UNAUDITED INTERIM RESULTS 6 MONTHS ENDED 31/08/23

Andrada Mining Limited

29 November 2023

 

29 November 2023

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (MAR) as in force in the United Kingdom pursuant to the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via Regulatory Information Service (RIS), this inside information will be in the public domain.

Andrada Mining Limited

("Andrada" or "the Company")

Unaudited Interim Financial Results for the six months ended 31 August 2023

Andrada Mining Limited (AIM: ATM, OTCQB: ATMTF), the metals and mining company with a portfolio of technology metals mining and exploration assets in Namibia, announces its unaudited interim financial results for the six-months ended 31 August 2023 ("H1 2024").

The company will be hosting an investor presentation at 9am UK time (11am SAST) on Thursday 30 November 2023. Please register for the event at: https://www.investormeetcompany.com/afritin-mining-limited/register-investor.

 

HIGHLIGHTS

FINANCIAL PERFORMANCE

§ 87% increase in revenue to GBP8.7 million (H1 2023: GBP4.7 million).

§ 19% decrease in cost of sales per tonne of contained tin to GBP17 276 (H1 2023: GBP21 903).

§ > 100% increase in gross profit to GBP1.5 million (H1 2023: loss of GBP1 million).

§ 30% reduction in operating loss to GBP2.5 million (H1 2023: loss of GBP3.5 million).

§ 25% reduction in loss before tax to GBP2.8 million (H1 2023: loss of GBP3.7 million).

§ Average C1¹ operating cash cost per tonne of contained tin produced was USD18 161 (GBP14 324), which is within management guidance.

§ Average C2² operating cost per tonne of contained tin produced was USD20 796 (GBP16 403), which is within management guidance.

§ All-in sustaining cost ("AISC") ³ per tonne of contained tin produced was USD24 662 (GBP19 452) which is below management guidance.

§ GBP7.7 million (c. USD10 million) raised through issuance of unsecured convertible loan notes.

§ Unaudited cash balance on 31 August 2023 was GBP6.7 million (USD8.5 million).

OPERATIONAL PEFORMANCE

§ Successful plant expansion in 2023 resulted in significant improvements in the H1 2024 performance.

§ 67% increase in tin concentrate to 758 tonnes (H1 2023: 455 tonnes).

§ 58% increase in contained tin metal to 454 tonnes (H1 2023: 287 tonnes).

§ 37% increase in the plant processing rate to 136 tonnes per hour (tph) (H1 2023: 99 tph).

§ 10% increase in plant utilisation to 81% (H1 2023: 74%).

§ Improved safety performance to 0.8714 Lost Time Injury Frequency Rate ("LTIFR") at the end of the period compared to 8.02 at the end of H1 2023.

§ Production of initial bulk saleable petalite concentrate at 85% purity and Li₂O grade of 4.16%.

§ Construction and commissioning of the lithium (bulk-sampling) pilot plant ("Pilot Plant") completed.

-     Production of lithium concentrate from the Pilot Plant has commenced (see announcement dated 27 November 2023).

§ Construction and commissioning of the tantalum circuit ("the Circuit") completed.

§ In-house test campaigns have commenced to determine how to produce a consistent saleable grade of lithium concentrate.

§ Drilling on Spodumene Hill licence area (ML 129) completed with all holes intersecting mineralised pegmatite

-     Inaugural drill results intersected high grade spodumene mineralisation with grades up to 2.32% lithium oxide (Li₂O).

STRATEGIC

§ Appointment of Barclays Bank PLC as a strategic advisor to the Company's lithium development programme.

§ Completed the rebranding from Afritin Mining to Andrada Mining to reflect the Company's expanding lithium, tin, and tantalum resources.

§ Upgraded the OTC listing from pink sheets to the QB tier to enhance access to the North American investor base.

§ Renewal of the Brandberg West exploration license (EPL 5445) for an additional 2 years from 1 August 2023.

POST - PERIOD

Operational

§ Renewal of the Thailand Smelting and Refining Co. Limited ("Thaisarco") tin off-take agreement for three years commencing December 2023.

§ Renewal of the AfriMet Resources AG ("AfriMet") tantalum off-take agreement for 12 months commencing January 2024.

§ Completion and publication of the 2023 Sustainability Report highlighting the Company's contribution of GBP33 million to the Namibian national economy since inception.

Financial

§ On 5 September 2023, the Company finalised the NAD100 million (c. GBP4.2 million OR USD5.3 million) Development Bank of Namibia ("DBN") financing that is ring-fenced for the implementation of the Uis Mine Stage II Continuous Improvement Project ("CI2").

§ Finalisation and receipt of USD25 million Financing Package from Orion Resource Partners ("Orion"). (See announcement dated 15 August 2023 and 16 November 2023).

§ Unaudited cash balance on 27 November 2023 at GBP23 million (USD29 million)

Exploration

§ Reverse Circulation ("RC") drilling programme undertaken on the Lithium Ridge licence area (ML133).

-     All holes intersected mineralised pegmatites with significant lithium mineralisation along a 6km strike length with spodumene and petalite identified as the primary lithium minerals.

§ Commencement of an exploration programme on Brandberg West licence area EPL 5445.

-     Historically a producer of tin and tungsten with strong indications of copper.

Chief Executive Officer's Statement

The interim period under review has been nothing short of eventful and exhilarating. We kicked off the year with a rebranding initiative to accurately reflect the poly-metallic nature of our extensive resource portfolio in Namibia's mineral-rich Erongo region. We achieved numerous milestones across all the Company's departments with a single-mindedness to expedite the route-to-market for lithium and tantalum. These milestones include the significant lithium discoveries on Lithium Ridge and Spodumene Hill license areas which established Andrada as an emerging, formidable poly-metallic producer. The commentary below further elaborates the various initiatives we have implemented towards the expanded strategic intent to being a renowned poly-metallic producer.

OPERATIONAL AND FINANCIAL OVERVIEW

Description	Unit	H1 2024	H1 2023	YoY % Δ
Feed grade	% Sn	0.156	0.147	6%
Plant processing rate	tph	136	99	37%
Ore processed	t	446 621	286 558	56%
Tin concentrate	t	758	455	67%
Contained tin	t	454	287	58%
Tin recovery	%	65	68	-4%
Plant availability	%	92	89	3%
Plant utilisation	%	81	74	10%
Uis mine C1 operating cost¹	USD/t contained tin	18 161	20 094	-10%
Uis mine C2 operating cost²	USD/t contained tin	20 796	22 668	-8%
Uis mine AISC³	USD/t contained tin	24 662	25 812	-5%
Tin price achieved	USD/t contained tin	25 912	25 525	2%

All the numbers are unaudited

¹C1 operating cash costs refers to operating cash costs per unit of production excluding selling expenses and sustaining capital expenditure associated with Uis Mine.

²C2 operating cash costs are equivalent to the C1 costs including selling expenses (logistics, smelting and royalties).

³All-in sustaining cost (AISC) incorporates all costs are related to sustaining production, capital expenditure associated with developing and maintaining the Uis operation as well as pre-stripping waste mining costs.

Increased tonnage and revenue

Andrada experienced significant growth in H1 2024, driven by a 67% increase in tin concentrate production to 758 tonnes, resulting in a 58% increase in contained tin to 454 tonnes compared to the interim period in the 2023 financial year ("H1 2023"). Consequently, revenue increased to GBP8.7 million (H1 2023: GBP4.7 million), generating a higher gross profit of GBP1.5 million (H1 2023: loss of GBP1 million). This impressive performance is attributed to a 37% increase in plant processing rate and a 10% improvement in capacity utilisation, following the completion of the modular expansion of the crushing and tin concentration circuits in Q3 2023.

The enhanced plant performance revealed bottlenecks that needed to be eliminated to ensure sustainability of the increased output and higher production rates. To that effect, the CI2 is expected to improve processing efficiencies to maximise the tin concentrate recovery rate to approximately 70%, establish business sustainability through the enhancement of operational support infrastructure and to reduce operating costs.

The renewal of the tin off-take with Thaisarco for up to 100% production that was agreed after the period end, should also secure the expanded output resulting from the Orion royalty for another three years to 30 November 2026. (See announcement dated 5 September 2023).

Lower unit cost per tonne

The Company is pleased to report a significant improvement in its financial performance in the first half of 2024. Despite an increase in the cost of sales to GBP7.3 million (H1 2023: GBP5.7 million), the cost per tonne of contained tin decreased by 19% to GBP17 276 (H1 2023: GBP21 903). due to increased production tonnage and economies of scale. At the same time, as set out above, the C1 operating cost and AISC decreased by 10% and 5% respectively due to the higher production tonnage. The increased waste stripping of the mining pit to access ore contributed to the higher costs during the period under review. We are pleased that we have exposed additional ore and the stripping ratios have continued to decrease.

