Rambler Reports Financial Results for the YE 2021
16 May 2022
Rambler Reports Financial Results for the
Year Ended 31 December 2021
London, England; Newfoundland and Labrador, Canada - Rambler Metals and Mining Plc (AIM: RMM) ("Rambler" or the "Company"), a copper and gold producer, explorer, and developer, today reports its audited financial results for the year ended 31 December 2021 .
To view the PDF version of the announcement and the Financial Results please click here:
http://www.rns-pdf.londonstockexchange.com/rns/5999L_1-2022-5-16.pdf
2021 Full Year RESULTS
The tables below summarise the key financial metrics for the year ended 31 December 2021. All references to $ are US$.
|
|
2021 |
2020 |
|
Revenue |
$28.2 M |
$24.3 M |
|
Production costs |
$29.5 M |
$28.1 M |
|
EBITDA |
$(8.5) M |
$(3.6) M |
|
Net loss after tax |
$(14.0) M |
$(1.8) M |
|
Loss per share (US$) |
$(0.12) |
$(0.10) |
|
Cash flow generated (utilised) in operating activities |
$(11.8) M |
$1.9 M |
|
Cash flow utilised in investment in mineral property |
$15.3M |
$4.0M |
|
Cash flow utilised in addition of property, plant and equipment |
$4.2M |
$1.2M |
|
Cash cost per lb of copper, net of credits (C1) (US$ per pound) |
$4.26 |
$3.45 |
|
Closing cash balance |
$1.6 M |
$6.2 M |
|
Net debt |
$19.4 M |
$3.5 M |
Dr Toby Bradbury, President and CEO, Rambler Metals & Mining commented:
"These financial results reflect a year in which we have had many challenges but, I am pleased to report, also a year in which we have made substantial progress on the turn-around we had planned for Rambler Metals and Mining. The Company invested US$23.2 million in mine development and equipment in 2021. This has placed the Company in a position to start to deliver on the true potential of its quality ore reserves. At the same time, as we have started to deliver higher quantities of copper, the market for copper has improved dramatically as the world's economy slowly recovers from the Covid pandemic. The long-term trend of electrification of the entire transport network (automobiles, trucks) to take advantage of clean energy, bodes well for sustained demand growth in the copper market. While we foresee a strong future for copper, we recognise that executing on the potential for optimisation of our own operations in the coming months and years will enable the Ming Mine to operate profitably through the commodity cycle and deliver significant returns to shareholders.
"In 2021 Rambler was committed to the sale of 3,600 tonnes of copper at a fixed price of US$7,700/tonne as part of the financing commitment made in 2020. At this price level, Rambler's operations delivered a small positive cash operating margin. This was supplemented by other funds brought in through the year. "A small portion of the fixed price sales contract rolled into 2022 and was fully completed in February 2022. Since then, Rambler's copper sales have been fully exposed to the current buoyant copper price.
"In 2021, the Company raised a total of US$32.2 million including $19.4 million from issuance of shares and warrant exercises (net of transaction costs), $3.0 million from sale of non-core assets and equity investments and $9.8 million from net borrowing. The most significant of these was the introduction of Newgen as a new partner as both a lender and equity holder at the end of the year. The Newgen debt facility of $16.3 million included a roll-over of the West Face $5.0 million loan which demonstrated their confidence in the project.
"We look forward to completing the ramp up of the Ming Mine in 2022 to its design potential of 1,350 tonnes of ore mined and processed per day at a target grade of 2% copper. We have the development in place to support this level of production and we are increasingly improving our operational reliability and execution. We look forward to providing updates in the coming year on our continuing progress. "
2022 Business Objectives
The 2022 business objectives for Rambler are:
|
· Perform all its activities in such a way that no harm is caused to people, the environment, or the community |
|
· Deliver 7,000 tonnes of saleable copper o Realistic production plan which has been built on the mine development and operational redundancy created in 2021 o 4 x mining areas established to deliver the required tonnage at an improving grade as we target the lower levels of the mine o Proven process and milling plant which has consistently achieved the planned recoveries of 95% Cu and 70% Au |
|
· Maintain development to support current and future production |
|
· Exploration - complete up to 17,000 metres of in-fill drilling |
|
· Resetting the culture - on-going process from 2021. Behaviour based coaching and training programs to continue |
|
· Engaging core competencies and skills |
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· Review mine ventilation for future expansion and production |
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· Complete the ore sorting study |
|
· Updated NI 43-101 base case including ore sorting |
|
· Optimisation studies - tailings backfill; shaft hoisting; electrical power supply upgrade; mine digitisation - fibre optic communications; mill relocation studies |
The full audited financial statements will be available on the Company's website in due course at http://www.ramblermines.com .
Tim Sanford, P.Eng., is the Qualified Person responsible for the technical content of this release and has reviewed and approved it accordingly. Mr. Sanford is an employee of Rambler Metals and Mining Canada Limited. Tonnes referenced are dry metric tonnes unless otherwise indicated.
Abbreviations:
g/t = grammes per tonne
dmt = dry metric tonnes
mtpd = metric tonnes per day
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') which has been incorporated into UK law by the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.
ABOUT RAMBLER METALS AND MINING
Rambler is a mining and development company that in November 2012 brought its first mine into commercial production. Rambler has a 100 per cent ownership in the Ming Copper-Gold Mine, a fully operational base and precious metals processing facility and year-round bulk storage and shipping facility; all located on the Baie Verte peninsula, Newfoundland and Labrador, Canada.
Rambler's focus is to regain its production profile at 1,350 metric tonnes per day at a target grade of 2% Cu in the course of 2022 and evaluate expansion opportunities from that base.
Along with the Ming Mine, Rambler also owns 100 per cent of the former producing Little Deer/Whalesback copper mines.
Rambler is listed in London under AIM:RMM.
For further information, please contact:
|
Toby Bradbury President and CEO Rambler Metals & Mining Plc Tel No: +1 (709) 800 1929 Fax No: +1 (709) 800 1921 |
Celeste Van Tonder CFO Rambler Metals & Mining Plc Tel No: +1 (709) 800 1929 Fax No: +1 (709) 800 1921 |
Tim Sanford. P. Eng. VP and Corporate Secretary Rambler Metals & Mining Plc Tel No: +1 (709) 532 5736 Fax No: +1 (709) 800 1921 |
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Nominated Advisor (NOMAD) |
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Ewan Leggat, Caroline Rowe SP Angel Corporate Finance LLP Tel No: +44 (0) 20 3470 0470 |
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Website: www.ramblermines.com
Caution Regarding Forward Looking Statements:
Certain information included in this press release, including information relating to future financial or operating performance and other statements that express the expectations of management or estimates of future performance constitute "forward-looking statements". Such forward-looking statements include, without limitation, statements regarding copper, gold and silver forecasts, the financial strength of the Company, estimates regarding timing of future development and production and statements concerning possible expansion opportunities for the Company. Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief are based on assumptions made in good faith and believed to have a reasonable basis. Such assumptions include, without limitation, the price of and anticipated costs of recovery of, copper concentrate, gold and silver, the presence of and continuity of such minerals at modeled grades and values, the capacities of various machinery and equipment, the availability of personnel, machinery and equipment at estimated prices, mineral recovery rates, and others. However, forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to, interpretation and implications of drilling and geophysical results; estimates regarding timing of future capital expenditures and costs towards profitable commercial operations. Other factors that could cause actual results, developments or events to differ materially from those anticipated include, among others, increases/decreases in production; volatility in metals prices and demand; currency fluctuations; cash operating margins; cash operating cost per pound sold; costs per ton of ore; variances in ore grade or recovery rates from those assumed in mining plans; reserves and/or resources; the ability to successfully integrate acquired assets; operational risks inherent in mining or development activities and legislative factors relating to prices, taxes, royalties, land use, title and permits, importing and exporting of minerals and environmental protection. Accordingly, undue reliance should not be placed on forward-looking statements and the forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement. The forward-looking statements contained herein are made as at the date hereof and the Company does not undertake any obligation to update publicly or revise any such forward-looking statements or any forward-looking statements contained in any other documents whether as a result of new information, future events or otherwise, except as required under applicable security law.
Rambler Metals and Mining Plc
Group Financial Statements
Consolidated Income Statement and Comprehensive Income
For the Year Ended 31 December 2021
|
|
|
2021 |
2020 |
|
|
|
$'000 |
$'000 |
|
|
|
|
|
|
Revenue |
5 |
28,176 |
24,346 |
|
Production costs |
|
(29,475) |
(28,113) |
|
Depreciation and amortisation |
|
(7,646) |
(6,240) |
|
Gross loss |
|
(8,945) |
(10,007) |
|
Administrative expenses |
|
(5,732) |
(4,684) |
|
Share based compensation |
|
(1,029) |
(168) |
|
Operating loss |
6 |
(15,706) |
(14,859) |
|
Foreign exchange (loss)/gain |
|
(217) |
541 |
|
(Loss)/gain in fair value of Gold Stream |
24 |
(3,160) |
202 |
|
Other income |
7 |
4,903 |
4,415 |
|
Other expenses |
7 |
(1,619) |
(816) |
|
Net finance costs |
9 |
(5,690) |
(1,881) |
|
(Loss)/gain in fair value of forward contract |
26 |
(430) |
593 |
|
Loss before tax |
|
(21,919) |
(11,805) |
|
Income tax credit |
10 |
7,921 |
10,042 |
|
Loss for the period |
|
(13,998) |
(1,763) |
|
Other comprehensive income |
|
|
|
|
|
Items that may be reclassified into profit or loss |
|
|
|
|
|
Exchange differences on translation of foreign operations (net of tax) |
|
(531) |
1,020 |
|
|
Items that will not be reclassified to the income statement (net of tax) |
|
|
|
|
|
Gain on fair value of equity investment (net of tax) |
14 |
125 |
71 |
|
|
Other comprehensive income for the period |
|
(406) |
1,091 |
|
|
|
|
|
|
|
|
Total comprehensive loss for the period |
|
(14,404) |
(672) |
|
|
|
|
|
|
|
|
Basic and diluted loss per share |
21 |
(0.12) |
(0.10) |
|
|
|
|
|
|
|
Rambler Metals and Mining Plc
Consolidated Statement of Financial Position
As at 31 December 2021
|
|
|
2021 |
2020 |
|
|
Note |
$'000 |
$'000 |
|
Assets |
|
|
|
|
Intangible assets |
11 |
3,672 |
3,408 |
|
Mineral property |
12 |
53,740 |
41,928 |
|
Property, plant and equipment |
13 |
23,566 |
20,693 |
|
Deferred tax |
10 |
29,919 |
22,565 |
|
Restricted cash |
19 |
3,568 |
3,553 |
|
Deposits |
13 |
- |
700 |
|
Total non-current assets |
|
114,465 |
92,847 |
|
|
|
|
|
|
Equity investments |
14 |
- |
206 |
|
Inventory |
16 |
4,356 |
2,683 |
|
Trade and other receivables |
17 |
1,421 |
839 |
|
Derivative financial asset |
18 |
2,473 |
561 |
|
Cash and cash equivalents |
|
1,605 |
6,242 |
|
Assets held for sale |
15 |
- |
800 |
|
Total current assets |
|
9,855 |
11,331 |
|
Total assets |
|
124,320 |
104,178 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Loans and borrowings |
23 |
3,296 |
5,129 |
|
Gold Stream |
24 |
749 |
1,370 |
|
Gold liability |
27 |
222 |
- |
|
Trade and other payables |
22 |
13,217 |
13,857 |
|
Liabilities associated with assets held for sale |
15 |
- |
514 |
|
Derivative financial liabilities |
26 |
1,163 |
733 |
|
Total current liabilities |
|
18,647 |
21,603 |
|
Net current liabilities |
|
(8,792) |
(10,272) |
|
|
|
|
|
|
Loans and borrowings |
23 |
17,674 |
4,645 |
|
Gold Stream |
24 |
8,098 |
5,713 |
|
Gold liability |
27 |
124 |
- |
|
Provision |
25 |
1,767 |
2,196 |
|
Trade and other payables |
22 |
1,505 |
2,705 |
|
Total non-current liabilities |
|
29,168 |
15,259 |
|
Net assets |
|
76,505 |
67,316 |
|
|
|
|
|
|
Equity |
|
|
|
|
Issued capital |
20 |
19,654 |
18,781 |
|
Share premium |
20 |
138,739 |
115,191 |
|
Share warrants reserve |
20 |
1,484 |
3,185 |
|
Share option reserve |
20 |
3,184 |
2,311 |
|
Merger reserve |
20 |
180 |
180 |
|
Translation reserve |
20 |
(16,419) |
(15,888) |
|
Other reserves |
20 |
- |
172 |
|
Retained losses |
|
(70,317) |
(56,616) |
|
Total equity |
|
76,505 |
67,316 |
The consolidated financial statements were approved and authorised for issue by the Board and signed on their behalf by:
"Toby Bradbury" "Brad Mills"
____________________________ ____________________________
Toby Bradbury Brad Mills
Director and Chief Executive Officer Director and Chairman
Rambler Metals and Mining Plc
Consolidated Statement of Changes in Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Ordinary Share |
Ordinary Share |
Deferred Share |
Share |
Warrants |
Share option |
Merger |
Translation |
Other |
Retained |
Total |
|
|||||||||||
|
Capital |
Capital |
Capital |
Premium |
Reserve |
Reserve |
Reserve |
Reserve |
Reserve |
Losses |
|
||||||||||||
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
||||||||||
|
Group |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Balance at 1 January 2020 |
17,872 |
- |
- |
99,059 |
- |
2,142 |
180 |
(16,908) |
101 |
(54,853) |
47,593 |
|
||||||||||
|
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Loss for the period |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(1,763) |
(1,763) |
|
||||||||||
|
Foreign exchange translation differences |
- |
- |
- |
- |
- |
- |
- |
1,020 |
- |
- |
1,020 |
|
||||||||||
|
Gain on fair value of equity investment (net of tax) |
- |
- |
- |
- |
- |
- |
- |
- |
71 |
- |
71 |
|
||||||||||
|
Total other comprehensive income |
- |
- |
- |
- |
- |
- |
- |
1,020 |
71 |
- |
1,091 |
|
||||||||||
|
Total comprehensive income for the period |
- |
- |
- |
- |
- |
- |
- |
