Share Dealing Code

 

The Company has adopted, with effect from Admission, a share dealing policy regulating trading and confidentiality of inside information for the Directors and other persons discharging managerial responsibilities (and their persons closely associated) which contains provisions appropriate for a company whose shares are admitted to trading on the Official List (particularly relating to dealing during closed periods which will be in line with the Market Abuse Regulation). The Company takes all reasonable steps to ensure compliance by the Directors and any relevant employees with the terms of that share dealing policy.

 

Audit Committee

 

The Audit Committee is chaired by James Cunningham-Davis and its other member is Christian Cordier. The Audit Committee meets at least twice a year, or more frequently if required. The Audit Committee is responsible, amongst other things, for making recommendations to the Board on the appointment of auditors and the audit fee, monitoring and reviewing the integrity of the Company's financial statements and any formal announcements on the Company's financial performance as well as reports from the Company's auditors on those financial statements.

 

In addition, the Audit Committee considers and reviews the Company's internal financial control and risk management systems to assist the Board in fulfilling its responsibilities relating to the effectiveness of those systems, including an evaluation of the capabilities of such systems in light of the expected requirements for any specific acquisition target.

 

Meetings of the Directors

 

The number of meetings of the board of directors of the Company and its committees held during the year ended 31 December 2023 and the number of meetings attended by each director is tabled below.

 

2023

	Meetings			Meetings attended
	Board	Audit		Board	Audit
C. Bird	2	-		2	-
R. Samtani	2	-		2	-
J. Cunningham-Davis	2	2		2	2
K Thygesen	2	-		2	-
C. Cordier	2	2		2	2

 

 

2022

	Meetings			Meetings attended
	Board	Audit		Board	Audit
C. Bird	2	-		2	-
R. Samtani	2	-		2	-
J. Cunningham-Davis	2	2		2	2
K Thygesen	2	-		2	-
C. Cordier	2	2		2	2

 

Diversity Policy

The Board operates a policy whereby Directors and other individuals considered for employment and professional services across the Group are selected on the basis of their experience, professional qualifications and ability and a such the Company does not discriminate on aspects such as age, gender or educational and professional background.

 

The Company is a small exploration company and the Company's only employees comprising of the 5 Board Directors who have been in office since the Listing on 1 June 2021 and were the Board members on the basis of whose experience and expertise investors invested in the Company at the time of the Listing.  The Company has at the date of these accounts not expanded or changes the composition of its Board and accordingly has not met the following  targets on board diversity

(i) at least 40% of the individuals on its board of directors are women; and

(ii) at least one of the following senior positions on its board of directors is held by a woman (A) the chair; (B) the chief executive; (C) the senior independent director; or (D) the chief financial officer.

The Company has met the target that at least one individual on its board of directors s from a minority ethnic background 

The diversity composition of the Board is shown in the table below:

 

  Number of board members Percentage of the board Number of senior positions on the board (CEO, CFO, SID and Chair) Number in executive management Percentage of executive management Men        5 100 % 3 3 100% Women  0 Nil - - Nil Ethnic Background of Board members Number of board members Percentage of the board Number of senior positions on the board (CEO, CFO, SID and Chair) Number in executive management Percentage of executive management White British or other White (including minority-white groups) 4 80% 2 2 66% Mixed/Multiple Ethnic Groups Asian/Asian British 1 20% 1 1 33% Black/African/Caribbean/Black British Other ethnic group, including Arab Not specified/ prefer not to say

 

Internal controls

The Board is responsible for establishing and maintaining the Group's system of internal control. Internal control systems manage rather than eliminate the risks to which the Group is exposed and such systems, by their nature, can provide reasonable but not absolute assurance against misstatement or loss.

 

There is a continuous process for identifying, evaluating and managing the significant risks faced by the Group. The key procedures which the Directors have established with a view to providing effective internal control, are as follows:

 

·    Identification and control of business risks The Board identifies the major business risks faced by the Group and determines the appropriate course of action to manage those risks.

 

·    Budgets and business plans Each year the Board approves the business plan and annual budget. Performance is monitored and relevant action taken throughout the year through the regular reporting to the Board of changes to the business forecasts.

 

·    Investment appraisal Capital expenditure is controlled by budgetary process and authorisation levels. For expenditure beyond specified levels, detailed written proposals must be submitted to the Board. Appropriate due diligence work is carried out if a business or asset is to be acquired.

