Zagra'). The Group
has undertaken a drilling programme targeting sets of polymetallic veins
together with areas of disseminated sulphide mineralization.
The Group continues to believe that exploration of the many mining
opportunities that have become dormant over the last two decades will be
an attractive prospect for global mining players seeking to capitalize
on the projected increase in demand globally for copper occasioned by
the global transition to clean energy and electric vehicles.
The Group's `first mover position' in Romania has attracted interest in
resuscitating the large-scale polymetallic resource projects in Romania.
Discussions have been held with global mining players and investors to
leverage their financial strength and expertise to jointly exploit these
considerable opportunities.
Zimbabwe
In April 2019, the Group divested its 25.01% stake in its Zimbabwean
gold related operations which included the producing Pickstone-Peerless
Gold Mine (`PPGM') together with the non-producing Eureka Gold Mine in
the course of restoration(`Eureka'), and the dormant Giant Gold Mine
(`GGM'). The Group recorded an accounting gain on disposal of US$ 8.6
million. This divestment was driven in part by need to restructure the
Group's balance sheet to enable the financing of strategic projects and
by the Group's strategy to focus resources on opportunities generating
high and near term operating free cashflow unrestrained by tight
currency controls as represented by BPPM and the expected diamond
concession in Zimbabwe.
During the period, the divested Zimbabwean gold operations recorded
profits of US$ 8.4 million (2018: US$ 2.3 million) on revenue of US$
31.2 million (2018: US$ 27.6 million). These results have been heavily
impacted by foreign exchange gains arising from a devaluation occasioned
by the re-designation of all US dollar balances in Zimbabwe as RTGS
(Real Time Gross Settlement) balances. This has resulted in significant
gains of US$ 5.7 million mainly arising from foreign exchange
revaluation gains on local currency denominated borrowings. On a
normalized basis after removing foreign exchange gains, profits from the
discontinued Zimbabwean operations increased by 16.4% to US$ 2.683
million (2018: US$ 2.305 million), largely driven by increased milled
volumes (up 30% to 383,838 tonnes) and associated increased gold
production (up 14% to 749kgs). Both the gain on disposal of US$ 8.6
million and the profits of $US 8.4 million from the divested Zimbabwean
gold operations are disclosed as profits from discontinued operations in
the consolidated statement of comprehensive income.
Diamond Concession -- Chiadzwa Diamond Fields
The Group has completed due diligence on the diamond concession on which
it expects to get the full right to mine shortly and has prepared a full
operating plan.
Corporate
The Group has repositioned its business, disposing of its Zimbabwean
gold operations in order to focus on BPPM and its expected diamond
interests. This restructuring has enabled the Group to repay $2.5
million of its loan from Sub-Sahara Goldia Investments (`Sub-Sahara')
and to reduce its borrowings by an additional $18.6 million thereby
significantly reducing the Group's gearing, simplifying the balance
sheet, and creating a financial platform for growth and refinancing.
The Group has been actively seeking substantive financing following the
withdrawal of Mercuria's US$ 5.5 million Tranche B to finance BBPM and
the diamond opportunity in Zimbabwe. At the time of writing this report
the Group is near to concluding agreed documentation with an institution
which will provide funding for the Group's operations both at BBPM and
in Zimbabwe.
During the year the Group strengthened its management team through the
hiring of industry experts in the diamond sector.
Strategy
The Group's strategy is to:
-- Attract appropriate funding for the Group -- including from institutional
investment
-- Attract appropriate joint venture partners and public institutions to
invest in the Group and projects of mutual interest
-- Grow into a mid-tier mining company both organically and through
acquisitions financed principally by third parties
-- Optimise operations to produce positive cashflows
-- Add value to operations by increasing resources and reserves
-- If expedient, hold significant minority stakes in new ventures
operationally managed by the Group
-- Finance growth, where possible in a non-dilutive manner
-- Maintain exposure to Zimbabwe and Romania where the Group has acquired
in-depth country knowledge
-- Continue to work with Government and local communities in Zimbabwe in the
diamond sector, and to develop the diamond business in a transparent way
for the benefit of all stake holders
Key performance indicators
In executing its strategy, the Board considers the Group's key
performance indicators to be, or will be after recommencement of mining:
Cash cost per tonne milled
-- Cash cost per tonne is derived from aggregate cash costs divided by
tonnes milled and measures productivity.
-- For PPGM the cash cost for the period until discontinuance was US$
48/tonne (2018: US$ 62/tonne), 23% lower than the 2018 result.
-- For MPM the cash cost for the period of production was US$ 70/tonne
(2018: US$ 42/tonne), 60% higher than the 2018 result reflecting reduced
volumes.
Cash costs per ounce sold for gold and per tonne for concentrate
-- Cash cost per ounce sold is calculated by dividing aggregate cash cost by
gold ounces produced or concentrate tonnes produced and measures
productivity.
-- For PPGM the cash cost was US$ 770/ounce (2018: US$ 880/ounce), 12.5%
lower than the 2018 result.
-- For MPM the cash cost was US$ 2,208/tonne (2018: US$ 1,471/tonne), 50%
higher than the 2018 result reflecting reduced volumes.
Plant production volumes as a measure of asset utilisation
-- PPGM processed a mill feed of 383,838 tonnes for the period till
divestment (2018: 295,424 tonnes), 30% higher than the 2018 level.
-- MPM processed mill feed of 62,391 tonnes for the period of production
(2018: 106,488 tonnes), 41% lower than the 2018 level.
Total resources and reserves
-- These indicators measure our ability to discover and develop new ore
bodies, including through acquisition of new mines, and to replace and
extend the life of our operating mines. There have been no changes over
the previous year other than as a result of the disposal of the Group's
gold interest in Zimbabwe. The alluvial diamond interest in Zimbabwe
where there is an imminent expectation of a right to mine is considered
very prospective, but by its nature is not susceptible to the estimation
of a JORC Resource.
The rate of utilization of the Group's cash resources. This is discussed
further below.
Cash resources
The Group's year end position was US$ 0.569 million (2018: US$ 1.3
million).
During the year cash inflows from operating activities (including
discontinued activities) were US$ 5.3 million. Excluding discontinued
activities, cash outflows from operating activities were US$ 7.9
million. A significant portion of these outflows are directly related
to developing, supporting and maintaining our mining assets, allowing
the Group to quickly start production and generate significant revenue
at both BPPM and the diamond concession once funding is in place and the
diamond special grant is procured.
Cash outflows from investing activities (including discontinued
activities) were US$ 13.3 million. Excluding discontinued activities,
cash outflows from investing activities were US$ 1.3 million mainly
driven by additions to mining assets in the Group's Romanian operations.
Cash inflows from funding activities (including discontinued activities)
were US$ 7.2 million. Excluding discontinued activities, cash inflows
from funding activities were $5.2 million, comprising the net of the
proceeds from the issuance of shares of US$ 8.1 million less net
repayment of loans and borrowings of US$ 2.9 million.
The Directors monitor the cash position of the Group closely to plan
sufficient funds within the business to allow the Group to meet is
commitments and continue the development of assets. As part of this
process, the Directors closely monitor capital expenditure and the
regulatory requirements of the licences to ensure they continue in good
standing.
Principal risks and uncertainties
Risk -- Going concern
The Group is in an advanced stage of agreeing documentation on a
substantial funding.
However, if this funding should fail it may cast doubt about the Group's
ability to continue as a going concern. Other material uncertainties
constituting this risk include unseasonal severe climatic conditions,
unforeseen delays in permits and licences for new mining or plant
investments, cost overruns and adverse commodity price movements.
Mitigation/Comments
The Board will continue to engage, or after recommencement of mining
will engage, with providers of commodity trade finance, potential joint
venture and other investors in order for them to understand the
fundamental strength of the Group's business and attract additional
funding when required. The Board also will, whenever possible, retain
sufficient cash margin to offset contingencies. The remittance
restrictions for the Zimbabwean gold operations will not apply to the
Group's diamond investments as the Group is advised that foreign
currency regulations will allow export proceeds not required to meet
costs in Zimbabwe to be retained offshore.
Risk -- Mining
Mining of natural resources involves significant risk. Drilling and
operating risks include geological, geotechnical, seismic factors,
industrial and mechanical incidents, technical failures, labour disputes
and environmental hazards.
Mitigation/Comments
Use of strong technical management together with modern technology and
electronic tools assist in reducing risk in this area. Good employee
relations are also key in reducing the exposure to labour disputes. The
Group is committed to following sound environmental guidelines and is
keenly aware of the issues surrounding each individual project.
Risk - Commodity prices
Commodity prices are subject to fluctuation in world markets and are
dependent on such factors as mineral output and demand, global economic
trends and geo-political stability.
Mitigation/Comments
The Group's management constantly monitors mineral grades mined and cost
of production to ensure that mining output becomes or remains economic.
As highlighted earlier, due to matters unrelated to both Vast's standing
and the viability of Vast's Romanian operations, the Group was unable to
draw down on the US$ 5.5 million second tranche ('Tranche B') of the
Mercuria prepayment facility. These funds were earmarked for capital
expenditure programs at BPPM and the Manaila Polymetallic Mine (`MPM')
with the objective of restarting production at BPPM and to improve
operational efficiency at MPM. Consequently, the Group is well advanced
in the process of arranging new funding which it is prioritising for
BPPM and its diamond concession given the short lead times expected to
generate free operational cash flows, and has placed MPM on care and
maintenance in expectation of a second funding round at a later stage.
Risk -- Management and Retention of Key Personnel
The successful achievement of the Group's strategies, business plans and
objectives depend upon its ability to attract and retain certain key
personnel.
Mitigation/Comments
The Group's policy is to foster a management culture where management is
empowered and where innovation and creativity in the workplace are
encouraged. The Group has in place a "Share Appreciation Right Scheme"
for Directors and senior executives to provide incentives based on the
success of the business. It is also introducing more specific incentive
arrangements for the Group's diamond business in Zimbabwe.
During the period the Group has been successful in attracting new talent
across its businesses.
Risk - Country and Political
The Group's operations are based in Romania and Zimbabwe. Emerging
market economies could be subject to greater risks, including legal,
regulatory, economic, bribery and political risks, and are potentially
subject to rapid change. In addition, there are risks particular to
Zimbabwe arising from a scarcity of foreign exchange, difficulty with
foreign remittances of funds and the, now albeit very substantially
mitigated, risk of indigenisation.
Mitigation/Comments
The Group's management team is experienced in its areas of operation and
skilled at operating within the framework of the local culture in
Romania and Zimbabwe to progress its objectives. The Group routinely
monitors political and regulatory developments in each of its countries
of operation. In addition, the Group actively engages in dialogue with
relevant government representatives to keep abreast of all key legal and
regulatory developments applicable to its operations. The Group has
several internal processes and checks in place to ensure that it is
wholly compliant with all relevant regulations to maintain its mining or
exploration licences within each country of operation.
Risk - Social, Safety and Environmental
The Group's success may depend upon its social, safety and environmental
performance, as failures can lead to delays or suspension of its mining
activities.
Mitigation/Comments
The Group takes its responsibilities in these areas seriously and
monitors its performance across these areas on a regular basis.
Corporate Governance
The Company has adopted the QCA (Quoted Company Alliance) Code on
corporate governance. Details of how the Company complies with this are
set out in the Company's website. Principles which are required to be
dealt with under the Code in the Company's Annual Report are set out
below.
Business model and strategy
This is described above under Strategy and elsewhere in this Report.
Risk Management
In addition to its other roles and responsibilities, the Audit and
Compliance Committee is responsible to the Board for ensuring that
procedures are in place and are being implemented effectively to
identify, evaluate and manage the significant risks faced by the
Company.
The Directors have established procedures, as represented by this
statement, for the purpose of providing a system of internal control.
An internal audit function is not considered necessary or practical due
to the size of the Company and the close day to day control exercised by
the Executive Directors. The Board works closely with and has regular
ongoing dialogue with the Company Financial Director and financial
controller and has established appropriate reporting and control
mechanisms to ensure the effectiveness of its control systems.
The risks facing the Company are detailed above. The Board seeks to
mitigate such risks so far as it is able to do, as explained above, but
certain important risks cannot be controlled. The CEO is primarily
responsible to the Board for risk management.
In particular, the products the Company mines and is seeking to identify
are traded globally at prices reflecting supply and demand rather than
the cost of production. In Romania, the Company seeks to protect its
cash flow by means of a long term offtake agreement, but it does not
hedge future production.
Maintenance of a well functioning Board of Directors led by the Chairman
Current membership of the Board is as follows:
Name Role Appointed
Brian Moritz Non-executive Chairman 6
October 2016
Andrew Prelea Chief Executive Officer 1
March 2018
Roy Tucker Finance Director 5 April 2005
Craig Harvey Chief Operating Officer 1
March 2018
Eric Diack Non-executive director 30
May 2014
Nick Hatch Non-executive director 9
May 2018
All the Non-executive Directors are considered to be independent.
All the Directors are subject to re-election at intervals of no more
than three years.
The table illustrates the success of the Board in refreshing its
membership.
The Board is well balanced both in its skill sets and in the domicile of
its members. Of the Executive Directors, Andrew Prelea is resident in
Romania, Roy Tucker in the UK, and Craig Harvey in Southern Africa. Of
the Non-Executive Directors, Nick Hatch and Brian Moritz are resident in
the UK, whilst Eric Diack resides in Southern Africa.
All of the current Non-executive Directors are considered to be
independent. None of them have been a Director for a sufficient length
of time to prejudice such independence.
Non-executive Directors are committed to devote 3 days per month to the
Company. Executive Directors devote substantially the whole of their
time to the Company.
Where possible Directors are physically present at board meetings, but,
due to the wide divergence of locations, Directors may be present by
telephone.
During the thirteen month period ended 30 April 2019 there were six full
board meetings in addition to twelve meetings on specific issues. Of
the Directors holding office throughout the period, Brian Moritz, Andrew
Prelea, Roy Tucker and Eric Diack, attended all the full meetings either
in person or by telephone.
Appropriate skills and experience of the Directors
The CVs of the Directors - three executives and three Non executives -
as disclosed on the website, are set out below. In addition, the
Company has employed the outsourced services of Ben Harber of
Shakespeare Martineau as company secretary.
Andrew Prelea -- Chief Executive Officer
Andrew has been involved with Vast since 2013 and has spearheaded the
development of the Company's Romanian portfolio. Beginning his career in
the early 1990s as a bulk iron ore and steel trader in Romania, he then
went on to develop his career in the property and earthmoving sector in
Australia before returning to Romania in 2003, initially to focus on the
development of properties for the Romanian Ministry of Defence and
latterly, private sector developments. Throughout his 26-year career,
Andrew has developed extensive investor and public relations experience
and has advised the Romanian government on wide ranging high-level
topics including social housing and economic policy. He has built a
strong network of contacts across the mining and metals industries and
Europe and southern Africa, in addition to policy makers and
governmental authorities.
Brian Moritz - Chairman
Brian is a Chartered Accountant and former Senior Partner of Grant
Thornton UK LLP, London; he formed Grant Thornton's Capital Markets Team
which floated over 100 companies on AIM under his chairmanship. In
December 2004, he retired from Grant Thornton UK LLP to concentrate on
bringing new companies to the market. He specialises in natural
resources companies, primarily in Africa, and was formerly chairman of
Metal Bulletin plc, African Platinum plc and Chromex Mining plc as well
as currently being chairman of several junior mining companies.
Roy Tucker -- Finance Director
Roy is a Chartered Accountant with 43 years of high level and broad
spectrum professional and business experience. He has been the founder
of a London banking group, served on bank boards and had a position as a
major shareholder of a substantial London commodity house. He is also
the founder of Legend Golf and Safari Resort in South Africa. He has
substantial investment in the Romanian property sector.