1,020 |
71 |
(1,763) |
(672) |
|
||||||||||
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Share restructure |
(17,872) |
179 |
17,694 |
- |
- |
- |
- |
- |
- |
- |
- |
|
||||||||||
|
Issue of share capital (note 20) |
- |
909 |
- |
17,269 |
- |
- |
- |
- |
- |
- |
18,178 |
|
||||||||||
|
Share issue expenses |
- |
- |
- |
(1,137) |
- |
- |
- |
- |
- |
- |
(1,137) |
|
||||||||||
|
Issue of warrants |
- |
- |
- |
- |
3,185 |
- |
|
- |
- |
- |
3,185 |
|
||||||||||
|
Share-based payments |
- |
- |
- |
- |
- |
169 |
- |
- |
- |
- |
169 |
|
||||||||||
|
Transactions with owners |
(17,872) |
1,088 |
17,694 |
16,132 |
3,185 |
169 |
- |
- |
- |
- |
20,395 |
|
||||||||||
|
Balance at 31 December 2020 |
- |
1,088 |
17,694 |
115,191 |
3,185 |
2,311 |
180 |
(15,888) |
172 |
(56,616) |
67,317 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rambler Metals and Mining Plc
Consolidated Statement of Changes in Equity (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Ordinary Share |
Ordinary Share |
Deferred Share |
Share |
Warrants |
Share option |
Merger |
Translation |
Other |
Retained |
Total |
|
|||||||||||
|
Capital |
Capital |
Capital |
Premium |
Reserve |
Reserve |
Reserve |
Reserve |
Reserve |
Losses |
|
||||||||||||
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
||||||||||
|
Group |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Balance at 1 January 2021 |
- |
1,088 |
17,694 |
115,191 |
3,185 |
2,311 |
180 |
(15,888) |
172 |
(56,616) |
67,317 |
|
||||||||||
|
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Loss for the period |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(13,998) |
(13,998) |
|
||||||||||
|
Foreign exchange translation differences |
- |
- |
- |
- |
- |
- |
- |
(531) |
- |
- |
(531) |
|
||||||||||
|
Loss on fair value of equity investment (net of tax) |
- |
- |
- |
- |
- |
- |
- |
- |
125 |
- |
125 |
|
||||||||||
|
Transfer to retained losses |
- |
- |
- |
- |
- |
- |
- |
- |
(297) |
297 |
- |
|
||||||||||
|
Total other comprehensive income |
- |
- |
- |
- |
- |
- |
- |
(531) |
(172) |
297 |
(406) |
|
||||||||||
|
Total comprehensive income for the period |
- |
- |
- |
- |
- |
- |
- |
(531) |
(172) |
(13,701) |
(14,404) |
|
||||||||||
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Share restructure |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
|
||||||||||
|
Issue of share capital (note 20) |
- |
737 |
|
19,700 |
- |
- |
- |
- |
- |
- |
20,437 |
|
||||||||||
|
Share issue expenses |
- |
- |
- |
(862) |
- |
- |
- |
- |
- |
- |
(862) |
|
||||||||||
|
Exercise of warrants |
|
135 |
- |
4,710 |
(2,825) |
- |
- |
- |
- |
- |
2,020 |
|
||||||||||
|
Issue of warrants |
- |
- |
- |
- |
1,124 |
- |
- |
- |
- |
- |
1,124 |
|
||||||||||
|
Share-based payments |
- |
- |
- |
- |
- |
873 |
- |
- |
- |
- |
873 |
|
||||||||||
|
Transactions with owners |
- |
872 |
- |
23,548 |
(1,701) |
873 |
- |
- |
- |
- |
23,592 |
|
||||||||||
|
Balance at 31 December 2021 |
- |
1,960 |
17,694 |
138,739 |
1,484 |
3,184 |
180 |
(16,419) |
- |
(70,317) |
76,505 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rambler Metals and Mining Plc
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2021
|
|
|
2021 |
2020 |
|
|
Note |
$'000 |
$'000 |
|
Cash flows from operating activities |
|
|
|
|
Loss before tax |
|
(21,919) |
(11,805) |
|
Depreciation and amortisation |
|
7,723 |
6,288 |
|
(Gain)/loss on disposal of property, plant and equipment |
7 |
(2,704) |
210 |
|
Loss on sale of equity investment |
14 |
142 |
- |
|
Gain on derivative financial instruments |
5 |
(10) |
(240) |
|
Loss/(gain) on fair value of forward contract |
26 |
430 |
(593) |
|
(Gain)/loss on fair value of Gold Stream |
24 |
3,160 |
(202) |
|
Share based payments |
|
1,029 |
168 |
|
Foreign exchange |
|
117 |
(1,385) |
|
Finance cost |
9 |
5,631 |
1,823 |
|
Reclamation and site closure costs |
|
63 |
58 |
|
Deposit written off |
7 |
732 |
- |
|
Gain on fair value of long-term payables |
7 |
- |
(878) |
|
Gain on fair value of government interest-free loan |
7 |
(119) |
(113) |
|
Inventory write-downs |
7 |
- |
125 |
|
Other provisions |
|
279 |
- |
|
Cash utilised in operating activities before changes in working capital |
|
(5,446) |
(6,544) |
|
Decrease/(increase) in inventory |
|
(1,659) |
215 |
|
Increase in prepayments |
|
(518) |
(217) |
|
Decrease/(increase) in derivative financial instruments |
|
(1,902) |
1,333 |
|
(Decrease)/increase in trade and other payable |
|
(2,320) |
7,139 |
|
Net cash (utilised)/generated in operating activities |
|
(11,845) |
1,926 |
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
Interest received |
|
- |
1 |
|
Sale of non-core assets |
|
2,270 |
- |
|
Sale of investments |
14 |
725 |
- |
|
Addition of evaluation and exploration assets |
11 |
(259) |
(2) |
|
Addition of Mineral property - net |
12 |
(15,267) |
(4,046) |
|
Addition of property, plant and equipment |
|
(4,197) |
(1,157) |
|
Non-current deposits |
13 |
- |
(700) |
|
Increase in reclamation deposit and others |
|
(60) |
- |
|
Net cash utilised in investing activities |
|
(16,788) |
(5,904) |
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
Issue of share capital |
20 |
18,287 |
8,373 |
|
Share issue expenses |
|
(862) |
(438) |
|
Warrants exercised |
|
2,020 |
- |
|
Interest paid |
|
(1,330) |
(922) |
|
Loans received |
|
18,393 |
7,155 |
|
Government assistance loan |
|
403 |
- |
|
Gold Stream payments |
24 |
(1,592) |
(830) |
|
Repayment of loans and borrowings |
|
(8,995) |
(3,846) |
|
Capital element of finance lease payments |
|
(2,047) |
(1,525) |
|
Net cash generated in financing activities |
|
24,277 |
7,967 |
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents |
|
(4,356) |
3,989 |
|
Cash and cash equivalents at beginning of period |
|
6,242 |
1,936 |
|
Effect of exchange rate fluctuations on cash held |
|
(281) |
317 |
|
Cash and cash equivalents at end of period |
|
1,605 |
6,242 |
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements
1. Nature of operation and going concern
Rambler Metals and Mining Plc (the "Company") is a limited company incorporated and domiciled in United Kingdom whose shares are publicly traded. The registered office of the Company is located at 3 Sheen Road, Richmond Upon Thames, Surrey, United Kingdom. The principal activity of the Company and its subsidiaries (collectively "the Group") is the operation, development and exploration of the Ming Copper-Gold Mine ("Ming Mine") located in Baie Verte, Newfoundland and Labrador, Canada.
The Group's business activities, together with the factors likely to affect its future development, performance and position, its financial position, cash flows, liquidity position and borrowing facilities are set out in the Strategic Report. In addition, notes 20 and 28 to the consolidated financial statements include the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.
The Group incurred a net loss before tax of $21.9 million for the year ended 31 December 2021 (2020: $11.8 million). As at 31 December 2021, the Group had a working capital deficiency of $8.8 million (2020: $10.3 million). The Group's ability to continue operating in the normal course of business is dependent upon establishing sufficient operating cash flows from the Ming Mine, and to the extent required, through access to equity and debt markets and proceeds from the exercise of warrants. These factors together with the continued unpredictability of the impact of Covid-19 indicate the existence of a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern.
The Group continually reviews operational results, expenditures and additional financing opportunities in order to ensure adequate liquidity to support its growth strategy while increasing production levels at the Ming Mine. The consolidated financial statements have been prepared on a going concern basis which assumes that the Group will be able to realise its assets and settle its obligations in the normal course of business. Management believes that the Ming Mine will generate sufficient operating cash flows to support the day-to-day activities and future growth requirements of the business. If the production is not ramping up in line with forecasts or lower than forecast copper grade and commodity prices, the Group would be able to obtain additional funding through either equity or debt financing. For the year ended 31 December 2021, the Group successfully obtained debt financing of $18.8 million and equity financing of $18.3 million. Also, the Group completed a gold stream financing of $11.0 million in March 2022.
These financial statements do not give effect to any adjustments which would be necessary should the Group be unable to continue as a going concern and, therefore, be required to realise its assets and discharge its liabilities in other than the normal course of business and at amounts different than those reflected in the financial statements. Such adjustments could be material.
2. Significant accounting policies
(a) Statement of compliance
The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards ("IFRS") and their interpretations issued by the International Accounting Standards Board ("IASB"), as adopted by the UK and with IFRS and their interpretations adopted by the IASB. There are no material differences on application to the Group. The consolidated financial statements have also been prepared in accordance with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
The accounting policies applied are consistent with those adopted and disclosed in the Group financial statements for the year ended 31 December 2021.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
2. Significant accounting policies (continued)
(a) Statement of compliance (continue)
An amendment to IFRS 9 and certain other standards, Interest Rate Benchmark Reform and its Effect on Financial Reporting, was issued by the IASB on 27 August 2020 and became effective January 1, 2021. The Group has assessed the impact of the amendment on its adoption effective 1 January 2021 and determined it does not currently have a significant effect on the Company's financial statements.
The new or amended standards that are issued, but not yet effective, up to the date of issuance of the Group's consolidated financial statements are disclosed below. The Group intends to adopt theses new or amended standards, if applicable, when they become effective.
Amendments to IAS 1: Classification of Liabilities as Current or Non-current
In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify:
• What is meant by a right to defer settlement
• That a right to defer must exist at the end of the reporting period
• That classification is unaffected by the likelihood that an entity will exercise its deferral right
• That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification
The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and must be applied retrospectively. The Group is currently assessing the impact the amendments will have on current practice.
Reference to the Conceptual Framework - Amendments to IFRS 3
In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations - Reference to the Conceptual Framework. The amendments are intended to replace a reference to the Framework for the Preparation and Presentation of Financial Statements, issued in 1989, with a reference to the Conceptual Framework for Financial Reporting issued in March 2018 without significantly changing its requirements.
The Board also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential ' day 2 ' gains or losses arising for liabilities and contingent liabilities that would be within the scope of IAS 37 or IFRIC 21 Levies, if incurred separately.
At the same time, the Board decided to clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Framework for the Preparation and Presentation of Financial Statements.
The amendments are effective for annual reporting periods beginning on or after 1 January 2022 and apply prospectively.
Property, Plant and Equipment: Proceeds before Intended Use - Amendments to IAS 16
In May 2020, the IASB issued Property, Plant and Equipment - Proceeds before Intended Use, which prohibits entities deducting from the cost of an item of property, plant and equipment, any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognises the proceeds from selling such items, and the costs of producing those items, in profit or loss.
The amendment is effective for annual reporting periods beginning on or after 1 January 2022 and must be applied retrospectively to items of property, plant and equipment made available for use on or after the beginning of the earliest period presented when the entity first applies the amendment. The amendments are not expected to have a material impact on the Group.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
2. Significant accounting policies (continued)
(a) Statement of compliance (continue)
Onerous Contracts - Costs of Fulfilling a Contract - Amendments to IAS 37
In May 2020, the IASB issued amendments to IAS 37 to specify which costs an entity needs to include when assessing whether a contract is onerous or loss-making.
The amendments apply a " directly related cost approach " . The costs that relate directly to a contract to provide goods or services include both incremental costs and an allocation of costs directly related to contract activities. General and administrative costs do not relate directly to a contract and are excluded unless they are explicitly chargeable to the counterparty under the contract.
The amendments are effective for annual reporting periods beginning on or after 1 January 2022. The amendments are not expected to have a material impact on the Group.
IFRS 9 Financial Instruments - Fees in the '10 per cent' test for derecognition of financial liabilities
As part of its 2018-2020 annual improvements to IFRS standards process the IASB issued amendment to IFRS 9. The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other's behalf. An entity applies the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment.
The amendment is effective for annual reporting periods beginning on or after 1 January 2022 with earlier adoption permitted. The Group will apply the amendments to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment. The amendments are not expected to have a material impact on the Group.
Amendments to IAS 12, Income Taxes
Amendments to IAS 12, Income Taxes, specify how entities should account for deferred income taxes on transactions such as leases and decommissioning obligations. In specified circumstances, entities are exempt from recognizing deferred income taxes when they recognize assets or liabilities for the first time. The amendments clarify that the exemption does not apply to transactions such as leases and decommissioning obligations and that entities are required to recognize deferred income taxes on such transactions.