Environmental, Social and Governance (ESG) Policy

African Pioneer plc practises responsible exploration as reflected in our ESG policy and our activities. By doing so we reduce project risk, avoid adverse environmental and social impacts, optimising benefits for all stakeholders while adding value to our projects.

 

Our business associates, consultants and contractors perform much of our primary activities at our projects and therefore we require that all representatives and contractors working on our behalf or for our subsidiaries accept and adhere to the principles set out in this policy. We encourage input from those with local knowledge and we review this policy on a regular basis.

 

Our ESG policy is guided by the Prospectors & Developers Association of Canada's (PDAC) Framework for Responsible Exploration (known as e3 Plus) which encourages mineral exploration companies to complement and improve social, environmental and health and safety performance across all exploration activities around the world.

 

Adopting Responsible Governance and Management: African Pioneer is committed to environmentally and socially responsible mineral exploration and has developed and implemented policies and procedures for corporate governance and ethics. We ensure that all staff and key associates are familiar with these and have the appropriate level of knowledge of these policies and procedures.

 

The Company employs persons and engages contractors with the required experience and qualifications relevant to their specific tasks and, where necessary, seeks the advice of specialists to improve understanding and management of social, environmental, human rights and security, and health and safety.

 

African Pioneer's Corporate Governance Statement can be viewed on our website and the Company has an Anti-Bribery and Corruption policy and an Anti-Slavery policy.

 

·    Applying Ethical Business Practices: As well as our shareholders and staff, our stakeholders include local communities and local leadership, government and regulatory authorities, suppliers, contactors and consultants, our local business partners and other interested parties. Our corporate culture and policies require honesty, integrity, transparency and accountability in all aspects of our work and when interacting with all stakeholders.

 

The Company takes all necessary steps to ensure that activities in the field minimise or mitigate any adverse impacts on both the environment and on local communities.

 

·    Respecting Human Rights: The exploration activities of African Pioneer are carried out in line with applicable laws on human rights and the Company does not engage in activities that have adverse human rights impacts.

 

·    Commitment to Project Due Diligence and Risk Assessment: We make sure we are informed of the laws, regulations, treaties and standards that are applicable with respect to our activities. We ensure that relevant parties are informed and prepared before going into the field in order to minimise the risk of miscommunication, unnecessary costs and conflict, and to understand the potential for creating opportunities with local communities where possible.

 

·    Engaging Host Communities and Other Affected and Interested Parties:  African Pioneer is committed to engaging positively with local communities, regulatory authorities, suppliers and other stakeholders in its project locations, and encourages feedback through this engagement. Through this process, the Company develops and fosters the relationships on which our business relies for success.

 

·    Protecting the Environment: We are committed to ensuring that environmental standards are met or exceeded in the course of our exploration activities. Applicable laws and local guidelines in all project jurisdictions are followed diligently and exploration programmes are only carried out once relevant permits and approvals have been secured from the appropriate regulatory bodies.

 

African Pioneer is committed to good practices in rehabilitation and repair during its mineral exploration activities and, where possible, choose less impactful exploration methods to limit disturbance.

 

·    Safeguarding the Health and Safety of Workers and the Local Population: Company activities are carried out in accordance with good practice and applicable laws related to Health and Safety.

 

Environment Health, safety and community statement

The Group is committed to providing a safe working environment for all its employees and to responsibly manage all of the environmental interactions of its business. Its objective is to perform and achieve at a level notably in excess of the regulatory minima required by the host countries in which it does business.

 

The following specific principles are adhered to by the Group:

 

Health & Safety

• Provision of health and safety training to all employees;

• All necessary measures are taken to minimise workplace injuries, and

• Establishment of management and advisory programmes for the prevention of transmissible diseases.

 

Environment

The Group prides itself on being a skilled and responsible operator. It functions with the clear mandate of being in full compliance with, applicable environmental laws, regulations and permit requirements. It has an internal monitoring programme in place that plays a critical role in continuously improving its environmental performance.

