01 July 2022
Eastinco Mining and Exploration plc
("EME" or the "Company")
Final results for the year ended 31 December 2021
Eastinco Mining and Exploration plc (AQSE: EM.P) announces its full year results for the year ended 31 December 2021.
Chairman's Statement
2021 was an encouraging year for the Company, as we continued to advance toward our goal of becoming an ethical, integrated exploration, development, and trading company across multiple mineral assets and jurisdictions.
During this reporting period, we benefitted greatly from having independent experts on the Musasa mine, supported by external laboratory analysis, to evaluate and provide specialist metallurgical analysis and engineering on the wash plant. In December 2021, we signed a Metallurgical and Services Agreement with Quiver Limited, a heavy mineral separation and processing consultancy. Quiver is providing a Process Manager based on-site to control and manage daily operations and a metallurgical consultant to develop short and long-term process improvements and associated plant upgrade strategies to increase and optimise plant production, with further material testing and analysis at approved laboratories. The addition of Quiver has been instrumental in achieving a better understanding of the metallurgy of the Musasa Deposit and how to achieve optimum recoveries from the existing wash plant infrastructure.
We successfully concluded an additional joint venture agreement with HCK Mining Company Limited over an exciting new exploration play in southern
During the period we suffered from what we hope to be the last COVID-related operational delays affecting the commissioning of the Musasa Mine wash plant in
Morocco Acquisition - Aterian Resources
On the 22nd of November 2021, the Company signed a SPA to acquire 100% of the share capital of Aterian Resources Limited, a 100% owned indirect subsidiary of AIM and TSX-listed Altus Strategies Plc ("Altus"). Upon the successful completion of the acquisition, which is conditional upon the Company listing on the LSE, Altus will become a significant beneficiary shareholder. This proposed transaction transforms the Company into a multi-jurisdiction, multi-commodity, critical and strategic metals exploration and development company; and, we are excited to have Altus become a key shareholder.
The rationale for this acquisition is to acquire assets that will fit into our strategy of focusing on critical and strategic metals. Currently, the renewable energy, automotive and electronic manufacturing sectors are driving the requirement to develop secure supply chains of these key critical and strategic minerals. The exploration conducted to date by Altus on the Moroccan assets highlights the strong potential for the discovery of strategic metals deposits, in particular copper and silver. We firmly believe the market fundamentals for copper are excellent and specifically linked to the anticipated growing demand for renewable energy and the related electrification of transportation globally. We are keen to invest in
Financial Review
During the period under review the Group made a loss before taxation of
Post Balance Sheet Events
The Company will, upon completion of the acquisition of Aterian Resources, the Altus' Moroccan business, change its name to Aterian plc. The new name reflects the broad and important shift from a single asset to a multi-jurisdictional, multi-asset mining exploration and trading company with a pan-African focus. As part of the acquisition, the Company will appoint Mr Alister Masterton-Hume, the Chief Investment Officer of Altus, to the Board of Directors.
In line with our growth plans, the Board announced the appointment of Mr Kasra Pezeshki, the Chief Investment Officer of Britishvolt, to the Board of Directors. The appointment will take place immediately on the Company's admission to the Standard Segment of the LSE. Mr Pezeshki has over 17 years of experience in investment banking, structured finance, and private equity at institutions such as UBP, Morgan Stanley, Adveq, Bank of America and Enveq in
The Company will produce a prospectus (to be available on the Company's website) related to the proposed listing on the London Stock Exchange. Additionally, to support the costs associated with the listing and for working capital purposes, the Company has raised
Previously, in December 2020, our 100% owned Rwandan subsidiary, Eastinco Limited, was granted a Trading Licence by the Rwanda Mines, Petroleum and Gas Board (RMB), allowing the Company to purchase and sell metal ore from our production, as well as third-party producers. With the Musasa operation nearing production, we have decided to activate the Trading Licence and, in May 2022, initiated the process to gain membership to iTSCI, the responsible supply chain initiative that monitors the production and sale of metals in
COVID-19 Statement
The COVID pandemic continued to intermittently disrupt the Company's operations in
Strategic shift
EME is a critical and strategic metal focused exploration and development company focused on African metal resource investment opportunities. Our objective is to create and build an integrated critical and strategic mineral exploration, development and trading company to meet the expected shortfall in the supply of "green" metals required to satisfy the global demand for renewable energy sources and decarbonisation targets. We will continue to review and evaluate new strategic opportunities that would support us in meeting this objective.