The amendment is effective for annual reporting periods beginning on or after 1 January 2023 and the Group is currently evaluating the impacts of adopting these amendments on its financial statements.
(b) Basis of preparation
The consolidated financial statements are presented in United States dollars ("US dollars" or "$"), rounded to the nearest thousand dollars, except the notes to the consolidated financial statements or when otherwise indicated. US dollars is used as the presentation currency in line with industry peers.
The Company has a functional currency of GB pounds and the majority of the Group's operations are carried out by its operating subsidiary which has a functional currency of Canadian dollars. Foreign operations are included in accordance with the policies set out in note 2(d). At 31 December 2021, the closing rate of exchange of CAD to US dollar was 0.7888 (2020: 0.7854), and US dollar to GB pound was 1.3477 (2020: 1.3651). The average rate of exchange of CAD to US dollar was 0.7539 (2020:0.7460), and US dollar to GB pound was 1.3002 (2020: 1.2830).
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements. The accounting policies have been applied consistently by Group entities.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
2. Significant accounting policies (continued)
(c) Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Group. An investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control is obtained.
Generally, there is a presumption that a majority of voting rights results in control. When the Group has less than a majority of the voting, or similar, rights of an investee, it considers all relevant facts and circumstances in assessing whether it has power over an investee. The relevant activities are those which significantly affect the subsidiary's returns. The ability to approve the operating and capital budget of a subsidiary and the ability to appoint key management personnel are decisions that demonstrate that the Group has the existing rights to direct the relevant activities of a subsidiary.
(ii) Transactions eliminated on consolidation
Intragroup balances and any unrealised gains and losses or income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements.
(d) Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the functional currency at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to the functional currency at foreign exchange rates ruling at the dates the fair value was determined.
(ii) Translation into presentation currency
The assets and liabilities of the Group are translated to US dollars at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of the Group are translated to US dollars at rates approximating to the foreign exchange rates ruling at the dates of the transactions.
(iii) Net investment in foreign operations
Exchange differences arising from the translation of the net investment in foreign operations are taken to translation reserve. They are released into the statement of comprehensive income upon disposal.
(e) Property, plant and equipment
(i) Owned assets
Items of property, plant and equipment is stated at cost, net of accumulated depreciation and/or accumulated impairment losses. The cost of self-constructed assets includes the cost of materials, direct labour and the estimate of the costs of dismantling and removing the items and restoring the site on which they are located, where an obligation to incur such costs exists.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
2. Significant accounting policies (continued)
(e) Property, plant and equipment (continued)
(ii) Subsequent costs
The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item will flow to the Group and the cost of the item can be measured reliably. All other costs are recognised in the income statement as an expense as incurred.
(iii) Depreciation
Depreciation is charged to the income statement or capitalised as part of the exploration and evaluation costs or mineral property where appropriate, on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Land is not depreciated. Depreciation on assets under construction does not commence until they are complete and available for use. The estimated useful lives are as follows:
· buildings 5 to 10 years
· plant and equipment - others 2 to 10 years
· plant and equipment - mill plant 23 years
· motor vehicles 3 years
· computer equipment 3 years
· fixtures, fittings and equipment 3 years
The estimated useful lives and residual values of the assets are considered annually and restated as required.
(f) Mineral property
Upon transfer of 'Exploration and evaluation costs' into 'Mineral property', all subsequent expenditure on the construction, installation or completion of infrastructure facilities is capitalised within 'Mineral property'. Development expenditure is net of proceeds from all sale of gold and copper concentrate extracted during the development phase and until commercial production is declared.
Mineral property is amortised on a unit of production basis. Future forecast capital expenditure is included in the unit of production amortisation calculation.
(g) Intangible assets
(i) Exploration and evaluation costs
These comprise costs directly incurred in exploration and evaluation. They are capitalised as intangible assets pending determination of the feasibility of the project. When the existence of economically recoverable reserves and the availability of finance are established, the related intangible assets are tran sferred to Mineral property and amortised over the life of the mine.
Impairment assessment is performed annually. Where a project is abandoned or is determined not to be economically viable, the related costs are written off.
The recoverability of deferred exploration and evaluation costs is dependent upon a number of factors common to the natural resource sector. These include the extent to which the Group can establish economically recoverable reserves on its properties, the ability of the Group to obtain necessary financing to complete the development of such reserves and future profitable production or proceeds from the disposition thereof.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
2. Significant accounting policies (continued)
(g) Intangible assets (continued)
(ii) Impairment of exploration and evaluation costs
Impairment reviews for exploration and evaluation costs are carried out on a project by project basis, with each project representing a potential single cash generating unit. An impairment review is undertaken when indicators of impairment arise but typically when one of the following circumstances apply:
· unexpected geological occurrences that render the resource uneconomic;
· title to the asset is compromised;
· variations in metal prices that render the project uneconomic; and
· variations in the exchange rate for the currency of operation.
(h) Equity investments
Equity investments are recognised at fair value with changes in value recorded in other comprehensive income as they are not held for short-term profit-taking trading under the Company's business model. Subsequent to initial recognition these are stated at fair value. Movements in fair values are recognised in other comprehensive income. Fair values are based on prices quoted in an active market if such a market is available. If an active market is not available, the Company establishes the fair value of financial instruments by using a valuation technique, usually discounted cash flow analysis. When an investment is disposed, any cumulative gains and losses previously recognised in fair value reserve are transferred to Retained profits.
(i) Inventory
Stockpiled ore is recorded at the lower of production cost and net realisable value. Production costs include all direct costs plus an allocation of fixed costs associated with the mine site.
Operating supplies are valued at the lower of cost and net realisable value. Cost is determined on an average cost basis.
(j) Trade and other receivables
Trade and other receivables are generally stated at their cost less impairment losses. Receivables in respect of the sale of copper concentrate which contain an embedded derivative linking them to future commodity prices are measured at fair value through profit and loss and are treated as derivative financial assets or liabilities. Receivables with a short duration are not discounted.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
2. Significant accounting policies (continued)
(k) Financial instruments
(i) Initial recognition and subsequent measurement
Financial assets are classified, at initial recognition, and subsequently measured at amortised cost, fair value through other comprehensive income, or fair value through profit or loss. The classification of the financial assets at initial recognition that are debt instruments depends on the business model in which a financial asset is managed and its contractual cash flow characteristics. A financial asset is measured at fair value net of transaction costs that are directly attributable to its acquisition except for financial assets at fair value through profit or loss where transaction costs are expensed. All financial assets not classified and measured at amortised cost or fair value through other comprehensive income are measured at fair value through profit or loss.
On initial recognition of an equity instrument that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment's fair value in other comprehensive income.
The Group's financial assets at amortised cost includes cash and cash equivalents, restricted cash, trade receivables, and other receivables. Derivative financial instruments are measured at fair value through profit or loss, and equity investments quoted in securities are measured at fair value through other comprehensive income.
Financial liabilities are classified, at initial recognition, and subsequently measured at amortised cost or fair value through profit or loss. The classification determines the method by which the financial liabilities are carried on the consolidated statement of financial position subsequent to inception and how changes in value are recorded.
The Group's financial liabilities measured at amortised cost includes trade payables, loan payables and other borrowings. Derivative liabilities consist of Gold Stream (note 24) and copper forward contract (note 26) and are measured at fair value through profit or loss. The Gold Stream is considered a financial liability as the Group purchases the payable gold from the market in order to repay Sandstorm based on actual production in the period (note 24).
(ii) Derecognition
A financial asset is primarily derecognised when the rights to receive cash flows from the asset have expired. A financial liability is derecognised when the associated obligation is discharged or cancelled or expires.
(iii) Impairment
At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. The estimated present value of future cash flows associated with the asset is determined and an impairment loss is recognised for the difference between this amount and the carrying amount as follows: the carrying amount of the asset is reduced to estimated present value of the future cash flows associated with the asset, discounted at the financial asset's original effective interest rate, either directly or through the use of an allowance account and the resulting loss is recognised in the consolidated income statement for the period.
In a subsequent period, if the amount of the impairment loss related to financial assets measured at amortised cost decreases, the previously recognised impairment loss is reversed through the consolidated income statement to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognised.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
2. Significant accounting policies (continued)
(l) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Restricted cash (note 19) is not available for use by the Group and therefore is not considered highly liquid.
(m) Impairment of non-financial assets
The carrying amounts of the Group's assets (except deferred exploration and evaluation costs (see accounting policy (g)(ii)) and deferred tax assets (see accounting policy 2(t)), are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated (see accounting policy 2(m)(i)).
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the income statement.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units (group of units) and then, to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.
(i) Calculation of recoverable amount
The recoverable amount of other assets is the greater of their net selling price 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 an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
(ii) Reversals of impairment
An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
(n) Convertible loans
Convertible loans are separated into liability and equity components based on the terms of the contract. On issuance of the convertible loans, the fair value of the liability component is determined using a market rate for an equivalent non-convertible instrument. This amount is classified as a financial liability measured at amortised cost (net of transaction costs) until it is extinguished on conversion or redemption. The remainder of the proceeds is allocated to the conversion option that is recognised and included in equity. Transaction costs are deducted from equity, net of associated income tax. The carrying amount of the conversion option is not remeasured in subsequent years. Transaction costs are apportioned between the liability and equity components of the convertible loan, based on the allocation of proceeds to the liability and equity components when the instruments are initially recognised.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
2. Significant accounting policies (continued)
(o) Share Warrants
The Group accounts for its share warrants as equity at fair value as of the date of issuance on the Group's consolidated balance sheets and no further adjustments to their valuation are made. Management estimates the fair value of the warrants using option pricing models and assumptions that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for future financings, expected volatility, expected life, yield, and risk-free interest rate.
(p) Leases
The Group assesses whether a contract is or contains a lease, at inception of a contract. A right-of-use asset ("ROU asset") and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, are recognised at the commencement of the lease, with the following exceptions: (a) the total lease term is less than or equal to 12 months, or (b) leases of low value. The payments for such leases are recognised in the consolidated income statement on a straight-line basis over the lease term.
The ROU asset is initially measured based on the present value of lease payments, lease payments made at or before the commencement day, and any initial direct costs. They are subsequently measured at cost less accumulated amortisation and impairment losses. The ROU asset is depreciated over the shorter of the lease term
or the useful life of the underlying asset. The ROU asset is subject to testing for impairment if there is an indicator of impairment.
The lease liability is initially measured at the present value of 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 Group uses its incremental borrowing rate. Lease payments include fixed payments less any lease incentives, and any variable lease payments where variability depends on an index or rate. When the lease contains an extension or purchase option that the Group considers reasonably certain to be exercised, the cost of the option is included in the lease payments.
ROU assets are included in plant and equipment, and the lease liability is included in loans and borrowing in the consolidated statement of financial position. Variable lease payments that do not depend on an index or rate are not included in the measurement of the ROU asset and lease liability. The related payments (if any) are recognised as an expense in the period in which the triggering event occurs and are included in the consolidated income statement.
(q) Provisions
The Group records the present value of estimated costs of legal and constructive obligations required to restore mining and other operations in the period in which the obligation is incurred. The nature of these restoration activities includes dismantling and removing structures, rehabilitating mines and tailings dams, dismantling operating facilities, closure of plant and waste sites, and restoration, reclamation and revegetation of affected areas.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
2. Significant accounting policies (continued)
(r) Revenue recognition
The Group is engaged principally in sales of metal concentrate that are stated at their invoiced amount which is net of treatment and refining charges. Revenue for sale of commodity is recorded when control of the commodity passes to the customer. Sales of commodities are provisionally priced such that the price is not settled until a predetermined future date and is based on the market price at that time. These sales are marked to market at each reporting date using the forward price for the period equivalent to that outlined in the contract. Revenue on provisionally priced sales is recognised at the forward market price when control passes to the customer and is classified as revenue from contracts with customers. Subsequent mark-to-market adjustments are recognised in revenue from other sources.
Revenues from the sale of material by-products are recognised within revenue at the point control passes. Where a by-product is not regarded as significant, revenue may be credited against the cost of sales.
(s) Borrowing costs
Borrowing costs are recognised in the income statement where they do not meet the criteria for capitalisation. Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised.
(t) Equity settled share based payments
All share based payments are recognised in the financial statements.
All goods and services received in exchange for the grant of any share-based remuneration are measured at their fair values. Fair values of employee services are determined indirectly by reference to the fair value of the share options awarded. Their value is appraised at the grant dates and excludes the impact of non-market vesting conditions.
All share-based remuneration is ultimately recognised as an expense in the income statement with a corresponding credit to the accumulated losses in the balance sheet.
If vesting periods apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense recognised in prior periods if the number of share options ultimately exercised is different to that estimated on vesting. Upon exercise of share options the proceeds received net of attributable transaction costs are credited to share capital.
(u) Income tax
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
2. Significant accounting policies (continued)
(u) Income tax (continued)
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
The following temporary differences are not provided for:
· goodwill not deductible for tax purposes,
· the initial recognition of assets or liabilities that affect neither accounting nor taxable profit,
· and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Mining taxes and royalties are treated and disclosed as current and deferred taxes if they have the characteristics of an income tax.
(v) Fair value measurement
A number of assets and liabilities included in the Group's financial statements require measurement at, and/or disclosure of, fair value.