Craig Harvey -- Chief Operating Officer
Craig began his career with Gold Fields of SA in 1988 as a bursary
student in Economic Geology where he worked on various gold, platinum,
coal and exploration projects. At Harmony Gold he managed the mineral
resources on various operations and was involved in due diligence on
acquisitions. He joined Simmer and Jack with a focus on shallow
hydro-thermal gold deposits in the Eastern Transvaal and later moved
into a corporate role managing and auditing the mineral resource process
across all gold and uranium operations. Craig spent 3 years in a
Principal Consultant role for Ravensgate based in Perth, Australia,
where he conducted numerous resource estimations, valuations and
technical reports mainly in gold, uranium, copper and iron ore. Craig
joined Vast Resources as a consultant in 2013 and became Chief Operating
Officer in March 2017. During his tenure with Vast Resources, he has
been heavily involved in both Zimbabwe and Romania.
Eric Diack -- Non-Executive Officer
Eric is a Chartered Accountant with many years' experience in the mining
and industrial landscape. Eric is the former CEO of Anglo American
Ferrous Metals Divisions, and has served on numerous major listed and
unlisted company boards, mainly associated with Anglo American. He is
currently a member of the Bidvest Group and Aveng boards which are large
South African listed companies with extensive international operations.
Nick Hatch -- Non-Executive Director
Nick has 35 years' experience in mining investment banking, primarily as
a mining analyst and in managing mining & metals research and equities
teams. He was most recently Director of Mining Equity Research at
Canaccord Genuity in London. Nick's experience includes researching and
advising on mining companies and projects across the globe and across
the commodity spectrum and includes companies of all sizes. Nick left
investment banking in 2017, and has recently set up his own company,
Nick Hatch Mining Advisory Ltd, to provide mining research, business
development and financing advice. He holds a degree in Mining Geology
and is a Chartered Engineer.
The Company believes that the current balance of skills in the Board as
a whole reflects the broad range of commercial and professional skills
that the Company requires. Among the Executive Directors, Andrew Prelea
is experienced in general management, including identifying and
negotiating new business opportunities; Roy Tucker is a Chartered
Accountant with many years experience in general financial management;
and Craig Harvey is a qualified geologist experienced in constructing
and operating mines.
Among the Non-executives Brian Moritz is a Chartered Accountant with
senior experience. In addition to his financial skills he has former
experience as a Registered Nominated Adviser. Eric Diack is also a
Chartered Accountant with experience in operational as well as financial
management. Nick Hatch is a qualified geologist with experience in
evaluating mining companies and natural resource projects.
Importantly, Directors without geological qualifications have
significant experience with junior companies in the natural resources
sector.
Evaluation of Board Performance
The Group is in the process of fast evolution and at this stage in the
Company's development it is not deemed necessary to adopt formal
procedures for evaluation of the Board or of the individual Directors.
There is frequent informal communication between members of the Board
and peer appraisal takes place on an ongoing basis in the normal course
of events however the Board will keep this under review and may consider
formalised independent evaluation reviews at a later stage in the
Company's development
Given the size of the Company, the whole Board is involved in the
identification and appointment of new Directors and as a result, a
Nominations Committee is not considered necessary at this stage. The
importance of refreshing membership of the Board is recognised and has
been implemented. In 2018 Andrew Prelea was appointed to replace Roy
Pitchford as CEO, and Nick Hatch replaced Brian Basham as a
Non-executive Director. The Directors believe that the Board operates
efficiently and cost effectively for the benefit of all stakeholders.
Nevertheless, it is envisaged that the Board will be strengthened in due
course as and when new projects are operated by the Company.
Maintenance of Governance Structures and Processes
The corporate governance structures which the Company is able to operate
are limited by the size of the Board, which is itself dictated by the
current size and geographical spread of the Company's operations, with
Directors resident in the UK, Romania and Southern Africa. With this
limitation, the Board is dedicated to upholding the highest possible
standards of governance and probity.
The Chairman, Brian Moritz:
-- leads the Board and is primarily responsible for the effective working of
the Board;
-- in consultation with the Board ensures good corporate governance and sets
clear expectations with regards to Company culture, values and behaviour;
-- sets the Board's agenda and ensures that all Directors are encouraged to
participate fully in the activities and decision-making process of the
Board.
The CEO, Andrew Prelea:
-- is primarily responsible for developing Vast's strategy in consultation
with the Board, for its implementation and for the operational management
of the business;
-- is primarily responsible for new projects and expansion;
-- is responsible for attracting finance and equity for the Company;
-- runs the Company on a day-to-day basis;
-- implements the decisions of the Board;
-- monitors, reviews and manages key risks;
-- is the Company's primary spokesperson, communicating with external
audiences, such as investors, analysts and the media.
The Chief Operating Officer, Craig Harvey:
-- is responsible for operational improvements and efficiency of mining
operations in Romania;
-- is responsible for expansion and exploration of projects at the mine
level;
-- is responsible for the re-opening of the Baita Plai mine;
-- assists and advises on the operation and expansion of the Zimbabwe
operations and projects;
-- provides technical input on new projects.
The Finance Director, Roy Tucker:
-- is responsible for the administration of all aspects of the Group;
-- assisted by the Chief Financial Officer oversees the accounting function
of all group companies;
-- runs the UK head office as the only UK based Executive Director;
-- assisted by the Chief Financial Officer deals with all matters relating
to the independent audit;
-- is the main point of contact with the Company's lawyers and Nomad, and
the London Stock Exchange.
The Remuneration Committee is chaired by Nick Hatch and comprises Eric
Diack and Nick Hatch. It meets on an ad hoc basis when required. The
Remuneration Committee is responsible for establishing a formal and
transparent procedure for developing policy on executive remuneration
and to set the remuneration packages of individual Directors. The
Committee's policy is to provide a remuneration package which will
attract and retain Directors and management with the ability and
experience required to manage the Company and to provide superior
long-term performance.
The Audit and Compliance Committee is chaired by Eric Diack and
comprises Nick Hatch and Eric Diack. It normally meets twice per annum
to inter alia, consider the interim and final results. In the latter
case the auditors are present and the meeting considers and takes action
on any matters raised by the auditors arising from their audit.
The chairman, Brian Moritz, attends the meetings of these committees
when requested to do so.
Matters reserved for the Board include:
-- Vision and strategy
-- Production and trading results
-- Financial statements and reporting
-- Financing strategy, including debt and other external financing sources
-- Budgets, acquisitions and expansion projects, divestments and capital
expenditure and business plans
-- Corporate governance and compliance
-- Risk management and internal controls
-- Appointments and succession plans
-- Directors' remuneration
Shareholder Communication
The Board is committed to maintaining effective communication and having
constructive dialogue with its shareholders. The Company has close
ongoing relationships with its private shareholders as explained above
under Principle Two. The Company is desirous of obtaining an
institutional shareholder base, and institutional shareholders and
analysts will have the opportunity to discuss issues and provide
feedback at meetings with the Company.
The Investors section of the Company's website provides all required
regulatory information as well as additional information shareholders
may find helpful including: information on Board members, advisors and
significant shareholdings, a historical list of the Company's
Announcements, its corporate governance information, the Company's
publications including historic annual reports and notices of annual
general meetings, together with share price information.
The results of shareholder meetings will be publicly announced through
the regulatory system and displayed on the Company's website with
suitable explanations of any actions undertaken as a result of any
significant votes against resolutions.
Outlook
While the period has been challenging the Group has completed a
successful divestment of its Zimbabwean gold operations and is in the
last stages of arranging finance to focus on its key assets, BPPM and
the Zimbabwean diamond concession. These projects which by industry
standards offer low cost entry, are expected to generate high returns
and strong operational free cashflow generation, providing the platform
for Vast's expansion.
As stated last year, the forecast global growth in electric vehicles
remains likely to create, over the next decade, a shortage of copper.
Whereas global supply and demand for copper is currently broadly
balanced, worldwide there is a decline in ore grades, while community
resistance and water supply issues are holding back discovery and
exploitation such that management continues to believe that current
supply will be overtaken by demand in a few years placing upward
pressure on copper prices and spurring investment in new copper mining
capacity. Management also believes that the business environment in
Zimbabwe will continue to improve as the government establishes an
attractive base for sustainable foreign investment, and that the Group,
having obtained the licence for BPPM and having established significant
first mover know-how, will begin to see traction on its other Romanian
opportunities. Management believes that a combination of a bullish
outlook on polymetallics together with a reduction in Romanian and
Zimbabwean country risk premiums will provide significant medium-term
growth in the share price and bode well for the financial performance of
these businesses.
Many thanks to fellow Board members and management for the commitment
and hard work that has been put into the Group.
On behalf of the Board,
Andrew Prelea
Group Chief Executive Officer
Group statement of comprehensive income
for the period ended 30 April 2019
30 Apr 31 Mar
2019 2018
Group Group
Note $'000 $'000
Revenue 3,432 3,098
Cost of sales (4,344) (4,298)
Gross loss (912) (1,200)
Overhead expenses (8,195) (3,334)
Depreciation and impairment of property,
plant and equipment 2 (1,206) (1,401)
Profit / (loss) on sale of property,
plant and equipment 84 (23)
Share option and warrant expense 22 (264) (27)
Sundry income 311 129
Exchange (loss) / gain (2,798) 2,301
Other administrative and overhead expenses (4,322) (4,313)
-------------------------------------------------- ---------
Loss from operations (9,107) (4,534)
Finance income 1 -
Finance expense 4 (845) (708)
Loss on disposal of interest in subsidiary
loans - (12,538)
Loss before taxation from continuing
operations (9,951) (17,780)
Taxation charge 5 - -
Total loss after taxation from continuing
operations (9,951) (17,780)
Profit after taxation from discontinued
operations 13 17,047 2,305
Total profit (loss) after taxation for
the period 7,096 (15,475)
Other comprehensive income
Items that may be subsequently reclassified
to either profit or loss
(Loss) / gain on available for sale financial
assets (3) 3
Exchange gain / (loss) on translation
of foreign operations 1,941 (1,435)
Total comprehensive profit / (loss) for
the period 9,034 (16,907)
========= =========
Total profit / (loss) attributable to:
- the equity holders of the parent company 243 (17,295)
- non-controlling interests 6,853 1,820
7,096 (15,475)
========= =========
Total comprehensive profit / (loss) attributable
to:
- the equity holders of the parent company 2,181 (18,727)
- non-controlling interests 6,853 1,820
9,034 (16,907)
========= =========
Profit / (loss) per share -- basic and
diluted 8 0.00 (0.36)
Loss per share continuing operations
-- basic and diluted 8 (0.16) (0.37)
The accompanying accounting policies and notes on pages 29 to 63 form an
integral part of these financial statements.
Group statement of changes in equity
for the for the period ended 30 April 2019
Foreign
currency Available
Share Share Share option translation for sale EBT Retained Non-controlling
capital premium reserve reserve reserve reserve deficit Total interests Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
At 31 March 2017 19,420 74,802 1,890 (1,228) - (3,942) (71,296) 19,646 12,394 32,040
Total comprehensive loss for
the period - - - (1,435) 3 - (17,295) (18,727) 1,820 (16,907)
Share option and warrant charges 27 27 27
Share options and warrants lapsed - - (337) - - - 337 - - -
Investment received in subsidiary
- Ronquil Enterprises (Pvt)
Ltd - - - - - - (757) (757) 2,457 1,700
Interest in mining asset - - - - - - (4,604) (4,604) 4,604 -
Acquisition of NCI in subsidiary
- Sinarom Mining Group SRL - - - - - - (4,073) (4,073) 1,772 (2,301)
Shares issued for cash: 620 2,435 - - - - - 3,055 - 3,055
At 31 March 2018 20,040 77,237 1,580 (2,663) 3 (3,942) (97,688) (5,433) 23,047 17,614
Total comprehensive loss for
the period - - - 1,941 (3) - 243 2,181 6,853 9,034
Share option and warrant charges - - 264 - - - - 264 - 264
Share options and warrants lapsed - - (229) - - - 229 - - -
Derecognised on discontinued
operations:
- Dallaglio Investments (Private)
Limited - - - - - - - (29,941) (29,941)
Derecognition of EBT reserve - - - - - 3,942 (3,721) 221 - 221
Shares issued 3,662 4,448 - - - - - 8,110 - 8,110
At 30 April 2019 23,702 81,685 1,615 (722) - - (100,937) 5,343 (41) 5,302
======== ======== ============= ============= ========== ======== ========= ======== ================ ========
The accompanying accounting policies and notes on pages 29 to 63 form an
integral part of these financial statements.
Company statement of changes in equity
for the for the period ended 30 April 2019
Foreign
currency Available
Share Share Share option translation for sale EBT Retained
capital premium reserve reserve reserve reserve deficit Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
At 31 March 2017 19,420 74,802 1,890 (4,954) - (3,942) (48,633) 38,583
Total comprehensive loss
for the year - - - - (2) - (14,917) (14,919)
Share option and warrant
charges - - 27 - - - - 27
Share options and warrants
lapsed - - (337) - - - 337 -
Shares issued for cash 620 2,435 - - - - - 3,055
At 31 March 2018 20,040 77,237 1,580 (4,954) (2) (3,942) (63,213) 26,746
Total comprehensive profit
for the period - - - - 2 - 398 400
Share option and warrant
charges - - 264 - - - - 264
Share options and warrants
lapsed - - (229) - - - 229 -
Derecognition of EBT
reserve - - - - - 3,942 (3,718) 224
Shares issued for cash 3,662 4,448 - - - - - 8,110
At 30 April 2019 23,702 81,685 1,615 (4,954) - - (66,304) 35,744
======== ======== ============= ============= ========== ======== ========= ========
The accompanying accounting policies and notes on pages 29 to 63 form an
integral part of these financial statements.