Director Changes
Mr Mike Staten resigned as an Executive Director on the 1st of February 2021, and Mr Simon Rollason officially joined the Board of Directors as a Director on the 14th of June 2021. Mr Rollason was previously announced as the Company CEO on the 30th of October 2020.
Outlook
The Company is at a critical juncture with the acquisition of a portfolio of critical and strategic assets in
On behalf of the Company, I would like to take this opportunity to once again thank my fellow Board members, employees, and our shareholders for their continued support and patience.
Charles G Bray
Director
30 June 2022
This announcement contains information which, prior to its disclosure, was inside information as stipulated under Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310 (as amended).
The Directors take responsibility for this announcement.
Enquiries:
For further information, please visit the company website www.eastinco.com or contact:
Eastinco Mining & Exploration Plc:
Charles
Simon Rollason, Director - simon.rollason@eme-plc.com
AQSE Growth Market Corporate Adviser:
Novum Securities Limited
David Coffman / Lucy Bowden
Tel: +44 (0)207 399 9400
Financial PR:
Yellow Jersey PR - eastinco@yellowjerseypr.com
Tom Randell / Henry Wilkinson / Laurie Gellhorn
Tel: +44 (0)20 3004 9512/ +44 (0)7948 758 681
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME YEAR ENDED 31 DECEMBER 2021
|
|
Group |
|
|
|
|
|
|
Notes |
Year to |
Year to |
|
|
31-Dec-21 |
31-Dec-20 |
|
|
£ '000 |
£ '000 |
Other revenue |
|
- |
44 |
|
|
|
|
Administrative expenses |
4 |
(1,020) |
(308) |
Share based payments |
17 |
(267) |
- |
Provision for impairment of ECL |
|
(64) |
- |
|
|
|
|
Total operating loss |
|
(1,351) |
(264) |
|
|
|
|
Interest payable and similar charges |
5 |
(18) |
(17) |
Loss before tax |
|
(1,369) |
(281) |
|
|
|
|
Income tax expense |
|
- |
- |
|
|
|
|
Loss after tax |
|
(1,369) |
(281) |
|
|
|
|
Other comprehensive loss |
|
- |
- |
|
|
|
|
Items that may be reclassified to profit or loss |
|
|
|
Exchange differences on translation of foreign operations |
|
28 |
(186) |
Total comprehensive loss |
|
(1,341) |
(467) |
|
|
|
|
Loss per share |
|
|
|
Basic and Diluted loss per share (pence) |
|
(0.31) |
(0.07) |
CONSOLIDATED AND COMPANY STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2021
|
|
Group |
|
Company |
||
|
|
|
|
|
|
|
|
Notes |
31-Dec-21 |
31-Dec-20 |
|
31-Dec-21 |
31-Dec-20 |
|
|
£'000 |
£'000 |
|
£'000 |
£'000 |
Non-current assets |
|
|
|
|
|
|
Investment |
8 |
- |
- |
|
2,261 |
2,261 |
Goodwill |
9 |
2,168 |
2,168 |
|
- |
- |
Trade and other receivables |
11 |
- |
- |
|
1,703 |
1,383 |
Property, plant and equipment |
10 |
1,226 |
1,038 |
|
- |
- |
Total non-current assets |
|
3,394 |
3,206 |
|
3,964 |
3,644 |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Trade and other receivables |
11 |
188 |
394 |
|
143 |
316 |
Cash and cash equivalents |
12 |
196 |
52 |
|
190 |
49 |
Total current assets |
|
384 |
446 |
|
333 |
365 |
|
|
|
|
|
|
|
Total assets |
|
3,778 |
3,652 |
|
4,297 |
4,009 |
|
|
|
|
|
|
|
Equity and liabilities |
|
|
|
|
|
|
Share capital |
16 |
5,671 |
4,301 |
|
5,671 |
4,301 |
Share premium |
16 |
2,144 |
2,144 |
|
2,144 |
2,144 |
Share based compensation reserve |
|
1,615 |
1,348 |
|
1,615 |
1,348 |
Interest in shares in EBT |
|
(395) |
(133) |
|
(395) |
(133) |
Translation reserve |
|
(263) |
(291) |
|
- |
- |
Accumulated losses |
|
(6,629) |
(5,326) |
|
(6,373) |
(5,221) |
Other reserves |
|
80 |
80 |
|
58 |
80 |
Merger relief reserve |
|
1,200 |
1,200 |