The fair value measurement of the Group's financial and non-financial assets and liabilities utilises market observable inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into different levels based on how observable the inputs used in the valuation technique utilised are (the 'fair value hierarchy'):
- Level 1: Quoted prices in active markets for identical items (unadjusted)
- Level 2: Observable direct or indirect inputs other than Level 1 inputs
- Level 3: Unobservable inputs (i.e. not derived from market data)
The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect on the fair value measurement of the item. Transfers of items between levels are recognised in the period they occur. The Group measures a number of items at fair value:
- Derivative financial asset - Level 2
- Equity investments - Level 1
- Gold Stream - Level 3
- Copper forward contract - Level 2
For more detailed information in relation to the fair value measurement of the items above, please refer to the applicable notes.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
2. Significant accounting policies (continued)
(w) Government grants and subsidies
Government grants and subsidies are recognised when the Group has complied with the conditions attached to the agreement and obtained reasonable assurance that revenue will be received. The grant is recognised as other income in income statement on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the assistance are intended to compensate.
(x) Restricted share unit
The Group grants restricted share units (the "RSUs") to officers and employees, which vest in three equal instalments, on grant dates and each of the first and second anniversary dates following the respective grant dates. Unvested RSUs are subject to forfeiture if the holder's employment with the Group terminates unless exception is made by the board of directors. Compensation cost for all RSUs expected to vest is measured at fair value on the date of grant and recognized over the service period. The fair value of restricted share units is determined based on the number of shares granted and the quoted price of the Group's common stock on the date of grant. Such a value is recognised as expense over the service period, net of estimated forfeitures, using the accelerated method.
3. Critical judgements and accounting estimates
(a) Critical judgements in applying the Group's accounting policies
The details of the Group's accounting policies are presented in accordance with International Financial Reporting Standards as set out in note 2 to the financial statements. The preparation of financial statements in conformity with IFRS requires management to make judgements in applying the Group's accounting policies,
Going concern
Judgements are necessary in applying the going concern basis in the preparation of the Group's financial statements in respect of the Group's ability to continue as a going concern for a period of at least 12 months from the date of signing the current period's report (see note 1).
Deferred tax
The Group has incurred losses which will be available for offset against future taxable profits and one of the subsidiaries has tax credits available to offset against future tax liabilities. Following the declaration of commercial production it has been concluded that the Group has sufficient evidence of future taxable profits to justify the recognition of a deferred tax asset. If future taxable profits prove to be insufficient the Group could be required to reduce the deferred tax asset which would result in a reduction in the Group's earnings and net assets.
(b) Key sources of estimation uncertainty
Mineral Property, Property, Plant and Equipment and Exploration and Evaluation Costs
Management considers these assets for impairment at least annually with reference to the following indicators:
· Reviewing the financial performance compared to forecast;
· Reviewing the key production and milling statistics to forecast;
· Reviewing the commodity price forecasts against assumptions in the previous impairment model; and
· Considering any significant changes to the cost of capital.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
3. Critical judgements and accounting estimates (continued)
(b) Key sources of estimation uncertainty (continued)
Mineral Property, Property, Plant and Equipment and Exploration and Evaluation Costs (continued)
The Group uses estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going 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 following estimates are considered by management to be the most critical for investors to understand some of the processes and reasoning that go into the preparation of the Group's financial statements, providing some insight also to uncertainties that could impact the Group's financial results.
The Company assessed whether there are any indicators of impairment in respect of mineral property, property, plant and equipment and exploration and evaluation costs totalling $81.0 million (2020: $66.0 million). In making this assessment they have considered the Group's business plan which includes resource estimates, future processing capacity, future exchange rates, the forward market and longer-term price outlook for copper and gold and assumptions regarding weighted average cost of capital. The Group continues to invest in exploration which has the potential to extend mine life and increase the rate of production. Resource estimates have been based on the most recently filed NI43-101 report and its opportunities economic model which includes resource estimates without conversion of its inferred resources. Management's estimates of these factors are subject to risk and uncertainties affecting the recoverability of the Group's mineral property and exploration and evaluation costs.
Amortisation rate for Property, Plant and Equipment and Depletion rate for Mineral Property
Amortisation expenses are allocated based on the estimated useful life of the asset. Depletion expenses of the Mineral Property is calculated on a unit of production method expected to amortise the cost including future forecast capital expenditure over the expected life of the mine based on the tonnes of ore expected to be extracted. Should the amortization rates and depletion rates differ from the initial estimate, an adjustment would be made in the consolidated income statement on a prospective basis.
Closure costs
The Group has an obligation to restore its properties after the minerals have been mined from the site and has estimated the costs necessary to comply with existing reclamation standards. These estimates are recorded as a liability at their fair values in the periods in which they occur. If the estimate of reclamation costs proves to be inaccurate, the Group could be required to increase the provision for site closure and reclamation costs, which would increase the amount of future reclamation expense, resulting in a reduction in the Group's earnings and net assets.
Share-based payments
The Group calculates the cost of share based payments using the Black-Scholes model. Inputs into the model in respect of the expected option/warrant life and the volatility are subject to management estimate and any changes to these estimates may have a significant effect on the cost. The assumptions used in calculating the cost of share based payments are explained in notes 8 and 20.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
3. Critical judgements and accounting estimates (continued)
(b) Key sources of estimation uncertainty (continued)
Gold Stream
The Group calculates the movement on the fair value of the Gold Stream liability based on estimates of future cash flows arising from the sale of payable gold (see note 24). The cash flows will be dependent on the production of gold and its selling price at the time of delivery which have been estimated in line with the mine plan, future prices of gold and reserve estimates. Management's estimates of these factors are subject to risk and uncertainties affecting the amount of the fair value movement. Any changes to these estimates may result in a significantly different fair value movement recognised in the income statement.
4. Operating segments
The Group's operations relate to the exploration for and development of mineral deposits with support provided from the UK and as such the Group has only one operating segment.
Information about geographical areas
|
|
2021 |
2020 |
||||
|
|
UK |
Canada |
Consolidated |
UK |
Canada |
Consolidated |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
Revenue |
- |
28,176 |
28,176 |
- |
24,346 |
24,346 |
|
Non-current assets |
- |
114,465 |
114,465 |
- |
92,847 |
92,847 |
5. Revenue
|
|
2021 |
2020 |
|
|
$'000 |
$'000 |
|
Revenue from sale of commodities |
28,166 |
24,106 |
|
Gain on fair value of provisional priced commodities |
10 |
240 |
|
|
28,176 |
24,346 |
Information about major customers
All our revenue is from one customer (2021: one customer).
6. Operating loss
The operating loss is after charging:
|
|
|
|
2021 |
2020 |
|
|
|
|
$'000 |
$'000 |
|
Depreciation (see note 13) |
|
|
4,175 |
3,321 |
|
Amortisation (see note 12) |
|
|
3,548 |
2,967 |
|
Emoluments of officers, directors and officers (see note 29) |
|
|
743 |
699 |
|
Auditor's remuneration: |
|
|
|
|
|
Audit of these financial statements |
|
|
69 |
84 |
|
Fees payable to the auditor for other services: |
|
|
|
|
|
Other assurance services |
|
|
30 |
25 |
The Audit Committee reviews the nature and extent of non-audit services to ensure that independence is maintained.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
7. Other income (expenses)
|
|
2021 |
2020 |
|
|
$'000 |
$'000 |
|
Forgiveness of payables from suppliers |
- |
761 |
|
Gain on fair value of government interest-free loan |
119 |
113 |
|
Gain on fair value of long-term payables |
- |
878 |
|
Royalty income |
43 |
24 |
|
Gain from sale of non-core assets |
2,704 |
- |
|
Canadian Emergency Wage Subsidy (CEWS) 1 |
2,037 |
2,639 |
|
Total other income |
4,903 |
4,415 |
|
|
|
|
|
Penalties |
(466) |
(481) |
|
Inventory write-downs |
- |
(125) |
|
Other provision |
(279) |
- |
|
Write off of non- refundable deposit |
(732) |
- |
|
Loss on sale of equity investment |
(142) |
- |
|
Loss on disposal of property, plant and equipment |
- |
(210) |
|
Total other expenses |
(1,619) |
(816) |
1 During the year the Group received CEWS of $3,584,000 out of which $1,547,000 was credited to Mineral Properties and balance $2,037,000 was recognised as other income.
8. Personnel expenses
|
Salary costs |
Group |
Group |
|
|
2021 |
2020 |
|
|
$'000 |
$'000 |
|
Wages and salaries |
10,236 |
10,589 |
|
Other short term benefits |
507 |
565 |
|
Compulsory social security contributions |
2,640 |
1,651 |
|
Share based payments |
1,029 |
168 |
|
|
14,412 |
12,973 |
Salary costs of $24,000 (2020: $14,000) were capitalised as part of property, plant and equipment, and $4,881,000 (2020: $2,111,000) were capitalised as part of the mineral properties during the year.
Number of employees
The average number of employees during the period was as follows:
|
|
Group |
Group |
|
|
2021 |
2020 |
|
Directors |
8 |
8 |
|
Administration |
14 |
11 |
|
Production and development |
196 |
149 |
|
|
218 |
167 |
During the period, the Group granted share options and RSUs to key personnel of the Group. Refer to note 20 for details.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
9. Net finance costs (income)
|
|
|
|
2021 |
2020 |
|
|
|
|
$'000 |
$'000 |
|
Bank interest receivable |
|
|
- |
(1) |
|
Finance lease interest |
|
|
196 |
65 |
|
Sandstorm loan interest |
|
|
- |
79 |
|
Advance Purchase Facility interest and charges |
|
|
110 |
255 |
|
Other loan interest |
|
|
1,654 |
988 |
|
Amortization of deferred borrowing cost |
|
|
295 |
32 |
|
Loss on early repayment of West Face loan |
|
|
3,168 |
- |
|
Interest on payroll source deduction liability |
|
|
59 |
187 |
|
Off-take provisional payment interest |
|
|
145 |
218 |
|
Unwinding of discount on reclamation provision |
|
|
63 |
58 |
|
Net finance costs |
|
|
5,690 |
1,881 |
10. Income tax
Recognised in the income statement
|
|
|
|
|
2021 |
2020 |
|
|
|
|
$'000 |
$'000 |
|
|
Current tax expense |
|
|
|
|
|
|
Current period |
|
|
- |
- |
|
|
|
|
|
|
|
|
|
Deferred tax credit |
|
|
|
|
|
|
Origination and reversal of temporary timing differences |
|
|
(5,914) |
(9,231) |
|
|
Deferred income tax asset not recognised |
|
|
|
(1,030) |
361 |
|
Mining tax - origination and reversal of temporary differences |
|
|
(977) |
(1,174) |
|
|
Total income tax credit in income statement |
|
|
(7,921) |
(10,042) |
|
Reconciliation of effective tax rate
A reconciliation between the tax credit and the product of the Group's accounting loss multiplied by the Group's statutory income tax rate is as follows:
|
|
2021 $'000 |
2020 $'000 |
|
Loss before tax |
(21,919) |
(11,805) |
|
|
|
|
|
Income tax using the UK corporation tax rate of 19% (2020: 19%) |
(4,165) |
(2,243) |
|
Effect of tax rates in foreign jurisdictions (rates increased) |
(2,324) |
(1,132) |
|
Mining tax |
(977) |
(1,174) |
|
Permanent differences |
872 |
(22) |
|
Timing differences |
(297) |
(5,834) |
|
Deferred income asset not recognised |
(1,030) |
363 |
|
|
(7,921) |
(10,042) |
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
10. Income tax (continued)
Recognised in other comprehensive income
|
|
2021 |
2020 |
|
|
$'000 |
$'000 |
|
Current tax expense |
|
|
|
Current year |
- |
- |
|
|
|
|
|
Deferred tax credit |
|
|
|
Fair value re-measurement of available for sale investments |
- |
- |
|
Exchange difference on retranslation of UK deferred tax asset |
- |
- |
|
Total income tax expense/(credit) in statement of other comprehensive income |
|
|
|
|
- |
- |
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
|
|
Assets |
Liabilities |
Net |
|||
|
|
Balance |
Balance |
Balance |
Balance |
Balance |
Balance |
|
|
2021 |
2020 |
2021 |
2020 |
2021 |
2020 |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
Property, plant and equipment |
894 |
- |
- |
(81) |
894 |
(81) |
|
Mineral property |
7,154 |
6,031 |
- |
- |
7,154 |
6,031 |
|
Intangible assets |
92 |
92 |
- |
- |
92 |
92 |
|
Others |
49 |
- |
- |
(204) |
49 |
(204) |
|
Gold Stream, government assistance and other loans |
277 |
- |
- |
(1,230) |
277 |
(1,230) |
|
Mining tax |
3,656 |
2,750 |
- |
- |
3,656 |
2,750 |
|
Derivative |
111 |
- |
- |
(182) |
111 |
(182) |
|
Tax value of loss carry-forwards and credits recognised |
17,686 |
15,389 |
- |
- |
17,686 |
15,389 |
|
Net tax assets /(liabilities) |
29,919 |
24,262 |
- |
(1,697) |
29,919 |
22,565 |
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
10. Income tax (continued)
Movement in recognised deferred tax assets and liabilities
|
|
Balance |
Recognised in income |
Recognised in other comprehensive income |
Exchange difference |
Balance |
|
|
|
||||||
|
|
||||||
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
|
Property, plant and equipment |
(3,352) |
3,171 |
- |
100 |
(81) |
|
|
Mineral property |
2,229 |
3,569 |
- |
233 |
6,031 |
|
|
Intangible assets |
90 |
- |
- |
2 |
92 |
|
|
Others |
- |
(194) |
- |
(10) |
(204) |
|
|
Gold Stream, government assistance and other loans |
1,527 |
(2,721) |
- |
(36) |
(1,230) |
|
|
Mining tax |
1,484 |
1,174 |
- |
92 |
2,750 |
|
|
Other timing differences |
(210) |
103 |
- |
(75) |
(182) |
|
|
Tax value of loss carry-forwards and credits - Canada |
9,987 |
4,940 |
- |
462 |
15,389 |
|
|
|
11,755 |
10,042 |
- |
768 |
22,565 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance |
Recognised in income |
Recognised in other comprehensive income |
Exchange difference |
Balance 2021 |
|
|
|
||||||
|
|
||||||
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
|
Property, plant and equipment |
(81) |
1,065 |
- |
(18) |
966 |
|
|
Mineral property |
6,031 |
1,198 |
- |
(135) |
7,094 |
|
|
Intangible assets |
92 |
- |
- |
(2) |
90 |
|
|
Others |
(204) |
278 |
- |
(1) |
73 |
|
|
Gold Stream, government assistance and other loans |
(1,230) |
1,651 |
- |
(8) |
413 |
|
|
Mining tax |
2,750 |
977 |
- |
(70) |
3,657 |
|
|
Other timing differences |
(182) |
322 |
- |
(3) |
137 |
|
|
Tax value of loss carry-forwards and credits - Canada |
15,389 |
2,430 |
- |
(330) |
17,489 |
|
|
|
22,565 |
7,921 |
- |
(567) |
29,919 |
|
The Group has incurred losses which will be available for offset against future taxable profits and one of the subsidiaries has tax credits available to offset against future tax liabilities. The Group considers that it has sufficient evidence of future taxable profits to justify the recognition of a deferred tax asset of $29.9 million (2020: $22.6 million).
