Joint ventures
In addition to the above mineral resources, the Group has an effective 44% interest in Gergarub Exploration and
Mining (Pty) Ltd ("Gergarub"), a joint venture with the Skorpion Zinc mine. Gergarub has recently been granted Mining License ML245 for 20 years until 20 February 2044, which covers an area of 691 hectares (6.9sqkm), and is located within EPL 2616 with zinc and lead potential.
The license was renewed in August 2022 as part of ongoing exploration. The Group is committed to making certain cash payments in order to fund the ongoing exploration of the Gergarub region, which is yielding indicators that reserves may exist. This ongoing commitment to providing cash is likely to utilise a substantial portion of the Group's trading cash generation in the near future, and during 2023 the Group has injected around $1.8m further into Gergarub. These amounts are being recognised as an increase in the carrying value of the joint venture, but until resources are proven, the carrying value of the joint venture is impaired in full, such that the Group effectively recognised exploration costs as an expense when incurred.
The Group has two further joint ventures, being a circa 28% share of Rosh Pinah Health Care (Proprietary) Limited and a circa 45% RoshSkor Township (Proprietary) Limited ("RTPL"). Both joint ventures support the employees of the Rosh Pinah region and therefore underpin the operation of the mine.
Rosh Pinah Health Care (Proprietary) Limited was incorporated in Namibia. The company operates the Sidadi medical clinic in Rosh Pinah, Namibia.
RTPL was incorporated in Namibia and is engaged in the supply of utilities and other services to Rosh Pinah town.
Future developments
On 24 June 2024, the group restructured its financing. $39.9m included in borrowings in note 22 owed to the parent undertaking unsecured and interest-free has been replaced with $39.9m owed to a related undertaking under a secured loan agreement charging 8% interest.
Included within the below are references to certain non-IFRS metrics including C1 Cash Cost per pound, and All-In-Sustaining-Cost per pound ("AISC"). These measures are not recognised under IFRS as they are highly specific to the mining industry. Management uses these measures internally to evaluate the underlying operating performance of the Group for the reporting periods presented. The use of these measures enables management to assess performance trends and to evaluate the results of the underlying business. The Directors believe that these measures reflect performance and are useful indicators of expected performance in future periods.
C1 Cash Cost per pound
This measures the estimated cash cost to produce a pound of payable zinc. This measure includes mine operating production expenses, such as mining, processing, administration, indirect charges (including surface maintenance and camp), and smelting, refining, and freight, distribution, royalties, and by-product metal revenues, divided by pounds of payable zinc produced. C1 Cash Cost per pound of payable zinc produced does not include depreciation, depletion, and amortisation, reclamation expenses, capital sustaining, and exploration expenses.
AISC per pound
This measures the cash cost to produce a pound of payable zinc plus the capital sustaining costs to maintain the mine and mill. This measure includes the C1 Cash Cost per pound and sustaining capital costs, dividend by pounds of payable zinc produced. AISC per pound of zinc payable does not include depreciation, depletion and amortisation, reclamation or exploration expenses. Sustaining capital costs are defined as those expenditures which do not increase payable mineral production at a mine site and excludes all expenditures at the Group's growth projects, and certain expenditures at the Group's operating sites which are deemed expansionary in nature.
Key financial risks
The following are key financial risks of the Group.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, company treasury maintains flexibility in funding by maintaining availability under committed credit lines.
The Group's risk to liquidity is a result of the funds available to cover future commitments. The Group manages liquidity risk through an ongoing review of future commitments and credit facilities. The directors, in terms of the Articles of Association of the relevant group companies, determine the borrowing capacity from time to time as authorised by the shareholders. Cash flow forecasts are prepared, and adequate utilised borrowing rates are monitored.
The summary below analyses the Group's financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position date to the contractual maturity date. The amounts disclosed in the table are contractual undiscounted cash flows. Balances due within 12 months are equal to their carrying balances as the impact of discounting is not significant.
At 31 December 2023 due in less than one year: trade and other payables $4.9m, group payables $43.0m.
At 31 December 2022 due in less than one year: trade and other payables $2.5m, group payables $48.7m.
In Q2 2024, Rosh Pinah Zinc Corporation (Proprietary) Limited signed a new funding loan agreement with the lender being a related party, RP FC (Jersey) Limited. The facility is up to $50m, of which $20m has been drawn to date. Details of the drawdowns made on the facility since the year end are provided in note 35.
Interest rate risk
Details of the Group's interest rate risk are given in note 23.
Foreign currency risk
Details of the Group's foreign currency risk are given in note 23.
Treasury operations
The centralised corporate treasury function at Trevali provided services to RPZC, co-ordinated access to domestic
and international financial markets, and managed the financial risks including risks relating to the Group's
operations through internal risk reports that analysed exposures by degree and magnitude of risks. These risks
included market risks (including foreign currency risks, interest rate, and price risks), credit and liquidity risks.
The Trevali internal auditors on a continuous basis reviewed compliance with policies and exposures limits and
results were reported to the Board. This continued until Trevali's sale of the Group was completed in June 2023.
Since June 2023, the trading subsidiary's treasury function maintains flexibility in funding by maintaining availability under committed credit lines.
The Group does not enter into nor trades financial instruments, including derivative financial instruments, for
speculative purposes.
Credit risk
Credit risk consists mainly of cash deposits, cash equivalents, and trade debtors. The company only deposits cash with major banks with high quality credit standing and limits exposure to any one counterparty.
Details of the Group's credit risk, and response to this credit risk, are detailed in note 21.
Financial assets exposed to credit risk at the year-end were as follows:
2023 2022
$m $m
Cash and cash equivalents 0.6 16.7
Trade and other receivables 19.6 0.0
Group receivables 0.0 2.0
Commodity price risk
The Group's exposure to price risk is significant. Although the settlement is of the amount receivable is on average within a short period from the date of the sale, the final price is subject to the quotational period.
Details of the Group's exposure to commodity price risk are given in notes 20 and 23.
Capital risk
The Group's capital risk management objectives include continuing to operate as a going concern while maximising the return to shareholders. The main risks that could adversely affect the Group's financial assets, liabilities or future cash flows are market risks comprising commodity price risk, cash flow interest risk, foreign currency risk, liquidity risk and credit risk. The Group manages its exposure to key financial risks in accordance with its financial risk management policy. The capital structure of the Group includes shareholders' equity and debt. Further details of this are provided in note 34.
Currency risk
The Group is subject to currency risks. The Group's functional currency is the US dollar, and its mining operations and interests are located in Namibia. Zinc and lead are sold in US dollars and the Group's costs are incurred principally in US dollars and Namibian dollars. The appreciation of non-US dollar currencies against the US dollar can increase the cost of production and capital expenditures in US dollar terms. The Group also holds cash and cash equivalents that are denominated in foreign currencies that are subject to currency risk.
Exchange controls risk
From time to time, countries similar in profile to the Namibian environment in which the Group operates or has interests have adopted measures to restrict the availability of the local currency or the repatriation of capital across borders. These measures are typically imposed by governments and/or central banks during times of local economic instability to prevent the removal of capital or the sudden devaluation of local currencies or to maintain in-country foreign currency reserves.
These measures can have a number of negative effects on the Group's operations. For example, exchange controls reduce the quantum of immediately available capital that the Group could otherwise deploy for investment opportunities or the payment of expenses. As a result, the Group may be required to use other sources of funds for these objectives which may result in increased financing costs. In addition, measures that restrict the availability of local currency or impose a requirement to operate in the local currency may create practical difficulties for the Company.
