RNS Number : 9779Q
Eastinco Mining and Exploration PLC
01 July 2022
 

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 Rwanda, which we are hopeful shall deliver positive near-term results. We have expanded the number of potentially mineralised zones for further evaluation work on this project (from two known occurrences when signing the joint venture to 18 targets after preliminary prospecting by the Company). An independent geologists' report for the area concluded that our licences in the south may prove to represent a significant new tantalum-bearing pegmatite field in Rwanda. We look forward to demonstrating this and developing the strategic and local stakeholder relationships to fully develop this asset.

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 Rwanda.

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 Morocco to demonstrate the potential of our assets there. Importantly, the proposed listing on the LSE will provide us with exposure to a broader investor profile and greater liquidity in our shares, providing a more solid platform to support the Company's continued growth.

Financial Review

During the period under review the Group made a loss before taxation of £1,418 (2021: loss £466,687).

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 LondonNew YorkGeneva, and Zurich. He brings C-suite experience and a global network and perspective to the Board.

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 £519,567 of new funds through the placement of equity at 1p (GB pence) per share. The Company also secured a £500,000 working capital facility from a related party lender related to the Chairman of Eastinco, Mr Charles Bray.

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 Central Africa. The focus initially is on the trading of coltan concentrate (tantalum), however, we shall seek to develop our trading expertise across the major minerals being mined and traded throughout the Great Lakes region. Ultimately, the decarbonisation of the global economy will boost demand across multiple mineral assets, including nickel, tungsten, tin, and copper. We intend to offer clients a verified ESG compliant product with material sourced solely from responsibly managed and certified mine and processing sites. Given the dominant role played by artisanal small-scale mining (ASM) entities across the region, it is vital to work closely with those who hold responsible supply chain certification and are demonstrably ESG compliant, ensuring the supply of responsibly sourced products.

COVID-19 Statement

The COVID pandemic continued to intermittently disrupt the Company's operations in Rwanda during 2021, with the Office of the Prime Minister imposing strict lockdown measures, including the restriction of movement across district boundaries and closing of the airport and international land borders. These measures were eased in late Q4, but some restrictions remain in place. The safety and well-being of EME's employees remain the highest priority for the Company, with the management of EME continuing to actively monitor the situation and the local government guidance being issued.

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 Morocco and the expansion of the Rwandan portfolio. Market fundamentals remain strong for the Group, and the wash plant commissioning, once operational, will contribute to funding exploration efforts. I remain firmly optimistic about the Company's prospects going forward. We have gained very valuable processing experience over the past two years and look forward to putting this experience to good use on our new projects in Southern Rwanda, where we work to evaluate and define the various targets on the licence. Furthermore, the launch of our trading operations will allow us to develop critical  relationships to drive product trading and sales with other ESG conscious and compliant.

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 Bray, Executive Chairman - charles.bray@eme-plc.com

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 £1,152,000 (2020 - loss of £92,000).

 

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-
ulated
losses

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-
ulated losses

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 £150,000 to £197,000.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes to Editors:

 

About Eastinco Mining and Exploration plc

www.eastinco.com

 

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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