|
1,200 |
1,200 |
Total equity |
|
3,423 |
3,323 |
|
3,920 |
3,719 |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Trade and other payables |
13 |
197 |
110 |
|
219 |
71 |
Total current liabilities |
|
197 |
110 |
|
219 |
71 |
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
Loan notes |
14 |
158 |
219 |
|
158 |
219 |
Total non-current liabilities |
|
158 |
219 |
|
158 |
219 |
|
|
|
|
|
|
|
Total Equity and liabilities |
|
3,778 |
3,652 |
|
4,297 |
4,009 |
The company made a loss for the year of
These financial statements were approved by the Board and were authorised for issue on 30 June 2022 and signed on their behalf by
Charles G Bray Simon Rollason
Chairman Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY YEAR ENDED 31 DECEMBER 2021
Group
|
Share capital |
Share premium |
Share-based compensation reserve |
Interest in shares in EBT |
Translation reserve |
Other Reserve |
Merger relief reserve |
Accum- |
Total |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
At 1 January 2020 |
3,613 |
1,835 |
1,348 |
(133) |
(105) |
97 |
1,200 |
(5,062) |
2,793 |
|
|
|
|
|
|
|
|
|
|
Loss for the year |
- |
- |
- |
- |
- |
- |
- |
(281) |
(281) |
Other comprehensive loss |
- |
- |
- |
- |
(186) |
- |
- |
|
(186) |
|
3,613 |
1,835 |
1,348 |
(133) |
(291) |
97 |
1,200 |
(5,343) |
2,326 |
|
|
|
|
|
|
|
|
|
|
Other reserve |
- |
- |
- |
- |
- |
(17) |
- |
17 |
- |
Exercise of warrants |
618 |
309 |
- |
- |
- |
|
- |
- |
927 |
Issue of new shares |
70 |
- |
- |
- |
- |
|
- |
- |
70 |
At 31 December 2020 |
4,301 |
2,144 |
1,348 |
(133) |
(291) |
80 |
1,200 |
(5,326) |
3,323 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2021 |
4,301 |
2,144 |
1,348 |
(133) |
(291) |
80 |
1,200 |
(5,326) |
3,323 |
|
|
|
|
|
|
|
|
|
|
Loss for the year |
- |
- |
- |
- |
- |
- |
- |
(1,447) |
(1,173) |
Other comprehensive loss |
- |
- |
- |
- |
(28) |
- |
- |
- |
28 |
|
4,301 |
2,144 |
1,348 |
(133) |
(263) |
80 |
1,200 |
(6,773) |
1,904 |
|
|
|
|
|
|
|
|
|
|
Other reserve |
- |
- |
- |
- |
- |
- |
|
144 |
144 |
Share based compensation |
- |
- |
267 |
(262) |
- |
- |
- |
- |
5 |
Convertible loan notes issue |
850 |
- |
- |
- |
- |
- |
- |
|
850 |
Issue of new shares |
520 |
- |
- |
- |
- |
|
- |
- |
520 |
At 31 December 2021 |
5,671 |
2,144 |
1,615 |
(395) |
(263) |
80 |
1,200 |
(6,629) |
3,423 |
COMPANY STATEMENT OF CHANGES IN EQUITY YEAR ENDED 31 DECEMBER 2021
|
Share capital |
Share premium |
Share-based compensation reserve |
Interest in shares in EBT |
Other Reserve |
Merger relief reserve |
Accum- |
Total |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
At 1 January 2020 |
3,613 |
1,835 |
1,348 |
(133) |
97 |
1,200 |
(5,146) |
2,814 |
|
|
|
|
|
|
|
|
|
Loss for the year |
- |
- |
- |
- |
- |
- |
(92) |
(92) |
|
3,613 |
1,835 |
1,348 |
(133) |
97 |
1,200 |
(5,238) |
2,722 |
|
|
|
|
|
|
|
|
|
Transfer from other reserve to accumulated losses |
|
|
|
- |
(17) |
- |
17 |
- |
Exercise of warrants |
618 |
309 |
- |
- |
- |
- |
- |
927 |
Issue of new shares |
70 |
- |
- |
- |
- |
- |
- |
70 |
At 31 December 2020 |
4,301 |
2,144 |
1,348 |
(133) |
80 |
1,200 |
(5,221) |
3,719 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2021 |
4,301 |
2,144 |
1,348 |
(133) |
80 |
1,200 |
(5,221) |
3,719 |
|
|
|
|
|
|
|
|
|
Loss for the year |
- |
- |
- |
- |
- |
- |
(1,152) |
(1,152) |
|
4,301 |
2,144 |
1,348 |
(133) |
80 |
1,200 |
(6,373) |
2,567 |
|
|
|
|
|
|
|
|
|
Other Reserve |
- |
- |
- |
- |
(22) |
- |
- |
(22) |
Transfer from other reserve to accumulated losses |
- |
- |
- |
- |
- |
- |
- |
- |