Namibia is part of the Common Monetary Area of Southern Africa ("CMA"). Exchange controls in the CMA require that dividends, loans, repayment of loans and payment of all invoices to parties outside the CMA by companies registered in the CMA receive prior approval. The controls, as they relate to Namibia, are applied by the Bank of Namibia. There can be no assurance that the Company will obtain the requisite approvals in the future to repay loans or pay invoices to parties outside the CMA, including the Group companies. Thus, exchange controls may restrict the Group from repatriating funds and using those funds for other purposes.
Key non-financial risks
The following are key non-financial (operational) risks of the Group.
Demand risk
The Group's principal products are zinc and lead. Even if commercial quantities of mineral deposits are discovered by the Group, there is no guarantee that a profitable market will continue for the sale of the metals produced. Zinc and lead prices fluctuate widely and are affected by numerous factors beyond the Group's control, such as the sale or purchase of metals by various central banks and financial institutions, interest rates, exchange rates, inflation or deflation, fluctuation in the value of the United States dollar and foreign currencies, global and regional supply and demand, and the political and economic conditions of major metals-producing and metals-consuming countries throughout the world.
A slowdown in the financial markets or other economic conditions, including but not limited to consumer spending, employment rates, business conditions, inflation, fuel and energy costs, consumer debt levels, lack of available credit, the state of the financial markets, interest rates and tax rates, may adversely affect the Group's growth and profitability.
Inventory risk
The Group's internal Mineral Resource and Mineral Reserve estimates (details of which are not presented as part of this annual report) are estimates only and no assurance can be given that any particular level of recovery of metals will in fact be realised. There can also be no assurance that an identified mineral deposit will ever qualify as a commercially mineable (or viable) orebody that can be economically exploited. Additionally, no assurance can be given that the anticipated tonnages and grades will be achieved or that the indicated level of recovery will be realised. These estimates may require adjustments or downward revisions based upon further exploration or development work or actual production experience.
Estimates of Mineral Reserves and Mineral Resources can also be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. In addition, the grade of ore ultimately mined may differ dramatically from that indicated by results of drilling sampling and other similar examinations. Short-term factors relating to Mineral Reserves and Mineral Resources, such as the need for orderly development of ore bodies or the processing of new or different grades, may also have an adverse effect on mining operations and on the results of operations.
Mineral Reserves and Mineral Resources are determined so as to be general indicators of mine life. Mineral Reserves and Mineral Resources should not be interpreted as assurances of mine life or of the profitability of current or future operations. There is a degree of uncertainty attributable to the calculation and estimation of Mineral Reserves and Mineral Resources and corresponding grades being mined or dedicated to future production. Until ore is actually mined and processed, Mineral Reserves and grades must be considered as estimates only.
In addition, the quantity of Mineral Reserves and Mineral Resources may vary depending on metal prices. Extended declines in market prices for zinc and lead may render portions of the Group's mineralisation uneconomic and result in reduced reported mineralisation. Any material change in Mineral Reserves and Mineral Resources tonnes or grades may affect the economic viability of the Group's projects.
Key personnel risk
The nature of the Group's business requires specialised skills and knowledge. The Group operates large mining operations in Namibia that requires technical expertise in the areas of geology, engineering, mine planning, metallurgical processing, mine operations and environmental compliance.
Regulatory & climate change risk
Governments are moving to introduce climate change legislation and treaties at the international, national, state, provincial and local levels.
The occurrence of any climate change violation or enforcement action may have an adverse impact on the Group's operations. In addition, there may be pre-existing environmental hazards or hazards caused by third parties which the Group or property owners are not aware at present, and which could impair the commercial success, levels of production and continued feasibility and project development and mining operations on these properties.
Operational risk
Mineral production, exploration and development involve risks, which even a combination of experience, knowledge and careful evaluation, may not be able to overcome. Operations in which the Group has a direct or indirect interest will be subject to hazards and risks beyond the Group's control and normally incidental to exploration, development and production of minerals, any of which could result in work stoppages, damage to or destruction of property, loss of life and environmental damage.
The Group is concentrated in the zinc mining industry, and accordingly, its profitability is most sensitive to changes
in the overall condition of this industry. Furthermore, any adverse condition affecting mining, processing conditions,
expansion plans, or ongoing permitting activities at any of the Group's operating mines could have a material
adverse effect on the Group's financial performance and results of operations.
Finite resource risk
By the nature of mining, there is a finite quantity of resources to be extracted from the current Rosh Pinah mine site. The Group continues to explore new deposits in the region, most notably through the Gergarub joint venture previously described. Should new resources not be locatable, it would be inevitable that the mine is closed and operations terminated at some point in the future.
Environmental and regulatory risk
Mining operations are heavily regulated to minimise environmental impact. Companies must comply with a myriad of environmental laws and regulations, which can vary significantly by country and region. Failure to comply can result in hefty fines, legal sanctions, and even shutdowns. Additionally, changes in environmental regulations can impose new compliance costs and operational restrictions, affecting the Group's ability to conduct its business.
At GLCR Limited ("the Group"), the Directors act in a manner consistent with their duties under section 172 of the UK Companies Act 2006. In doing so, they promote the success of the Group for the benefit of its shareholders, taking into consideration the interests of all stakeholders including employees, customers, suppliers, the environment, and the wider community.
In this statement we outline the key aspects of our approach to Section 172 and how our Directors have fulfilled their duties throughout the year.
Although 2023 has been a year of significant change, most notably in ownership and Board composition fully changing, the Directors believe that we have consistently acted in accordance with duties under Section 172, working to promote the success of the Group and safeguard the interests of shareholders and stakeholders alike. We will continue to uphold these principles as we navigate the challenges and opportunities ahead, striving to create lasting value for all those connected to our business.
The Directors take the following into consideration in their decision-making process.
1. The likely consequences of any decision in the long term
We are committed to making strategic decisions that drive long-term growth and value creation for our shareholders. This includes investments in further exploration (as detailed earlier in this Report), securing potential mining licences, forming strategic partnerships, and collaborating with the Namibian government to maximise the potential of the area under licence.
2. The interests of the Group's employees
The success of our business would not be possible without the dedication of our workforce. Our staff view health, safety, wellbeing, training, compensation, and career opportunities as being important, and we recognise the importance of attracting, retaining, and developing a talented workforce.
We are committed to providing a safe and inclusive working environment, and challenge local leadership groups to maintain the highest operational standards.
We have further invested in the development of both the Rosh Pinah town and living environment, and also in the healthcare facilities in the town which underpin the health of the employees of our mine. All employees are also entitled to participate in access to dividend streams payable from the mine through the Rosh Pinah Employee Empowerment Participation Scheme.
3. The need to foster the Group's business relationships with suppliers, customers, and others
We believe that maintaining strong relationships with our stakeholders is essential for long-term success. In particular, all zinc and lead concentrate sales are with a sole customer which places emphasis on maintaining a good relationship with that customer.
4. The impact of the Group's operations on the community and the environment
The Directors are aware that the Rosh Pinah site uniquely impacts the local community as it is one of two major employers in the region, which underpins the Rosh Pinah township's very existence. The Group has investments in ownership of the township.
Whilst mining has an unavoidable impact on the environment, the Group seeks strategic partnerships where possible to mitigate this impact. On 7 April 2021 the Group entered into a 15 year renewable energy power purchase agreement with Emerging Markets Energy Services Company ("EMESCO") for the supply of solar power to the Rosh Pinah Mine.
5. The desirability of the Group maintaining a reputation for high standards of business conduct
Our Directors are committed to upholding the highest standards of ethical conduct and ensuring compliance with all relevant laws and regulations.
6. The need to act fairly between members of the Group
The Board aims to understand the views of its shareholders and always act in their best interest, whilst also balancing this with local decision-making requirements at the Rosh Pinah site.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2023.
The results for the year are set out on page 16.
No dividends were paid. The directors do not recommend payment of final dividend.
