Kazera Global Regulatory News (KZG)

Kennedy Ventures plc (c/o Camarco)

Larry Johnson (CEO)

Tel: +44 (0)203 757 4997

finnCap (Nominated Adviser and Joint Broker)

Christopher Raggett / Scott Mathieson / Anthony Adams (corporate finance)

Simon Johnson (corporate broking)

Tel: +44 (0)20 7220 0500

Shore Capital (Joint Broker)

Mark Percy / Toby Gibbs (corporate finance)

Jerry Keen (corporate broking)

Tel: +44 (0) 207 408 4090

Camarco (PR)

Gordon Poole / James Crothers / Monique Perks

Tel: +44 (0) 203 757 4997

Notes

Year ended

30 June

2017

£'000

Year ended

30 June

2016

£'000

Administrative expenses

Administrative expenses

(1,098)

(788)

Operating loss and loss before tax

6

(1,098)

(788)

Taxation

9

-

-

Loss for the year and total comprehensive loss

(1,098)

(788)

Loss attributable to owners of the Company

(901)

(676)

Loss attributable to non-controlling interests

(197)

(112)

(1,098)

(788)

Earnings per share attributable to owners of the Company

From continuing operations:

Basic and diluted (pence)

10

(0.5)p

(0.6)p

Year ended

30 June

2017

£'000

Year ended

30 June

2016

£'000

Loss for the year attributable to owners of the Company

(901)

(676)

Other comprehensive income:

Items that may be subsequently reclassified to profit and loss:

Exchange differences on translation of foreign operations

235

21

Other comprehensive income/(expense) for the period

235

21

Total comprehensive loss for the year attributable to equity holders of the parent

(666)

(655)

GROUP

COMPANY

Notes

2017

£'000

2016

£'000

2017

£'000

2016

£'000

Non-Current assets

Goodwill

11

588

571

-

-

Other intangible assets

12

1,891

674

-

-

Property, plant and equipment

13

655

466

-

-

Investment in subsidiaries

14

-

-

4,434

2,184

3,134

1,711

4,434

2,184

Current assets

Trade and other receivables

15

174

70

19

38

Cash and cash equivalents

16

364

60

249

27

538

130

268

65

Current liabilities

Trade and other payables

17

135

286

128

212

Short term borrowings

18

-

150

-

150

135

436

128

362

Net assets

3,537

1,405

4,574

1,887

Equity

Share capital

19

1,890

1,084

1,890

1,084

Share premium account

19

11,314

9,125

11,314

9,125

Capital redemption reserve

2,077

2,077

2,077

2,077

Currency translation reserve

252

17

-

-

Retained earnings

(11,674)

(10,773)

(10,707)

(10,399)

Equity attributable to owners of the Company

3,859

1,530

4,574

1,887

Non-controlling interests

(322)

(125)

-

-

Total equity

3,537

1,405

4,574

1,887

Share capital

£'000

Share premium account

£'000

Capital redemption reserve

£'000

Currency translation reserve

£'000

Retained earnings

£'000

Equity shareholders' funds

£'000

Non-controlling interests

£'000

Total

£'000

Balance at 1 July 2015

763

7,849

2,077

(4)

(10,182)

503

143

646

Comprehensive income Loss for the year

-

-

-

-

(676)

(676)

(112)

(788)

Other comprehensive income

-

-

-

21

-

21

-

21

Total comprehensive income

-

-

-

21

(676)

(655)

(112)

(767)

Issue of share capital

321

1,276

-

-

-

1,597

-

1,597

Acquisition of subsidiary undertakings

-

-

-

-

-

-

(156)

(156)

Share cased payment expense

-

-

-

-

85

85

-

85

Balance at 30 June 2016

1,084

9,125

2,077

17

(10,773)

1,530

(125)

1,405

Comprehensive income Loss for the year

-

-

-

-

(901)

(901)

(197)

(1,098)

Other comprehensive income

-

-

-

235

-

235

-

235

Total comprehensive expense

-

235

(901)

(666)

(197)

(863)

Issue of share capital

806

2,189

-

-

-

2,995

-

2,995

Balance at 30 June 2017

1,890

11,314

2,077

252

(11,674)