The operating loss decreased by 30% to GBP2.5 million (H1 2023: loss of GBP3.6 million) whilst the loss before tax decreased to GBP2.8 million (H1 2023: loss of GBP3.7 million). The average C1 and C2 cash costs remained within management guidance at USD18 161 (GBP14 324) and USD20 796 (GBP16 403), respectively. We are particularly pleased that the AISC at USD24 662 (GBP19 452) was below management guidance of between USD25 000 (GBP19 719) and USD30 000 (GBP 23 663) per tonne of contained tin. It is important to note that due to the higher stripping ratio and Orion tin royalty, the AISC is expected to increase but remain within our guidance. The CI2 is expected to improve plant efficiency and to reduce operational costs by 10%, with the initial impact expected in Q1 2024.

Improved safety performance

At Andrada we are committed to upholding the highest safety standards at Uis. The concerted effort of supervisors across all functions to instil a culture of safety have resulted in a significant improvement in safety performance. The LTIFR decreased from 8.02 at the end of H1 2023 to 0.87 at the end of H1 2024 and there were no fatalities recorded. Various initiatives, such as quarterly safety audits and training, have been instrumental in promoting the safety culture.

Strengthened the financial position

To support ongoing capital expansion programs related to lithium and tantalum development, the Company issued unsecured convertible loan notes totalling GBP7.7 million (c. USD10 million) in July 2023. These funds were primarily utilised for working capital purposes, to progress the exploration program, and to commence a lithium feasibility study. Additionally, the Company secured a USD25 million funding package from Orion Mining, comprising a USD12.5 million unsecured tin royalty, a USD2.5 million equity subscription, and a USD10 million unsecured convertible loan note (see announcement dated 16 November 2023, for more details of this completed package). This funding should provide sufficient capital to progress the expansion programmes at Uis and to expedite the lithium implementation program. In August 2023, Andrada signed binding documentation for the USD25 million Orion funding and ultimately received the funds in November 2023, after the period under review, following the fulfilment of all precedent conditions. We believe that this funding from Orion strongly endorses Andrada's corporate and broader multi-commodity development strategy. (see announcements dated 18 July 2023 and 16 November 2023).

In September 2023, the Company concluded the NAD100 million (c. GBP4.2 million OR c. USD5.3 million) funding with DBN to expedite the implementation of the CI2. The Directors consider this DBN funding to be an essential component of the overall funding and development strategy. The proceeds will be used to implement improvements at Uis Mine to enhance the plant's productivity and output. The targeted increase in the tin recovery rate will complement the royalty portion of the Orion funding by enabling Andrada to achieve the requisite concentrate tonnages. The improvement in cost efficiencies and overall productivity at Uis resulting from the CI2, should lay the foundation for the management of the lithium processing plant and other future operations. (see announcement dated 5 September 2023).

These capital inflows of almost USD40 million, provide funding for the Company to pursue the development of lithium and tantalum revenue streams whilst expanding tin production. Importantly, the DBN and Orion funding will enable us to implement various strategic initiatives necessary for further production growth and the stabilisation of the Company's assets.

The Directors believe that partnering with the DBN and gaining the bank's confidence, should also enable the Company to secure additional infrastructure development financing potentially required for our future growth aspirations.

LITHIUM & TANTALUM DEVELOPMENT

The production of the initial off- site petalite bulk sample concentrate of saleable grade in May 2023 from the Lithium Ridge project represents a significant step towards establishing Andrada as an emerging lithium producer.

Lithium Pilot Plant production

Testing of bulk samples at the Pilot Plant to determine the optimal processing parameters for lithium extraction from all three mining licences commenced in October 2023. In addition to the bulk testing campaigns, the Pilot Plant is also targeting the production of at least 2 400 tpa comprising a saleable concentrate suitable for glass-ceramics market. To date, the Company, has delivered high purity petalite concentrate samples to several potential customers and progress will be provided as these discussions progress.  We believe that our lithium concentrate may potentially be suitable as feedstock for refineries producing lithium carbonate or lithium hydroxide for the battery manufacturing industry and will provide further updates on this as our test work in this area advances. (see announcement 15 and 27 November 2023).

Tantalum Circuit production

After the end of the period under review, the Company renewed its tantalum offtake agreement with AfriMet. This will commence on 1 January 2024 for a period of 12 months and should absorb all the concentrate produced by the Circuit at the Uis Mine. The renewal of the off-take agreement should enable us to realise additional value from a the newly commissioned magnetic separation circuit. Optimisation of the Circuit is on-going, and we foresee commercial production commencing in or around December 2023. (see announcement 15 November 2023).

Spodumene Hill: Mining Licence 129

An initial drill programme over the B1 and C1 pegmatites returned positive results with spodumene mineralisation identified within all holes drilled. The results revealed notable intersections of up to 2.32% Li₂O grade, highlighting the tantalum potential of this area, which further enhances the relevance of the recently constructed Tantalum Circuit. The proximity of Spodumene Hill to the existing operations at Uis provides an immediate opportunity for additional revenues from the licence area by blending material to increase tantalum grades. (see announcement dated 6 July 2023)

Lithium Ridge: Mining Licence 133

Lithium Ridge infill channel sampling programme confirmed the presence of continuous mineralisation at surface over a 6 km strike length along multiple mineralised pegmatites. An initial RC drilling programme investigated the continuation of several pegmatites at depth and found that the mineralisation continues within the pegmatite lithologies. The primary lithium minerals identified through drilling and channel sampling were spodumene and petalite, notable lithium intersections including 9m with grades exceeding 2% Li₂O. (See announcement dated 29 August 2023, 6 September 2023 & 18 September 2023).

Off-site Testing Update

Metallurgical test work to date has focused on the concentration of petalite due to its prevalence within the mining areas. The Lithium processing testwork has therefore focussed on petalite recovery, whilst the feasibility of concentrating other lithium bearing minerals present within the mineralised pegmatites is also being investigated. A substantial metallurgical programme focussing on spodumene production is planned to commence in Q4 2024. Three processing technologies are currently being evaluated to determine the optimal process for the extraction and concentration of petalite. Some test work has indicated that it may be possible to upgrade ore to a saleable concentrate solely through DMS technology.

STRATEGIC OVERVIEW

Resource upgrade

Simultaneously, we upgraded the Uis Mineral Resource Estimate for the V1 and V2 pegmatites, confirming 81 million tonnes (Mt) of ore with an enhanced average tin grade of 0.15% and an updated Lithium Carbonate Equivalent of 1.45Mt at a noteworthy average grade of 0.73% Li₂O. (See announcement dated 6 February 2023 for full details of the MRE).

Enhanced governance

As we embarked on the new financial year commencing in March 2023, we further strengthened the Board's expertise by welcoming Hiten Ooka, our Chief Financial Officer, as an executive director and Ms. Gida Sekandi as a non-executive director. Hiten's appointment bolstered the Board's financial acumen, while Gida's expertise deepened our sustainability knowledge. (See announcement dated 11 May 2023).

Strategic Assessment Process

The Strategic Process is on-going with further updates to be released in due course. (See announcement dated 11 May 2023 and 27 November 2023).

Expansion into the North American capital market

The admission to the OTCQB® Market was a key step in Andrada's strategy to broaden the Company's investor base by increasing accessibility to Andrada shares by North American institutional and retail investors. This investor base is known for its understanding of, and strong appetite, for mining companies with strong growth potential, particularly in lithium equities. (See announcement dated 5 June 2023).

Sustainability focus

Sustainability is one of our foundational pillars and is intricately woven into our business model. Our approach goes beyond the mine as we strive to make a positive impact on the Erongo region in which we operate and on Namibia as a whole. Since inception, we have contributed significantly to the national economy through job creation and procurement. We estimate that we have contributed GBP33 million (NAD690 million) to the Namibian economy through procurement, royalties, and taxes since inception. In the 2023, the Company's procurement outlay was GBP 9.1 million (NAD203 million) through 225 Namibian suppliers of which 107 are situated within the Erongo region where Uis is located. The Company further contributed c. GBP2 million (NAD45 million) in royalties and taxes during the year ending 28 February 2023. As focus shifts globally towards climate-smart economies, there is an increased focus on the natural environment. To that effect, we have concentrated our efforts on the sustainable management of the surrounding resources including biodiversity and water whilst producing minerals that are integral to the green energy transition. We are committed to creating long lasting value for all our stakeholders. (See announcement dated 27 October 2023).