Disclosures required under s416(4) of the Companies Act 2006 are commented upon in the Strategic Report, as the Directors consider them to be of strategic importance to the Group.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The company has made qualifying third party indemnity provisions for the benefit of its directors during the period.
These provisions remain in force at the reporting date.
The Group's current policy concerning the payment of trade creditors is to:
settle the terms of payment with suppliers when agreeing the terms of each transaction;
ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
pay in accordance with the company's contractual and other legal obligations once required approvals are in place
Trade creditors of the Group at the year end were equivalent to 26 days purchases, based on the average daily amount invoiced by suppliers during the year.
Explanations of financial instruments are shown in the strategic report.
The RP2.0 expansion project was restarted in Q3 2023, and has the potential to expand Rosh Pinah's zinc production levels, while also producing significant by-products of lead and silver. To partially fund this project, in Q2 and Q3 2024, a related party, RP FC (Jersey) Limited, provided $20m of funding via an intercompany loan facility of up to $50m to RPZC (details of which are given in note 23).
On 24 June 2024, the group restructured its financing. $39.9m of borrowings, included in note 22, representing a Namibian Dollar value of N$730.2m which were interest-free, unsecured, and owed to ANR RP Limited (a controlling entity of the Group), has been novated to RP FC (Jersey) Limited ("RPFC"), a related party. As part of this the currency has been fixed in the US$ equivalent at that date, resulting in a revaluation to $40.3m, and as a result the Group then owed this amount to RPFC. The replacement loan carries interest at 8% per annum, is unsecured, and is payable to RPFC on demand.
Rosh Pinah is a producing zinc mine located in Namibia, with significant value accretion potential through the RP2.0 expansion project. The asset produces high-quality zinc and lead concentrates and has been in almost continuous operation since 1969, expanding reserves under previous ownership, including Exxaro Resources, Glencore and most recently, Trevali Mining Corporation.
Azets Audit Services Limited were appointed as auditor on 26 March 2024 and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
The company's UK emissions and energy consumption was less than 40,000 kWh of energy in the reporting period.
As such the company qualifies as a low energy user and is exempt from reporting under SECR regulations.
The life of mine (“LOM”) was calculated at 14 years as at 1 January 2023. The life of mine as at 1 January 2023 was calculated by using the 2021 year‐end Reserves, subtracting the 2022 depletion and applying the RP2.0 expansion project ramp‐up profile used in the August 2022 internally prepared life of mine. The life of mine as at 1 January 2022 was calculated using the National Instrument 43‐101 (NI 43‐101) guidelines.
The life of mine calculation as at 1 January 2024 is assessed at 12 years based on the preliminary results of the steady state profile of 1.3Mtpa.
The directors believe that the Group and company have adequate financial resources to continue in operation for the foreseeable future and accordingly the financial statements have been prepared on a going concern basis. The directors have satisfied themselves that the Group and company are in a sound financial position and that they have access to sufficient borrowing facilities to meet their foreseeable cash requirements.
The directors are also not aware of any material non‐compliance with statutory or regulatory requirements or of any pending changes to legislation that may affect the ability of the Group and company to continue operations for the foreseeable future.
On 24 June 2024, the group restructured its financing. $39.9m of borrowings, included in note 22, representing a Namibian Dollar value of N$730.2m which were interest-free, unsecured, and owed to ANR RP Limited (a controlling entity of the Group), has been novated to RP FC (Jersey) Limited ("RPFC"), a related party. As part of this the currency has been fixed in the US$ equivalent at that date, resulting in a revaluation to $40.3m, and as a result the Group then owed this amount to RPFC. The replacement loan carries interest at 8% per annum, is unsecured, and is payable to RPFC on demand.
The Company, GLCR Limited in its own right, has net liabilities because it has no trading income but incurs expenditure. Group support is available. Refer to the going concern note 1.4 later in the financial statements.
We have audited the financial statements of GLCR Limited (the 'parent company') and its subsidiaries (the 'Group') for the year ended 31 December 2023 which comprise the group income statement, the group statement of comprehensive income, the group and parent company statement of financial position, the group and parent company statement of changes in equity, the group statement of cash flows, and the group and parent company notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted International Financial Reporting Standards.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group’s and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
· the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
· the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent company or group, or returns adequate for our audit have not been received from branches not visited by us; or
· the parent and group company financial statements are not in agreement with the accounting records and returns; or
· certain disclosures of director's remuneration specified by law are not made; or
· we have not received all the information and explanations we require for our audit.
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the parent company's and group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the parent company or to cease operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
Extent to which the audit was considered capable of detecting irregularities, including fraud
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias;
·Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
A further description of our responsibilities is available on the Financial Reporting Council's website at: https:// www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to him in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
GLCR Limited
The Group consists of GLCR Limited and all of its subsidiaries. The principal place of business is the site of a subsidiary at the Rosh Pinah mine, Namibia. See the subsidiaries note 17.
The financial statements are prepared in US dollars, which is the functional currency of the Group. Monetary amounts in these financial statements are rounded to the nearest $'000.
The Company financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.
As permitted by FRS 101, the Company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
inclusion of an explicit and unreserved statement of compliance with IFRS;
presentation of a statement of cash flows and related notes;
disclosure of the objectives, policies, and processes for managing capital;
disclosure of key management personnel compensation;
disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;
comparative narrative information;
related party disclosures for transactions with the parent or wholly owned members of the group.
The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.
The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.
Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.
The consolidated group financial statements consist of the financial statements of the parent company GLCR Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence are treated as associates.
Investments in joint ventures and associates are carried in the group statement of financial position at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
Special purpose entity
Rosh Pinah Employee Empowerment Participation Scheme exists for the benefit of the permanent employees of the Group's trading subsidiary Rosh Pinah Zinc Corporation (Proprietary) Limited. Although legally independent with a majority of trustees appointed by the employees, this amounts to a special purpose entity with no genuine ability to exist or operate without the employer's co-operation. Therefore, it is included in the accounts by full consolidation as if it was part of Rosh Pinah Zinc Corporation.
Rosh Pinah Employee Empowerment Participation Scheme owns 0.574% of Rosh Pinah Zinc Corporation (Proprietary) Limited so the effect of the above assessment is to consider this shareholding to be part of the group's and revise the non-controlling interest accordingly.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its continued use or disposal. Any gain or loss arising from the recognition of an item of property, plant and equipment is included in profit of loss when the item is derecognised. Any gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.
Major spare parts and stand-by equipment which are expected to be used for more than one year are included in property, plant and equipment.
The residual value, useful life and depreciation method of each asset are reviewed at the end of each reporting year. If the expectations differ from previous estimates, the change is accounted for prospectively as a change in accounting estimate.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.
The depreciation charge for each year is recognised in profit or loss unless it is included in the carrying amount of another asset.
Impairment tests are performed on property, plant and equipment when there is an indicator that they may be impaired. When the carrying amount of an item of property, plant and equipment is assessed to be higher than the estimated recoverable amount, an impairment loss is recognised immediately in profit of loss to bring the carrying amount in line with the recoverable amount.
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the parent company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the group holds a long-term interest and has significant influence. The Group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the group’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
The group recognises financial debt when the group becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Financial liabilities are derecognised when, and only when, the group’s obligations are discharged, cancelled, or they expire.
Equity instruments issued by the parent company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer payable at the discretion of the company.
The tax expense represents the sum of the tax currently payable and deferred tax.
Provision is made for environmental rehabilitation costs where either a legal or constructive obligation is recognised as a result of past events. Estimates are based upon costs that are regularly reviewed and adjusted as appropriate for new circumstance.
Where a provision is made for dismantling and site restoration costs, an asset of similar initial value is raised and amortised in accordance with the company’s accounting policy for property, plant and equipment. As the value of the provision for mine closure represents the discounted value of the present obligation to restore, dismantle and close the mine, the increase in this provision due to the passage of time is recognised as a borrowing cost.