 

The Group strives to minimise its environmental effects wherever and to:

 

•     Comply with applicable laws, regulations and commitments wherever it operates;

•     Ensure it has the necessary resources, procedures, training programmes and responsibilities in place to achieve its environmental objectives;

•     Strive to protect air and water quality, minimise consumption of water and energy, and protect natural habitats and biodiversity;

•     Promote an ongoing environmental dialogue with its stakeholders in the communities where it conducts business;

•     Collaborate with stakeholders to define environmental priorities and to protect the environment, and

•     Consider the requirement for environmental protection in all aspects of exploration and development.

 

Communities

 

As well as recognising the need to protect the natural environment the Group follows best practices in:

 

•     its interactions with local communities,

•     respecting customs and cultural practices, and

•     minimising intrusion upon lifestyles and traditions.

 

The Group will not violate human rights and will, wherever possible, favour employment for local people when it recruits. It will strive to be recognised as a socially aware and responsible business

 

 

Task Force on Climate-related Financial Disclosures (TCFD)

 

The Company has not included climate-related financial disclosures consistent with any of the TCFD Recommendations and Recommended Disclosures, as required by Listing Rule 14.3.27, neither in this annual financial report or any other document as it has not yet established the metrics and obtained the data to do this. Set out below is a summary of the Company's activities and how the Company proposes to align with the TCFD recommendations. The Company will provide an update of its alignment with the TCFD recommendations in next year's Annual Report.

 

The Company's business strategy is to explore for base metals focusing on Southern Africa which are materials used to produce diverse products used in modern living in a safe and sustainable environment for all its stakeholders with a focus on copper projects. As an organisation, we recognise the growing importance of understanding the impact of climate change on the environment in which we operate and its potential impact on the business.

 

TCFD was established in 2015 to improve and increase reporting of climate-related financial information and to provide information to investors about the actions companies are taking to mitigate the risks of climate change, as well as to provide increased clarity on the way in which they are governed.

 

The Company's exploration activities are "asset" light as the Company does not own its drilling and exploration equipment and instead uses contractors and it is a standard operating procedure for exploration activities to be conducted in accordance with applicable environmental regulations.  The effect of this is that the Company's demand for and use of carbon fuels is very low though its contractors will use carbon fuels.  An opportunity arising for the Company from climate change is that copper is projected to increase in response to the global green energy transition in particular for electric vehicles, charging stations and the generation and distribution of renewable energy.  

 

The Company is planning to adopt the TCFD framework and recommendations to the extent that it is appropriate given the size of the company and its activities.  The framework is useful as a guide to understand how climate change could impact a broad range of business drivers and will provide a structured approach for the Group, to work towards embedding climate into our decision-making and will enable us to learn from and apply best practice on reporting and disclosures.

 

We see this as a means to increase the quality and transparency in our climate related disclosures whilst taking the first steps on the roadmap of TCFD reporting. We aim to ensure our stakeholders will have a better understanding of the Company's operational and business resilience to climate change and how we will incorporate the consideration of climate-related risks and opportunities in our business model. The table below provides a brief statement on our current thought process to understand and begin aligning with the TCFD recommendations.

 

Governance: The Group's governance relating to climate-related risks and opportunities is the responsibility of the Board.

 

Strategy: The actual and potential impacts of climate-related risks and opportunities will have effects on the business policies, strategy and financial planning of the Company.

 

Risk Management: The financial director is responsible for Company's risk assessment and identifying, assessing, and managing climate related risks is part of that function.

 

Metrics & Targets: The formulation of metrics and targets used to assess and manage relevant climate related risks and opportunities will be considered.

 

 

STRATEGIC REPORT

 

The Directors present their strategic report on the group for the year ended 31 December 2023.

 

PRINCIPAL ACTIVITY

African Pioneer Plc ("the Company") is a public limited company which is listed on the main market of the London Stock Exchange and incorporated and domiciled in the Isle of Man. The Company's registered address is 19-21 Circular, Douglas, Isle of Man IM1 1AF.  

 

The Company is the parent company of African Pioneer Zambia Ltd (80% owned), African Pioneer Chongwe Ltd (80% owned), Resource Capital Partners Pty Ltd (100% owned) and Zamcu Exploration Pty Ltd (100% owned), which has an 85% equity holding in Ongombo Mine (Pty) Limited and Manmar Investments One Hundred and Thirty Six (Pty) Ltd. (see note 10 for further details).

 

The principal activity of the Company and its subsidiaries (the "Group") is the exploration for base metals in Zambia, Namibia and Botswana.