CONCLUSION

As we approach the final quarter of 2024, we look forward to achieving the key milestones regarding the lithium development strategy and tin production in line with the Orion tin royalty. The CI2 will be implemented into 2025 and is instrumental in achieving the tin production targeted volumes and cost efficiencies. We also look forward to providing further updates on the many initiatives.  

Glossary of abbreviations

GBP	Great British Pound
NAD	Namibian Dollar
USD	United States Dollar

ANDRADA MINING LIMITED

INTERIM REPORT AND CONDENSED CONSOLDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

GBP (£)	Notes	6 months ended 31 August 2023 (unaudited)	6 months ended  31 August 2022 (unaudited)	12 months ended       28 February 2023 (audited)
Continuing operations
Revenue	5	8 846 997	4 726 609	9 827 474
Cost of Sales	6	(7 325 039)	(5 724 376)	(10 509 418)
Gross profit / (loss)		1 521 958	(997 767)	(681 944)
Administrative expenses	7	(4 031 304)	(2 557 296)	(7 451 352)
Idle Pant Costs		-	-	(258 177)
Other income		20 583	-	52 196
Operating loss		(2 488 763)	(3 555 063)	(8 339 277)
Finance income		22 354	21 368	39 054
Finance cost	8	(309 832)	(186 874)	(669 824)
Loss before tax		(2 776 241)	(3 720 569)	(8 970 047)
Tax credit/(charge)	9	-	888 933	866 203
Loss for the period		(2 776 241)	(2 831 636)	(8 103 844)
Other comprehensive income/(loss)
Items that will or may be reclassified to profit or loss:
Exchange differences on translation of share-based payment reserve		(325)	126	(441)
Exchange differences on translation of foreign operations		(2 207 455)	394 000	(2 298 674)
Exchange differences on non-controlling interest		13 410	5 508	19 395
Total comprehensive loss for the period		(4 970 611)	(2 432 002)	(10 383 564)
Profit/((loss) for the period attributable to:
Owners of the parent		(2 755 819)	(2 680 820)	(7 753 819)
Non-controlling interests		(20 422)	(150 816)	(350 025)
		(2 776 241)	(2 831 636)	(8 103 844)
Total comprehensive income/(loss) for the period attributable to:
Owners of the parent		(4 963 600)	(2 286 694)	(10 052 933)
Non-controlling interests		(7 012)	(145 308)	(330 631)
		(4 970 611)	(2 432 002)	(10 383 564)
Loss per ordinary share
Basic and diluted loss per share (in pence)	10	(0.18)	(0.25)	(0.60)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

GBP (£)	Notes	6 months ended     31 August 2023 (unaudited)	6 months ended              31 August 2022 (unaudited)	12 months ended           28 February2023 (audited)
Assets
Non-current assets
Intangible assets	11	8 401 278	6 812 947	7 279 593
Property, plant, and equipment	12	29 571 064	26 142 978	26 723 218
Total non-current assets		37 972 342	32 955 925	34 002 811
Current assets
Inventories	13	3 171 674	1 429 829	2 667 193
Trade and other receivables	14	2 896 972	2 830 985	2 592 770
Cash and cash equivalents	15	6 686 921	1 675 245	8 205 705
Total current assets		12 755 567	5 936 059	13 465 668
Total assets		50 727 909	38 891 984	47 468 479
Equity and liabilities
Equity
Share capital	20	56 944 408	38 655 078	56 883 908
Accumulated deficit		(21 089 934)	(13 420 141)	(18 334 115)
Warrant reserve	21	338 903	192 632	50 307
Share-based payment reserve	22	994 087	1 074 125	1 049 663
Convertible loan note reserve		4 595 614	-	-
Foreign currency translation reserve		(6 040 689)	(1 140 560)	(3 833 234)
Equity attributable to the owners of the parent		35 742 389	25 361 134	35 816 529
Non-controlling interests		(154 442)	37 892	(147 430)
Total equity		35 587 947	25 399 026	35 669 099
Non-current liabilities
Environmental rehabilitation liability	18	912 550	319 440	965 578
Borrowings	16	4 328 373	4 198 763	3 287 121
Lease liability	19	568 076	89 776	707 355
Deferred tax liability		-	-	-
Total non-current liabilities		5 808 999	4 607 979	4 960 054
Current liabilities
Trade and other payables	17	5 289 812	3 881 051	3 655 126
Borrowings	16	3 839 746	4 829 492	2 915 917
Lease liability	19	201 405	174 436	268 283
Total current liabilities		9 330 963	8 884 979	6 839 326
Total equity and liabilities		50 727 909	38 891 984	47 468 479

The notes that follow in this report form part of this interim financial information This interim financial information was authorised and approved for issue by the Board of Directors and authorised for issue on 28 November 2023.

ANTHONY VILJOEN

Chief Executive Officer

28 November 2023

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

GBP (£)	Share capital	Convertible loan note reserve	Accumulated deficit	Warrant reserve	Share-based payment reserve	Foreign currency translation reserve	Total	Non-controlling interests	Total equity
Total equity at 28 February 2022	38 655 078	-	(10 739 321)	192 632	704 828	(1 534 560)	27 278 657	183 200	27 461 857
Loss for the period	-	-	(2 680 820)	-	-	-	(2 680 820)	(150 816)	(2 831 636)
Other comprehensive income/(loss)	-	-	-	-	126	394 000	394 126	5 508	399 634
Transactions with owners:
Share-based payments	-	-	-	-	369 171	-	369 171	-	369 171
Total equity at 31 August 2022	38 655 078	-	(13 420 141)	192 632	1 074 125	(1 140 560)	25 361 134	37 892	25 399 026
Loss for the period	-	-	(5 072 999)	-	-	-	(5 072 999)	(199 209)	(5 272 208)
Other comprehensive income/(loss)	-	-	-	-	(567)	(2 692 674)	(2 693 241)	13 887	(2 679 354)
Transactions with owners:
Issue of shares	19 801 083	-	-	-	-	-	19 801 083	-	19 801 083
Share issue costs	(1 962 253)	-	-	-	-	-	(1 962 253)	-	(1 962 253)
Share-based payments	-	-	-	-	(23 895)	-	(23 895)	-	(23 895)
Warrants exercised in the year	390 000	-	159 025	(159 025)	-	-	390 000	-	390 000
Warrants modified in the year	-	-	-	16 700	-	-	16 700	-	16 700
Total equity at 28 February 2023	56 883 908	-	(18 334 115)	50 307	1 049 663	(3 833 234)	35 816 529	(147 430)	35 669 099
Loss for the period	-	-	(2 755 819)	-	-	-	(2 755 819)	(20 422)	(2 776 241)
Other comprehensive income/(loss)	-	-	-	-	(325)	(2 207 455)	(2 207 780)	13 410	(2 194 370)
Transactions with owners:
Issue of shares	60 500	-	-	-	(60 500)	-	-	-	-
Share-based payments	-	-	-	-	5 249	-	5 249	-	5 249
Issue of convertible loan notes	-	5 124 235	-	-	-	-	5 124 235	-	5 124 235
Convertible loan notes issue costs	-	(528 621)	-	-	-	-	(528 621)	-	(528 621)
Issue of warrants	-	-	-	288 596	-	-	288 596	-	288 596
Total equity at 31 August 2023	56 944 408	4 595 614	(21 089 934)	338 903	994 087	(6 040 689)	35 742 388	(154 442)	35 587 946

CONSOLIDATED STATEMENT OF CASH FLOWS

GBP (£)	Notes	6 months ended 31 August 2023 (unaudited)	6 months ended 31 August 2022 (unaudited)	12 months ended 28 February 2023 (audited)
Cash flows from operating activities
Loss before taxation		(2 776 241)	(3 720 569)	(8 970 047)
Adjustments for:
Fair value adjustment to customer contract	5	40 866	30 726	261 689
Depreciation of property, plant, and equipment	12	1 692 332	949 884	2 377 349
Depreciation of intangible assets	11	3 499	5 285	10 290
Share-based payments		5 250	267 401	345 276
Equity-settled transactions		-	-	16 700
Finance income		(22 354)	(21 368)	(39 054)
Finance costs	8	309 832	186 874	669 824
Changes in working capital:
Decrease/(increase) in receivables		(530 322)	1 189 937	869 458
Decrease/(increase) in inventory		(706 531)	57 917	(1 471 706)
Increase in payables		1 910 817	851 750	997 469
Net cash (used)/generated in operating activities		(72 853)	(202 163)	(4 932 752)
Cash flows from investing activities
Purchase of intangible assets		(1 477 104)	(1 606 380)	(2 580 267)
Purchase of property, plant, and equipment		(6 415 069)	(7 466 335)	(10 677 505)
Net cash used in investing activities		(7 892 173)	(9 072 715)	(13 257 772)
Cash flows from financing activities
Finance income		22 354	21 368	39 054
Finance costs	8	(209 479)	(153 901)	(499 621)
Lease payments	19	(193 149)	(120 977)	(363 959)
Net proceeds from issue of shares	20	-	-	18 228 830
Proceeds from equity component of convertible loan notes		4 848 214	-	-
Proceeds from borrowings (incl. debt component of convertible loan notes)		2 816 215	3 997 799	1 729 454
Repayment of borrowings		(425 792)	(166 932)	(89 014)
Net cash generated from financing activities		6 858 363	3 577 357	19 044 744
Net decrease/(increase) in cash and cash equivalents		(1 106 663)	(5 697 521)	854 220
Cash and cash equivalents at the beginning of the period		8 205 705	7 365 379	7 365 379
Exchange differences		(412 121)	7 387	(13 894)
Cash and cash equivalents at the end of the period		6 686 921	1 675 245	8 205 705