The discount rate used is a pre‐tax rate that reflects the current market assessment of the time value of money and the risks specific to the liability.
Expenditure on plant and equipment for pollution control is capitalised and depreciated over the useful lives of the assets whilst the cost of on‐going current programmes to prevent and control pollution and to rehabilitate the environment is charged against profit or loss as incurred.
Medical
No contributions are made to the medical aid of retired employees.
Short‐term and long‐term benefits
The cost of all short‐term employee benefits, such as salaries, bonuses, housing allowances, medical and other contributions is recognised during the period in which the employee renders the related service. The vesting portion of long‐term benefits is recognised and provided for at reporting date, based on current cost to company.
Termination benefits
Termination benefits are payable whenever an employee’s employment is terminated before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits. The company recognises termination benefits when it has demonstrated its commitment to either terminate the employment of current employees according to a detailed formal plan without possibility withdrawal or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. If the benefits fall due more than 12 months after the reporting date, they are discounted to present value.
Provision for severance benefits is made in accordance with Section 35 of the Namibian Labour Act 2007. As the severance benefits are only payable on retirement or the voluntary termination of service from the side of the employer, this is accounted for as a post‐retirement service. The plan is defined benefit obligation. The cost of providing these benefits is determined based on the projected unit method and actuarial valuations are performed at every reporting date.
Remeasurement, comprising actuarial gains and losses, is reflected immediately in the statement of financial position with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment.
Net interest is calculated by applying the discount rate at the beginning of the period to the net defined liability
or asset. Defined costs are categorised as follows:
- Service costs (including current service cost, past service cost. As well as gains and losses on curtailments and settlements)
- Net interest expense or income
- Remeasurement
The Group presents the first two components of the defined benefit costs in profit or loss in the line item
employee benefits. Curtailment gains and losses are accounted for as past service costs.
The company assesses whether a contract is, or contains a lease, at the inception of the contract. A contract is, or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
In order to assess whether a contract is, or contains a lease, management determine whether the asset under consideration is "identified", which means that the asset is either explicitly or implicitly specified in the contract and that the supplier does not have a substantial right of substitution throughout the period of use. Once management has concluded that the contract deals with an identified asset, the right to control the use thereof is considered. To this end, control over the use of an identified asset only exists when the company has the right to substantially all of the economic benefits from the use of the asset as well as the right to direct the use of the asset.
In circumstances where the determination of whether the contract is or contains a lease requires significant judgement, the relevant disclosures are provided in the significant judgements and sources of estimation uncertainty section of these accounting policies.
A lease liability and corresponding right‐of‐use asset are recognised at the lease commencement date, for all lease agreements for which the company is a lessee, except for short‐term leases of 12 months or less, or leases of low value assets. For these leases, the company recognises the lease payments as an operating expense on a straight‐line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Details of leasing arrangements where the company is a lessee are presented in the note.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the company uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise the following:
fixed lease payments, including in‐substance fixed payments, less any lease incentives;
variable lease payments that depend on an index or rate, initially measured using the index or rate at commencement date;
the amount expected to be payable by the Group under residual value guarantees;
the exercise price of purchase options, if the Group is reasonably certain to exercise the option;
lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option; and
penalties for early termination of a lease, if the lease term reflects the exercise of an option to terminate the lease.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability (or right‐of‐use asset). The related payments are recognised as an expense in the period incurred and are included in operating expenses.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect lease payments made. Interest charged on the lease liability is included in finance costs.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right‐of‐use asset) when:
there has been a change to the lease term, in which case the lease liability is remeasured by
discounting the revised lease payments using a revised discount rate;
there has been a change in the assessment of whether the group will exercise a purchase,
termination or extension option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate;
there has been a change to the lease payments due to a change in an index or a rate, in which case the lease liability is remeasured by discounting the revised lease payments using the initial discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used);
there has been a change in expected payment under a residual value guarantee, in which case the lease liability is remeasured by discounting the revised lease payments using the initial discount rate
a lease contract has been modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised payments using a revised discount rate.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right‐ of‐ use asset or is recognised in profit or loss if the carrying amount of the right‐of‐use asset has been reduced to zero.
The right‐of‐use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under IAS 37. To the extent that the costs relate to a right‐of‐use asset, the costs are included in the related right‐of‐use asset, unless those costs are incurred to produce inventories.
Right‐of‐use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right‐of‐use asset reflects that the group expects to exercise a purchase option, the related right‐of‐use asset is depreciated over the useful life of the underlying asset.
The depreciation starts at the commencement date of the lease.
The right‐of‐use assets are presented as a separate line in the statement of financial position.
The Group applies IAS 36 to determine whether a right‐of‐use asset is impaired and accounts for any identified impairment loss as described in the ‘Property, Plant and Equipment’ policy.
Variable rents that do not depend on an index or rate are not included in the measurement the lease liability and the right‐ of‐use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs and are included in the line “Other expenses” in profit or loss.
As a practical expedient, IFRS 16 permits a lessee not to separate non‐lease components, and instead account for any lease and associated non‐lease components as a single arrangement. The company has not used this practical expedient. For contracts that contain a lease component and one or more additional lease or non‐lease components, the company allocates the consideration in the contract to each lease component on the basis of the relative stand‐alone price of the lease component and the aggregate stand‐alone price of the non‐lease components.
The Company's and Group's functional and presentation currency are the United States dollar. The functional currency of the Namibian subsidiaries is the Namibian dollar.
Transactions denominated in Namibian dollars have been translated into United States dollars at the average rate for the year of US$1=N$18.4588 (2022: US$1=N$16.3818).
Monetary items denominated in Namibian dollars at the year‐end have been translated at the closing rate at the last day of the reporting period of US$1=N$18.2847 (2022 US$1=N$16.9325).
Monetary items denominated in British pounds at the year‐end have been translated at the closing rate at the last day of the reporting period of US$1=£0.7845 (2022 US$1= £0.8306).
Unrealised differences arising from the above and realised differences arising on settlement in the year are included in the appropriate income or expenditure category.
Transaction and balances
Transactions denominated in currencies other than the Group’s functional currency, US dollar, are translated at the rate of exchange ruling at the transaction date. Monetary items denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Gains and losses arising on translation are credited to or charged to the statement of profit or loss and other comprehensive income.
Foreign currency hedges
Foreign currency hedges are dealt with in the financial instruments accounting policy.
Consolidation
Financial statements of components whose functional currency is not the United States dollar have been translated at the average rate for the year for comprehensive income items and closing rate for financial position items. Differences arising are included in other comprehensive income.
Exchange rates used
Monetary items at year‐end have been translated at the closing rate at the last day of the reporting period
US$1:N$18.2847 (2022 US$1: N$16.9325).
Interest and dividends
Interest is recognised on the time proportion basis taking into account of the principal outstanding and the effective rate over the period to maturity, when it is determined that such income will accrue to the company.
Dividends are recognised when the right to receive payment is established.
Dividends paid are recognised by the company when the shareholder’s right to receive payment is established. These dividends are recorded and disclosed as dividends paid in the statement of changes in equity. Dividends proposed or declared subsequent to the year‐end are not recognised at the reporting date but are disclosed in the notes to the financial statements.
Research, development and exploration costs
Exploration and evaluation expenditure relates to costs incurred on the exploration and evaluation of potential mineral resources and include costs such as exploration, researching and analysing historical exploration data, exploratory drilling, trenching, sampling and the cost of pre‐feasibility studies. Exploration and evaluation expenditure for each area of interest, other than that acquired from another company, is charged to profit or loss as incurred, except when the expenditure will be recouped from future exploitation or sale of the area of interest and it is planned to continue with active and significant operations in relation to the area, or at the reporting period end, the activity has not reached a stage which permits a reasonable assessment of the existence of commercially recoverable reserves, in which case the expenditure is capitalised.