3,859

(322)

3,537

Share

 capital

Share

 Premium

Capital redemption reserve

Retained

earnings

Total

£'000

£'000

£'000

£'000

£'000

Balance at 1 July 2015

763

7,849

2,077

(10,143)

546

Loss for the financial period

-

-

-

(341)

(341)

Issue of share capital

321

1,276

-

-

1,597

Share based payment expense

-

-

-

85

85

Balance at 30 June 2016

1,084

9,125

2,077

(10,399)

1,887

Total comprehensive expense for the year

-

-

-

(308)

(308)

Issue of share capital

806

2,189

-

-

2,995

Balance at 30 June 2017

1,890

11,314

2,077

(10,707)

4,574

GROUP

COMPANY

Year ended

30 June

2017

Year ended

30 June

2016

Year ended

30 June

2017

Year ended

30 June

2016

Notes

£'000

£'000

£'000

£'000

OPERATING ACTIVITIES

Net cash used in operating activities

23

(1,291)

(423)

(615)

(147)

INVESTING ACTIVITIES

Purchases of property, plant and equipment

(251)

(88)

-

-

Development costs

(1,217)

(664)

-

-

Advances to subsidiary undertakings

-

-

(2,008)

(1,306)

Acquisition of non-controlling interests

-

(336)

-

-

Acquisition of subsidiary undertakings

-

-

-

-

Net cash used in investing activities

(1,468)

(1,088)

(2,008)

(1,306)

FINANCING ACTIVITIES

Net proceeds from share issues

2,995

1,365

2,995

1,365

Loans from associates

-

108

-

108

Repayment of loans

(150)

-

(150)

-

Net cash from financing activities

2,845

1,473

2,845

1,473

Net (decrease)/increase in cash and cash equivalents

86

(38)

222

20

Exchange rate translation adjustment

218

72

-

-

Cash and cash equivalents at beginning of year

60

26

27

7

Cash and cash equivalents at end of year

16

364

60

249

27

1

GENERAL INFORMATION

Kennedy Ventures Plc is a company incorporated in the United Kingdom under the Companies Act 2006. The nature of the Group's operations and its principal activities are set out in the Strategic Report and the Directors' Report.

2

STATEMENT OF COMPLIANCE

The financial statements have been prepared and approved by the Directors in accordance with all relevant IFRSs as issued by the International Accounting Standards Board ("IASB"), and interpretations issued by the IFRS Interpretations Committee, endorsed by the European Union ("EU").

At the date of authorisation of this document, the following Standards and Interpretations, which have not been applied in these financial statements, were in issue, but not yet effective:

· IFRS 9 Financial Instruments

· IFRS 15 Revenue from Contracts with Customers

· IFRS 16 Leases

· IAS 27 (amendments) Equity Method in Separate Financial Statements

The Directors anticipate that the adoption of the above Standards and Interpretations in future periods will have little or no impact on the financial statements of the Company when the relevant Standards come into effect for future reporting periods, although they have yet to complete their full assessment in relation to the impact of IFRS 9 and IFRS 15.

3

Accounting Policies

The principal accounting policies adopted and applied in the preparation of the Group and Company Financial statements are set out below.

These have been consistently applied to all the years presented unless otherwise stated:

BASIS OF ACCOUNTING

The consolidated financial statements have been prepared in accordance with applicable International Financial Reporting Standards ("IFRS") including standards and interpretations issued by both the International Accounting Standards Board ("IASB") and the International Financial Reporting Interpretation Committee ("IFRIC") as adopted and endorsed by the European Union ("EU"), further to IAS Regulation (EC 1606/2002).

The consolidated financial statements have been prepared on the basis of historical cost. Cost is based on the fair values of the consideration given in exchange for assets.

In the application of IFRS management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. 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 judgments. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Judgments made by management in the application of IFRS that have significant effects on the financial statements and estimates with a significant risk of material adjustment in the next year are disclosed, where applicable, in the relevant notes to the financial statements.

GOING CONCERN

The financial statements have been prepared on the going concern basis.