Group and Company statements of financial position
As at 30 April 2019
30 Apr 31 Mar 30 Apr 31 Mar
2019 2018 2019 2018
Group Group Company Company
$'000 $'000 $'000 $'000
Assets Note
Non-current assets
Property, plant and equipment 10 11,261 45,534 1 -
Investment in subsidiaries - 1,673 1,583
Investment in joint ventures 12 - 559 - -
Loans to group companies 14 - - 34,568 25,179
11,261 46,093 36,242 26,762
--------- -------- --------- ---------
Current assets
Inventory 15 413 4,054 - -
Receivables 16 2,537 5,406 361 93
Available for sale
investments - 13 - 3
Cash and cash equivalents 569 1,300 218 208
Total current assets 3,519 10,773 579 304
--------- -------- --------- ---------
Total Assets 14,780 56,866 36,821 27,066
Equity and Liabilities
Capital and reserves
attributable to equity
holders of the Parent
Share capital 23,702 20,040 23,702 20,040
Share premium 81,685 77,237 81,685 77,237
Share option reserve 1,615 1,580 1,615 1,580
Foreign currency translation
reserve (722) (2,663) (4,954) (4,954)
Available for sale reserve - 3 - (2)
EBT reserve - (3,942) - (3,942)
Retained deficit (100,937) (97,688) (66,304) (63,213)
5,343 (5,433) 35,744 26,746
Non-controlling interests (41) 23,047 - -
Total equity 5,302 17,614 35,744 26,746
--------- -------- --------- ---------
Non-current liabilities
Loans and borrowings 17 4,043 22,635 - -
Provisions 19 489 1,397 - -
Deferred tax liability - 3,330 - -
4,532 27,362 - -
--------- -------- --------- ---------
Current liabilities
Loans and borrowings 17 1,476 4,331 309 -
Trade and other payables 18 3,470 7,559 768 320
Total current liabilities 4,946 11,890 1,077 320
--------- -------- --------- ---------
Total liabilities 9,478 39,252 1,077 320
Total Equity and Liabilities 14,780 56,866 36,821 27,066
The accompanying accounting policies and notes on pages 29 to 63 form an
integral part of these financial statements. The parent Company reported
a loss after taxation for the year of US$ 3.237 million (2018: US$ 2.378
million). The financial statements on pages 24 to 63 were approved and
authorised for issue by the Board of Directors on 29 September and were
signed on its behalf by:
Roy C. Tucker Registered number 5414325
Director 29 September 2019
Group and Company statements of cash flow
for the period ended 30 April 2019
30 Apr 31 Mar 30 Apr 31 Mar
2019 2018 2019 2018
Group Group Company Company
$'000 $'000 $'000 $'000
CASH FLOW FROM OPERATING ACTIVITIES
Profit (loss) before taxation for
the period
- from continuing operations (9,951) (17,780) (3,237) (14,917)
- from discontinued operations 17,047 6,099 - -
Adjustments for:
Depreciation and impairment charges 4,554 2,862 - -
(Profit) loss on sale of property,
plant and equipment (76) 22 (2) -
Gain on disposal of discontinued
operations (8,649) - - -
Loss on disposal of available for
sale investments 10 - - -
Loss on disposal of interest in
loans - 12,538 - 12,538
Share option expense 264 27 264 27
3,199 3,768 (2,975) (2,352)
-------- -------- ------- --------
Changes in working capital:
Decrease (increase) in receivables 2,140 8 (268) 1,513
Decrease (increase) in inventories 1,290 (2,392) - -
Increase (decrease) in payables (1,275) (1,998) 452 (127)
2,155 (4,382) 184 1,386
-------- -------- ------- --------
Cash generated by / (used in) operations 5,354 (614) (2,791) (966)
Investing activities:
Payments to acquire property, plant
and equipment (11,391) (9,197) (1) -
Payments to acquire of new
subsidiary (4,480) - - -
Payments for investment in
subsidiary - - (90) -
Proceeds on disposal of property,
plant and equipment 168 107 - -
Proceeds of third-party investment
in subsidiary - 1,700 - -
Proceeds of disposal of available
for sale investments - - 3 -
Net cash inflow on disposal of
discontinued operations 1,592 - - -
Proceeds of derecognition of EBT
reserve 221 - 221 -
Payments to acquire controlling
interest in subsidiary - (2,303) - (2,303)
Proceeds of loan assignment - 2,300 - 2,300
Decrease (increase) in investment
in joint venture 559 (102) - -
(Increase) decrease in loans to
group companies - - (5,752) (3,117)
Total cash used in investing activities (13,331) (7,495) (5,619) (3,120)
-------- -------- ------- --------
Financing Activities:
Proceeds from the issue of ordinary
shares 8,110 3,055 8,110 3,055
Proceeds from loans and borrowings
granted 6,165 9,177 310 -
Repayment of loans and borrowings (7,029) (4,149) - -
Total proceeds from financing activities 7,246 8,083 8,420 3,055
-------- -------- ------- --------
Increase (decrease) in cash and
cash equivalents (731) (26) 10 (1,031)
Cash and cash equivalents at beginning
of period 1,300 1,326 208 1,239
Cash and cash equivalents at end
of period 569 1,300 218 208
======== ======== ======= ========
The accompanying notes and accounting policies on pages 29 to 63 form an
integral part of these financial statements.
Statement of accounting policies
for the period ended 30 April 2019
General information
Vast Resources plc and its subsidiaries (together "the Group") are
engaged principally in the exploration for and development of mineral
projects in Sub-Saharan Africa and Eastern Europe. Since incorporation
the Group has built an extensive and interesting portfolio of projects
in these jurisdictions. The Company's ordinary shares are listed on the
AIM market of the London Stock Exchange.
Vast Resources plc was incorporated as a public limited company under UK
Company Law with registered number 05414325. It is domiciled and
registered at 60 Gracechurch Street, London EC3V 0HR.
Basis of preparation and going concern assessment
The principal accounting policies adopted in the preparation of the
financial information are set out below. The policies have been
consistently applied throughout the current year and prior year, unless
otherwise stated. These financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRSs and
IFRIC interpretations) issued by the International Accounting Standards
Board (IASB) as adopted by the European Union and with those parts of
the Companies Act 2006 applicable to companies preparing their accounts
under IFRS.
During the period, the Group changed its year end from 31 March 2019 to
30 April 2019. The consolidated financial statements incorporate the
results of Vast Resources plc and its subsidiary undertakings for the
thirteen-month period ended 30 April 2019 and are therefore not entirely
comparable to the previous year's results for the twelve-month period
ended 31 March 2018.
The financial statements are prepared under the historical cost
convention on a going concern basis.
In April 2019 the Group disposed of its Zimbabwean gold operations to
focus on its mining assets in Romania and its Marange diamond concession
in Zimbabwe. The Group will require further funding in order to put
these assets into production and to meet United Kingdom entity overheads
and Romanian and Zimbabwean working capital needs. The Directors are
confident that the Company will be able to raise such funds as it
considers appropriate to meet such requirements over the course of the
next 24 months, in cash. While no binding financing agreement is in
place at the date of this Report, the Group is well advanced in the
process of arranging new funding that will allow Vast to place the Baita
Plai Polymetallic Mine (`BPPM') into production and will enable the
commencement of operations at the Group's diamond concession, upon the
imminent issuance of a special grant. Upon successfully funding these
key assets, the Group would then be in a position to focus resources to
secure the necessary investment to upgrade the Manaila Polymetallic Mine
(`MPM') which is currently on care and maintenance. These conditions
indicate the existence of material uncertainty which may cast
significant doubt about the Group's and Company's ability to continue as
a going concern. The financial statements do not include the adjustment
that would result if the Group and Company were unable to continue as a
going concern.
Changes in Accounting Policies
At the date of authorisation of these financial statements, a number of
Standards and Interpretations were in issue but were not yet effective.
The Directors do not anticipate that the adoption of these standards and
interpretations, or any of the amendments made to existing standards as
a result of the annual improvements cycle, will have a material effect
on the financial statements in the year of initial application.
Areas of estimates and judgement
The preparation of the Group financial statements in conformity with
generally accepted accounting principles requires the use of estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Although these estimates are
based on management's best knowledge of current events and actions,
actual results may ultimately differ from those estimates. The estimates
and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities in the next
financial year are discussed below:
a) Impairment of intangibles and mining assets
The Group reviews, on an annual basis, whether deferred exploration
costs, acquired either as intangible assets, as property, plant and
equipment, or as mining options or licence acquisition costs, have
suffered any impairment. The recoverable amounts are determined based on
an assessment of the economically recoverable mineral reserves, the
ability of the Group to obtain the necessary financing to complete the
development of the reserves and future profitable production or proceeds
from the disposition of recoverable reserves. Actual outcomes may vary.
In the event that the Group is unable to secure financing for developing
its Romanian assets, US$ 5.1 million of mining assets would be impaired.
The disposal value of the remaining fixed assets held by the Group's
Romanian operations is not easily quantifiable
b) Going concern and Inter-company loan recoverability
The Group's cash flow projections, which have used conservative
assumptions on forward commodity prices, indicate that the Group should
have sufficient resources to continue as a going concern, although, as
stated in the Principal Risks section of the Strategic Report and the
basis of preparation and going concern assessment above, the Group will
require additional funding for its near-term investment plans. While the
Group is confident of its capacity to raise this funding, should it not
materialise, or if the projections not be realised, the Group's going
concern would depend on the success of future fund-raising initiatives.
These conditions indicate the existence of material uncertainty which
may cast significant doubt about the Group's and Company's ability to
continue as a going concern.
The recoverability of inter-Company loans advanced by the Company to
subsidiaries depends also on the subsidiaries realising their cash flow
projections.
c) Estimates of fair value
The Group may enter into financial instruments, which are required by
IFRS to be recorded at fair value within the financial statements. In
determining the fair value of such instruments, the Directors are
required to apply judgement in selecting the inputs used in valuation
models such as the Black Scholes or Monte Carlo models. Inputs over
which the Directors may be required to form judgements related to
volatility, vesting periods, risk free interest rates, commodity price
assumptions and discount rates. In addition, where a valuation requires
more complex fair value considerations the Directors may appoint third
party advisers to assist in the determination of fair value.
The fair value measurement of the Group's financial and non-financial
assets and liabilities utilises market observable inputs and data as far
as possible. Inputs used in determining fair value measurements are
categorised into different levels based on how observable the inputs
used in the valuation technique utilised are (the 'fair value
hierarchy'):
Level 1: Quoted prices in active markets for identical items
(unadjusted).
Level 2: Observable direct or indirect inputs other than Level 1 inputs.
Level 3: Unobservable inputs (i.e. not derived from market data).
The classification of an item into the above levels is based on the
lowest level of the inputs used that has a significant effect on the
fair value measurement of the item.
d) Provisions
The Group is required to estimate the cost of its obligations to realise
and rehabilitate its mining properties.
The estimation of the cost of complying with the Group's obligations at
future dates and in economically unpredictable regions, and the
application of appropriate discount rates thereto, gives rise to
significant estimation uncertainties.
e) VAT recoverable
In countries where the Group has productive mining operations carried
out by its subsidiaries those subsidiaries are registered for Value
Added Tax (VAT) with their respective local taxation authorities and, as
their outputs are predominantly zero-rated for VAT, receive net refunds
of VAT in respect of input tax borne on their inputs. This amount is
carried as a receivable until refunded by the State
The amount carried as a receivable is determined in accordance with the
returns submitted to the taxation authorities.
Basis of consolidation
Where the Company has control over an investee, it is classified as a
subsidiary. The Company controls an investee if all three of the
following elements are present: power over the investee, exposure to
variable returns from the investee, and the ability of the investor to
use its power to affect those variable returns. Control is reassessed
whenever facts and circumstances indicate that there may be a change in
any of these elements of control.
De-facto control exists in situations where the Company has the
practical ability to direct the relevant activities of the investee
without holding the majority of the voting rights. In determining
whether de-facto control exists the Company considers all relevant facts
and circumstances, including:
-- The size of the Company's voting rights relative to both the size and
dispersion of other parties who also hold voting rights.
-- Substantive potential voting rights held by the Company and by other
parties.
-- Other contractual arrangements.
-- Historic patterns in voting attendance.
The consolidated financial statements present the results of the Company
and its subsidiaries ("the Group") as if they formed a single entity.
Inter-company transactions and balances between Group companies are
therefore eliminated in full.
The consolidated financial statements incorporate the results of
business combinations using the acquisition method. In the statement of
financial position, the acquiree's identifiable assets, liabilities and
contingent liabilities are initially recognised at their fair values at
the acquisition date. The results of acquired operations are included in
the consolidated statement of comprehensive income from the date on
which control is obtained. They are deconsolidated from the date on
which control ceases.
Business combinations
The financial information incorporates the results of business
combinations using the purchase method. In the statement of changes in
equity, the acquirer's identifiable assets, liabilities and contingent
liabilities are initially recognised at their fair values at the
acquisition date. The results of acquired operations are included in the
Group statement of comprehensive income from the date on which control
is obtained. The assets acquired have been valued at their fair value.
Any excess of consideration paid over the fair value of the net assets
acquired is allocated to goodwill. Any excess fair value over the
consideration paid is considered to be negative goodwill and is
immediately recorded within the income statement.
Where business combinations are discontinued, whether by closure or
disposal to third parties, any resultant gain or loss on the
discontinued operation is identified separately and dealt with in the
Group's consolidated income statement as a separate item.
Financial instruments
IFRS 9 supersedes IAS 39 Financial Instruments: Recognition and
Measurement with new requirements for the classification and measurement
of financial assets and liabilities, impairment of financial assets and
hedge accounting.
IFRS 9 introduces a new forward-looking impairment model based on
expected credit losses to replace the incurred loss model in IAS 39.
This determines the recognition of impairment provisions as well as
interest revenue.
The Group adopted IFRS 9 from 1 April 2018 with retrospective effect in
accordance with the transitional provisions.
The Group's principal financial assets are cash and cash equivalents and
receivables.
The Group has assessed the impact of IFRS 9 on the impairment of its
financial assets and has concluded that the change in the impairment is
immaterial.
While cash and cash equivalents are also subject to the impairment
requirements of IFRS 9, the identified impairment loss was immaterial.
The Group's financial assets consist of cash and cash equivalents and
other receivables. The Group's accounting policy for each category of
financial asset is as follows:
Financial assets held at amortised cost
Trade receivables and other receivables are classified as financial
assets held at amortised cost. They are initially recognised at fair
value plus transaction costs that are directly attributable to their
acquisition or issue and are subsequently carried at amortised cost
using the effective interest rate method, less provision for impairment.
Impairment provisions are recognised when there is objective evidence
(such as significant financial difficulties on the part of the
counterparty or default or significant delay in payment) that the Group
will be unable to collect all of the amounts due under the terms
receivable, the amount of such a provision being the difference between
the net carrying amount and the present value of the future expected
cash flows associated with the impaired receivable. For receivables,
which are reported net, such provisions are recorded in a separate
allowance account with the loss being recognised within administrative
expenses in the statement of comprehensive income. On confirmation that
the receivable will not be collectable, the gross carrying value of the
asset is written off against the associated provision.
The Group's financial assets held at amortised cost comprise other
receivables and cash and cash equivalents in the statement of financial
position.
Cash and cash equivalents
These amounts comprise cash on hand and balances with banks. Cash
equivalents are short term, highly liquid accounts that are readily
converted to known amounts of cash. They include short-term bank
deposits and short-term investments.
Any cash or bank balances that are subject to any restrictive conditions,
such as cash held in escrow pending the conclusion of conditions
precedent to completion of a contract, are disclosed separately as
"Restricted cash".
There is no significant difference between the carrying value and fair
value of receivables.
Financial liabilities
The Group's financial liabilities consist of trade and other payables
(including short terms loans) and long term secured borrowings. These
are initially recognised at fair value and subsequently carried at
amortised cost, using the effective interest method. Where any liability
carries a right to convertibility into shares in the Group, the fair
value of the equity and liability portions of the liability is
determined at the date that the convertible instrument is issued, by use
of appropriate discount factors.
Foreign currency
The functional currency of the Company and all of its subsidiaries
outside Romania is the United States Dollar, while the functional
currency of the Company's Romanian subsidiaries is the Romanian Lei
(RON), these are the currencies of the primary economic environment in
which the Company and its subsidiaries operate.
Transactions entered into by the Group entities in a currency other than
the currency of the primary economic environment in which it operates
(the "functional currency") are recorded at the rates ruling when the
transactions occur. Foreign currency monetary assets and liabilities are
translated at the rates ruling at the date of the statement of financial
position. Exchange differences arising on the retranslation of
unsettled monetary assets and liabilities are similarly recognised
immediately in profit or loss, except for foreign currency borrowings
qualifying as a hedge of a net investment in a foreign operation.
The exchange rates applied at each reporting date were as follows:
-- 30 April 2019 $1.3036: GBP1 and
$1: RON 4.2440 and $1: RTGS 3.2641
-- 31 March 2018 $1.4012: GBP1 and $1: RON
3.7779 and $1: RTGS 1
-- 31 March 2017 $1.2253: GBP1 and $1: RON
4.2615 and $1: RTGS 1
On 22 February 2019 all US dollar balances in Zimbabwe were restated as
RTGS (Real Time Gross Settlement) balances, as a separate and distinct
currency tradeable against the US dollar. The initial inter-bank trading
rate with the US dollar was US$ 1: RTGS 2.5.