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL INFORMATION

For the period ended 31 August 2023

1.    Corporate information and principal activities

Andrada Mining Limited ("Andrada") was incorporated and domiciled in Guernsey on 1 September 2017, and admitted to the AIM market in London on 9 November 2017. The company's registered office is PO Box 282, Oak House, Hirzel Street, St Peter Port, Guernsey GY1 3RH and operates from Illovo Edge Office Park, 2nd Floor, Building 3, Corner Harries and Fricker Road, Illovo, Johannesburg, 2116, South Africa. This financial information is for the period ended 31 August 2023 and the comparative figures for the 6-month period ended 31 August 2022 and for the year ended 28 February 2023 are shown.

      As at 31 August 2023, the Andrada Group comprised:

Company	Equity holding and voting rights	Country of incorporation	Nature of activities
Andrada Mining Limited	N/A	Guernsey	Ultimate holding company
Greenhills Resources Limited1	100%	Guernsey	Holding company
Andrada Mining Pty Limited1	100%	South Africa	Group support services
Tantalum Investment Pty Limited1	100%	Namibia	Tin & tantalum exploration
Andrada Mining (Namibia) Pty Limited2	100%	Namibia	Tin, tantalum & lithium operations
Uis Tin Mining Company Pty Limited3	85%	Namibia	Tin, tantalum & lithium operations
Mokopane Tin Company Pty Limited2	100%	South Africa	Holding company
Renetype Pty Limited4	74%	South Africa	Tin & tantalum exploration
Jaxson 641 Pty Limited4	50%	South Africa	Tin & tantalum exploration
Pamish Investments 71 Pty Limited2	100%	South Africa	Holding company
Zaaiplaats Mining Pty Limited5	74%	South Africa	Property owning
Uis Tin Mining Company Rwanda Limited2	100%	Rwanda	Tin & tantalum exploration

¹ Held directly by Andrada Mining Limited

² Held by Greenhills Resources Limited

³ Held by Andrada Mining (Namibia) Pty Limited

⁴ Held by Mokopane Tin Company Pty Limited

⁵ Held by Pamish Investments 71 Pty Limited

This financial information presented in Pound Sterling (£) because that is the currency in which the Group has raised funding on the AIM market in the United Kingdom. Furthermore, Pound Sterling (£) is the functional currency of the ultimate holding company, Andrada Mining Limited. The Group's key subsidiaries, Andrada Namibia and UTMC, use the Namibian Dollar (N$) as their functional currency. The period-end spot rate used to translate all Namibian Dollar balances was £1 = N$23.87 and the average rate for the period was £1 = N$23.25.

2.    SIGNIFICANT ACCOUNTING POLICIES

a.   Basis of accounting

The Consolidated interim financial information has been prepared in accordance with UK Adopted International Accounting Standards. The Consolidated interim financial information also complies with the AIM Rules for Companies, NSX Listing requirements, OTCQB Listing requirements and the Companies (Guernsey) Law, 2008 and show a true and fair view.

The significant accounting policies applied in preparing this information are set out below. These policies have been consistently applied throughout the period. This information has been prepared under the historical cost convention except as where stated.

The interim financial information for the six months to 31 August 2023 is unaudited and does not constitute statutory financial information. The statutory accounts for the year ended 28 February 2023 are available on the Company's website.

b.   Going concern

These financial statements have been prepared on the basis of accounting principles applicable to a going concern which assumes the Group will be able to continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations. At period end, the Group had cash in the bank of £6.7m and had drawn down £1.5m of the Standard Bank working capital facility.

In September 2023, N$50m (c. £2.1m) of the N$100m (c. £4.2m) funding from the Development Bank of Namibia was received. These funds will be used to expedite the implementation of the Uis Mine Stage II Continuous Improvement Project.

In November 2023, US$25m (c. £19.8m) was received from Orion Resource Partners. This includes US$2.5m (c. £2.0m) equity, a US$10m (c. £7.9m) Convertible Loan Note and a US$12.5m (c. £9.9m) unsecured tin royalty. The equity and loan note will be used to accelerate Andrada's overall strategy of achieving commercial production of its lithium, tin and tantalum revenue streams. The royalty funds will be used for the sole purpose of increasing Andrada's tin production as it ramps up its capital programmes over the next 2 years.

Management has prepared a detailed cash flow forecast for the period to 30 November 2024 and have performed stress tests of these forecasts. The base case forecast demonstrates that the Group will have sufficient funds to meet its liabilities as they fall due. The main estimates considered as part of management's going concern assessment are production profiles, tin, lithium and tantalum prices, exchange rates and committed capital. The production profile is based on the Group's current achieved production post the completion of the expansion project, as well as the additional production on the successful completion of the continuous improvement capital project. The Group also retains the ability to flex its ongoing exploration and metallurgical capital expenditures in line with cash availability as well as macro-economic circumstances.

The forecast revenue and funding raised to date supports the liquidity requirements of the Group and its ability to meet its obligations in the ordinary course of business until February 2025. Accordingly, the Directors have concluded that the going concern basis in the preparation of the financial statements is appropriate and that there are no material uncertainties that would cast doubt on that basis of preparation.

c.   Critical accounting estimates and judgements

In the application of the Group's accounting policies, the Directors are required to make judgements, estimates and assumptions about the carrying amounts 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 relevant. Actual results may differ from these estimates. Information about significant areas of estimation uncertainty considered by management in preparing the interim financial information is provided below.

Estimates and judgements are continually evaluated. Revisions to accounting estimates are recognised in the year in which the estimates are revised if the revision affects only that year, or in the year of revision and in future years if the revision affects both current and future years.

d.   Going concern and liquidity

Significant estimates were required in forecasting cash flows used in the assessment of going concern including tin, tantalum and lithium prices, the levels of production, operating costs, and capital expenditure requirements. For further details, refer to going concern considerations laid out earlier in Note 2(b).

e.   Decommissioning and rehabilitation obligations

Estimating the future costs of environmental and rehabilitation obligations is complex and requires management to make estimates and judgements, as most of the obligations will be fulfilled in the future and contracts and laws are often not clear regarding what is required. The resulting provisions (see Note 18) are further influenced by changing technologies, and by political, environmental, safety, business, and statutory considerations.

The Group's rehabilitation provision is based on the net present value of management's best estimates of future rehabilitation costs. Judgement is required in establishing the disturbance and associated rehabilitation costs at period end, timing of costs, discount rates, and inflation. In forming estimates of the cost of rehabilitation which are risk adjusted, the Group assessed the Environmental Management Plan and reports provided by internal and external experts. Actual costs incurred in future periods could differ materially from the estimates, and changes to environmental laws and regulations, life of mine estimates, inflation rates, and discount rates could affect the carrying amount of the provision.

In determining the amount attributable to the rehabilitation liability, management used a risk-free discount rate of 13% (August 2022: 13% and February 2023: 13%), an inflation rate of 5.3% (August 2022: 7% and February 2023: 5.3%) and an estimated mining period of 12.9 years (August 2022: 16.5 years and February 2023: 13.4 years), being the Phase 1 expansion life of mine. The rates used are in line with the Namibian market rates.

f.    Impairment indicator assessment for exploration and evaluation assets

Determining whether an exploration and evaluation asset is impaired requires an assessment of whether there are any indicators of impairment, including specific impairment indicators prescribed in IFRS 6: Exploration for and Evaluation of Mineral Resources. If there is any indication of potential impairment, an impairment test is required based on value in use of the asset. The valuation of intangible exploration assets is dependent upon the discovery of economically recoverable deposits which, in turn, is dependent on future tin prices, future capital expenditures, environmental and regulatory restrictions, and the successful renewal of licences. The directors have concluded that there are no indications of impairment in respect of the carrying value of Namibian intangible assets at 28 February 2023 based on planned future development of the Namibian projects, and current and forecast tin prices. Exploration and evaluation assets are disclosed fully in Note 11. 

g.   Impairment assessment for property, plant, and equipment

Management have reviewed the Uis mine for indicators of impairment and have considered, among other factors, the operations to date at the Uis Tin Mine, forecast commodity prices, production profile, inflation rate, post-tax real discount rate and market capitalisation of the Group. Management identified the reduction in the tin price as an indicator of impairment. In undertaking the impairment review, management have also reviewed the underlying LoM valuation model for Uis.  The LoM valuation model is on a fair value less cost to develop basis and includes assessments of different scenarios associated with capital improvements and expansion opportunities. The impairment testing performed by management did not result in an impairment.