The Directors have prepared cash flow forecasts to 31 March 2019, which show that the Company will have sufficient available cash resources to provide for its future requirements. In preparing their forecasts the Directors have given due regard to the risks and uncertainties affecting the business as set out in the Strategic report.

On this basis, the Directors have a reasonable expectation that the Company has adequate resources to continue operating for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the Company's financial statements.

BASIS OF CONSOLIDATION

The Group's consolidated financial statements incorporate the financial statements of Kennedy Ventures Plc (the "Company") and entities controlled by the Company (its subsidiaries). Subsidiaries are entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

BUSINESS COMBINATIONS

The acquisition of subsidiaries is accounted for using the acquisition method under IFRS 3. The acquisition method involves the recognition at fair value of all identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date, regardless of whether or not they were recorded in the financial statements of the subsidiary prior to acquisition. On initial recognition the assets and liabilities of the subsidiary are included in the consolidated statement of financial position at their fair values, which are also used as the bases for subsequent measurement in accordance with the Group accounting policies. Goodwill is stated after separating out identifiable intangible assets. Goodwill represents the excess of the fair value of the consideration transferred over the fair value of the Group's share of the identifiable net assets of the acquired subsidiary at the date of acquisition. Acquisition costs are expensed as incurred.

GOODWILL

Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary, associate or jointly controlled entity at the date of acquisition and is included as a non-current asset.

Goodwill is tested annually, or more regularly should the need arise, for impairment and is carried at cost less accumulated impairment losses. Any impairment is recognised immediately in the income statement and is not subsequently reversed.

Goodwill is allocated to cash generating units for the purpose of impairment testing.

On disposal of a subsidiary the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

In accordance with IAS 36 the Group values Goodwill at the lower of its carrying value or its recoverable amount, where the recoverable amount is the higher of the value if sold and its value in use.

FOREIGN CURRENCIES

The individual financial statements of each group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the Group financial statements, the results and financial position of each group company are expressed in Pounds Sterling, which is the functional currency of the Company, and the presentation currency for the Group financial statements.

In preparing the financial statement of the individual companies, transactions in currencies other than the entity's functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each year end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the year end date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the income statement. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period, except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.

For the purpose of presenting Group financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the year end date. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are classified as equity and transferred to the Group's translation reserve. Such translation differences are recognised as income or as expenses in the period in which the operation is disposed of.

TAXATION

The tax currently payable is based on taxable profit or loss for the period. Taxable profit or loss differs from net profit or loss as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying value of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised based on tax laws and rates that have been enacted at the balance sheet date. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

DEVELOPMENT COSTS

Development costs relate to expenditure incurred on the development and evaluation of mineral resources. These costs are recorded as intangible assets until the mineral resource reaches the production stage. Upon completion of development and commencement of production, capitalised development costs as well as evaluation expenditures are transferred to mining assets in property, plant and equipment and depreciated over the expected life of the mineral resource.

Development costs incurred on specific projects are capitalised when all the following conditions are satisfied:

· completion of the intangible asset is technically feasible so that it will be available for use or sale

· the Group intends to complete the intangible asset and use or sell it

· the Group has the ability to use or sell the intangible asset

· the intangible asset will generate probable future economic benefits

· there are adequate technical, financial and other resources to complete the development and to use or sell the intangible asset, and

· the expenditure attributable to the intangible asset during its development can be measured reliably.

Other development expenditure that does not meet these criteria is recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

PROPERTY, PLANT AND EQUIPMENT

Property, Plant and equipment are recorded at cost, less depreciation, less any amount of adjustments for impairment, if any.

Significant improvements are capitalised, provided they qualify for recognition as assets. The costs of maintenance, repairs and minor improvements are expensed when incurred.

Tangible assets, retired or withdrawn from service, are removed from the balance sheet together with the related accumulated depreciation. Any profit or loss resulting from such an operation is included in the income statement.