Intangible assets - Mining rights
Mineral rights are recorded at cost less amortisation and provision for
diminution in value. Amortisation will be over the estimated life of the
commercial ore reserves on a unit of production basis.
Licences for the exploration of natural resources will be amortised over
the lower of the life of the licence and the estimated life of the
commercial ore reserves on a unit of production basis.
Inventories
Inventories are initially recognised at cost, and subsequently at the
lower of cost and net realisable value. Cost comprises all costs of
purchase, costs of conversion and other costs incurred in bringing the
inventories to their present location and condition. Weighted average
cost is used to determine the cost of ordinarily inter-changeable items.
Mining inventory includes run of mine stockpiles, minerals in circuit,
finished goods and consumables. Stockpiles, minerals in circuit and
finished goods are valued at their cost of production to their point in
process using a weighted average cost of production, or net realisable
value, whichever is the lower. Low grade stockpiles are only recognised
as an asset when there is evidence to support the fact that some
economic benefit will flow to the Company on the sale of such inventory.
Consumables are valued at their cost of acquisition, or net realisable
value, whichever is the lower.
Investment in subsidiaries
The Company's investment in its subsidiaries is recorded at cost less
any impairment.
Non-controlling interests
For business combinations completed on or after 1 January 2010 the Group
has the choice, on a transaction by transaction basis, to initially
recognise any non-controlling interest in the acquiree which is a
present ownership interest and entitles its holders to a proportionate
share of the entity's net assets in the event of liquidation at either
acquisition date fair value or, at the present ownership instruments'
proportionate share in the recognised amounts of the acquiree's
identifiable net assets. Other components of non-controlling interest
such as outstanding share options are generally measured at fair value.
The total comprehensive income of non-wholly owned subsidiaries is
attributed to owners of the parent and to the non-controlling interests
in proportion to their relative ownership interests.
Revenue
Revenue from the sales of goods is recognised when the Group has
transferred the significant risks and rewards of ownership to the buyer
and it is probable that the Group will receive the previously agreed
upon payment. These criteria are considered to be met when the goods are
delivered to the buyer. Where the buyer has a right of return, the Group
defers recognition of revenue until the right to return has lapsed.
However, where high volumes of sales are made to established wholesale
customers, revenue is recognised in the period where the goods are
delivered less an appropriate provision for returns based on past
experience. Delivery of gold and metal concentrates is the Group's
single performance obligation under its contracts with its customers.
The same policy applies to warranties.
Under IFRS 15, the freight service on export commodity contracts with
CIF/CFR terms represents a separate performance obligation, and a
portion of the revenue earned under these contracts, representing the
obligation to perform the freight service, is deferred and recognised
over time as this obligation is fulfilled, along with the associated
costs for which the point of recognition is dependent on the contract
sales terms. The Group's agreed terms with Mercuria, currently its sole
buyer of concentrates, require that the seller must contract for and pay
the costs and freight necessary to bring the goods to the named port of
destination. The impact of applying this methodology versus that
currently adopted by the Group during the year ended 30(th) April 2019
is not material as the transfer of risks and rewards generally coincides
with the transfer of control at a point in time. The timing and amount
of revenue recognised by the Group for the sale of commodities is
therefore not materially affected. The Group's gold sales, which form
part of discontinued operations, were also not affected by this
standard.
Provided the amount of revenue can be measured reliably and it is
probable that the Group will receive any consideration, revenue for
services is recognised in the period in which they are rendered.
Pension costs
Contributions to defined contribution pension schemes are charged to
profit or loss in the year to which they relate.
Production expenses
Production expenses include all direct costs of production but exclude
depreciation of property plant and equipment involved in the mining
process, and mine and Company overhead.
Property, plant and equipment
Land is not depreciated. Items of property, plant and equipment are
initially recognised at cost and are subsequently carried at depreciated
cost. As well as the purchase price, cost includes directly attributable
costs and the estimated present value of any future costs of dismantling
and removing items. The corresponding liability is recognised within
provisions.
Depreciation is provided on all other items of property and equipment so
as to write off the carrying value of items over their expected useful
economic lives. It is applied at the following rates:
Buildings -- 2.5% per annum, straight line
Plant and machinery -- 15% per annum,
reducing balance
Fixtures, fittings & equipment -- 20% per annum,
reducing balance
Computer assets -- 33.33% per annum,
straight line
Motor vehicles -- 15% per annum,
reducing balance
Development costs associated with the development of the Zimbabwean
diamond project have been expensed as the concession has yet to receive
a Special Grant.
Capital works in progress: Property, plant and equipment under
construction are carried at its accumulated cost of construction and not
depreciated until such time as construction is completed or the asset
put into use, whichever is the earlier.
Proved mining properties
Depletion and amortisation of the full-cost pools is computed using the
units-of-production method based on proved reserves as determined
annually by management.
Provision for rehabilitation of mining assets
Provision for the rehabilitation of a mining property on the cessation
of mining is recognised from the commencement of mining activities. This
provision accounts for the full cost to rehabilitate the mine according
to good practice guidelines in the country where the mine is located,
which may involve more than the stipulated minimum legal commitment.
When accounting for the provision the Company recognises a provision for
the full cost to rehabilitate the mine and a matching asset accounted
for within the non-current mining asset. The rehabilitation provision is
discounted using a risk-free rate, which is linked to the currency in
which the costs are expected to be incurred, and the applicable
inflation rate applied to the cash flows. The unwinding of the
discounting effect is recognised within finance expenses in the income
statement.
Share based payments
Equity-settled share-based payments
Where share options are awarded to employees, the fair value of the
options at the date of grant is charged to profit or loss over the
vesting period. Non-market vesting conditions are taken into account by
adjusting the number of equity instruments expected to vest at each
reporting date so that, ultimately, the cumulative amount recognised
over the vesting period is based on the number of options that
eventually vest. Market vesting conditions are factored into the fair
value of the options granted. As long as all other vesting conditions
are satisfied, a charge is made irrespective of whether the market
vesting conditions are satisfied. The cumulative expense is not adjusted
for failure to achieve a market vesting condition.
Where the terms and conditions of options are modified before they vest,
the increase in the fair value of the options, measured immediately
before and after the modification, is also charged to profit or loss
over the remaining vesting period.
Where equity instruments are granted to persons other than employees,
the fair value of goods and services received is charged to profit or
loss, except where it is in respect to costs associated with the issue
of shares, in which case, it is charged to the share premium account.
Cash-settled share-based payments
The Company also has cash-settled share-based payments arising in
respect of a performance programme (see Note 22). A liability is
recognised in respect of the fair-value of the benefit received under
the programme and charged to profit or loss over the vesting period. The
fair-value is re-measured at each reporting date with any changes taken
to profit or loss.
Remuneration shares
Where remuneration shares are issued to settle liabilities to employees
and consultants, any difference between the fair value of the shares on
the date of issue and the carrying amount of the liability is charged to
profit or loss.
Stripping costs
Costs incurred in stripping the overburden to gain access to mineral ore
deposits are accounted for as follows:
Stripping costs incurred during the development phase of the mine
(before production begins) are capitalised as part of the depreciable
cost of building, developing and constructing the mine. Capitalised
costs are amortised using the units of production method, once
production begins.
Stripping costs incurred during the production phase of the mine which
give rise to the production of usable inventory are accounted for in
accordance with the principles contained in the Group's policy on
Inventories. Stripping costs incurred in the production phase of the
mine which result in improved access to ore are capitalized and
recognized as additions to non-current assets provided that it is
probable that the future economic benefit from improved access to the
ore body associated with the stripping activity will flow to the Company,
that it is possible to identify the component of the ore body to which
access has been improved and that the costs relating to the stripping
activity associated with that component of the ore body can be measured
reliably.
Tax
The major components of income tax on the profit or loss include current
and deferred tax.
Current tax
Current tax is based on the profit or loss adjusted for items that are
non-assessable or disallowed and is calculated using tax rates that have
been enacted or substantively enacted by the reporting date.
Tax is charged or credited to the statement of comprehensive income,
except when the tax relates to items credited or charged directly to
equity, in which case the tax is also dealt with in equity.
Deferred tax
Deferred tax assets and liabilities are recognised where the carrying
amount of an asset or liability in the statement of financial position
differs to its tax base, except for differences arising on:
-- The initial recognition of goodwill;
-- The initial recognition of an asset or liability in a transaction which
is not a business combination and at the time of the transaction affects
neither accounting or taxable profit; and
-- Investments in subsidiaries and jointly controlled entities where the
Group is able to control the timing of the reversal of the difference and
it is probable that the differences will not reverse in the foreseeable
future.
Recognition of deferred tax assets is restricted to those instances
where it is probable that taxable profit will be available against which
the difference can be utilised.
The amount of the asset or liability is determined using tax rates that
have been enacted or substantively enacted by the reporting date and are
expected to apply when deferred tax liabilities/(assets) are
settled/(recovered). Deferred tax balances are not discounted.
New IFRS accounting standards
The following are the major new IFRS accounting standards in issue and
effective from 1 January 2019
IFRS 16 Leases
The principal impact of IFRS 16 will be to change the accounting
treatment by lessees of leases currently classified as operating leases.
Lease agreements will give rise to the recognition by the lessee of an
asset, representing the right to use the leased item, and a related
liability for future lease payments. Lease costs will be recognised in
the income statement in the form of depreciation of the right of use
asset over the lease term, and finance charges representing the unwind
of the discount on the lease liability. The adoption of IFRS 16 does not
materially impact the carrying value of lease liabilities given the
Group's negligible leasing exposure.
Notes to financial statements
for the period ended 30 April 2019
1 Segmental analysis
The Group operates in one business segment, the development and mining
of mineral assets. The Group has interests in two geographical segments
being Southern Africa (primarily Zimbabwe) and Europe (primarily
Romania).
The Group's operations are reviewed by the Board (which is considered to
be the Chief Operating Decision Maker ('CODM')) and split between mining
exploration and development and administration and corporate costs.
Exploration and development is reported to the CODM only on the basis of
those costs incurred directly on projects. All costs incurred on the
projects are capitalised in accordance with IFRS 6, including
depreciation charges in respect of tangible assets used on the projects.
Administration and corporate costs are further reviewed on the basis of
spend across the Group.
Decisions are made about where to allocate cash resources based on the
status of each project and according to the Group's strategy to develop
the projects. Each project, if taken into commercial development, has
the potential to be a separate operating segment. Operating segments
are disclosed below on the basis of the split between exploration and
development and administration and corporate.
Continuing operations Discontinued operations
Mining, exploration Admin Mining, exploration Admin
and development and corporate Total and development and corporate Total
Europe Africa Europe Africa
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Thirteen months to 30 April
2019
Revenue 3,328 - 104 3,432 - 31,243 - 31,243
Production costs (4,344) - - (4,344) - (18,527) - (18,527)
Gross profit (loss) (1,016) - 104 (912) - 12,716 - 12,716
Depreciation (1,200) - (6) (1,206) - (3,348) - (3,348)
Profit (loss) on sale of property,
plant and equipment 86 - (2) 84 - (8) - (8)
Share option and warrant expense - - (264) (264) - - - -
Sundry income 311 - - 311 - 670 - 670
Exchange (loss) gain (2,283) - (515) (2,798) - 6,494 (779) 5,715
Other administrative and overhead
expenses (1,516) - (2,806) (4,322) - (4,894) (22) (4,916)
Finance income - - 1 1 - 2 - 2
Finance expense (413) - (432) (845) - (1,014) - (1,014)
Profit on disposal of discontinued
operations - - - - - 8,649 - 8,649
Taxation (charge) - - - - - (1,408) (11) (1,419)
Profit (loss) for the year from
continuing operations (6,031) - (3,920) (9,951) - 17,859 (812) 17,047
30 April 2019 - - -
Total assets 13,611 - 1,169 14,780 - - - -
Total non-current assets 11,220 - 41 11,261 - - - -
Additions to non-current
assets 1,684 - 53 1,737 -14,371 - 14,371
Total current assets 2,441 - 1,078 3,519 - -
Total liabilities 8,434 - 1,044 9,478 - - - -
Continuing operations Discontinued operations
Mining, exploration Admin Mining, exploration Admin
and development and corporate Total and development and corporate Total
Europe Africa Europe Africa
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
12 Months to 31 March 2018
Revenue 3,098 - - 3,098 - 27,590 - 27,590
Production costs (4,298) - - (4,298) - (19,114) - (19,114)
Gross profit (loss) (1,200) - - (1,200) - 8,476 - 8,476
Depreciation (1,398) - (3) (1,401) - (1,460) - (1,460)
Profit (loss) on sale of property,
plant and equipment (23) - - (23) - 1 - 1
Share option and warrant expense - - (27) (27) - - - -
Sundry income 129 - 129 - 342 - 342
Exchange (loss) gain 1,451 - 850 2,301 - - - -
Other administrative and overhead
expenses (1,700) - (2,613) (4,313) - (741) (67) (808)
Finance income - - - - - 42 - 42
Finance expense (708) - - (708) - (462) (32) (494)
Loss on disposal of subsidiary
company loans - - (12,538) (12,538) - - - -
Taxation (charge) - - - - - (3,794) - (3,794)
Profit (loss) for the year
from continuing operations (3,449) (14,331) (17,780) 2,404 (99) 2,305
- -
31 March 2018 - -
Total assets 14,976 - 320 15,296 - 41,306 264 41,570
Total non-current assets 11,669 - 16 11,685 - 34,409 (1) 34,408
Additions to non-current assets 3,134 - - 3,134 - 6,063 - 6,063
Total current assets 3,186 - 425 3,611 - 6,898 264 7,162
Total liabilities 9,686 - 327 10,013 - 14,379 14,860 29,239
There are no non-current assets held in the Company's country of
domicile, being the United Kingdom (2018: $nil).
Revenue analysis by geographical location, product and customer
2019 2018
Group Group Group Group
$'000 $'000 $'000 $'000
Romania Zimbabwe Romania Zimbabwe
Gold bullion - 31,243 - 27,590
Mineral concentrates 3,328 - 3,098 -
Other 104 - - -
3,432 31,243 3,098 27,590
100% of gold bullion and mineral concentrate sales (2018: 100%) in both
Romania and Zimbabwe were made to a single customer in each respective
country.
Romanian revenues form part of continuing operations. All Zimbabwean
revenues form part of discontinued operations.
2 Group loss from operations
2019 2018
Group Group
$'000 $'000
Operating loss is stated after charging/
(crediting):
Auditors' remuneration (note 3) 105 129
Depreciation 1,206 1,401
Employee pension costs 43 61
Share option expense 264 27
Foreign exchange loss / (gain) 2,798 (2,301)
(Gain) / loss on disposal of property,
plant and equipment (84) 23
3 Auditor's remuneration from continuing operations
2019 2018
Group Group
$'000 $'000
Fees payable to the Company's auditor
for the audit of the Company's annual
accounts 59 83
Fees payable to the Company's auditor
for other services:
- Audit of the accounts of subsidiaries 46 46
- Other services - -
105 129
----- -----
Auditors remuneration from discontinued
operations 33 22
4 Finance expense from continuing operations
2019 2018
Group Group
$'000 $'000
Interest paid on secured borrowings 770 698
Interest paid on unsecured borrowings - 10
Interest paid on convertible loan 75 -
845 708
----- -----
Finance expense from discontinued operations 1,014 494
5 Taxation
There was no taxation charge for continuing operations during the year
(2018: US$ nil).