Purchased exploration and evaluation assets are recognised at their fair value at acquisition. As the intangible component represents an insignificant and indistinguishable portion of the overall expected tangible amount to be incurred and recouped from future exploitation, these costs along with other capitalised exploration and evaluation expenditure is recorded as a component of property, plant and equipment.
As the capitalised exploration and evaluation expenditure asset is not available for use, it is not depreciated. All capitalised exploration and evaluation expenditure is monitored for indications of impairment. Where a potential impairment is indicated, an assessment is performed for each area of interest or at the cash generating unit level. To the extent that capitalised expenditure is not expected to be recovered, it is charged to profit or loss.
Administration costs that are not directly attributable to a specific exploration area are charged to profit or loss. Licence costs paid in connection with a right to explore in an existing area are capitalised and amortised over the term of a permit.
When commercially recoverable reserves are determined and such development receives the appropriate approvals, capitalised exploration and evaluation expenditure is transferred to extensions under construction, a component within the plant and equipment asset sub‐category. All subsequent development expenditure is similarly capitalised, provided commercial viability conditions continue to be satisfied. Proceeds from the sale of product extracted during the development phase are netted against development expenditures. Upon completion of development and commencement of production, capitalised development costs are further transferred, as required, to the appropriate plant and equipment asset category and depreciated using the straight‐line basis.
Financial instruments
Classification
The Company classifies its financial instruments in the following measurement categories:
∙ Those to be measured subsequently at fair value either through
‐ Other Comprehensive Income (FVOCI) or through
‐ Profit or loss (FVPL), and
∙ Those to be measured at amortised cost
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI).
Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade‐date, the date on which the Company commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
Subsequent measurement
Subsequent measurement of debt instruments depends on the Company’s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Company classifies its instruments:
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the statement of profit or loss.
FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses) and impairment expenses are presented as separate line item in the statement of profit or loss.
FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognised in profit or loss and presented net within other gains/(losses) in the period in which it arises.
In the current year, the following new and revised standards and interpretations have been adopted by the group and have an effect on the current period or a prior period or may have an effect on future periods:
At the date of authorisation of these financial statements, the following standards and interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective (and in some cases had not yet been adopted by the UK Endorsement Board):
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Inventory is carried at the lower of cost and net realisable value. Net realisable value is estimated by calculating the net selling price less all costs still to be incurred in converting the relevant inventory to saleable product, and delivering it to the customer. The selling price of mine products is generally determined by reference to mineral content; management must determine the grade of the material as well as the physical quantities.
Net realisable value is determined on the basis of conditions that existed at balance sheet date; subsequent price movements are also considered to determine whether they provide more information about the conditions that were present at balance sheet date. The net realisable value should be determined using the most reliable estimate of the amounts the inventories are expected to realise. Both the year‐end spot price and the market forward commodity price may provide unbiased and reliable estimates of the amount the inventories are expected to realise. The spot price at period end will often provide the best evidence of the value which the inventories could realise, however, where the inventory is to be sold at a future date and the entity has an executory contract for this the use of the forward price curve would be appropriate. Movements in the ore price after the balance sheet date typically reflect changes in the market conditions after that date and therefore should not be reflected in the calculation of the net realisable value. A consistent approach to different commodities will need to be applied and this approach should be consistent from one year to another.
Impairment tests are performed when there is an indication of impairment of assets or a reversal of previous impairment of assets. Management therefore has implemented certain impairment indicators and these include movements in exchange rates, commodity prices and the economic environment its business operate in.
Estimates are made in determining the recoverable amount of assets that include the estimation of cash flows and discount rates used. In estimating the cash flows, management base cash flow projects on reasonable and supportable assumptions that represent management’s best estimate of the range of economic conditions that will exist over the remaining useful life of the assets, based on publicly available information. The discount rates used are pre‐tax rates that reflect the current market assessment of the time value of money and the risks specific to the assets for which the future cash flow estimates have not been adjusted.
The historical cost of acquiring an asset includes the costs necessarily incurred to bring it to the condition and location necessary for its intended use. Determining which costs are “necessarily incurred” for a capital project requires judgment. Generally, costs incurred for replacements or betterments of property, plant, and equipment is capitalized when they extend the life or increase the functionality of the asset in question; otherwise, they are expensed as incurred.
The company applies a capitalisation threshold of USD 5,000 (Five Thousand US Dollars), with stand alone costs necessarily incurred that is less than the threshold being expensed. The application of the threshold do not have a material effect on the financial statements
The company applies judgement in the capitalisation of internal incurred costs relating to exploration and development. Direct and indirect costs are capitalised by applying a percentage of the total related costs in so far as those costs contribute or are incurred for the specific activity.
Such estimates relate to the category of the resource (measured, indicated or inferred), the quantum and the grade. Management use a National Instrument 43‐101 (NI‐43‐101) compliant LOM for business calculations and financial accounting.
For defined benefit schemes, management is required to make annual estimates and assumptions about future returns on classes of schemes’ assets, future remuneration changes, employee attrition rates, administration costs, and changes in benefits, inflation rates, exchange rates, life expectancy and expected remaining periods of service of employees. In making these estimates and assumptions, management considers advice provided by external advisers, such as actuaries.
The principal estimates input to the model were a discount rate of 9.80% (2022 - 9.80%), an inflation rate of 4.80% (2022 - 4.80%), an expected salary increase of 6.30% (2022 - 6.30%), and a withdrawal table of 15% ages 20-24, 10% ages 25-29, 7% ages 30-34, 4% ages 35-39, 2% ages 40-44, and 0% aged 45 and over. The mortality table used was a Pre-retirement SA85-90 (Light).
The depreciable amount of assets is allocated on a systematic basis over their useful lives. In determining the depreciable amount management makes certain assumptions in respect of the residual value of assets based on the expected estimated amount that the entity would currently obtain from disposal of the asset, after deducting the estimated cost of disposal. If an asset is expected to be abandoned the residual value is estimated at zero. In determining the useful life of assets, management considers the expected usage of assets, expected physical wear and tear, legal or similar limits of assets such as mineral rights as well as obsolescence.
Provision is made for environmental and decommissioning costs where either a legal or a constructive obligation is recognised as a result of past events. Estimates are made in determining the present obligation of environmental and decommissioning provisions, which include the actual estimate, the discount rate and inflation rate used and the expected date of closure of mining activities in determining the present value of environmental and decommissioning provisions. Estimates are based upon costs that are regularly reviewed, by internal and external experts, and adjusted as appropriate for new circumstances. Refer to the note for detailed explanation of the provisions raised.
There is a sole buyer for all concentrate produced thus represents a significant concentration risk. In absence of this, the Directors are of the opinion that the nature of commodity markets means that this customer could be readily replaced if required.
Fees payable for the audit of subsidiaries pursuant to legislation is to a component auditor of the Group who is unaffiliated with the Group auditor. Non- audit fees of $13,000 (2022 $23,000) in respect of taxation services were payable to the component auditor.
The average monthly number of persons (including directors) employed by the group during the year was:
Their aggregate remuneration comprised:
The average monthly number of persons (including directors) employed by the company during the year was:
Directors of the subsidiary companies are classed as key management personnel, for whom details of remuneration is provided in note 36.
3 directors are accruing benefits under defined contribution pension schemes.
The above includes all remuneration paid to directors of the parent company by any group company. The above was paid for services as directors of the trading subsidiary; no director received any remuneration for their role as director of GLCR Limited.
The environmental cost includes a provision of $3.5m in respect of remedial works for environmental contamination. See note 27 and note 30 for further details.