 

GOING CONCERN

 

As disclosed in Note 2 The Group made a loss from all operations for the year ended 31 December 2023 after tax of £(689,000) (2022: £671,000). In June 2023, the Company raised £790,000 (gross) and at the year end had cash of £372,156 (2022 £71,674). An operating loss is expected in the year subsequent to the date of these accounts and as a result the Company will need to raise funding to provide additional working capital to finance its ongoing activities. The management team has successfully raised funding for exploration projects in the past, but there is no guarantee that adequate funds will be available when needed in the future. 

 

Based on its current reserves and the Board's assessment that the Company will be able to raise additional funds, as and when required, to meet its working capital and capital expenditure requirements, the Board have concluded that they have a reasonable expectation that the Group can continue in operational existence for the foreseeable future. For these reasons the financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal course of business.

 

The management team has successfully raised funding for exploration projects in the past, but there is no guarantee that adequate funds will be available when needed in the future. 

 

There is a material uncertainty relating to the conditions above that may cast significant doubt on the Group's ability to continue as a going concern and therefore the Group may be unable to realise its assets and discharge its liabilities in the normal course of business.

 

 

KEY PERFORMANCE INDICATORS

The key performance indicators in assessing the completion of this activity are monitored on a regular basis:

 

• Progress with exploration, monitoring licence commitments and environmental compliance; and

• Cash management - ensuring that the Company is well funded and has adequate cash to meet its obligations as they fall due.

 

REVIEW OF THE BUSINESS

 

Details of the Company's strategy, results and prospects are set out in the Chairman's Statement on page 3 and in the Financial, Corporate and Operational Review on page 6.

 

Financial highlights:

 

·    £689k consolidated loss after tax (2022: £671k - loss)

·    Approximately £372k cash at bank at the year-end (2022: £72k).

·    The basic and diluted losses per share are summarised in the table below

Profit/(Loss) per share (pence)		2023	2022
Basic & Diluted	Note 6	(0.33)p	(0.35)p

 

·    The net assets of the Group at as at 31 December 2023 were £5.2M (31 December 2022 £5.2m)

 

 

INVESTMENTS HELD BY THE COMPANY FOR RESALE

The Company has previously held investments available-for-sale investments but sold these during the year as a source of liquidity to cover explorations costs and general overheads of the Group. It is the Group's intention not to purchase any new investments.

 

PORTFOLIO HOLDING AT 31 December 2023

 

	Number	Cost	Valuation	Valuation
	31/12/23	31/12/23	31/12/23	31/12/22

 

                                                                                                                          

Jubilee Metals Group Plc		-	-	-	22,107
Galileo Resources Plc		-	-	-	32,500
Sandfire Resources Ltd		-	-	-	329,325
South 32 Limited		-	-	-	-
Xtract Resources Plc		-	-	-	11,818
TOTAL FOR COMPANY			-	-	395,750

 

PRINCIPAL RISKS AND UNCERTAINTIES

This business carries a high level of risk and uncertainty, although the potential rewards can be outstanding.  The Directors have identified the following principal risks in regards to the Group's future. The relative importance of risks faced by the Group can, and is likely to, change as the Group executes its strategy and as the external business environment evolves the strategy as may be required based on developments and exploration results. Key elements of this process are the Group's reporting and Board meetings.

 

Strategic risk

The Group's strategy may not deliver the results expected by shareholders. The Directors regularly monitor the appropriateness of the strategy, taking into account both internal and external factors, together with progress in  and modify

Exploration risk

Exploration at the Namibia, Zambia and Botswana Projects may not result in success.

 

 

Whilst the Directors endeavour to apply what they consider to be the latest technology to assess projects, the business of exploration for and identification of minerals and metals, is speculative and involves a high degree of risk. The mineral and metal potential of the Group's projects in Namibia, Zambia and Botswana, may not contain economically recoverable volumes of minerals, base metals, or precious metals of sufficient quality or quantity. To mitigate this risk, the Group has acquired the rights to carry out exploration and earn an interest in certain licences in the specific areas.

 

Even if there are economically recoverable deposits, delays in the construction and commissioning of mining projects or other technical difficulties may make the deposits difficult to exploit. The exploration and development of any project may be disrupted, damaged or delayed by a variety of risks and hazards which are beyond the control of the Group. These include (without limitation) geological, geotechnical and seismic factors, environmental hazards, technical failures, adverse weather conditions, acts of God and government regulations or delays.