The Group has recognised a deferred tax asset in respect of mining tax of $0.9 million (2020: $1.2 million) during the year bringing the balance to $3.7 million (2020: recognised deferred tax asset of $2.8 million). The Group considers that with recent increases in the market outlook for copper prices and ramp up in production from 2022 onward, there is sufficient evidence of future mining profits to justify the recognition of this asset.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
11. Intangible assets
|
|
Exploration and evaluation costs |
||
|
|
Ming Mine |
Little Deer Project |
Total |
|
|
$'000 |
$'000 |
$'000 |
|
Cost |
|
|
|
|
Balance as at 1 January 2020 |
974 |
2,365 |
3,339 |
|
Additions |
2 |
- |
2 |
|
Effect of movements in foreign exchange |
20 |
47 |
67 |
|
Balance as at 31 December 2020 |
996 |
2,412 |
3,408 |
|
|
|
|
|
|
Balance as at 1 January 2021 |
996 |
2,412 |
3,408 |
|
Additions |
209 |
50 |
259 |
|
Effect of movements in foreign exchange |
(4) |
9 |
5 |
|
Balance as at 31 December 2021 |
1,201 |
2,471 |
3,672 |
|
|
|
|
|
|
Carrying amounts |
|
|
|
|
1 January 2020 |
974 |
2,365 |
3,339 |
|
31 December 2020 |
996 |
2,412 |
3,408 |
|
|
|
|
|
|
1 January 2021 |
996 |
2,412 |
3,408 |
|
31 December 2021 |
1,201 |
2,471 |
3,672 |
Little Deer Project
The Little Deer Project is a high-grade copper exploration property located less than 140 kilometres from the Group's Nugget Pond mill.
Consideration of impairment for exploration and evaluation costs
Management have assessed whether there are any indicators of impairment in respect of exploration and evaluation costs for the year 2021. Management concluded that no impairment indicators had been noted that would require a formal impairment test.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
12. Mineral property
|
|
|
$'000 |
|
Cost |
|
|
|
Balance at 1 January 2020 |
|
86,521 |
|
Additions |
|
4,046 |
|
Transfer from asset under construction |
|
2,164 |
|
Reclassified to asset held for sale |
|
(187) |
|
Foreign exchange effect |
|
1,953 |
|
Balance at 31 December 2020 |
|
94,497 |
|
|
|
|
|
Balance at 1 January 2021 |
|
94,497 |
|
Additions |
|
15,267 |
|
Foreign exchange effect |
|
316 |
|
Balance at 31 December 2021 |
|
110,080 |
|
|
|
|
|
Amortisation and impairment |
|
|
|
Balance at 1 January 2020 |
|
48,508 |
|
Amortisation charge |
|
2,967 |
|
Foreign exchange effect |
|
1,094 |
|
Balance at 31 December 2020 |
|
52,569 |
|
|
|
|
|
Balance at 1 January 2021 |
|
52,569 |
|
Amortisation charge |
|
3,548 |
|
Foreign exchange effect |
|
223 |
|
Balance at 31 December 2021 |
|
56,340 |
|
|
|
|
|
Carrying amounts |
|
|
|
At 1 January 2020 |
|
38,013 |
|
At 31 December 2020 |
|
41,928 |
|
|
|
|
|
Balance at 1 January 2021 |
|
41,928 |
|
Balance at 31 December 2021 |
|
53,740 |
Consideration of impairment for mineral property costs
As a result of the loss in the year, the Company concluded that there was an impairment indicator at 31 December 2021. A valuation model was completed using the most current operating plan, taking into account the forward markets or analyst consensus on metal prices and exchange rates, and using an after-tax discount rate of 12%. The Company uses long-term copper price of USD$4.50 per pound, long-term gold price of $2,000 per ounce, and long-term exchange rate of CAD 1.2000. The recoverable amount was greater than the carrying value of the fixed assets and consequently no impairment charge was required .
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
13. Property, plant and equipment
|
|
Land and buildings |
Assets under construction |
Motor vehicles |
Plant and equipment |
Fixtures, and equipment |
Computer equipment |
Total |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
Cost |
|
|
|
|
|
|
|
|
Balance at 1 January 2020 |
4,222 |
4,853 |
229 |
48,475 |
115 |
972 |
58,866 |
|
Additions |
112 |
1,388 |
19 |
2,214 |
- |
66 |
3,799 |
|
Disposals |
(319) |
- |
(215) |
(6,103) |
(32) |
(173) |
(6,842) |
|
Reclassification |
- |
(3,252) |
- |
3,252 |
- |
- |
- |
|
Transfer to asset held for sale |
- |
- |
- |
(612) |
- |
- |
(612) |
|
Transfer to mineral properties |
- |
(2,164) |
- |
- |
- |
- |
(2,164) |
|
Foreign exchange effect |
96 |
(87) |
6 |
2,497 |
2 |
22 |
2,536 |
|
Balance at 31 December 2020 |
4,111 |
738 |
39 |
49,723 |
85 |
887 |
55,583 |
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2021 |
4,111 |
738 |
39 |
49,723 |
85 |
887 |
55,583 |
|
Additions |
681 |
1,182 |
87 |
5,512 |
15 |
90 |
7,567 |
|
Disposals |
- |
- |
- |
(261) |
- |
- |
(261) |
|
Write off related to Duck Pond mill |
- |
(505) |
- |
- |
- |
- |
(505) |
|
Expensed during the year |
- |
- |
- |
253 |
- |
- |
253 |
|
Reclassification |
- |
(801) |
- |
801 |
- |
- |
- |
|
Effect of movements in foreign exchange |
467 |
(13) |
(3) |
(609) |
- |
4 |
(154) |
|
Balance at December 31, 2021 |
5,259 |
601 |
123 |
55,419 |
100 |
981 |
62,483 |
|
|
|
|
|
|
|
|
|
|
Depreciation and impairment losses |
|
|
|
|
|
|
|
|
Balance at 1 January 2020 |
3,339 |
- |
229 |
31,324 |
101 |
860 |
35,853 |
|
Depreciation |
363 |
- |
7 |
2,901 |
4 |
46 |
3,321 |
|
Disposals |
(312) |
- |
(215) |
(5,900) |
(32) |
(173) |
(6,632) |
|
Foreign exchange effect |
84 |
- |
4 |
2,240 |
2 |
18 |
2,348 |
|
Balance at 31 December 2020 |
3,474 |
- |
25 |
30,565 |
75 |
751 |
34,890 |
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2021 |
3,474 |
- |
25 |
30,565 |
75 |
751 |
34,890 |
|
Depreciation |
543 |
- |
26 |
3,502 |
7 |
97 |
4,175 |
|
Disposals |
- |
- |
- |
(263) |
- |
- |
(263) |
|
Foreign exchange effect |
7 |
- |
- |
105 |
- |
3 |
115 |
|
Balance at 31 December 2021 |
4,024 |
- |
51 |
33,909 |
82 |
851 |
38,917 |
|
|
|
|
|
|
|
|
|
|
Carrying amounts |
|
|
|
|
|
|
|
|
At 1 January 2020 |
883 |
4,853 |
- |
17,151 |
14 |
112 |
23,013 |
|
At 31 December 2020 |
637 |
738 |
14 |
19,158 |
10 |
136 |
20,693 |
|
|
|
|
|
|
|
|
|
|
At 1 January 2021 |
637 |
738 |
14 |
19,158 |
10 |
136 |
20,693 |
|
At 31 December 2021 |
1,235 |
601 |
72 |
21,510 |
18 |
130 |
23,566 |
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
13. Property, plant and equipment (continued)
At 31 December 2021, the net carrying amount of Right-Of-Use (ROU) assets was $5,255,000 (2020: $1,966,000). During the year ended 31 December 2021, plant and equipment additions of $4,740,000 (2020: $1,942,000) were acquired through lease arrangements. The amount of depreciation of leased plant and machinery was $1,951,000 (2020: $978,000).
During the year ended 31 December 2020, the Group entered an agreement to acquire all of the assets of Teck Resources Limited's ("Teck") closed Duck Pond processing plant (the "Plant") including building, plant equipment with certain exceptions, and related spare parts for cash consideration of $1,100,000 and to provide dismantling and disposal services to remove the Plant from Teck's property.
A non-refundable deposit of $700,000 was paid to Teck in 2020 and recognised as deposits in non-current assets of the consolidated statement of financial position. The deposit was forfeited during the year ended 31 December 2021 because the Group decided not to purchase the Plant.
During the year, the Company disposed of assets which were not in use with asset cost $261,000 (2020: $6,842,000) and accumulated depreciation $261,000 (2020: $6,632,000).
14. Equity Investments
|
|
|
Equity investments |
|
|
|
$'000 |
|
Cost or valuation |
|
|
|
Balance at 1 January 2020 |
|
128 |
|
Revaluation |
|
71 |
|
Effect of movements in foreign exchange |
|
7 |
|
Balance at 31 December 2020 |
|
206 |
|
|
|
|
|
Balance at 1 January 2021 |
|
206 |
|
Additions |
|
538 |
|
Revaluation |
|
125 |
|
Sale of investments |
|
(725) |
|
Gain on sale of investments |
|
(132) |
|
Effect of movements in foreign exchange |
|
(12) |
|
Balance at 31 December 2021 |
|
- |
|
Carrying amounts |
|
|
|
At 31 December 2020 |
|
206 |
|
At 31 December 2021 |
|
- |
The carrying amount of the equity investments relates to investments in public listed companies in Canada, which were sold in 2021. The valuation is determined using the closing market price of the shares on the respective stock exchange and is considered level 1 in the IFRS13 fair value hierarchy.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
15. Assets held for sale
During the year ended 31 December 2020, the Group entered into a letter of intent with Maritime Resources Corp. to sell its non-core assets including the Nugget Pond gold circuit, Lac Pelletier gold property, and various Canadian mineral exploration properties and royalty interests and received a non-refundable deposit of C$0.2 million (note 22). In April 2021, the Group completed the sale of non-core assets and received the remaining consideration of $2.0 million in cash and C$0.5 million in common shares of Maritime Resources Corp. based on the 30-day volume weighted average price ("VWAP") on closing, representing 3,571,428 shares issued at a price of C$0.14.
|
|
2021 |
2020 |
|
|
|
|
$'000 |
$'000 |
|
|
|
Mineral properties |
- |
187 |
||
|
Plant and equipment |
- |
613 |
||
|
Assets classified as held for sale |
- |
800 |
||
|
Reclamation liability |
- |
(514) |
||
|
Net assets classified as held for sale |
- |
286 |
||
|
|
|
|
|
|
16. Inventory
|
|
|
|
2021 |
2020 |
|
|
|
|
$'000 |
$'000 |
|
Metal concentrates and metals in process |
|
|
1,172 |
355 |
|
Operating supplies, net of provision |
|
|
3,184 |
2,328 |
|
|
|
|
4,356 |
2,683 |
The cost of inventories recognised as an expense and included in cost of sales amounted to $37,121,000 (2020: $34,353,000). Inventory provision of $Nil is recognised related to slow moving operating supplies inventory for the year ended 31 December 2021 (2020: $125,000).
17. Trade and other receivables
|
|
|
|
2021 |
2020 |
|
|
|
|
$'000 |
$'000 |
|
Other receivables |
|
|
73 |
11 |
|
Canadian emergency wage subsidy |
|
|
- |
276 |
|
Sales taxes recoverable |
|
|
726 |
541 |
|
Prepayments |
|
|
622 |
11 |
|
|
|
|
1,421 |
839 |
The Group applies a simplified approach in calculating expected credit losses (ECL) and recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
There are no trade receivables past due or considered impaired (period ended 31 December 2020: $Nil).
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
18. Derivative financial asset
|
|
|
|
2021 |
2020 |
|
|
|
|
$'000 |
$'000 |
|
Concentrate receivables from off-taker |
|
|
2,473 |
2,445 |
The carrying amount of the derivative financial asset is considered level 2 under the IFRS13 fair value hierarchy. Level 2 fair value is determined using forward prices of copper at $7,700 per tonne (2020: $5,820), gold at $1,815 per ounce (2020: $1,899) and silver at $24.21 per ounce (2020: $26.40). The cost of the concentrate receivables is $2,473,000 (2020: $2,445,000).