Share based compensation |
- |
- |
267 |
(262) |
- |
- |
- |
5 |
Convertible loan notes issue |
850 |
- |
- |
- |
- |
- |
- |
850 |
Issue of new shares |
520 |
- |
- |
- |
- |
- |
- |
520 |
At 31 December 2021 |
5,671 |
2,144 |
1,615 |
(395) |
58 |
1,200 |
(6,373 |
3,920 |
Reserves |
Description and purpose |
|
|
|
|
|
Share capital |
Nominal value of the contributions made by shareholders in return for the issue of shares. |
|||||
Share premium |
Amount subscribed for share capital in excess of nominal value. |
|
|
|||
Share-based compensation reserve |
Cumulative fair value of the charge/(credit) in respect of share options granted and recognised as an expense in the Income Statement. |
|||||
|
||||||
Translation reserve |
The translation reserve comprises translation differences arising from the translation of financial statements of the Group's foreign entities into Sterling (£). |
|||||
|
||||||
Other reserves |
The other reserve comprises differences arising from the discounting of loan notes. |
|||||
Merger relief reserve |
The merger relief reserve comprises differences between the fair value and at par value of shares issued for the acquisition of subsidiary |
|||||
Interest in shares in Employees Benefit Trust (EBT) |
The Company set up an Employees Benefit Trust on 6 March 2015 (the Equatorial EBT) for the benefit of its employees. The cost of shares held by the EBT that are presented as a deduction from entity. |
|||||
|
||||||
|
||||||
Accumulated losses |
Accumulated losses represents total losses. |
CONSOLIDATED AND COMPANY STATEMENTS OF CASH FLOWS YEAR ENDED 31 DECEMBER 2021
|
Group |
|
Company |
||
|
31-Dec-21 |
31-Dec-20 |
|
31-Dec-21 |
31-Dec-20 |
|
£'000 |
£'000 |
|
£'000 |
£'000 |
Cash flow from operating activities |
|
|
|
|
|
Loss before tax |
(1,369) |
(281) |
|
(1,151) |
(93) |
Adjustments for: |
|
|
|
|
|
Depreciation |
2 |
23 |
|
- |
- |
Share based expense |
267 |
- |
|
267 |
- |
Interest expense |
18 |
17 |
|
18 |
17 |
Inter-company Interest income |
- |
- |
|
(224) |
(163) |
Provisions against ECL |
64 |
- |
|
64 |
- |
Foreign exchange gains |
(28) |
(74) |
|
- |
- |
Operating profit/(loss) before working capital changes |
(1,047) |
(315) |
|
(1,027) |
(239) |
Changes in working capital: |
|
|
|
|
|
Decrease/(increase) in trade & other receivables |
338 |
(129) |
|
381 |
(82) |
Decrease/(increase) in trade & other payables |
(490) |
(84) |
|
(294) |
59 |
Net cash outflows from operating activities |
(1,199) |
(528) |
|
(940) |
(262) |
Cash flow from investing activities |
|
|
|
|
|
Purchase of exploration and evaluation assets |
(239) |
(431) |
|
- |
- |
Funds advanced to subsidiary |
(5) |
- |
|
(5) |
(688) |
Net cash used in investing activities |
(243) |
(431) |
|
(270) |
(688) |
Cash flow from financing activities |
|
|
|
|
|
Net proceeds from borrowings |
567 |
- |
|
567 |
- |
Amounts advanced from parent |
500 |
- |
|
- |
- |
Net proceeds from issue of shares |
520 |
767 |
|
520 |
767 |
Net cash flow from financing activities |
1,586 |
767 |
|
1,086 |
767 |
Net increase/(decrease) in cash & cash equivalents |
144 |
(192) |
|
141 |
(183) |
Cash & cash equivalents at beginning of the year |
52 |
246 |
|
49 |
232 |
Effect of exchange rate movements on cash |
-- |
(2) |
|
- |
- |
Cash & cash equivalents at end of the year |
196 |
52 |
|
190 |
49 |
NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2021
The financial information set out below does not constitute the Group's statutory accounts for the year ended 31 December 2021 but is derived from those accounts.