The charge for the year can be reconciled to the profit/(loss) per the income statement as follows:
The Group's primary operating environment is in Namibia, where the prevailing tax rate is 37.50% for hard-rock mining companies during both periods. There is no expected future change in this rate.
The company has UK corporation tax losses carried forward of $377,000 (2022: $218,000). If sufficient taxable profits arise to use these losses, corporation tax payable will be reduced by $94,000 (2022: $54,000). No deferred tax asset has been recognised.
Inventory impairments were $432,000 (2022: $484,000) and have been recognised in cost of sales.
All intangible assets are associated with the Group's sole cash-generating unit, being that of mining operations at the Rosh Pinah site in Namibia.
The mining licence represents the right to use the Rosh Pinah Mine, grant number ML39, owned by PE Minerals Namibia (Proprietary) Limited. The mining licence was renewed in November 2020 for 15 years.
Computer software transfers of $4,328,000 in 2022 and $234,000 in 2023 arose from the developments and implementation that took place on the operating systems during the year. This software consisted of capitalised development costs and therefore represents an internally generated intangible asset.
The life of mine (“LOM”) was calculated at 14 years as at 1 January 2023 (13 years at 1 January 2022). The life of mine as at 1 January 2023 was calculated by using the 2021 year‐end Reserves, subtracting the 2022 depletion and applying the RP2.0 expansion project ramp‐up profile used in the August 2022 internally prepared life of mine. The life of mine as at 1 January 2022 was calculated using the National Instrument 43‐101 (NI 43‐101) guidelines.
Site preparation represents capitalised exploration costs of $7,395,000 and development costs of $346,000.
At 31 December 2023, the Group had an interest of circa 28% (2022 - circa 28%) in Rosh Pinah Health Care (Proprietary) Limited. The Group has joint control of its board to execute and comply with all policy and strategic directives, although the majority of the Board seats are appointed by the other joint venturer.
At 31 December 2023, the group had an interest of circa 45% (2022 - 45%) in RoshSkor Township (Proprietary) Limited ("RTPL"). The Group has joint control of its board to execute and comply with all policy and strategic directives, alongside Skorpion Zinc, the fellow joint venturer. This joint venture is fully impaired at the current and prior year ends.
As at 31 December 2023 the group had an effective interest of circa 44% (2022 - circa 44%) in Gergarub Exploration and Mining (Proprietary) Limited ("Gergarub"). Gergarub is a joint venture operation between Skorpion Mining Company (Proprietary) Limited and the Group. The Group is the holder of Mineral Deposit Retention Licence 2616 which holds the exclusive right to mine precious, base, and rare metals over a certain portion of the land in the Karas region, near Rosh Pinah. The Gergarub project has recently been granted Mining Licence 245 ("ML 245") for 20 years until 20 February 2044, which covers an area of 691 hectares (6.9 square kilometres) and is located within EPL 2616.
The Group jointly controls, but does not control alone, all companies and therefore has treated these as joint ventures under IAS 28.
Details of the company's subsidiaries at 31 December 2023 and 31 December 2022 are as follows:
Details of the group's joint ventures at 31 December 2023 and 31 December 2022 are as follows:
Inventories can be analysed to product categories as follows:
There is a sole buyer for all concentrate products. The buyer has a long-term credit rating of BBB+ from Standard & Poor's, and Baa1 from Moody's.
The trade receivables figure is adjusted to be representative of mark to market adjustments (hereafter, "provisional pricing adjustments"), being a level 2 fair value measurement. Details of these adjustments and the sensitivity to market inputs are provided in note 23.
At the year end the Group has the following open contracts which are subject to provisional pricing adjustments:
(1) Revenue originally recognised under the contract, determined using spot commodity pricing and expected tonnages, prior to the deductions shown in note 4.
(2) The cumulative impact of provisional pricing adjustments from the contract date to the year end for all open contracts. The gain/(loss) from this is shown in note 11.
The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.
No significant receivable balances are impaired at the reporting end date.
Credit risk exists predominantly on cash deposits and trade receivables. The Group only deposits cash with major banks with high quality credit standing, and limits exposure to any one counter-party insofar as is possible.
The Group's zinc and lead sales were made to a single customer. For both lead and zinc, provisional payments of 100% are made based on provisional weight, moisture, assays, and the metal quotation applicable.
During the year 31 December 2023, revenue decreased by $ 0.4 million (2022: $ 0.3 million decrease) from the final zinc sales invoices and increased by $ 0.7 million (2021: $ 1.0 million increase) from final lead, silver and gold sales invoices in respect of invoices outstanding at previous year‐end.
The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics, except for the sole customer. That sole customer is the sole buyer for all concentrate produced. It has a long-term credit rating of BBB+ from Standard & Poor's, and Baa1 from Moody's.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets. Trade receivables and contract assets are written off where there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a counterparty to engage in a repayment plan with the Group, and a failure to make contractual payments for a period of greater than 120 days.
Impairment losses on trade receivables and contract assets are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item.
2023
Group borrowings were reorganised as part of the acquisition by ANR RP Limited therefore the borrowings are owed to ANR RP Limited, the ultimate parent company as at 31 December 2023.
$3.1m carries interest at a rate per annum equal to the Scotiabank rate plus 1.0%, until a full and final repayment of all advances. Interest is calculated daily and accrues for payment on the Demand Date, being the date that the lender fixes by notice to the Group.
$39.9m is unsecured and interest-free and has no fixed repayment terms. This loan was subject to a change in terms subsequent to the year end, as detailed in note 35, resulting in this incurring interest to a related party at 8% per annum and being repayable on demand.
2022
The borrowings are owed to Trevali Mining Corporation , part of the ultimate parent company as at 31 December 2022.
$5.6m carries interest at a rate per annum equal to the Scotiabank rate plus 1.0%, until a full and final repayment of all advances. Interest is calculated daily and accrues for payment on the Demand Date, being the date that the lender fixes by notice to the Group.
$43.1m is unsecured and interest-free and has no fixed repayment terms.
Until June 2023, the centralised corporate treasury function at Trevali provided services to the Group, coordinated access to domestic and international financial markets, and managed the financial risks including risk relating to the Group's operations through internal risk reports that analysed exposures by degree and magnitude of risks. These risks included market risks, credit risk, and liquidity risks. The Group does not enter into nor trades financial instruments, including derivative financial instruments, for speculative purposes.
From June 2023, the new parent company co-ordinates access to domestic and international financial markets and manages the financial risks including risks relating to the company’s operations through internal risk reports that analyse exposures by degree and magnitude of risks, in a manner consistent with that provided by Trevali. These risks include market risks (including foreign currency risks, interest rate and price risk), credit and liquidity risk.
The Group does not enter into nor trades financial instruments, including derivative financial instruments, for speculative purposes.
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Namibian Dollar which is the predominant currency of its country of operations.
The Group does not hedge foreign exchange fluctuations. All revenue is paid in US Dollars into the Group's CFC bank account. Management reviews the forecasted operational cash requirements on a continuous basis and transfers funds from the CFC account to the current account at the applicable spot rate. Borrowings (shown in note 22) are in US Dollars thus matching the primary operational currency holdings in the CFC account to the borrowings, which provides a natural matching of revenues to borrowings, thus eliminating foreign exchange risk from this.
The carrying amounts of the group's foreign currency denominated monetary assets and liabilities at the reporting date are as follows:
At 31 December 2023, if the US Dollar had strengthened by 10% against the Namibian Dollar with all other variables held constant, pre-tax profit for the year would have been approximately $0.7m lower (2022 - $5.61m lower), mainly as a result of exchange gains on the translation of Namibian Dollar denominated trade and other payables.