The forecasts require estimates regarding forecast tin, tantalum and lithium prices, ore resources, production, operating and capital costs. Under the base case forecast scenario, management used a forecast tin price of $26 000, tantalum price of $150 000, lithium price of $2 960 dropping to $1 051 in FY2027, a post-tax real discount rate of 8.7%, an inflation rate of 5.5% and a life of mine of 30 years. The forecast indicates sufficient headroom as at 31 August 2023.

The complex judgement in determining the recoverable amount of mining assets is an estimation of the future tin price. The estimation of future tin price is subject to uncertainty considering the volatility of market. Management has therefore compared the forecast tin price with the economic consensus estimates. Furthermore, a sensitivity analysis was performed by lowering the forecast tin prices by 5% which also indicated sufficient headroom as at 31 August 2023.

As an additional test, management performed certain sensitivity calculations. These included raising the discount rate to 9.7% post tax real rate, lowering plant recovery by 5% and increasing operating costs by 5%. In each of these circumstances, the forecast indicated sufficient headroom as at 31 August 2023.

h.   Depreciation

Judgement is applied in making assumptions about the depreciation charge for mining assets when using the unit-of-production method in estimating the ore tonnes held in reserves. The relevant reserves are those included in the current approved LoM plan which relates to the Phase 1 expansion. Judgement is also applied when assessing the estimated useful life of individual assets and residual values. The assumptions are reviewed at least annually by management and the judgement is based on consideration of the LoM plan, as well as the nature of the assets. The reserve assumptions included in the LoM plan are evaluated by management.

i.    Capitalisation and depreciation of waste stripping

The Group has elected to capitalise the costs of waste stripping activities as these are necessary to allow improved access to the ore and, therefore, will result in future economic benefits. The costs of drilling, blasting and load & haul of waste material is capitalised until such time that the underlying ore is used in production. These costs are then expensed on a proportional basis. The capitalised costs are included in the mining asset in property, plant & equipment and are expensed back into the statement of comprehensive income as depreciation. Capitalisation of waste stripping requires the Group to make judgements and estimates in determining the amounts to be capitalised. These judgements and estimates include, amongst others, the expected life of mine stripping ratio for each separate open pit, the determination of what defines separate pits, and the expected volumes to be extracted from each component of a pit for which the stripping asset is depreciated.

j.    Determination of ore reserves

The estimation of ore reserves primarily impacts the depreciation charge of evaluated mining assets, which are depreciated based on the quantity of ore reserves. Reserve volumes are also used in calculating whether an impairment charge should be recorded where an impairment indicator exists.

The Group estimates its ore reserves and mineral resources based on information, compiled by appropriately qualified persons, relating to geological and technical data on the size, depth, shape, and grade of the ore body and related to suitable production techniques and recovery rates. The estimate of recoverable reserves is based on factors such as tin prices, future capital requirements and production costs, along with geological assumptions and judgements made in estimating the size and grade of the ore body. There are numerous uncertainties inherent in estimating ore reserves and mineral resources. Consequently, assumptions that are valid at the time of estimation may change significantly if or when new information becomes available.

k.   Valuation of inventories

Judgement is applied in making assumptions about the value of inventories and inventory stockpiles, including tin prices, plant recoveries and processing costs, to determine the extent to which the Group values inventory and inventory stockpiles. The Group uses forecast tin prices to determine the net realisable value of the ROM stockpile and the tin concentrate inventory on hand at period end. Inventory stockpiles are measured using actual mining and processing costs.

l.    Determining the lease term

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise, or not to exercise, an extension option. Extension options are only included in the lease term where the company is reasonably certain that it will extend or will not terminate the lease when the lease expires. For all leases, the most relevant factors include:

§ Historical lease durations.

§ Costs incurred in replacing the leased asset.

§ Possible business disruption due to replacing the leased asset.

§ Likelihood of extension of the lease - if there are significant penalties to terminate, then it's reasonably certain that the Group will extend.

The lease term is reassessed on an ongoing basis, especially when the option to extend becomes exercisable, or on occurrence of a significant event or a significant change in circumstances which affects this assessment, and that is within the control of the Group. 

m. Determining the incremental borrowing rate to measure lease liabilities

The interest rate implicit in leases is not available, therefore the Group uses the relevant incremental borrowing rate (IBR) to measure its lease liabilities. The IBR is estimated to be the interest rate that the Group would pay to borrow:

§ over a similar term.

§ with similar security.

§ the amount necessary to obtain an asset of a similar value to the right of use asset; and

§ in a similar economic environment.

The IBR, therefore, is the best estimate of the incremental rate and requires management's judgement as there are no observable rates available.

n.   Determining the fair value of trade receivables classified at fair value through profit or loss

The consideration receivable in respect of certain sales for which performance obligations have been satisfied at period end and for which the Group has received prepayment under the terms of the offtake agreement, remain subject to pricing adjustments with reference to market prices at the date of finalisation. Under the Group's accounting policies, the fair value of the consideration is determined, and the remaining receivable is adjusted to reflect fair value. Management estimated the forward price based on the LME 3-month tin price that is expected when the open shipments will be finalised. As at 31 August 2023, the Group recognised a receivable at fair value through profit or loss of £432 220 (August 2022: receivable of £519 321 and February 2023: receivable of £126 125).

3.    Adoption of new and revised standards

Several new and amended standards and interpretations issued by IASB have become effective for the first time for financial periods beginning on (or after) 1 March 2023 and have been applied by the Group in this interim financial information. None of these new and amended standards and interpretations had a significant effect on the Group because they are either not relevant to the Group's activities or require accounting which is consistent with the Group's current accounting policies.

a.     Accounting standards and interpretations not applied

There are several standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods and which have not been adopted early.

4.    Segmental reporting

The reporting segments are identified by the management steering committee (who are the chief operating decision-makers) by the way that the Group's operations are organised. The Group has previously reported a Namibian and a South African operating segment. In the 2021 financial year, the Group made the decision to impair the full value of the South African mining licences as it chose to focus on developing its Namibian assets and it did not intend to incur any further expenditure on its South African licences. The Group now has a single operating segment, consisting of the Namibian operations.

5.    Revenue

GBP (£)	6 months ended 31 August 2023 (unaudited)	6 months ended 31 August 2022 (unaudited)	12 months ended 28 February 2023 (audited)
Revenue from the sale of tin	8 863 854	4 723 857	10 024 487
Revenue from the sale of sand	24 009	33 478	64 676
Total revenue from customers	8 887 863	4 757 335	10 089 163
Other revenue - change in fair value of customer contract	(40 866)	(30 726)	(261 689)
	8 846 997	4 726 609	9 827 474

6.    Cost of sales

GBP (£)	6 months ended 31 August 2023 (unaudited)	6 months ended 31 August 2022 (unaudited)	12 months ended 28 February 2023 (audited)
Costs of production	6 340 380	5 049 956	9 334 142
Smelter charges	643 468	339 978	757 459
Logistics costs	79 401	59 328	106 626
Government royalties	261 790	275 114	311 191
	7 325 039	5 724 376	10 509 418

7.    Administrative expenses

The loss for the period has been arrived at after charging:

GBP (£)	6 months ended 31 August 2023 (unaudited)	6 months ended 31 August 2022 (unaudited)	12 months ended 28 February 2023 (audited)
Staff costs	1 216 022	1 083 726	3 025 406
Depreciation of property, plant & equipment	209 960	113 185	366 190
Professional fees	1 089 805	443 781	1 201 984
Travelling expenses	153 875	150 450	350 884
Uis administration expenses	484 264	266 779	916 238
Auditor's remuneration	5 350	5 000	190 000
Foreign exchange losses	305 870	315 510	696 621
IT costs	199 685	105 846	285 408
Other costs	366 473	73 018	418 621
	4 031 304	2 557 296	7 451 352

Other costs are mainly comprised of corporate overheads necessary to run the South African head office and the costs associated with being listed in London.