1. The financial information has been extracted from the statutory accounts of Eastinco Mining and Exploration Plc and is presented using the same accounting policies, which have not yet been filed with the Registrar of companies, but on which the auditors, MHA MacIntyre Hudson, gave an unqualified report on 20 June 2022. The audit report included the following modification:-
Material uncertainty related to going concern
We draw attention to note 2 in the financial statements which states that the Group and Parent Company's operational existence is reliant on the ability to raise further funding through equity placing or through the support of the directors through an injection of capital. The impact of this together with other matters, indicate that a material uncertainty exists that may cast significant doubt on their ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors' assessment of the Group and Parent Company's ability to continue to adopt the going concern basis of accounting included:
The consideration of inherent risks to the Group's operations and specifically its business model.
The evaluation of how those risks might impact on the Group's available financial resources.
Where additional resources may be required the reasonableness and practicality of the assumptions made by the Directors when assessing the probability and likelihood of those resources becoming available.
Liquidity considerations including examination of cash flow projections.
Solvency considerations including examination of budgets and forecasts and their basis of preparation, including review and assessment of the model's mechanical accuracy and the reasonableness of assumptions included within.
Held discussions with management regarding their future plans and strategies to begin operating in the future.
We have performed sensitivity analysis on management's forecasts to determine if this has a material impact on the Group's ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
2. Loss per share
The calculation of the basic and diluted loss per share is based on the following data:
|
2021 |
2020 |
|
|
|
Earnings |
£'000 |
£'000 |
Loss from continuing operations for the year attributable to the equity holders of the Company |
(1,369) |
(281) |
Number of shares |
|
|
Weighted average number of ordinary shares for the purpose of basic and diluted earnings per share |
|
|
488,692,170 |
393,879,187 |
|
Basic and diluted earnings per share (pence) |
(0.28) |
(0.07) |
The potential number of shares which could be issued following the exercise of options and warrants currently outstanding amounts to 19.2 Billion (see note 17). Dilutive earnings per share equals basic earnings per share as, due to the losses incurred, there is no dilutive effect from the existing share options and warrants.
3. Prior Year Adjustment
The Group's 2020 figures have been restated as Eastinco Ltd has accounted for ECL provision related to year 2020 in the year 2021 for £47,566. The effect of the prior year adjustment can be seen in the Statement of Comprehensive Income and the Consolidated Statement of Financial Position.
Impact of restatement on-
Consolidated statement of comprehensive income-
following restatement Losses for the year 2021 increased to £1,341,000 from £1,293,000.
Consolidated statement of financial position-
following restatement Total current liabilities as at 31.12.2021 increased from
Notes to Editors:
About Eastinco Mining and Exploration plc
Eastinco Mining and Exploration plc is an exploration and development company developing its portfolio of African focused critical and strategic metal assets, listed on the AQUIS Market in London.
We are actively seeking to acquire and develop new critical and strategic metal resources to strengthen our existing asset base, whilst supporting ethical and sustainable supply chains. The supply of these metals is vital for the development of the renewable energy, automotive and electronic manufacturing sectors that are playing an increasing role in reducing carbon emissions and meeting climate ambitions globally.
In 2019, we acquired Eastinco Limited, our Rwandan based subsidiary exploration, development, and trading company. We currently have three joint ventures in Rwanda where we are exploring for and are developing small-scale tantalum-niobium-tin mining operations.
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