 

Exploration is also subject to general industrial operating risks, such as equipment failure, explosions, fires and industrial accidents, which may result in potential delays or liabilities, loss of life, injury, environmental damage, damage to or destruction of property and regulatory investigations. The Group may also be liable for the mining activities of previous miners and previous exploration works. Although the Group intends, itself or through its operators, to maintain insurance in accordance with industry practice, no assurance can be given that the Group or the operator of an exploration project will be able to obtain insurance coverage at reasonable rates (or at all), or that any coverage it obtains will be adequate and available to cover any such claims. The Group may elect not to become insured because of high premium costs or may incur a liability to third parties (in excess of any insurance cover) arising from pollution or other damage or injury.

 

Environmental and other regulatory risks

In relation to the Group's existing projects the environmental impact to date is limited to activities associated with exploration. The ultimate development of any project into a mining operation will inevitably impact considerably on the local landscape and communities. These projects sit in an area of considerable natural beauty and therefore there is likely to be opposition to mining by some parties. This may impact on the cost and/or Group's ability to sell or move these projects into production.

 

While the Group believes that its operations and future projects are currently, and will be, in substantial compliance with all relevant material environmental and health and safety laws and regulations, including relevant international standards, there can be no assurance that new laws and regulations, or amendments to, or stringent enforcement of, existing laws and regulations will not be introduced.

 

Nevertheless, the Group will continue to vigorously apply international standards to the design and execution of any and all of its activities, including engagement and consultation with local communities, and non-governmental and Governmental organisations to ensure any impacts of current and future activities are minimised and appropriately managed. The Group has organisations to ensure any impacts of current and future activities are minimised and appropriately managed. The Group has established a comprehensive suite of health, safety, environmental and community policies which will underpin all future activities.

 

Financing

The successful exploration or exploitation of natural resources on any project will require significant capital investment. The only sources of financing currently available to the Group are through the issue of additional equity capital in the Company convertible loans or through bringing in partners to fund exploration and development costs. The Group's ability to raise further funds will depend on the success of their investment strategy and conditions in financial and commodity markets. The Group may not be successful in procuring the requisite funds on terms which are acceptable to it (or at all) and, if such funding is unavailable, the Group may be required to reduce the scope of its investments or anticipated expansion.

 

Political, economic and regulatory regime

The licences and operations of the Group are in jurisdictions outside the United Kingdom and accordingly there will be a number of risks which the Group will be unable to control. Whilst the Group will make every effort to ensure it has robust commercial agreements covering its activities, there is a risk that the Group's activities will be adversely affected by economic and political factors such as the imposition of additional taxes and charges, cancellation or suspension of licences and changes to the laws governing mineral exploration and operations.

 

The Group's activities will be dependent upon the grant of appropriate licences, concessions, leases, permits, and regulatory consents that may be withdrawn or made subject to limitations. There can be no assurance that they will be granted or renewed or if so, on what terms. There is also the possibility that the terms of any licence may be changed other than as represented or expected.

 

The current focus of the Group's activities, offer stable political frameworks and actively support foreign investment. The countries have well-developed exploration and mining code and proactive support for foreign companies. Through a programme of proactive engagement with each Government at all levels the Group is able to partially mitigate these risks by establishing professional working relationships.

 

Dependence on key personnel

The Group is dependent upon its executive management team and various technical consultants. Whilst it has entered into contractual agreements with the aim of securing the services of these personnel, the retention of their services cannot be guaranteed. The development and success of the Group depends on its ability to recruit and retain high quality and experienced staff. The loss of the service of key personnel or the inability to attract additional qualified personnel as the Group grows could have an adverse effect on future business and financial conditions. Nevertheless, through programmes of incentivising staff, appropriate succession planning, and good management these risks can be largely mitigated.

 

Uninsured risk

The Group, as a participant in exploration and development programmes, may become subject to liability for hazards that cannot be insured against or third-party claims that exceed the insurance cover. The Group may also be disrupted by a variety of risks and hazards that are beyond its control, including geological, geotechnical and seismic factors, environmental hazards, industrial accidents, occupation and health hazards and weather conditions or other acts of God.