8.    Finance cost

GBP (£)	6 months ended 31 August 2023 (unaudited)	6 months ended 31 August 2022 (unaudited)	12 months ended 28 February 2023 (audited)
Interest on lease liability	50 506	15 882	156 118
Interest on environmental rehabilitation liability	13 851	17 209	14 085
Bank interest	150 915	95 900	338 812
Interest on convertible loan notes	19 809	-	-
Interest on warrants	16 187	-	-
Other interest	58 564	57 882	160 809
	309 832	186 874	669 824

9.    Taxation

      The tax expense represents the sum of the tax currently payable and deferred tax.

GBP (£)	6 months ended 31 August 2023 (unaudited)	6 months ended 31 August 2022 (unaudited)	12 months ended 28 February 2023 (audited)
Factors affecting tax for the period - The tax assessed for the period at the Guernsey corporation tax charge rate of 0%, as explained below
Loss before taxation	(2 776 241)	(3 720 569)	(8 970 048)
Profit/ (Loss) before taxation multiplied by the Guernsey: Corporation tax charge rate of 0%	-	-	-
Effects of:
Differences in tax rates (overseas jurisdictions)	(548 888)	(615 188)	(1 791 238)
Tax losses carried forward	548 888	615 188	1 791 238
Movement in deferred tax	-	888 933	866 203
Tax for the period	-	888 933	866 203

Accumulated losses in the subsidiary undertakings for which there is an unrecognised deferred tax asset are £9 379 913 (August 2022: £5 131 401 and February 2023: £8 100 173).

10.  Loss per share from continuing operations

The calculation of a basic loss per share of 0.18 pence (February 2022: loss per share of 0.25 pence and February 2023: loss per share of 0.60 pence), is calculated using the total loss for the period attributable to the owners of the Company of £2 755 819 (February 2022: £2 680 820 and February 2023: £7 753 819 and the weighted average number of shares in issue during the period of 1 538 528 155 (August 2022: 1 064 247 295  and February 2023: 1 291 331 804). Due to the loss for the period, the diluted loss per share is the same as the basic loss per share. The number of potentially dilutive ordinary shares, in respect of share options, warrants and shares to be issued as at 31 August 2023 is 76 309 563 (August 2022: 97 310 649 and February 2023: 77 636 918). These potentially dilutive ordinary shares may have a dilutive effect on future earnings per share.

11.  Intangible assets

GBP (£)	Exploration and evaluation assets	Computer software	Total
Cost
As at 31 August 2022	6 723 897	122 418	6 846 315
Additions for the period	957 860	-	957 860
Exchange differences	(476 995)	(10 104)	(487 099)
As at 28 February 2023	7 204 762	112 313	7 317 076
Additions for the period	1 477 104	-	1 477 104
Exchange differences	(346 855)	(5 155)	(352 010)
As at 31 August 2023	8 335 011	107 159	8 442 170
Accumulated Depreciation
As at 31 August 2022	-	33 368	33 368
Charge for the period	-	5 005	5 005
Exchange differences	-	(890)	(890)
As at 28 February 2023	-	37 483	37 483
Charge for the period	-	3 499	3 499
Exchange differences	-	(91)	(91)
As at 31 August 2023	-	40 892	40 892
Net Book Value
As at 31 August 2023	8 335 011	66 268	8 401 278
As at 28 February 2023	7 204 762	74 831	7 279 593
As at 31 August 2022	6 723 897	89 050	6 812 947

The additions to the evaluation and exploration asset during the period mainly comprise of expenses capitalised as part of the Phase 2 exploration drilling project, the metallurgical test work programme, environmental studies, and region exploration projects.

12.  Property, plant, and equipment

GBP (£)	Land	Mining asset under construction	Mining Asset	Mining Asset - Stripping	Decommissioning asset	Right-of-use Asset	Computer Equipment	Furniture	Vehicles	Mobile equipment (crane)	Buildings	Total
Cost
As at 31 August 2022	12 613	8 741 126	17 063 094	2 083 162	275 258	671 519	242 417	197 962	256 268	489 237	52 271	30 084 927
Additions for the period	-	2 151 424	(122 546)	808 190	750 363	1 121 536	72 089	85 000	104 577	(7 960)	232 099	5 194 772
Disposals for the period	-	-	(309 259)	-	-	(61 435)	-	-	-	-	-	(370 694)
Transfer from exploration and evaluation asset	-	(9 532 184)	9 532 184	-	-	-	-	-	-	-	-	-
Exchange differences	(1 351)	(119 492)	(2 500 783)	(279 125)	(97 049)	(172 923)	(31 466)	(28 470)	(32 449)	(44 458)	(25 272)	(3 332 838)
As at 28 February 2023	11 262	1 240 874	23 662 690	2 612 227	928 572	1 558 697	283 040	254 492	328 396	436 819	259 098	31 576 167
Additions for the period	-	3 953 001	380 379	1 838 423	-	22 458	68 646	66 240	85 926	-	-	6 415 073
Disposals for the period	-	-	-	-	-	-	-	-	-	-	-	-
Exchange differences	(776)	(763 865)	(963 365)	(227 596)	(63 968)	(112 191)	(21 231)	(19 211)	(24 850)	(30 092)	(17 849)	(2 244 994)
As at 31 August 2023	10 486	4 430 010	23 079 70	4 223 054	864 604	1 468 964	330 455	301 521	389 472	406 727	241 249	35 746 246
Accumulated Depreciation
As at 31 August 2022	-	-	2 330 648	840 539	17 585	425 950	145 881	88 373	72 793	19 527	653	3 941 949
Charge for the period	-	-	532 865	624 439	7 567	168 863	25 354	21 703	18 605	19 591	8 479	1 427 466
Exchange differences	-	-	(264 204)	(138 298)	(2 380)	(69 973)	(17 358)	(10 876)	(9 085)	(3 475)	(817)	(516 466)
As at 28 February 2023	-	-	2 599 309	1 326 680	22 772	524 840	153 877	99 200	82 313	35 643	8 315	4 852 949
Charge for the period	-	-	802 796	587 519	32 511	156 332	36 216	27 251	30 183	17 422	2 104	1 692 334
Exchange differences	-	-	(182 819)	(106 619)	(2 411)	(49 187)	(11 564)	(7 515)	(6 452)	(2 907)	(627)	(370 101)
As at 31 August 2023	-	-	3 219 286	1 807 580	52 872	631 985	178 529	118 936	106 044	50 158	9 792	6 175 182
Net Book Value
As at 31 August 2023	10 486	4 430 010	19 860 418	2 415 474	811 732	836 979	151 926	182 585	283 428	356 569	231 457	29 571 064
As at 28 February 2023	11 262	1 240 874	21 063 381	1 285 547	905 800	1 033 857	129 163	155 292	246 083	401 176	250 783	26 723 218
As at 31 August 2022	12 613	8 741 126	14 732 446	1 242 624	257 673	245 569	96 536	109 589	183 475	469 710	51 618	26 142 978

Additions to the mining asset under construction include capitalised costs and equipment purchased as part of the construction of the Bulk Sample Processing Facility. This includes a Lithium pilot plant, a Tantalum pilot plant and an ore sorting plant.  Additions to the mining asset include capitalised costs and equipment purchased as part of the Uis Phase 1 Continuous Improvement project

 

13.  Inventories

GBP (£)	6 months ended                31 August 2023 (unaudited)	6 months ended            31 August 2022 (unaudited)	12 months ended     28 February 2023 (audited)
Run-of-mine stockpile	1 669 176	605 258	589 725
Tin concentrate on hand	723 747	204 236	1 364 286
Consumables	778 752	620 335	713 182
	3 171 674	1 429 829	2 667 193

14.  Trade and other receivables

	6 months ended         31 August 2023 (unaudited)	6 months ended         31 August 2022 (unaudited)	12 months ended 28 February 2023 (audited)
Trade receivables	305 410	160 188	27 678
Trade receivables at fair value through profit or loss	432 220	(519 321)	126 125
Other receivables	951 525	538 218	1 369 867
VAT receivables	1 207 817	2 651 899	1 069 100
	2 896 972	2 830 984	2 592 770

15.  Cash and cash equivalents

GBP (£)	6 months ended 31 August 2023 (unaudited)	6 months ended         31 August 2022 (unaudited)	12 months ended 28 February 2023 (audited)
Cash on hand and in bank	6 686 921	1 675 245	8 205 705

16.  Borrowings

	6 months ended 31 August 2023 (unaudited)	6 months ended         31 August 2022 (unaudited)	12 months ended 28 February 2023 (audited)
Standard Bank term loan facility	3 387 437	4 467 960	4 083 503
Standard Bank VAT facility	313 186	376 709	336 357
Standard Bank Vehicle Asset Financing	528 064	503 444	484 373
Standard Bank Short-term Loan Facility	-	2 005 565	-
Standard Bank working capital facility	1 472 644	1 674 577	1 298 805
Convertible Loan Note (debt component)	2 466 788
	6 168 120	9 028 255	6 203 038

On 18 November 2022, a term loan facility of N$90 000 000 (c.£3 771 000), a VAT facility of N$8 000 000 (c.£335 000) and a working capital facility of N$35 000 000 (c. £1 476 000) was entered into between the Company's subsidiary, Uis Tin Mining Company (Pty) Ltd and Standard Bank Namibia. During the prior year, a vehicle asset financing facility to the value of N$15 000 000 (c. £629 000) was provided.