The sensitivity rate used internally is 10% and represents management's assessment of the reasonably possible change in the foreign exchange rates. A strengthening of the Namibian Dollar or Pound Sterling against the US Dollar represents a weakening of the US Dollar which will result in higher costs being incurred without a change in associated revenues (which are only denominated in US Dollars). The opposite will apply for a strengthening in the US Dollar.
The Group's main interest rate risk arises from short-term borrowings with variable rates, which expose the Group to cash flow interest rate risk.
The short-term borrowings from ANR RP/ Trevali, disclosed in note 22, carries interest at a rate equal per annum to the Scotiabank (Canada) rate plus 1.0% until the borrowings are settled in full.
Subsequent to the year end the Group has replaced certain major borrowings with an interest-bearing loan owed to a related party. Details of this are provided in note 35.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of credit facilities, and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, Group treasury maintains flexibility in funding by maintaining availability under committed credit lines.
The Group's liquidity risk is a result of the funds available to cover future commitments. The Group manages liquidity risk through an ongoing review of future commitments and credit facilities. Cash flow forecasts are prepared, and adequately utilised borrowing facilities are monitored.
The group's financial liabilities are analysed into relevant maturity groupings based on the remaining period at the year end date to the contractual maturity date, based on contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. As at the year end all balances within trade and other payables, and borrowings, are payable within 12 months and the undiscounted cashflows are equal to the amortised cost disclosed in the financial statements.
The Group had access to an undrawn borrowing base facility of $23.6m and an undrawn overdraft until March 2023, when this terminated. In April 2024, Rosh Pinah Zinc Corporation (Proprietary) Limited signed a new funding loan agreement with the lender being a related party, RP FC (Jersey) Limited ("RPFC"), which is a financing vehicle for monies sourced from Appian Natural Resources Fund III L.P. and Appian Natural Resources (UST) Fund III L.P. RPFC provided a facility of up to $50m at a fixed interest rate of 8%. This new funding is secured via a floating charge over the assets of the Group other than investments in joint ventures; the Company has also pledged the shares in subsidiary companies (which are detailed in note 17) along with any intercompany receivables from the same subsidiaries. Details of the drawdowns since the year end are provided in note 35. All amounts are repayable on demand by RPFC.
Further changes to borrowings were enacted subsequent to the year end. Details of this are provided in note 35.
An analysis of the Group's liquidity gap is given in note 24.
Commodity price risk
The Group sells its zinc and other minerals at prevailing market prices, which is the commodity price prevailing at the date of dispatch but subject to a variable embedded derivative pricing adjustment which normally ranges from one to four months after delivery. The Group is therefore exposed to changes in market prices for zinc and other minerals for future and previous sales which remain open for final pricing. The Group does not actively hedge against the impact of commodity price movements.
Whilst a movement in the commodity price would not affect reported revenues, such movements would result in gains or losses for the pricing adjustment shown in note 11 and therefore on reported profits of the Group. Such a movement in the commodity price will affect sales that remain open at that date only, but would result in a change to the value of the trade receivables.
If all other variables, such as currency rates, remain constant then:
If commodity pricing for zinc (the predominant mineral mined by the Group) at the reporting date had increased/decreased by 1% then profit recognised by the Group would have increased/decreased by approximately $320,000 (2022 - $501,000).
If commodity pricing for lead at the reporting date had increased/decreased by 1% then profit recognised by the Group would have increased/decreased by approximately $195,000 (2022 - $81,000).
If commodity pricing for silver and gold at the reporting date had increased/decreased by 1% then profit recognised by the Group would have increased/decreased by approximately $48,000 (2022 - $21,000).
In addition, a movement in the average commodity prices during the year would impact revenue and earnings. If all other variables, such as currency rates, remained constant and ignoring the impact of provisional pricing, then:
If commodity pricing for zinc had increased/decreased by an average of 1% then the revenue and profit before tax recognised by the Group would have increased/decreased by approximately $805,000 (2022 - $1,008,,000).
If commodity pricing for lead had increased/decreased by an average of 1% then the revenue and profit before tax recognised by the Group would have increased/decreased by approximately $195,000 (2022 - $236,000).
If commodity pricing for silver and gold had increased/decreased by an average of 1% then the revenue and profit before tax recognised by the Group would have increased/decreased by approximately $48,000 (2022 - $101,000).
The following are the major deferred tax liabilities and assets recognised by the group and movements thereon during the current and prior reporting period.
Environmental (non-current)
Provision is made for environmental rehabilitation costs where either a legal or a constructive obligation is recognised as a result of past events. Estimates are based upon costs that are regularly reviewed and adjusted as appropriate for new circumstances. The current estimate was discounted at a rate of 9.93% (2022: 9.35%) with inflation adjustment of 4.6% (2022: 5.5%) over the current life of mine of 14 years at 1 January 2023 (13 years at 1 January 2022). The environmental plan has been approved by the Minister of Mines and Energy.
Decommissioning
The decommissioning provision relates to decommissioning of property, plant and equipment where either a legal or a constructive obligation is recognised as a result of past events. Estimates are based upon cost that are regularly reviewed and adjusted as appropriate for new circumstances. The current estimate was discounted at a rate of 9.93% (2022: 9.35%) with an inflation adjustment of 4.6% (2022: 5.5%) over the current life of mine of 14 years at 1 January 2023 (13 years as at 1 January 2022).
Environmental (current)
During 2023, the Group identified a source of potential contamination associated with historical and ongoing operations, with the potential to affect certain employees of the mine and dependents living in the Rosh Pinah area. Following the Group’s discovery, shortly after its acquisition by ANR RP (an Appian entity), it took immediate action to contain and resolve the situation, incurring directly attributable expenses in 2023 of approximately $687,000. Such fees represent the cost of environmental monitoring and studies, together with relocation costs for those affected.
The Group expects to incur further costs for ongoing monitoring of the site, together with improvements to avoid a recurrence of similar contamination. Capital commitments are expected to be $2.7m and a provision has been made for the remaining costs of $3.5m.
Severance pay
Details of the severance pay provisions are provided in note 37.
The Group has a liability for termination benefits payable to employees on dismissal, death, retrenchment or retirement at the age of 60 or 63 as determined by the Group policy.
Eligibility for severance payments on dismissals, death, retirement and resignation on reaching age 65 has been determined in accordance with the Namibia Labour Act, 2007 and the recommendations in Circular 3 (2009) as compiled by the Institute of Chartered Accountants of Namibia. The benefits are unfunded under IAS19. As the severance benefits are only payable on retirement or the involuntary termination of services from the side of the employer, this is accounted for as a post‐retirement benefit. This plan is a defined benefit obligation. No other post‐retirement benefits are provided to these employees. The benefit payable is a week’s wages for each completed year of service.
Alexander Forbes carried out the most recent actuarial valuation of the present value of the defined benefit obligation in December 2023. The present value of the defined benefit obligation and the related current service costs and past service cost was measured using the Projected Unit Credit Method.
The principal assumptions used for the purpose of the actuarial valuation were as follows:
2023
• Discount rate 9.80%
• Inflation rate 4.80%
• Expected rates of salary increase 6.30%
• Mortality Pre‐retirement ‐ SA85‐90(Light) Table
• Annual withdrawal rate by age range:
• 20 – 24 15.00%
• 25 – 29 10.00%
• 30 – 34 7.00%
• 35 – 39 4.00%
• 40 – 44 2.00%
• 45+ 0.00%
2022
• Discount rate 9.80%
• Inflation rate 4.80%
• Expected rates of salary increase 6.30%
• Mortality Pre‐retirement ‐ SA85‐90(Light) Table
• Annual withdrawal rate by age range:
• 20 – 24 15.00%
• 25 – 29 10.00%
• 30 – 34 7.00%
• 35 – 39 4.00%
• 40 – 44 2.00%
• 45+ 0.00%
The company has one class of Ordinary share which carries no fixed right to income.