 

Other business risks

In addition to the current principal risks identified above and those disclosed in note 3 to the financial statements, the Group's business is subject to risks relating to the financial markets and commodity markets. The buoyancy of both the aforementioned markets can affect the ability of the Group to raise funds for exploration. The Group has identified certain risks pertinent to its business including:

 

Strategic and Economic:

• Business environment changes

• Limited diversification

 

Operational:

• Difficulty in obtaining / maintaining / renewing Licences / approvals

 

Commercial:

• Failure to maximise value from its Namibia/Zambia/Botswana projects

• Loss of interest in key assets

• Regulatory compliance and legal

 

Human Resources and Management:

• Failure to recruit and retain key personnel

• Human error or deliberate negative action

• Inadequate management processes

 

Financial:

• Restrictions in capital markets impacting available financial resources

• Cost escalation and budget overruns

• Fraud and corruption

 

The Directors regularly monitor such risks, using information obtained or developed from external and internal sources, and will take actions as appropriate to mitigate these. Effective risk mitigation may be critical to the Group in achieving its strategic objectives and protecting its assets, personnel and reputation. The Group assesses its risk on an ongoing basis to ensure it identifies key business risks and takes measures to mitigate these. Other steps include regular Board review of the business, monthly management reporting, financial operating procedures and antibribery management systems. The Group reviews its business risks and management systems on a regular basis

 

PROMOTION OF THE COMPANY FOR THE BENEFIT OF THE MEMBERS AS A WHOLE

The Director's believe they have acted in the way most likely to promote the success of the Company for the benefit of its members as detailed below.

•     Consider the likely consequences of any decision in the long term

•     Act fairly between the members of the Company,

•     Maintain a reputation for high standards of business conduct,

•     Consider the interests of the Company's employees,

•     Foster the Company's relationships with suppliers, customers, and others, and

•     Consider the impact of the Company's operations on the community and the environment.

Our Board of Directors remain aware of their responsibilities both within and outside of the Group. Within the limitations of a Group with so few employees we endeavour to follow these principles, and examples of the application of the s172 are summarised and demonstrated below.

The Group operates as a mining exploration and development business which is speculative in nature and at times may be dependent upon fund-raising for its continued operation. The nature of the business is well understood by the Company's members, employees and suppliers, and the Directors are transparent about the cash position and funding requirements. 

The Company is investing time in developing and fostering its relationships with its key suppliers.

As a mining exploration company with future operations based in Scandinavia, the Board intends to take seriously its ethical responsibilities to the communities and environment in which it works.

The interests of future employees and consultants are a primary consideration for the Board, and we have introduced an inclusive share-option programme allowing them to share in the future success of the company. Personal development opportunities are encouraged and supported.

 

OUTLOOK

 

Outlook for Copper: During the second half of 2023 and into 2024 the copper price has recovered and is currently around US$9,000 per tonne. Forecasts for the price of copper and its by-product metals remain positive in the range of US$10-US$15,000 per tonne. The outlook for copper supply remains quite pessimistic as most large copper mining projects have been shelved as a result of political or economic reasons but we anticipate this will lead to both smaller but profitable mines being developed , and junior mining companies with good copper resources in reliable jurisdictions becoming potential targets for acquisitions by major mining companies. As a result, the Company is well positioned with all its projects, to take part in a potential acquisition boom or alternatively to attract financing for its own operations which might not otherwise have been available.

 

The major mining companies are seeking new projects for acquisition and all our projects have the fundamentals which may attract the attention of larger companies as reflected in the fact that First Quantum has as reported in the Corporate review section issued an Option Exercise Notice in relation to the 4 Zambian exploration licences the subject of the First Quantum Option Agreement

 

The Board feels the Group has assembled an enviable portfolio of projects and we are pleased that Sandfire has taken and retained a significant equity position in the Company. We look forward to advancing all our projects and providing our shareholders with the prospects of enhanced value flowing into next year.

 

 

STATEMENT OF DIRECTORS' RESPONSIBILITIES

 

 

STATEMENT AS TO THE DISCLOSURE OF INFORMATION TO THE AUDITORS

 

The directors are responsible for preparing the Report of the Directors and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under the law the directors have prepared the financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the directors must not approve the financial statements unless they are satisfied that the financial statements give a true and fair view of the state of affairs and profit or loss of the Company for that period. In preparing these financial statements, the directors are required to:

 

•     select suitable accounting policies and then apply them consistently;

•     make judgements and accounting estimates that are reasonable and prudent;

•     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business;

•     state whether applicable IFRS's have been followed, subject to any material departures disclosed and explained in the financial statements.