The maturity date of the term loan facility is November 2026 and the capital balance of the loan together with accrued interest will be repaid in quarterly instalments over the next 5 years. Interest is charged on the outstanding capital balance of the loan at a rate of 3-month JIBAR plus a margin of 4.5%.

The Group is required to meet the following covenants each year on 28 February as part of the term loan facility agreement:

§ EBITDA ÷ total interest must not be lower than 4.5 times

§ Total debt ÷ EBITDA must not exceed 4 times in year 1, 3.5 times in year 2 and 3 times thereafter

§ Free cash flow before Debt Service Cover ÷ Principal and Interest Senior Debt Service Payments must not be lower than 1.3 times

§ Free cash flow before Debt Service Cover + Total Cash Collateral ÷ Principal and Interest Senior Debt Service Payments must not be lower than 2 times

The Group received a covenant waiver from Standard Bank for the year ended 28 February 2023. The next measurement date will be 28 February 2024.

The VAT facility is secured by assessed/audited VAT returns (refunds) which have not been paid by Namibia Inland Revenue. Standard Bank Namibia provides a facility amounting to the unpaid refunds. Any drawdowns against this facility are repaid to the bank upon receipt of cash from Namibia Inland Revenue.

The VAT facility and the working capital facility have no fixed maturity date but are both renewed on an annual basis. Interest accrues on these facilities at the Namibian prime rate less 1%.

Standard Bank Namibia have provided a N$ 5 956 100 (c. £250 000) guarantee to the Namibia Power Corporation Pty Limited in relation to a deposit for the supply of electrical power. As a result of the guarantee provided by Standard Bank, no cash was paid over for the deposit.

On 21 July 2023 the Group issued 77 unsecured convertible loan notes of £100 000 each to new and existing investors. The notes have a term of 3 years, bear interest at a rate of 12% per annum and can be redeemed in cash only at the option of the Group or converted into ordinary shares at a fixed price of 9.45p by mutual agreement between the Group and the note holders. As per IAS 32 and IFRS 9, the convertible loan notes have been classified as a compound financial instrument. The principal amount is classified as equity because, at the election of the Group, they can avoid paying cash by delivering a fixed number of shares. The interest payments are classified as a liability because there is a contractual obligation to either pay cash or to deliver a variable number of the Group's shares. Refer to the Statement of Changes in Equity for the equity portion of this instrument and Note 24 for further details of the transaction.

17.  Trade and other payables

GBP (£)	6 months ended 31 August 2023 (unaudited)	6 months ended         31 August 2022 (unaudited)	12 months ended 28 February 2023 (audited)
Trade payables	2 652 507	3 344 593	1 624 816
Other payables	518 574	168 378	202 127
Accruals	2 118 731	368 080	1 828 183
	5 289 812	3 881 051	3 655 126

18.  Environmental rehabilitation liability

	GBP (£)
Balance at 31 August 2022	319 441
Increase in provision	750 363
Interest expense	(3 006)
Foreign exchange differences	(101 219)
Balance at 28 February 2023	965 578
Increase in provision	-
Interest expense	13 851
Foreign exchange differences	(66 877)
Balance at 31 August 2023	912 552

Provision for future environmental rehabilitation and decommissioning costs are made on a progressive basis. Estimates are based on costs that are regularly reviewed and adjusted appropriately for new circumstances. The environmental rehabilitation liability is based on disturbances and the required rehabilitation as at 31 August 2023.

The rehabilitation provision represents the present value of decommissioning costs relating to the dismantling of mechanical equipment and steel structures related to the Phase 1 Pilot Plant, the demolishing of civil platforms and reshaping of earthworks. A provision for this requires estimates and assumptions to be made around the relevant regulatory framework, the magnitude of the possible disturbance and the timing, extent and costs of the required closure and rehabilitation activities. In calculating the appropriate provision, cost estimates of the future potential cash outflows based on current studies of the expected rehabilitation activities and timing thereof are prepared. These forecasts are then discounted to their present value using a risk-free rate specific to the liability.

In determining the amount attributable to the rehabilitation liability, management used a discount rate of 13% (August 2022: 13% and February 2023: 13%), an inflation rate of 5.3% (August 2022: 7% and February 2023: 5.3%) and an estimated mining period of 12.9 years, being the Phase 1 expansion life of mine. Actual rehabilitation and decommissioning costs will ultimately depend upon future market prices for the necessary rehabilitation works and timing of when the mine ceases operation.

19.  Lease liability

The Company assessed all rental agreements and concluded that the following rentals fall within the scope of IFRS 16: Leases and therefore a lease liability has been recognised:

	Lease term	Option to extend/terminate	Incremental borrowing rate
Office building	5 years	Option to extend not specified in contract. Term of lease determined to be 5 years.	13.75%
Workshop facility	2 years	Option to extend not specified in contract. Term of lease determined to be 2 years.	9.75%
Residential housing	5 years	The lease will continue automatically after the initial period for an open-ended period. Either party must provide written notice if they wish to terminate. Lease term determined to be 5 years.	11.75%
Mobile Units	2 years	The lessee is granted the option to purchase the units after the lease period of 2 years.	7.5%
Vehicles	5 years	The lessee will own the vehicles after the after the lease period of 5 years.	11.25%

GBP (£)	Office Building	Workshop	Housing	Mobile Units	Vehicles	Total
Balance at 31 August 2022	130 669	9 276	95 717	28 550	-	264 212
Additions	534 606	43 507	153 388	-	208 892	940 393
Disposals	(22 035)					(22 035)
Interest expense	45 733	14 862	58 016	601	21 025	140 237
Lease payments	(104 824)	(31 229)	(32 144)	(18 086)	(56 699)	(242 982)
Foreign exchange differences	(55 866)	(4 075)	(26 752)	(1 900)	(15 594)	(104 187)
Balance at 28 February 2023	528 283	32 341	248 225	9 165	157 624	975 638
Additions	-	-	-	-	-	-
Interest expense	29 952	815	12 137	103	7 500	50 507
Lease payments	(94 822)	(23 819)	(42 970)	(7 901)	(23 637)	(193 149)
Foreign exchange differences	(34 712)	(1 631)	(16 302)	(430)	(10 440)	(63 515)
Balance at 31 August 2023	428 702	7 706	201 090	937	131 047	769 481

The following is the split between the current and the non-current portion of the liability:

GBP (£)	6 months ended                 31 August 2023 (unaudited)	6 months ended             31 August 2022 (unaudited)	12 months ended 28 February 2023 (audited)
Non-current liability	568 076	89 776	707 355
Current liability	201 405	174 436	268 283
	769 481	264 212	975 638

20.  Share capital

	Number of ordinary shares of no-par value issued and fully paid	Share Capital
Balance at 31 August 2022	1 121 841 684	38 655 078
Capital raise - 16 September 2022	222 701 660	11 135 083
Capital raise - 10 October 2022	173 320 000	8 666 000
Share issue costs	-	(1 962 253)
Warrants exercised - 25 January 2023	20 000 000	390 000
Balance at 28 February 2023	1 537 863 344	56 883 908
Shares issued in lieu of Directors fees - 11 May	1 092 189	60 500
Balance at 31 August 2023	1 538 955 533	56 944 408

Authorised: 1 617 600 762 ordinary shares of no-par value

Allotted, issued, and fully paid: 1 538 955 533 ordinary shares of no-par value

On 16 September 2022, the Group completed an equity fundraising by way of a placing and direct subscription of 222 701 660 ordinary shares of no-par value in the Group at a price of 5 pence per share.  A further 173 320 000 660 ordinary shares of no-par value in the Group at a price of 5 pence per share were issued on 10 October 2022 as part of the same capital raise.

On 25 January 2023, warrant holders exercised 20 000 000 warrants at an exercise price of 1.95.

On 11 May 2023, the Group issued 1 092 189 Ordinary Shares ("New Shares") to Directors in lieu of their fees for the financial years ended February 2022 and 2023. This is in accordance with the terms of their contracts.