Set out below are the future cash outflows to which the lessee is potentially exposed that are not reflected in the measurement of lease liabilities:
At 31 December 2023 the group had capital commitments as follows:
The committed expenditure relates to property, plant and equipment and will be financed by existing cash resources, funds internally generated and available borrowing capacity.
The Group contributes to medical aid schemes for the benefit of permanent employees and their dependents. The contributions charged against income amounted to $1,631,000 (2022: $1,581,000). Rosh Pinah Zinc Corporation (Proprietary) Limited has no post‐retirement medical aid obligation for current or retired employees.
The Group is exposed to the cyclical price movements associated with commodity products. The Group's policy is therefore to ensure that the group builds a robust capital structure with strong financial metrics that can withstand a significant downturn in commodity prices. Growth opportunities, debt levels, and dividend distributions to shareholders are considered against this backdrop.
Provision is made for future commitments and working capital requirements in determining the level of interim and final dividends to shareholders, if any.
Details of the Group's primary borrowings are given in note 25.
The RP2.0 expansion project was restarted in Q3 2023, and has the potential to expand Rosh Pinah's zinc production levels, while also producing significant by-products of lead and silver. To partially fund this project, in Q2 and Q3 2024, a related party, RP FC (Jersey) Limited, provided $20m of funding via an intercompany loan facility of up to $50m to RPZC (details of which are given in note 23).
On 24 June 2024, the group restructured its financing. $39.9m of borrowings, included in note 22, representing a Namibian Dollar value of N$730.2m which were interest-free, unsecured, and owed to ANR RP Limited (a controlling entity of the Group), has been novated to RP FC (Jersey) Limited ("RPFC"), a related party. As part of this the currency has been fixed in the US$ equivalent at that date, resulting in a revaluation to $40.3m, and as a result the Group then owed this amount to RPFC. The replacement loan carries interest at 8% per annum, is unsecured, and is payable to RPFC on demand.
The remuneration of key management personnel, including directors, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures.
Key management personnel remuneration was $498,000 (2022: $539,000) in total. This represented short-term remuneration of $377,000 (2022: $406,000), retirement benefits of $22,000 (2022: $24,000), and long-term incentive plans totalling $99,000 (2022: $109,000).
This has three components: base salary including benefits and group contributions, short-term incentive plans (STIP), and long-term incentive plans (LTIP).
Base salary recognises the responsibilities of the individual managers with considerations for the experience and skills of the individual, market conditions, and the group's overarching interest in attracting and retaining executive talent. This is fixed compensation determined annually.
The STIP is intended to motivate and reward the achievement of annual individual and Group objectives which contribute to the successful implementation of the Group’s business plan and the enhancement of Shareholder value.
The LTIP is intended to help attract and retain employees by providing them with an opportunity to participate in the future success of the Group and to reinforce commitment to long‐term growth in profitability and Shareholder value.
Other transactions with related parties
Debtors
Glencore International AG, the largest shareholder in the former ultimate parent undertaking Trevali Mining Corporation, $0 (2022: $ 2,046,000). All revenue in the current and year (as shown in note 4) was receivable from Glencore International AG.
Creditors
Trevali Mining Corporation, former ultimate parent undertaking $0 (2022: $48,701,000).
ANR RP Limited, parent undertaking $43,023,000 (2022: $0).
PE Minerals Namibia (Proprietary) Limited, minority shareholder and holder of mining licence ML39 under which the Group operates $1,028,000 (2022: $987.000).
Appian Capital Advisory LLP, connected to the controlling party $1,086,000.
Subsequent to the year end, $39.9m of the amount owed to ANR RP Limited has been novated and at the date of approval of the financial statements is owed instead to RP FC (Jersey) Limited, a related party. Details of this change are provided in note 35.
Expenditure
Administration Fees
Access World Logistics (Namibia) Pty Limited, owned and managed by Glencore International AG $nil (2022: $1,180,000).
Trevali Mining Corporation, former ultimate parent undertaking $440,000 (2022: $1,273,000).
Trevali Mining South Africa, owned by Trevali Mining Corporation $nil (2022: $1,295,000).
Rosh Pinah Health Care (Proprietary) Limited, joint venture, $219,000 (2022: $265,000).
RoshSkor Township (Proprietary) Limited, joint venture $1,324,000 (2022: $1,136,000).
Appian Capital Advisory LLP, connected to the controlling party $1,086,000.
Royalties
PE Minerals Namibia (Proprietary) Limited, minority shareholder and holder of mining licence ML39 under which the group operates $1,986,000 (2022: $2,795.000).
Interest paid
Trevali Mining Corporation, former ultimate parent undertaking $503,000 (2022: $202,000).
ANR RP Limited, parent undertaking $210,000 (2022: $0).
Joint ventures
During the year the Group has contributed to the exploration for mineral resources, with costs incurred in its joint venture Gergarub Exploration and Mining (Proprietary) Limited ("Gergarub"). Gergarub is conducting exploration activities in a region close to Rosh Pinah, under a separate mining licence. It has no source of funds other than from its joint venturers, being the Group and Skorpion Mining Company (Proprietary) Limited. As part of this arrangement, the joint venturers each incur costs on behalf of Gergarub and then these are settled on a quarterly basis via a cash transfer between the joint venturers or remitted from Gergarub.
For costs incurred by the Group, these are added to the investment in the joint venture but then fully provided for such that the carrying value of the joint venture is $nil; this policy is expected to continue until the point at which mineral resources are substantially proven and commercial viability can be established, at which point recoverability of the investment will be reassessed. This has the effect of expensing these exploration costs.
During the year the Group made payments to, or on behalf of, Gergarub totalling $3,291,000 (2022 - $307,000), of which $1,613,000 (2022 - $150,000) represents a cost expensed as irrecoverable from the joint venture and the balance is recoverable from Gergarub and/or Skorpion Zinc. At the year end the outstanding balance owed from Gergarub was $935,000 (2022 - $297,000).
Independent funds provide retirement and other benefits for all permanent employees, retired employees, and their dependents. At the end of the financial year, the main fund to which Rosh Pinah Zinc Corporation (Proprietary) Limited was a participating employer, was as The Rosh Pinah Retirement Fund operating as a defined contribution fund.
The employer’s contribution of 16.25% in the Rosh Pinah Retirement fund is expensed as incurred. Members pay a contribution of 9.75% to the Rosh Pinah Retirement fund.
Membership was 410 (2022: 412).
Employer contributions were $1,087,000 (2022: $1,207,000).
Due to the nature of these funds, the accrued liabilities by definition equate to the total assets under control of these funds. The last actuarial valuation of the Rosh Pinah Retirement Fund was performed as at 31 December 2023 in which the actuary reported that the fund was in sound financial position.
The Group's cash is predominantly held in US Dollars. For accounts held in Namibian Dollars, the rate of conversion is USD$1 = N$18.28 (2022 - USD$1 = N$17.27). The group has an unsecured overdraft facility of N$80 million at an interest rate of prime overdraft rate.
Cash and cash equivalents includes petty cash at the company premises. The Group's bank has a long-term credit rating of AA+ from Fitch (Standard Bank Investor Relations: Credit Ratings). The Group's banker provides general banking facilities and facilitates the payment of suppliers and employees via an electronic banking platform.
Until 23 June 2023
The parent and ultimate controlling party was Trevali Mining Corporation, a company incorporated in Canada.
This was the only party which consolidated the group's results into its financial statements. These were available from 1900-999 West Hastings Street, Vancouver, British Columbia, Canada.
From 23 June 2023
The immediate parent and controlling party is ANR RP Limited, a company incorporated in England & Wales. ANR RP Limited is under the control of Appian Natural Resources Fund GP III Limited, the ultimate controlling party incorporated in Jersey.
There is no party which consolidates the Group's results into its financial statements.