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006 and Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors confirm that:

 

•     so far as each director is aware, there is no relevant audit information of which the Company's auditor is unaware; and

•     the directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and establish that the auditors are aware of that information.

 

Legislation in the Isle of Man governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

 

Signed on behalf of the Board:

30 April  2024

 

 

 

 

Colin Bird                                                                          

Executive Chairman   

 

 

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AFRICAN PIONEER PLC FOR THE YEAR ENDED 31 DECEMBER 2023

Independent Auditors Report

Opinion

We have audited the financial statements of African Pioneer Plc (the 'Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statement of Financial Position, the Consolidated and Parent Company Statements of Changes in Equity, the Consolidated and Parent Company Statements of Cash flows, the notes to the financial statements, which include a summary of significant accounting policies. The financial reporting framework that has been applied in in the preparation of the financial statements is applicable law and UK-adopted international accounting standards ('IFRS').

In our opinion the financial statements:

·    give a true and fair view of the state of the Group's and of the Company's affairs as at 31 December 2023 and of the Group's loss for the year then ended; and

·      have been properly prepared in accordance with IFRS.

 

Basis for opinion

 

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

 

Material uncertainty related to going concern

 

We draw attention to note 2 in the financial statements. We have considered the adequacy of the going concern disclosures made concerning the Company and the Group's ability to continue as a going concern. The Company and Group has made a loss of (£685,126) and (£689,213) respectively, and an operating loss is expected in the year subsequent to the year of these financial statements.

 

As a result, the Company and Group will need to raise funding to provide additional working capital to finance its ongoing activities. As stated in note 2, these conditions, along with other matters set forth in note 2, indicate that material uncertainty exists that may cast significant doubt on the Company and Group's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

 

We have highlighted going concern as a key audit matter. In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors' assessment of the Group and the Parent Company's ability to continue to adopt the going concern basis of accounting included:

 

·    Analysing management's and the Directors' cash flow forecast which forms the basis of their assessment that the going concern basis of preparation remains appropriate for the preparation of the Group and Company financial statements for a period of at least twelve months from the date of approval of these financial statements;

 

·    Testing the integrity of the cash flow model;

 

·    Reviewing post year-end financial statements for each entity and comparing actual performance to managements assessments

·    Sensitising the cash flows for changes in key assumptions and considering impact on headroom;

·    Reviewing and considering the adequacy of the disclosure within the financial statements relating to the Directors' assessment of the going concern basis of preparation.

·    Reviewing any additional financial and non-financial subsequent events which may be identified post the year end in relation to going concern.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Our approach to the audit

In planning our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the directors made subjective judgements, for example in respect of significant accounting estimates. As in all of our audits, we also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

We tailored the scope of our audit to ensure that we performed sufficient work to be able to issue an opinion on the financial statements as a whole, considering the structure of the Group, the accounting processes and controls, and the industry in which they operate.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement we identified (whether or not due to fraud), including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The use of the Going Concern basis of accounting was assessed as a key audit matter and has already been covered in an earlier section of this report. The other key audit matters identified are described below.

Key audit matter	How our work addressed this matter
Carrying value of E&E assets (Group) The most significant assets of the group as at December 2023 were intangible assets of £5.2m comprising exploration and evaluation assets. In accordance with IAS36 Impairment of Assets, entities are required to conduct annual impairment tests for goodwill and certain intangible assets. Given the subjectivity and number of estimates involved in any such assessment, we consider the carrying value of E&E assets in the Group's balance sheet to be a key audit matter.	Our work included: ·  Reviewing brought forward calculations to agree to the opening balance position and prior year assessment of compliance with IFRS6; ·  Reviewing additions in the year for compliance with IFRS6; ·  Reviewing the impairment model provided and checking that the value in use model is appropriate; ·  Discussing with management the assumptions used and obtaining support for key assumptions; and ·  Obtain an understanding as to the status of each project to ensure the accounting treatment complies with IFRS6.
Investment valuation (Company) The most significant asset of the group and company are investments assets at £2.8m. There is a risk that these balances may be subject to impairment and therefore materially misstated within the financial statements. Given the subjectivity and number of estimates involved in any such assessment, we consider the carrying value of investments in the Company's balance sheet be a key audit matter.	Our work included: ·  Reviewing brought forward calculations to agree the opening balance position; ·  Reviewing management's assessment of impairment, including challenging the assumptions used; ·  Consider the consistency of cost of investment with the underlying carrying value of E&E assets tested at Group level; and ·  Reviewing any additional financial and non-financial subsequent events which may be identified post the year end indicating an impairment may be present in the valuation of investments.