19. Restricted cash
|
|
|
2021 |
2020 |
|
|
|
$'000 |
$'000 |
|
Bearer deposit notes |
|
3,568 |
3,553 |
The Group is required to hold Letters of Credit in favour of the Government of Newfoundland and Labrador in respect of the reclamation and closure liabilities associated with the Ming Mine. The bearer deposit notes mature on differing dates throughout fiscal 2021 and beyond and have a nominal value of $3,568,000 (2020: $3,553,000) giving an effective yield of 0.1% (2020: 0.5%).
20. Capital and reserves
Share capital and share premium - Group
|
|
Share capital |
Share capital |
Deferred share capital |
Share premium |
Total |
|
|
|
1 penny |
0.01 penny |
0.99 penny |
|
|
Number |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
'000 |
|
|
|
|
|
|
|
|
|
In issue at 1 January 2020 |
17,872 |
- |
- |
99,059 |
116,931 |
12,964 |
|
Share restructuring |
(17,872) |
179 |
17,694 |
- |
- |
- |
|
Shares issued during the year |
- |
909 |
- |
17,269 |
18,178 |
68,392 |
|
Share issue expenses |
- |
- |
- |
(1,137) |
(1,137) |
- |
|
In issue at 31 December 2020 |
- |
1,088 |
17,694 |
115,191 |
133,972 |
81,356 |
|
|
|
|
|
|
|
|
|
In issue at 1 January 2021 |
- |
1,088 |
17,694 |
115,191 |
133,972 |
81,356 |
|
Shares issued during the year |
- |
737 |
- |
19,700 |
20,437 |
53,588 |
|
Exercise of warrants |
|
135 |
- |
4,710 |
4,845 |
9,735 |
|
Share issue expenses |
- |
- |
- |
(862) |
(862) |
- |
|
In issue at 31 December 2021 |
- |
1,960 |
17,694 |
138,739 |
158,393 |
144,680 |
The Companies Act 2006 prohibits the Company from issuing shares at a price below their nominal value. In May 2021, the Company consolidated its shares whereby every 100 ordinary shares of 0.01 pence each are consolidated into 1 ordinary share of 1 pence each.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
20. Capital and reserves (continued)
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Group.
Warrants reserve
|
|
|
|
Number ('000) |
$'000 |
|
At 1 January 2020 |
|
|
- |
- |
|
Issuance of warrants during the year |
|
|
11,551 |
3,185 |
|
At 31 December 2020 |
|
|
11,551 |
3,185 |
|
At 1 January 2021 |
|
|
11,551 |
3,185 |
|
Issuance of warrants during the year |
|
|
4,646 |
1,124 |
|
Exercise of warrants during the year |
|
|
(9,735) |
(2,825) |
|
At 31 December 2021 |
|
|
6,462 |
1,484 |
During December 2021, the Group issued 4,645,666 share warrants at an exercise price of £0.28 ($0.37) in connection with the NewGen Loan. The fair value of the warrants in the amount of $1.12 million is recognised and included in warrant reserve in equity. The carrying amount of the share warrants is not remeasured in subsequent years.
The fair value of the share purchase warrants was measured using the Black-Scholes model assuming an expected volatility range 122% to 126%, a risk-free interest rate of 0.71% and a contractual life of the warrant of 4 years. The fair value of services received in return for the warrants issued was measured by reference to the fair value of the warrants issued in the absence of information on the fair value of the services provided.
Share options
The number and weighted average exercise prices of share options are as follows:
|
|
Weighted average exercise price |
|
Weighted average exercise price |
|
|
|
|
|
||||
|
Number |
Number |
|
|||
|
of options |
of options |
|
|||
|
|
2021 |
2021 |
2021 |
2021 |
|
|
|
$ |
'000 |
$ |
'000 |
|
|
Outstanding at the beginning of the period |
0.61 |
3045 |
8.00 |
164 |
|
|
Granted during the period |
0.39 |
1,800 |
0.30 |
2,885 |
|
|
Expired during the period |
6.95 |
(48) |
3.70 |
(4) |
|
|
Outstanding at the end of the period |
0.11 |
4,797 |
1.00 |
3,045 |
|
|
Exercisable at end of period |
0.16 |
2,956 |
1.10 |
55 |
|
The options outstanding at 31 December 2021 have an exercise price in the range of $0.27 to $41.02 (2020: $0.27 to $47.11) and a weighted average remaining contractual life of 5 years (2020: 5 years).
The fair value of services received in return for share options granted are measured by reference to the fair value of share options granted. The estimate of the fair value of the services received is measured based on the Black-Scholes model.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
Fair value of share options and assumptions issued during the period
|
|
|
2021 |
2020 |
|
Fair value at measurement date |
|
0.29 |
$0.1 |
|
|
|
|
|
|
Share price (weighted average) |
|
$0.35 |
$0.3 |
|
Exercise price (weighted average) |
|
$0.11 |
$0.3 |
|
Expected volatility (expressed as weighted average volatility used |
|
|
|
|
in the modelling under Black-Scholes model) |
|
149% |
295% |
|
Expected option life (years) |
|
10 |
5 |
|
Expected dividends |
|
- |
- |
|
Risk-free interest rate (based on national government bonds) |
|
0.71% |
0.46% |
During the year ended 31 December 2021, the Group issued options totalling 1,800,000 options to Directors, Persons Discharging Managerial Responsibility (PDMRs) and other employees of the Company, exercisable at 29.875 pence. 1/3 of the options vested immediately, 1/3 on each of the first and second anniversaries following the grant date. The other 50% of the options are vested based on the share price of the Company in accordance with the table below:
|
Options |
16.5% vesting |
33% vesting |
50% vesting |
|
Share price |
0.57 pence |
0.90 pence |
1.24 pence |
The expected volatility is based on the historical volatility (calculated based on the weighted average remaining life of the share options), adjusted for any expected changes to future volatility due to publicly available information.
Restricted share units (RSUs)
|
|
|
|
Number |
Fair value |
|
|
|
|
'000 |
$'000 |
|
At 1 January 2021 |
|
|
- |
- |
|
RSUs issued during the year |
|
|
1,181 |
468 |
|
RSUs vested during the year |
|
|
(394) |
(156) |
|
At 31 December 2021 |
|
|
787 |
312 |
The fair value of the RSUs granted for the year ended 31 December 2021 is $0.39 per unit (2020: nil) based on the market value of the underlying shares on grant dates. Stock compensation expense related to the RSUs granted is
$0.16 million for the year ended 31 December 2021 (2020: nil).
Merger reserve
The merger reserve arose from the acquisition of Rambler Mines Limited by Rambler Metals and Mining PLC. This acquisition was accounted for in accordance with the merger accounting principles set out in UK Financial Reporting Standard 6 and the Companies Act 1985, which continue under the Companies Act 2006, whereby the consolidated financial statements were presented as if the business previously carried out through Rambler Mines Limited had always been owned and controlled by the Group. The transition provisions of IFRS 1 allow all business combinations prior to transition to IFRS to continue to be accounted for under the requirements of UK GAAP at that time. Accordingly this acquisition has not been re-stated in accordance with that standard.
Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of the parent Group which has a different functional currency from the presentation currency. Exchange differences arising are classified as equity and transferred to the Group's translation reserve. Such translation differences are recognised in the income statement in the period of disposal of the operation.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
20. Capital and reserves (continued)
Fair value reserve
The fair value reserve comprises cumulative adjustments made to the fair value of equity investments.
Capital management
The Group's objectives when managing capital are to safeguard the entity's ability to continue as a going concern so that it can continue to increase the value of the entity for the benefit of the shareholders. Given the nature of the Group's current activities the entity will remain dependent on a mixture of debt and equity funding until such a time as the Group becomes self-financing from the commercial production of mineral resources.
The Group's capital was as follows:
|
|
|
|
2021 |
2020 |
|
|
|
|
$'000 |
$'000 |
|
Cash and cash equivalents |
|
|
1,605 |
6,242 |
|
Loans and borrowings |
|
|
(20,970) |
(9,774) |
|
Net debt |
|
|
(19,365) |
(3,532) |
|
Equity |
|
|
(69,247) |
(67,316) |
|
Total capital |
|
|
(88,612) |
(70,848) |
21. Loss per share
Loss attributable to ordinary shareholders
|
|
|
|
2021 |
2020 |
|
|
|
|
$'000 |
$'000 |
|
Loss for the period attributable to ordinary shareholders |
|
|
(13,998) |
(1,763) |
Weighted average number of ordinary shares
|
|
|
|
|
Number '000 |
|
In issue at 1 January 2020 |
|
|
|
12,964 |
|
Effect of shares issued during period |
|
|
|
4,222 |
|
Weighted average number of ordinary shares at 31 December 2020 |
|
|
|
17,187 |
|
|
|
|
|
|
|
In issue at 1 January 2021 |
|
|
|
81,356 |
|
Effect of shares issued during period |
|
|
|
33,248 |
|
Weighted average number of ordinary shares at 31 December 2021 |
|
|
|
114,605 |
For the year ended 31 December 2021, because there would be a further reduction in loss per share resulting from the assumption that share options, warrants and convertible loan are exercised or converted, all these instruments are considered anti-dilutive and are ignored in the computation of loss per share. As there were no other instruments that may have a potentially dilutive impact, the basic and diluted loss per share is the same for the year ended 31 December 2021. At 31 December 2021 there were 4,796,150 (2020: 3,044,800) share options in issue of which none (2020: Nil) were considered to be dilutive. At 31 December 2021 there were 6,462,324 warrants outstanding (2020: 11,551,426) of which none were considered to be dilutive (2020: Nil).
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
22. Trade and other payables
|
Trade and other payables less than one year |
|
|
2021 |
2020 |
|
|
|
|
$'000 |
$'000 |
|
Trade payables |
|
|
9,050 |
4,726 |
|
Other payables |
|
|
1,004 |
5,082 |
|
Accrued expenses |
|
|
3,163 |
3,892 |
|
Non-refundable deposit |
|
|
- |
157 |
|
|
|
|
13,217 |
13,857 |
Non-refundable deposit is related to payment received from Maritime Resource Corp. for the purchase of non-core assets from the Group. Refer to note 15 for details.
Trade payables include $209,000 (2020: $155,000) consulting and director fees payable to Plinian Capital Limited as at 31 December 2021. Other payables include payroll taxes and social contribution in relation to Rambler Metals and Mining Canada Limited.
|
Trade and other payables more than one year |
|
|
2021 |
2020 |
|
|
|
|
$'000 |
$'000 |
|
Trade payables |
|
|
1,505 |
2,705 |
Previous year Group entered into agreements with certain suppliers to repay the outstanding balance over 2 to 4 years. Certain suppliers also agreed to relinquish a percentage of the outstanding balance which has been recognised as other income (note 7).
The balance payable as per the long-term payment plan has been valued at fair value by discounting at 12% per annum and recognised as other income which will be amortised over the payment plan term (note 7).
23. Loans and borrowings
This note provides information about the contractual terms of the Group's loans and borrowings. For more information about the Group's exposure to interest rate and foreign currency risk, see note 28.
|
|
|
2021 |
2020 |
|
|
|
$'000 |
$'000 |
|
Non-current liabilities |
|
|
|
|
Non-current lease liabilities |
(a) |
2,058 |
1,282 |
|
West Face loan |
(b) |
- |
2,107 |
|
Government assistance |
(d) |
1,481 |
1,256 |
|
NewGen loan |
(e) |
14,135 |
- |
|
|
|
17,674 |
4,645 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Current lease liabilities |
(a) |
1,832 |
1,292 |
|
Supplier loan |
(f) |
- |
707 |
|
Government assistance |
(d) |
102 |
92 |
|
Advance Purchase Facility |
(c) |
990 |
3,038 |
|
NewGen loan |
(e) |
372 |
- |
|
|
|
3,296 |
5,129 |
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
23. Loans and borrowings (continued)
(a) Lease liabilities
|
|
Minimum lease Payments |
Interest |
Principal |
Minimum lease Payments |
Interest |
Principal |
|
|
|
|||||||
|
|
|||||||
|
|
2021 |
2021 |
2021 |
2020 |
2020 |
2020 |
|
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
|
Less than one year |
2,029 |
197 |
1,832 |
1,405 |
113 |
1,292 |
|
|
Between one and five years |
2,137 |
79 |
2,058 |
1,362 |
80 |
1,282 |
|
|
|
4,166 |
276 |
3,890 |
2,767 |
193 |
2,574 |
|
Under the terms of the lease agreements, no contingent rents are payable. The lease liabilities are secured on the ROU assets.
(b) West Face Loan
In December 2020, Group received a secured loan from West Face Capital Inc. ("West Face") of $5,000,000 carrying interest rate of 10% per annum. Interest is payable every calendar quarter and loan repayable in December 2023. The Group has granted a prior ranking security interest over all of present and after-acquired assets to West Face.
As part of the loan agreement 8,131,810 warrants were issued to West Face exercisable in 5 years at £0.2 ($0.264) per warrant. The fair value of warrants of $2,486,000 is determined through Black Scholes model. The fair value of warrants and the transaction costs of $439,000 are classified as deferred expenses which will be amortised during the loan term. During the year ended 31 December 2021, the loan was fully repaid along with 5% early repayment charge and all the warrants have been exercised. The cost resulting from early repayment charge and the remaining deferred expenses relating to the loan was fully charged to Income Statement during the year as loss on early repayment of West Face loan.
(c) Advance Purchase Facility
In December 2017, the Company entered into an advance purchase facility with Transamine.
Pursuant to the terms of the Purchase Agreement, Transamine agreed to purchase in advance, at Rambler's option, up to $4 million of concentrate (the "Advance Purchase Payments") to be used for working capital requirements.