Tangible and intangible assets are depreciated on the straight-line method based on their estimated useful lives from the time they are put into operation, so that their net cost is diminished over the lifetime of consideration to estimated residual value as follows:

Land and buildings - Over 20 years

Plant and equipment- Between 5 and 10 years

IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENT AND INTANGIBLE ASSETS EXCLUDING GOODWILL

Assets that have an indefinite useful life are not subject to amortisation but are reviewed for impairment annually and where there are indications that the carrying value may not be recoverable. An impairment loss is recognised for the amount by which the carrying value exceeds the recoverable amount.

TRADE RECEIVABLES, LOANS AND OTHER RECEIVABLES

Trade and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the balance sheet date, which are classified as non-current assets and are measured at amortised cost less an allowance for any uncollectible amounts. The net of these balances are classified as "trade and other receivables" in the balance sheet.

Trade and other receivables are assessed for indicators of impairment at each balance sheet date and are impaired where there is objective evidence that the recovery of the receivable is in doubt.

Objective evidence of impairment could include significant financial difficulty of the customer, default on payment terms or the customer going into liquidation.

The carrying amount of trade and other receivables is reduced through the use of an allowance account. When a trade or other receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in the income statement.

Loans and receivables, as categorised above, are measured at amortised cost using the effective interest method less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash at bank and in hand, deposits at call with banks, other short-term highly liquid investments with original maturity at acquisition of three months or less that are readily convertible to cash, net of bank overdrafts. For the purpose of the cash flow statement, cash and cash equivalents consist of the definition outlined above.

FINANCIAL LIABILITIES

All non-derivative financial liabilities are classified as other financial liabilities and are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Other financial liabilities consist of borrowings and trade and other payables.

Financial liabilities are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

OTHER FINANCIAL LIABILTIES, BANK AND SHORT TERM BORROWINGS

Other financial liabilities, as categorised above, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. Other financial liabilities are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

EQUITY INSTRUMENTS INCLUDING SHARE CAPITAL

Equity instruments consist of the Company's ordinary share capital and are recorded at the proceeds received, net of direct issue costs.

SEGMENTAL ANALYSIS

Under IFRS 8 operating segments are considered to be components of an entity about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. The Company's chief operating decision maker is the Board of Directors. At present, and for the period under review, the Company's sole reporting segment is the tantalite mining operation in Namibia.

4

CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATIONS

In the application of the Group's accounting policies, which are described in Note 3, the Directors are required to make judgements, 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 valuation of the options involves making a number of critical estimates relating to price volatility, future dividend yields, expected life of the options and forfeiture rates. These assumptions have been described in more detail in Note 20. The estimates and assumptions could materially affect the Income Statement.

5

SEGMENTAL REPORTING

The business consists of a single investment activity being the tantalite mining operation in Namibia. As a result the segmental financial information is the same as that set out in the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and the Statement of Cash Flows.

6

OPERATING LOSS

Year ended

30 June 2017

 £'000

Year ended

 30 June 2016

 £'000

Loss for the period has been arrived at after charging:

Staff costs as per Note 8 below

311

406

Auditors remuneration

20

20

Depreciation of property, plant and equipment

62

17

7

AUDITORS' REMUNERATION

The analysis of auditors' remuneration is as follows:

Year ended

30 June 2017

£'000

Year ended 30 June 2016

£'000

Fees payable to the Group's auditors for the audit of the Group's annual accounts

20

20

Total audit fees

20

20

Fees payable to the Group auditor and their associates for other services to the Group:

Tax services

1

1

21

21

8

staff costs

The average monthly number of employees (including executive directors) for the continuing operations was:

Year ended

30 June 2017

Number

Year ended

30 June 2016

Number

Group total staff

100

100

£'000

£'000

Wages and salaries

277

194

Share based payment in respect of exercise of options

-

112

Other share base payment expense

-

85

Social security costs

34

15

311

406

DIRECTORS' EMOLUMENTS

An analysis of the directors' emoluments and pension entitlements and their interest in the share capital of the Company is contained in the Report of the Board on remuneration accompanying these financial statements.