Taxation from discontinued activities
was as follows: 2019 2018
Group Group
$'000 $'000
Income tax on profits 485 -
Deferred tax charge 934 3,794
Tax charge (credit) 1,419 3,794
------ ------
Deferred tax assets are only recognised in the Group where the company
concerned has a reasonable expectation of future profits against which
the deferred tax asset may be recovered.
2019 2018
Group Group
$'000 $'000
The tax assessed for the year is
lower than the standard rate of corporation
tax in the UK. The differences are
explained as follows:
Profit / (loss) before taxation 8,515 (11,681)
Profit / (loss) before taxation at
the standard rate of corporation
tax in the UK of 19% (2018: 19%) 1,618 (2,219)
Difference in tax rates in foreign
jurisdictions 2,007 690
Income not chargeable to tax (4,629) (227)
Expenses not allowed for tax 1,308 350
Short term timing differences (1,056) (1,795)
Loss carried forward (1,237) (3,201)
Income tax charge on profits 485 -
Factors that may affect future tax
charges:
Tax losses 2019 2018 2019 2018
Group Group Company Company
$'000 $'000 $'000 $'000
Accumulated tax losses 49,558 61,423 31,152 28,903
However, these losses will only be recoverable against future profits,
the timing of which is uncertain, and a deferred tax asset has not been
recognised in respect of these losses. A deferred tax asset has not been
recognised in respect of accumulated tax losses for the Company.
6 Employees from both continuing and discontinued operations
2019 2018
Group Continuing Dis-continued Group Continuing Dis-continued
$'000 $'000 $'000 $'000 $'000 $'000
Staff costs (including
directors) consist of:
Wages and salaries --
management 1,383 753 630 987 513 474
Wages and salaries --
other 6,057 2,444 3,613 4,224 2,523 1,701
7,440 3,197 4,243 5,211 3,036 2,175
Consultancy fees 1,057 754 303 1,419 912 507
Social Security costs 257 165 92 229 162 67
Healthcare costs - - - - -
Pension costs 201 43 158 213 61 152
8,955 4,159 4,796 7,072 4,171 2,901
The average number of
employees (including
directors) during the
year was as follows:
Management 19 11 8 15 9 6
Other operations 590 208 382 371 213 158
609 219 390 386 222 164
7 Directors' remuneration
2019 2018
Group Group
$'000 $'000
Directors' emoluments 697 402
Company contributions to pension schemes - 14
Directors and key management remuneration 697 416
------ ------
The Directors are considered to be the key management of the Group and
Company.
Four of the Directors at the end of the period have share options
receivable under long term incentive schemes. The highest paid Director
received an amount of $244,166 over the thirteen-month period (2018:
$196,359).
Included within the above remuneration are amounts accrued at 30 April
2019
8 Earnings per share
30 Apr 2019 31 Mar 2018
Group Group
Profit and loss per ordinary share
has been calculated using the weighted
average number of ordinary shares in
issue during the relevant financial
year.
The weighted average number of ordinary
shares in issue for the period is: 5,887,042,985 4,821,870,747
Profit / (loss) for the period ($'000) 243 (17,295)
Profit / (loss) per share basic and
diluted (cents) 0.00 (0.36)
Profit / (loss) from continuing operations
for the period ($'000) (9,649) (17,898)
Profit / (loss) per share basic and
diluted continuing operations (cents) (0.16) (0.37)
Profit / (loss) from discontinued operations
for the period ($'000) 9,892 603
Profit / (loss) per share basic and
diluted discontinued operations (cents) 0.17 0.01
The effect of all potentially dilutive
share options is anti-dilutive.
9 Loss for the financial year
The Company has adopted the exemption allowed under Section 408(1b) of
the Companies Act 2006 and has not presented its own income statement in
these financial statements.
10 Property, plant and equipment
Fixtures, Capital
Plant and fittings Computer Motor Buildings Mining Work in
Group machinery and equipment assets vehicles and Improvements assets progress Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Cost at 1 April
2017 8,401 202 227 605 3,231 24,946 6,382 43,994
Additions during
the year 811 53 109 94 33 1,908 6,189 9,197
Reclassification 9,942 (30) 30 - 242 194 (10,378) -
Disposals during
the year (131) (62) (78) (60) (28) (2) - (361)
Impairment - - - - (34) - - (34)
Foreign exchange
movements 224 7 3 60 296 385 50 1,025
Cost at 31 March
2018 19,247 170 291 699 3,740 27,431 2,243 53,821
----------- --------------- --------- --------- ------------------ -------- ---------- --------
Additions during
the period 1,392 103 118 313 176 5,428 3,861 11,391
Acquired through
business
combination 2,812 21 102 2 1,790 - - 4,727
Reclassification 246 - - - 134 - (380) -
Disposals during
the period (14) - - - (82) - - (96)
Discontinued
operations (20,142) (243) (382) (707) (2,240) (26,188) (2,830) (52,732)
Foreign exchange
movements (338) (5) (11) (62) (306) (497) (110) (1,329)
Cost at 30 April
2019 3,203 46 118 245 3,212 6,174 2,784 15,782
----------- --------------- --------- --------- ------------------ -------- ---------- --------
Depreciation at 1
April 2017 2,963 119 139 283 345 978 604 5,431
Charge for the
year 1,826 21 79 114 152 670 - 2,862
Disposals during
the year (91) (62) (78) (34) (1) - - (266)
Foreign exchange
movements 100 5 - 42 42 71 - 260
Depreciation at
31 March 2018 4,798 83 140 405 538 1,719 604 8,287
----------- --------------- --------- --------- ------------------ -------- ---------- --------
Charge for the
year 2,710 44 162 100 210 1,222 106 4,554
Acquired through
business
combination 52 - 9 - - - - 61
Disposals during
the period (4) - - - - - - (4)
Discontinued
operations (5,402) (84) (238) (319) (68) (1,828) - (7,939)
Foreign exchange
movements (201) (8) (7) (54) (95) (73) - (438)
Depreciation at
30 April 2019 1,953 35 66 132 585 1,040 710 4,521
----------- --------------- --------- --------- ------------------ -------- ---------- --------
Net book value at
31 March 2018 14,449 87 151 294 3,202 25,712 1,639 45,534
Net book value at
31 March 2019 1,250 11 52 113 2,627 5,134 2,074 11,261
10 Property, plant and equipment (cont.)
Fixtures,
Plant and fittings Computer Motor Buildings
Company machinery and equipment assets vehicles and Improvements Total
$'000 $'000 $'000 $'000 $'000 $'000
Cost at 31
March 2017 30 5 23 - - 58
Additions
during the
year - - - - - -
Disposals
during the
year - - - - - -
Cost at 31
March 2018 30 5 23 - - 58
----------- --------------- --------- --------- ------------------ ------
Additions
during the
period - - 1 - - 1
Disposals
during the
period - - - - - -
Cost at 30
April 2019 30 5 24 - - 59
----------- --------------- --------- --------- ------------------ ------
Depreciation
at 31 March
2017 30 5 23 - - 58
Charge for
the year - - - - - -
Disposals
during the
year - - - - - -
Depreciation
at 31 March
2018 30 5 23 - - 58
----------- --------------- --------- --------- ------------------ ------
Charge for
the period - - - - - -
Disposals
during the
period - - - - - -
Depreciation
at 30 April
2019 30 5 23 - - 58
----------- --------------- --------- --------- ------------------ ------
Net book
value at 31
March 2018 - - - - - -
----------- --------------- --------- --------- ------------------ ------
Net book
value at 30
April 2019 - - 1 - - 1
----------- --------------- --------- --------- ------------------ ------
11 Investments in subsidiaries
2019 2018
Company Company
$'000 $'000
Cost at the beginning of the year 1,583 218
Additions during the year 90 1,365
Cost at the end of the year 1,673 1,583
------- -------
The principal subsidiaries of Vast Resources plc, all of which are
included in these consolidated Annual Financial Statements, are as
follows:
Country Proportion held
Company of registration Class by group Nature of business
------------------------ ----------------- --------- ----------------- ------------------
2019 2018
------------------------ ----------------- --------- ------ --------- ------------------
African Consolidated Mining exploration
Resources SRL Romania Ordinary 80% 80% and development
------------------------ ----------------- --------- ------ --------- ------------------
Millwall International
Investments Limited BVI Ordinary 100% 100% Holding company
------------------------ ----------------- --------- ------ --------- ------------------
Mining exploration
Moorestown Limited BVI Ordinary 100% 100% and development
------------------------ ----------------- --------- ------ --------- ------------------
Sinarom Mining Group Mining exploration
SRL Romania Ordinary 100% 100% and development
------------------------ ----------------- --------- ------ --------- ------------------
Vast Resources Romania
Ltd United Kingdom Ordinary 100% 100% Holding company
------------------------ ----------------- --------- ------ --------- ------------------
Vast Resources Zimbabwe Mining exploration
(Private) Limited Zimbabwe Ordinary 100% 100% and development
------------------------ ----------------- --------- ------ --------- ------------------
The table above shows the principal subsidiaries of the Company. A full
list of all group subsidiaries is given in Note 29, at the end of this
report.
12 Investment in joint venture and subsidiary company
On 1 April 2018 the Group acquired a 25.01% interest in Delta Gold
(Private) Limited ("Delta") for US$ 4.5 million which was held
indirectly through the Group's interest in Dallaglio Investments
(Private) Limited ("Dallaglio"). Delta is incorporated in Zimbabwe and
is the owner of the Eureka Gold Mine which at the time of the
acquisition was on care and maintenance. The goodwill arising on this
transaction was US$ 0.6 million
The Group previously held a 25.01% interest in a Joint venture,
Cordillera (Private) Limited (Cordillera), which was indirectly held
through the Group's interest in Breckridge Investments (Private) Limited,
the operating company for the Pickstone Peerless mine in Zimbabwe.
Cordillera is incorporated in Zimbabwe and its main interest is the
provision of custom milling services to artisanal miners operating in
the vicinity of the Pickstone Peerless Gold Mine. On 1 April 2018 the
Joint Venture was fully absorbed into the operations of Breckridge
Investments (Private) Limited.
Both of these investments have been disposed of as part of the Group's
disposal of its gold operations in Zimbabwe. The associated fixed asset
additions associated with these investments are disclosed within the
fixed asset note.
No detailed disclosures have been made of these transactions as, in the
opinion of the Directors, they are not material to the financial
statements.
13 Profit after taxation from discontinued operations
On 23rd April 2019, the Group disposed of its remaining 25.01% interest
in Dallaglio Investments (Private) Limited, the holding company for the
Pickstone Peerless and Eureka Gold mines in Zimbabwe. On 24th April
2019, the group disposed of its 100% interest in Canape Investments
(Private) Limited, the holding company for its gold investments in
Zimbabwe. The aggregate consideration received for these disposals was
$3.5 million.
The amounts included within the profit (loss) after taxation from
discontinued operations are as follows:
30 Apr 2019 31 Mar 2018
Group Group
$'000 $'000
Gain on disposal of operations 8,649 -
Profit after tax from discontinued
operations before Zimbabwe dollar devaluation 2,683 2,305
Profit after tax from discontinued
operations - devaluation gains 5,715 -
Total profit after taxation from discontinued
operations 17,047 2,305
=========== ===========
The net assets and non-controlling interests derecognised in arriving at
the gain on disposal are as follows:
$'000
Non current assets
Property, plant and equipment 44,793
Joint venture investments -
Total non-current assets 44,793
--------
Current assets
Inventories 3,045
Trade receivables 1,276
Available for sale investments
Cash and cash equivalents 1,908
Total current assets 6,229
--------
Non Current liabilities
Loans and borrowings 14,873
Provisions 240
Deferred tax liability 4,386
Total non-current liabilities 19,499
--------
Current liabilities
Trade payables 1,554
Loans and borrowings 5,743
Total current liabilities 7,297
--------
Attributable goodwill 566
Net assets de-recognised 24,792
========
Consideration received:
Cash 3,500
-
Total consideration received 3,500
========
Gain on disposal
Consideration received 3,500
Net assets derecognised (24,792)
Non-controlling interest de-recognised 29,941
Fair value of retained interest -
Cumulative gain/loss on financial assets at
FVTOCI reclassified on loss of control of subsidiaries -
Cumulative exchange differences in respect
of net assets of the subsidiaries reclassified
from equity on loss of control of subsidiaries -
Gain on disposal 8,649
========
The breakdown of the components of profit after tax from discontinued
operations in the period is as follows:
30 Apr 2019 31 Mar 2018
Group Group
$'000 $'000
Revenue 31,243 27,590
Cost of sales (18,527) (19,114)
Gross profit 12,716 8,476
Overhead expenses (1,887) (1,925)
Depreciation (3,348) (1,460)
(Loss) profit on disposal of fixed
assets (8) 1
Sundry income 670 342
Exchange gains 5,715 -
Other administrative expenses (4,916) (808)
-----------
Profit from operations 10,829 6,551
Finance income 2 42
Finance expense (1,014) (494)
Loss on disposal of interest in subsidiary
loans - -
Profit before taxation from continuing
operations 9,817 6,099
Taxation charge (1,419) (3,794)
Total profit after taxation for the
year 8,398 2,305
Other comprehensive income (3) -
Total comprehensive profit for the
period 8,395 2,305
=========== ===========
Total comprehensive profit attributable
to:
The equity holders of the parent company 1,249 613
Non-controlling interest 7,146 1,692
8,395 2,305
=========== ===========
Cash generated by / absorbed in:
2019 2018
Continuing Discontinued Continuing Discontinued
operations operations operations operations
Operating activities (7,872) 13,226 (5,131) 4,517
Investing activities (1,348) (11,983) (5,437) (2,059)
Financing activities 5,262 1,985 7,989 92
14 Loans to group companies
Loans to Group companies are repayable on demand. The treatment of this
balance as non-current reflects the Company's expectation of the timing
of receipt.
15 Inventory
Apr 2019 Mar 2018 Apr 2019 Mar 2018
Group Group Company Company
$'000 $'000 $'000 $'000
Minerals held for sale 61 1,484 - -
Production stockpiles 48 1,425 - -
Consumable stores 304 1,145 - -
413 4,054 - -
-------- -------- -------- --------
16 Receivables
Apr 2019 Mar 2018 Apr 2019 Mar 2018
Group Group Company Company
$'000 $'000 $'000 $'000
Trade receivables - 94 - -
Other receivables 1,502 1,145 137 29
Short term loans 174 789 224 50
Prepayments 74 1,366 - 14
VAT 787 2,012 - -
2,537 5,406 361 93
-------- -------- -------- --------
Of which: not impaired
as at 30 April 2019 and
past due in the following
Of which: periods:
------------------------------------------
Neither
Carrying impaired More than
amount before nor past three months
deducting Related due on Not more and not
any impairment Impairment Net carrying 30 April than three more than More than
loss loss amount 2019 months six months six months
Trade
receivables 707 707 - - - - -
Other
receivables 1,704 202 1,502 1,502 - - -
---------------- ------------- ---------- ------------ -------------- ------------
2,411 909 1,502 1,539 - - -
============= ========== ============ ============== ============
At the reporting date, included within VAT receivable is an amount in
respect of VAT owed to African Consolidated Resources SRL of US$ 710,362
(RON 3,014,349) The amount represents VAT paid on the Baita Plai Mine's
care and maintenance operations. As reported last year, ANAF, the
Romanian revenue authority had refused to accept aforesaid amount as a
legitimate VAT receivable as a mining licence was not then in place for
Baita Plai Mine. On 15th October 2018, the mining licence was granted.
The Romanian Court has instructed an independent VAT audit and,
subsequent to the reporting date, the audit has been completed
satisfactorily and supports the Group's claim for repayment.