At 31 December 2021 the balance was $0.5 million (2020: $1.2 million). The loan was repayable by eighteen monthly instalments of $222,000 including interest at 6.75% per annum, but a grace period of 6 months was provided by Transamine from June 2019, so the loan was payable by revised instalments of $130,000 starting December 2019 but another grace period for 3 months from August 2020 was provided during the year. The loan instalments of $130,000 are being repaid from November 2020 and the loan will be fully repaid in 2022.
Additionally, Transamine has extended an amount of $2.0 million in December 2019. This loan shall be repaid from Jan 2021 by monthly instalments of $222,000 per month plus accrued interest at 7% per annum. At 31 December 2021 the balance was $0.5 million (2020: $1.8 million).
The outstanding balance of the Advance Purchase Facility has been reduced to $362,000 at the date of issuance of these financial statements.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
23. Loans and borrowings (continued)
(d) Government Assistance
In 2019, Group received $0.4 million in interest free repayable contributions from a Canadian government agency. Contributions to a total of $1.6 million are available in support of the Phase II expansion project for the mine. The contributions are repayable over eight years from May 2019. Due to COVID-19 pandemic Canadian government provided the moratorium period from April to December 2020. The fair value of the contributions received, calculated at a market interest rate of 12%, have been classified as a financial liability with the difference between the fair value and the amount received credited against the cost of assets under construction.
In 2021, Group received further $0.4 million (2020: $0.4 million) in interest free repayable contributions from a Canadian government agency as part of assistance to COVID-19 outbreak. The contributions are repayable over three years from January 2023.The fair value of the contributions received, calculated at a market interest rate of 12%, have been classified as other income (note 7).
(e) NewGen Loan
During the year the Group completed a 3-year senior secured debt financing in the gross amount of US$16.4 million with NewGen Resource Lending Inc. ("NewGen"). The loan bears interest at the rate of 8.0% plus the greater of: (i) US Dollar 3 month LIBOR; and (ii) 1.75% per annum, payable monthly. The loan matures in three years and principal repayments will commence the month following the first anniversary of the closing date of the first tranche and be paid monthly thereafter (i.e. fully amortized for the remaining 24 months from the date of first principal payment until the end of the third year).
The loan was subject to 3% arrangement fees of the gross amount which was recognised as deferred cost. As part of the loan agreement, 4,109,818 warrants were issued with exercise price of £0.2661 per share. The warrants expire in four years. The fair value of warrants of $0.9 million is determined through Black Scholes model. Further, Gold equivalent payment (GEP) in total of 223 ounces will be paid over three years. The fair value of the GEP is $0.34 million .The fair value of the warrants, the GEP, arrangement fee and other transaction costs in the total of $2.4 million were recognised as deferred cost. The deferred cost is amortised over the term of loan. The principal balance of the NewGen Loan is $16.4 million (2020: Nil) and the carrying amount (net of deferred expense) of the loan is $14.5 million (2020: Nil) as of 31 December 2021.
.
(f) Supplier Loan
The Group received loans two suppliers of the Group with interest of 10% per annum. The loans were fully repaid during the year ended 31 December 2021.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
24. Gold Stream
|
|
|
2021 |
2020 |
|
|
|
$'000 |
$'000 |
|
Fair value of Gold Stream liability opening balance |
|
7,083 |
8,675 |
|
Movement in fair value of Gold Stream |
|
3,160 |
(202) |
|
Outstanding gold payable (prepayment) |
|
196 |
(560) |
|
Gold payments for the year |
|
(1,592) |
(830) |
|
Fair value of Gold Stream liability closing balance |
|
8,847 |
7,083 |
In March 2010, the Group entered into an agreement ("Gold Stream") with Sandstorm Gold Royalties ('Sandstorm') to sell a portion of the life-of-mine gold production. Under the terms of the agreement, Sandstorm made staged upfront cash payments for the gold to the Group totalling $20 million.
For this, in each production year following the first year of production, until 175,000 oz of payable gold has been produced, the Group has agreed to sell to Sandstorm, at market price, a percentage equal to 25% x (85% divided by the actual percentage of metallurgical recovery of gold realised in the immediately preceding production year) provided that, if the payable gold production in any production year after the third production year is less than 15,000 ounces, then in each such production year, Sandstorm payable gold shall not be less than 25% of the payable gold. The percentage of payable gold of 25% falls to 12% after 175,000 oz of payable gold has been produced and remains payable for the remainder of the period ending 40 years after the date of the agreement. After the expiry of the 40-year term, the agreement is renewable in 10-year terms at the option of Sandstorm. Rambler purchases the payable gold from the market and repayment is made in kind to Sandstorm.
At 31 December 2021, the Group has produced 55,516 payable ounces of gold of which 17,252 ounces were transferrable to Sandstorm, out of which 17,717 ounces were transferred, under the agreement as follows:
|
Production year |
Payable gold ounces produced |
Ounces transferrable |
|
|
|
|
|
Pre-production |
15,429 |
4,937 |
|
1 |
4,888 |
1,280 |
|
2 |
5,945 |
1,904 |
|
3 |
5,408 |
1,689 |
|
4 |
6,905 |
2,069 |
|
5 |
3,040 |
955 |
|
6 |
3,889 |
1,342 |
|
7 |
5,049 |
1,569 |
|
8 |
2,708 |
808 |
|
9 |
2,154 |
668 |
|
10 (to date) |
102 |
32 |
|
Total |
55,516 |
17,252 |
The Gold Stream is accounted for as a financial liability carried at fair value through profit and loss. The liability represents management's best estimate of the time of delivery of payable gold, the total amount of gold expected to be produced over the remaining life of the mine, the timing of production, the Group's view on forecast gold prices and the rate implicit in the loan at the date of inception. Fair value is based on approximated payable gold transferrable to Sandstorm of 7,802 ounces at an average price of $2,089 per ounce discounted at 12.28% per annum. The increase in the fair value of the gold stream of $3.2m arose from the assumed increase in the gold price.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
24. Gold Stream (continued)
The following table summarises the impact on loss before tax for changes in the key estimates on the fair value of Gold Stream liabilities.
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
$'000 |
$'000 |
|
5% increase in the price of gold |
|
|
|
(442) |
(354) |
|
5% decrease in the price of gold |
|
|
|
442 |
354 |
|
1% increase in discount rate |
|
|
|
346 |
361 |
|
1% decrease in discount rate |
|
|
|
(370) |
(325) |
On 4 April 2022, the Company repurchased the Gold Stream from Sandstorm and the consideration is $6,713,500 and 1,150 ounces of gold to be delivered over 18 months.
25. Provision
|
|
|
|
2021 |
2020 |
|
Reclamation and closure provision |
|
|
$'000 |
$'000 |
|
|
|
|
|
|
|
Opening balance |
|
|
2,196 |
2,106 |
|
(Deduction)/Addition |
|
|
(500) |
500 |
|
Transfer to liabilities associated with asset held for sale |
|
|
- |
(514) |
|
Unwinding of discount |
|
|
64 |
58 |
|
Effect of movements in foreign exchange |
|
|
7 |
46 |
|
Ending balance |
|
|
1,767 |
2,196 |
The reclamation and closure provision has been made in respect of costs of land restoration and rehabilitation expected to be incurred at the end of the Ming Mine's expected useful life of 20 years. The provision has been calculated based on the present value of the expected future cash flows discounting at 3.02% associated with reclamation and closure activities as required by the Government of Newfoundland and Labrador. The provision relates to restoration of all three sites associated with the Ming Mine project: mill, mine and port sites. The liability is secured by Letters of Credit for $3.5 million.
The reclamation provision of $500,000 was made in 2020 in respect of the clean-up costs expected to be incurred for the Plant. The provision was reversed during the year as the agreement with Teck resources did not materialise.
26. Derivative financial liabilities
|
|
|
$'000 |
|
Balance at 1 January 2020 |
|
1,302 |
|
Change in fair value of copper forward contract |
|
(593) |
|
Effect of movements in foreign exchange |
|
24 |
|
Balance at 31 December 2020 |
|
733 |
|
|
|
|
|
Balance at 1 January 2021 |
|
733 |
|
Change in fair value of copper forward contract |
|
430 |
|
Balance at 31 December 2021 |
|
1,163 |
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
26. Derivative financial liabilities (Continued)
During the year ended 31 December 2020, the Group entered into a forward contract to sell 3,600 tonnes of copper in 2021 at the price of $7,700 per tonne. During the year ended 31 December 2019, the Group entered into a forward contract with Transamine to sell 3,600 tonnes of copper in 2020 at the price of $5,820 per tonne.
The difference between the agreed forward rate and the forward rate on the copper that has not been delivered as at year-end is recognised as fair value gain or loss in the consolidated income statement. 584 tonnes of the forward contract with Transamine was outstanding at 31st December 2021, this was settled by February 2022.
27. Gold Liability
|
|
|
2021 |
2020 |
|
|
|
$'000 |
$'000 |
|
Balance at 1 January |
|
- |
- |
|
Initial recognition |
|
345 |
- |
|
Change in fair value of the GEP |
|
1 |
- |
|
Balance at 31 December |
|
346 |
- |
Gold equivalent payment (GEP) of 223 ounces to be paid to payable to NewGen as part of 3 year senior debt financing. The fair value of GEP is measured at fair valued through profit and loss.
28. Financial instruments
The Group's principal financial assets comprise: cash and cash equivalents, restricted cash, equity investments, derivative financial instruments and other receivables. In addition, the Company's financial assets include amounts due from subsidiaries. The Group and Company's financial liabilities comprise: trade payables, other payables, and accrued expenses. The Group's financial liabilities also include interest bearing loans and borrowings and Gold Stream.
All of the Group's and Company's financial liabilities are measured at amortised cost with the exception of Gold Stream and derivative financial liabilities. All the their financial assets are classified as loans and receivables and measured at amortised cost with the exception of equity investments and derivative financial instruments.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
28. Financial instruments (continued)
The Group held the following categories of financial instruments at 31 December 2021:
|
|
|
|
2021 |
2020 |
|
|
|
Note |
$'000 |
$'000 |
|
Financial assets |
|
|
|
|
|
Assets at fair value through profit and loss: |
|
|
|
|
|
Derivative financial instruments - level 2 fair value |
|
18 |
2,473 |
561 |
|
|
|
|
|
|
|
Fair value through other comprehensive income: |
|
|
|
|
|
Investment in quoted equity securities - level 1 fair value |
|
14 |
- |
206 |
|
|
|
|
|
|
|
Amortised cost |
|
|
|
|
|
Other receivables |
|
|
73 |
11 |
|
Canadian Emergency Wage Subsidy receivable |
|
|
- |
276 |
|
Cash at bank |
|
|
1,605 |
6,242 |
|
Restricted cash |
|
|
3,568 |
3,553 |
|
|
|
|
5,246 |
10,082 |
|
Total financial assets |
|
|
7,719 |
10,849 |
|
Liabilities at amortised cost or equivalent: |
|
|
2021 |
2020 |
|
|
|
|
$'000 |
$'000 |
|
Trade payables |
|
|
(9,050) |
(4,726) |
|
Long term trade payables |
|
|
(1,505) |
(2,705) |
|
Other payables |
|
|
(1,004) |
(5,082) |
|
Accrued expenses |
|
|
(3,163) |
(3,892) |
|
Loans and borrowings |
|
|
(20,970) |
(9,774) |
|
|
|
|
(35,692) |
(26,179) |
|
Liabilities at fair value through P&L |
|
|
|
|
|
||
|
Gold Stream |
|
24 |
(8,847) |
(7,083) |
|||
|
Gold liability |
|
27 |
(346) |
- |
|||
|
Derivative financial liabilities |
|
26 |
(1,163) |
(733) |
|||
|
Total financial liabilities |
|
|
(46,048) |
(33,995) |
|||
|
|
|
|
|
|
|
|
|
The carrying amounts of financial instrument are representative of the fair value related to each class of financial assets and liabilities in both years.
The Company determines, as required, the degree to which it is appropriate to use financial instruments and hedging techniques to mitigate risks. The main risks for which such instruments may be appropriate are liquidity risk, credit risk and market risk which includes foreign currency risk, interest rate risk and commodity price risk each of which is discussed below.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
28. Financial instruments (continued)
Liquidity risk
With finite cash resources the liquidity risk is significant. This risk is managed by controls over expenditure and concentrating on achieving the payment milestones under the financing arrangement. Success will depend largely upon the outcome of on-going and future exploration and development programmes. Given the nature of the Group's current activities the entity will remain dependent on a mixture of debt and equity funding in the short to medium term until such time as the Group becomes self-financing from operating cash flow generated from production. The liabilities of the Company are due within one year. The Company has adequate financial resources to meet the obligations existing at 31 December 2021.
Credit risk
The Group generally holds the majority of its cash resources in Canadian dollars given that the majority of the Group's outgoings are denominated in this currency. Given the current climate, the Group has taken a very risk averse approach to management of cash resources and management monitors events and associated risks on a continuous basis. There is little perceived credit risk in respect of trade and other receivables (see note 17). The Group maximum exposure to credit risk at 31 December 2021 was represented by the carrying amount of the receivables and cash resources.
Market risk
Foreign currency risk
The Group has a small amount of cash and certain liabilities including the Gold Stream and the advance purchase facility denominated in US dollars. All other assets and liabilities are denominated in Canadian dollars and GB pounds. Revenue is generated in US dollars while the majority of the expenditure is incurred in Canadian dollars and, to a lesser extent, GB pounds. The Group has a downside exposure to any strengthening of the Canadian Dollar or GB pound as this would increase expenses in US dollar terms. This risk is mitigated by reviewing the holding of cash balances in Canadian Dollars and GB pounds. Any weakening of the Canadian Dollar or GB pound would however result in the reduction of the expenses in US dollar terms. In addition movements in the Canadian dollar and GB pound/US Dollar exchange rates would affect the consolidated statement of financial position.