9

TAXATION

Year ended

30 June 2017

£'000

Year ended

30 June 2016

£'000

Loss on continuing operations before tax

(1,098)

(788)

Tax at the UK corporation tax rate of 19.75% (2016: 20%)

(217)

(158)

Effects of:

Expenses not deductible for tax purposes

5

8

Unutilised tax losses carried forward

212

150

Tax charge for period

-

-

The total taxation charge in future periods will be affected by any changes to the corporation tax rates in force in the countries in which the Group operates.

10

LOSS PER SHARE

The calculation of basic loss per share is based on the following data:

Year ended

 30 June 2017

Year ended

 30 June 2016

£'000

£'000

Loss for the year attributable to owners of the Company

(901)

(676)

Weighted average number of ordinary shares in issue for basic and fully diluted earnings

177,144,947

104,756,967

LOSS PER SHARE (PENCE PER SHARE)

BASIC AND FULLY DILUTED:

- from continuing and total operations

(0.5)

(0.6)

11

GOODWILL

2017

2016

GROUP

£'000

£'000

Balance brought forward

571

442

Arising on acquisition of non-controlling interest

-

180

Exchange translation difference

17

(51)

Balance carried forward

588

571

12

OTHER INTANGIBLE ASSETS

Development costs

Mining

licences

Total

GROUP

£'000

£'000

£'000

At 1 July 2016

664

10

674

Additions in year

1,217

-

1,217

At 30 June 2017

1,881

10

1,891

13

PROPERTY, PLANT AND EQUIPMENT

Land & buildings

Plant & machinery

Furniture & equipment

Total

GROUP

£'000

£'000

£'000

£'000

Cost

At 1 July 2015

125

270

-

395

Additions

-

51

37

88

Cost at 30 June 2016

125

321

37

483

Adjustment

-

64

(4)

60

Additions

-

251

-

251

Cost at 30 June 2017

125

636

33

794

Depreciation

At 1 July 2015

-

-

-

-

Charge for the year

6

7

4

17

Depreciation at 30 June 2016

6

7

4

17

Adjustment

-

63

(3)

60

Charge for the year

9

49

4

62

Depreciation at 30 June 2017

15

119

5

139

Net book value at 30 June 2017

110

517

28

655

Net book value at 30 June 2016

119

314

33

466

14

INVESTMENT IN subsidiarY UNDERTAKINGS

The Company invests in its subsidiary and associated undertakings

COMPANY

2017

£'000

2016

£'000

Cost and net book value

At 1 July

2,184

758

Additional advances to African Tantalum (Pty) Ltd

2,008

1,306

Intercompany loan interest

242

120

As at 30 June

4,434

2,184

The intercompany loan to Aftan bears interest at 12% p.a.

All principal subsidiaries of the Group are consolidated into the financial statements. At 30 June 2017 the subsidiaries were as follows:

Subsidiary undertakings

Country of registration

Principal activity

Holding

%

African Tantalum (Pty) Ltd

Namibia

Intermediate holding company

Ordinary shares

75

Namibia Tantalite Investments (Pty) Ltd

Namibia

Tantalite mining

Ordinary shares

100

Tameka Shelf Company Four (Pty) Ltd

Namibia

Mining licence holder

Ordinary shares

100

COMPANY

2017

£'000

2016

£'000

At 1 July

2,184

758

Part capitalisation of loan to Aftan

550

500

Increase in loan to Aftan

1,700

926

As at 30 June

4,434

2,184

15

TRADE AND OTHER RECEIVABLES

GROUP

COMPANY

2017

2016

2017

2016

£'000

£'000

£'000

£'000

Other receivables

166

64

11

32

Prepayments and accrued income

8

6

8

6

174

70

19

38

16

CASH AND CASH EQUIVALENTS

GROUP

COMPANY

2017

2016

2017

2016

£'000

£'000

£'000

£'000

Cash and cash equivalents

364

60

249

27

17

TRADE AND OTHER PAYABLES

GROUP

COMPANY

2017

2016

2017

2016

£'000

£'000

£'000

£'000

Trade payables

33

56

33

56

Other payables

-

129

-

63

Accruals

102

101

95

93

135

286

128

212

The Directors consider the carrying amount of trade payables approximates to their fair value.