17 Loans and borrowings
Non-current secured borrowings consist of:
Apr 2019 Mar 2018 Apr 2019 Mar 2018
Group Group Company Company
$'000 $'000 $'000 $'000
Non-current
Secured borrowings 4,043 8,149 - -
Unsecured borrowings - 14,838 - -
less amounts payable in less than 12
months - (352) - -
4,043 22,635 - -
-------- -------- -------- --------
Current
Secured borrowings 978 -
Unsecured borrowings 498 2,664 309 -
Bank overdrafts - 1,315 -
Current portion of long-term
borrowings - 352 - -
1,476 4,331 - -
-------- -------- -------- --------
Total loans and borrowings 5,519 26,966 309 -
Non-current secured borrowings consist of:
-- US$ 4,000,000 (2018: US$ 4,000,000) secured offtake finance from Mercuria
Energy Trading SA. The loan is secured by a pledge on 49.9% of the shares
of the Group's subsidiary Sinarom Mining Group SRL and bore annual
interest of 9.4%.
-- US$ 43,449 (2018: US$ 69,131) asset financing loans secured on the
underlying movable assets belonging to ACR SRL.
Current secured borrowing consists of:
-- US$ 978,453 (2018: US$ 4,080,000) loan from Sub-Sahara Goldia Investments
Ltd secured by a pledge over 50.1% of the shares of the Group's
subsidiary Sinarom Mining Group SRL. The loan bears interest at 12% per
annum and is repayable within the year.
Current unsecured borrowing consists of:
-- US$ 189,072 (2018: US$ 220,156) loans from the non-controlling interests
in African Consolidated Resources SRL, the holder of the rights to the
Baita Plai Mine. The loans from the non-controlling interests are
interest free and have no fixed terms of repayment. There is no
expectation that this loan will be called.
-- US$ 309,635 (2018: nil) loan from M Semere bearing an interest rate of
6%. There is no expectation that this loan will be called.
Reconciliation of liabilities arising from financing activities
Non cash changes
Accrued
Amortised Loans interest
1 Apr Cash finance repaid Disposal Exchange in other 30 Apr
2018 -flows charges in shares of liabilities adjustments payables 2018
2019 Group $'000s $'000s $'000s $'000s $'000s $'000s $'000s $'000s
Long-term borrowings 22,635 (3,754) 412 - (14,873) 35 (412) 4,043
Short-term borrowings 4,331 7,896 1,435 (900) (5,743) (5,543) - 1,476
Total liabilities
from financing activities 26,966 4,142 1,847 (900) (20,616) (5,508) (412) 5,519
Non cash changes
Amortised Loan
1 Apr finance Loss on disposal 31 Mar
2017 Cashflows charges loan disposal Cashflows* 2018
2018 Group $'000s $'000s $'000s $'000s $'000s $'000s
Long-term borrowings 3,166 3,923 708 12,538 2,300 22,635
Short-term borrowings 3,935 (98) 494 - 4,331
Total liabilities from
financing activities 7,101 3,825 1,202 12,538 2,300 26,966
------ --------- --------- -------------- ----------- ------
*Loan disposal cashflows are included in investing activities
Reconciliation of external
interest costs
2019 2018
Group Group
$'000s $'000s
Amortised finance charges -
short-term borrowings 1,435 494
Amortised finance charges -
long-term borrowings 412 708
Total external interest for
the period 1,847 1,202
------ ------
18 Trade and other payables
Apr 2019 Mar 2018 Apr 2019 Mar 2018
Group Group Company Company
$'000 $'000 $'000 $'000
Trade payables 1,193 5,719 288 186
Other payables 1,033 769 470 106
Other taxes and social
security taxes 1,027 980 10 28
Accrued expenses 217 91 - -
3,470 7,559 768 320
-------- -------- -------- ----------
Maturity profile for trade and other
payables
150 days
Amount 30 days 60 days 90 days 120 days or more
Trade
payables 1,193 365 57 170 105 496
Other
payables 1,033 709 171 8 4 141
19 Provisions
Apr Mar Apr Mar
2019 2018 2019 2018
Group Group Company Company
$'000 $'000 $'000 $'000
Provision for rehabilitation of mining
properties
- Provision brought forward from previous
periods 1,397 1,095 - -
- Derecognised on disposal of subsidiary (908) 302 - -
489 1,397 - -
------ ------- ------- -------
As more fully set out in the Statement of Accounting Policies on page
33, the Group provides for the cost of the rehabilitation of a mining
property on the cessation of mining. Provision for this cost is
recognised from the commencement of mining activities.
This provision accounts for the estimated full cost to rehabilitate the
mine at Manaila according to good practice guidelines in the country
where the mine is located, which may involve more than the stipulated
minimum legal commitment. The comparative figures include provisions in
respect of Pickstone Peerless which was divested in April 2019.
When accounting for the provision the Group recognises a provision for
the full cost to rehabilitate the mine and a matching asset accounted
for within the non-current mining asset.
20 Financial instruments -- risk management
Significant accounting policies
Details of the significant accounting policies in respect of financial
instruments are disclosed on page 31. The Group's financial instruments
comprise available for sale investments, cash and items arising directly
from its operations such as other receivables, trade payables and loans.
Financial risk management
The Board seeks to minimise its exposure to financial risk by reviewing
and agreeing policies for managing each financial risk and monitoring
them on a regular basis. No formal policies have been put in place in
order to hedge the Group and Company's activities to the exposure to
currency risk or interest risk; however, the Board will consider this
periodically. No derivatives or hedges were entered into during the
year.
The Group and Company is exposed through its operations to the following
financial risks:
--
-- Credit risk
-- Market risk (includes cash flow interest rate risk and foreign
currency risk)
-- Liquidity risk
The policy for each of the above risks is described in more detail
below.
The principal financial instruments used by the Group, from which
financial instruments risk arises are as follow:
--
-- Receivables
-- Cash and cash equivalents
-- Trade and other payables (excluding other taxes and social
security) and loans
-- Available for sale investments
The table below sets out the carrying value of all financial instruments
by category and where applicable shows the valuation level used to
determine the fair value at each reporting date. The fair value of all
financial assets and financial liabilities is not materially different
to the book value.
2019 2018 2019 2018
Group Group Company Company
$'000 $'000 $'000 $'000
Loans and receivables
Cash and cash equivalents 569 1,300 218 208
Receivables 2,537 5,406 361 93
Loans to Group Companies - - 34,568 25,179
Available for sale financial
assets
Available for sale investments
(valuation level 1) - 13 - 3
Other liabilities
Trade and other payables (excl.
short term loans) 3,470 7,559 768 320
Loans and borrowings 5,519 26,966 309 -
Credit risk
Financial assets, which potentially subject the Group and the Company to
concentrations of credit risk, consist principally of cash, short-term
deposits and other receivables. Cash balances are all held at recognised
financial institutions. Other receivables are presented net of
allowances for doubtful receivables. Other receivables currently form
an insignificant part of the Group's and the Company's business and
therefore the credit risks associated with them are also insignificant
to the Group and the Company as a whole.
The Company has a credit risk in respect of inter-company loans to
subsidiaries. The recoverability of these balances is dependent on the
commercial viability of the exploration activities undertaken by the
respective subsidiary companies. The credit risk of these loans is
managed as the directors constantly monitor and assess the viability and
quality of the respective subsidiary's investments in intangible mining
assets.
Maximum exposure to credit risk
The Group's maximum exposure to credit risk by category of financial
instrument is shown in the table below:
2019 2019 2018 2018
Carrying Maximum Carrying Maximum
value exposure value exposure
$'000 $'000 $'000 $'000
Cash and cash equivalents 569 1,620 1,300 1,817
Receivables 2,537 10,454 5,406 6,941
The Company's maximum exposure to credit risk by class of financial
instrument is shown in the table below:
2019 2019 2018 2018
Carrying Maximum Carrying Maximum
value exposure value exposure
$'000 $'000 $'000 $'000
Cash and cash equivalents 218 8,964 208 1,663
Receivables 361 342 93 1,540
Loans to Group Companies 34,568 36,237 25,179 40,132
Market risk
Cash flow interest rate risk
The Group has adopted a non-speculative policy on managing interest rate
risk. Only approved financial institutions with sound capital bases are
used to borrow funds and for the investments of surplus funds.
The Group and the Company seeks to obtain a favourable interest rate on
its cash balances through the use of bank deposits. At the reporting
date, the Group had a cash balance of $0.569 million (2018: $1.300
million) which was made up as follows:
2019 2018
Group Group
$'000 $'000
Sterling 218 106
United States Dollar 205 1,131
Euro - 1
Lei (Romania) 31 62
Zimbabwe Dollar 115 -
569 1,300
-------- --------
At the reporting date, the Company had a cash balance of $0.218 million
(2018: $0.208 million) which was made up as follows:
2019 2018
Company Company
$'000 $'000
Sterling 218 106
United States Dollar - 102
Euro - -
Lei (Romania) - -
218 208
-------- --------
The Group had interest bearing debts at the current year end of US$
5.330 million (2018: US$ 9.464 million). These are made up as follows:
Interest 2019 2018 2019 2018
rate Group Group Company Company
$'000 $'000 $'000 $'000
Secured long-term loans 9.4% 4,043 8,149 - -
Secured short-term loans 12% 978
Unsecured loans 6% 309 309
Bank overdraft 12% - 1,315 - -
-------- --------
5,330 9,464 309 -
-------- --------
These loans are repayable
as follows:
- Within 1 year 1,287 2,000 309 -
- Between 1 and 2 years 4,043 3,667 - -
- In more than 2 years - 3,797 - -
Borrowings of US$ 4 million carry a floating interest rate with the
remainder having fixed rates. An increase in interest rates of 1% would
increase the annual finance expense by US$ 40,000.
Foreign currency risk
Foreign exchange risk is inherent in the Group's and the Company's
activities and is accepted as such. The majority of the Group's expenses
are denominated in United States Dollars and therefore foreign currency
exchange risk arises where any balance is held, or costs incurred, in
currencies other than United States Dollars. At 30 April 2019 and 31
March 2018, the currency exposure of the Group was as follows:
Sterling US Dollar Euro Other Total
At 30 April 2019 $'000 $'000 $'000 $'000 $'000
Cash and cash equivalents 218 205 - 146 569
Trade and other receivables 162 387 - 1,989 2,537
Trade and other payables (320) (902) - (2,271) (3,493)
Available for sale - - - - -
investments
At 31 March 2018
Cash and cash equivalents 106 1,131 1 62 1,326
Trade and other receivables 14 4,026 - 1,366 5,960
Trade and other payables (258) (3,246) (42) (4,013) (7,559)
Available for sale investments - 13 - - 13
The effect of a 10% strengthening of Sterling against the US dollar at
the reporting date, all other variables held constant, would have
resulted in decreasing post tax losses by $5,952 (2018: $13,527
decrease). Conversely the effect of a 10% weakening of Sterling against
the US dollar at the reporting date, all other variables held constant,
would have resulted in increasing post tax losses by $5,952 (2018:
$13,527 decrease)
At 30 April 2019 and 31 March 2018, the currency exposure of the Company
was as follows:
Sterling US Dollar Euro Other Total
At 30 April 2019 $'000 $'000 $'000 $'000 $'000
Cash and cash equivalents 218 - - - 218
Trade and other receivables 137 943 - - 1,080
Loans to Group companies 34,568 - 34,568
Trade and other payables (320) (470) - - (790)
Available for sale - - - -
investments
At 31 March 2018
Cash and cash equivalents 106 102 - - 208
Other receivables 14 79 - - 93
Loans to Group companies 1,286 22,686 1,207 - 25,179
Trade and other payables (258) (82) - - (340)
Available for sale investments - 3 - - 3
Liquidity risk
Any borrowing facilities are negotiated with approved financial
institutions at acceptable interest rates. All assets and liabilities
are at fixed and floating interest rate. The Group and the Company seeks
to manage its financial risk to ensure that sufficient liquidity is
available to meet the foreseeable needs both in the short and long term.
See also references to Going Concern disclosures in the Strategic Report
on page 9.
As set out in Note 18, of the consolidated trade and other payables
balance of $2.226 million, $1,302 million is due for payment within 60
days of the reporting date. The maturity profile of interest bearing
debts are highlighted above.
Capital
The objective of the Directors is to maximise shareholder returns and
minimise risks by keeping a reasonable balance between debt and equity.
In previous years the Company and Group has minimised risk by being
purely equity financed. In the current year, the Group has assumed debt
risk but has kept the net debt amount as low as possible.
The Group's debt to equity ratio is
93.4% (2018: 145.7%), calculated as
follows: Apr 2019 Mar 2018
$000's $'000
Loans and borrowings 5,519 26,966
Less: cash and cash equivalents (569) (1,300)
Net debt 4,950 25,666
Total equity 5,302 17,614
Debt to capital ratio (%) 93.4% 145.7%
21 Share capital
Ordinary 0.1p Deferred 0.9p Share premium
Nominal Nominal
No of shares value No of shares value
As at 31 March
2017 4,663,404,459 6,570 863,562,664 12,850 74,802
Issued during the
year * 461,882,523 620 - - 2,435
As at 31 March
2018 5,125,286,982 7,190 863,562,664 12,850 77,237
Issued during the
year * 2,819,884,329 3,662 - - 4,448
As at 30 April
2019 7,945,171,311 10,852 863.,562,664 12,850 81,685
* Details of the shares issued during the year are as shown in the table
below and in the Statement of Changes of Equity on pages 25-26.
There were no shares reserved for issue under share options at 30 April
2019 (2018: nil).
The deferred shares carry no rights to dividends or to participate in
any way in the income or profits of the Company. They may receive a
return of capital equal to the amount paid up on each deferred share
after the ordinary shares have received a return of capital equal to the
amount paid up on each ordinary share plus GBP10,000,000 on each
ordinary share, but no further right to participate in the assets of the
Company. The Company may, subject to the Statutes, acquire all or any
of the deferred shares at any time for no consideration. The deferred
shares carry no votes.
The ordinary shares carry all the rights normally attributed to ordinary
shares in a company subject to the rights of the deferred shares.
See also Note 27 on page 61 for details of share issues after the
reporting date.