The policy in relation to the translation of foreign currency assets and liabilities is set out in note 2(d), 'Accounting Policies Foreign Currency' to the consolidated financial statements.
The Group does not hedge its exposure of foreign investments held in foreign currencies. There is no significant impact on profit or loss from foreign currency movements associated with the Company's assets and liabilities as the foreign currency gains or losses are recorded in the translation reserve.
Exchange rate fluctuations may adversely affect the Group's financial position and results. The following table details the Group's sensitivity to a 10% strengthening and weakening in the GB pound and Canadian Dollar against the US Dollar. 10% represents management's assessment of the reasonable possible exposure.
Equity
|
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
|
$'000 |
$'000 |
|
10% strengthening of GB pound |
|
|
|
|
(107) |
639 |
|
10% weakening of GB pound |
|
|
|
|
98 |
(581) |
|
10% strengthening of Canadian dollar |
|
|
|
|
1,536 |
1,259 |
|
10% weakening of Canadian dollar |
|
|
|
|
(1,396) |
(1,145) |
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
28. Financial instruments (continued)
Market risk (continued)
Foreign currency risk (continued)
At the period end the cash and short term deposits were as follows:
|
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
|
$'000 |
$'000 |
|
Canadian $ |
|
|
|
|
508 |
1,005 |
|
US $ |
|
|
|
|
1,063 |
722 |
|
Sterling |
|
|
|
|
34 |
4,515 |
|
|
|
|
|
|
1,605 |
6,242 |
Interest rate risk
The Group's policy is to retain its surplus funds on the most advantageous term of deposit available up to twelve month's maximum duration. Details of the Group's borrowings are described in note 23.
If the interest rate on deposits were to fluctuate by 1% there would be no material effect on the Group's and Company's reported results.
Commodity price risk
Commodity price risk is the risk that the Group's future earnings will be adversely impacted by changes in the market prices of commodities. The Group is exposed to commodity price risk as its future revenues will be derived based on contracts with customers at prices that will be determined by reference to market prices of copper and gold at the delivery date.
As explained in note 3 the Group calculates the fair value of the Gold Stream based on estimates of future cash flows arising from the sale of payable gold. In estimating the cash flows the following table details the Group's sensitivity to a 10% increase and a 25% decrease in the price of gold. These percentages represent management's assessment of the reasonable possible exposure.
Gross assets
|
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
|
$'000 |
$'000 |
|
10% increase in the price of gold |
|
|
|
|
(885) |
(708) |
|
25% decrease in the price of gold |
|
|
|
|
2,212 |
1,771 |
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
28. Financial instruments (continued)
Commodity price risk (continued)
Receivables in respect of the sale of copper concentrate which contain an embedded derivative linking them to future commodity prices are measured at fair value through profit and loss and are treated as derivative financial assets or liabilities. In estimating the value of the derivative the following table details the Group's sensitivity to a 5% increase and a 5% decrease in the price of copper, gold and silver. These percentages represent management's assessment of the reasonable possible exposure.
Gross assets
|
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
|
$'000 |
$'000 |
|
5% increase in the price of copper, gold and silver |
|
|
161 |
285 |
||
|
5% decrease in the price of copper, gold and silver |
|
|
(161) |
(285) |
||
Financial assets
The floating rate financial assets comprise interest earning bank deposits at rates set by reference to the prevailing LIBOR or equivalent to the relevant country. Fixed rate financial assets are cash held on fixed term deposit.
Fair values
In management's opinion there is no material difference between the book value and fair value of any of the Group's financial instruments.
29. Related parties
Identity of related parties
The Group has a related party relationship with its subsidiaries and with its directors and executive officers.
The directors Belinda Labatte, Mark Sander, Brad Mills and Terrell Ackerman are all appointed as investor directors or "shareholder associates" to the Rambler board on behalf of the CE Mining Funds and its concert parties. Under a Relationship Agreement entered into in April 2016 CE Mining Funds and its concert parties have the right to appoint four investor directors so long as their shareholding remains greater than 30%.
Sanjay Swarup was the chief financial officer of the Company till January 2021 and is a major shareholder of SKS Business Services Ltd.
Certain major shareholders and certain officers and directors of Plinian Capital Limited are the same as the Group. Plinian Capital Limited is also the investment advisor of CE Mining Funds.
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
29. Related parties (continued)
Transactions with officers, directors and related parties
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
$'000 |
$'000 |
|
Salary |
|
|
|
|
|
|
A Booyzen1 |
|
|
|
- |
92 |
|
T Bradbury |
|
|
|
250 |
146 |
|
E C Chen |
|
|
|
190 |
20 |
|
|
|
|
|
|
|
|
Fees |
|
|
|
|
|
|
B A Mills2 |
|
|
|
48 |
19 |
|
B Labatte2 |
|
|
|
37 |
19 |
|
M V Sander2 |
|
|
|
41 |
19 |
|
T I Ackerman2 |
|
|
|
44 |
19 |
|
G Poulter |
|
|
|
- |
15 |
|
R Round3 |
|
|
|
42 |
- |
|
P Patil3 |
|
|
|
41 |
- |
|
SKS Business Services Ltd.4 |
|
|
|
- |
130 |
|
Plinian Capital Limited5 |
|
|
|
50 |
220 |
|
|
|
|
|
743 |
699 |
1 Andre Booyzen resigned as a director from 31 May 2020.
2 The directors fees for these directors are funded by the Group but are paid through Plinian Capital Limited.
3 This includes director fee of $14,000 which will be settled through issuance of ordinary shares in 2022.
4 SKS Business Services Ltd. ("SKS")'s principle was the Chief Financial Officer until 2020. SKS provides accounting and finance services to the Group.
5 Plinian Capital Limited provided certain consultancy and advisory services for Ming Mine operation.
Ordinary shares, share options, warrants and RSUs held by officers and directors were as follows:
|
|
2021 |
2020 |
||||||
|
|
Ordinary shares |
Options |
RSUs |
Warrants |
Ordinary Shares |
Options |
RSUs |
Warrants |
|
B Mills |
83,333 |
- |
- |
2,500 |
83,333 |
- |
- |
2,500 |
|
E Chen3 |
246,649 |
250,000 |
135,333 |
- |
649 |
- |
- |
- |
|
P Patil |
82,246 |
- |
- |
- |
- |
- |
- |
- |
|
R Round |
32,246 |
- |
- |
- |
- |
- |
- |
- |
|
T Bradbury2 |
589,666 |
3,284,615 |
246,000 |
2,500 |
50,000 |
2,884,615 |
- |
2,500 |
|
|
1,034,140 |
3,534,615 |
381,333 |
5,000 |
167,315 |
2,884,615 |
- |
5,000 |
1 Fully vested on 5 June 2020.
2 3,285,000 options at an exercise price of $0.3 expiring 3 years to 10 years after vested. The further details of these share options are provided in note 8 personnel expenses.
3 250,000 options at an exercise price of $0.3 expiring no later than 10 years after vested.
|
|
|
|
2021 |
2020 |
|
|
|
|
$'000 |
$'000 |
|
Short term employee benefits |
|
|
1,205 |
958 |
|
Social security costs |
|
|
34 |
41 |
|
Share based payments |
|
|
801 |
122 |
|
|
|
|
2,040 |
1,121 |
Rambler Metals and Mining Plc
Notes to the Consolidated Financial Statements (Continued)
29. Related parties (continued)
Subsidiaries
The Group has interests in the following material subsidiary undertakings, which are included in the consolidated financial statements.
|
Name |
Class |
Holding |
Activity |
Country of Incorporation |
Registered address |
|
Rambler Mines Limited |
Ordinary |
100% |
Holding company |
England |
3 Sheen Road Richmond Upon Thames, Surrey TW9 1AD |
|
Rambler Metals and Mining Canada Limited |
Common |
100% (indirectly) |
Exploration, development and mining |
Canada |
PO Box 610 |
|
1948565 Ontario Inc. |
Common |
100% |
Exploration |
Canada |
PO Box 610 |
CE Mining III Rambler Limited, CE Mining II Rambler Limited and Aether Real Assets Co-Investment I, L.P are the key shareholder of the Group. Details of related party transactions with these entities are included in note 23.
Ultimate and controlling party
CE Mining III Rambler Limited, CE Mining II Rambler Limited and Aether Real Assets Co-Investment I, L.P are deemed to be acting in concert and their shareholding was 25.1% as of 31 December 2021.
30. Subsequent events
On 4 April 2022, the Group entered into a gold purchase and sale agreement with Elemental Royalties Corp. ("Elemental") (TSX-V:ELE, OTCQX:ELEMF) (the "Agreement"), in relation to production from its Ming Mine to sell 50% of accountable gold to Elemental until 10,000 ounces of gold have been delivered, decreasing to 35% until a further delivery of 5,000 ounces of gold and 25% thereafter for the life of the mine. Elemental will make ongoing payments to Rambler equal to 20% of the market price of gold for each ounce of gold delivered by Rambler. Rambler receives $11 million as consideration and $6,713,500 was paid to Sandstorm to repurchase the Gold Stream. Refer to Note 24 for details.
On 3 February 2022, the Group raised gross proceeds of £3,833,644 (approximately US$5,200,000) by way of a placing of 14,466,580 new ordinary shares at a price of 26.5 pence per share.
Alternative Performance Measures
The Company has included Alternative Performance Measures throughout this document. These include: net direct cash cost (C1) per pound of saleable copper, fully allocated costs (C3) per pound of saleable copper, earnings before interest, taxes, depreciation, amortisation ('EBITDA') and net debt.
C1 and C3 costs per pound of saleable copper are common performance measures in the mining industry but do not have any standardised meaning. The guidance provided by the World Gold Council for calculating all-in costs was followed; however, the Company adjusts for non-cash items and includes financing fees within the total cash costs. Total cash operating costs include mine site operating costs (mining, processing and refining, in-mine drilling expenditures, administration, and production taxes), but are exclusive of other costs (non-cash inventory valuation adjustments, reclamation, capital, long-term development and exploration). These measures, along with sales, are considered to be key indicators of the Company's ability to generate operating earnings and free cash flows from its mining operations. The Company believes that certain investors use this information to evaluate the Company's performance and ability to generate cash flows. These should not be considered in isolation as a substitute for measures of performance prepared in accordance with IFRS and are not necessarily indicative of production costs presented under IFRS. There has been a change in calculation of C1 costs as the sandstorm gold transfer and royalties were earlier deducted from by-product credits but now they are excluded from C1 calculation and included directly in C3 calculation. This change has no impact on C3 costs. The following tables provide reconciliation of said costs to the Company's financial statements for the year ended 31 December 2021:
|
Cash Operating Cost |
|
|
|
|
|
All amounts in 000s of US Dollars except pounds of saleable copper |
|
|
||
|
|
2021 |
2020 |
||
|
Production Costs per financial statements |
|
$ 29,475 |
|
$ 28,113 |
|
Less: Royalties |
|
(106) |
|
(99) |
|
Cash Production Costs |
|
29,369 |
|
28,014 |
|
On-site general administration costs |
|
4,984 |
|
3,903 |
|
By-product credits |
|
(3,535) |
|
(4,548) |
|
Net direct cash costs (C1) |
|
$ 30,818 |
|
$ 27,369 |
|
Pounds of saleable copper |
|
7,228 |
|
7,937 |
|
C1 cost per pound of saleable copper |
|
$ 4.26 |
|
$ 3.45 |
|
C3 per Pound of Saleable Copper |
|
|
|
|
|
All amounts in 000s of US Dollars except pounds of saleable copper |
|
|
||
|
|
2021 |
2020 |
||
|
Net direct cash costs (see above) |
|
$ 30,818 |
|
$ 27,369 |
|
Depreciation and amortisation |
|
7,723 |
|
6,288 |
|
Corporate cash expense |
|
1,214 |
|
1,190 |
|
Cash interest expense |
|
1,252 |
|
1,279 |
|
Transferable Gold Stream payments |
|
1,038 |
|
1,270 |
|
Royalties |
|
106 |
|
99 |
|
Fully allocated costs (C3 cost) |
|
$ 42,151 |
|
$ 37,495 |
|
Pounds of saleable copper |
|
7,228 |
|
7,937 |
|
C3 cost per pound of saleable copper |
|
$ 5.83 |
|
$ 4.72 |
Alternative Performance Measures (continued)
EBITDA is a widely used metric of corporate profitability. EBITDA is a measure of a company's overall financial performance and is used as an alternative to simple earnings or net income in some circumstances. EBITDA is used to analyse and compare profitability among companies and industries, as it eliminates the effects of financing and capital expenditures.
|
Earnings before interest, tax and depreciation |
|
|
|
|
|
|
|
|
|
2021 |
2020 |
|||
|
|
|
$'000 |
$'000 |
|||
|
Loss after tax per financial statements |
|
|
(13,998) |
|
(1,763) |
|
|
Taxation |
|
|
(7,921) |
|
(10,042) |
|
|
Net interest |
|
|
5,690 |
|
1,881 |
|
|
Depreciation and amortisation |
|
|
7,723 |
|
6,288 |
|
|
EBITDA |
|
|
(8,506) |
|
(3,636) |
|
|
|
|
|
|
|
|
|
Net debt is a liquidity metric used to determine how well a company can pay all its debts if they were due immediately. Net debt shows how much debt a company has on its balance sheet compared to its liquid assets. Net debt shows how much cash would remain if all debts were paid off and if a company has enough liquidity to meet its debt obligations.
|
|
|
|
2021 |
2020 |
|
|
|
|
$'000 |
$'000 |
|
Cash and cash equivalents |
|
|
1,605 |
6,242 |
|
Loans and borrowings |
|
|
(20,970) |
(9,774) |
|
Net debt |
|
|
(19,365) |
(3,532) |
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