18

SHORT TERM BORROWINGS

GROUP

COMPANY

2017

2016

2017

2016

£'000

£'000

£'000

£'000

Westleigh Investments Holdings Ltd loan

-

150

-

150

-

150

-

150

See Note 25, Related party transactions, for further details.

19

share capital AND SHARE PREMIUM

Number of shares

Nominal value

£'000

Share premium

£'000

ISSUED AND FULLY PAID:

At 30 June 2015, shares of 1p each

76,309,748

763

7,849

Share issue

32,151,791

321

1,351

Share issue expenses

-

-

(75)

At 30 June 2016, shares of 1p each

108,461,539

1,084

9,125

Share issues

80,555,554

806

2,444

Share issue expenses

-

-

(255)

At 30 June 2017

189,017,093

1,890

11,314

Share issues

On 20 July 2016, the Company issued 66,666,665 ordinary shares of 1p at 3p per share for cash in respect of a private placing.

On 1 February 2017, the Company issued 13,888,889 ordinary shares of 1p at 9p per share for cash in respect of a private placing.

20

Share-based payments

Equity-settled share option scheme

The Company operates share-based payment arrangements to incentivise directors by the grant of share options. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company's estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions.

On 25 March 2014, the Board resolved to grant options over up to 8,531,760 new ordinary shares exercisable at 1.25p per share and granted 1,599,705 such options each to G Clarke and N Harrison. On 16 July 2015, a further 1,599,705 such options were granted each to G Clarke and N Harrison, and 2,132,940 options were granted to former directors on the same terms. The options are exercisable at any time up to 25 March 2018.

The significant inputs to the model in respect of the options granted in July 2015 were as follows:

Share price at date of grant

Exercise price

No. of share options

Expected volatility

Option life

Risk free rate

Calculated fair value per share

4.85 pence

1.25 pence

5,332,350

50%

2.7 years

2%

3.70 pence

The total share-based payment expense recognised in the income statement for the year ended 30 June 2017 in respect of the share options granted was £Nil (2016: £197,000).

Number of

options at

1 July 2016

Issued in

 the year

Exercised in the year

Number of options at

30 June 2017

Exercise price

Vesting Date

Expiry date

5,332,350

-

-

5,332,350

1.25p

16.07.2015

25.03.2018

5,332,350

-

-

5,332,350

1.25p

21

FINANCIAL INSTRUMENTS

The Group's financial instruments comprise borrowings, cash and various items, such as trade receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Group's operations.

FINANCIAL ASSETS BY CATEGORY

The IAS 39 categories of financial assets included in the Statement of financial position and the headings in which they are included are as follows:

2017

2016

£'000

£'000

Financial assets:

Cash and cash equivalents

364

60

Loans and receivables

166

64

530

124

FINANCIAL LIABILITIES BY CATEGORY

The IAS 39 categories of financial liability included in the Statement of financial position and the headings in which they are included are as follows:

2017

2016

£'000

£'000

Financial liabilities at amortised cost:

Trade and other payables

33

185

Short term borrowings

-

150

33

335

The following table details the Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest repayment date on which the Company can be required to pay. The table includes both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from the interest rate curves at the balance sheet date. The contractual maturity is based on the earliest date on which the Company may be required to pay.

Less than

1 month

1-3 months

3 months

to 1 year

1-5 years

Over 5 years

£'000

£'000

£'000

£'000

£'000

30 June 2017

Non-interest bearing:

Trade and other payables

-

33

-

-

-

Short term borrowings

-

-

-

-

-

30 June 2016

Non-interest bearing:

Trade and other payables

-

185

-

-

-

Short term borrowings

-

150

-

-

-

22

RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group is exposed to a variety of financial risks which result from both its operating and investing activities. The Group's risk management is coordinated by the Board of Directors, and focuses on actively securing the Group's short to medium term cash flows by minimising the exposure to financial markets.

The main risks the Group are exposed to through its financial instruments and the operations of the Group are credit risk, foreign currency risk, liquidity risk and market price risk. These risks are managed by the Group's finance function together with the Board of Directors.

Capital risk management

The Group's objectives when managing capital are:

 · to safeguard the Group's ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders;

 · to support the Group's growth; and

 · to provide capital for the purpose of strengthening the Group's risk management capability.