21.  Warrant reserve

The following warrants were granted during the period ended 31 August 2023:

Date of grant	21 July 2023
Number granted	15 400 000
Vesting period	2 years
Contractual life	2 years
Estimated fair value per option (pence)	1.874

The estimated fair values were calculated by applying the Black Scholes pricing model. The model inputs were:

Date of grant	21 July 2023
Share price at grant date (pence)	7.70
Exercise price (pence)	9.45
Expiry date	21 July 2025
Expected volatility	52%
Expected dividends	Nil
Risk-free interest rate	3.70%

The warrants in issue during the period are as follows:

Outstanding at 31 August 2022	22 613 334
Exercisable at 31 August 2022	22 613 334
Granted during the period	-
Expired during the period	-
Exercised during the period	(20 000 000)
Outstanding at 28 February 2023	2 613 334
Exercisable at 28 February 2023	2 613 334
Granted during the period	15 400 000
Expired during the period	-
Exercised during the period	-
Outstanding at 31 August 2023	18 013 334
Exercisable at 31 August 2023	2 613 334

On 21 July 2023, 15 400 000 warrants were issued as part of the convertible loan note transaction. Each note holder received 2 warrants for every £1 subscribed for. Each warrant enables the holder to subscribe for one ordinary share at a subscription price of 9.45p. The Warrants are exercisable at any time from the date of issue for a period of two years. Please refer to note 24 for further details.

22.       Share-based payment reserve

Director share options

The following director share options were granted during the period ended 28 February 2023:

Date of grant	8 April 2022	8 April 2022	8 April 2022
Number granted	7 800 000	3 900 000	3 900 000
Vesting period	1 year	2 years	3 years
Contractual life	3 years	3 years	3 years
Estimated fair value per option (pence)	2.0830	2.8490	3.4090

The estimated fair values were calculated by applying the Black Scholes pricing model. The model inputs were:

Date of grant	8 April 2022	8 April 2022	8 April 2022
Share price at grant date (pence)	9.35	9.35	9.35
Exercise price (pence)	9.80	10.30	10.80
Expiry date	8 April 2025	8 April 2025	8 April 2025
Expected volatility	60%	60%	60%
Expected dividends	Nil	Nil	Nil
Risk-free interest rate	1.24%	1.24%	1.24%

The director share options in issue during the period are as follows:

Outstanding at 31 August 2022	25 850 000
Exercisable at 31 August 2022	23 850 000
Granted during the period	15 600 000
Forfeited during the period	-
Exercised during the period	-
Expired during the period	-
Outstanding at 28 February 2023	41 450 000
Exercisable at 28 February 2023	23 850 000
Granted during the period	-
Forfeited during the period	-
Exercised during the period	-
Expired during the period	-
Outstanding at 31 August 2023	41 450 000
Exercisable at 31 August 2023	23 850 000

a.     Employee share options

The following employee share options were granted during the period ended 28 February 2023:

Date of grant	8 April 2022	8 April 2022	8 April 2022
Number granted	2 400 000	1 200 000	1 200 000
Vesting period	1 year	2 years	3 years
Contractual life	3 years	3 years	3 years
Estimated fair value per option (pence)	2.0830	2.8490	3.4090

The estimated fair values were calculated by applying the Black Scholes pricing model. The model inputs were:

Date of grant	8 April 2022	8 April 2022	8 April 2022
Share price at grant date (pence)	9.35	9.35	9.35
Exercise price (pence)	9.80	10.30	10.80
Expiry date	8 April 2025	8 April 2025	8 April 2025
Expected volatility	60%	60%	60%
Expected dividends	Nil	Nil	Nil
Risk-free interest rate	1.24%	1.24%	1.24%

The employee share options in issue during the period are as follows:

Outstanding at 31 August 2022	27 371 229
Exercisable at 31 August 2022	27 371 229
Granted during the period	4 800 000
Forfeited during the period	-
Exercised during the period	-
Expired during the period	-
Outstanding at 28 February 2023	32 171 229
Exercisable at 28 February 2023	27 371 229
Granted during the period	-
Forfeited during the period	-
Exercised during the period	-
Expired during the period	-
Outstanding at 31 August 2023	32 171 229
Exercisable at 31 August 2023	27 371 229

23.  Events after balance sheet date

a.   Funding:

On 5 September 2023, the Development Bank of Namibia ("DBN") served notice confirming that all conditions had been fulfilled or waived and that financial close had occurred. Accordingly, the Group received the 1^st drawdown of NAD50 million (c. £2.1m) of a total NAD100 million (c. £4.2m). These Funds are being used to expedite the implementation of the Uis Mine Stage II Continuous Improvement Project

On 14 November 2023, a US$25m (c. £19.8m) funding packing was concluded with Orion Resource Partners. This includes US$2.5m (c. £2.0m) equity, a US$10m (c. £7.9m) Convertible Loan Note and a US$12.5m (c. £9.9m) unsecured tin royalty. The equity and loan note will be used to accelerate Andrada's overall strategy of achieving commercial production of its lithium, tin and tantalum revenue streams. The royalty funds will be used for the sole purpose of increasing Andrada's tin production as it ramps up its capital programmes over the next 2 years.

b.   Exercise of share options:

On 29 September 2023, the Group issued 3 473 684 Ordinary Shares to satisfy the following employee share option exercises:

§ 1 736 842 share options at an exercise price of 3p

§ 868 421 share options at an exercise price of 3.5p

§ 868 421 share options at an exercise price of 4p

On 3 October 2023, the Group issued 7 315 786 Ordinary Shares to satisfy the following employee share option exercises:

§ 3 407 894 share options at an exercise price of 3p

§ 1 953 946 share options at an exercise price of 3.5p

§ 1 953 946 share options at an exercise price of 4p

24.  reserves within equity

a.   Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

b.   Convertible loan note reserve

The convertible loan note reserve represents the equity component of the outstanding convertible loan notes.

On 21 July 2023 the Group raised £7.7m through the issue of 77 unsecured convertible loan notes of £100 000 each to new and existing investors. The notes have a term of 3 years, bear interest at a rate of 12% per annum and can be redeemed in cash only at the option of the Group or converted into ordinary shares at a fixed price of 9.45p by mutual agreement between the Group and the note holders. As per IAS 32 and IFRS 9, the convertible loan notes have been classified as a compound financial instrument. The principal amount is classified as equity because, at the election of the Group, they can avoid paying cash by delivering a fixed number of shares. The interest payments are classified as a liability because there is a contractual obligation to either pay cash or to deliver a variable number of the Group's shares (based on the 30-day VWAP share price). Issues costs have been proportionally deducted for the liability and the equity component.

c.   Warrant reserve

The warrant reserve represents the cumulative charge to date in respect of unexercised share warrants at the balance sheet date.

d.   Share-based payment reserve

The share-based payment reserve represents the cumulative charge to date in respect of unexercised share options at the balance sheet date as well as fees/salaries owed to directors/employees to be settled through the issuing of shares.

e.   Foreign currency translation reserve

The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of entities with a functional currency other than Pound Sterling.

f.    Retained earnings/accumulated deficit

The retained earnings/accumulated deficit represents the cumulative profit and loss net of distribution to owners.

CONTACT
Andrada Mining Limited Anthony Viljoen, CEO Sakhile Ndlovu, Investor Relations	[phone] [e-mail]
Nominated Adviser
WH Ireland Limited Katy Mitchell	[phone]
Corporate Adviser and Joint Broker
H&P Advisory Limited Andrew Chubb Jay Ashfield Matt Hasson	[phone]
Stifel Nicolaus Europe Limited Ashton Clanfield Calum Stewart Varun Talwar	[phone]
Tavistock Financial PR (United Kingdom) Jos Simson Catherine Drummond Adam Baynes	[phone] [e-mail]

About Andrada Mining Limited

Andrada Mining Limited, is a London-listed technology metals mining company with a vision to create a portfolio of globally significant, conflict-free, production and exploration assets. The Company's flagship asset is the Uis Mine in Namibia, formerly the world's largest hard-rock open cast tin mine. An exploration drilling programme is currently underway at Uis with the aim of expanding the tin resource over the fourteen additional, historically mined pegmatites, all of which occur within a 5 km radius of the current processing plant. The Company has set a mineral resource target of 200 Mt to be delineated within the next 5 years. The existing mine, together with its substantial mineral resource potential, allows the Company to consider economies of scale.

Andrada is managed by a board of directors with considerable industry knowledge and a management team with extensive commercial and technical skills. Furthermore, the Company is committed to the sustainable development of its operations as demonstrated by the way the leadership team places emphasis on creating value for the wider community, investors, and other key stakeholders. Andrada has established an environmental, social and governance system that has been implemented at all levels of the Company and aligns with international standards.

[END]

 

END