Date of issue No of shares Issue Purpose of issue
price
(pence)
2018
4 Apr 17 6,116 0.5 Exercise of open offer warrants
1 Jun 17 20,000,000 0.5 Exercise of open offer warrants
14 Jun 17 51,386 0.5 Exercise of open offer warrants
26 Jul 17 225,017 0.5 Exercise of open offer warrants
9 Oct 17 2,228 0.5 Exercise of open offer warrants
17 Oct 17 2,112 0.5 Exercise of open offer warrants
27 Oct 17 1,061,060 0.5 Exercise of open offer warrants
30 Oct 17 183,180 0.5 Exercise of open offer warrants
1 Nov 17 265,161 0.5 Exercise of open offer warrants
3 Nov 17 36,794 0.5 Exercise of open offer warrants
21 Nov 17 190,476,190 0.525 Issued for cash to investors
21 Nov 17 1,000,000 0.5 Exercise of open offer warrants
27 Nov 17 807,018 0.5 Exercise of open offer warrants
6 Dec 17 382,062 0.5 Exercise of open offer warrants
11 Dec 17 234,261,876 0.525 Open offer to existing shareholders
13 Dec 17 123,553 0.5 Exercise of open offer warrants
22 Dec 17 1,250,956 0.5 Exercise of open offer warrants
29 Dec 17 163,147 0.5 Exercise of open offer warrants
30 Jan 18 541,204 0.5 Exercise of open offer warrants
1 Feb 18 5,799 0.5 Exercise of open offer warrants
22 Feb 18 8,000,000 0.5 Exercise of open offer warrants
9 Mar 18 37,664 0.5 Exercise of open offer warrants
23 Mar 18 3,000,000 0.5 Exercise of open offer warrants
461,882,523
2019
5 Apr 2018 8,200,000 0.5 Exercise of open offer warrants
10 May 2018 244,240 0.5 Exercise of open offer warrants
15 May 2018 513,456 0.5 Exercise of open offer warrants
23 May 2018 300,000 0.5 Exercise of open offer warrants
31 May 2018 539,280 0.5 Exercise of open offer warrants
22 Jun 2018 78,701 0.5 Exercise of open offer warrants
27 Jun 2018 238,095,238 0.525 Placing
24 Jul 2018 2,426,640 0.5 Exercise of open offer warrants
2 Aug 2018 400,000 0.5 Exercise of open offer warrants
7 Aug 2018 1,384,087 0.5 Exercise of open offer warrants
28 Aug 2018 3,000,000 0.5 Exercise of open offer warrants
29 Aug 2018 14,043 0.5 Exercise of open offer warrants
29 Aug 2018 133,914,127 0.645 Subscription
29 Sep 2018 354,006 0.5 Exercise of open offer warrants
12 Oct 2018 13,920 0.5 Exercise of open offer warrants
16 Oct 2018 57,331 0.5 Exercise of open offer warrants
18 Oct 2018 70,847,785 0.6 Placing
18 Oct 2018 16,666,666 0.6 Exercise of open offer warrants
2 Nov 2018 188,679,245 0.53 Placing
5 Dec 2018 153,810 0.5 Exercise of open offer warrants
7 Dec 2018 576,835 0.5 Exercise of open offer warrants
Subscription (Bergen convertible
18 Dec 2018 68,000,000 0.1 security)
4 Jan 2019 13,754 0.5 Exercise of open offer warrants
Exercise of conversion rights (Bergen
18 Jan 2019 164,469,356 0.24 convertible security)
Exercise of conversion rights (Bergen
4 Feb 2019 255,604,120 0.12 convertible security)
13 Feb 2019 550,000,000 0.135 Placing
13 Feb 2019 74,074,074 0.135 Subscription
13 Feb 2019 29,629,629 0.135 Subscription
13 Feb 2019 10,000,000 0.135 Subscription
4 Mar 2019 550,000,000 0.153 Placing
4 Mar 2019 7,189,542 0.153 Subscription
12 Apr 2019 407,407,407 0.135 Placing
12 Apr 2019 7,407,407 0.135 Subscription
12 Apr 2019 29,629,630 0.135 Subscription
2,819,884,329
Directors and Management financing agreement
As previously reported, on 6 January 2016 the Directors of the Company,
together with certain senior managers, subscribed an aggregate amount of
GBP0.5 million for new ordinary shares of 0.1p each in the Company,
together with one warrant for each share issued; these warrants carry an
entitlement either to one share at a price of 130 per cent of the issue
price of the shares to which the warrant related or to a number of
shares to be determined by a calculation based on a Black Scholes
valuation of the shares at the time of exercise. 62,500,000 new Ordinary
Shares were issued by the Company together with 62,500,000 warrants.
As at 31 March 2018, the Directors and senior managers held 5,208,313
unexercised warrants. None of these have been exercised in the current
year and all remain unexercised at 30 April 2019. The last date for
exercise is 31 March 2021.
Existing shareholders financing agreement
As reported in the report for the year to 31 March 2016, on 4 March 2016
the Company entered into an agreement with a number of existing
shareholders (the "Investors") for their subscription for up to GBP0.8
million, on similar terms as those agreed with the Directors and
Management, detailed above. A total of 190,211,632 shares were
subscribed for; in addition, 190,211,632 warrants were issued.
At 31 March 2018 there remained 6,613,756 warrants unexercised by these
investors. None of these have been exercised in the current year and all
remain unexercised at 30 April 2019. The last date for exercise is 31
March 2021.
22 Share based payments
Equity -- settled share-based payments
The Company has granted share options and warrants to Directors, staff
and consultants.
In June 2015, the Company also established a Share Appreciation Scheme
to incentivise Directors and senior executives. The basis of the Scheme
is to grant a fixed number of 'share appreciation rights' (SARs) to
participants. Each SAR is credited rights to receive at the discretion
of the Company ordinary shares in the Company or cash to a value of the
difference in the value of a share at the date of exercise of rights and
the value at date of grant. The SARS are subject to various performance
conditions.
The tables below reconcile the opening and closing number of SAR's in
issue at each reporting date:
In issue
at In issue
Exercise 31 March Issued during Lapsed during Exercised at 30 April Final exercise
price 2018 year year during year 2019 date
Options
0.3p - 20,000,000 - - 20,000,000 March 2022
0.45p 5,000,000 - - - 5,000,000 June 2020
0.5p 50,500,000 - (2,500,000) - 48,000,000 March 2022
0.5p 50,500,000 - (2,500,000) - 48,000,000 March 2023
0.7p 24,500,000 - (24,500,000) - - March 2019
0.7p 28,500,000 - - - 28,500,000 March 2020
159,000,000 20,000,000 (29,500,000) - 149,500,000
In issue
at In issue
Exercise 31 March Issued during Lapsed during Exercised at 31 March Final exercise
price 2017 year year during year 2018 date
Options
0.45p 5,000,000 - 5,000,000 June 2020
0.5p - 50,500,000 - 50,500,000 March 2022
0.5p - 50,500,000 - 50,500,000 March 2023
0.7p 56,500,000 - (32,000,000) - 24,500,000 March 2019
0.7p 40,500,000 - (12,000,000) - 28,500,000 March 2020
97,000,000 106,000,000 (44,000,000) - 159,000,000
The tables below reconcile the opening and closing number of share
options and warrants in issue at each reporting date:
In issue
at In issue
Exercise 31 March Issued during Lapsed during Exercised at 30 April Final exercise
price 2018 year year during year 2019 date
Warrants
0.4p 5,425,000 - - - 5,425,000 October 2019
December
0.5p 547,274,243 - - (18,270,103) 529,004,140 2019*
variable 14,583,250 - - - 14,583,250 January 2021
variable 6,613,756 - - - 6,613,756 March 2021
573,896,249 - - (18,270,103) 555.626.146
variable 565,000,000 - - - 565,000,000 See note*
1,138,986,249 - - (18,270,103) 1,120,626,146
*Extended from June 2019
In issue
at In issue
Exercise 31 March Issued during Lapsed during Exercised at 31 March Final exercise
price 2017 year year during year 2018 date
Warrants
0.4p 5,425,000 - - - 5,425,000 October 2019
December
0.5p 6,659,903 - - (6,659,903) - 2017
0.5p 564,418,700 - - (17,144,457) 547,274,243 June 2019
December
0.5p 13,340,097 - - (13,340,097) - 2017
variable 14,583,250 - - - 14,583,250 January 2021
variable 6,613,756 - - - 6,613,756 March 2021
611,040,706 - - (37,144,457) 573,896,249
variable - 565,000,000 - - 565,000,000 See note
611,040,706 565,000,000 - (37,144,457) 1,138,896,249
Note: These warrants are only exercisable in the event of a default in
repayment of the Mercuria Tranche A pre-payment off-take facility of US$
4,500,000 (Mercuria Warrants).
2019 2018
Weighted Weighted
average average
exercise exercise price
price (pence) Number (pence) Number
Outstanding at the beginning
of the year 0.44 732,896,249 0.43 708,040,706
Granted during the year 0.30 20,000,000 0.50 106,000,000
Lapsed during the year 0.44 (47,770,103) 0.75 (44,000,000)
Exercised during the year - (18,270,103) - 37,114,457
Outstanding at the end of the
year 0.45 686,856,043 0.44 732,896,249
Exercisable at the end of the
year 0.43 613,856,043 0.41 701,040,706
The weighted average remaining lives of the SARs, share options or
warrants outstanding at the end of the period is 34 months (2018: 22
months). Of the 686,856,043 SARs, options and warrants outstanding at 30
April 2019 (2018: 732,896,249), 613,856,043 (2018: 701,040,706) are
fully vested in the holders and are exercisable at that date.
Fair value of share options
The fair values of share options and warrants granted have been
calculated using the Black Scholes pricing model which takes into
account factors specific-to-share incentive plans such as the vesting
periods of the plan, the expected dividend yield of the Company's shares
and the estimated volatility of those shares. Based on the above
assumptions, the fair values of the options granted are estimated to be:
Share Option Share price Risk free
Grant or Warrant Vesting at date Life Dividend interest Fair
date Value periods of grant Volatility (years) yield rate value
Apr 16 variable Mar-21 0.240p 135% 5.00 nil 1.5% .2055p
Jul-16 variable Mar-21 0.360p 135% 5.00 nil 1.5% .3082p
Jul-16 0.5p Jun-19 0.315p 76% 4.11 nil 0.63% 0.5670p
Aug-16 0.5p Jun-19 0.265p 76% 4.01 nil 0.34% 0.0522p
Aug-16 0.5p Jun-19 0.290p 76% 3.97 nil 0.34% 0.0664p
Oct-16 variable Mar-21 0.280p 135% 5.00 nil 1.5% 0.2397p
Oct-16 0.4p Oct-19 0.320p 76% 3.97 nil 0.18% 0.1012p
Volatility has been based on historical share price information. A
higher rate of volatility is used when determining the fair value of
certain options in order to reflect the special conditions attached
thereto.
Based on the above fair values the expense arising from equity-settled
share options and warrants made was $263,967 (2018: $26,747).
Cash-settled share-based payments
The Directors of the Company had set up an Employee Benefit Trust (EBT)
in which a number of employees and directors were participants (the
'Participants'). The EBT held shares on behalf of Participants until
such time as those Participants exercised their right to require the EBT
to sell the shares. On the sale of the shares the Participants would
have received the appreciation of the value in the shares above the
market price on the date that the shares were purchased by the EBT,
subject to the first 5% in growth in the share price, on an annual
compound basis, being retained by the EBT. The Participants were to pay
0.01p per share to acquire their rights.
In view of the large reduction in the Company's share price since the
EBT was set up, the value of the rights of the Participants under the
EBT has become negligible, and accordingly the EBT has been terminated
by the sale of the shares and the application of the sale proceeds in
repayment of the loan by The Company to the EBT.
In the event of an increase in the Company's share price to a figure
substantially in excess of 6p, the Company would have a liability to
Participants equal to the rights that the Participants would have had
under the EBT.
The EBT rights of Participants are set out in the table below.
Exercised Lapsed Granted
Outstanding during during during Outstanding Date
Exercise at 31 March last 13 Last 13 last 13 at 30 April exercisable
price 2018 months months months 2019 from
8.75p 6,000,000 - - - 6,000,000 July 2010
8.75p 6,000,000 - - - 6,000,000 July 2011
9.00p 2,500,000 - - - 2,500,000 August 2011
9.00p 2,500,000 - - - 2,500,000 August 2012
6.00p 7,750,000 - - - 7,750,000 August 2012
6.00p 7,750,000 - - - 7,750,000 August 2013
32,500,000 - - - 32,500,000
As at 30 April 2019 a total of 32,500,000 of the EBT
participation rights were exercisable.
Exercised Lapsed Granted
Outstanding during during during Outstanding Date
Exercise at 31 March last 12 Last 12 last 12 at 31 March exercisable
price 2017 months months months 2018 from
8.75p 6,000,000 - - - 6,000,000 July 2010
8.75p 6,000,000 - - - 6,000,000 July 2011
9.00p 2,500,000 - - - 2,500,000 August 2011
9.00p 2,500,000 - - - 2,500,000 August 2012
6.00p 7,750,000 - - - 7,750,000 August 2012
6.00p 7,750,000 - - - 7,750,000 August 2013
32,500,000 - - - 32,500,000
As at 31 March 2018 a total of 32,500,000 of the EBT
participation rights were exercisable.
Fair value of Participants' rights
The fair values of the rights granted to participants under the EBT have
been calculated using a Black Scholes valuation model. Based on the
assumptions set out in the table below, as well as the limitation on the
growth in share price attributable to the participants (as set out in
the table above) the fair-values are estimated to be:
Rights
exercisable
from: Jul 2010 Jul 2011 Aug 2011 Aug 2012 Aug 2012 Aug 2013
Grant date Aug 2009 Aug 2009 Oct 2010 Oct 2010 Sep 2011 Sep 2011
Validity of
grant 10 years 10 years 10 years 10 years 10 years 10 years
Aug 2009 Aug 2009 Oct 2010 Oct 2010
Vesting - Jul - Jul - Aug - Aug Sep 2011- Sep 2011-
periods 2010 2011 2011 2012 Aug 2012 Aug 2013
Share price
at date of
grant 8.75p 8.75p 9.00p 9.00p 6.00p 6.00p
Volatility 51% 51% 51% 51% 51% 51%
Dividend
yield Nil Nil Nil Nil Nil Nil
Risk free
investment
rate 0.65% 0.65% 0.65% 0.65% 0.65% 0.65%
Fair value Nil Nil Nil Nil Nil Nil
The Group has recorded liabilities in respect of the Participants'
rights of $nil and $nil in 2018 and 2019. Fair value is determined by
using the Black Scholes model using the assumptions noted in the above
table. The Group recorded total expenses of $nil and $nil in 2018 and
2019, respectively. The total intrinsic value at 31 December 2018 and
2019 was $nil and $nil, respectively.
Volatility has been calculated by reference to historical share price
information.
Warrant and Share option expense
2019Group$'000 2018Group$'000
Warrant and share option expense:
- In respect of remuneration contracts 264 27
- In respect of financing arrangements - -
Total expense / (credit) 264 27
23 Reserves
Details of the nature and purpose of each reserve within owners' equity
are provided below:
-- Share capital represents the nominal value at 0.1p each of the shares in
issue.
-- Share premium represents the balance of consideration received net of
fund raising costs in excess of the par value of the shares.
-- The share options reserve represents the accumulated balance of share
benefit charges recognised in respect of share options granted by the
Company, less transfers to retained losses in respect of options
exercised or lapsed.
-- The foreign currency translation reserve represents amounts arising on
the translation of the Group and Company financial statements from
Sterling to United States Dollars, as set out in the Statement of
Accounting Policies on page 32, prior to the change in functional
currency to United States Dollars, together with cumulative foreign
exchange differences arising from the translation of the Financial
Statements of foreign subsidiaries; this reserve is not distributable by
way of dividends.
-- The available for sale reserve represents the gains/(losses) arising on
recognising financial assets classified as available for sale at fair
value.
-- The retained deficit reserve represents the cumulative net gains and
losses recognised in the Group statement of comprehensive income.
24 Non-controlling Interests
The non-controlling interests (NCI) in Dallaglio Investments (Private)
Limited and its subsidiaries, together with the NCI in Ronquil
Enterprises (Private) Limited, were de-recognised on the disposal of the
Group's interests in both Companies, as more fully set out in Note 13.
African Consolidated Resources SRL is an 80% owned subsidiary of the
Company which also has an NCI. This follows the merger of this company
with Mineral Mining in February 2016.