The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. Management regards total equity as capital and reserves, for capital management purposes.

Credit risk

The Company's principal financial assets are bank balances and cash and other receivables, which represent the Company's maximum exposure to credit risk in relation to financial assets. The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies. The Group's maximum exposure to credit risk is £364,000 (2016: £60,000) comprising cash and cash equivalents.Liquidity risk

Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through maintaining a positive cash balance and controlling expenses and commitments. The Directors are confident that adequate resources exist to finance current operations.Foreign Currency risk

The Group undertakes transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. Following the acquisition of African Tantalum (Pty) Ltd. Ltd, the Group's major activity is now in Namibia, bringing exposure to the exchange rate fluctuations of GBP/£ Sterling with the Namibian Dollar and South African Rand, the currencies in which most of the operating costs are denominated. At the year end the value of assets denominated in these currencies was such that the resulting exposure to exchange rate fluctuations was not material to the Group's operations. Going forwards the Group is exposed to the US$ as it has entered into an off-take agreement for the major part of its production, priced in US$.

Exchange rate exposures are managed within approved policy parameters. The Group has not entered into forward exchange contracts to mitigate the exposure to foreign currency risk.

The Directors consider the assets most susceptible to foreign currency movements to be the Investment in Subsidiaries. Although these investments are denominated in Namibian Dollars their value is dependent on the global market value of the available Tantalite resources.

Market Price risk

Going forwards the Group's exposure to market price risk mainly arises from potential movements in the market price of Tantalite. The Group is managing this price risk by completing a fixed price off-take agreement in respect of the major part of its planned production.

23

NOTES TO THE CASHFLOW STATEMENT

GROUP

COMPANY

2017

2016

2017

2016

£'000

£'000

£'000

£'000

Operating loss

(1,098)

(788)

(308)

(341)

Depreciation and amortisation

62

17

-

-

Share based payment expense

-

197

-

197

Shares issued in settlement of fees

-

20

-

20

Intercompany loan interest

-

-

(242)

(120)

Operating cash flows before movement in working capital

(1,036)

(554)

(550)

(244)

(Increase)/decrease in receivables

(104)

(57)

19

(28)

(Decrease)/increase in payables

(151)

188

(84)

125

Net cash used in operating activities

(1,291)

(423)

(615)

(147)

24

EVENTS AFTER THE REPORTING PERIOD

On 27 July 2017 the Company announced that it had conditionally raised £3.75m before expenses through the placing of 62,500,000 new ordinary shares in the Company at a price of 6p per share. The net proceeds of the placing will be used by African Tantalum (PTY) Limited ("Aftan"), Kennedy Ventures' investee company, for upgrades and expansion of the Namibia Tantalite Investments mine in order to fulfil increasing demand, in addition to drilling and bulk sampling to establish JORC lithium resource and extension to the life of the NTI mine. The upgrade and expansion of the mine will support the multiyear supply agreement signed with a global North American leading tantalum consumer and end user of the Company's tantalum ore.

On 17 August 2017, the Company granted 10,000,000 options to L Johnson, exercisable at 6p per share and vesting over a 3 year period.

25

RELATED PARTY TRANSACTIONS

The remuneration of the Directors, who are the key management personnel of the Company, is set out in the report of the Board on remuneration accompanying these financial statements.

During the year Westleigh Investment Holdings Ltd ("WIHL") received £48,000 (2016: £48,000) in respect of accounting, administration and office accommodation services provided to the Company. WIHL is a substantial shareholder in the Company and is controlled by Giles Clarke and Nick Harrison through their holdings of 73.28% and 26.72% respectively.

There have been no other material transactions with related parties.

26

OPERATING LEASES

The Group has an operating lease over the land for which it has a mining licence which endures until the mining operations permanently cease. The rent is approximately £150 per annum.

27

CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES

There were no capital commitments authorised by the Directors or contracted for at 30 June 2017 (2016: £nil).

28

ULTIMATE CONTROLLING PARTY

The Directors do not consider there to be one single ultimate controlling party.