Our application of materiality

We apply the concept of materiality both in planning and performing our audit and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions could influence the economic decisions of reasonable users that are taken on the basis of the financial statements.

In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.

We consider gross assets to be the most significant determinant of the Group's financial performance used by the users of the financial statements. We have based materiality on 1.5% of reported gross assets for the group. Overall materiality for the group was therefore set at £84,000.

Other information

The other information comprises the information included in the annual report other than the financial statements and auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities, the directors are responsible for the preparation of the Group financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the Group financial statements, the directors are responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group's financial reporting process.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

·    We obtained an understanding of the Group and the sector in which it operates to identify laws and regulations that could reasonably be expected to have a direct effect on the financial statements, including equity accounted associate. We obtained our understanding in this regard through discussions with management and application of our cumulative audit knowledge and experience of the industry.

·    We determined the principal laws and regulations relevant to the Group in this regard to be, but were not limited to, those arising from local licensing laws, Isle of Man Companies Act, and the London Stock Exchange Listing Rules. We focused on laws and regulations that could give rise to a material misstatement in the financial statements.

·    We designed our audit procedures to ensure the audit team considered whether there were any indications of non-compliance by the Group with those laws and regulations. Our test included, but were not limited to specific enquiries of management, reviewing Board minutes and any legal or regulatory compliance correspondence.

·    We also identified the risks of material misstatement of the financial statements due to fraud. We considered, in addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls, whether key accounting estimates and judgements made by management when auditing significant accounting estimates. We address these risks by challenging the assumptions and judgements made by management when auditing significant accounting estimates, comprising the impairment assessment of intangible assets.

·    We addressed the risk of fraud arising from management override of controls by performing audit procedures which included, but were not limited to: the testing of journals and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business, as well as discussions with management.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit If the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Other matters that we are required to address

We were appointed on 15 December 2023 and this is the first year of our engagement as auditors for the Group.

We confirm that we are independent of the Group and have not provided any prohibited non-audit services, as defined by the Ethical Standard issued by the Financial Reporting Council as applied to listed entities, and we have fulfilled our ethical responsibilities in accordance with these requirements.

Our audit report is consistent with our additional report to the Audit Committee explaining the results of our audit.

Use of our report

This report 's made solely to the Company's members, as a body, in accordance with our engagement letter. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

 

 

 

 

Paul Randall BA FCA

Recognised Auditor

for and on behalf of RPG Crouch Chapman LLP

Chartered Accountants and Recognised Auditors

40 Gracechurch Street

London

EC3V 0BT

Date: 30 April 2024

 

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

For the year ended 31 December 2023

 

	Notes	Year ended 31 December 2023	Year ended 31 December 2022
		£	£
CONTINUING OPERATIONS
Income:
Dividend receivable		-	2,951
Realised gain on sale of investments		34,799	4,320
Unrealised loss on investments			(78,197)
Total Income Administrative expenses		34,799	(70,926)
Administrative expenses	4	(724,012)	(599,965)
Total Administrative Expense		(724,012)	(599,965)
OPERATING (LOSS)FOR THE YEAR		(689,213)	(670,891)
Interest expense		-	-
Interest income		-	20
(LOSS) BEFORE TAX		(689,213)	(670,871)
Taxation	7	-	-
NET (LOSS) FOR THE YEAR		(689,213)	(670,871)
Other comprehensive income:
Other comprehensive income		-	-
(Loss)/Profit for the financial year
Items that may be reclassified to profit or loss:
Foreign currency reserve movement		(120,526)	(32,256)
Total comprehensive (loss) for the financial year		(809,739)	(703,127)
Attributable to: Owners of the Company		(809,739)	(703,127)
Non-controlling interest		-	-
		(809,739)	(703,127)
Basic & Diluted loss per share	6	(0.33) p	(0.35) p
All results are derived from continuing operations.