Summarised financial information for these three entities, before
intra-group eliminations, is presented below together with amounts
attributable to NCI:
African Ronquil
Dallaglio Consolidated Enterprises
Investments Resources (Private) Total
& subsidiaries SRL Limited NCI
For the period ended 30 April
2019 $000's $000's $000's $000's
Revenue 31,243 418 - 31,661
Cost of sales (18,527) (219) - (18,746)
Gross Profit (loss) 12,716 199 - 12,915
Overhead expenses (750) (1,764) (17) (2,531)
Operating profit (loss) 11,966 (1,565) (17) 10,384
Finance expense (1,012) (3) - (1,015)
Loss before tax 10,954 (1,568) (17) 9,369
Tax expense / credit (1,408) - - (1,408)
Profit (loss) after tax 9,546 (1,568) (17) 7,961
Total comprehensive profit
(loss)
allocated to NCI 7,155 (293) (9) 6,853
Cash flows from operating
activities 13,226 (574) - 12,652
Cash flows from investing
activities (13,575) (1,690) - (15,265)
Cash flows from financing
activities 1,985 2,264 - 4,249
Net cash inflows/(outflows) 1,636 - - 1,636
As at 30 April 2019 $000's $000's $000's $000's
Assets:
Property plant and equipment - 7,125 - 7,125
Inventory - 8 - 8
Receivables - 830 - 830
Liabilities: - -
Loans and other borrowings - 700 - 700
Trade and other payables - 1,479 - 1,479
Accumulated non-controlling
interests - (41) - (41)
Ronquil
African Consolidated Sinarom Enterprises
Dallaglio Resources Mining Group (Private) Total
and subsidiaries SRL SA Limited NCI
For the year ended 31
March 2018 $000's $000's $000's $000's $000's
Revenue 27,590 664 3,098 - 31,352
Cost of sales (19,114) - (4,298) - (23,412)
Gross Profit (loss) 8,475 664 (1,200) - 7,939
Administrative expenses (1,567) (653) (1,514) - (3,734)
Operating profit (loss) 6,908 11 (2,714) - 4,205
Finance expense (419) (1) (10) (21) (451)
Loss before tax 6,489 10 (2,724) (21) 3,754
Tax expense / credit (3,794) - - - (3,794)
Profit (loss) after tax 2,695 10 (2,724) (21) (40)
Total comprehensive profit
(loss)
allocated to NCI 1,702 3 125 (10) 1,820
Cash flows from operating
activities 5,984 (1,720) 1,105 - 5,369
Cash flows from investing
activities (6,190) (1,023) (2,036) - (9,249)
Cash flows from financing
activities - 2,745 1,663 - 4,408
Net cash inflows/(outflows) (206) 2 732 - 528
As at 31 March 2018 $000's $000's $000's $000's $000's
Assets:
Intangible assets - (1) - - (1)
Property plant and equipment 15,905 6,501 5,184 - 27,590
Investment in joint venture 559 - - - 559
Inventory 2,883 12 1,094 - 3,989
Receivables 4,302 845 521 25 5,693
Cash and cash equivalents 272 3 763 - 1,038
Liabilities: - -
Loans and other borrowings 4,730 8,719 12,487 - 25,936
Trade and other payables 2,336 835 2,572 - 5,743
Deferred tax liability 3,330 - - - 3,330
Provisions 877 - 521 - 1,398
Accumulated non-controlling
interests 20,348 252 - 2,447 23,047
25 Related party transactions
Company and group
Directors and key management emoluments are disclosed in notes 6 and 7.
Group
The non-controlling interest in African Consolidated Resources SRL,
where 20% of the shareholding of the subsidiary is held by third parties
(the "AP Group"), consisting as to a majority of a director and senior
executives of the group, namely:
Roy Tucker (Director) 2%
Andrew Prelea (Director) 8%
Senior Romanian management 2%
Non-related party 8%
At the reporting date, there was an amount owing by African Consolidated
Resources SRL to the AP Group of $91,656 (2018: $165,399). At the
reporting date, there was an amount owing by African Consolidated
Resources SRL to the individual related members of the AP Group,
totalling $65,606 (2018: $78,348).
At the reporting date, there was an amount owing by African Consolidated
Resources SRL to Ozone Homes SRL (Ozone) of US$ 9,568 (2018: US$16,727)
in respect of transactions undertaken by Ozone in 2014. Ozone is a
company controlled by Andrew Prelea, the Group CEO and senior Group
executive in Romania.
During the year, the company had a service contract with Roy Tucker to
provide office premises and associated services totalling US$ 25,420
including VAT.
26 Contingent liabilities and capital commitments
Capital commitments
The Group acquired an effective 29.41% economic interest through EMA
Resources Ltd (`EMA') in a brown field perimeter in the `Golden
Quadrilateral' of Western Romania on which historic work has
demonstrated prospectivity for gold and polymetallic minerals. The Group
is undertaking exploration on behalf of the perimeter owners with a view
to establishing a JORC resource sufficient to justify an independent
IPO. To date the Group has arranged US$ 1 million third party financing
on behalf of the venture in the form of convertible debt to fund a
drilling and assay programme. This programme is underway and is
anticipated to deliver sufficient information to support an Inferred
JORC Mineral Resource for gold and other polymetallic minerals including
silver, copper, lead and zinc in one or more of several distinct breccia
pipes.
Of the US$ 1 million convertible funding, the Company has committed to
repay US$ 750,000 to a convertible debt investor in EMA Resources
Limited ('EMA') (the owner of the Blueberry Project) on 31(st) December
2019 in the event the investor elects not to convert into shares in EMA.
Such an event might arise if the assay results are unsatisfactory and /
or the planned IPO of EMA has not taken place. As explained in more
detail in the Strategic Report, current indications are that the assays
are encouraging and it is anticipated that the project will continue to
support the necessary third-party financing beyond 31 December 2019 and
to the conclusion of the drilling and assay programme.
27 Events after the reporting date
Exercise of warrants
Warrants were exercised, and shares issued, as follows:
Warrants Shares
Date exercised issued
21 June 2019 1,221 1,221
7 August 2019 244 244
Warrant security to Mercuria
Pursuant to the terms of the Warrant Instrument between the Company and
Mercuria dated 13 March 2018, warrants were issued to Mercuria to
subscribe for shares in the Company up to a further aggregate nominal
amount of GBP1,750,000 (in addition to the existing warrants to
subscribe for shares in the Company for a nominal amount of GBP565,000
already granted in connection with the Warrant Instrument). These
warrants have been issued to Mercuria as security for the Tranche A
advance of US$4,500,000 under the Mercuria Pre-payment Agreement and are
only exercisable in the event of a default thereunder.
Share placings and subscriptions
On 30 May the Company announced that it had raised, in aggregate,
GBP900,000 before costs through a placing of 775,862,068 ordinary shares
of 0.1p in the Company at a price of 0.116p per share.
On 8 August the Company announced that it had raised, in aggregate,
GBP655,000 (GBP625,000 after costs) through a placing of 595,454,545
ordinary shares of 0.1p in the Company at a price of 0.11p per share.
The Subscription was undertaken by a new institutional investor, to whom
it has been agreed to issue 17,000,000 warrants to subscribe for
Ordinary Shares in the Company at an exercise price of 0.13p per share
and 17,000,000 warrants at an exercise price of 0.15p per share. All
warrants will expire on 8 August 2022.
Historical diamond claims
The Company announced on 26 September that it had settled its historical
claims by mutual consent and that the Company would update the matter
further as this matter progressed.
Chiadzwa Community joint venture
The Company announced on 26 September that it had signed a Joint Venture
Agreement with a company designated to represent the Chiadzwa Community
in relation to the Chiadzwa Diamond Concession in Zimbabwe.
Corporate broker
On 5 August 2019 the Company was informed that one of its joint
corporate brokers, SVS Securities plc, had been placed into Special
Administration.
28 Group subsidiaries
A full list of all subsidiary companies and their registered offices is
given below:
Country Reg.
Company of registration office Group Interest Nature of business
note 2018 2017
African Consolidated Resources
SRL Romania 1 80% 80% Mining development
African Consolidated Resources
PTC Ltd * BVI 3 nil nil Nominee company
Breckridge Investments (Private)
Limited Zimbabwe 5 - 25.05% Mining Production
Cadex Investments (Private)
Limited Zimbabwe 5 100% 100% Claim holding
Canape Investments (Private)
Limited Zimbabwe 6 - 100% Mining investment
Conneire Mining (Private)
Limited Zimbabwe 6 100% 100% Claim holding
Holding Company
for Breckridge
Dallaglio Investments (Private) Investments (Private)
Limited Zimbabwe 5 - 25.05% Limited
Dashaloo Investments (Private)
Limited Zimbabwe 6 100% 100% Claim holding
Exchequer Mining Services
(Private) Limited Zimbabwe 6 100% 100% Claim holding
Mining exploration
Fisherman Mining Limited Zambia 7 49.6% 100% and development
Heavystuff Investment Company
(Private) Limited Zimbabwe 6 100% 100% Claim holding
Kleton Investments (Private)
Limited Zimbabwe 5 - 25.05% Claim holding
Lafton Investments (Private)
Limited Zimbabwe 5 100% 100% Claim holding
Lescaut Investments (Private)
Limited Zimbabwe 5 - 25.05% Claim holding
Lomite Investments (Private)
Limited Zimbabwe 5 100% 100% Claim holding
Lotaven Investments (Private)
Limited Zimbabwe 5 - 25.05% Claim holding
Mayback Investments (Private)
Limited Zimbabwe 5 - 25.05% Claim holding
Millwall International Investments
Limited BVI 3 100% 100% Holding company
Mining exploration
Moorestown Limited BVI 3 100% 100% and development
Mystical Mining (Private)
Limited Zimbabwe 6 100% 100% Claim holding
Naxten Investments (Private)
Limited Zimbabwe 6 100% 100% Asset holding
Nivola Mining (Private) Limited Zimbabwe 6 - 25.05% Claim holding
Olebile Investments (Private)
Limited Zimbabwe 6 100% 100% Claim holding
Perkinson Investments (Private)
Limited Zimbabwe 6 100% 100% Claim holding
Possession Investment Services
(Private) Limited Zimbabwe 6 100% 100% Claim holding
Rabame Investments (Private)
Limited Zimbabwe 6 - 25.05% Claim holding
Ronquil Enterprises (Private)
Limited Zimbabwe 6 - 50.01% Holding company
Sackler Investments (Private)
Limited Zimbabwe 6 100% 100% Claim holding
Schont Mining Services (Private)
Limited Zimbabwe 6 100% 100% Claim holding
Sinarom Mining Group SRL Romania 2 100% 100% Mining production
Vast Resources Nominees Limited
** UK 4 100% 100% Nominee company
Vast Resources Romania Limited UK 4 100% 100% Mining investment
Vast Resources Zimbabwe (Private)
Limited Zimbabwe 6 100% 100% Mining investment
Accufin Investments (Private)
Limited Zimbabwe 6 100% 100% Dormant
Aeromags (Private) Limited Zimbabwe 6 100% 100% Dormant
Campstar Mining (Private)
Limited Zimbabwe 6 100% 100% Dormant
Chaperon Manufacturing (Private)
Limited Zimbabwe 6 100% 100% Dormant
Charmed Technical Mining (Private)
Limited Zimbabwe 6 100% 100% Dormant
Chianty Mining Services (Private)
Limited Zimbabwe 6 100% 100% Dormant
Corampian Technical Mining
(Private) Limited Zimbabwe 6 100% 100% Dormant
Deep Burg Mining Services
(Private) Limited Zimbabwe 6 100% 100% Dormant
Deft Mining Services (Private)
Limited Zimbabwe 6 100% 100% Dormant
Febrim Investments (Private)
Limited Zimbabwe 6 100% 100% Dormant
Hemihelp Investments (Private)
Limited Zimbabwe 6 100% 100% Dormant
Isiyala Mining (Private) Limited Zimbabwe 6 100% 100% Dormant
Katanga Mining (Private) Limited Zimbabwe 6 100% 100% Dormant
Kengen Trading (Private) Limited Zimbabwe 6 100% 100% Dormant
Kielty Investments (Private)
Limited Zimbabwe 6 100% 100% Dormant
Lucciola Investment Services
(Private) Limited Zimbabwe 6 100% 100% Dormant
Malaghan Investments (Private)
Limited Zimbabwe 6 100% 100% Dormant
Methven Investment Company
(Private) Limited Zimbabwe 6 100% 100% Dormant
Mimic Mining (Private) Limited Zimbabwe 6 100% 100% Dormant
Monteiro Investments (Private)
Limited Zimbabwe 6 100% 100% Dormant
Nedziwe Mining (Private) Limited Zimbabwe 6 100% 100% Dormant
Notebridge Investments (Private)
Limited Zimbabwe 6 100% 100% Dormant
Pickstone-Peerless Mining
(Private) Limited Zimbabwe 6 100% 100% Dormant
Prudent Mining (Private) Limited Zimbabwe 6 100% 100% Dormant
Rania Haulage (Private) Limited Zimbabwe 6 100% 100% Dormant
Regsite Mining Services (Private)
Limited Zimbabwe 6 100% 100% Dormant
Riberio Mining Services (Private)
Limited Zimbabwe 6 100% 100% Dormant
Swadini Miners (Private) Limited Zimbabwe 6 100% 100% Dormant
Tamahine Investments (Private)
Limited Zimbabwe 6 100% 100% Dormant
The Salon Investments (Private)
Limited Zimbabwe 6 100% 100% Dormant
Vono Trading (Private) Limited Zimbabwe 6 100% 100% Dormant
Wynton Investment Company
(Private) Limited Zimbabwe 6 100% 100% Dormant
Zimchew Investments (Private)
Limited Zimbabwe 6 100% 100% Dormant
* The company has effective control of this entity
** Formerly ACR Nominees Ltd
Notes - Addresses of Registered offices:
1 Sat Iacobeni,Str.Minelor Nr.20, Jud. Suceava, Romania
2 Str.9 Mai, Nr.20, Baia Mare, Jud.Maramures, 430274 Romania
3 Nerine Chambers, PO Box 906, Road Town, Tortola, British
Virgin Islands
4 Nettlestead Place, Nettlestead, Maidstone, Kent ME18 6HE,
United Kingdom
5 121 Borrowdale Road, Gun Hill, Harare, Zimbabwe
6 6, John Plagis Avenue, Alexandra Park, Harare, Zimbabwe
7 Suite 2, Diplomatic Centre, Mass Media, Off Alick Nkhata
Road, Lusaka, Zambia
The financial information set out in this announcement does not
constitute the Group's statutory financial statements for the year ended
30 April 2019 or 31 March 2018, but is derived from these financial
statements. The financial statements for the year ended 31 March 2018
have been delivered to the Registrar of Companies. The financial
statements for the 13 months ended 30 April 2019 will be forwarded to
the Registrar of Companies. The Auditors have reported on these
financial statements; their reports were unqualified and did not contain
statements under Section 498(2) or (3) of the Companies Act 2006.
Company information
Brian Moritz Non-Executive Chairman
Richard Andrew Prelea Chief Executive Officer
Roy Clifford Tucker Finance Director
Craig Harvey Chief Operations Officer
Eric Kevin Diack Non-Executive Director
Directors Nick Hatch Non-Executive Director
Ben Harber
60 Gracechurch Street,
Secretary and registered London,
office EC3V 0HR
Country of incorporation United Kingdom
Legal form Public Limited Company
Website www.vastplc.com
Crowe UK LLP
St Bride's House
10 Salisbury Square
Auditors London EC4Y 8EH
Beaumont Cornish Limited
10(th) Floor,
30, Crown Place
Nominated & Financial London
Adviser EC2A 4EB
SP Angel Corporate Finance LLP
Price Frederick House
35-39 Maddox Street
Corporate Broker London W1S 2PP
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent
Registrars BR3 4TU
Registered number 5414325
Attachment
-- Posting of Annual Report
https://ml-eu.globenewswire.com/Resource/Download/a5d5cc01-df0e-4535-82ac-c8f27a2b271d
(END) Dow Jones Newswires
September 30, 2019 02:00 ET (06:00 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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